FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v Eco Recyclers Pty Ltd [2013] FCA 24

UPON THE APPLICANT BY ITS COUNSEL UNDERTAKING TO:

(a)    submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation (with or without variation) thereof;

(b)    pay the compensation referred to in (a) to the person there referred to.

AND Upon the Second Respondent by its Counsel undertaking that:

Until the hearing and determination of this application or further order, the second respondent by itself, its servants or agents, will refrain from refusing or threatening to refuse to engage or use the services of the first respondent because of any actual or perceived non-compliance of the Eco Agreement with any requirement of the Code or the Guidelines.

And upon the third respondent by its counsel undertaking that:

Until the hearing and determination of this application or further order the third respondent, by itself, its servants or agents, will refrain from requiring or inducing the second respondent to not engage or use the services of the first respondent because of any actual or perceived non-compliance of the Eco Agreement with any requirement of the Code or Guidelines.

The Court noting that the reference in the undertakings given by the second and third respondents to the ‘Eco Agreement’, the ‘Code’ and the ‘Guidelines’ are references to those documents referred to in paragraphs 2 and 18 of the reasons for judgment of his Honour Justice Bromberg dated 24 January 2013.

THE COURT ORDERS AS FOLLOWS:

1.    The parties have liberty to apply in relation to the applicant’s application for interlocutory relief on the giving of one working day’s written notice to all other parties.

2.    The hearing of the trial be expedited.

3.    The applicant file and serve a statement of claim by 1 February 2013.

4.    The first, second and third respondent file and serve their defences by 11 February 2013.

5.    The applicant file and serve any reply by 18 February 2013.

6.    The proceeding be adjourned to a directions hearing at 9:30am on 20 February 2013.

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

REASONS FOR JUDGMENT

1    Part 4 of Chapter 2 of the Fair Work Act 2009 (Cth) (“the Act”) provides for a scheme by which employees may collectively bargain with their employer for collective industrial agreements known as enterprise agreements. Once made, enterprise agreements which are approved by the fourth respondent (“the Commission”) are given legal effect by the Act. The Act also provides for enterprise agreements to be varied on application to and with the approval of the Commission.

2    The first respondent (“Eco”) operates a business in which it provides demolition, excavation, asbestos removal and recycling services. It employs some 40 employees, about 10 of whom are involved in the provision of demolition services in the building and construction industry. With its employees involved in building and construction work, Eco made an enterprise agreement called the “Eco Recyclers P/L T/AS Eco Group and the CFMEU Demolition Enterprise Agreement” (“the Eco Agreement”) which was approved by the Commission on 26 October 2012 and remains in operation. By force of the Act, both Eco and the employees covered by the Eco Agreement are legally bound to comply with it. The applicant (“CFMEU”) has members who are employed by Eco. It represented Eco’s employees in the industrial bargaining which led to the making of the Eco Agreement. That agreement also applies to the CFMEU so as to make the CFMEU legally bound to observe it.

3    Broadly speaking, the CFMEU complains that the third respondent (“the State of Victoria”) is applying pressure upon the second respondent (“McCorkell”), a large construction company, not to engage the services of Eco. The reason for that conduct is said to relate directly to the Eco Agreement and the non-conformity of its terms with a code of practice which the State of Victoria requires parties involved in public building and construction work in Victoria to observe.

4    The CFMEU contends that the pressure being applied by the State of Victoria and the resulting reluctance of McCorkell to engage Eco, is conduct which involves the taking of ‘adverse action’ against Eco and its employees in contravention of s 340(1) of the Act and is also conduct which involves ‘coercion’ of the kind prohibited by s 343(1) of the Act.

5    The CFMEU seeks that pending the trial of the proceeding, both the State of Victoria and McCorkell desist from engaging in that conduct. On the basis that the unlawful conduct of the State of Victoria and McCorkell has resulted in Eco making an application to the Commission for its approval to vary the Eco Agreement so that it complies with the State’s code of conduct, the CFMEU seeks orders which would prohibit such a variation.

