C2004/6686, Transcript of Proceedings [2004] AIRCTrans 4630 (2 December 2004)

AUSCRIPT AUSTRALASIA PTY LTD
ABN 72 110 028 825

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N 9121

A 26.11.04

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT KAUFMAN

C2004/6686

APPLICATION FOR AN ORDER TO STOP
OR PREVENT INDUSTRIAL ACTION

Application under section 127(2) of the Act
by Visy Board Pty Limited and Others for an
order to stop or prevent industrial action
at various Visy companies' sites

MELBOURNE

9.02 AM, MONDAY, 22 NOVEMBER 2004

Continued from 19.11.04

PN338

THE SENIOR DEPUTY PRESIDENT: Visy Board Pty Limited and other companies in the Visy Group have applied for an order under section 127(2) of the Act. On Friday last, I issued a certificate under section 166A in respect of industrial action that is proposed to commence tomorrow, Tuesday, 23 November, and this application arises in relation to that proposed industrial action as well. The grounds accompanying the application set out the history and the facts leading up to this application and the history and the facts are largely, if not entirely, undisputed.

PN339

Currently there are two certified agreements between the Visy companies and the AMWU; the Visy Industries Southern EBA 2001, and the Visy Industries Agreement New South Wales 2001. The nominal expiry date of each agreement is 30 - or was 30 September 2004. There is no doubt that industrial action is threatened, impending or probable in relation to an industrial dispute or the negotiation - or proposed negotiation of an agreement under Division 2 of Part VIB of the Act, and accordingly those jurisdiction requirements in section 127 are met. There is no doubt that the applicants are persons who are directly affected, or likely to be affected by the industrial action, and accordingly that jurisdictional aspect of section 127 is also met.

PN340

Going back to the grounds, the history of negotiations is set out, and then the more recent history appears from paragraph 11, and I read from thereon as a convenient summary of the facts to date:

PN341

On 27 August 2004, the AMWU served a notice of intention of bargaining period pursuant to section 170MI of the Act. ON 28 October 2004 the AMWU served a notice of intention to take industrial action pursuant to section 170MO of the Act.

PN342

The action was to take place from 4 November 2004 until 4 February 2005, or until an agreement was reached. On 1 November 2004 the Visy companies made an application to the Commission for orders under section 127 and 166A of the Act. The applications were heard by me on 3 November, that following negotiations between the parties, the threatened industrial action was abandoned and I was informed that a basis of settlement or a proposal for settlement had been reached, and I was provided with a document, exhibit AMWU, that set out a without prejudice basis of settlement.

PN343

However, the negotiations broke down, primarily over the entitlements of persons on extended sick leave. On 17 October 2004, the AMWU served a second notice of intention to take industrial action pursuant to section 170MO of the Act, and that industrial action notified a proposed stoppage of work at most sites form 23 November 2004 until agreement is reached, or by no later than 22 February 2005.

PN344

Visy contends that the industrial action is illegitimate industrial action, in that it is not protected action under section 170ML of the Act, because the 170MI notice seeks an agreement containing non-pertaining matters, and of course, such an agreement may not be certified, as is made clear by the High Court in Electrolux. There are also some other grounds in support, that appear to me no longer to be in issue.

PN345

The grounds go on to indicate that the Visy companies will be directly affected by the action, and that the action will have a significant financial impact on the operations of the Visy companies. And as to that, last Friday Marie Kidd, the Human Resources Manager, gave evidence to the effect that the industrial action will cost the group some $2.1 to $2.2 million a day in lost sales.

PN346

The first question to determine is whether the proposed industrial action will be protected industrial action. And if it is, whether or not I should exercise my discretion to make an order under section 127. Mr McDonald of counsel, who appears for the Visy Group, says that the industrial action is not protected, because the proposed certified agreement would contain "non-pertaining" matters, and therefore Electrolux Home Products Pty Limited v The Australian Workers Union and Others [2004] HCA 40; 2004 209 ALR 116 applies. Mr McDonald took me to the MI notice, which was served on 31 August 2004. The opening words of that state:

PN347

Under section 170MI(2) of the Act, notice is hereby given to the Australian Industrial Relations Commission that the Automotive, Food, Metals, Engineering Printing and Kindred Industries Union of level 3, 440 Elizabeth Street, Melbourne (AMWU), and organisation of employees, intends to try to make, (a), to make an agreement under Division 3 of Part VIB of the Act with...

