C2004/2327, Transcript of Proceedings [2004] AIRCTrans 1114 (24 March 2004)

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TRANSCRIPT OF PROCEEDINGS

O/N 10010
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER CARGILL

C2004/2327

RESTRICTION IN TORT

Application under section 166A of the Act
by John Holland Pty Limited re action against
Construction, Forestry, Mining and Energy Union
re contracts of employment

SYDNEY

11.00 AM, FRIDAY, 12 MARCH 2004

PN1

THE COMMISSIONER: Can I have appearances, please?

PN2

MR P. LUDEKE: If the Commission pleases, I seek leave to appear for the notifier, John Holland Pty Limited.

PN3

THE COMMISSIONER: Yes, Mr Ludeke.

PN4

MR S. SMITH: If the Commission pleases, I appear for the Construction, Forestry, Mining and Energy Union and I appear today with MR M. LANE.

PN5

THE COMMISSIONER: Mr Smith, is there any objection to Mr Ludeke being given leave?

PN6

MR SMITH: No, Commissioner.

PN7

THE COMMISSIONER: In that case leave is granted. Mr Ludeke, if you would like to go ahead please.

PN8

MR LUDEKE: Commissioner, this notice was lodged yesterday as a result of continuing conduct, we say, arising in breach of orders the Commission issued on Monday this week. The Commission as presently constituted heard that matter you will recall in C2004/1736. As I say the conduct we allege is continuing and as a result my client has issued proceedings in the Federal Court and now seeks a certificate by the Commission pursuant to section 166A and in support of that I wish to call some relatively brief evidence if that's convenient now.

PN9

THE COMMISSIONER: Yes, Mr Ludeke.

PN10

MR LUDEKE: I call Mr Sasse.

<STEVEN MICHAEL SASSE, AFFIRMED [11.03am]

<EXAMINATION-IN-CHIEF BY MR LUDEKE

PN11

MR LUDEKE: Your name is Steven Michael Sasse?---Yes.

PN12

You are Corporate General Manager, Human Resources, Industrial Relations and Safety for the John Holland Group?---Yes.

PN13

And your professional address is 235 Pyrmont Street, Pyrmont, in New South Wales?---Yes.

PN14

You have heard in my introductory remarks to the Commission that John Holland has issued proceedings in the Federal Court, did you prepare an affidavit in respect of those proceedings?---I did.

PN15

I hand up that affidavit, Commissioner.

PN16

THE COMMISSIONER: Have you provided a copy to Mr Smith?

PN17

MR LUDEKE: Yes, Commissioner. I am instructed the union was served with this affidavit yesterday. I have given Mr Smith a copy today if it hasn't filtered through to his own office. Would the Commission like some time to read that or should I have Mr Sasse read the affidavit?

PN18

THE COMMISSIONER: I can read it, so you are going to want this marked as an exhibit in this matter as well, are you, Mr Ludeke?

PN19

MR LUDEKE: If the Commission pleases, yes.

PN20

THE COMMISSIONER: Is there any objection with that Mr Smith? I mean obviously you'll have the right to cross examine on anything that's in it.

**** STEVEN MICHAEL SASSE XN MR LUDEKE

PN21

MR SMITH: I can't think of any reason why I would object, Commissioner.

PN22

THE COMMISSIONER: In that case I'll mark that as exhibit John Holland 1, seeing it's an affidavit and obviously don't need Mr Sasse to attest to its truthfulness.

EXHIBIT #JOHN HOLLAND 1 AFFIDAVIT OF MR SASSE

PN23

MR LUDEKE: Could you read the affidavit into the record, Mr Sasse, starting from paragraph 1?

PN24

THE COMMISSIONER: Just before you do, Mr Ludeke, is there actually need for the whole of it to be read?

PN25

MR LUDEKE: I'm at the Commission's convenience. Much of the material in there will be familiar to both the Commission and to the union because it relates to the proceedings that were before you on Monday but I'm happy for the Commission simply to read it if that's convenient and I've only got a couple of supplementary questions for Mr Sasse.

PN26

THE COMMISSIONER: Did you particularly want it read into the record, Mr Smith, or are you able to deal with it?

PN27

MR SMITH: No.

PN28

THE COMMISSIONER: I just thought it might take up a lot of time, Mr Ludeke, that's all, on matters that probably aren't going to - I'm not saying they are not relevant but I don't know that they need to be particularly read into the record for the proceedings so I'm happy for you just to, if you want to lead evidence on perhaps what's happened since Monday if that can bring me up to date please.

**** STEVEN MICHAEL SASSE XN MR LUDEKE

PN29

MR LUDEKE: Yes. The affidavit for the Federal Court's purposes covers material relevant up to and including the Commission proceedings on Monday. At paragraph 16, there is reference there to 5 March, the Commissioner will remember there were proceedings here that day in relation to the stoppage and then paragraph 17 confirms the stoppage that day, at paragraph 19 there's reference to the order the Commission made on 8 March requiring an end to the industrial action. Paragraph 20 attests to the service of that order on the CFMEU as required and then to read from the affidavit the second sentence says:

PN30

On 9 March I'm informed by Mr Ross Herbert and verily believe ...(reads)... a copy of the orders to each employee as they entered the meeting.