6    The interlocutory orders sought by the CFMEU are as follows:

1.    Until the hearing and determination of this application or further order, Eco by itself, its servants or agents, is restrained from:

(a)    treating the proposed variations of the Eco Agreement contained in the variation application made by Eco in the Commission in matter number AG2012/14385 (“the Variation Application”) as valid or of any effect; and

(b)    taking any further step to seek approval from the Commission of the proposed variations of the Eco Agreement contained in the Variation Application.

2.    Until the hearing and determination of this application or further order, the Commission is restrained from approving the proposed variations to the Eco Agreement contained in the Variation Application.

3.    Until the hearing and determination of this application or further order, McCorkell by itself, its servants or agents, is restrained from refusing or threatening to refuse to engage Eco or make use of the services offered by Eco, because the employees of Eco have a workplace right, namely they are entitled to the benefit of a workplace instrument being the Eco Agreement.

4.    Until the hearing and determination of the application or further order, McCorkell by itself, its servants or agents, is restrained from refusing or threatening to refuse to engage Eco or make use of the services offered by Eco, with intent to coerce Eco and/or Eco’s employees, to exercise their workplace right to vary the Eco Agreement or to vary it in a particular way.

5.    Until the hearing and determination of the application or further order, the State of Victoria by itself, its servants or agents, is restrained from requiring or threatening to require McCorkell not to engage Eco or make use of the services offered by Eco, with intent to coerce Eco and/or Eco’s employees, to exercise their workplace right to vary the Eco Agreement or to vary it in a particular way.

RELEVANT LEGISLATIVE PROVISIONS

7    Relevantly to the ‘adverse action’ claim, s 340(1) of the Act provides that:

340(1) A person must not take adverse action against another person:

(a)    because the other person:

(i)    has a workplace right; or

(ii)    has, or has not, exercised a workplace right; or

(iii)    proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or

(b)    to prevent the exercise of a workplace right by the

other person.

8    Section 341(1) of the Act defines “workplace right”. It relevantly provides in paragraph (a) that:

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;

9    “Workplace instrument” is defined in s 12 as an instrument that is made under, or recognised by a workplace law, and that concerns the relationships between employers and employees.

10    “Adverse action” is defined in s 342 of the Act. Item 4 of the table in s 342(1) provides:

a person (the principal) proposing to enter into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor:

if the principal:

(a) refuses to engage the independent contractor; or

…

(c) refuses to make use of, or agree to make use of, services offered by the independent contractor;

11    “Independent contractor” is defined in s 12 of the Act as being “not confined to an individual”.

12    Section 342(2) provides that “threatening or organising to take action covered by the table in subsection (1)” is also ‘adverse action’.

13    Relevantly to the claims of ‘coercion’, s 343(1) provides that:

(1)    A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to:

(a)    exercise or not exercise, or propose to exercise or not exercise a workplace right; or

(b)    exercise or propose to exercise a workplace right in a particular way.

14    The definition of “workplace right” in s 341(1) includes in paragraph (b):

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

15    Section 341(2) defines “process or proceeding under a workplace law or workplace instrument” as including:

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

THE EVIDENCE

16    The CFMEU relied on an affidavit made by its industrial officer Raoul Wainwright. Eco relied upon an affidavit of its solicitor Timothy Lange. Neither the State of Victoria nor McCorkell tendered any evidence. The Commission did not appear and has filed a Submitting Notice.

17    The findings of fact which follow, including inferences drawn from the evidence, are made purely for the purpose of determining the application for interlocutory relief. It is best to commence by describing the nature and relevant content of the State of Victoria’s code of practice to which I earlier referred.

18    In about March 1999, the Victorian Government introduced what it called the “Code of Practice for the Building and Construction Industry” (“the Code”). The Code is not a legislative instrument of any kind. It is a document which sets out a range of policies, standards and expectations which the Victorian Government has adopted. Importantly for current purposes, the Code has, since 1 July 2012, operated in conjunction with guidelines made by the Victorian Government known as the “Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry” (“the Guidelines”).

19    The content of the Code and Guidelines including their introductory statements, identify that the Code and Guidelines have been formulated in furtherance of workplace and other industry reform objectives being pursued by the Victorian Government. Whilst many of the provisions of the Code and the Guidelines may be intended to provide value to the Victorian Government as a purchaser of building and construction services, the stated objectives have a wider purpose. In that respect, the Code and the Guidelines may be fairly characterised as a policy initiative of the Victorian Government to utilise its influence through its capital investment in building and construction projects to promote conduct by participants in the building and construction industry consistent with the Victorian Government’s policies, including its industrial relations policies.

