FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v Mirage Industries Pty Ltd [2012] FCA 490

THE COURT ORDERS THAT:

1.    Until the determination of this application, or further order, the respondent, by itself, its servants or agents refrain from conducting the vote in relation to approval of the proposed agreement, which is MS-2 to the affidavit of Matthew Stewart affirmed on 10 May 2012.

2.    The parties participate in a mediation, such mediation to be concluded by 4.00pm on 24 May 2012 and which for avoidance of doubt may be attended, if necessary, by telephone.

3.    The further hearing of the matter be adjourned until 10:15am 5 June 2012.

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

REASONS FOR JUDGMENT

Introduction

1    On 10 May 2012, I made the orders set out above, for the reasons that follow.

2    On 10 May 2012, the applicant, the Construction, Forestry, Mining and Energy Union (“CFMEU”) by originating application filed on 9 May 2012, sought urgent interlocutory relief restraining the respondent, Mirage Industries Pty Ltd (“Mirage”) from conducting, until the hearing and determination of the originating application, a ballot of members of the CFMEU to vote on the approval of a proposed agreement which was scheduled for the following day (11 May 2012).

3    The interlocutory relief sought was as follows:

1.    An order that until the determination of this application, or further order, the Respondent, by itself, its servants or agents refrain from conducting the vote.

2.    An order that until the determination of this application, or further order the Respondent, by itself, its servants or agents refrain from in any way, directly or indirectly, treating the vote as a valid decision to approve the Agreement.

3.    An order that until the determination of this application, or further order, the Respondent, by itself, its servants or agents refrain from making application for approval of the Agreement in Fair Work Australia.

4.    Such further or other orders as to the Court seem appropriate.

4    The originating application seeks final relief as follows:

1.    A declaration that the Respondent, in contravention of s345 of the FW Act, knowingly or recklessly made a false or misleading representation about the exercise, or the effect of the exercise, of a workplace right of the employees of the Respondent, namely by representing that the Mirage Industries and CFMEU (Vic) On-Site Installers Enterprise Agreement 2012 (“the Agreement”) was:

a.    An agreement between the respondent and the applicant

b.    An agreement binding of the respondent and the applicant

2.    The imposition of penalties of the Respondent in respect of the contraventions referred to in paragraph 4 above.

3.    An order pursuant to s 543(3)(b) of the FW Act that any penalties be paid to the applicant.

4.    A declaration that the proposed vote for the approval of the Agreement which is to take place on 11 May 2012 ("the vote") is null and void and of no effect as an approval of the agreement.

5.    An order that the Respondent, by itself, its servants or agents refrain from in any way, directly or indirectly, treating the vote as a valid decision to approve the Agreement.

6.    An order that the Respondent, by itself, its servants or agents refrain from making application for approval of the Agreement in Fair Work Australia

7    An order that the Respondent, by itself, its servants or agents refrain from conducting the vote.

8.    Such further or other orders as to the Court seem appropriate.

5    The application was supported by:

(1)        the affidavit of Malcolm Smith, an organiser employed by the CFMEU, sworn on 9 May 2012; and

(2)        an outline of submissions dated 9 May 2012.

6    The application was opposed. The affidavit of Matthew Stewart (the chief executive officer of the Steel-line Group, which owns Mirage) affirmed on 10 May 2012, and written submissions dated 10 May 2012, were filed in opposition.

Background

7    The CFMEU is a registered organisation of employees within the Fair Work (Registered Organisations) Act 2009. Mirage is a manufacturing company which manufactures and installs doors for commercial and residential premises in Victoria, Queensland and Western Australia.

8    Mirage employs both workshop workers who work in its workshop and on-site installers. It employs members of the CFMEU.

9    For some years, Mirage and the CFMEU have operated under two industrial agreements relevant to its workshop workers and on-site installers respectively. An agreement covering the employees engaged in the workshop (“the Workshop Agreement”), by which the CFMEU is bound, was approved by Fair Work Australia on 22 December 2011.

10    The CFMEU and Mirage also have an enterprise agreement covering on-site installers, known as “Mirage Industry Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2008 – 2011”, which has a nominal expiry date of 31 March 2011 (“the existing On-Site Installers Agreement”).

