Esso Australia Pty Ltd v The Australian Workers' Union; The Australian Workers' Union v Esso Australia Pty Ltd [2016] HCATrans 311 (16 December 2016)

Last Updated: 16 December 2016

[2016] HCATrans 311

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M81 of 2016

B e t w e e n -

ESSO AUSTRALIA PTY LTD (ABN 49 000 018 566)

Applicant

and

THE AUSTRALIAN WORKERS’ UNION

Respondent

Office of the Registry
Melbourne No M82 of 2016

B e t w e e n -

THE AUSTRALIAN WORKERS’ UNION

Applicant

and

ESSO AUSTRALIA PTY LTD (ABN 49 000 018 566)

Respondent

Applications for special leave to appeal

KIEFEL J
GAGELER J
NETTLE J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO MELBOURNE

ON FRIDAY, 16 DECEMBER 2016, AT 10.02 AM

Copyright in the High Court of Australia

____________________

MR F. PARRY, QC: If the Court pleases, I appear for the applicant in the first matter, Esso Australia, and the respondent in M82/2016, with MR M.J. FOLLETT. (instructed by Clayton Utz Lawyers)

MR H. BORENSTEIN, QC: If the Court pleases, I appear with MR P.C. ROZEN, for the respondent in M81/2016 and the appellant in M82/2016. (instructed by Maurice Blackburn)

KIEFEL J: Yes, Mr Parry, the Court considers that the two matters should be argued together, on the basis that 20 minutes should suffice for the argument for both, but if the parties have any difficulty with that, they can ask for an extension of time, as the matters proceed.

MR PARRY: As your Honour pleases. There are, as far as Esso is concerned, two issues on which Esso seeks special leave. The first concerns the power of the Fair Work Commission to make orders under section 418 of the Fair Work Act. The second concerns the effect of section 413(5) of the Act on the taking of protected industrial action.

To the first of those, section 418 falls in that part of the Fair Work Act that sets up a regime for the taking of protected industrial action. Industrial action that is not protected still occurs on occasions and the Act has set up a mechanism to allow the Fair Work Commission to make orders that such industrial action not occur or be stopped. The issue here is the power of the Commission under section 418 where it has found unprotected industrial action and the power to make orders for a period that stop all unprotected industrial action.

The extent of the Commission’s powers under section 418 is an important one for all parties regulated by the Fair Work Act but particularly employers. Unprotected industrial action by employees can involve no notice and strikes or bans on a range of matters, actions which can be very damaging. There is a real importance in clarifying the extent of the powers of the Commission under section 418. The legal issue arises because there is a tension in section 418 between subsection (1) and subsection (3).

The history of how subsection (3) came to be in the predecessor to the Fair Work Act is set out in the judgment of the trial judge at court book 46, and the Court will have noted from court book 46 in the trial judge’s rulings he set out the explanatory memorandum which went to the introduction of the predecessor to subsection (3) and at page 47 of the court book, halfway down, it is set out that:

This provision is designed to allow comprehensive orders to be made –

The tension is clear from the trial judge’s conclusions, referred to by the Full Court at court book page 125. The Court will note that, at court book 125, at paragraph 108, near the bottom of the page, the trial judge was dealing with the construction he had adopted of the subsection. He said:

it is permissible for the industrial action to be identified without specification of whether it is, or would be, a work stoppage, a ban, or something else. But that does not mean that the Commission can go beyond the findings made under subs (1).

If the trial judge is right and the Full Court accepted the trial judge’s construction of the section, then if there was a strike there could be an order to stop the strike expressed in comprehensive terms, not specifying the strike, but that order would only operate in respect of the strike found to exist. You would have a comprehensive order made which could only operate in a much more narrow framework.

Our submission is, if the Full Court is right and the trial judge is right, subsection (3) means little. The order can only extend to the industrial action found to exist. The order could be expressed comprehensively but act narrowly.