PN31

Paragraph 21 refers to the damage and loss that my client is suffering as result of the action.

PN32

I should, Commissioner, just refer you to paragraph 17, at the end of that paragraph Mr Sasse attests that:

PN33

I am informed by Mr Herbert and verily believe that the said employees are not returning to work as at the date of this affidavit.

PN34

The affidavit being dated 10 March, so that's Wednesday of this week.

PN35

Mr Sasse, can you please advise the Commission what has occurred since the 10 March in relation to the industrial action referred to?---There was a mass meeting held on site at 7.00 am this morning. The outcome of that mass meeting was a decision to continue the strike action with a decision to meet further on Friday of next week, 19 March at 7.00 am to reconsider the position so the strike action continues.

**** STEVEN MICHAEL SASSE XN MR LUDEKE

PN36

And your affidavit refers to the action continuing as at 10 March, you've now said that it continues as of today, is there any difference between 10 March and today? Was there any return to work?---No, there was not.

PN37

Now, Mr Sasse, have you read the written notice of intention to bring an action in tort that was filed and initiated these proceedings yesterday, 11 March?---I have.

PN38

Is it correct to say that there are some factual inaccuracies in that?---There are.

PN39

At clause 3 of the notice there is - Commissioner, this is the paragraph at the bottom of page 2, there is a paragraph stating by reason of the code of practice for construction work adopted in New South Wales by the New South Wales Government and applying at the site, the New South Wales Government must approve any and all payments in the nature of the claims advanced by the union, the New South Wales Government refuses to grant such approval. Do you wish to correct that paragraph?---I do.

PN40

Could you tell the Commission how you wish to correct it?---That paragraph should be deleted and replaced with the following words: the New South Wales Code of Practice for the construction industry and its associated documents and processes provides the procedure and criteria that must be followed where contractors seek to establish site ..... project agreements. At this time it is John Holland's view that we would be unable to satisfy those criteria and therefore would be unable to obtain approval for any proposed project agreement. The establishment of a project agreement outside the provisions of the Code of Practice would put John Holland at risk of being disqualified from bidding on future New South Wales Government construction work. This work generally represents some 30 per cent of John Holland's New South Wales revenue.

PN41

THE COMMISSIONER: Can I just clarify, Mr Sasse, and perhaps with Mr Ludeke, in other words, you saying to delete not only the paragraph at the bottom of page two, but I gather from what you have said the one at the top of page three?---Yes, Commissioner.

**** STEVEN MICHAEL SASSE XN MR LUDEKE

PN42

MR LUDEKE: If the Commission pleases. Can I ask for leave to amend the notice to that effect to ensure that it is factually accurate and I apologise to the Commission for having to do that. I misunderstood my client's instructions and I am to blame for the need for the amendment.

PN43

THE COMMISSIONER: Mr Smith, is that going to - first of all, did you want to put anything about Mr Ludeke's request to vary or amend the notice?

PN44

MR SMITH: Well, we would oppose that, Commissioner. If my friend wants to amend the notice, then I would suggest a fresh notice be issued. It is a serious thing seeking a 166A certificate, and having these things dropped on us here is not convenient.

PN45

THE COMMISSIONER: Well, Mr Smith, is there anything in this paragraph that Mr Sasse now says is the correct one that would cause you inconvenience, I mean, have you got a copy? Has a copy of those words been provided to Mr Smith?

PN46

MR LUDEKE: No, but we can arrange that, Commissioner.

PN47

THE COMMISSIONER: I must say, from what I heard I do not know that it will have made a big difference to your case that you would be putting. I take your point, they are serious issues seeking these certificates, but I do not know that what Mr Sasse has said has been really of material difference from your point of view.

PN48

MR SMITH: I would say it is a matter for the Commission.

PN49

THE COMMISSIONER: Yes. I will grant leave to you to amend the notice, Mr Ludeke. And, as I say, it would be useful perhaps if Mr Smith could have an opportunity to - - -

**** STEVEN MICHAEL SASSE XN MR LUDEKE

PN50

MR LUDEKE: That is our evidence, Commissioner.

PN51

THE COMMISSIONER: Thank you. Mr Smith, firstly, did you want to cross-examine? Allied with that is do you actually need any time to study those words before you do?

PN52

MR SMITH: Perhaps just 30 seconds to read over them again, Commissioner.

PN53

THE COMMISSIONER: We will stay on the record, but just take your time there. So, if you would not mind just waiting, Mr Sasse, thank you.

PN54

MR SMITH: I have read that, Commissioner.

PN55

THE COMMISSIONER: You are okay to proceed with cross-examination then?

<CROSS-EXAMINATION BY MR SMITH [11.15am]

PN56

MR SMITH: Yes, I am.

PN57

Mr Sasse, you said there was a meeting this morning of the workers?---Yes.

PN58

Were you at that meeting?---I was on site while the meeting was happening. I made an offer to be available to that meeting to answer any questions from the company directly, and I was party to a report back that was attended by the delegates and the organiser.

PN59

Right. So, you were not at the meeting, but you were at a report back about what occurred at the meeting?---Yes.

**** STEVEN MICHAEL SASSE XXN MR SMITH

PN60

You do not know what any official from the CFMEU said at that meeting, do you?---I had a - Mr Primmer advised us what he said at the meeting and I take that at face value.

