FEDERAL COURT OF AUSTRALIA

Communication, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Stanwell Corporation Ltd (No 2) [2014] FCA 593

THE COURT ORDERS THAT:

1.    The following paragraphs of the applicants’ statement of claim be struck out:

(a)    paragraphs 19-23;

(b)    paragraph 24, to the extent that it relates to an alleged contravention of clause 2.11 of the Tarong Power Stations Enterprise Agreement 2012; and

(c)    paragraph 25, to the extent that it relies on the allegation pleaded in paragraph 23.

2.    The matter be listed for directions at a date to be fixed.

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

REASONS FOR JUDGMENT

1    This is an interlocutory application brought by the respondent to the substantive proceedings (“the respondent”) seeking orders from the Court to strike out certain paragraphs of the statement of claim filed by the applicant on 18 March 2014.

2    The background facts to this interlocutory application are set out in some detail in the judgment in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Stanwell Corporation [2014] FCA 89. The respondent takes issue with paragraphs 19-25 of the applicants’ statement of claim, in that it seeks the following orders:

    that paragraphs 19-23 be struck out;

    that paragraph 24, to the extent that it relates to an alleged contravention of clause 2.11 of the Tarong Power Stations Enterprise Agreement 2012, be struck out; and

    that paragraph 25, to the extent that that it relies on the allegation pleaded in paragraph 23, be struck out.

3    At the hearing Mr Murdoch for the respondent submitted, in substance, that the interlocutory application rests on the view taken by the Court of paragraphs 19 and 20, as paragraphs 21-25 are dependent on those paragraphs. Mr Friend SC for the applicant did not demur from this submission.

4    It appears from the material before the Court that the applicants have particularised a number of these paragraphs in response to a request for further and better particulars from the respondent. Read together with these further and better particulars provided by the applicants, paragraphs 19-25 of the statement of claim can be read as follows:

19.    At present there are insufficient staff employed at Tarong to perform the work to bring units 4 and 2 online.

Further and better particulars provided by the applicant in respect of paragraph 19 were as follows:

[4] a.    Contractors are currently being utilized by the Respondent to return unit 4 to service;

b.    Because a significant number of additional staff were required to operate units 2 and 4 previously, additional staff will also be required to operate them when they are made operational;

c.    Further particulars may be provided following discovery.

20.    Further, the present staffing levels at Tarong are not sufficient to maintain and operate units 4 and 2 into the future once they are brought online.

Particulars

The respondent had previously employed 130 additional staff to operate those units.

21.    By reason of the matters alleged in paragraphs 15 to 20 the Respondent’s decision to bring back into service units 2 and 4 at Tarong will or is likely to result in

a)    Major change to the composition, operation or size of the respondent’s workforce at Tarong or the skills required of employees;

b)    The alteration of hours of work;

c)    The need to retrain employees;

d)    The restructuring of jobs

Further and better particulars provided by the applicant in respect of paragraph 21 were as follows:

[6]    …

b.    contractors are currently engaged by the Respondent for the purpose of returning unit 4 to service;

c.    The composition and operation of the workforce at Tarong has been affected by the engagement of contractors;

d.    Further particulars may be provided following discovery.

[7] a.    the applicants refer to paragraphs 15 to 20 of the statement of claim and the particulars thereto;

b.    to the extent that the request seeks details in respect of individual employees it is not a proper request for particulars because no such information is necessary to determine whether a change will have a significant effect on “the employee” under the Enterprise Agreement.

22.    By reason of the matters alleged in paragraphs 14 to 21 the Respondent was required to consult with the Applicants and its employees in respect of any preliminary decision to bring the Tarong units 2 and 4 back in to service.

23.    In breach of clause 2.11 of the Tarong Agreement the Respondent has failed and refused to consult with the Applicants or its employees in respect of its decision.

24.    By reason of the contraventions of clauses 2.11 of the Swanbank Agreement and 2.11 of the Tarong Agreement employees of the Respondent at Swanbank and Tarong have permanently lost valuable rights to consultation in respect of the decisions referred to in paragraphs 10 and 15 above and have thereby suffered loss and damage.

Particulars

The employees have been unable to have input either individually or through their union to decisions which have a negative effect on them which may have been ameliorated had the employees been consulted as they were required to. The full extent of their loss has not been completed and further particulars will be provided prior to trial.

Further and better particulars provided by the applicant in respect of paragraph 24 were as follows:

[9] a.    the negative effects are those arising from the significant effects referred to above.

25.    By reason of the matters alleged in paragraphs 14 and 23 the Respondent has contravened s.50 of the FWA which provides that a person must not contravene a term of an enterprise agreement.

Contentions of the parties

5    The contentions of the parties in this proceeding are straightforward.

6    In summary, the respondent submits as follows:

    The applicants seek the imposition of civil penalties on the respondent for the alleged failure of the respondent to comply with its consultation obligations under clause 2.11 of the Tarong Power Stations Enterprise Agreement 2012.

    Paragraphs 19-25 fail to provide the respondent with sufficient material facts for it to understand the case which is being brought against it. They are vague, embarrassing and fail to disclose a reasonable cause of action.

    The applicants should be required to specifically plead how the respondent’s decision in relation to Tarong power station is likely to have a significant effect on Tarong employees, and the relevant class of employees.

    The particulars provided by the applicants in response to a request for further and better particulars by the respondent has failed to remedy the fundamental faults the respondent submits affect the pleadings.

7    The applicants contend that:

    The respondent knows the material facts upon which the applicants rely.

    The respondent was able to deal with the allegation in paragraph 20 in the affidavit of Dennis Franklin affirmed on 13 February 2014.