20    The Code applies to all parties involved in “public construction” as defined in s 3 of the Project Development and Construction Management Act 1994 (Vic). The definition includes all building and construction work carried out for or on behalf of the Victorian Government and Victorian statutory authorities or statutory corporations. It is not necessary to detail the background to or content of the Code save to say that, relevantly, it adopts the industrial relations elements of a Commonwealth code known as the National Code of Practice for the Construction Industry (“the National Code”).

21    The industrial relations elements adopted from the National Code are in general and largely unspecific terms and of themselves are unlikely to have resulted in any suggestion that the Eco Agreement was non-compliant with the Code.

22    It is the Guidelines, which purport to assist in the achievement of the objectives of the Code including, in particular, the industrial relations objectives as adopted from the National Code, that have raised issues about whether the Eco Agreement is consistent with the Guidelines and thus the Code. The Guidelines are quite specific in their content and are accompanied by a document called “Model Tender and Contract Documentation” which sets out model clauses designed to be incorporated in contracts made with contractors.

23    The terms of the Guidelines make it clear that the State of Victoria requires compliance by contractors with both the terms of the Code and the terms of the Guidelines. Compliance is required not only of contractors directly involved in the provision of public building construction work but is also required of their related entities. Compliance is not confined to work performed by those contractors for public building and construction, but extends also to privately funded work undertaken by them.

24    A Construction Code Compliance Unit (“CCCU”) has been established in the Victorian Department of Treasury and Finance and has been given responsibility for monitoring compliance with the Code and the Guidelines.

25    The terms of both the Guidelines and the model clauses which accompany it show that, unless an exception is made, the State of Victoria intends to require contractors to contractually undertake to abide by the Code and the Guidelines when expressing interest in, tendering for and entering into a contract to perform public building and construction work. Contractors who obtain such work are required to ensure that any party with whom they contract to undertake public building and construction work, complies with the Code and Guidelines.

26    The Guidelines identify sanctions for non-compliance. Those sanctions include the reduction in tendering opportunities at either an agency or government-wide level for a party in breach. That may be done by the exclusion of the breaching party from tendering for government work above a certain monetary level or by the exclusion of the party for a specified period.

27    On 22 June 2012 the Victorian Premier held a press conference in relation to the Guidelines in which the Premier stated that:

If contractors wish to contract and tender into State Government projects in Victoria, they will have to comply with these guidelines. If contractors don’t comply with these guidelines, then they won’t be working on State Government projects …

28    On the same occasion, the Victorian Minister for Finance stated:

… as the Premier has indicated, that (sic) companies that wish to tender to undertake public sector construction work here, in Victoria, have to commit to comply with those guidelines. And, ultimately, if firms fail to do that, they face the sanction of being restricted or, indeed, ultimately totally excluded from future Victorian Government and public sector construction work.

29    I am satisfied, at least to the extent necessary for determining an interlocutory application such as this, that a sub-contractor such as Eco, would readily appreciate from the terms of the Code and the Guidelines and the supporting public statements made by the Victorian Government, that non-compliance by that person (including in relation to the terms of its industrial agreement) with the Code or Guidelines is highly likely to result in that person being excluded from tendering for and performing public building and construction work in Victoria. The evidence, including that tendered by Eco, makes it apparent that Eco has that understanding and has held it at least since early November 2012.

30    Some time prior to 8 November 2012, Eco was contacted by the CCCU and told that the Eco Agreement was not compliant with the Code. Eco was provided with a document which identified the alleged non-compliance in relation to eight matters dealt with by the Eco Agreement. The document identified the clauses in the Eco Agreement that were said to be non-compliant and by reference to clauses in the Guidelines, gave a short explanation as to the nature of the alleged non-compliance.

31    It is likely that the contact made by the CCCU arose in the context of McCorkell’s desire to utilise Eco as a demolition sub-contractor on a project (“the Circus Oz project”) which is partly funded by the State of Victoria. McCorkell had been contracted to refurbish a building at 35 Johnston Street Collingwood as the new premises for Circus Oz.