PN61

What did Mr Primmer say that he said?--- He said that the decision of the meeting was that they would be taking strike action and meeting further in a week's time.

PN62

Is that word for word what he said?---Substantially.

PN63

Is there anything that he said?---We had some general discussions about we have got pressing environmental issues, we have got to pump a pond, we have got to do a few other things and talked about the mechanics, how that might happen.

PN64

He did not say to you that the decision to stop work was that of the unions or was encouraged by the union at all, did he?---The delegates made it clear to us that it was a decision of the meeting of the employees.

PN65

Right. Okay. And what about the meeting on Tuesday, there was a meeting on Tuesday, you will recall, after orders were issued by this Commission. There was a report back meeting in the morning on Tuesday, was there not?---I think that is mentioned in the affidavit, that I had a report back from my site management.

PN66

And you were not at that meeting either?---No, I was not.

PN67

Is it the same circumstance, that after this meeting, at the report back, you were told by someone else that the workers had voted to continue to withdraw their labour. Is that correct?---Well, that was the outcome of the meeting. I cannot give any evidence as to the precise words that were said at the time.

**** STEVEN MICHAEL SASSE XXN MR SMITH

PN68

Is it not the case that the union advised the workers of the section 127 notice, the orders issued by this Commission - - -

PN69

MR LUDEKE: Commissioner, I doubt whether Mr Sasse is competent to be able to assist the Commission with an answer to that question.

PN70

THE COMMISSIONER: Whether he is or not, Mr Ludeke, I would be interested in the answer if he happens to know, if he does not know then we will find out.

PN71

THE WITNESS: Neither I nor any other company officer was at that meeting.

PN72

MR SMITH: No further questions, Commissioner.

PN73

THE COMMISSIONER: Thank you. Mr Ludeke, did you want to re-examine Mr Sasse.

PN74

MR LUDEKE: No thank you, Commissioner.

PN75

THE COMMISSIONER: In that case you can be excused. Thank you.

<THE WITNESS WITHDREW [11.17am]

PN76

THE COMMISSIONER: Did you have any more evidentiary material you wanted to put on, Mr Ludeke?

PN77

MR LUDEKE: No thank you, Commissioner.

PN78

THE COMMISSIONER: Mr Smith, are you proposing to call any evidence or put any material on?

PN79

MR SMITH: No, Commissioner.

PN80

THE COMMISSIONER: Right. In that case, to both, did you want to make submissions, Mr Ludeke? It is a little - each of you can make submissions, but as you are aware 166A requires the use of conciliation powers, so, presumably at the end of your submissions, or at some point, we will need to go into conference for me to see whether there is any possibility that the exercise of those powers may resolve the issue.

PN81

MR LUDEKE: It might be open on an interpretation of the Act that you not actually conciliate, but we would be prepared to participate in that immediately, rather than go to submissions straight away, Commissioner.

PN82

THE COMMISSIONER: Sorry, you say that it may be open that there is no need? I thought that was the whole purpose, that the Commission use its powers, including conciliation powers, is that not the - - -

PN83

MR LUDEKE: Well, the provision I am - - -

PN84

THE COMMISSIONER: If you are prepared to go to conference it may be an academic question, Mr Ludeke.

PN85

MR LUDEKE: It might be, it is just that a 166A subsection 5 talks about the Commission taking immediate step to try or continue to try by the exercise of its powers and we would say that the Commission has already tried, very much so, to bring this conduct to an end by the issuing awarders. And then 166A(6) is predicated with the word if, it does not, in my submission, require the Commission to exercise conciliation powers, but as I say, it is not an argument that I seek to press. We are happy to involve ourselves in conciliation and I will not make any comments about what we think is the likely success of that. You have heard the evidence that there is a stoppage continuing for another week.

PN86

THE COMMISSIONER: Yes, but I think it would be useful. The successor otherwise will remain to be seen, but as you will remember, Mr Ludeke, that I have not as yet have any opportunity to exercise conciliation powers in relation to the matter. It is not like - sometimes these matters pan out that you have actually conciliated in relation to a 127 application and then the 166A may follow down the track. I have not had that opportunity because of the way things have happened, so, I think - unless Mr Smith had anything to say to the contrary, would perhaps be useful to at least go into conference and see if it is possible to try to resolve something. Obviously, reserving to you your right to put submissions should the matter not resolve itself.

PN87

MR LUDEKE: Thank you. Mr Smith, did you want to put anything on the aspect of whether or not we go into conference - - -

PN88

MR SMITH: We have no objection to going into conference either before or after submissions, Commissioner.

PN89

THE COMMISSIONER: Right. Well, maybe it might be useful to perhaps go into conference now. Obviously you would have the same rights reserved to you in relation to putting submissions should the matter not resolve so, in that case, is there any difficulty from any of you if we go off the record now and into conference?

PN90

MR SMITH: No, Commissioner.

PN91

MR LUDEKE: No, Commissioner.

PN92

THE COMMISSIONER: In that case we will go off the record, thank you.

OFF THE RECORD [11.22am]

RESUMED [12.19pm]

PN93

THE COMMISSIONER: Yes, Mr Ludeke.