PN348

and there are then set out a number of the Visy companies. And:

PN349

(b), to have any agreements that are reached, certified under Division 4 of Part VIB of the Act.

PN350

I think that should be Division 3. It does say Division 4, although Mr McDonald doesn't take any point in relation to that. Then it goes on to state:

PN351

Particulars, as specified in section 170MJ of the Act are (a), the whole business carried on by Visy Industries and Visy Trading Companies as listed above at...

PN352

and there are then set out the names and addresses of the relevant companies. And after those companies:

PN353

(i) are covered by certified agreements, which will pass the nominal expiry dates on 30 September 2004.

PN354

(b)(i) the employees subject to the proposed agreement and the other persons who will be bound by the agreement are those employees of the employer who are or are eligible to become members of the AMWU who perform work described in the classifications of the Graphic Arts Interim Award 1995, the Metals, engineering and Associated Industries Award 1998, and the Visy Paper Award 1998, Printing Industry Award - State 1992 (Queensland);

PN355

(ii) the employer who is proposed to be bound by the agreement is Visy Industries trading as Visy Board, Visy Recycling, Visy Pulp and paper, Visy Specialities and Visy Services Fine Art Graphics.

PN356

And:

PN357

(c), the matters that should be dealt within the agreement are as follows.

PN358

And then there was set out a catalogue of headings, including regulations of casuals and contractors, delegates' charter, and AMWU education and training levy:

PN359

(d), the agreement sought is under Division 3, Part VIB of the Act.

PN360

And they are the relevant parts of the notice of initiation of bargaining period. Mr McDonald submits that the three items to which I referred in the catalogue of matters that should be dealt with in the agreement would not pertain to the relationship between Visy and the relevant employees. I don't go to the section for the precise words, but I will call it the relevant relationship or non-pertaining matters, during the course of these reasons. And it would therefore render the agreement incapable of certification.

PN361

Mr McDonald also referred me to a national log of claims that was faxed to Visy on the 13 August to demonstrate what those references in the catalogue of items means, and why the matters are non-pertaining. A log of claims was - appears to have been served on the applicant by the Union, by fax on 13 August 2004. It is headed, Visy Industries National Log of Claims 2004. In relation to regulations of casuals and contractors, the particulars given are under three dot points, the first of which is, Use of Casuals and Contractors to be Agreed To AMWU Delegates. The dot points are not relevant to these reasons. Alongside the heading, Delegates' Charter, it says:

PN362

See attached AMWU endorsed Delegates' Charter -

PN363

which is attached, and sets out detailed requirements for recognition and time off and payment and so on, for AMWU delegates. Alongside the heading, AMWU Education and Training Levy, the particulars are:

PN364

$1 per employee per week to be paid by the company into an AMWU Printing Division Union Education and Training Fund.

PN365

I agree that a certified agreement that contained those items would contain non-pertaining matters, and would be incapable of certification. And that is clear from the decision of the High Court in Electrolux. The AMWU, at the very least, seems to accept that there are difficulties in regard to these matters, and has attempted to address them in their two notices of intention to take industrial action under section 170MO of the Act. The notice that was served on 28 October, the first notice of intention to take industrial action concluded with these words:

PN366

Please note that in industrial action is not being taken in support of the Delegates' Charter, or AMWU Education Training Levy.

PN367

And that notice was exhibit VISY2 in the first set of proceedings before me, and is part of exhibit A2 in these proceedings. The second notice of intended industrial action, which is dated 17 November 2004, exhibit A1, concludes with these words:

PN368

Please note that industrial action is not being taken in support of the Delegates' Charter, AMWU Education Training Levy and the requirement for AMWU delegates to authorise the engagement of casuals/contractors.

PN369

Mr Addison, who appeared for the AMWU, contends that those paragraphs render the action proposed for tomorrow protected industrial action, even if, which he doesn't concede, the items are non-pertaining. This, he says, is because the action would only be in support of the matters in the agreement that do pertain. I don't accept that argument. I agree with Mr McDonald, that this device to render the action protected is ineffectual. The action that is proposed is for the purpose of supporting or advancing claims made in respect of the proposed agreement.

PN370

Mr McDonald contends that the proposed agreement is that referred to in the section 170MI notice which, read with the log of claims, clearly contains the offending items. I don't accept that it is possible to isolate non-pertaining claims from those in respect of which industrial action is being taken in support of. Mr McDonald put this argument on the previous occasion, and repeated it again last Friday. To attempt to overcome this difficulty, last Friday Mr Addison produced a letter from the National Secretary of the Printing Division of the AMWU.

