Wattyl Ltd v The Australian Liquor, Hospitality and Miscellaneous Workers Union [1995] IRCA 645

CATCHWORDS

INDUSTRIAL LAW - Application for INTERLOCUTORY INJUNCTION - certified agreement - Whether JURISDICTION to restrain proposed breach of AWARD - Scope of ss 418, 419 and 431 of Industrial Relations Act 1988

Industrial Relations Act 1988, ss 170pd, 170pg, 418, 419, 431.

Australasian Meat Industry Employees’ Union v Frugalis Pty Limited & Anor (1987) 14 FCR 535

Byrne & Frew v Australian Airlines Ltd (1995) 131 ALR 422

The Queen v Australian Teachers Union (No 2) (1993) 48 IR 109

Dunham v Randwick Imaging Pty Limited (1994) 1 IRCR 54

Medcraft v Federated Engine Drivers & Firemen’s Association of Australia (1984) 8 IR 211

Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150

WATTYL LTD

THE AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION

NI 95/4171

CORAM: MADGWICK J

PLACE: SYDNEY

DATE: 30 October 1995

IN THE INDUSTRIAL RELATIONS COURT

OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

No. NI 4171 of 1995

BETWEEN WATTYL LIMITED

Applicant

AND AUSTRALIAN LIQUOR, HOSPITALITY &

MISCELLANEOUS WORKERS UNION

Respondent

CORAM: MADGWICK J

PLACE: SYDNEY

DATE: 30 October 1995

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The application for interim injunction be refused.

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA

NEW SOUTH WALES

DISTRICT REGISTRY

No. NI95/4171 of 1995

BETWEEN WATTYL LIMITED & ORS

Applicant

AND THE AUSTRALIAN LIQUOR,

HOSPITALITY AND

MISCELLANEOUS

WORKERS UNION

Respondent

CORAM: MADGWICK J

PLACE: SYDNEY

DATE: 30 OCTOBER 1995

REASONS FOR JUDGMENT

MADGWICK J: In this case the applicants seek

“(1) a declaration that a bargaining period purportedly initiated by the respondent pursuant to section 170PD of the Industrial Relations Act 1988 (the Act) is invalid;

(2) a declaration that any industrial action taken by the respondent and/or its members against any of the applicants is not protected action as defined by section 170PG of the Act;

(3) an order [and an interim order] directing the respondent to take all steps necessary to ensure that its members employed by any of the applicants work and continue to work in accordance with their contracts of employment and the agreement certified by the Australian Industrial Relations Commission on 30 November 1994, being the Wattyl Limited, Pascol Paints Australia Pty Limited and Colors and Chemicals’ Enterprise Agreement 1994;

(4) damages; and

(5) costs.”

The matter before me was an application for interlocutory order in the terms set out in (3) above. I refused that interim relief on 30th October and reserved my reasons, which I now give. In short, my reason for declining to grant the interlocutory order is that the power to grant such relief is beyond the jurisdiction of the Court.

I. The Factual Background of the Present Matter

The applicant company owns and/or controls several other companies (“the subsidiary companies”) including WP Crowhurst Pty Limited (“Crowhurst”). Those other companies were party to an industrial dispute found to exist by the Australian Industrial Relations Commission in matter number C21100 of 1991 and involving the respondent organisation (“the Union”). Crowhurst was not a party to that industrial dispute. There were in existence at relevant times an award, which bound all the subsidiary companies and the Union, and two certified agreements which, between them, likewise bound all concerned. It may be possible to argue that those instruments impose an obligation on the Union generally not to permit cessation of work.

Each of the certified agreements contains a “Disputes Resolution Procedure” clause, the essence of which is the following:

“9.1 Other than a dispute on a genuine safety issue the parties are totally committed to the resolution of all disputes without any interruption to normal work.

9.2 Disputes shall be dealt with in the following manner as swiftly as circumstances permit:

...

a. If still unresolved [after discussions at various levels between representatives of the Union and the employer], the matter shall be referred to the Australian Industrial Relations Commission for determination.”

On 27 October 1995 the Union served a notice in the following terms upon the various subsidiary companies and the applicant, including Crowhurst:

“Re: Notice of Taking Industrial Action - National Redundancy Agreement

In accordance with s 170ph of the Industrial Relations Act 1988, I advised (sic) industrial action will commence on Tuesday 31 October 1995 at the rostered time for the commencement of the first shift on that day. The industrial action will take the form of stoppages of work up to and including stoppages of work for 72 hours, bands (sic) on the working of overtime, bands (sic) on the processing and despatching of finished product, and bands (sic) on the receipt of materials used in the making of paints, varnish and resins (?).”