PN94

MR LUDEKE: Commissioner, thank you for the opportunity to participate in that conciliation. Unfortunately the matter is unresolved so we seek to press for the issue of a certificate. If it's convenient I'll make submissions to that effect now.

PN95

THE COMMISSIONER: Yes, thank you.

PN96

MR LUDEKE: You will be aware, Commissioner, there's a line of authority in Full Bench decisions as to the criteria that needs to be considered as to whether a certificate under section 166A should issue and in identifying conduct, in particular, for the purposes of the section. Can I hand you a decision in an appeal matter, it's Print PE5522, it's the CFMEU v Coal and Allied Operations Pty Limited decision of the Full Bench and I'm advised that that decision is reported in (1997) 77 IR 142 and the criteria that I referred to, Commission, are at page 5 of that decision. At the top of the page there's a reference to the reasons issued by Bolton J in the decision under appeal where he referred to earlier Full Bench decisions in Wettingture Homes v AMWU and Mobile Oil Australia.

PN97

The Commission in this decision adopts the views expressed in those two decisions and at the end of that first paragraph says in Mobile Oil the Full Bench said that the Commission in exercising its jurisdiction under section 166A was required only to identify conduct, firstly, capable of being the subject of a notice under a section, secondly, capable of being the subject of conciliation proceedings, thirdly, capable of being the subject of attempts by the Commission to stop the conduct and, finally, that it might reasonably be the subject of a declared intention to bring an action in tort.

PN98

As to those criteria, Commissioner, I rely on the evidence of Mr Sasse in exhibit John Holland 1 in support of the submission that each of these criteria are met and ought to satisfy the Commission that a certificate should issue. The conduct, Commissioner, is the industrial action identified in Mr Sasse's affidavit as to those stoppages and stop work meetings set out in paragraphs 8 to 17 and I note that paragraph 17 concludes by saying that:

PN99

I am informed by Mr Herbert and verily believe that the said employees have not returned to work as at the date of this affidavit.

PN100

You will recall Mr Sasse's oral evidence that the date of his affidavit being 10 March, the conduct did continue yesterday and is continuing today. He also said to you that he had been advised having spoken to delegates at the project this morning that the conduct is apparently to continue for a further week and the strike will be the subject of a further meeting of the employees on Friday next week and in respect of that first criterion of identifying the decision, Commissioner, we say that that is conduct, it's in furtherance of a claim identified in paragraph 11 of Mr Sasse's affidavit, that being a site specific agreement including amongst other things a site allowance of $2 to $3. We say that conduct plainly can be the subject of a notice under section 166A.

PN101

The second criterion referred to in the decision is whether the conduct is capable of being the subject of conciliation proceedings and we'd say that the conduct in the claim that underpins it are unremarkable of themselves in that regard as matters that might regularly come before the Commission and be the subject of the conciliation. The union has not, prior to today, pressed the Commission to conciliate but that doesn't alter the fact that in terms of that second criterion the issue is capable of conciliation proceedings and indeed the Commission has attempted that today.

PN102

The third criterion is the conduct is to be capable of being the subject of attempts by the Commission to stop the conduct. Now, I should say at this point that the conduct for our purposes in these proceedings is conduct which exists as at the time that a notice is filed with the Registrar or with a member of the Commission under section 166A, subsection (1), and more particularly conduct that's notified pursuant to subsection (3).

PN103

So the Commission needs to be satisfied that the conduct is capable of being subject to attempts by the Commission to stop that conduct. Conduct that is the subject of the notice, while the notice was filed early yesterday, is nonetheless ongoing conduct and it's the continuation of industrial action that's been going on for some time. We would say that's an important consideration that since November of last year there has been industrial action which continues on regular occasions, it's likely to continue for the purposes of the Commission's consideration of the issue of a certificate, indeed, you've heard evidence that it will certainly continue for at least another week, you've heard from Mr Sasse and confirmed in cross examination. He was asked questions about what the union had told him about the continuation of the conduct and, indeed, the union itself has brought no evidence to suggest the conduct is not going to continue.

PN104

This of course is important because not only is it continuing into the future but the Commission's already made efforts to stop the conduct, the Commission issued orders pursuant to section 127 on Monday and the evidence before you is that that was rejected by employees at a meeting on Tuesday morning and, indeed, the further evidence that they've met today and decided to continue it. So that effort, as the Commission knows, to stop the conduct by the issuing of orders has failed. Furthermore, the Commission has attempted to conciliate the matter again to attempt to bring a stop to the conduct that is conciliated today and, unfortunately, that has not been successful.

PN105

The final criterion is that the conduct might reasonably be a declared intention to bring an action in tort. The submission needs to be made in that regard that the conduct of itself is relatively straightforward as being amenable to bringing an action in tort. There's authority in the Commission that the Commission doesn't need to decide the likely outcome of proceedings brought in tort. It only needs to be satisfied that there is, as the criterion says:

PN106

Reasonably there can be in respect of the conduct, the subject of a declared intention to bring the action.

PN107

You already know Commissioner, that there has been the initiation of proceedings by my client in the Federal Court and, subject to the Commission issuing a certificate pursuant to section 166A, my client will seek to amend its application in the Federal Court and, amongst other things, it will ask for orders that the CFMEU indemnify my client in respect of any claim for liquidated damages under its contract on this project. I say, amongst other things, because my client of course needs to look at all its remedies because as is attested to by Mr Sasse at paragraph 21 of his affidavit the losses that are being incurred by my client are substantial.