GAGELER J: Why do you confine it to an industrial action found to exist? I mean, does not 418(1) look prospectively?

MR PARRY: Yes, it can be an impending or intended. The words of the section refer to, I think, an industrial action that is coming up. I am paraphrasing it slightly, but 418 refers to “happening”, “threatened, impending or probable” or “is being organised”. But the problem that we say arises is that the court, having made a finding that industrial action is occurring is required to make a finding of the industrial action either happening, threatened or being organised, but can then only make an order that relates to that finding, although it can, on the construction of the Full Court, be expressed in a comprehensive way.

Our position is that effective, comprehensive orders can and should be able to be made, as was intended with regard to this section. Our position is that, once the finding in subsection (1) is made, the Commission has a power, in its discretion, to make a comprehensive order stopping all existing or impending or probable industrial action as defined in section 19, and we say that power is given or enabled by subsection (3).

GAGELER J: I just do not understand why that is not available on the construction that the Full Court has arrived at. If there is a finding that the action is “threatened, impending or probable” then that is a finding within subsection (1) and, on the reasoning of the Full Court here, it can be remedied by an order under subsection (3). How much further do you want to go?

MR PARRY: No, no. Posit this situation: that is, there is a campaign of industrial action going on which has changed over a few months. And on one particular day there is unprotected action taken for a strike. The Commission may well say, “Well, I find that strike exists and I can make an order in respect of that but, in my discretion, I would want to make an order stopping all unprotected industrial action”. And as the position stands now, that sort of order cannot be made. It can only be limited to the exact industrial action which has been found to be in existence or threatened.

Now, our position is that this construction debate is a suitable one for special leave. In our submission, the tension between the Full Court and the forms of orders often made by the Commission, as we have set out in the affidavit of my instructing solicitor at court book 331, there is a common but not universal practice of the Commission making comprehensive orders, that is, orders which extend beyond the finding of the particular industrial action in case.

KIEFEL J: But is that only where further action is threatened or probable?

MR PARRY: No, we would say if one looks at some of the orders that are made that the orders are orders that are expressed generally to include industrial action as defined in section 19 of the Act. So, the decisions of the Commission would, on the Full Court’s reasoning, be unsustainable and unenforceable.

KIEFEL J: Does the construction for which you contend operate something in the nature of a penalty?

MR PARRY: No, we would say it is not a penalty at all because it starts from the proposition that somebody, a union or employees, has taken unprotected industrial action. There are complicated mechanisms in the Act for the taking of protected industrial action, they can be followed, but unprotected industrial action, clearly, those mechanisms have not been followed. As I submitted earlier, these sort of actions can be without notice and be exceedingly damaging to employers. It is not a penalty in those circumstances where there has been a finding made and the Commission has given the discretion to make the broader form of orders to stop other unprotected action occurring.

NETTLE J: You would have it that it could be ordered that a union be restrained from taking industrial action even though there was no evidence that such action was threatened or intended.

MR PARRY: There would need to be evidence that there had been unprotected industrial action occurring - - -

NETTLE J: I am talking about the activity or the proposed activity to which the order would go, not that which has already occurred.

MR PARRY: That which has occurred, if the Commission on our argument, if there is an impending strike next week the Commission would find - make a finding that there is an impending strike but they would be permitted in their discretion to make an order that all industrial action threatened or impending within the definition in section 19 shall not occur.

NETTLE J: But it would have to be established, at least to some degree of proof, that the action to be restrained was threatened or intended?

MR PARRY: No, it would have to be established that there was industrial action, in my argument, a strike – it would have to be found to be a strike, but once that was found to be impending or threatened, then an order could be made that no unprotected industrial action take place in the future.

NETTLE J: Yes, thank you.

MR PARRY: And our submission is the powers of the Fair Work Commission are of broad interest and the facts here are a suitable vehicle for the determination of the question.

KIEFEL J: That was your ground 3, I think, in the draft notice of appeal.

MR PARRY: Yes.