There had been previous correspondence from the Union about this. The Union had on 23 October sent a “Notice of Initiation of Bargaining Period” in purported pursuance of s 170pd(2), Rule 30M and according to Form R8F, making the following points:

“That the Union was “involved in an industrial dispute found in C21100 of 1991 and is a party to the following award titled Australian Paint Industry Award 1992 in which Wattyl Australia Pty Limited is also involved.

It was said that the agreement that the Union wished to reach and have certified under Division 2 of Part VIB of the Act would concern “the single business and/or part of the single business” [being the Wattyl subsidiaries including Crowhurst].

The matters to be dealt with in the agreement relate to redundancy and in particular the [Union] seeks a national redundancy agreement covering all Wattyl Australia Pty Ltd operations including subsidiaries. The agreement will also provide for withdrawal of redundancy notices concerning the five persons purported to be made redundant by [Crowhurst] on 26 September 1995.”

The Statutory Framework

It may be useful to set out fairly fully what I conceive to be the relevant provisions of the Industrial Relations Act 1988.

Overall objects of the Act

Section 3 provides that:

“The principal object of the Act is to provide a framework for the prevention and settlement of industrial disputes which promotes the economic prosperity and welfare of the people of Australia by:

(a) encouraging and facilitating the making of agreements...to determine matters pertaining to the relationship between employers and employees, particularly at the workplace or enterprise level; and

(b) providing the means for:

(i) establishing and maintaining an effective framework for protecting wages and conditions of employment through awards; and

(ii) ensuring that labour standards meet Australia’s international obligations; and

(c) providing a framework of rights and responsibilities for the parties involved in industrial relations which encourages fair and effective bargaining and ensures that those parties abide by agreements between them; and

(d) enabling the Commission to prevent and settle industrial disputes [preferably by conciliation but, where necessary, by arbitration]

...”

Part VI - Dispute Prevention and Settlement (ss 88k - 167).

According to s 88a, the objects of the Part include, the following: to ensure that

“(c) awards are suited to the efficient performance of work according to the needs of particular industries and enterprises, while employees’ interests are also properly taken into account”

...

“(e) the Commission’s functions and powers in relation to making and varying awards are performed and exercised in a way that ...

(ii) encourages the prevention and settlement of industrial disputes by the making of agreements under Part VIb.”

The Part controls, among other things, the general functions of the Commission and its award-making processes.

Section 111(1)(e) enables the Commission to make or vary an award to include a provision making breaches of specified terms of the award subject to penalty as for a separate breach on each day the breach continues.

Under s 125, the power of the Commission to include a bans clause is exercisable only by a Presidential Member or a Full Bench. A bans clause is defined in s 4, in summary, as a term of an award which prohibits engaging in conduct that would hinder, prevent or discourage, among other things, the performance of work in accordance with the award unless such a term constitutes or forms part of the dispute-settling or prevention procedure specified in the award.

Division 8 (ss 164-7) of that Part is entitled “Exclusive Jurisdiction in Relation to Certain Proceedings”. Under s 164, an action under a law of a State or Territory does not lie against trade unions or their members in relation to secondary boycotts (which are dealt with by Division 7 of Part VI (ss 156 - 163Q)). Likewise, under s 166, such an action does not lie against an organisation or its members in relation to conduct that is in breach of a bans clause of an award.

Under s166A, a tortious action under the law of a State or Territory may not be brought against an organisation or its members in relation to conduct by them “in contemplation or furtherance of claims that are the subject of an industrial dispute” unless the Commission has certified in writing, among other things, that it would cause substantial injustice to a person who might wish to bring such action if the person were prevented from bringing that action while the Commission is exercising its conciliation powers in relation to the dispute.

Part VIb - Promoting Bargaining and Facilitating Agreements (ss 170la - 170rc)

Objects

Division 1 (ss 170LA-170LC) of this Part deals with the objects of the Part and matters of interpretation. Section 170LA(1) states the objects of the Part:

“(a) to facilitate:

(i) the making and certifying of agreements under Division 2 [this relates to “certified agreements”]; and

(ii) the making, and approval of the implementation of, agreements under Division 3 [“Enterprise Flexibility Agreements”]; and

(b) to encourage the use of agreements, particularly at the workplace or enterprise level.”

Under subsection (2) of the same section it is provided that the Commission must, as far as practicable, perform its functions under the Part in a way that furthers the objects of the Act including, in particular, the objects of the Part.

Sections that do not apply

Subsection (3) provides that s 90 of the Act (which enjoins the Commission normally to take into account the public interest and the likely effects on the national economy of any award or order the Commissioner is considering) does not apply to the Commission’s work under Part VIB.