PN108

Can I just briefly take you to section 166(a). The operative provisions are in sub section (6) and indeed there is a relationship also with subsection (5) where the Commission is required to take immediate steps to try or continue to try, by the exercise of its powers under this Act, to stop the conduct. As I say the conduct continues. There is evidence that it will continue for at least a week. There is no evidence to the contrary. The Commission has exercised its conciliation powers today but without avail. The Commission has previously issued orders which is another of its powers contemplated, no doubt, by subsection (5) and those orders have been ignored.

PN109

Subsection (6) then provides for three separate bases upon which the Commission is required to issue a certificate immediately if one or other of those bases is satisfied.

PN110

Paragraph (a) speaks of:

PN111

If after the Commission starts to exercise conciliation powers in relation to the industrial dispute and informs the opinion that it is not likely to be able to stop the conduct properly.

PN112

That's the first and, we would say Commissioner, that you are able to form that opinion on the basis of two things. Firstly, the evidence that Mr Sasse which is uncontroverted and no attempt has been made to say that conduct will not, as Mr Sasse has attested, continue until at least Friday of next week and you are also able to form the opinion, in my respectful submission, that having started to exercise your conciliation powers it is unlikely you are going to be able to stop the conduct promptly given that nothing has been put by way of evidence to suggest otherwise.

PN113

Paragraph (b) is a separate base, as I submitted earlier, for the issue of a certificate if the Commission is so satisfied. It is that it would cause substantial injustice to the person, the person in this case being my client the employer who gave the notice under subsection (3) in respect of the conduct, if the person were prevented from bringing the action to which the notice relates while the Commission is exercising conciliation powers.

PN114

Now it may be that the Commission is able in certain circumstances to say that it is worth the effort to continue to exercise conciliation powers to attempt to bring the conduct to an end. For the purposes of this paragraph (b) we would say that, in fact, the Commission would form a view to the contrary, that continuing exercise of your conciliation powers is unlikely to bring the conduct to an end. The result of that is my client would suffer a substantial injustice if the Commission were not to issue a certificate in respect of the conduct.

PN115

That substantial injustice is simply this Commissioner, my client has already issued proceedings in the Federal Court and it ought not be prevented from pursuing an action in tort when the evidence before you is that there will be yet another week of a strike in relation to this notice and that there is no evidence put to you by the CFMEU that there will be an early end to that conduct.

PN116

My client will suffer a substantial injustice of the significant extent identified in paragraph 21 of Mr Sasse's affidavit and ongoing and the Commission, in my respectful submission, ought be persuaded that that substantial injustice should not occur. I don't spend any time on paragraph (c), it's the provision which separately deals with whether the conduct has continued for at least 72 hours after the notice is filed under subsection (3). I acknowledge that the 72 hours hasn't expired until late Sunday morning.

PN117

I rely on paragraphs (a) and (b) to suggest that the Commission would be persuaded to issue the certificate under either of those paragraphs without waiting for the 72 hours to expire. Indeed, waiting for the 72 hours to expire brings, in my submission, an automaticity in the requirement for the Commission to issue the certificate but there is no reason before you and certainly no evidence as to why the Commission would wait for that 72 hours to pass.

PN118

The union has thrown no lifeline to assist in coming to a conclusion that if the Commission were to wait for the 72 hours and, presumably, continue to exercise its conciliation powers, that that would make some difference to the outcome of the matter. On the contrary the evidence plainly is that my client is going to continue to suffer the damage that has already been inflicted on it to a substantial extent for yet another week. In those circumstances Commissioner, I conclude by saying that section 166(a)(6) is satisfied and the Commission ought issue the certificate pursuant to the subsection, if the Commissioner pleases.

PN119

THE COMMISSIONER: Thank you, Mr Ludeke. Yes, Mr Smith.

PN120

MR SMITH: Thank you Commissioner. I would like to start Commissioner by putting a couple of things on the record. The first of that is, as the evidence has shown, the workers are not working today. There was a meeting today with an organiser from the CFMEU, Peter Primmer, where Mr Primmer read the section 127 order issued by this Commission on Monday and strongly advised them to return to work. Mr Primmer left that meeting and the workers then voted to continue to withdraw their labour by 70 percent. Seventy percent of the workers voted to continue to withdraw their labour and that is somewhat reflective of what occurred on Tuesday, the day after the orders were issued. The CFMEU officials complied wholeheartedly with that section 127 order.

PN121

Mr Lane attended a meeting of the workforce, distributed copies of the order, read it to the workers and the workers there again voted by approximately 70 percent to withdraw their labours as well. So I want to make the point that the CFMEU has not, in any way, breached its section 127 order and indeed my friend has not alleged that.

PN122

I would also like to refer to Mr Sasse's evidence. If we look at his affidavit John Holland 1. You will note that from paragraph 20 he talks about the order, the section 127 order, and you will note that nothing from paragraph 20 onwards infers that the CFMEU official or CMFEU has not complied with section 127 order. You will also note Mr Sasse's evidence that he was not at the meetings on either Tuesday or this morning. He does not know whether any union official said, what any union official said at any of those meetings. Indeed, his evidence was that he was told that the decision to not work, made today by the workers this morning, was made by the workers themselves and not the union.

