FEDERAL COURT OF AUSTRALIA

BHP Billiton Minerals Pty Ltd v Maritime Union of Australia [2014] FCA 1357

THE COURT ORDERS THAT:

1.    Judgment is entered for the applicant.

2.    The respondents pay to the applicant damages in the amount of $1,000,000 as provided in Order 7.

3.    A penalty of $25,000 is imposed pursuant to s 546 of the FW Act on the first respondent in respect of its contravention of s 417 of the FW Act on 9 March 2012.

4.    A penalty of $5,000 is imposed pursuant to s 546 of the FW Act on the second respondent in respect of his contravention of s 417 of the FW Act on 9 March 2012.

5.    The penalties in Orders 3 and 4 are payable to the applicant forthwith.

6.    Each of:

(a)    the first respondent, whether by itself, its officers, officials, shop stewards, delegates, employees, agents or otherwise; and

(b)    the second respondent,

is hereby restrained from:

(c)    engaging in any industrial action; or

(d)    being involved in any industrial action,

for a period of 6 years from the date of this Order on, in connection with or which affects:

(e)    tug operations at the Port of Port Hedland; or

(f)    any of the applicant’s operations at the Port of Port Hedland; or

(g)    any future construction or expansion of infrastructure at the Port of Port Hedland by the applicant or a related body corporate of the applicant.

7.    The amount in Order 2 is payable to the applicant immediately upon either or both of the respondents being found by a court of competent jurisdiction to have contravened any of the restraints in Order 6.

8.    In these Orders, the following terms have the following meanings:

(a)    “FW Act” means the Fair Work Act 2009 (Cth) as amended from time to time and any successor legislation;

(b)    “industrial action” has the meaning given in s 19 of the FW Act but does not include protected industrial action;

(c)    “involved in” has the meaning given in s 550(2) of the FW Act;

(d)    “protected industrial action” has the meaning given in s 408 of the FW Act;

and

(e)    “related body corporate” has the meaning given in s 50 of the Corporations Act 2001 (Cth) as amended from time to time and any successor legislation.

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

REASONS FOR JUDGMENT

Introduction

1    On 9 March 2012, at about 9 am, seamen employed as general purpose hands on tugs at Port Hedland in Western Australia went on strike. The strike lasted only four hours, until about 1 pm, but the commercial consequence for the applicant was at least loss and damage of approximately $3 million.

2    The applicant commenced proceedings in the Supreme Court of Western Australia against the respondents, claiming that they were both responsible for the strike taking place.

3    The proceedings were transferred to this Court with the consent of the parties. They were listed for hearing on questions of liability on 3 and 4 December 2014. Shortly before the hearing, the parties reached agreement on all issues. Nevertheless, some aspects of the settlement require consideration by the Court. This judgment deals with the orders which should, in the circumstances, be made.

The parties

4    The applicant mines iron ore in the Pilbara region of Western Australia, transports it to Port Hedland and ships it for export. It holds a service provider’s licence from the Port Hedland Port Authority to provide towage services for its own business and to other port users.

5    To provide those towage services the applicant engaged Teekay Marine Pty Ltd (“Teekay Marine”) to provide berthing and unberthing services to vessels at the port using tugs. Teekay Marine engaged Teekay (Shipping) Australia Pty Ltd (Teekay Shipping) to provide employees on the tugs, including general purpose hands.

6    General purpose hands are eligible to be members of the first respondent, which is an organisation of employees registered as such under the Fair Work (Registered Organisations) Act 2009 (Cth).

7    The second respondent is the Assistant Branch Secretary of the Western Australian Branch of the first respondent.

The industrial arrangements

8    The general purpose hands employed by Teekay Shipping on the tugs at Port Hedland are covered by the Teekay Shipping (Australia) Pty Ltd / MUA Port Hedland Towage Operations General Purpose Hands Fair Work Agreement 2010, which is an enterprise agreement within the meaning of the Fair Work Act 2009 (Cth) (“the FW Act”). The enterprise agreement was approved by Fair Work Australia on 22 September 2010, commenced operation on 29 September 2010 and had a nominal expiry date of 31 March 2014.

9    Section 417 of the FW Act prohibits taking or organising industrial action (other than “protected” industrial action) during the nominal life of an enterprise agreement. Penalties may be imposed for unlawful industrial action. Injunctions may be granted. Compensation may be ordered (see also FW Act, s 545).

