C2001/1343, Transcript of Proceedings [2001] AIRCTrans 357 (23 March 2001)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

MUNRO J

C2001/1343

APPLICATION TO STOP OR PREVENT
INDUSTRIAL ACTION

APPLICATION UNDER SECTION 127(2) BY THE
AUSTRALIAN LIQUOR AND HOSPITALITY AND MISCELLANEOUS WORKERS UNION FOR AN ORDER TO STOP OR PREVENT INDUSTRIAL ACTION

SYDNEY

2.18 PM, TUESDAY, 6 MARCH 2001

PN1

HIS HONOUR: This is C2001/1343. It is an application lodged on 5 March for an application to stop or prevent industrial action. The application was lodged by - I thought it was filed by the Miscellaneous Workers Union - for an order under section 127. Could I have appearances please?

PN2

MR J. NOLAN: May it please the Commission, I seek leave to appear for the applicant union.

PN3

MR B. O'DONALD: If the Commission please, your Honour, I appear for the Australian Industry Group. With me is MR D. DENNIS, managing director of Miratone. We do not oppose counsel's appearance.

PN4

HIS HONOUR: Thank you, Mr O'Donald. Leave is granted, Mr Nolan.

PN5

MR NOLAN: Yes, thank you, your Honour. Your Honour will have received, because your office has distributed, a number of documents that pertain to this matter: the application for the order to stop or prevent industrial action, and then a number of attachments that were attached to the application, namely, the form of order that was proposed by the union, and the various other pieces of correspondence relating to the events at Miratone. It might be convenient, your Honour, if your Honour is minded to do so, to mark that bundle of documents that was distributed simply for convenience, because it contains within it most of what we will rely upon as the evidentiary basis for the applications that are made.

PN6

HIS HONOUR: Do I need to mark these? These are part of the application, aren't they?

PN7

MR NOLAN: They are. They are attachments to the application. Just so long as it is shown that they are on the record, I am content, your Honour.

PN8

The application is made under section 127 of the Act. The allegation made by the LHMU is that the industrial action that has been undertaken by the company, in this case a lock out that was notified to employees and the union last Friday and commenced yesterday morning, is not protected action under the Workplace Relations Act for reasons I will get to in a moment. It should be appreciated that the lock out which was initiated by a letter from the company, a letter dated - I don't think there is a date on the letter, but about three pages or a half a dozen pages in in the bundle - it is page 11 of 14 in the facsimile numbering - there is a letter, Notice of intention to lock out. Does your Honour see that?

PN9

HIS HONOUR: There seem to be several.

PN10

MR NOLAN: Yes. Well, the one in particular is the one that, whilst undated, is addressed to Ms Cheryle Hyde.

PN11

HIS HONOUR: I have a couple, I think, that are addressed to Ms Cheryle Hyde. An amended Notice of intention to lock out. That is the 23rd. The first one - - -

PN12

MR NOLAN: It is attachment D for our present purposes, your Honour.

PN13

HIS HONOUR: Attachment B is also called that, too, but D, you say.

PN14

MR NOLAN: Just after the sheet with attachment D on it, there is a letter to Ms Hyde and it says:

PN15

In accordance with section 170ML of the Workplace Relations Act I formally give notice of intention to lock out members of your organisation. The lock out will commence from 6 am on Monday, 5 March 2001 when the company will exercise its rights under section 170ML of the Act for the purpose of responding to industrial action by employees whose employment will be subject to the agreement. The lock out will cease at 6 am on Monday, 19 March 2001 -

PN16

and, as it indicates there, the letter was copied to Mr Bullock, an official of the LHMU in Brisbane and to the site delegates at the plants affected at Wacol in Queensland and Revesby in New South Wales, and that was a letter sent by Mr Bowden who is the general manager of the company.

PN17

Behind attachment E is the other document sent to employees. I won't read all of that out but that is a letter that has been sent to each of the employees indicating the company's position with respect to the enterprise bargaining negotiations and indicating in the second paragraph that the company is also entitled under law to take action to protect its interests. It goes on to say this means that -

PN18

the company can lock out without pay any employee who takes industrial action -

PN19

and so on. I won't read all that out to your Honour.

PN20

But the particular act that this application focuses upon is this decision indicated in the Notice of intention that purported to lock out employees of the company on and from 5 March. Now, the short history of this, your Honour, is that - in fact, I will hand up to you if I may, a copy of a brief outline of submissions that I have prepared which I hope will be of assistance to the Commission.

EXHIBIT #ALHMWU1 OUTLINE OF SUBMISSIONS

PN21

MR NOLAN: As indicated in paragraph 1, this outline considers the basis upon which a challenge might be made to what I will characterise there as the current extension of the lock out at Miratone Paints. We say that if the lock out is not protected action, then, by definition, it is industrial action and we say amenable to orders under section 127. The brief facts of the disputes, we say, so far as are relevant, are those set out in the dot points but I will refer to them briefly, if I may.

PN22

On 5 December 2000, the union served a notice of intention to take industrial action. It should be said that there had been a pre-existing notice of intention to bargain, sir. Sporadic episodes of industrial action took place after 5 December. The dispute came before the Commission, Commissioner Redmond, on 2 February. Following the Commission proceedings, there was a cessation of disputation until mid-February. The LHMU served a notice of intention to take industrial action on 14 February 2001. The only union-initiated industrial action taken after that notice was served was a brief half-day stoppage on 21 February 2001. The initial Miratone-initiated lock out commenced on 22 February, the day that those employees returned to work and was expressed to continue until 5 March. In fact, there was an initial notice that said 6 March, but that was amended and that is not presently of concern.

PN23

Last Friday evening, it will be appreciated at the very end of the first lock out, a fresh notice was served on the union and delegates and that is the notice to which your Honour has just been referred which purported to extend the lock out or institute a new lock out from 5 March for another fortnight, and so our contention is that that lock out has not been validly effected and, as a consequence, the action is not protected action and, as a further consequence of that, it being industrial action, it attracts the operation of section 127.

PN24

Now, we commenced the analysis by considering section 170ML(3) and refer your Honour to those provisions which state that, during the bargaining period, the employer is entitled to lock out employees on two bases:

PN25

Firstly, for supporting or advancing claims made by the employer in respect of the proposed agreement, and

PN26

Secondly -

PN27

and this is important -

PN28

responding to industrial action by any of the employees whose employment will be subject to the agreement and if the employer does say the lock out is protected action.