KIEFEL J: Are you turning to ground 2 now?

MR PARRY: I am, your Honour. The second question concerns section 413(5). This falls in that part of the Fair Work Act that sets up a regime again for the taking of protected industrial action. That industrial action must be taken or a proposed enterprise agreement. The importance of protection - and this is relevant to the first ground as well – is that the action and the damage caused is immune from suit for tort or breach of contract and to gain that immunity parties, either employers or employees, are required to meet the common requirement in section 413.

Section 413(5) refers to orders and the regime set up by the Fair Work Act gives a number of powers to the Fair Work Commission to make orders. Our first ground deals with one of those, section 418, but there are other orders that the Commission can make, in respect of bargaining, for example.

Bargaining orders can be made and we have included within the legislative framework at court book 316 the sorts of requirements for the making of a bargaining order. These orders are not made lightly. As with regard to section 418, there has to have been unprotected industrial action. For bargaining orders there has to have been conduct by a party that does not meet, in general terms, the good faith bargaining requirements.

So there are orders in place and ordered the Commission to meet and to deal with some sort of conduct and section 413(5) operates when those orders are then contravened. In the present case, there are orders made under section 418, which were contravened by the taking of unprotected industrial action.

The construction of section 413(5) was undertaken by the trial judge. He commenced at court book 57 dealing with this. He looked at the history. He concluded the changes that had been made from the previous legislative scheme to the current one were changes of substance. He looked at the consequences of the union’s argument about the orders having to be operative at the time the proposed industrial action was to be undertaken. He considered the judgment in Mines and Metals which forms part of the appeal by the Full Court and he respectfully critiques that, and his Honour the trial judge took a view of the words of the subsection that we respectfully agree with at court book 64 and 65.

As this Court will have noted, the trial judge, for reasons of comity, followed the ruling of the trial judge in the AMMA Case. The Full Court then, on appeal, adopted a construction which we summarise in our outline at court book 309, where at paragraph 28 we set out various comments of the Full Court with regard to their construction and their reasoning and required, the Court will have noted, that the orders be in existence and that:

the orders bear directly upon organising –

of the particular industrial action that is sought to be taken and apparently the Full Court noted that –

the industrial action being organised or taken must itself be in contravention of the relevant orders.

We have submitted that that is a strained and artificial way of rewriting what are the plain words of the section. We submit that the main argument against the construction of the trial judge is that that it is said to produce extreme and unjust outcomes. Can we say that such descriptions are unhelpful in this construction exercise? An employer may well say it is unfair and unjust that employees and unions can contravene orders and still be able to take industrial action.

Further, the argument that somehow, if there have been contraventions, this somehow takes away rights. We say the effect is that if there have been contraventions, then the contravener – in our case, the union because they were the bargaining agent – cannot organise any further industrial action in respect of their proposed agreement. There are a range of options they would have and a wide range of potential circumstances.

KIEFEL J: Mr Parry, was the result of the construction adopted by the primary judge and, to an extent, by the Full Court the denial of a permanent injunction that Esso sought? Was that what resulted from this approach? I am just having a little difficulty in seeing, because AWU was held to be in breach of the 6 March order for a period but what resulted from the construction of the Full Court and the primary judge?

MR PARRY: Two things. Firstly, it allowed the AWU to organise industrial action thereafter for the same proposed agreement. So they had the ongoing right, on that construction, to continue to take industrial action. Secondly, we had no basis to argue for the ongoing nature of the injunction.

KIEFEL J: Yes.

MR PARRY: If that answers your Honour’s question?

KIEFEL J: Yes, it does, thank you.

MR PARRY: So there are options.

GAGELER J: Could I just ask a question about the actual construction of the subsection 413(5)? Relevantly, it says:

persons must not have contravened any orders that apply to them –

Do you have to read that as meaning “must not have contravened any orders that applied to them”? I mean, are you looking and reading it as if it was cast in the past tense?