The proceedings

10    As ultimately pursued in this Court, by a second further re-amended statement of claim filed on 20 June 2014, the applicant sought against the respondents:

    civil penalties for breach of provisions of the FW Act;

    compensation to remedy the effects of contravention of the FW Act;

    damages for procuring a breach of contractual relations between the applicant and others;

    damages for the tort of interference with contractual relations by unlawful means;

    injunctions against the first and second respondents restraining future unprotected industrial action;

    interest on various amounts of damages claimed;

    costs.

11    Until late on 1 December 2014, the proceedings were defended. The parties have now agreed the facts and the terms of orders to be made, subject to approval of those orders by the Court.

The admissions

12    The respondents have admitted that the stoppage of work by the general purpose hands for four hours on 9 March 2012 constituted unlawful industrial action in contravention of s 417 of the FW Act and that:

26    … each of the Respondents deliberately organised, aided, abetted, counselled, procured and were knowingly concerned in the unlawful industrial action taken by the Teekay employees, in contravention of section 417 of the FW Act.

13    The parties have agreed that the second respondent organised a meeting of general purpose hands for the purpose of instituting a stoppage, that the second respondent told the general purpose hands not to carry out their duties and that, as a result, general purpose hands refused to work from about 9 am until about 1 pm, when the second respondent instructed them to reinstate their labour. The first respondent admitted responsibility for the conduct of the second respondent.

14    The parties agreed:

27    By reason of the unlawful industrial action taken by the Teekay employees, Teekay Marine was unable to perform the Services between around 9.00 am and around 1.00 pm.

28    By reason of the unlawful industrial action taken by the Teekay employees, and Teekay Marine’s inability to provide the Services, the Services were delayed and disrupted with the consequence that:

(a)    the Applicant’s Business was disrupted and interfered with in that:

(1)    the tugboats operated by the Teekay employees could not assist the vessel known as the “Guo May” to berth at the Port at the original scheduled time;

(2)    the Applicant could not load iron ore onto the Guo May at the original scheduled time; and

(3)    the Guo May could not depart from the Port at the original scheduled time;

and

(b)    the Applicant suffered loss and damage in the amount of approximately $3 million.

Background facts

15    The stoppage had its origins in a complaint made in December 2011 by an official of the first respondent about the conduct of a Teekay Shipping manager. The complaint alleged sexual harassment by the manager. On Saturday 3 March 2012 the second respondent sent an email to Teekay Shipping’s Director of Marine Human Resources informing him that the WA Branch Executive of the first respondent was due to meet in Port Hedland on Thursday of that week and delivered an ultimatum that the issue must be “fixed” before that or “we will fix it for you”. The stoppage occurred on Friday 9 March 2012. It may be inferred that the second respondent regarded the response by Teekay Shipping to be inadequate (if there was a response), and that the stoppage of work occurred in fulfilment of the threat made in the email on 3 March 2014.

16    The agreed facts do not disclose what position was later taken by any of the parties about the underlying issue which appears to have been the immediate reason for the stoppage.

The proposed orders

Civil penalties

17    Penalties for contravention of s 417 are fixed by the FW Act. The parties propose that the respondents should each pay a penalty fixed at the maximum permissible penalty. Those penalties are not substantial by comparison with the damage which the parties agree was occasioned to the applicant. The proposed penalties are $33,000 and $6,600 respectively.

18    It should be noted that the present proceedings are not brought by Teekay Shipping, the employer of the general purpose hands. The proceedings were commenced by an entity twice removed, contractually, from Teekay Shipping.

19    The parties agreed that the applicant was a “person affected” by the breach of s 417 of the FW Act and hence had standing to commence proceedings for a civil penalty (see FW Act, s 539(2)). There was no evidence, however, that the unlawful industrial action represented by the stoppage was directed at the applicant, rather than Teekay Shipping. So far as the agreed facts disclose, the stoppage arose from a sense of grievance within the first respondent that Teekay Shipping’s investigation into the allegations against one of its managers had been inadequate.

20    Normally, imposition by a Court of the maximum penalty prescribed by a statute for particular conduct is reserved for a “worst possible case”. Notwithstanding the agreement of the parties in the present case that the maximum penalty should be imposed on each of the first and second respondents, I do not see this four hour stoppage arising from a particular grievance about Teekay Shipping’s handling of allegations of sexual harassment against one of its managers as a worst possible case of unlawful industrial action.