PN29

We say that whereas an employer is entitled to take protected industrial action against its employees in the form of a lock out during a bargaining period, the circumstances of that action are circumscribed by another section, section 170MO:

PN30

An employer is entitled to lock out from their employment all or any of its employees for the purpose of supporting or advancing claims made by the employer in respect of a proposed agreement or -

PN31

and again these are the important words -

PN32

responding to industrial action by any of the employees whose employment will be the subject of the proposed agreement.

PN33

So turning from that to 3(o), sorry, MO(3)(a), it says that:

PN34

The employer is obliged only to give written notice of the intended lockout if the lockout is ...(reads)... in respect of the proposed agreement.

PN35

So there are two situations that arise: one, the one I've just read to you which requires the employer only to give written notice of the intended lockout. In all other circumstances, however, at least three working days written notice of the intended lockout will be required and, of course, on no view, just going back to the date of that second lockout are there three working days between Friday evening and Monday morning. We go on to develop this and say that subsection (i), (a)(i) is the relevant provision in this case since the employer has purported to take responsive action and we refer back - I might interpolate to that notice to which you were referred, your Honour, where it's made quite clear that the action is responsive action.

PN36

In such a case, the lockout must be in response to and take place after the start of industrial ...(reads)... in respect of the proposed agreement.

PN37

Which is the case here. In this case, only written notice of the intended lockout is required. The critical elements of the subsection are that the lockout must be in response to and take place, that should read, after the start of industrial action. Now, so far as our researches indicate, there is only one case that considers something close to this and this is the decision of Finkelstein J. I'll hand up copies of this, and while I'm at it, I might hand up the other cases to which I'll refer your Honour.

PN38

HIS HONOUR: Yes, I won't mark these, Mr Nolan.

PN39

MR NOLAN: No, your Honour. I've extracted the passage from Finkelstein Js decision with respect to this issue and his analysis of the particular sections and I'll just read it if I may, paragraph 29. Finkelstein J in Cadbury Schweppes says this - he says:

PN40

Section 170ML identifies the actions to which immunity granted by section 170MT will ...(reads)... that justifies an order against Mr Wiseman -

PN41

and I should interpolate he was a union official.

PN42

It's not been shown that he organised the picket. While he manned the picket line ...(reads)... the company to take any action.

PN43

And so on, but the relevant passage, paragraph 29, refers to a submission that had been made by the union in that case that the, as a matter of construction, the Act only permitted the employer to give one unnotified, if you like, one - engage in one episode of protected action by way of a lockout that didn't have the three day notice requirement. Well, we say that that is not an issue that we would cavil with, and we say here at paragraph 7 that the issue which was not considered in Cadbury Schweppes was whether there was industrial action actually occurring when the responsive lockout was initiated, in other words, whether the lockout occurred after the start of industrial action.

PN44

In this case, there - I should say in this case, no industrial action had started at the time when the responsive second lockout was initiated. The words "after the start of industrial action" require, in our submission, there to be an actual occurrence of industrial action. If the legislature had intended otherwise, it would have been a relatively easy matter to adopt the words used, for example, in section 127 which speak of threatened, impending or probable industrial action in contrast to industrial action which is happening, again, to use the expression in section 127.

PN45

So it is our submission that the industrial action must be happening in the sense that there must be actual bans or limitations, etcetera, in place. The notice of industrial action in this case suggests that industrial action might include a variety of activities but at the time when the lockout occurred, there was no action, industrial action happening. I interpolate indeed the employees were locked out when they were locked out for the second time with that notice and the only industrial action which had happened since 14 February was the one half-day stoppage which I go on to mention.

PN46

HIS HONOUR: I thought there was a matter in which Finkelstein J or someone had - well, it might be Goldberg J, it might be in this next matter you're referring to. There's authority to the effect that there was no industrial action while people were locked out, or they couldn't be on strike. Is that - are you familiar with that?

PN47

MR NOLAN: They couldn't be on strike. I'm not familiar with that, I have to say. The other authority to which I refer is Goldberg Js decision where he said that the lockout to be valid had to be for a certain term and I get to that. That's a subsidiary issue in the argument here but I'm not aware of a decision that positively deals with - - -

PN48

HIS HONOUR: Well, it surprised me a little bit but it's certainly an observation in one of the recent ones that I've seen.

PN49

MR NOLAN: Yes. I must say I didn't pick that up in the brief time I had to have a look at this, but obviously it's possible to contemplate industrial action ongoing and responded to by a lockout but the situation here is not one where the union have definite bans and limitations in place that were ongoing; it was one discrete episode of industrial action that brought the response in the shape of the first lockout and of course then that was followed up by the second lockout, so we say it couldn't on any view be regarded as industrial action that was occurring or happening in the sense required.

PN50

So we say at paragraph 9, your Honour, that a responsive lockout cannot validly commence without the requisite three days' notice unless the industrial action has started. It can't be said that the industrial action has started simply by reference to a notice of intention to take protected action. A threat to take action is different in quality and character to the actual action itself. If the notice is served and nothing else happens, industrial action cannot be said to have started, that is to say, it's not happening.

PN51

If this construction were not correct, the mere service of the notice would, without more, be all that was necessary to attract a lockout for which no notice would be required, and we submit that that can't be the case as a matter of either applying an English understanding of the section or as a matter of logic. We say that the scheme of the Act suggests that a responsive lockout is a discrete event. If a further episode of industrial action occurs, it may be met by an another responsive lockout. In the absence of any further industrial action, the lockout fails to be responsive.

PN52

It's a separate and discrete piece of industrial action which requires the giving of three days' notice. So plainly the employer may engage in a lockout on more than one occasion during the course of the bargaining period. Cadbury Schweppes is the authority for that if one be needed. This means that whenever an episode of industrial action by the union occurs or is happening, the employer has the option of a responsive lockout. Cadbury Schweppes does not address the circumstance where the employer is not suffering industrial action. The construction suggests that he is not inconsistent with what is said by Finkelstein J in Cadbury Schweppes. If the lockout is invalid because it lacks the requisite notice, the industrial action will not be protected and an order under section 127 will be attracted.