11    The CFMEU is a bargaining representative under s 176 of the Fair Work Act 2009 (Cth) (“the Act”) for Mirage employees in negotiations to replace the existing On-Site Installers Agreement.

12    Mr Smith, who has been an organiser with the CFMEU for about 23 years, deposed that he is the organiser with primary responsibility for dealing with Mirage. He has dealt with Mirage’s representatives and worked closely with CFMEU members employed by Mirage for the last 21 years.

13    Messrs Smith and Stewart deposed to the history of negotiations between Mirage and the CFMEU to replace the existing On-Site Installers Agreement.

14    On 7 November 2011, Mr Smith first met, to negotiate a new agreement, with Mr Stewart, Tony (the Mirage representative), Mark (the shop steward) and Kylie Bowe from the Australian Industry Group. Mr Smith deposed that he advanced a log of claims, but no agreement was reached and a further meeting was scheduled. Mr Stewart deposed that Mirage nevertheless agreed to some of CFMEU’s claims in relation to certain entitlements (“the Incolink entitlements”).

15    On 13 December 2011, a further negotiation meeting took place between the above persons and Amanda Swayn, an industrial officer of the CFMEU, which Ms Bowe and Mr Stewart attended by telephone.

16    No agreement was reached. Mr Smith deposed that, the parties did not reach agreement about which award would underpin the new agreement. Mr Stewart deposed that there were also a number of other matters on which the parties did not agree at the meeting. Discussion was therefore to continue.

17    Mr Smith deposed that on 3 February 2012, he met members of the CFMEU who, when informed of the CFMEU’s position, were not satisfied with Mirage’s position and wished to pursue the CFMEU’s log of claims.

18    On 20 March 2012, Mr Smith again met representatives of Mirage, being Mr Stewart, Tony, Mark and a manager called Natasha Meredith. Amanda Swayn and Ms Bowe were also present by telephone.

19    According to Mr Smith, at the meeting on 20 March 2012, Ms Bowe stated that negotiations had reached a standstill. Mirage was not prepared to move on the award question and could not afford the increased superannuation and pay rates. Mr Smith deposed that although Mirage had not met a single one of the CFMEU’s log of claims, Ms Bowe said that Mirage would nevertheless pursue a three year agreement and put it to the workers. Mr Stewart challenged the assertion that Mirage had not met a single claim, as Incolink entitlements had been agreed.

20    Mr Stewart deposed that as negotiations were then at an impasse, he instructed Ms Bowe to draft a memorandum to employees updating them and stating that Mirage and the CFMEU had not reached an agreement. The memorandum exhibited to Mr Stewart’s affidavit headed “Enterprise Bargaining Update” is undated. It states that Mirage had been negotiating with the CFMEU for a number of months to reach an agreement to replace the existing On-Site Installers Agreement which had passed its nominal expiry date but under which Mirage could still lawfully operate. The memorandum stated that “negotiations have now come to an impasse and Mirage Industries simply cannot afford to agree to the CFMEU’s claims in these tough economic times”. The memorandum set out its offers on pay increases, superannuation, meal allowance, Incolink and overtime penalty rates. It stated that with the exception of Incolink, the CFMEU had advised that all of the above were not acceptable offers and it would not agree to an agreement in those terms.

21    The memorandum then stated:

[f]ollowing our last negotiation meeting with the CFMEU, Mirage Industries has decided to agree to the CFMEU’s claims for a 4 year agreement and to incorporate the old Award rather than the Modern Award into the Agreement. As noted above, Mirage Industries simply cannot afford to offer any other increases over what is listed above. To this end, we are currently finalising the Mirage Industries 2012 Enterprise Agreement and anticipate providing you with a copy … in the next week or so.

22    Mr Stewart did not depose, and there was no evidence to establish, that the above memorandum was ever provided to any employee and if so, on what date.

23    On 16 April 2012, Mr Smith and Ms Swayn received an email from Ms Bowe indicating that Mirage proposed to put an agreement incorporating the “National Building and Construction Award 2000” enforceable for a four year period (thus including two claims in the CFMEU’s log of claims on which the parties had been apart) to the workers in the coming weeks.

