FEDERAL COURT OF AUSTRALIA

Iluka Resources Limited v Construction, Forestry, Mining and Energy Union [2011] FCA 1447

THE COURT ORDERS THAT:

1.    The time for service of the originating application and the affidavit of Stephen John Stock sworn on 21 November 2011 be abridged until 6.00 pm on 21 November 2011.

2.    The applicant’s application for an interlocutory injunction is dismissed.

3.    The respondents’ oral application for an interlocutory injunction is dismissed.

4.    The matter is listed for a directions hearing at 9.00 am on 9 December 2011.

5.    Costs of the respondents’ oral application are reserved.

6.    Liberty to apply on 2 days’ notice.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 23 November 2011, I dismissed two applications for interlocutory injunctions and gave short reasons. I said I would give more detailed reasons later. These are the reasons.

2    Each of the applicant and the respondents has brought an application for an urgent interlocutory injunction.

3    By an application for urgent interlocutory relief filed on 21 November 2011, the applicant, Iluka Resources Limited (Iluka), brought one of the applications. The first respondent to this application is the Construction, Forestry, Mining and Energy Union (CFMEU), an “industrial association” for the purposes of the Fair Work Act 2009 (Cth). The second respondent is Mr Gary Wood, the State secretary of the Western Australian branch of the Mining and Energy division of the first respondent, and an employee of the first respondent.

4    Iluka and its employees in Western Australia are in the course of seeking to make a new enterprise agreement. Iluka has proposed an enterprise agreement to its employees, and has requested that the employees, who would be covered by the agreement, approve it by voting in a secret ballot. The voting period commenced on 19 November 2011 and concludes on 29 November 2011. It is for this reason, says Iluka, that the application for the interlocutory injunction is urgent.

5    This is, however, not the first occasion on which the employees of Iluka have been asked to vote on whether to approve the new enterprise agreement. The employees also voted by a secret ballot during the period 16 October 2011 to 21 October 2011. On that occasion, the vote was a tie, with 76 votes in favour and 76 votes against the agreement. After that result became known, the first respondent asked Iluka to recommence the bargaining process provided for under s 228(1) of the Fair Work Act. That section imposes an obligation on the parties to the bargaining process, to bargain in good faith. Iluka declined the request from the first respondent. Rather than recommence that process, Iluka asked its employees to vote again on the agreement in a second ballot. It is that ballot which concludes on 29 November 2011.

6    When Iluka declined the first respondent’s request to recommence the bargaining process, the respondents brought an application in Fair Work Australia complaining about the refusal by Iluka to engage in a new bargaining process. By that application, the first respondent sought orders that Iluka desist from seeking approval of the enterprise agreement in the second ballot and that Iluka meet with the first respondent and other bargaining representatives to further negotiate the agreement. That application was heard on 9 November 2011.

7    On 14 November 2011, the first respondent published a flyer, entitled “Vote No to the Iluka Agreement. Why?”. This flyer contained the statement “Iluka have refused the CMFEU request to bargain in Good Faith”. The flyer complained about Iluka’s conduct in this regard and about the terms of the agreement which Iluka was proposing that the employees accept.

8    On 14 November 2011, the first respondent published a second flyer, entitled “What’s the Rush Iluka?”. This flyer made further comments upon the terms of the proposed agreement and said that there were “very few benefits to employees under their proposed agreement that will change current arrangements anyway” and also that a “a vote in support of the agreement rewards Iluka for refusing to bargain in good faith”.

9    On 16 November 2011, Commissioner Williams of Fair Work Australia handed down the decision. Commissioner Williams found that the applicant’s refusal to continue bargaining following the tied vote, was not a breach of its good faith bargaining requirements under s 228 of the Fair Work Act.

10    On 18 November 2011, the first respondent published a third flyer, entitled “Notice to all Iluka Employees Re: Collective Agreement”. The third paragraph of the flyer referred to its invitation to Iluka to embark upon a good faith bargaining process and then went on to state “This was rejected by Iluka who were/are determined to impose the inferior agreement on employees”.