PN53

We contend furthermore, and in addition, and in the alternative, that the lock-out is not valid because it is simply an impermissible extension of the previous lock-out or not validated on that ground. It is has also been held that a lock-out in order to be valid, must be of a fixed duration. And in that connection we refer to Goldberg Js decision in the ACI ..... Manufacturing case. And I have set out the passage there, and I won't read that to your Honour.

PN54

But suffice it is to say that his Honour Goldberg J makes the appropriate qualifications and caveats on the fact that he is dealing with an interlocutory proceeding, but says that he is prepared to accept that it is arguable that the order be a certain duration to a lock-out notice. And that appears to be the accepted wisdom these days, and indeed reflected in the notice that was served by the company, because the company indicated the date upon which the lock-out would cease as well as the date upon which it commenced.

PN55

And we go on to say at paragraph 14:

PN56

That if there is a requirement that a lock-out be for a fixed duration ...(reads)... instituted ad infinitum.

PN57

We say to permit such an operation of the Act would offend the well established principle of construction that provisions will not be construed to allow indirectly which cannot be done - that which cannot be done directly. And in that connection I would refer you to that Builders Labourer's case at page 525 where the principle of construction is discussed by Beaumont J. But I don't read it, your Honour will be familiar with those cases that are set out there, at the bottom of page 525.

PN58

So your Honour the position, it is always dangerous to say it is a simple point, but it is a point that I am not aware of having been raised in section 127 proceedings or in court for that matter. But it is one that suggests itself by reference to the words of the Act to which you have been referred, which suggests that industrial action must be - must have started, and the lock-out to be a valid a protective lock-out must be in response to industrial action which has commenced or has started, or is, in our terminology, happening.

PN59

And in the absence of such an event, section 127 will be attracted, because as I have indicated it fails to be protected action. And I think I have referred to a passage in Finkelstein J, if it needs to be referred to, which said that it was accepted, and certainly accepted by his Honour, that there was no protected action - I am sorry, if there was no valid lock-out notice, there was no protected action.

PN60

So, your Honour, in those circumstances, there being a strong case on the documents and evidence of un-protected industrial action having occurred, it remains for your Honour to consider the manner in which, or the manner in which section 127 orders might, or ought to be made to bring to heal the un-authorised industrial action.

PN61

And in cases such as this, and indeed in any case where there is un-protected industrial action, in our submission, it will only be in the most unusual circumstances that an order under section 127 would not be made by the Commission, and that there are no discretionary reasons which are apparent to us, certainly, that would persuade your Honour to the contrary, and dissuade your Honour from making a section 127 order.

PN62

The section, as your Honour is only too well aware, obliges the Commission to hear and determine applications as quickly as practicable, and your Honour has conformed with that provision by setting the matter down for hearing this afternoon. In our submission an order ought to be made under the Act, and an order in terms suggested in the draft order supplied by the union to your Honour, in our submission, is appropriate, because it will have the effect of requiring the un-authorised industrial action to cease and procuring a situation where there can be a return to work by the employees who have been unlawfully locked out, and otherwise staking out for the employees the position in response to what we have characterised as unauthorised industrial action.

PN63

So, your Honour, those are the submissions that we seek to make, support of the orders. And unless your Honour has some questions of me I - - -

PN64

HIS HONOUR: What is the position in relation to negotiation of an agreement. I assume that there is an existing agreement with Mirotone, and that appears from the letter to - - -

PN65

MR NOLAN: Yes, there is an agreement, there is an un-registered agreement and there is an award. The negotiations have been going on since December for a new agreement. Unfortunately there has been no resolution to those two issues between the parties, and there is still, perhaps it is fair to say, one critical issue that separates the parties, and that has unfortunately led to the situation where industrial action has taken place and industrial action has now occurred at the behest of the employer in this past month.

PN66

HIS HONOUR: And what is that issue?

PN67

MR NOLAN: That issue is the desire on the part of the union when the employees are affected, to preserve the 35 hour week, which has been a part of an agreement in the industry for many years. And in particular, a nine fortnight. And a countervailing desire on the part of the company to erode the nine day fortnight at least in one section of the company's operations. Unfortunately that has become the sticking point, and it is a problem that issue that the parties have reached an impasse, thus far.

PN68

HIS HONOUR: And how much negotiation has there been since industrial, or the lock-out action commenced on - what date did you say it was?

PN69

MR NOLAN: Middle of Feb - 22 February.

PN70

HIS HONOUR: Yes.

PN71

MR NOLAN: There had been negotiations including - and last Thursday, I think it was, conciliation proceedings before Commissioner Redmond in the morning, last Thursday. And then the position was put back to employees, and the company position effectively that had been handed out which resulted in negotiations, put back to employees, that was rejected, and that was followed up swiftly without any further threat of industrial action by the employees with a further lock-out negotiated by the employer, which has brought us here today. May it please, your Honour.

PN72

HIS HONOUR: Thank you. Mr O'Donald?

PN73

MR O'DONALD: Thank you, your Honour. We say in relation to this matter that there has been a notice of bargaining which was served upon the company by the LHMU, on 29 November. And in respect of that I would like to tender a copy of that notice of initiation of bargaining.

PN74

HIS HONOUR: Yes, this can be Mirotone 1.

EXHIBIT #MIROTONE 1 NOTICE OF INITIATION OF BARGAINING

PN75

MR O'DONALD: Following that initiation of the bargaining period, which we say continues to operate, there was on 5 December a notice of taking of industrial action in relation to enterprise bargaining negotiations, and I would like to tender a copy of that.

PN76

HIS HONOUR: Mirotone 2.

EXHIBIT #MIROTONE 2 NOTICE OF TAKING INDUSTRIAL ACTION IN RELATION TO ENTERPRISE BARGAINING NEGOTIATIONS DATED 5 DECEMBER

PN77

MR O'DONALD: I might take the Commission to that notice of intention which is required prior to any industrial action being taken by employees. That notice gave an indication that industrial action would be commencing against the company from Wednesday 13 December, and indicated a wide variety of industrial action that was intended to be pursued by the union and its members, with respect to the company.

PN78

And the variety of industrial action has been set out in that notice. On 13 December, employees commenced their industrial campaign, with a 48 hour stoppage.