Agreements

The general power of the Commission, (pursuant to s 113) to vary awards, is limited (s 170mk). The Commission can vary a certified agreement for various purposes by, for example, omitting or varying a bans clause or a term that authorises an employer to stand down an employee.

In order that an agreement settling an industrial dispute may be certified, among other matters designed to provide a safety net against exploitation of employees, the agreement must include “procedures for preventing and settling disputes between the persons bound by the agreement about matters arising under the agreement” (see s 170nc(1)(e)). Likewise, in relation to “enterprise flexibility agreements”, under s 170nc(e) they must, before they can have their implementation approved by the Commission, include similar dispute-settling procedures.

Immunity from Civil Liability

Division 4 (ss 170pa - 170pp) of Part VIB deals with immunity from civil liability. Section 170pa(1) provides that the object of the Division is “to give effect, in particular situations, to Australia’s international obligation to provide for a right to strike”. Subsection 2 continues:

“The Parliament considers that it is necessary to provide specific legislative protection for the right to strike, subject to limitations compatible with the existence of the right, in situations where:

(a) there exists an industrial dispute involving an employer and one or more organisations members of which:

(i) are employed by the employer to perform work in a single business, part of a single business or a single place of work [“single business” is defined in s 170lb]; and

(ii) are covered by an award; and

(b) the employer and one or more of those organisations are negotiating an agreement under Division 2.”

Pursuant to s 170pc, Division 4 applies if:

“(a) the Commission has found that an industrial dispute exists; and

(b) the dispute involves a particular employer and a particular organisation or organisations of employees; and

(i) are employed by that employer; and

(ii) are members of the relevant organisation or one of the organisations;

are regulated by one or more awards (as defined [elsewhere]) that bind the employer; and

(d) all or some of those employees are employed by the employer in a single business or a part of a single business or at a single place of work.”

For the purposes of s 170pc, and pursuant to the definition contained in s 170mc(6), “award” includes a State award but does not include either a certified agreement or an enterprise flexibility agreement.

Initiation of Bargaining Period

Section 170pd provides that either the employer or a relevant organisation may initiate a bargaining period for a proposed agreement under Division 2, (that is, a certified agreement). The bargaining period is initiated by giving written notice to the other proposed party or parties. Section 170pe requires the notice to be accompanied by particulars of various matters, including the single business etc to be covered by the proposed agreement, and the industrial dispute to which the proposed agreement relates. The bargaining period then begins at the expiration of seven days after the date, or the last if there were several dates, upon which the notice was given.

Protected action

Under s 170pg, during the bargaining period, industrial action (that is, bans or limitations upon the ordinary performance of work, etc - see s 4) by relevant employees, organisations or their officers, or lockouts by employers are, subject to the following provisions of the Division (see subs 7), protected. Section 170ph requires 72 hours notice of action to be given before industrial action takes place. Section 170pi requires that the organisation or employer, as the case may be, shall have before engaging in industrial action, tried to reach agreement with the other party. Each party must also have complied with any order of the Commission which might be made under s 170qk to ensure that negotiations are conducted in good faith and otherwise to facilitate the making of the agreement, including to refrain from taking specified action. Section 170pj requires that, if the Commission, under s 135, has ordered that a secret ballot of workers be taken, then before the action will be regarded unprotected, the ballot must have been taken and the industrial action approved therein.

Section 170pk requires that the industrial action before it is to be regarded as protected must be duly authorised on behalf of the organisation. However technical breaches in authorisation are excused. Under s 170pk(4) industrial action is taken to have been duly authorised under the rules of an organisation of employees unless the Court within a limited period declares that the industrial action was not duly authorised under those rules.

Section 170pl retracts the protection available during the bargaining period once an agreement is arrived at, unless an application to certify the agreement is made within 21 days.

Pursuant to s 170pm(3):

“...an action does not lie under any law (whether written or unwritten) in force in a State or Territory in respect of any industrial action that is protected action unless the industrial action has involved or is likely to involve:

(a) personal injury; or

(b) wilful or reckless destruction of, or damage to, property; or

The Commission may suspend or terminate a bargaining period under s 170po for lack of good faith, for public health and safety considerations or because of significant damage to an important part of the Australian economy.

Facilitating Part VIb Agreements

Division 5 (ss 170qa - 170qg) deals with the Commission’s role in facilitating Part VIb agreements. A separate Bargaining Division of the Commission is established. Conciliation in relation to proposed agreements is provided for.