MR PARRY: Yes, we are. We say that is the – for the reasons the trial judge advanced, that is, respectfully, the plain meaning of any orders that apply to them. In our submission and on our construction, in contravening any orders that apply to them, the term “contravened” itself suggests some things that occurred in the past any orders that apply to them. We say it is a plain and straightforward meaning and consistent with the sort of approach to the making of orders that becomes important when industrial action is to be sought.

GAGELER J: So we are really concerned with its application or non-application to spent orders in respect of which there has, in the past, been a contravention?

MR PARRY: Not necessarily spent orders, the orders may still be in existence. We say all that is important is that there have been a contravention and that contravention have occurred at the time that the industrial action is sought to be taken.

NETTLE J: Still in existence but the Union cease to contravene them, you mean? It would apply the orders still in existence.

MR PARRY: Yes, it would.

NETTLE J: Which the Union has breached in the past but has ceased to contravene.

MR PARRY: Yes, but they could still be contravening it but they may - - -

NETTLE J: But it would be either case that would apply.

MR PARRY: Yes.

NETTLE J: Thank you.

KIEFEL J: Given the time, Mr Parry, I think it might be as well to turn to the other application.

MR PARRY: If your Honour pleases. The other application being the Union’s application?

KIEFEL J: Yes, of course.

MR PARRY: Yes, if your Honour pleases.

KIEFEL J: I am sorry, we would like to hear from you in relation to that. I probably did not make myself clear at the outset. We would like to hear counsel in relation to the proposed grounds of appeal in both applications.

MR PARRY: If your Honour pleases, the Union application, the first ground concerns an argument about the elements of coercion in section 343 and 348.

KIEFEL J: Yes.

MR PARRY: Our submission is that special leave should not be granted. There are decisions of the trial judge and the Full Court both of which rejected this argument and both of which, in our submission, are plainly correct. The trial judge dealt with this at paragraph 68. There were two basic arguments he dealt with, that was the construction, how one reads section 343 where it refers to “intent to coerce” then adopted the approach that the intent to coerce was the intent to negate choice.

As to the second element, which is sometimes called in the authorities “the exercise of the pressure”, that must involve conduct that is “unlawful, illegitimate or unconscionable”. Now, our submission is that his Honour was right with regard to that construction. He then analysed what may be said to be an authority roughly on point, Seven Network, an earlier decision.

We do make the observation that that decision dealt with a different factual circumstance where his Honour Justice Merkel in that case did not have to deal with this issue and he analyses that very fully and finds that when looked at it actually supports the position he took. The Court will note court book 69 at point 5 where the trial judge extracts something from the judgment of Justice Merkel which, we say, is totally consistent with the position both of the trial judge and the Full Court.

It is not necessary, in our submission, the actors have the intent that their actions be “unlawful, illegitimate or unconscionable”. They are legal characteristics of the action organised or taken. It is the action itself that is coercive. If the action is protected by the Act, then it still remains as coercive but there is a total defence under section 343(2) or under the immunity of section 415. Now, the Full Court dealt with it at court book 162. They consistently, with the trial judge, found an intention to negate choice was sufficient.

We in our submissions have said that introducing a belief as to the legal status or legitimacy of the action would introduce irrational outcomes, as we submit in our outline at court book 411 at paragraph 10. Special leave should be refused on this issue because, for the reasons given by the trial judge and the Full Court, on analysis, there is no real dispute within the court about this matter.

Your Honours, there is then a second ground of the special leave application by the AWU, which concerns reconciling what is said to be 341 and section 347 of the Act. Now, again, as with ground 1, the trial judge dealt with this at court book 78 and in his decision at 78, he took the position that – and his analysis is compelling that section 341 dealt with adverse action for particular reasons and section 347 dealt with industrial activities, which are of a different nature, and the Full Court respectfully followed that at court book 172 and for similar reasons made the rulings they did.