PN123

Now, I would like to refer the Commission to the written notice from the company and we should just go through this slowly, Commissioner, because it is crucial. Under section 166A - this is paragraph 1 of the written notice of the Act - John Holland gives due notice of its intention to bring an action or actions in tort against the Construction, Forestry, Mining and Energy Union. It then goes on to detail what that action is, sorry, in respect of what conduct that action will be. The conduct is inducing or procuring or threatening to induce or procure, breaches of or preventing or interfering with the performance of the contracts, and then there are paragraphs (a) through to (d) there, detailed what that means. Paragraph I(i) says:

PN124

Unlawfully interfering with the business of the applicant or the contractors.

PN125

and the next paragraph says:

PN126

And/or intimidation.

PN127

Commissioner, there is no evidence before you today to indicate that the CFMEU or any of its officers or officials have induced or procured or threatened to induce or procure breaches of or prevented or interfered with any of the contracts below today. There is no evidence of that, there is no evidence of unlawfully interfering with the business of the applicant or the contractors and there is no evidence of intimidation. The only evidence before you today, Commissioner, of industrial action occurring at the moment, is that the workers themselves have voted to withdraw their labour.

PN128

Commissioner, in our submission there is no jurisdiction for this Commission to issue a 166A certificate. I will take the Commission to that section and I will go through it slowly. This is section 166A, subsection 1.

PN129

Subject to this section an action in tort under the law of a State or Territory may not be brought by a person against an organisation of employees or an officer, member or employee of such an organisation, in relation to conduct by the organisation or the officer, member or employee.

PN130

The company is not seeking a notice with respect to any conduct by the employees with respect to any conduct by the workers who have withdrawn their labour. The conduct that they are relying on here today is conduct by the CFMEU, and in our submission there is no evidence of any conduct by the CFMEU to, as I said before, induce, procure, etcetera, the withdrawal of labour as it stands today. And if you go on ahead, in section 166A, subsection 3:

PN131

A person who wants to bring an action in tort in respect of conduct to which subsection 1 applies may give written notice to the member of the Commission or Registrar stating that the person wants to bring the action.

PN132

That is obviously what this written notice is. Again, it is the conduct within contemplation of subsection 1, and the conduct as defined by this application is conduct by the CFMEU. And then if we go to section 166A, subsection 6:

PN133

If, after the Commission starts to exercise conciliation powers in relation to the industrial dispute, it forms the opinion it is not likely to be able to stop the conduct promptly,

PN134

and it goes on. What conduct is that, Commissioner? The conduct alleged by my friends is conduct by the CFMEU. No evidence has been presented before you today to allege that CFMEU is procuring or inducing any industrial action at the moment. The conduct that the company is referring to is a withdrawal of labour by the workers, but that is not what this notice refers to. This notice is silent on conduct by workers, it is referring to conduct by the CFMEU. If we go on to section 166A, subsection (b):

PN135

The Commission decides that it would cause substantial injustice to the person who gave a notice under subsection 3 in respect of the conduct if the person were prevented from bringing the action to which the notice relates while the Commission is exercising conciliation powers in relation to the industrial dispute.

PN136

In our submission the company has presented no evidence of a substantial injustice. The company has presented evidence of a loss, but that is different from substantial injustice, Commissioner. I would like to refer the Commission to a decision, the print number is 913101, it is the Age Company Limited and the AMWU. I would like to refer the Commission to page 21, paragraph 106. I will start reading from the second sentence:

PN137

In order to issue a certificate the Commission in the exercise of its powers of conciliation must be satisfied that the prevention in bringing the intended tort action would cause substantial injustice to the person wanting to take the action.

PN138

In our view that necessarily involves a balancing process. It is not merely a question of prejudice to, or loss, that may be suffered by an individual. The essential criterion is injustice. The evidence that my friend referred to alleging some kind of substantial injustice was paragraph 21 of John Holland 1, the affidavit of Mr Sasse, and you will note that that paragraph talks only about loss, Commissioner. Loss itself does not prove substantial injustice. The providing of substantial injustice must be done through a balancing process. If you see on the same page of that judgment, Commissioner, you will see that Justice Blackburn in Australian Continental Resources Limited is quoted, and that is an important paragraph, I will read it out:

PN139

Some argument occurred on the connotation of the word injustice in this paragraph. In my opinion it necessarily implies a consideration of the relative gains or losses of the parties involved. Council for the respondent sought to persuade me that in effect the word injustice meant loss, the word prejudice was the one he actually used in argument and I use it here in the sense of loss or harm.

PN140

The gist of his argument was that if the order proposed would cause prejudice to the company, member or creditor in question, that in itself was enough to preclude the making of the order without regard to the effect of the order upon the rights of the parties. I think this construction is incorrect and that it would make the section far less useful. In my opinion, the task of the Court in complying with paragraph (e), that paragraph (e) has nothing to do with the legislation we are referring to, will not be complete merely upon its satisfying itself that the order proposed would not cause prejudice in the sense indicated to any person of the classes mentioned. Such an order may well do so, prejudice is not the criterion, justice is, and justice may require that the prejudice to one party if the order were made, be balanced to get the respective prejudice to other parties if the order were not made.