11    Each of the three flyers stated that it was authorised by Mr Gary Wood.

12    Iluka contended that in publishing the impugned statements in the three flyers, the respondents knowingly made false or misleading representations in contravention of s 345 of the Fair Work Act.

13    Section 345 of the Fair Work Act provides:

(1)    A person must not knowingly or recklessly make a false or misleading representation about:

(a)    the workplace rights of another person; or

(b)    the exercise, or the effect of the exercise, of a workplace right by another person.

(2)    Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it.

14    In its application for interlocutory relief, Iluka seeks to restrain the respondents, the CFMEU and Mr Gary Wood, who are bargaining representatives of some of the affected employees, from continuing to publish the impugned statements contained in the three flyers, and, also, seeks orders that the respondents forthwith remove the flyers from display and publish a corrective statement. Iluka relies upon the powers of the Court in s 545(1) and s 545(2)(a) of the Fair Work Act. Those subsections provide as follows:

(1)    The Federal Court or the Federal Magistrates Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.

(2)    Without limiting subsection (1), orders the Federal Court or Federal Magistrates Court may make including the following:

(a)    an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention…

15    The second application for an urgent interlocutory injunction is brought by way of an oral application by the respondents, who, as I have said, are bargaining representatives for some of the Iluka employees. The respondents seek an urgent interlocutory injunction stopping the conduct of the second ballot which is currently underway. The respondents contend that the Fair Work Act does not provide for a second ballot to be undertaken in circumstances where the first ballot is inconclusive. It is their contention that in the circumstances of an inconclusive ballot for the making of an enterprise agreement, the bargaining process should recommence. The respondents have undertaken to file a cross-claim seeking a declaration as to the proper construction of the Fair Work Act and an injunction.

iluka’s application

16    I deal first with Iluka’s application for urgent interlocutory relief.

17    Iluka contended that an interlocutory injunction should be granted because it has a strong case that the respondents have contravened s 345 of the Fair Work Act. Iluka also contended that the balance of convenience favours the grant of the interlocutory injunction.

18    As mentioned, the relief which Iluka seeks at this hearing, is for a mandatory injunction in the sense of requiring the respondents forthwith to remove the flyers and to publish a corrective statement. This relief also comprises relief in the nature of final relief. Accordingly, for Iluka to succeed, it is necessary for Iluka to demonstrate that it has strong prospects of success at trial.

19    The main focus of Iluka’s contention in support of its claim that the respondents knowingly or recklessly made false or misleading representations, is the finding by Fair Work Australia that, in all the circumstances, Iluka’s decision to put the enterprise agreement to a second vote, was not in breach of the good faith bargaining requirements.

20    I do not accept that Iluka has demonstrated a strong case. I do accept, however, that Iluka has demonstrated an arguable case.

21    The reason why I do not accept that Iluka has demonstrated a strong case is that, in my view, there are a number of obstacles which Iluka will face, at trial, in demonstrating that the respondents knowingly or recklessly made false or misleading representations in contravention of s 345 of the Fair Work Act.

22    First, there is a question as to the extent to which statements of the kind of which Iluka complains, fall within the ambit of s 345 of the Fair Work Act. In my view, there is a serious question to be determined at trial, whether the impugned statements are to be characterised as statements of fact readily capable of assessment as representations which are false or misleading, or as comment or argument, less readily susceptible of such assessment. For example, Iluka complained of this statement in the third flyer “This was rejected by Iluka who were/are determined to impose the inferior agreement on employees”. Iluka complained that it was not determined to “impose” an agreement on the employees, nor was the agreement “inferior”. In my view, it is likely that, at trial, there will be debate as to whether the words are anything more than comment, perhaps hyperbolically, but, nevertheless, lawfully made, as part of a robust ballot campaign. It is, of course, not possible for Iluka to “impose” an enterprise agreement, inferior or otherwise, on the employees in this context, because the agreement will only be made if the majority of the employees agree to it. This much is obvious. Accordingly, it is, in my view, highly questionable whether such a statement could comprise a “false or misleading representation” for the purposes of s 345. Likewise, at trial, the question will arise of whether the statement that the agreement was “inferior” was a statement of fact, or alternatively of comment or argument and, if the latter, how the Court is to assess whether that statement is, or is capable of being, a false or misleading representation knowingly or recklessly made, for the purposes of s 345 of the Fair Work Act. I was advised by senior counsel for Iluka that there were no decided cases on this provision.