PN79

HIS HONOUR: I am sorry on what date?

PN80

MR O'DONALD: On 13 December 2000, Wednesday the 13th, employees commenced that industrial campaign with a 48 hour stoppage.

PN81

The company says that, from the commencement of the campaign, there has been continuing stoppages, bans, go-slows, stop-work meetings, generally stoppages and other disruption which fits the wide range of description included in the notice of intention to take industrial action. That industrial action, your Honour, we say, has continued from that time, up to the date of the lock-out which first occurred on 22 February. We say, with a great deal of seriousness, your Honour, that the company has very serious apprehension about sabotage and damage to product and stock and equipment within the company premises and we are quite prepared to provide detailed information in respect of the sort of disruption that's occurred and what we say amounts to sabotage of the company's premises and the product under production.

PN82

The documentary evidence in relation to that shows that the damage and wastage caused by raw material flaws which are a result of operator actions generally would happen from month to month, fairly rarely but, from the beginning of work in January of this year, such sabotage of company production has reached epidemic proportions. It's resulted in at least a dozen occasions on which quite costly and serious disruption has occurred. We've also got data - and I'm not tendering that documentation at this time, your Honour, because there is some highly confidential materials in respect to inventory codes and batches and product which the company believes is extremely sensitive.

PN83

We make that point in submissions at this stage and, in appropriate circumstances, we'd be prepared to provide documentary evidence in respect of that. We will also be prepared to provide documentary evidence in support of a decline in productivity over the period January/February of in excess of 20 per cent and all of that is fully documented and the Managing Director, Mr Dennis, would be quite prepared to take the Commission to the detail of that. We would say, your Honour, that that is not necessary.

PN84

We say that the company's entitlement is clear, under section 170ML3, that, during a bargaining period, the company is entitled to take protected industrial action. The company has been open about its intentions. It's followed the rules, we say. The Marquis of Queensbury rules are applicable and perhaps, in some respects, all is fair in love and war. In respect of the campaign of industrial action engaged in by the union and their members with respect to this company, there has been no reluctance or shyness about engaging in that action by the union and its members and that action, we say, has been a continuing action.

PN85

Section 170ML4, we say, provides a good definition of what is a lock-out and a lock-out, we say, is any action by the employer, preventing employees from performing work under their contracts of employment without terminating those contracts. We say that - - -

PN86

HIS HONOUR: On the union contentions, there was notification on 5 December - - -

PN87

MR O'DONALD: Of the commencement of industrial action?

PN88

HIS HONOUR: - - - of the commencement of industrial action. Then, there was a further notification on 14 February. What difference was there between those two notifications?

PN89

MR O'DONALD: Your Honour, I might address that issue. On 29 January, the union notified a dispute to the Commission and I would like to tender a copy of that notification.

PN90

HIS HONOUR: Yes, this can be Mirotone 3.

EXHIBIT #MIROTONE 3 COPY OF NOTIFICATION, DATED 29 JANUARY, BY UNION TO COMMISSION OF A DISPUTE

PN91

MR O'DONALD: That notification of dispute, lodged by the union makes reference to, "there has been on-going industrial action since 13 December 2000." We don't have to do much more than accept the union's word and we do accept their word, advising this Commission that there has been on-going industrial action since 13 December. From that time, there were then - following that notification, there have been two occasions on which there were proceedings before Commissioner Redmond. A variety of proposals and compromises, we say, were put in respect of the negotiating about the enterprise agreement.

PN92

There have been several meetings that have occurred with officials, the Australian Industry Group and the company involved from this time onwards at the company premises, as well as the two occasions on which the matter has been before Commissioner Redmond. There were commitments given to the Commission by both the company and the union that, whilst there were negotiations in terms of a timetable that was agreed before the Commission, the union, on their part, we say, would not engage in any industrial action - and that was their commitment - until the matter came back on 1 March 2000 before the Commission.

PN93

The union, as I understand it, has a slightly different view of what their commitment was and we have differences about the commitments that were given. I understand the union has a difference as to the commitment that the company gave in the Commission, off the record, at that time. I might add that, in the report-back on 1 March, the Commission certainly indicated that the recollection of the Commission - and this is on the record before Commissioner Redmond - was that the company's view of those commitments was the correct view.

PN94

The company's commitments were with respect to some restructuring arrangements that were on-going and the finalising of two people working with the company who had indicated that they were interested in entering into AWAs, Australian Workplace Agreements. There were commitments given by the company in respect of the progressing of the restructuring and those other matters. We say, the company honoured their commitments in that respect. The union then initiated further industrial action and, in response to that, given the continuing industrial action which had occurred - - -

PN95

HIS HONOUR: Why - when you say, "initiated further industrial action", that's the notice on the 14th, is it?

PN96

MR O'DONALD: Following the 14th, on, I understand, 21 February, the union had a stop-work meeting and stopped work for the remainder of that day. A stop-work meeting had occurred on 21 February which was at lunch time and the employees walked off the job. My friend referred to that half day stoppage.

PN97

HIS HONOUR: What I'm going to is the notice of intention to take industrial action dated 14 February. Where does that fit in the picture?

PN98

MR O'DONALD: Prior to the commencement of that further industrial action for whatever reason, as I understand it, the union saw fit that they should serve a further notice of commencement of industrial action. I'm unaware of any requirement that they should serve a further notice of intention to engage in industrial action given the notice that had been served on 5 December and I'm not aware that that notice of industrial action was at any time withdrawn and certainly the bargaining period remains on foot.

PN99

HIS HONOUR: But what terms was the notice given on 14 February? Were they limited in any way?

PN100

MR O'DONALD: I don't have a copy of the notice of 14 February to look at, your Honour, at the moment.

PN101

MR NOLAN: As far as I know the notices are relevantly the same as the earlier notice and I can give Mr O'Donald a copy of that. If I can hand it up to your Honour as well. Sorry, I've mistakenly thought that it was on the other bundle of documents.

PN102

MR O'DONALD: From quickly looking at that second notice with respect to the industrial action, your Honour, I indicate that it appears to me to be in similar, if not identical terms, as to the range of industrial action identified.