Part VIII - Compliance (ss 177A - 187)

Division 1 (ss 177a - 180) is headed “Penalties and Other Remedies for Contravention of Awards and Orders”. Section 178 allows for the imposition of a penalty for the breach of an award. A breach of an award that is a certified agreement or enterprise flexibility agreement is subject to a higher penalty. Unlike other breaches of awards, a penalty for a breach of a bans clause is within the exclusive jurisdiction of this Court.

Division 2 (ss 181 - 186) entitled “Breaches of bans clauses” contemplates that there is to be compulsory notification of a likely breach of a bans clause to the Commission. A Presidential Member of a Commission is then to inquire into the matter and is to endeavour either to prevent, or bring to an early end, the breach. Where the Presidential Member is not satisfied that settlement in relation to the breach has been, or will promptly be, effected, the Presidential Member is to issue a certificate (see s 183). Under s 182 it is only if a certificate under the Division issues in relation to a breach of a bans clause that a proceeding for a penalty may be instituted under s 178. Sections 184 to 186 deal with other situations in which certificates might be given.

Division 3 (s 187) provides for the cancellation and suspension of awards and orders by a Full Bench of the Commission if, pursuant to s 187(4), it appears:

“(a) that an organisation has contravened this Act or an award or an order of the Commission; [or]

(b) that a substantial number of the members of an organisation refuse to accept employment either at all or in accordance with existing awards and orders; or

and the Full Bench may attach conditions and may cancel or suspend for such period as it considers appropriate the terms of an award or an order; all or any of the terms of an order may be cancelled or suspended.

Part XI - Offences (ss 299 - 340)

Under s 334a, a section the stated object of which is to give effect in certain respects to Australia’s international obligation to provide for a right to strike, it is an offence for an employer to dismiss an employee, injure an employee in his or her employment, or alter the position of an employee to the employee’s prejudice merely because the employee has engaged, or is proposing to engage, in industrial action in relation to an industrial dispute that has been notified to the Commission or that the Commission has found to exist.

Part XIV - Jurisdiction of the Court (ss 360 - 487)

Pursuant to s 412 the Court has jurisdiction with respect to matters arising under the Act in relation to which, among other things, applications may be made to it or actions may be brought in it under the Act, and “such other jurisdiction as is vested in it by this Act or other laws made by the Parliament”.

Section 418 requires the Court to grant in every matter before it:

“all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined ...”.

Section 419 provides:

“The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders ... as the court thinks appropriate”.

Section 430 grants the Court, so far as the Constitution permits, jurisdiction in respect of matters not otherwise within its jurisdiction but which are associated with matters in which the jurisdiction of the Court is invoked.

Section 430(1) provides:

“So far as the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked.”

Section 431 empowers the Court to “grant an injunction requiring a person not to contravene, or to cease contravening, this Act.” Pursuant to s 4, the expression “this Act” includes the regulations made under the Act, but there is no similar extension of its meaning to include awards made under the Act.

III. The argument that the Court has jurisdiction

The applicant contends that, among other things, Crowhurst is not a party to the particular industrial dispute referred to above, that the employees concerned are not employed by a single employer in a single business and that their wages and conditions of employment are not regulated by an award (as defined in subsection 170mc(6)), all of which are preconditions under s 170pc to the application of Division 4 of Part VIb - the “Immunity from Civil Liability” Division.

As I understand it, the argument that the Court would have power to make the two declarations sought as orders 1 and 2 in the amended application runs something like this. Section 170pk(4) contemplates, as indicated above, that the Court might make a declaration that industrial action which might be within the Division was not duly authorised under the rules of the organisation concerned. Section 170pk therefore assumes an underlying jurisdiction in the Court to pass generally by way of declaration upon the validity of proposed or actual action that is taken with a view to gaining, seeking or enjoying the protection of the said Division.

Alternatively, it is said that the Court could determine as a matter of interpretation of the agreement (see s 413), for example, whether one or both of the two certified agreements ousted the operation of the said award referred to therein; the Court would then have jurisdiction under s 412 with respect to the justiciable question said to be “a matter arising under the Act” whether the agreements did so oust the award. In consequence, the Court could make a declaration in relation to such a matter (see s 417) and, as that would be a “matter before it”, the Court could grant, pursuant to s 418, all remedies to which the applicant appeared to be entitled in respect of that claim properly brought forward in that matter, in terms that s 418 contemplates. Then the Court could, under s 419, make interlocutory orders, among others, of such other kinds as the Court thought appropriate and, specifically under s 431, might grant an injunction requiring the Union to cease contravening the Act by acting in purported pursuance, but actually not in pursuance at all, of the “Immunity from Civil Liability” Division of the Act.