32    I am satisfied that on or shortly before 8 November 2012, McCorkell informed Eco that it was its preferred contractor for demolition work on the Circus Oz project, but that McCorkell could not engage Eco unless the Eco Agreement was made compliant with the Code and Guidelines. By its submissions, the State of Victoria accepted that its position in relation to the Eco Agreement meant that McCorkell’s engagement of Eco would contravene the Guidelines.

33    As a result of those communications from the CCCU and McCorkell and because of its concern that it would lose prospective work on the Circus Oz project, Eco contacted the CFMEU in an attempt to obtain its consent to a variation of the Eco Agreement which would rectify the non-compliance asserted by the State of Victoria. It is likely that by 20 November 2012, when Eco again contacted the CFMEU, Eco understood that there were wider ramifications for it if it were unable to achieve a variation of the Eco Agreement “that the CCCU will be happy with” (to utilise the words communicated by Eco to the CFMEU). The CFMEU was informed by Eco that it heavily relied upon Government work over the Christmas period and that it was imperative that “we get this issue resolved ASAP, so as to avoid significant job losses”.

34    The business of Eco is divided into two divisions – a demolition division and a recycling division. Some 80% of the products processed by the recycling division are supplied from the demolition work of the demolition division. Eco considers that the continued viability of the recycling division is likely to be jeopardised should Eco not be able to sustain the market demand for its recycled products. Over the last two years, approximately 60% of the demolition work undertaken by Eco’s demolition division was work that would have been covered by the Guidelines had those Guidelines applied in their current terms. That work was undertaken for some 12 principals including McCorkell. Based on Eco’s relationships and prior experience, I accept that if Eco were not prevented or restricted from doing so by reason of the perceived non-conformity of the Eco Agreement with the Code and Guidelines, it is reasonably likely that Eco would continue to obtain that demolition work from is traditional sources.

35    Eco’s attempts to convince the CFMEU to support a variation to the Eco Agreement were not successful. Without notice to the CFMEU, in early December 2012, Eco took steps to seek to have the Eco Agreement varied. Section 208 of the Act provides that an employer covered by an enterprise agreement may request its affected employees to approve a proposed variation by voting for it. On or about 6 December 2012, Eco provided affected employees with a memorandum setting out the proposed amendments to the Eco Agreement. The proposed amendments were also discussed with those employees prior to the vote conducted on 14 December 2012. By their vote, the employees unanimously approved the proposed variations. On or about 21 December 2012, Eco applied to the Commission for its approval of the proposed variations pursuant to s 211 of the Act. Eco’s application was listed to be heard before the Commission on 16 January 2013, the day immediately following the hearing of the CFMEU’s interlocutory application.

36    A comparison of the proposed variations with the clauses of the Eco Agreement which were brought to the attention of Eco by the CCCU, shows that each proposed variation is directed to addressing an issue of non-compliance raised by the CCCU. The proposed variations relate to provisions in the Eco Agreement requiring or allowing for consultation with the CFMEU; the conduct of inductions by the CFMEU; the employment of apprentices; and include provisions which would require that disputes using the dispute resolution mechanisms in the Eco Agreement are not resolved by measures inconsistent with the requirements of the Code and Guidelines.

37    I am satisfied that Eco has taken the steps it has to try and give effect to the proposed variations to the Eco Agreement because it fears that, unless the Eco Agreement is regarded by the CCCU as compliant with the Code and Guidelines, Eco will be denied access to work on the Circus Oz project and access to other work from McCorkell and other principal contractors engaged in public building and construction work. I am satisfied that Eco perceives that such a denial will seriously jeopardise its business and the jobs of its employees. I am further satisfied that Eco’s fear is based upon the terms of the Code and Guidelines and the communications relating to non-compliance made by the State of Victoria and McCorkell to which I have earlier referred.

38    I am also satisfied that the source, nature and extent of Eco’s fear (including as to the loss of employment for its employees) was communicated (at least in general terms) to those of Eco’s employees who participated in voting to approve the proposed variations. I am further satisfied that as a result of those communications, those employees became similarly fearful and consequently motivated to approve the proposed variations.