PN103

MR NOLAN: Can I seek your Honour's indulgence perhaps to get this bundle that I've handed up marked as well because it probably completes the set.

PN104

HIS HONOUR: Yes, this can be ALHMWU - I think it's 2 isn't it?

PN105

MR NOLAN: Yes.

EXHIBIT #ALHMWU2 BUNDLE OF DOCUMENTS

PN106

HIS HONOUR: But that doesn't have any terms to it. It says, "The industrial action will commence on Wednesday, 21 February."

PN107

MR NOLAN: That's correct, your Honour. It did; it indicates that.

PN108

HIS HONOUR: Then advises various forms.

PN109

MR NOLAN: Yes.

PN110

MR O'DONALD: Following that notice and then on 21 February, the recommencement of that campaign of industrial action, the company then took the action firstly of locking out employees for 6½ days until the commencement of work on 5 March. We say, your Honour, that the employer is entitled for the purpose of supporting - or rather for the purpose of responding to industrial action to lock out employees or all or any of their employees once there is industrial action engaged in whilst there is a bargaining period in place. Section 170MO with respect to notice of action provides in 170MO(3) that any action as mentioned in 170ML(3) by the employer to lock out employees will be protected action.

PN111

It refers to any action not just some individual or discrete action. The industrial action engaged in commencing from 13 December last year persisted with over a considerable period of time with a brief lull. Whilst there were some discussions in attempts to resolve the matters with respect to the bargaining for a new agreement and then recommenced is example of a range of industrial action which the Act does not in any way limit the time frame or make any specific limitation on the time when an employer is entitled to engage in that lock-out action in response to the industrial action. Provisions of 170ML(3) make it clear that provided written notice is given after the commencement of industrial action, then lock-out action by an employer is protected and we would say is not able to be made illegitimate by an order of this Commission under 127(2).

PN112

HIS HONOUR: One point that troubles me a bit about those submissions is the - at this junction you seem to be wanting to make between the action as commenced under 170ML(3) and the protection under 170MO is it of - sorry, what is the protection?

PN113

MR O'DONALD: Well, section 170MO simply makes provision for the notice that is expected to be given: the rules of engagement as it were, and the rules of engagement as I referred to in 170MO(3) refer to any action not some specific or individual action by an employer. It says, "Any action taken as mentioned in subsection 170ML(3)."

PN114

HIS HONOUR: Sorry. What section are you referring to?

PN115

MR O'DONALD: I'm reading from section 170ML(3), the requirements of a lock-out to be protected action, where it says:

PN116

If one or more of the negotiating parties is an organisation of employees, any action taken as mentioned in subsection 170ML(3) by the employer to lock out employees from their employment -

PN117

it then has couched in the negative -

PN118

is not protected unless the lock-out is in response to and takes place after the start of industrial action.

PN119

And in that case the requirement is that written notice of the intended lock-out be given. There is no limitation or any other intention that I'm aware of in the Act which provides some time frame in which the employer must engage in a lock-out. The lock-out on 5 March as is the lock-out that occurred from 22 February, both of those lock-outs are employer responses in respect to a wide range of industrial action which occurred from 13 December last year and we say continued in one form or another for the entire period other than a short time when there were commitments given to the Commission.

PN120

And we would be quite happy to rely upon the judgment referred to of the Federal Court by Finkelstein J. The paragraph mentioned by my friend at paragraph 29 we say quite clearly supports the position that I'm putting to the Commission and that is and I would read from the bottom of the page where paragraph 29 starts, "Indeed this is no reason to suppose that there will only be a single lock-out during the course of a bargaining period." Section 170MO(3) to which I've referred contains the requirement which an employer must satisfy before a lock-out will be a protected action.

PN121

Provided the relevant requirement to satisfy the lock-out will have the benefit of the immunity given by section 170MT. Section 170MO does not impose a limit on the number or occasions on which an employer is entitled to lock-out its employees. The only work of that section is to specify the type of notice that must be given so that action taken under 170ML will be protected by section 170MT. And we say that once the union determined to engage in industrial action that's the trigger under the rules which entitles the employer to respond to that industrial action and we say not necessarily with a single lock-out but there may be a number of lock-outs.

PN122

There may be lock-outs of some or all of the employees. They may be of varying durations. The Act doesn't in any way limit the scope of that lock-out. In very similar terms it doesn't limit the scope of the industrial action to which employees may turn in order to pursue their aims. So fundamentally, your Honour, we say that the employer is - - -

PN123

HIS HONOUR: Perhaps - I can understand most of those points. I think, Mr O'Donald, the difficulty I have with some of those propositions is the inherent notion that you're advancing that there is somehow a unbroken or seamless movement from the first action in response to industrial action to lock-out and any continuing arrangement of lock-out action with or without particular notice and with or without regard to what has happened at the expiry of one period of lock-out notice, almost as though the purpose of the lock-out is a matter that is beyond examination.

PN124

In other words if a lock-out has been perhaps embarked upon for what one could call a legitimate action or reaction that it continues to be treated as legitimate even though there may be evidence that doesn't warrant that conclusion. And for instance I'm thinking of circumstances where an employer may in the course of its lock-out action switch bargaining periods or switch negotiating parties. It may start off taking lock-out action in order to achieve an agreement of the kind that is being sought by the negotiating party and then midway through decide that really what it wants is negotiating an AWA with each of its employees and effectively only the AWA parties will be the ones who get back off the lock-out.

PN125

Joy Mining was an instance of that where, in effect, the Commission found to that effect.

PN126

MR O'DONALD: I appreciate what your Honour is saying in that respect.

PN127

HIS HONOUR: But my - and I can understand what you're putting broadly in the context but if you have a look at the letter of 3 March which I take it that is the - - -

PN128

MR O'DONALD: That's the lock-out notice which is effective at this time.

PN129

HIS HONOUR: Is that the only one that has gone to employees?

PN130

MR O'DONALD: Yes, at this time. It's gone to all employees. That's in attachment E. The copy tendered to you there is the copy that was also provided to the union with the notice of intention to lock out which is attachment D. So each employee received the notice at attachment E obviously with the particular employee's name.

PN131

HIS HONOUR: And when did they receive that?