Now, this is in a way linked with the third ground as well, because the trial judge at court book – at the end of his judgment on the very last page of his judgment at page 80, he made the findings he did and they were contraventions of section 341 and 347, and he then, at paragraph 204, gave the parties the opportunity to, bearing in mind the potential for overlap and so forth, he set the matter down for a further hearing.

There was such a further hearing and the Full Court dealt with that at court book 173. Respectfully, there was an opportunity at the

declaration-making stage, as the Full Court noted, for there to be a debate about whether those findings of the trial judge should be converted into declarations. We propose declarations and ultimately they were agreed and accepted but subject to other arguments that are not relevant for current purposes, and the Full Court noted this at court book 173, paragraph 209 where they noted the court:

not to have pursue the point further, or resisted the terms of the declarations -

So these issues of overlapping or double jeopardy, respectfully, do not – the opportunity was there for a debate and not taken. We say the Full Court dealt with it, in any event, correctly, noting that the elements of the two contraventions are different. Section 341 does not require a request from the industrial association to make an enterprise agreement. It can simply deal with the participation in the making of an enterprise agreement. Section 347 requires that there be a lawful request to agree on favourable terms for inclusion in an enterprise agreement.

So they are different rights. We accept that the contraventions arose out of the same or very similar fact circumstances. However, any issues regarding – there is no suggestion of double punishment. Indeed, the Act makes specific provision for that circumstance to be dealt with. So, again, with regard to that issue of the overlap, we say it is not a matter of special leave. There is no general point of principle. It simply concerns the number of contraventions found and the decisions of the trial judge in the Full Court are correct.

As to the double jeopardy debate, I am not sure that it really is double jeopardy. Rather, it is an argument that really concerns what might be described as abuse of process – that is, that by we, seeking relief under 343, 346 and 348, we somehow were involved in abuse of process. Again, we say they are different contraventions found on similar facts but the finding of contraventions based on similar facts is an unremarkable outcome in civil law and in law involving civil penalties. We say there is no point of principle here and there should not be special leave granted. If the Court pleases.

KIEFEL J: Yes, thank you. Yes, Mr Borenstein.

MR BORENSTEIN: Thank you, your Honours. I will deal with Esso’s appeal first, if the Court pleases, and then move on to our appeal.

KIEFEL J: Yes, thank you.

MR BORENSTEIN: The first matter is the appeal ground in relation to section 418. We have made extensive submissions in our summary, which reflect the analysis which was applied both by the primary judge and the Full Court, and that analysis addressed the actual terms of subsection (1) of section 418, which the Court will find at court book 317. The significance of the actual terms of the subsection was not really addressed by our friends.

The matter that persuaded the Full Court and the primary judge in subsection (1) is that in subsection (1) the jurisdiction and the powers of the Commission are primarily outlined and that they require that the Commission form a view as to whether the industrial action about which complaint is made was or would be protected industrial action. Then, if it is satisfied that it would not, the Commission “must make an order that the industrial action stop, not occur” et cetera. The critical point we make here is that the clear intent of subsection (1) is that the Commission is not at large under subsection (1). It can only move against industrial action which it has formed a view about in terms of whether or not it is protected.

It is only if the view of the Commission is that it is not protected that it can then move to make an order that that industrial action should not occur. Subsection (3) was introduced subsequently and our friends took your Honours to the explanatory memorandum which is at page 47 of the court book in one of the judgments. Your Honours will see that the explanatory memorandum speaks of the purpose being:

to allow comprehensive orders to be made, without the need to identify each instance of industrial action separately.

We say that what that means in the context of subsection (1) expressed as it is – and it was not changed when subsection (3) was introduced – is that in circumstances where you have, for example, a strike occurring last week, an application being made in respect of that, and evidence that strike is part of ongoing industrial action which is identified sufficiently to be able to form a view about its being protected or not, the Commission does not have to make an order that the industrial action on such and such a date stop.