A SERIOUS ISSUE TO BE TRIED

39    In determining an application for interlocutory relief, the Court addresses two main inquiries. First, whether the applicant has made out a prima facie case in the sense that if the evidence remains as it is, there is a probability that at trial the applicant will be entitled to relief. That inquiry is often referred to in terms of whether a serious issue to be tried is established. The second inquiry addresses whether the inconvenience or injury which the applicant would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the respondent would suffer if an injunction were granted. That inquiry asks where the balance of conveniences lies. The principles at play are well known and are set out in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57.

40    Both the State of Victoria and McCorkell have conceded that on the evidence before the Court, a serious issue to be tried is established in relation to both the ‘adverse action’ and ‘coercion’ claims made by the CFMEU. Eco made no submissions on that issue. In my view, the concessions made by the State of Victoria and McCorkell were properly made. I need nevertheless to consider the strength of the prima facie case as “the balance of convenience may be affected by the Court’s perception or evaluation of the strength of the plaintiff’s case”: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 155 (Mason ACJ); Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 at 472 (Woodward J, with whom Sweeney J agreed).

41    I am satisfied that there is a serious issue to be tried that McCorkell has taken and threatens to take ‘adverse action’ against Eco and its employees involved in demolition work. The ‘adverse action’ concerned falls within the circumstances identified by Item 4 of s 342(1) of the Act. It is manifested by McCorkell’s refusal or threatened refusal to engage or make use of the services offered by Eco as an independent contractor. The refusal concerns the demolition services for the Circus Oz project. The Court was informed by both McCorkell and Eco, that the demolition work on the Circus Oz project has been all but completed. That occurred to the exclusion of Eco. The threatened refusal therefore concerns so much of the Circus Oz work as may remain as well as any further public building construction work in Victoria in relation to which McCorkell may require the services of a demolition sub-contractor.

42    Although the communication in evidence made by McCorkell to Eco related to the Circus Oz project, I am satisfied to the requisite standard that McCorkell threatens to exclude Eco from all Victorian public building construction work with which it is involved and to which the Code and Guidelines apply. The communication in relation to the Circus Oz project is indicative of an approach likely to be taken by McCorkell to all projects to which the Code and Guidelines apply. By reason of the continuing requirements of the Code and Guidelines and their application to McCorkell, McCorkell will be required to exclude Eco unless and until the Eco Agreement is Code compliant. McCorkell’s history of engaging Eco suggests that the threat to Eco (of being excluded from work it would otherwise have had a reasonable chance of obtaining) is real and not merely theoretical.

43    It is not only the fact of the existence of an industrial agreement but also the content of that agreement that may constitute a “workplace right” within the meaning of that expression in s 341(1) of the Act. As the CFMEU contended, the proper approach to the words “entitled to the benefit” in s 341(1)(a) is that they protect against conduct motivated by the fact that an industrial instrument or order applies to the person against whom ‘adverse action’ is taken, as well as where the motivation to engage in the ‘adverse action’ arises because of the content of the instrument or order: Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union (2001) 112 FCR 232 at [80] (Wilcox J); [123] – [131] (Merkel J); and [212] (Finkelstein J).

44    I am satisfied that McCorkell’s refusal or threatened refusal is or has been motivated by the content of the Eco Agreement. No evidence or submission to the contrary was called or made by McCorkell or the State of Victoria. In the absence of any evidence to the contrary, the content of the communication made by McCorkell to Eco on 8 November 2012 is sufficient to support that conclusion. In reaching that view I have taken into account that s 361(1) of the Act provides for a reverse onus. As a number of authorities have explained, the reverse onus of proof in relation to the prohibited reason is still to be taken into account in determining the strength of the prima facie case when the grant of an interlocutory injunction is being considered: Police Federation of Australia v Nixon (2008) 168 FCR 340 at [69] (Ryan J); Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2012] FCA 563 at [63] (Greenwood J); Construction, Forestry, Mining and Energy Union v Downer EDI Engineering Power Pty Ltd [2012] FCA 661 at [12] (Logan J); Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as The Australian Manufacturing Workers’ Union (AMWU) v McCain Foods (Aust) Pty Ltd [2012] FCA 1126 at [45] (Bromberg J).