21    On the basis of the agreed facts alone, and in the absence of any evidence of some more aggravating circumstance than the agreed facts disclose, I would not be prepared to impose the maximum penalty prescribed by the FW Act on either the first or the second respondent.

22    However, the applicant also relied upon the contention that:

each of the Respondents has previously contravened the FW Act and has had penalties imposed on it and him.

23    Although there was no specific evidence, or agreement, directed to this contention it was not disputed. I accept that some weight should be given to it.

24    Finally, I take into account the following admission made by the respondents in their written submissions:

12.    The First Respondent and the Second Respondent admit that the appropriate level of the quantum of penalties is the maximum provided by the provisions of the FW Act and that these penalties are proportionate to the contraventions, as admitted in paragraph 34(b) of the Statement of Agreed Facts.

25    This admission may convey an acceptance by the respondents that their (undisclosed) motivation and conduct do truly warrant characterisation of the admitted offence as one falling within the category of a worst possible offence, or it may simply reflect the fact that the penalties imposed by the statute are not so significant that a few thousand dollars either way will matter very much.

26    Ultimately, as the parties accept, assessment of the proper penalties is a matter for the Court on the evidence before it, whatever the parties may have agreed (see NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 (“NW Frozen Foods”), Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 (“Mobil Oil”)). For the reasons I gave in Deputy Commissioner of Taxation (Superannuation) v Graham Family Superannuation Pty Limited [2014] FCA 1101 at [3]-[15], I regard NW Frozen Foods and Mobil Oil to be binding on me and I do not propose to act on the criticism of those authorities which appears in Australian Securities and Investments Commission v Ingleby (2013) 275 FLR 171.

27    On the evidence which the parties have put before the Court, I do not accept that the circumstances of the four hour stoppage on 9 March 2012 represent a worse possible case. I see no reason to burden the parties with a requirement to supplement the evidence they have chosen to present.

28    Taking into account the matters I have mentioned, and all the various indicia and guides referred to by the parties in their written submissions (which it is not necessary to separately discuss) I assess the penalties to be imposed on the first and second respondents at $25,000 and $5,000 respectively.

29    I appreciate that the penalties thus assessed seem small (even trifling) when compared with the agreed commercial consequences of the stoppage, but that is not the test to be applied.

Injunctions

30    The parties have agreed upon the terms of injunctions which will restrain the first and second respondents. The proposed restraint is in the following terms:

6.    Each of:

(a)    the first respondent, whether by itself, its officers, officials, shop stewards, delegates, employees, agents or otherwise; and

(b)    the second respondent,

is hereby restrained from:

(c)    engaging in any industrial action; or

(d)    being involved in any industrial action,

for a period of 6 years from the date of this Order on, in connection with or which affects:

(e)    tug operations at the Port of Port Hedland; or

(f)    any of the applicant’s operations at the Port of Port Hedland; or

(g)    any future construction or expansion of infrastructure at the Port of Port Hedland by the applicant or a related body corporate of the applicant.

31    I am prepared to grant an injunction in the terms agreed. It appears to me to be sufficiently specific in its terms. Although it will add additional legal consequences to those imposed directly by the FW Act, that does not appear to me to be inappropriate in light of the circumstances of the present case and the overall terms of settlement.

Damages

32    The parties have agreed that:

7.    … immediately upon either or both of the respondents being found by a court of competent jurisdiction to have contravened any of the restraints in Order 6.

the respondents will:

2.    … pay to the applicant damages in the amount of $1,000,000 …

33    It is a matter for the parties how they resolve the question of civil damages sought by the applicant. Payment of the damages will arise in (but only in) the event of proven disobedience of the restraints in proposed Order 6. However, suspension of the payment of damages is independent of, and does not detract from, the terms and legal effect of the injunctions which the parties propose and of the civil penalties which I will order to be paid. I am therefore prepared to award damages in the amount proposed and to suspend its payment as agreed.

Final orders

34    For the reasons set out above, I will make orders in the terms agreed and proposed by the parties, save that civil penalties of $25,000 and $5,000 will be imposed on the first and second respondents, respectively, rather than $33,000 and $6,600.

Associate:

Dated:    12 December 2014