PN141

I will refer the Commission to the quote on page 21 from Chief Justice Bowman. I will not read it out because it is similar to the other paragraph. I will read out on page 22, paragraph 109, I will start from the second sentence:

PN142

The Commission must consider all of the circumstances of the case when determining whether substantial injustice is caused by preventing the action in tort. The Commission must in the context of seeking to resolve the dispute by conciliation, balance the interests of the parties seeking the certificate against the interests of the parties in respect of whose conduct the certificate is sought.

PN143

Commissioner, my friend has not put any submissions with regard to that balancing process, nor is there any evidence. The only evidence before you is that there may be a loss. Commissioner, that is clearly not enough based on that authority. In our submission if you balance the rights of the parties in this matter, you have the right of the employer to obviously seek common law damages or what not. We also have the right of the CFMEU to immunity under section 166A. Section 166A has a presumption of immunity for conduct which is in furtherance of claims. There is a presumption there in the legislation of an immunity and that is a significant right for industrial organisations in our industrial relations system.

PN144

Also significant is the fact that the CFMEU has complied with the section 127 order of this Commission. The CFMEU is not now procuring or inducing any form of withdrawal of labour as alleged in the written notice. In our submission Commissioner, the company cannot hang its hat on section 166A(6)(b) because they have not proved a substantial injustice and it is the onus of the company to prove that injustice. It's not our onus to disprove it, it's the onus of the company. Just like, it's the onus of the company to prove CFMEU is inducing or procuring or threatening to induce etcetera the action going on at the moment. It's not up to us to disprove that, the onus is on the employer to prove that. They have not done that. They've proven today that the workers are not working, that's all that's been proven.

PN145

I move to section 166(a) subsection 6(c). That says that if the Commission has not stopped the conduct by the end of 72 hours after the notice was given under subsection 3 in respect of the conduct, a certificate can be issued. There's no conduct Commissioner. There's no conduct as it is outlined within the written notice. The CFMEU is not inducing or procuring any withdrawal of labour. There is, quite simply, no conduct as alleged in the written notice and in our submission there is no way that a certificate can be issued by this Commission. That concludes our submissions Commissioner.

PN146

THE COMMISSIONER: Thank you, Mr Smith. Mr Ludeke, did you wish to put anything in reply?

PN147

MR LUDEKE: I'll only be brief, Commissioner. I'm acknowledging the time. Unfortunately, Commissioner, my friend misapprehends what section 166(a) is intended to do. It does prevent unfettered access to actions in tort but only subject to its own terms. It doesn't require the Commission to determine what those actions in tort might be, nor does it require the Commission to determine the likely success or otherwise of those actions in tort. It simply needs to be satisfied that a party has properly issued a notice to the Commission pursuant to the section but it is its intention to bring such an action and, until the Commission issues a certificate, the party will be prevented from doing so but, as I say, only subject to the terms of the section itself.

PN148

My friend seems to be saying to you, you need to be satisfied under the terms of paragraph 1(i), (ii) and (iii) of the notice that was filed with the Registrar yesterday. You have to be convinced, for the purposes of section 166(a), that the conduct there is proven. That's not the Commission's role. The Commission does not deal with the facts and the evidence as to the alleged tort or torts. They are matters for the court.

PN149

The matters raised in paragraph 1 of the notice must be brought to the Commission's attention, as required by section 166(a)(3), the Commission must be advised of the intention of the party in bringing the action in tort. My friend seems to suggest that we need to prove to you that the CFMEU is engaged in the conduct that is alleged in paragraph 1 of the notice and that's why I say his interpretation of the section in that regard is misconceived. That's the notice of intention. It's a question of proof elsewhere as to whether those alleged torts have indeed been committed.

PN150

THE COMMISSIONER: But you recognise, Mr Ludeke, that if the certificate is issued and you proceed to go elsewhere to pursue that action, that those issues may be a matter of factual dispute between you?

PN151

MR LUDEKE: Indeed, yes. My client is going to have to prove them somewhere, but not here. I think my friend is suggesting that you need to be satisfied that those allegations of tort are proven before you would then exercise what's required, as we suggest, under subsection (6). I think he is misconceived in that regard. We're not required by the section to prove those matters here.

PN152

The next issue that should be addressed is that a number of statements have been made to you about what action or conduct is occurring and what circumstances surround the action or conduct. Mr Smith said to you that all you know is the employees are not working today. He then made some statements to you about what Mr Primmer has said to have done in a meeting last Tuesday and you will recall, he said that the result was that 70 per cent of the employees voted in a certain way.

PN153

THE COMMISSIONER: I think that was the meeting today with Mr Primmer.

PN154

MR LUDEKE: No, as I understood it, it was Mr Primmer on Tuesday and Mr Lane today.

PN155

THE COMMISSIONER: I thought it was reversed.

PN156

MR LUDEKE: The other way around Commissioner. Mr Lane on Tuesday, Mr Primmer today but those officials of the union put certain matters to the meetings and there were certain results of the meetings. It's said that that's important for you because the result of it is that you can conclude that the CFMEU has not reached the order that the Commission made under section 127 on Monday.