45    I am satisfied that the prima facie case established in relation to the ‘adverse action’ claim has a good prospect of success at trial.

46    The State of Victoria conceded that if McCorkell’s conduct constituted a contravention of s 340(1), by reason of its conduct in formulating and enforcing the Code and Guidelines, the State of Victoria is a person involved in McCorkell’s conduct, within the meaning of s 550 of the Act. There is a strong prima facie case of accessorial liability against the State of Victoria in relation to the ‘adverse action’ claim.

47    Having reached the view that the CFMEU’s ‘adverse action’ claim is not weak and has a good prospect of success at trial, it is not necessary that I assess the strength of the CFMEU’s ‘coercion’ claim. As I have indicated, the existence of a prima facie case in relation to that claim has been properly conceded by both the State of Victoria and McCorkell. I can proceed to the second inquiry regarding balance of convenience on the basis that the CFMEU has established a prima facie case with a good prospect of success at trial.

BALANCE OF CONVENIENCE

48    The CFMEU’s members and other employees covered by the Eco Agreement may be subjected to inconvenience or injury in the absence of the Court granting interim relief. Their employment and their earning capacity is dependant upon a continuing demand for Eco’s demolition services. A refusal by McCorkell to utilise Eco’s services for Victorian public building and construction work may have a bearing upon the extent to which Eco’s employees will be required for work. The extent of any such harm between now and when the proceeding is finally determined is difficult to assess.

49    On the same basis, harm may be experienced by Eco itself. For the reasons I will explain however, Eco contends that there are better ways of avoiding any future harm to it and its employees than by granting the orders sought by the CFMEU.

50    Neither the State of Victoria nor McCorkell point to or rely upon any injury or inconvenience which may be occasioned upon them should the relief sought be granted. Both indicated a preparedness to give undertakings which mirrored the interlocutory orders sought directly against them by the CFMEU, so long as those orders were confined to the use of Eco’s services by McCorkell on the Circus Oz project. Those orders were therefore said to be unnecessary.

51    The main focus of the submission of the State of Victoria and McCorkell was on the orders sought which would prohibit or restrict the pursuance by Eco of its variation application before the Commission (proposed orders 1 and 2 as set out at [6]). Those parties contended that the Court should not interfere with that application. They say that the CFMEU has the capacity to raise the concerns raised in this proceeding by opposing the variation application. Any inconvenience which may be occasioned upon the CFMEU or its members may be dealt with in that forum. In that respect, they contend that whether Eco and those of its employees who voted to approve the proposed variations did so due to the ‘coercion’ applied by the State of Victoria and McCorkell, is a matter relevant to whether the variation has been “genuinely agreed to by the employees covered” by the Eco Agreement. That issue arises for consideration in the variation application because of the requirements of s 211(1)(a) in conjunction with s 186(2)(a) of the Act.

52    As to the CFMEU’s ‘adverse action’ claim, they contend that the Commission could take into account that claim in determining pursuant to s 211(1) of the Act whether, “there are serious public interest grounds for not approving the variation”. They say that there is no basis for the Court to interfere with the statutory scheme and that the Court should allow the Commission to perform its statutory functions.

53    Eco also contended that the Commission should not be precluded from dealing with its variation application. Eco perceives that the variation application provides it with its best chance of avoiding any harm as a consequence of the application to it of the Code and Guidelines. Whilst the orders sought by the CFMEU would have the effect of precluding harm being occasioned upon Eco in relation to services for McCorkell, Eco rightly contended that the orders sought are limited to Eco’s engagement by McCorkell and not other contractors. In contrast, if Eco’s application to the Commission succeeded, the prospect that other contractors may refuse to engage Eco by reason of the non-compliance of the Eco Agreement with the Code and Guidelines would likely evaporate.

54    The CFMEU contended in support of its proposed orders 1 and 2, that those orders were essential. The primary basis for that contention is that the orders are necessary in order for the Court to protect the effective exercise of its jurisdiction. In support of that submission the CFMEU relied on the following observation made in the judgment of the majority in Patrick Stevedores v Maritime Union of Australia (1998) 195 CLR 1 at [35]:

The general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders, at least against the parties to the proceeding against whom final relief might be granted, as are needed to ensure the effective exercise of the jurisdiction invoked (citing Tait v The Queen (1962) 108 CLR 620).