23    Further, there is likely to be debate, at trial, as to whether the factual statement in the first flyer “Iluka have refused the CMFEU request to bargain in Good Faith”, is false or misleading. This is because, it is common cause that Iluka did decline the first respondent’s request to recommence the bargaining phase after the tied vote. On one view of the facts, that bargaining phase may be referred to as the “bargaining in good faith” phase. On that view, the statement would not appear to be false.

24    Secondly, even if it were to be found, at trial, that one or more of the impugned statements was a factual statement, that Iluka did not bargain in good faith, and that, in light of the finding of Fair Work Australia referred to above, such a statement was a “false or misleading representation”, there is still the question of whether the respondents are likely to be found to have had the mental element necessary to have contravened s 345 of the Fair Work Act. An obstacle that Iluka will have to overcome, is that two of the flyers were published before the publication of the decision of Fair Work Australia.

25    Accordingly, I do not accept that Iluka has demonstrated that it has a sufficiently strong prospect of success for it to be granted, before trial, an interlocutory injunction which, in effect, gives final relief.

26    However, in any event, in my view, the balance of convenience also does not favour the grant of the interlocutory injunction sought by Iluka.

27    First, this application was brought on an urgent basis because the ballot period is due to expire on 29 November 2011. However, a substantial number of the employees have already cast their votes. In fact, more employees have already voted, than those who have not. Thus, it is not at all clear that the grant of the interlocutory injunction will serve any utility.

28    Secondly, I take into account that Iluka is able to, and has, distributed to its employees documents which respond to the impugned statements in the three flyers distributed by the respondents. Iluka did not include the documents that it had distributed to its employees in its evidence. However, I infer that the contents of the documents were addressed to answering the complaints as to the false or misleading nature of the impugned statements that Iluka made before the Court.

29    Thirdly, Iluka will not suffer irreparable loss if the interlocutory injunction sought is not granted. This is because it will be open to Iluka, if it succeeds at trial, to seek an order under s 545(1) of the Fair Work Act, setting aside the result of the ballot, if it transpires that the employees vote against the enterprise agreement. Further, insofar as Iluka asserts that it will suffer damage because the relationship of trust and confidence that it enjoys with its employees, will be destroyed if the interlocutory injunction is not granted, it will be open to the Court, at trial, under s 545, to award Iluka compensation, insofar as it is able to establish that allegation.

30    Finally, I also take into account the fact that the making of an order for the interlocutory injunction sought by Iluka, which requires that the respondents publish a corrective statement, will be prejudicial to the respondents because it will damage their standing in the eyes of the employees they represent, without the benefit of a full trial.

31    For these reasons, I dismiss Iluka’s application for interlocutory relief.

the respondents’ application

32    I, also, dismiss the respondents’ application on the grounds that the balance of convenience does not favour the grant of the interlocutory injunction they claim, either.

33    In my view, the respondents will not suffer irreparable harm if the interlocutory injunction terminating the second ballot, is not granted. This is because, the respondents will, in any event, have the opportunity to challenge the validity of the process undertaken leading up to the making of the enterprise agreement, after the result of the ballot is known, and, assuming a vote in favour of the agreement, before Iluka registers the agreement with Fair Work Australia.

34    Accordingly, both applications for interlocutory injunctions, are dismissed.

Associate:

Dated:    14 December 2011