It can make an order that strikes of the kind which have been brought before it should stop. So it does not have to specify a particular incident or instance on a particular day if it is possible to form a more global view of the nature of the industrial action about which complaint is made and a view that that is likely to continue. Can I illustrate the point by an example that came up in this very case?

The first order that was sought was Esso from the Commission under section 418 was an order against the unions putting a ban on overtime. The matter came before the Commission and the Commission found that the overtime ban was not authorised by the procedures that make it protected and it, therefore, made an order that the overtime ban stop. At the same time as the unions were doing that, there were a host of other forms of industrial action occurring, none of which were challenged for their protected nature.

It would be, we would say, entirely inconsistent with the overall scheme of allowing protected action that if one form of protected action, for whatever reason, fell foul of the protections under the Act, that all industrial action should also be banned without an examination of its character for the purposes of determining whether it is protected or not.

That was, in essence, the position which the court came to below and we say that is a position which is completely sustainable on the basis of the text of the provision and the principles for statutory construction and it is consistent with the explanatory memorandum to which the Court has been taken. So, we say, there is no error in relation to this matter and it is not a matter on which special leave should be granted.

In relation to section 413(5), this section is at court book 316, and again, it is necessary to approach consideration of this by reference to the text of the section and the context in which one finds it. Your Honours will have seen from the discussion in the judgment that different views were taken about the significance that should be attached to the different tenses which appear in subsection (5). As your Honour Justice Nettle drew attention to with Mr Parry, the section talks about:

persons must not have contravened any orders that apply to them –

So the first part is in the past tense; the second part appears to be in the present tense. Now, the judge in the AMMA Case, if I can call it that, Justice Barker, drew attention to that and suggested that if it was intended that the section apply only to orders that applied in the past, it was open to the legislature to have said that and he refers to that in his judgment.

The Full Court similarly moved on the basis of that difference. The Full Court did an analysis of the section as a whole, identifying that it is directed to an examination and assessment of proposed industrial action at the time when it is proposed to be taken.

All of the other common requirements that section 413 identifies are to be applied at the time when a party seeks to take the protected industrial action and on that basis the Full Court held that the operation of subsection (5) should similarly be focused on the time when the industrial action is to be taken, so that the orders that apply are orders that apply at the time the proposed industrial action is to be taken.

GAGELER J: Mr Borenstein, can I just ask a question because I am not sure that I fully understand the construction that is described as “a point in time construction”? I understand that you need to have an existing order. Is it also part of the construction adopted by the Full Court here that you need to have at that point in time an existing contravention or can it be a past contravention of an existing order?

MR BORENSTEIN: Your Honour, the Full Court held that the order must apply at the time when you are proposing to take the action. This is common in the Commission because the Act requires the Commission in various provisions to put an end point on the operation of orders that it makes.

So it is not uncommon for an order – for example, a bargaining order – to say, “Such and such will happen and this order will operate until such a date.” The position which the Full Court took was that the orders have to apply at the time when you come to seek to take your industrial action.

KIEFEL J: Does that mean there has to be a current contravention?

MR BORENSTEIN: Well, I was just about to address the second part of Justice Gageler’s proposition to me. First of all, you have to have an order that actually is operative at the time and then, secondly, as we understand the Full Court, there has to be a contravention which is occurring, if I can use that word, at the time when you seek to take the protected industrial action. Now, the reasoning of the court was that this section allowed for people to take action which would otherwise be actionable and that the apparent purpose of it was to ensure that when you seek, in effect, an indulgence for this action you should not be in breach of orders of the Commission that there, at that point, apply to you.

GAGELER J: But you could have been in breach yesterday.

MR BORENSTEIN: Yes. But, your Honour, that is a situation which was present under previous legislation which his Honour Justice Jessup also analysed. Although that legislation expressly limited itself to bargaining orders, the legislation also indicated that before you take your protected industrial action you must be in conformity with those bargaining orders. So, the idea that you can be non-compliant with an order but when you want to go and take your industrial action you bring yourself into compliance is not a new idea. It was present, as your Honour will see from the analysis from Justice Jessup, so it was present previously.