55    If the variation application were allowed to proceed and the Commission approved it, the CFMEU contended that the Court could well be left without the power to restore the Eco Agreement to its present state. That would leave the employees of Eco subject to terms and conditions which they were coerced into adopting and would allow the contraveners to retain the fruits of their contraventions. In the CFMEU’s contention, that would be a most unjust outcome which the grant of proposed orders 1 and 2 would avoid. Contrary to the submissions put by the other parties, the CFMEU contended that the variation application before the Commission was not an appropriate forum in which to resolve the CFMEU’s claims of ‘adverse action’ and ‘coercion’. Those matters should be answered by this Court in this application. Permitting the Commission to embark upon an exercise in which it will likely be called upon to make factual findings on the same or similar issues to those raised in this proceeding, is a recipe for embarrassment by reason of the potential for inconsistent findings. Additionally, if ultimately the Court determines that it does have the power to restore the Eco Agreement if it were varied by the Commission, complications and difficulties may arise including in the process of trying to unscramble a change which should never have been made. For all those reasons the CFMEU argued that ‘prevention is better than cure’.

56    The balancing exercise which the Court is required to address is complicated. I should begin my consideration by expressing my concern to make orders which minimise the potential harm to Eco and its employees. They are innocent parties caught in a large legal battle the scope of which appears to transcend this proceeding. There is another recently commenced proceeding before the Court which raises the same or similar legal issues about the Code and Guidelines and the extent to which the application of them by the State of Victoria may contravene the Act. The issues raised by this proceeding are significant, not only in terms of the legal questions they pose, but also in terms of the potential ramifications the answers to those questions are likely to have for a large number of participants in the Victorian building and construction industry. This is a proceeding which of itself and by reason of its potential impact generally, justifies early disposition by a speedy trial. Subject to hearing further from the parties, my disposition is to make orders (in due course) facilitating an early trial. The interlocutory orders I make are based on the presumption of an early trial and may need to be reconsidered should that presumption not eventuate.

57    The evidence suggests that Eco and its employees need an urgent and immediate remedy so as to avoid losing further work. Eco’s preference of obtaining such a remedy through its variation application seems to me to be misplaced. It has no application before the Commission for urgent interlocutory relief. The final hearing is unlikely to be determined quickly, including because of the prospect that the CFMEU will (as the State of Victoria and McCorkell say it can) oppose the application on the basis that there was no genuine agreement to the proposed variation by the employees and on the public interest ground that the variation is infected by unlawfulness. The prospect of Eco obtaining urgent or even early relief from the Commission does not appear to me to be likely.

58    The interlocutory orders the Court can make and which I intend to make have a capacity to provide Eco and its employees some protection immediately. Subject to hearing from the parties as to the form of the orders, I intend to make orders which have the effect of precluding McCorkell from refusing or threatening to refuse to engage or use the services of Eco because of any actual or perceived non-compliance of the Eco Agreement with the Code or Guidelines. Those orders will extend to all potential engagements of Eco by McCorkell and will not be limited to the Circus Oz project. As I have earlier stated, the prima facie case established by the CFMEU extends to include the threatened non-engagement of Eco across all public building and construction projects. Whilst on a prima facie basis, that threat is exemplified by McCorkell’s conduct in relation to the Circus Oz project, the prima facie case is not limited to that project. I will also make orders which will restrain the State of Victoria from requiring or inducing McCorkell to not engage or use the services of Eco because of any actual or perceived non-compliance of the Eco Agreement with the Code or Guidelines.

59    I accept that despite an early trial in this Court, Eco may nevertheless be faced, in the interim, with other contractors who, by reason of the application upon them of the Victorian Code and Guidelines, may refuse to engage Eco because of actual or perceived non-compliance. The scope of the orders sought by the CFMEU do not permit such circumstances being addressed at present. However all parties, including Eco, have liberty to apply to the Court should the need arise: Patrick Stevedores at [80]. Whether the extent of protection from potential harm to Eco and its employees should be extended can be urgently considered should such consideration become necessary.