It is a very large question whether the Court has any jurisdiction to make orders 1 and 2 as sought in the amended application. It is a larger question as to how order 3 or any interlocutory version of it might be regarded as interlocutory relief directed to such declarations as are contemplated by orders 1 and 2 as sought. It is also a large question whether order 3, if sought as a final order at an appropriate stage, could be properly regarded as within any power the Court might have to supplement a declaration by an injunction if the declaration should prove in due course to be an ineffective remedy; see The Queen v Australian Teachers Union (No 2) (1993) 48 IR 109 at 112-3.

For the sake of the present matter, I am prepared to assume that, somehow or other, some relief in the nature of orders 1 and 2 might be available. But, in the end, there is no getting away from the fact that, however the matter is framed, what the applicant is seeking is that an order be made directing the Union to take steps to ensure that its members work in accordance with the certified agreement referred to in order 3. In other words, it seeks that a proposed breach or contravention of, or non-compliance with, that certified agreement, (such being for general purposes an award of the Commission) be restrained by the Court.

The Course of Authority

(a) The legislative history

Matters relevant to the question before me were considered in two cases in the Federal Court in its then Industrial Division. The first was Australasian Meat Industry Employees Union v Frugalis Pty Limited & Anor (1986) 14 FCR 535. That case concerned s 122 of the Conciliation and Arbitration Act 1904 (Cth) (the “C & A Act”), the pre-cursor of the Industrial Relations Act 1988 (Cth), which was in the following terms:

“No person shall wilfully make default in compliance with any order or award”.

Section 109(1)(b) of the same Act provided:

“The Court is empowered to ...

(b) enjoin an organisation or person from committing or continuing a contravention of this Act or the Regulations.”

It was contended that in the circumstances of the case there was a wilful default by way of a breach of an order of the Conciliation and Arbitration Commission and that this constituted a breach of s 122; therefore, an injunction should issue requiring the defaulting employer to permit members of the applicant Union to resume work at a particular abattoir.

However, Pincus J declined to grant the orders sought, holding that he had no jurisdiction to do so, because of the legislative history. Prior to a 1970 amendment of the C & A Act, s 109(1)(a) had given the Court specific power:

“(a) to order compliance with an award proved to the satisfaction of the Court to have been broken or not observed”

and s 109(1)(b) had given the court power:

“to enjoin an organisation or person from committing or continuing a contravention of this Act or a breach or non-observance of an award”.

The 1970 amendment deleted paragraph (a) of s 109(1) and removed from s 109(1)(b) the power of the Court to restrain “a breach or non-observance of an award”. The 1970 Act also inserted within s 33 of the then Act a safeguard before the use of those aspects of the Court’s jurisdiction which might in due course enliven what were colloquially known as the “penal powers” of the Court: the underlying dispute was to be referred to the Commission constituted by a Presidential Member who was required to make every effort to settle the dispute existing between the parties.

His Honour rejected the literal construction being urged upon him of the combination of s 109(1)(b) as it stood in 1987 and s 122, upon the basis that the s 33 “safeguard” would then be applicable only to instances in which the breach was otherwise than wilful and, by implication, that in the context of industrial relations in Australia, that would be an absurd and unintended result.

The second case is The Queen v Australian Teachers Union (No 2) (1993) 48 IR 109. Gray J had given an interpretation of an award which was contrary to that contended for by the State of Victoria, an employer party to it. Nevertheless, a government officer advised various regional offices of his Department in effect to act in a way contrary to His Honour’s interpretation of the award. Indeed, His Honour said (at 110): “It is inconceivable that any rational person could have interpreted the order of the Court” as the officer had done. The relevant Union sought an injunction to restrain the Government, its servants or agents from proceeding as the governmental officer had indicated should and would be done. On the question of whether the Court had jurisdiction, his Honour said (at 111):

“When the Conciliation and Arbitration Act 1904 (the “C & A Act”) was amended to create the Commonwealth Industrial Court, that Court was endowed with specific jurisdiction to grant injunctions. Section 109(1)(a) empowered the Court to order compliance with an award proved to have been broken or not observed. Section 109(1)(b) empowered the Court to enjoin an organisation or person from committing or continuing a contravention of the Act or a breach or non-observance of an award. By Act No 53 of 1970, s 109(1)(a) was repealed altogether and the words “or a breach or non-observance of an award” in s 109(1)(b) were repealed. There was added to the C & A Act in s 33 a new procedure, involving the exercise of the conciliation and arbitration powers of a presidential member of the Australian Conciliation and Arbitration Commission, before recourse could be had to the Court in respect of breach of a “bans clause” in an award. The clear legislative intention was that there should no longer be the remedy of injunction in respect of breach of an award.