24    Mr Smith deposed that he did not respond to the email, but waited to see the foreshadowed proposed agreement.

25    Mr Smith deposed that on 3 May 2012, Mirage, through its employee, Mr Vivarelli, sent a letter to employees stating that it had been in negotiations for some months and was now at a stage where it intended to put a proposed agreement entitled “Mirage Industries and CFMEU (Vic) On-Site Installers Enterprise Agreement 2012” to a ballot to obtain the employees approval.

26    It was not disputed that the employees were advised that ballot papers for the vote would be issued on Friday, 11 May 2012 at 6.30am and the ballot would close at 5.00pm that day.

27    On 3 May 2012, Mr Smith inspected the proposed agreement to be put to the workers and Ms Swayn received a copy by email from Ms Bowe.

28    Mr Smith deposed that the proposed agreement is not an agreement between the CFMEU and Mirage, and that the CFMEU has never agreed to be a party to, or endorsed, the proposed agreement.

29    The proposed agreement nevertheless, in clause 2, under the heading “Parties Bound”, states:

2.1 The parties to this Agreement are:

…

(c) The Construction, Forestry, Mining and Energy Union, General and Construction Division, VIC Branch (“The Union”) subject to an application to FWA to be bound by the Agreement.

30    On 4 May 2012, Raoul Wainright, an industrial officer with the CFMEU, wrote to Ms Bowe and, under a subject heading “Misleading Representations”, stated that at no time has the CFMEU endorsed the relevant agreement. The letter sought that Ms Bowe immediately terminate the voting procedure that had commenced.

Whether interlocutory relief should be granted

31    The principles relevant to the grant of interlocutory relief were not in dispute. Briefly, they are as follows (see McDermott Australia Pty Ltd v Australian Workers’ Union [2011] FCA 303 at [24]):

(a)    whether there exists a prima facie case; in the sense that, if the evidence remains as it is, there is a probability that, at the trial of the action, the applicant will be held entitled to relief. It is to be recalled that the test does not require that the Court reach a determination that it will be more probable than not that the applicant for an injunction will succeed at trial but merely that there is a sufficient likelihood of success to justify in the circumstances the preservation of the status quo; and

(b)    whether the inconvenience or injury that an applicant would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury that the respondent would suffer if an injunction were granted.

(See Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; and CPSU, The Community and Public Sector Union v Commonwealth of Australia [2006] FCAFC 176).

Where there has been a breach of the legislation regulating industrial rights, slightly different principles may apply. As was said by Merkel J in Transfield Construction Pty Ltd v AFMEPKIU [2002] FCA 1413 at [28]:

[T]he traditional reluctance of the Court to make interlocutory mandatory orders, including ordering employees to return to work, may not apply to conduct which, prima facie, is in breach of the Act: see Amcor Packaging (Australia) Pty Ltd v Automotive, Food, Metals, Engineering and Kindred Industries Union [2002] FCA 127 ("Amcor Packaging") at [11]-[12].

Whether there is a serious question to be tried

32    Section 345 of the 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.

33    A workplace right is defined in s 341 of the Act as follows:

(1)    A person has a workplace right if the person:

(a)    is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or

(b)    is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or

(c)    is able to make a complaint or inquiry:

(i)    to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or

(ii)    if the person is an employee—in relation to his or her employment.

Meaning of process or proceedings under a workplace law or workplace instrument

(2)    Each of the following is a process or proceedings under a workplace law or workplace instrument:

(a)    a conference conducted or hearing held by FWA;

(b)    court proceedings under a workplace law or workplace instrument;

(c)    protected industrial action;

(d)    a protected action ballot;

(e)    making, varying or terminating an enterprise agreement;

(f)    appointing, or terminating the appointment of, a bargaining representative;

(g)    making or terminating an individual flexibility arrangement under a modern award or enterprise agreement;

(h)    agreeing to cash out paid annual leave or paid personal/carer’s leave;

(i)    making a request under Division 4 of Part 2-2 (which deals with requests for flexible working arrangements);

(j)    dispute settlement for which provision is made by, or under, a workplace law or workplace instrument;

(k)    any other process or proceedings under a workplace law or workplace instrument.

34    In the present case, the workplace right about which, or the exercise of which, it is alleged that Mirage had made misleading representations, is being able to participate in making, varying or terminating an enterprise agreement (pursuant to s 341(1)(b) and s 341(2) of the Act).