60    I note in that regard that cl 1.3.3 of the Code envisages that circumstances may arise which call for exceptions to be made to the strict application of the Code. The fact that the legality of the State of Victoria’s application of the Code and the Guidelines upon Eco and its employees is a matter pending determination before the Court in which the State of Victoria has conceded that a prima facie case has been established, may well constitute the kind of circumstances envisaged by cl 1.3.3. If that was thought to be the case by the State of Victoria, the potential need for the Court to consider extending the scope for the interim relief granted will likely dissipate.

61    As to the orders sought by the CFMEU which would have the effect of precluding the variation application being considered by the Commission, I am not persuaded that those orders are necessary at this time.

62    In coming to that view, I have not accepted the respondents’ contention that the matters sought to be agitated by the CFMEU in this Court may conveniently be dealt with by the Commission in the variation application. Jurisdiction in relation to those causes of action is given to this Court and not to the Commission. Whilst a contravention of s 340(1) of the Act (‘adverse action’) may well be a ground of public interest relevant to the exercise of the Commission’s discretion under s 211(1), I very much doubt that the Commission would be prepared to engage with that issue whilst an early trial is pending before this Court. The notion that the Commission will attempt to second guess the outcome of this proceeding is unattractive. If it were persuaded down that course, the potential for embarrassment by reason of inconsistency is manifest. Similar, but perhaps not the same, observations may be made in relation to the Commission dealing with the issue of the genuine approval by employees of the variation application, whilst the CFMEU’s ‘coercion’ claim is pending in this Court.

63    I also take the view that neither the parties nor the resources of the Commonwealth ought to be vexed by the duplication of effort which may be involved in both the Court and the Commission grappling with related issues. Further, the prospect that the effect of any variation granted by the Commission may later need to be unscrambled, should the CFMEU succeed in this proceeding, also weights in favour of the Commission not proceeding with the variation application.

64    I presume, given the undertakings made to the Court by the parties at the conclusion of the hearing, that the variation application in the Commission is currently adjourned pending this judgment. Having considered these reasons for judgment, including the fact of an early trial, Eco may come to the view that the proceedings in the Commission should not be pursued. If Eco does pursue that proceeding, it may be expected (given its position in this Court) that the CFMEU will resist and seek an adjournment or stay. The Commission will need to consider that application. I assume it will do so with the benefit of these reasons for judgment. If the Commission comes to the view that it should proceed, I expect that it will give its reasons.

65    The need for comity between Courts and Tribunals and in particular between this Court and the Commission suggests two matters. First, that before finally determining whether an order should be made to preclude the Commission from proceeding, the Court should await any decision by the Commission that it will proceed and consider any reasons of the Commission for intending to do so. Second, if the Commission decides to proceed, the Commission will give the CFMEU an opportunity to approach the Court so that the Court can give further consideration to the orders sought by the CFMEU in the light of the Commission’s reasons.

66    For those reasons I do not consider it necessary that the CFMEU’s proposed orders 1 and 2 be made at this juncture.

67    For the sake of completeness, I should add that whilst the matter is not entirely free from doubt (and not appropriate for final determination here and now), the very wide power given by s 545(1) of the Act to “make any order the Court considers appropriate” including orders which “remedy the effects of a contravention” (s 545(2)(a)), is likely to include a power to make an order which would restore the Eco Agreement should it be varied by the Commission. In Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697 at [186], Katzmann J characterised s 545 as conferring “the broadest of discretions on the Court”. However, as the judgment of Gray J in Independent Education Union of Australia v Australian International Academy of Education Inc [2012] FCA 1512 shows, there are bound to be some limitations on the scope of the Court’s powers, despite the broadness of the language utilised (see at [17]). The fact that I consider the matter not entirely free from doubt, is somewhat supportive of the CFMEU’s position, but not substantially so.

68    It is preferable that orders made to restrain conduct are precise in identifying the conduct which is restrained. The form of orders proposed by the CFMEU by its proposed orders 1-3 suffers from the potential for ambiguity which arises when orders are drafted by reference to defined terms sourced from the legislative provisions relied upon to found the underlying cause of action. I have set out at [58] the content of the orders I have in mind to make. I will hear the parties as to the form of the orders that should be made and as to what directions the Court should make to facilitate the trial.

Associate:

Dated:    24 January 2013