PN157

Well, Commissioner, that's all very well but unfortunately none of that is in evidence before you. It is merely contested that the CFMEU has not done certain things in breach of the order, or that it has done certain things in compliance with the order and therefore, it's absolved of any responsibility that flows when the order is breached by its members.

PN158

In my submission you can completely discount what Mr Smith has had to say to you in that regard. If the union truly wanted to rely on circumstances such as those, it would have put them into evidence. It can't stand before you and say our hands are clean because we've done certain things or we haven't done certain other things and expect you to simply accept that. They are important contentions that need the force of evidence, not submissions. On this note Mr Smith suggested that Mr Sasse's affidavit from paragraph 20 onwards said that there was no allegation that a breach of the Commission's order by the CFMEU and that in my submission I had made a submission to the effect that the CFMEU had breached the order. Well, maybe it's possible to conclude from those matters that there isn't an allegation in front of you that the CFMEU has breached the order. I'm not putting that submission. That's a matter to be tested in evidence. What I do say about that to you is that it's not relevant for your consideration under section 166A, it doesn't matter that there is an allegation or there is no allegation that the CFMEU has breached the order.

PN159

The only issue that the Commission needs to consider is whether there is conduct, whether there is participation in conduct that is ongoing and that according to subsection (6) ought to be the subject of a certificate. Whether the CFMEU thinks its hands are clean is not relevant. It's interesting that a union tries to divorce itself from its members. My friend ought to have a think about the doctrine of collectivity. The union and its members are one. They can't divorce one another even if they were to do so amicably. The responsibility of one is the responsibility of all.

PN160

The orders that the Commission issued on Monday are directed at the CFMEU. There's no evidence before you that the CFMEU has done everything required under those orders. You're entitled to conclude otherwise but in the end the fact is that the conduct by the collective, the union, is continuing.

PN161

Mr Smith then spent some time on paragraph (b) of subsection (6) of section 166A and suggested to you that you need to have proved to you that there is a potential for substantial injustice if a certificate were not issued and therefore my client is prevented from bringing the action that it intends and I agree and respectively adopt the Commission's words in the Age Company decision that my friend took you to, paragraph 109. The Commission will balance the interests of the party seeking the certificate in whether it will agree that a certificate should issue but those words in section 109 are put into an important proviso in terms of the Commission making that decision on the balance and it's the words there in the context of seeking to resolve the dispute by conciliation.

PN162

I'll read more fully: in determining whether a substantial injustice is caused by preventing the action in tort the Commission must in the context of seeking to resolve the dispute by conciliation balance the interests of the party seeking the certificate against the interests of the parties in respect of whose the conduct the certificate is sought.

PN163

So, Commissioner, you are invited to consider that balance, at the same time as you would according to that part of the Full Bench of the Commission's decision consider the context of your likely ability to resolve the dispute by conciliation. I've addressed you on that earlier and I don't repeat what I had to say. You've made those attempts, if you conclude that according to subsection (6) it's unlikely that you are able to resolve the matter by conciliation and certain things come to bear under the section, principally, that you would issue the certificate but in balancing the interests of the parties you do so having already conciliated and in that context where does the balance lie.

PN164

Indeed, I suggest it lies with my client because there's nothing being put to you that its interests have been prejudiced by the action and the conduct would not be the subject of remedy. Indeed, the material before you and your own knowledge of the industrial dispute is that it's ongoing. One party has declined, the collective party, the union, has declined to follow the Commission's orders, the matter hasn't resolved in conciliation, what are the balance of the interests or why should my client have the substantial injustice visited upon it of no certificate issuing when the collective, the union and its members, have refused to comply with the Commission's order.

PN165

The last thing that needs to be said about that is the suggestion that I was saying that paragraph 21 of Mr Sasse's statement means that because certain figures are set out there, there is a substantial injustice, well, I didn't put that submission before the Commission. I certainly agree with Mr Smith paragraph 21 identifies loss. On the balance of the interests in the Age Company decision that I've taken you to there is that loss, is it in the balance of interests of the parties convincing that the Commission should allow those losses to continue without my client having some opportunity to remedy them.

PN166

I finish on this note, Commissioner, even if you were persuaded in the unlikely event that you were persuaded by the union's submission as to paragraph (b), paragraph (a) of subsection (6) of section 166A would still, in my respectful submission, lead you to conclude that the certificate should issue. If the Commission pleases.

PN167

THE COMMISSIONER: Thank you, Mr Ludeke. I'll reserve my decision in relation to the matter. I'm aware though of course of the time constraints, etcetera, that I suppose we are all operating under and I will be able to give a decision later this afternoon. I can't say that I'll be able to give it before 2 pm when I have my next matter but certainly a decision will issue this afternoon and you will both be informed of that decision. So the matter is now adjourned generally.

ADJOURNED INDEFINITELY [1.10pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

STEVEN MICHAEL SASSE, AFFIRMED PN11
EXAMINATION-IN-CHIEF BY MR LUDEKE PN11
EXHIBIT #JOHN HOLLAND 1 AFFIDAVIT OF MR SASSE PN23
CROSS-EXAMINATION BY MR SMITH PN56
WITNESS WITHDREW PN76