    As part of their case the applicants do not accept that Tarong can have two more generating units operating with the same staff and that the current staff are insufficient to bring those units back into operation. Paragraphs 19 and 20 are allegations of fact and the applicants have given particulars of the allegation.

    Paragraph 21 is a conclusion that is based on allegations of material fact in paragraphs 15-20. Those matters will (or are likely to) lead to the matters alleged or they will not.

    One needs only to look at the respondent’s defence at paragraphs 12-17 to see that it has a fair appreciation of the matters in issue.

    It is not to the point to say that the matters alleged in paragraphs 15-20 do not support the conclusion in paragraph 21. That is in fact a matter in dispute between the parties and one that falls to be determined in the trial.

Consideration

8    Materially, r 16.02(1) of the Federal Court Rules 2011 (Cth) provides:

A pleading must:

…

…

(c)    identify the issues that the party wants the Court to resolve; and

(d)    state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved

9    This rule reflects general principles explained by the High Court in such cases as Dare v Pulham (1982) 148 CLR 658 at 664 and Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279.

10    Failure of a party to comply with r 16.02(1) can result in an order being made by the Court to strike out offending pleadings, although the power to strike out should only be employed by the Court in a clear case (see authorities listed in Fair Work Ombudsman v Eastern Colour Pty Ltd (2011) 209 IR 263).

11    In this case I am satisfied that paragraphs 19 and 20 do not plead material facts, and that they should be struck out. I have formed this view for the following reasons.

12    First, and foremost, both paragraphs 19 and 20 plead that there are insufficient staff employed at Tarong to perform the work therein identified. “Sufficiency” or otherwise in this context is a conclusion in the nature of a value judgment (cf MZWAS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 924 at [25] and the discussion in Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International B.V. (No 2) [2012] FCA 23 at [35]). I consider that paragraphs 19 and 20 are merely assertions of the conclusions stated therein. It is not appropriate for a pleader to state conclusions drawn from unstated facts: Mobileworld Operating Pty Ltd v Telstra Corporation Limited [2005] FCA 292 at [25], Wright Rubber Products Pty Ltd v Bayer AG [2008] FCA 1510 at [5], Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd [2007] FCA 2024 at [42], Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International B.V. (No 2) at [35]. The further and better particulars provided by the applicant do not assist in clarifying paragraphs 19 and 20 – rather they simply restate the current workforce of 130 and make the assertion that because a significant number of additional staff were required to operate units 2 and 4 previously, additional staff will also be required to operate them when they are made operational.

13    Second, the only facts in the statement of claim of relevance to paragraphs 19 and 20 are those in paragraphs 5, 16, 17 and 18, which read:

15.    Further, on date presently unknown to the Applicants, but prior to 5 February 2014, the Respondent decided to return two megawatt generating units to service at the Tarong Power Station.

Particulars

The Respondent announced this by media release dated 5 February 2012. The two units to be returned to service were units 4 and 2.

16.    Generating units 4 and 2 at Tarong had been taken out of service in 2012 and 2013.

17.    During the taking out of service of units 4 and 2 the Tarong workforce was reduced by approximately 130 workers.

18.    The reactivation of units 4 and 2 at Tarong will require several months of works by persons who, if employed by the Respondent, would be eligible to be members of one of the Applicants.

Particulars

The work will require the use of persons trained as fitters, electricians, power workers, wickers and scaffolders, engineers and operational personnel.

14    At the hearing Mr Friend SC submitted that the employer should have no difficulty meeting the applicant’s case, and indeed the respondent has met it in its defence. In short, the applicant’s case is that there are not enough people at the Tarong power station to operate it, that everyone there is working to capacity because of the reductions, there are not enough people to operate the power station with the existing workforce, and this appears from the pleadings.

15    However I am not persuaded that paragraphs 15-18 adequately plead the facts upon which paragraphs 19 and 20 must rely. I note, for example, that these paragraphs do not plead Mr Friend’s submission that everyone at the power station is working to capacity. In my view the submissions of Counsel for the respondent are correct, in summary that the dearth of material facts in the pleadings potentially means that the applicant has a different conception of what is meant by “sufficient” staff to operate the power station from the understanding of the respondent as to “sufficient” staff. Paragraphs 15-18 cast no further light on facts underscoring paragraphs 19 and 20.

16    Third, I am not persuaded that simply because the respondent has provided a defence to the statement of claim and has previously put on evidence in relation to the workforce, that the respondent is clearly in a position to meet the statement of claim. Mr Murdoch submitted that the respondent had done the best that it could to construct a meaningful defence in the circumstances, but this did not excuse defects in the statement of claim. I agree.

17    Finally I note that the applicant is claiming a contravention of s 50 of the FW Act, which provides that a person must not contravene a term of an enterprise agreement. Section 50 is a civil penalty provision. As I observed in Eastern Colour, in light of the seriousness of the consequences to the respondents should the applicants substantiate their claims, it is incumbent upon the applicants to clearly plead the case the respondents are required to meet. In my view, they have not.

Conclusion

18    Not every conclusionary statement in a pleading needs to be struck out if particulars can be ordered to cure a deficiency: Australian Competition and Consumer Commission v Golden West Network Pty Ltd and Ors [1997] FCA 792, Mobileworld Operating Pty Ltd v Telstra Corporation Limited at [19]. In this case further particulars have already been provided in relation to paragraphs 19 and 20, and those particulars have not cured the deficiency in those paragraphs. In my view they should be struck out.

19    In the circumstances it follows that paragraphs 21-25 should also be struck out to the extent that they rely upon paragraphs 19 and 20.

Associate:

Dated:    5 June 2014