PN371

The letter, which was produced at around 3.30 last Friday, is exhibit R1, and reads, and looking at formal parts, it was addressed to the Human Resources Manager of Visy Industries:

PN372

I write with regard to the proceedings currently before his Honour Senior Deputy President Kaufman and the position put by your representative, Mr McDonald, we note the criticism that was put with regard to our section 170MO notice filed in the Commission and served upon yourself on 17 November 2004.

PN373

To clarify our position, I have instructed Mr Addison to give the following undertaking to the Commission on behalf of the Printing Division of the AMWU, with regard to the industrial action being pursued on Tuesday, 23 November:

PN374

And there is then in the telex, the following:

PN375

The AMWU undertakes that the industrial action scheduled to commence on Tuesday, 23 November, pursuant to the MO notice served on 17 -

PN376

I take this to be an error, small f -

PN377

November, is not for the purpose of pursuing the delegates charter, the AMWU Education Training Levy, and the requirement of the authorisation of AMWU delegates prior to the engagement of casuals or contractors. To avoid any doubt, the AMWU undertakes that it will not seek the inclusion of any of the above matters in the final certified agreement, the subject of the proposed industrial action. I hope that the above clarifies our position.

PN378

And that concludes the quote from that letter. Thus it seems that the AMWU will no longer be pressing to have any potentially non-pertaining matters included in any agreement that it wishes to have certified. Does this latest turn of events render the proposed industrial action protected? Mr McDonald says, no. He referred me to sections 170MI(1)(c) and ML(2)(e) of the Act, and their references to "the proposed agreement." Section 170MI(1) relevantly reads:

PN379

If, (b), an organisation of employees wants to negotiate an agreement under Division 2 in relation to employees who are employed in a single business or part of the single business (the initiating party) may initiate a period (the bargaining period) for negotiating the proposed agreement.

PN380

Before I leave section 170MI I will read section 170MI(2) which provides:

PN381

The bargaining period is initiated by the initiating party, giving written notice to each other negotiating party (see sub-section (3)) and to the Commission stating that the initiating party intends to try, (a), to make an agreement with the other negotiating parties under Division 2 or 3, and, (b), to have any agreements so made certified under Division 4.

PN382

I also note in passing that section 170MJ requires that particulars accompany any such notice. Section 170ML identifies certain action which is protected action, and section 170ML(2) relevantly reads:

PN383

During the bargaining period, (a), and organisation of employees that is a negotiating party is entitled for the purpose of (e), supporting or advancing claims made in respect of the proposed agreement to organise or engage in industrial action directly against the employer. And if the organisation member, officer or employee does so, the organising of or engaging in that industrial action is protected action.

PN384

I end the quote there. Mr McDonald submits that the notice of initiation of bargaining period dated 27 August 2004, given under section - or given pursuant to section 170MI(2) was in relation to that, and I emphasise the word "that", proposed agreement. As that proposed agreement contains non-pertaining matters, the bargaining period was not validly initiated. Mr McDonald contends that last Friday's letter cannot validate that notice of initiation of bargaining period. He relies heavily on the judgments of the Chief Justice and McHugh J in Electrolux and I read from the passages to which Mr McDonald particularly took me. At paragraph 25 the Chief Justice said:

PN385

The reference in section 170ML(2), to "the proposed agreement" is a reference to an agreement of the nature identified in section 170LI. The fact that parties to industrial action may be acting under a mistake of law as to whether a proposed agreement is of that nature is no more relevant to the protection given by section 170ML(2) than would be the fact that they neither knew nor cared whether the proposed agreement was of that nature.

PN386

The protection conferred by section 170ML(2) is attracted by a combination of two circumstances: the purpose of supporting or advancing claims the subject of a proposed agreement; and the nature of the proposed agreement. The kind of proposed agreement being supported is not at large. It is not merely the fact of the proposal in support that is sufficient to gain protection; the nature of that which is proposed is also material.

PN387

Section 170ML appears in Division 8 of Part VIB, which deals with negotiations for certified agreements. It relates to action taken during the bargaining period. The bargaining period is for negotiation of an agreement under Divisions 2 or 3 of section 170MI. Reference has earlier been made to section 170L, which identifies the object of Part VIB as the facilitation of the making and certifying by the Commission of certain agreements.

PN388

That is the statutory purpose which is furthered by the protection and immunity in question. And that protection and immunity does not extend beyond action in support of agreements of the nature of the agreements with which Part VIB is concerned. That is to say, agreements of the kind identified in section 170LI.