PN132

MR DENNIS: I handed those lock out notices personally on - sorry, apology - on Monday morning this week from 5.30 onwards and the purpose of the lock-out notice was clearly explained to every employee. I know these people very well by first name and I requested them to return to work but in order to return to work I explained to them that we needed them to do a fair day's work, to work without restrictions or bans and to work co-operatively and harmoniously with fellow workers. Provided they agreed to those three very simple terms and signed the individual lock-out notice I was to welcome them back inside the door and start work again.

PN133

You must remember that this lock-out notice has been issued against the backdrop of quite consistent industrial action. There have been numerous walk-off the job, not just the one referred to on 13 December. Our productivity has been low, our inventory in the warehouse has been depleted. We've had numerous batches of production which haven't passed our quality control standards and during the first lock-out period I negotiated with the union delegates and the union and made a compromise offer which was rejected and went to the Commission last Thursday and put a second compromise that week which Commissioner Redmond thought was reasonable and I'm sure did his best to try and persuade the union to accept that compromise.

PN134

That compromise again was rejected last Friday and there was quite a threatening meeting with the union officials at which essentially they threatened that Miratane will be shut down and there would be hundreds of people outside the front gate and that whilst my General Manager could find another job I perhaps might not have a business. So against this backdrop of industrial action and basically industrial sabotage as I see it to our products we felt that unless our employees were prepared to come inside and do a fair day's work then we shouldn't let them back inside the company.

PN135

And that was the feeling also of the other 75 per cent of staff who were currently working. They thought that was a very fair and reasonable request and they are still invited back in today. I would love to see them back at work if they do a fair day's work.

PN136

HIS HONOUR: Yes, thank you.

PN137

MR O'DONALD: One of the things, your Honour, that was referred to there is the ongoing picketing which has occurred at all times and there is an issue, we would say, that that picketing of the company's premises is indeed itself industrial action which has occurred at all times since the first lock-out occurred. And that's another issue which we would say is further and continuing industrial action.

PN138

HIS HONOUR: Yes. In the first paragraph of that:

PN139

To date Miratane's proposed enterprise bargaining agreement for the Revesby and Wacol sites have not been accepted.

PN140

What's that agreement? What's that reference to?

PN141

MR O'DONALD: There has been a number of drafts in various versions that have been produced over the past few months and that's referring to the latest draft of the enterprise bargaining agreement which I guess is at the core of both the industrial action pursued by the employees. And very specifically one of the things which the company is seeking is that where an employee chooses they should be entitled under the enterprise bargaining agreement to accept an additional amount of money and to work a 10 day fortnight instead of the prescribed nine day fortnight which is provided for in the arrangements that are currently worked under the - well, under the unregistered agreement which has been used at the company premises for some years.

PN142

HIS HONOUR: So the company is seeking the importation of that provision inside what is otherwise an agreed document to be a certified agreement.

PN143

MR O'DONALD: There is very little else that's in disagreement between the parties other than the provision that the company wants and the last compromise offer that was put on 1 March before Commissioner Redmond was that the company offered that all employees currently employed would remain on a nine day fortnight but that new employees who may be employed - that there would be an entitlement for the company if those employees chose to accept that, but that for the life of the current agreement all current employees would remain on the nine day - that was the proposal which Mr Dennis referred to which was rejected on the - - -

PN144

HIS HONOUR: The life of the proposed agreement, you mean?

PN145

MR O'DONALD: For the life of the proposed agreement, yes. There's one particular area which is called the colour services section, which has a critical need to be responsive to 24 hour order turn arounds and that's a key area the company sees which is in need - - -

PN146

HIS HONOUR: How many employees are affected, Mr O'Donald?

PN147

MR O'DONALD: 8. There are some 8 employees with respect to that. The total number of employees under the lockout is about 30, isn't it? About 35 employees.

PN148

HIS HONOUR: How many are locked out?

PN149

MR O'DONALD: About 35.

PN150

HIS HONOUR: How many are not locked out or have come back in?

PN151

MR O'DONALD: How many employees are actually working, including yourself? There are about 120 who are working.

PN152

HIS HONOUR: And are the 120 subject to the agreement or likely to be subject to the agreement?

PN153

MR O'DONALD: Those employees would not be subject to the agreement, no.

PN154

HIS HONOUR: Why is that? They're above it under a different -

PN155

MR O'DONALD: They tend to be chemists, managing directors, general managers -

PN156

MR..........: Or under an alternate workplace agreement.

PN157

MR O'DONALD: Yes. They're employees of Victoria who are not involved with this matter.

PN158

HIS HONOUR: I see. That's nationally. You're speaking of New South Wales and Wacol.

PN159

MR O'DONALD: That's right. It's only in respect of Revesby in New South Wales and Wacol in Queensland where there is industrial action and disruption taking place.

PN160

HIS HONOUR: Yes. Well, how's the matter going to be resolved? Mr O'Donald, what prospects are there in sight of reaching any agreement?

PN161

MR O'DONALD: That perhaps is a difficult question to answer. There are a number of ways in which this dispute can be resolved, and we've proposed a variety of those to the company. The first, a preferred option, is a Section 170LJ agreement to which the union is a party. Secondly is a 170LK agreement directly with those affected employees. A third alternative would be that there is no agreement and the union ceases industrial action.

PN162

HIS HONOUR: Well, if out of the outcome today the union were to withdraw its notice of industrial action and to cease industrial action without - - -

PN163

MR O'DONALD: If they were to withdraw the bargaining - - -

PN164

HIS HONOUR: - - - an order being made, what prospects would there be?

PN165

MR O'DONALD: If they were to end the bargaining period, I guess that would be certainly one way of terminating the industrial action, and that's what I was really referring to.

PN166

HIS HONOUR: I'm looking for some formula whereby the union is in truth looking for a cooling down period to take some re-appraisal. It's now had, what, 14 days locked out, or coming up for 14 days. It'll be getting on for a month. A really long time to work through the matter. It's plainly here to put a stopper on your continuation of the lock out and I don't think it would be so naive as to think that if I were to do that that I would not be likely to attach as a condition to any order that it at least back off from taking industrial action to allow the company if it wanted to restore it to give proper notice in retaliation for any action that was continuing.

PN167

So in other words, what I'm looking for is a way if there is short of making an order, is there any possibility of thrashing out an agreement either about the substance of the matter now or at least a mode of resuming before each of you do too much more damage to the other.