There remained in the C & A Act s 122, by virtue of which it was an offence wilfully to make default in compliance with any award. In Australasian Meat Industry Employees Union v Frugalis Pty Ltd (1987) 19 IR 386; 14 FCR 535, the question arose whether the combination of s 122 and the remainder of s 109(1)(b) of the C & A Act empowered the Court to grant an injunction to restrain a wilful breach of award. After an examination of the legislative history, and of my comments in Medcraft v Federated Engine Drivers & Firemen’s Association of Australia (1984) 8 IR 211, at 218, Pincus J reached the conclusion that this Court had no jurisdiction under the C & A Act to grant an injunction to restrain a breach of award.”

Having referred to remarks of Pincus J, His Honour continued (at 112):

“I respectfully follow the view of Pincus J, not merely because of the doctrine of precedent, but because I have a firm opinion that his Honour’s view is correct. There is no warrant for the reintroduction of the use of injunctions to restrain breaches of awards, thereby circumventing a specific code designed to deal with such breaches, merely because such breaches could be characterised as having occurred or being threatened “wilfully”. According to current fashion, an interlocutory injunction may be granted on a finding that there is a serious question to be tried. The mere allegation of a breach might be regarded as raising a serious question to be tried as to whether the breach alleged was, or would be, wilful. Alternatively, the element of wilfulness could be supplied by knowledge that a threatened or intended act would be a breach of the award. Thus, there are few breaches of award which could not be brought within the ambit of the power to grant injunctions.

On 1 March 1989, the C & A Act was repealed and replaced by the Industrial Relations Act. What had been s 109(1)(b) of the C & A Act became s 61 of the Industrial Relations Act and what was s 122 became s 311 of the Industrial Relations Act, which makes it an offence wilfully to contravene an award. The enactment of those provisions without significant amendment, in the light of the reasoning in Frugalis, together with the retention of the code of provisions dealing with the consequences of breaches of awards in Division 1 of Part VIII of the Industrial Relations Act, demonstrate the intention of Parliament that the remedy of injunction should continue to be unavailable in respect of breaches of awards.

The injunctions sought in proceeding No VI 26 of 1993 were sought in reliance on ss 61 and 311 of the Industrial Relations Act. For the reasons which I have given, I took the view that those sections do not give the Court jurisdiction to grant injunctions in respect of breaches of awards.”

(b) The limits of ss 418 and 419

Later His Honour said (at 113-114):

“Both in reference to ss 61 and 311 and s 51 of the Industrial Relations Act, reference was made to s 23 of the Federal Court of Australia Act 1976. That section provides as follows:

‘The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, Writs of such kinds, as the Court thinks appropriate.’

In Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150, at 161, Gibbs CJ, Stephen, Mason and Wilson JJ, said with respect to s 23:

‘The provisions of that Act, correctly understood, do not empower the Court to grant injunctions restraining, or relating to, contraventions of the Trade Practices Act in situations falling outside the boundaries drawn by s 80 of that Act. Section 22 of the Federal Court of Australia Act is a “Judicature Act” provision, designed to ensure that the Court can grant relief which is appropriate to both legal and equitable claims and to avoid multiplicity of proceedings. Its effect is to enable the Court to dispose of all rights, legal and equitable, in the one action, so far as that is possible .... It does not confer authority to grant an injunction in circumstances where a plaintiff has no case for relief by way of injunction under the general law or by statute. So also with s 23 it arms the Court with power to make all kinds of orders and to issue all kinds of writs as may be appropriate, but it does not provide authority for granting an injunction where there is otherwise no case for injunctive relief.’

See also QIW Retailers Ltd v Davids Holdings Pty Ltd (No 1) (1992) 36 FCR 386, at 387-391. Like the Trade Practice Act 1974, the Industrial Relations Act provides for the circumstances in which injunctions may be granted. Section 23 of the Federal Court of Australia Act 1976 cannot be taken to give the Court a general power to grant injunctions in matters in which the Industrial Relations Act gives jurisdiction, but in respect of which the Industrial Relations Act does not provide the power to grant injunctions.”