PN389

And I end the quote there, and of course 170LI, which was the nub of the debate in Electrolux, requires that for an application to be made to the Commission under Division 2 of Part VIB there must be an agreement in writing about matters pertaining to the relationship between an employer who is a constitutional corporation and all persons who, at any time the agreement is in operation, are employed in a single business or part of a single business of the employer whose employment is subject to the agreement.

[9.29am]

PN390

Now, Mr McDonald also took me to the judgment of McHugh J who, from paragraphs 112 on, discussed the question whether industrial action in support of a proposed non-certifiable agreement is protected action. But, at paragraph 113, his Honour said:

PN391

Section 170ML(2)(e) protects action for the purpose of supporting or advancing claims made in respect of "the proposed agreement". The "proposed agreement", as identified in section 170MI(1), was that which the initiating party "wants to negotiate", being an agreement under Division 2, it is the agreement proposed to be certified under Division 2 that is the subject of negotiations.

PN392

The reference in section 170ML(2) to "the proposed agreement" is a reference to an agreement of the nature identified in section 170LI. And, in the context of part VIB the term "under" must be understood to mean meeting the requirements of specifications set out in Division 2.

PN393

And I don't quote further from 113 and I will go to paragraph 116 where his Honour said:

PN394

The immunity, as to important consequences, the Commission cannot make an order under section 127 to stop or prevent the action.

PN395

And his Honour there refers to section 170MT(1) which has now been repealed. And:

PN396

2. Subject to certain exceptions, no action lays under any law whether written or unwritten in force in a State or Territory in respect of that action.

PN397

At paragraph 119 his Honour observed:

PN398

In the present case the natural and ordinary meaning of the legislation evinces an intention to curtain the common law rights of negotiating parties, and third parties, who suffer actionable damage as a result of certain industrial action to take civil action against the person who took the industrial action.

PN399

However, the curtailment is not absolute:

PN400

But protection conferred by sections 170ML(2) and section 170MT operates only if the action has the genuine purpose of supporting or advancing claims that are the subject of the proposed agreement and the nature of the proposed agreement satisfies the requirements of section 170L.

PN401

At paragraph 120, his Honour said:

PN402

Given these limiting conditions the natural and ordinary meaning of section 170ML is consistent with the two presumptions of statutory construction to which I have referred. Indeed, those presumptions support the proposition that the scope of, "protected action", is limited and that industrial action is only protected if it is in support of a claim in a proposed agreement that is capable of being certified under Division 2 of Part VIB.

PN403

And at 121:

PN404

An honest and reasonable, but mistaken, belief that a proposed agreement satisfies the requirements of section 170LI is a mistake as to the operation of the Act. If a person takes industrial action in respect of such a proposed agreement it does not assist the person who makes the mistake that he or she believed that the proposed agreement was wrong which fell within the meaning of Division 2 of Part VIB and was capable of being certified under Division 4 of Part VIB.

PN405

The Act does not refer to, "purported", proposed agreement - to a "purported" proposed agreement; nor does it refer to, "an honest and reasonable, but mistaken, belief", that a proposed agreement under Division 2 is an agreement capable of certification under Division 4. On the contrary, the nature of the proposed agreement is expressed as an element of the protection conferred by section 170ML.

PN406

And he concluded at 122:

PN407

Accordingly, industrial action in support of a claim for the inclusion of a bargaining agent's fee clause in a proposed agreement that does not meet the requirements for certification, "under Div 2", is not, "protected action", within the meaning of section 170ML(2).

PN408

And I end the quote there. Mr Addison, for his part, referred me to a decision of Munro J, in AIG v AMWU, reported at print 93259. It was a decision published on 13 June 2003 in relation to section 127. Now, Mr Addison, submits that that - the decision stands for the proposition that, if reasonable notice of intention to take industrial action is given, even if it - "even if it be not technically compliant with section 170MO", and a quote that appears in paragraph 30 of the decision:

PN409

A section 127 order should not issue to prevent the taking of what was clearly intended to be protected action taken to support legitimate claims for a certified agreement.

PN410

It seems to me that AIG goes more to the question of discretion than to jurisdiction. Mr Addison also referred me to David's Distribution Pty Limited v National Union of Workers [1999] FCA 1108; (1999) 91 IR 198 where Wilcox and Cooper JJ approved a passage in the judgment under appeal where North J has observed that the particulars required by section 170MO(5) should not be interpreted as requiring the giving of precise details of every future act or omission as this would impose an obligation almost impossible to fulfil. And that passage can be found at paragraph 84 of the joint judgment of Wilcox and Cooper JJ.