PN168

MR O'DONALD: Your Honour, I'm confident that the company is prepared to consider any reasonable options for lowering the heat level of this dispute, and for trying to find a way to normalise the relationship both with the union and with at least some of its employees. I'm not sure what the elements of that are. I think the questions you're asking us may equally be put to my friends on the other side.

PN169

HIS HONOUR: Well, I propose to do that.

PN170

MR O'DONALD: Yes. I would hope so, your Honour.

PN171

HIS HONOUR: But I take it from what you're saying that the terrain there may not be absolutely impossible anyhow. That's all I need, I think, at this stage.

PN172

MR O'DONALD: And most certainly the sorts of things - the lock out notice itself does give a fairly clear signal as to what the company is really seeking from its employees - - -

PN173

HIS HONOUR: In terms of - - -

PN174

MR O'DONALD: - - - and they're not unreasonable expectations.

PN175

HIS HONOUR: - - - at least having a method of living. Yes. I understand. Mr Nolan.

PN176

MR NOLAN: Your Honour, as far as the union is concerned, my instructions are that there have been cooling periods that have come on and off. However, the union indicated, or was prepared to indicate, last Friday that the members were prepared to resume work on Monday without any then present intention to take industrial action. Our proposal is that members would be prepared to resume work, that there be perhaps a 7 day period during which there was no - there would certainly be no industrial action from the union and of course the expectation would be that that would be reciprocated, but there has been some additional aggravation created apparently by the company using staff employees to do production and work.

PN177

One would expect if there were to be a cooling off period that one would revert to the pre-existing status quo and therefore we would be back in a predispute situation for a 7 day period during which time further earnest efforts could be made and I know the union officials are prepared to devote themselves virtually full time to this activity if necessary, to try to come up with a formula that could keep everyone happy.

PN178

HIS HONOUR: I don't understand what you're saying about a 7 day period.

PN179

MR NOLAN: Well, I understood your Honour inviting some sort of response from the union which would involve it making some commitment that it would withdraw any threat of protected action for a particular period as a gesture to get things back on an even keel, and the suggestion is that it would commit to a 7 day period at a minimum for that to be - for work to resume - - -

PN180

HIS HONOUR: I see, yes.

PN181

MR NOLAN: - - - during which time the further efforts could be expended to try to reach some settlement, and I'm sure that if the Commission was available to assist the parties in that additional effort we'd be only too happy to accept your assistance.

PN182

HIS HONOUR: Are you suggesting that there be a resumption of work for a period of not less than 7 days without recurrence of industrial action or that there be a recurrence of work in 7 days?

PN183

MR NOLAN: No, no. That there be a resumption of work and that for a 7 day period there be no threat of industrial action.

PN184

HIS HONOUR: Well, I think I'd probably need to go higher than that in the sense if I'm to relatively publicly broker a truce period, it would need to be in effect that there is full commitment, I suppose, basically to the terms that the company is seeking, that is resumption without intimidation or cryptic problems occurring on the sites and I have from a long way back some familiarity with what can happen. I can remember one person who I think inadvertently busted the machine by poking it with the wrong implement and ran up thousands of dollars. His job was in jeopardy, so one doesn't need to be too inept in order to be able to do a lot of damage, I gather, to the grinders and the other things that help to make paint.

PN185

So there will need to be a complete commitment for resumption of work on completely normal terms, but I would have in mind that there be no resumption of industrial action by either party without, in effect, I suppose coming back to the Commission and the Commission saying, "Well, okay, you can start your terror against each other where you left off" and that would probably be along the lines of 3 days notice that, okay, we're going to take the gloves off again, so you're probably looking at 10 days if you came in on the last of the 7 days, but otherwise you don't start fighting again without my permission.

PN186

MR NOLAN: Yes, I understand that, your Honour. Might I ask your Honour to give us a - - -

PN187

HIS HONOUR: Certainly. I think that should be done. You can see that I'm skating in some sense I'm on fairly thin ice here, but I guess what I would really be saying to both parties, you're starting on what could be a fairly intractable problem. I have seen in the last week or so at Tenex, I think where, in fact, the employees refused, as I gather, to make findings about what was essentially a recommendation to their single unit bargaining committee and their officials on what the company said, and I think meant, was the final offer. They then had quite a few days of lock-out and the situation was starting to get pretty intense at Williamstown dockyard which can get very intense and having been left bemused by the ..... matter, it went on for months, and I still don't understand quite why.

PN188

I can see how these matters can congeal over if a bit of inventiveness to try to rein people back isn't arrived at, but that has to be reciprocal. I sympathise with the company's complaint that it shouldn't have to take back people who are back on the job to effectively resume covert industrial action. If the company's induced to back off and the hard play is itself to create then there has to be reciprocity and an attempt generally to arrive at an agreement and that I would propose to do by, I suppose, some form of direction and standing over both applications, but basically we'll need consent so that broadly the direction I'm heading - I won't preclude you from speaking between yourselves, but you might be able to come up with a better formula than the one I came to. I'd hope that we can steer the matter then in the way of resolving by some formula the real industrial difference without making it into a donnybrook that's going to end up really damaging both parties, I would have thought.

PN189

MR NOLAN: Well, we'd appreciate the opportunity of 10 or 15 minutes or so, so we can get some instructions on what your Honour suggested.

PN190

HIS HONOUR: Very well. I'll adjourn for that period and if the parties want to confer then perhaps they can let me know.

SHORT ADJOURNMENT [3.32 pm]

RESUMED [5.34 pm]

PN191

HIS HONOUR: Yes, well, we've adjourned for somewhat longer than originally anticipated, but is there anything to report?

PN192

MR O'DONALD: Yes, your Honour, we would like to report that the parties have reached an understanding or agreement about a cooling off process to be initiated as proposed by the Commission. The parties are committed there be a 7 day period for cooling off, that there will be no resumption of any industrial action at the end of that 7 day period without first giving 3 days notice prior to such resumption of any industrial action to the Commission by either party. That that cooling off will be put in place by a number of steps which the parties have agreed would involve the following.