35    The CFMEU alleged that the inclusion of its name in the title of the proposed agreement (which was unnecessary for an effective agreement) represented that it was a party thereto. The statements in clause 2 also represented that the CFMEU was a party to, and bound by, the proposed agreement. Further, the inclusion of the CFMEU’s name in the title and clause 2 of the proposed agreement implicitly represented that the CFMEU approved of or endorsed it.

36    The CFMEU alleged that, such representations were false and misleading, because, as was common ground, the CFMEU was not a party to the proposed agreement, did not approve or endorse it, was not bound by it and would be so only if it exercised its option to apply to Fair Work Australia.

37    Mirage submitted that the CFMEU’s name had been included in the title to the proposed agreement throughout the course of the negotiations without complaint, and the Workshop Agreement (which also included the CFMEU’s name in the title) had also been put to employees for approval in that form prior to the CFMEU’s agreement (which was subsequently secured).

38    That submission, if correct, simply begs the question whether the inclusion of the CFMEU name and the impugned statements in the proposed agreement, to which it is not a party, and which the CFMEU does not endorse, is a misleading representation.

39    Mirage submitted that employees would be sufficiently conversant with industrial law to understand the meaning of the rider “subject to an application to FWA” in clause 2.1(c) of the proposed agreement. They would therefore comprehend that the CFMEU was neither a party nor bound, need not be bound unless it exercised the option to apply, and did not approve or endorse the proposed agreement. Mirage submitted that, in any event, the memorandum referred to above would have clarified the matter and negated any capacity to mislead.

40    In my opinion, however, it is probable that the inclusion of the CFMEU’s name in the title to the proposed agreement would indicate to an ordinary reader that the CFMEU was a party to the agreement. That construction would be reinforced by clause 2, which includes, under “parties bound” and the statement that “the parties to this Agreement are”, the CFMEU. The construction would not, in my opinion, be displaced by the rider in clause 2.1(c) concerning the application to Fair Work Australia, which would be more likely to prove cryptic than illuminating. The representation that the CFMEU is a party and bound, arguably at least, carries with it a representation that the CFMEU approved of or endorsed the proposed agreement, which was not the case.

41    While the memorandum to employees made plain that there were some outstanding issues on which Mirage and the CFMEU had not agreed, it then indicated that Mirage had conceded some issues and its tenor was consistent with the continuation of negotiations. Further, the memorandum was undated. Its effect therefore fell short of an unambiguous statement that the proposed agreement in final form was not agreed to by the CFMEU or that the CFMEU was not a party.

42    More fundamentally, there was no evidence that the memorandum was ever provided to any employees or that the employees were advised by any other means that the CFMEU was not party to, bound by, or approved of the proposed agreement.

43    While it would also be necessary to establish for the purposes of s 345 of the Act that the misrepresentations were knowing or reckless, in my opinion, the applicant established a serious question to be tried that the inclusions in the proposed agreement for which the ballot was scheduled amounted to misleading representations in contravention of s 345 of the Act.

Balance of convenience

44    While little material was adduced by either party in relation to the balance of convenience, on the basis of matters submitted, I concluded that it favoured the applicant.

45    As the applicant conceded, its position would not be irretrievable if the ballot proceeded on the following day, in the sense that it would have an opportunity to challenge the proposed agreement at the stage of the application to Fair Work Australia to approve it. The respondent submitted that if the ballot were enjoined, it would have to cancel that scheduled ballot and set in train a new ballot to vote upon an amended proposed agreement (removing the impugned features of the title and “parties bound” clause) with 7 days notice (s 180 of the Act). In such circumstances, the complications, distraction and detriment to the applicant, its members and indeed the respondent itself (should the applicant subsequently establish that the proposed agreement was invalid by reason of misrepresentation) outweighed the detriment that the respondent would suffer if the currently scheduled ballot were enjoined and the respondent ultimately successfully defended the allegations of misrepresentation.

46    The respondent submitted that it was concerned to conclude a new enterprise agreement promptly, in order to end the uncertainty, difficulties and loss associated with the expiry of the existing agreement. Those problems would not, however, be effectively addressed by the approval of a proposed agreement which raised a serious question to be tried of misleading representations and would be, almost inevitably, subject to further challenge.

Associate:

Dated:    14 May 2012