PN411

David's is somewhat different from this case. In this case the point here is not whether sufficient detail was provided but whether a notice of initiation of bargaining period that is given in respect of a proposed agreement that contains non-pertaining matters or would contain non-pertaining matters can subsequently be cured by evincing an intention that the proposed agreement would not contain those prohibited items. Mr McDonald submits that the notice of initiation of bargaining period was given because the union wanted to negotiate an agreement under Division 2 (section 170MI(1)). The next point - by section 170MJ the union provided particulars including the matters that proposed should be dealt with by the agreement - that was, "the proposed agreement".

PN412

"The proposed agreement", is incapable of certification. Section 170ML(2) entitles the union to take protected industrial action for the purpose of supporting or advancing claims made in respect of, and I emphasise - the proposed agreement. It was in respect of, and again I emphasise - the proposed agreement, that the notice of taking of industrial action was given under section 170MO of the Act. Thus, according to Mr McDonald the notice of initiation of bargaining period and the two notices of intention to take industrial action were given to support action to advance claims for an agreement that does not fall within section 170LI of the Act and the notices are thus invalid.

PN413

Mr McDonald contends that, what the union is now doing, is proposing to make a different albeit complying, agreement and he contends that the industrial action of which notice was given was not to support that new agreement and therefore is not protected action. I don't accept the use of the definitive article locks an initiating party into pursuing precisely and only the items that it set out in the documentation it was required to serve to initiate the bargaining period. What an initiating party does, it seems to me, is to propose an agreement and the proposed agreement is only that - a proposal. That proposal triggers negotiations which generally involve a modification of positions on both sides. That is the very essence of negotiations.

PN414

It seems to me that Mr McDonald's analysis ignores the fact that, during the negotiation of an agreement, the positions of the parties almost invariably change. Claims are dropped or modified. New demands may be made. The, "agreement", that emerges for certification may bear little or much resemblance to the log originally propounded. Negotiations prior to the taking of protected industrial action is a statutory pre-requisite. Section 170MP requires that before protected industrial action may be taken the organisation or the person who begins to engage in the industrial action genuinely tried to reach agreement with the employer.

PN415

The agreement, in respect of which industrial action might be taken, or the proposed agreement in respect of which such action might be taken, might differ to varying degrees to that which was the subject of the MJ - of the section 170MJ particulars or many matters might be agreed and the industrial action only be taken to get the employer to concede the final one or two items, which is very much the case here on what I have been told. It is now the case that the agreement proposed by the union and to be made and to be certified does not contain prohibited items. It does not contain non-pertaining items. The industrial action that will commence tomorrow is to support that proposed agreement.

PN416

The written notice, given by the union in accordance with section 170MI(2) require that the union give notice that it intends to make an agreement - section 170MI(2)(a). The particulars required by section 170MJ require particulars of the matters to be included in the agreement that the union intends to make. Although those matters contain non-pertaining matters it is now clear, as I have said, that when the industrial action will be taken it will not be to support a proposed agreement containing those non-pertaining matters. The use of the word, "proposed", suggests to me that there is some validity envisaged in the situation. What the union is required to put is a proposal.

PN417

That proposal no longer contains a claim for non-pertaining matters. If Mr McDonald's argument is correct, there could be no modification to a union's position before protected action could be taken regardless of whether items were pertaining or not. If the proposed agreement at the time of the taking of the action differed from that the subject of the MI notice it would seem to follow, from Mr McDonald's argument, that the industrial action could not be protected because the agreement in respect of which it was being taken was not, "the proposed agreement" for the purposes of section 170ML(2), the subject of the MI notices and the MJ particulars.

PN418

Thus, if during negotiations, after the initiating of the bargaining period and the serving of the section 170MI notice with the MJ particulars, a revised "log of claims", was served on the employer, on Mr McDonald's analysis action taken to support those claims would be unprotected. This seems to me to be completely at odds with the scheme of the Act that allows protected action to be taken during negotiations. Accordingly, it seems to me that tomorrow's proposed industrial action will be protected industrial action. Section 127(5)(a) means that any order I would make under section 127 would not apply. In the circumstances the application for an order under section 127 is dismissed.

ADJOURNED INDEFINITELY [9.47am]