PN193

Firstly, the calling of a meeting of all employees, expected to take place tomorrow. Secondly, that there be a vote taken by those employees for a resolution committing to the 7 day cooling off period including the commitment to there being no resumption of industrial action without 3 days prior notice to the Commission. That, thirdly, the union would provide, to the company, advice in writing making that same commitment to the company, and, fourthly, the company will provide in writing to the union advice withdrawing the lock-out notice currently applying and making commitment to the same 7 day cooling off period with the commitment that there be no industrial action resumed without 3 days prior notice.

PN194

Fifthly, that the company agrees that employees may attend the industry meeting for the paint industry scheduled in various states. I understand that it's on Thursday with respect to New South Wales Revesby employees. The sixth point, management will not continue working on the floor during the period of the cooling off including beyond that whilst there is no industrial action. The seventh point, that the company will implement a limit on the number of casuals, to limit the number of casuals to 4, and, eighth, during the period of this cooling off the company commits that it will make no offers of AWAs or take any steps to process any AWA which has already been offered. Those are the steps in the cooling off proposal.

PN195

MR NOLAN: Can I indicate that the union agrees to those steps, your Honour, and it might just be said by way of a further elaboration that so far as point six and in particular point six and seven are concerned, the idea is to go back to the pre-dispute working arrangements. In other words, people will work on the basis that they ordinarily worked prior to the dispute erupting and that's the idea of those particular points, so those steps are agreed. There's been consultations so far as the union's concerned with officers in authority to seek agreement to those points and of course there is also the suggestion that I made earlier, which I think did not find any dissent that the parties would be assisted by your Honour if your Honour was available to assist with conciliation if further conciliation on the outstanding issues could go forward under the auspices of the Commission.

PN196

HIS HONOUR: Yes, I don't think there's any barrier to that, Mr Nolan. I'll stand the matter over generally subject to application. It might be a question of availability.

PN197

MR O'DONALD: Your Honour, I would like, in respect of these proceedings, given the nature of Section 127 proceedings, we would have anticipated that in a formal sense these proceedings would be discontinued. We would see there's no barrier in terms of bringing - there is already a Section 99 dispute before the Commission previously notified by the union or bringing a fresh matter to the Commission and we would see there is nothing to impede the parties from involving the Commission in a conciliation process. We would think it would be quite unusual for Section 127 applications to be left hanging over the heads of either party and I am sure I recall on a number of occasions unions making similar applications when I'd even made a short proposal of a few days standing over of 127 applications.

PN198

HIS HONOUR: Yes. Is there any objection to that?

PN199

MR NOLAN: Well, I suppose we're in your Honour's hands really, but of course Section 127 includes capacity for the Commission to conciliate in respect of a 127 application, so it wouldn't be, you know - - -

PN200

HIS HONOUR: I think it's really a matter of what I would be conciliating. I must say I simply had in mind that you've got the availability of the transcript if you needed it.

PN201

MR NOLAN: Yes, that's right.

PN202

HIS HONOUR: What you've recorded on transcript takes it thus far and I would expect that if there is conciliation it's probably about the matter that's in dispute.

PN203

MR O'DONALD: Your Honour, we don't press that at all. We're perhaps being overly anxious about the nature of the proceedings.

PN204

HIS HONOUR: Because I must say, Mr O'Donald, I didn't have in mind keeping the file alive for any other purpose than that when we book a room that we've got something to call. That was really what I had in mind. I think you need to persuade me up hill, Mr Nolan, to do much about the 127 aspect of it.

PN205

MR NOLAN: We're happy to proceed on the basis your Honour suggests.

PN206

HIS HONOUR: Very well. Well, I'll note for the record. I take it you've got a copy of those respective positions adequate for your own needs, have you?

PN207

MR NOLAN: Yes.

PN208

MR O'DONALD: Yes.

PN209

HIS HONOUR: Yes.

PN210

MR O'DONALD: Yes, we have written that out.

PN211

HIS HONOUR: Well, I'll order transcripts so as that be available and I'll give liberty to apply in relation to this matter for effectively what is a 170MH, I think it is, is the provision that - whatever is the section - for conciliation functions. There seem to be a variety of disputes around. I know Commissioner Redman is taking some leave fairly soon, so he's going to be a bit difficult to catch. I will be available for the purposes but I would ask the parties if there is an application for conciliation to advise the other party. I expect that would probably happen anyhow and I will endeavour to accommodate whatever the needs are. Subject to that the matter is - - -

PN212

MR NOLAN: Your Honour, there's one other thing, just for completeness, this was clarified in conference. It might be of assistance to us if Mr O'Donald could just confirm, on the record, that this agreement relates to both the site, that is to say, the Revesby site and the Wacol site.

PN213

MR O'DONALD: Yes. There had been past issues about whether Wacol was included or not in these arrangements, and, yes, we would indicate that this agreement and these arrangements will apply with respect to both Wacol in Brisbane and at the Revesby site in New South Wales.

PN214

HIS HONOUR: That reminds me. There's not a matter before Commissioner Bacon in Brisbane is there? Has Mirotone been before the Commission?

PN215

MR O'DONALD: Not that I'm aware of your Honour.

PN216

HIS HONOUR: Yes.

PN217

MR WARBURTON: Not other than their proceedings, the conciliation proceedings before Commissioner Redman.

PN218

HIS HONOUR: Very well. Well, if there's any sensitivity about what matters are where then perhaps that could be addressed in the future, but subject to that I'll stand this matter over generally on the basis that the Commission will be available for conciliation if need be, otherwise if there is no further application in relation to the matter I would simply close the file in 6 weeks time. Very well, the Commission will adjourn and I congratulate the parties on having made progress.

ADJOURNED INDEFINITELY [5.44 pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #ALHMWU1 OUTLINE OF SUBMISSIONS PN21
EXHIBIT #MIROTONE 1 NOTICE OF INITIATION OF BARGAINING PN75
EXHIBIT #MIROTONE 2 NOTICE OF TAKING INDUSTRIAL ACTION IN RELATION TO ENTERPRISE BARGAINING NEGOTIATIONS DATED 5 DECEMBER PN77
EXHIBIT #MIROTONE 3 COPY OF NOTIFICATION, DATED 29 JANUARY, BY UNION TO COMMISSION OF A DISPUTE PN91
EXHIBIT #ALHMWU2 BUNDLE OF DOCUMENTS PN106