In Dunham v Randwick Imaging Pty Limited (1994) 1 IRCR 54, in the context of an application for relief under s 170ea of the Act against alleged unlawful termination of employment and where the applicant sought an interim order restraining the respondent from terminating his employment, Wilcox CJ traced the history of s 431 and of ss 418 and 419 of the Act and, in particular, the descent of s 431 from s 109(1)(b) of the C & A Act (see pp 58 to 59). Having referred to the decision of Gray J in Medcraft v Federated Engine Drivers and Firemen’s Association of Australia (1984) 8 IR 211, Wilcox CJ outlined, admittedly as obiter dictum, the general background of the development of the law in relation to the grant of injunctions to restrain threatened contraventions of statutes. His Honour concluded (at p 61):

“As I see the position, the purpose of s 109(1)(b) of the Conciliation and Arbitration Act was to meet these deficiencies in the capacity of the Commonwealth Industrial Court to enforce the Conciliation and Arbitration Act. The Court was granted an express power to make an order restraining a contravention of the Act and that power was not subjected to the limitations still applying to the judicially-developed injunction power available to courts of general jurisdiction.

When the Industrial Relations Act replaced the Conciliation and Arbitration Act the same need was felt; hence s 61 and, in due course, s 431.”

His Honour thus saw a wider role for s 109(1)(b) and its successor, the present s 431 of the Act, than Gray J would have admitted in Medcraft.

His Honour then considered s 419 of the Act (at 61-62):

“Counsel next concentrated attention on s 419. As mentioned, this section is identical to s 23 of the Federal Court of Australia Act. That section was examined by the High Court of Australia in Jackson v Sterling Industries Ltd (1987) 162 CLR 612. Deane J, with whom Mason CJ, Wilson and Dawson JJ agreed, described the section as one that confers on the Federal Court “a broad power to make orders of such kinds, including interlocutory orders, as it “thinks appropriate”. He went on (at 622):

‘Wide though that power is, it is subject to both jurisdictional and other limits. It exits only ‘in relation to matters’ in respect of which jurisdiction has been conferred upon the Federal Court. Even in relation to such matters, the power is restricted to the making of the ‘kinds’ of order, whether final or interlocutory, which are capable of properly being seen as ‘appropriate’ to be made by the Federal Court in the exercise of its jurisdiction.’

In the present case, there is no difficulty about the first limitation. The matter in respect of which the power is sought to be exercised, the allegedly unlawful termination of Mr Dunham’s employment, is within the jurisdiction of this Court. The difficulty arises out of the second requirement. Given the existence of s 170eh, can it be appropriate to make an interim injunction restraining the proposed termination? I think not.”

The limits of s 23 of the Federal Court of Australia Act were pointed out in Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150. The issue in that case was whether the Federal Court had power to accept certain undertakings. The case was argued on the basis that the Court’s power to accept undertakings was coterminous with the Court’s injunction power; and it was said that this power was limited to certain paragraphs in s 80(1) of the Trade Practices Act 1974 (Cth). The Commission sought to justify the acceptance of the undertaskings by reference to ss 22 and 23 of the Federal Court of Australia Act but its argument found no favour. At 161, Gibbs CJ, Stephen, Mason and Wilson JJ said:

“The Federal Court of Australia Act sets up the Federal Court and arms it with certain powers, eg ss 22 and 23. But generally speaking, and apart from s 32, the Act does not invest the Court with jurisdiction. It leaves it to the Parliament to do so by other statutes (s 19). This the Parliament has done by other statutes, such as the Trade Practices Act. When a specific statute which invests the Court with jurisdiction in matters of a particular class does so in such a way as to limit the power of the Court to grant relief of a particular kind, there is no basis for transcending that limitation by recourse to the general provisions of the Federal Court of Australia Act.

The provisions of that Act, correctly understood, do not empower the Court to grant injunctions restraining, or relating to, contraventions of the Trade Practices Act in situations falling outside the boundaries drawn by s 80 of that Act. Section 22 of the Federal Court of Australia Act is a ‘Judicature Act’ provision, designed to ensure that the Court can grant relief which is appropriate to both legal and equitable claims and to avoid multiplicity of proceedings. Its effect is to enable the Court to dispose of all rights, legal and equitable, in the one action, so far as that is possible ... It does not confer authority to grant an injunction in circumstances where a plaintiff has no case for relief by way of injunction under the general law or by statute. So also with s 23; it arms the Court with power to make all kinds of orders and to issue all kinds of writs as may be appropriate, but it does not provide authority for granting an injunction where there is otherwise no case for injunctive relief.” [My emphasis]

This passage is not literally applicable to the Industrial Relations Court. In the case of the Industrial Relations Court, the statute that invests it with jurisdiction is the same statute as that which sets it up and arms it with powers such as ss 418 and 419. But the emphasised sentence of their Honours’ reasons applies equally to this Court. When the statute (the Industrial Relations Act) that invests the Court with jurisdiction to determine unlawful termination claims limits (by s 170eh) the Court’s power to grant relief of a particular kind (an injunction restraining an unlawful termination or proposed unlawful termination), it would not be “appropriate” to transcend that limitation by recourse to the general language of s 419. To do this would be to defy the legislative policy evidenced by s 170eh and to render that section otiose.”

Conclusions:

(1) An argument that the Court has power to restrain award breaches, based upon a literal reading of what is now s 431 of the Act together with the provisions of the former s 311 of the Act prohibiting wilful default in compliance with an order or award, was rejected by two judges of the former Industrial Division of the Federal Court. Like Gray J, not only because of the doctrine of precedent, though this would be powerful enough, but because I agree with that rejection, I adopt those conclusions. I add some additional reasons for so doing below.

(2) Gray J in the Teachers Case and Wilcox CJ in Dunham have spelled out the implicit limitations on ss 418 and 419 arising from the approach of the High Court in Thompson Australian Holdings. Again, not merely for reasons of comity, I agree with their approach. (The apparent difference of approach between Wilcox CJ and Gray J as to the factual preconditions which may be necessary to enliven s 431 in a proper case is of no significance here.)

(3) However the matter goes further than that. Section 311 was repealed by the Industrial Relations Reform Act 1993 (Cth). That is, it used to be, but it is not now, a criminal offence wilfully to contravene an award. Hence, the last shred of the kind of argument advanced in Frugalis and the Teachers Case (and such, in essence, is what is advanced here) that this Court can restrain a breach of an award has, in my opinion, been destroyed.

(4) There is, in my opinion, no warrant as a matter of statutory construction, even without consideration of the legislative history, or the availability of other remedies, for regarding the terms of s 431 standing alone as empowering the Court to restrain contraventions of awards made under the Act, that is, for regarding awards as falling within the expression “this Act”. As noted above, s 4 does not extend that expression to include awards. Awards are simply instruments made pursuant to the Act and made binding by the Act (s 149) under pain of a penalty (s 178). They are not a part of the Act itself: see Byrne v Australian Airlines (1995) 131 ALR 422 and Ex parte McLean (1930) 43 CLR 472, 484. Thus, the former s 109(1)(b) of the C & A Act took the pre-1970 form which it did (see p 17 above).

(5) There is a specific means of enforcing awards including bans clauses therein provided by the Act in s 178. It is open to parties to awards to move the Commission to insert bans clauses in them. There are various other ways, obvious from the review of the Act’s provisions set out above (and those provisions do not exhaust the means available), whereby work stoppages, etc or lockouts and the like are strongly discouraged in most but, by deliberate legislative policy, not all circumstances. Some of these are new, following the 1993 reform of the Act; some are of long standing. But all these avenues permit some preliminary conciliation and investigation of the merits of the positions taken by the parties in the underlying disputation. Such procedures and investigations are not readily or fully available to the Court. It would be strange if s 431 could operate as a back door method of circumventing those procedures and investigations.

(6) Insofar as a right to an injunction as sought, and the Court’s power to grant one, might be said to depend upon non-statutory law, the approach of the High Court in Bryne v Australian Airlines Ltd (1995) 131 ALR 422 appears, by analogy, to be in point. In Byrne, the Court was considering whether the purported dismissal of employees in breach of an award was, because of that breach, illegal and void. Brennan CJ, Dawson and Toohey JJ approved a statement of Latham CJ in Automatic Fire Sprinklers v Watson (1946) 72 CLR 435, 434: “the fact that a statute prohibits the doing of an act under a penalty does not show that the act cannot be done...” Then their Honours quoted with approval a statement by Mason J in Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410 at 429, a case of alleged statutory illegality of contracts:

“There is much to be said for the view that once a statutory penalty has been provided for an offence the role of the common law in determining the legal consequences of commission of the offence is thereby diminished”.

Once the ability to recover a statutory penalty has been provided for a breach of an award s 178 (and there are means to have that penalty made payable and recoverable for each day, the breach continues: s 111(1)(e)), it seems to me that there is much to be said for the view that the role of the common law in determining the legal remedies for award breaches is thereby diminished. The availability of legal remedies for award breaches, once those breaches have been committed, is among the legal consequences of such breaches, just as the possible tainting with illegality of a contract may be a legal consequence of some statutory breach.

For these reasons I declined the interlocutory relief sought as being beyond the jurisdiction of the Court to grant it.

I certify that this and the preceding 26 pages are a true copy of the Reasons for Judgment of His Honour Justice Madgwick.

Associate:

Dated:

APPEARANCES

Counsel for the Applicant: G J Hatcher

Solicitor for the Applicant: M Sant

Counsel for the Respondent: T Lynch

Solicitor for the Respondent: S G Masselos of Steve Masselos & Co

Dates of hearing: 30 October 1995

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