The other thing that we draw attention to in a contextual way, which we think is important to consider, is that in order to be permitted to take protected industrial action at all under this legislation, you have to go through a process where you apply to the Commission and the Commission makes what is called a protected action ballot order and that means that a series of forms of industrial action are submitted to the employees for a ballot and they will approve or not approve the taking of action of that form.

So you do not get to 413 until you have got your other order and it has been approved by the employees. Now, in order to get the ballot order from the Commission, the only thing you have to demonstrate is that you are genuinely seeking to bargain for the enterprise. There is no precondition that you have not been in breach of a previous order of the Commission, as 413(5) speaks of.

So you could have this curious situation where if in January of this year you breached a bargaining order by doing as was have done in the AMMA Case and filing a document two or three days late and thereafter being completely compliant, and then, because the negotiations go nowhere, in June of this year you apply for a ballot order to be permitted to bargain and you have been genuinely bargaining and the section in the Act makes it mandatory for the Commission to make such an order and yet when you get the order you can come along and under section 413(5) Mr Parry can stand up and say, “Well, even though the Commission says you can take your protected action, you cannot because eight months ago you were three days late with a document”.

So, contextually, we say that the analysis of the Full Court is more satisfactory in focusing on both the existence of the order and the non-compliance at the time when you seek to take your protected industrial action. So, your Honours, they are the only matters that I think I need to articulate in response, except for one thing. Our friend says that complaint is made about the construction for which they argue on the basis that it will produce extreme or unjust results.

Now, our friend says that is very unhelpful but we rely in our outline on that famous passage in the joint judgment of Justices Mason and Wilson in Cooper Brookes where they say that those are considerations which a court should take into account in deciding whether or not it should apply a completely literal construction of a provision and we say that in this case, looking at the section in context in the Act as a whole, and the potential injustice of the results as is demonstrated in the Mines and Metals Case, that the conclusion of the Full Court should not be overturned.

Now, your Honours, in relation to our appeal, the first area that we deal with is section 343 and again, if I could ask the Court to look at the actual terminology of 343 which the Court will find at court book 398. The Court will see that section 343 prohibits the organising or taking or threatening of action against any person “with intent to coerce the other person” to do something.

Now, the argument which arose in this case has only arisen once before in the courts and that is in the case of the Seven Network to which Mr Parry referred which is a judgment of Justice Merkel, and the reason why it arises in this case, as your Honours will have seen, is that on the evidence, the union sought to take protected industrial action.

They sought to take action in conformity with the provisions of the Act. The Act requires that they give notice of the action that they propose to take and that that action must be covered by the ballot order questions which I referred to a minute ago and what happened here was that there was a disagreement which emerged in the case between Esso and the employees about the meaning of one of the terms in the notice.

The term referred to “de-isolations” which refers to returning plant that has been taken off line back onto line. Now, as your Honours might well imagine, that would be a process by which various steps would have to be taken and there was disagreement about the factual basis of one view that it was simply the final, in effect, clicking of the switch to turn the equipment on, or whether it included the preliminaries to that as well, and that was the area of disagreement and a large part of the judgments in the case deal with that. But from the union’s point of view, there was no question that they were genuinely trying to take action which was within their understanding of the meaning of that term and Esso had a different understanding.

NETTLE J: Was it a mistake as to the meaning of the term or as to the nature of the apparatus which was said to fall within the term?

MR BORENSTEIN: I am not sure what your Honour is referring to in terms of “apparatus”, but - - -

NETTLE J: The process.

MR BORENSTEIN: The process. It was a difference of opinion about the factual question of what constituted de-isolation.

NETTLE J: What constituted de-isolation as a matter of fact - - -

MR BORENSTEIN: Yes.

NETTLE J: - - - or what constituted de-isolation as a matter of definition within the section?

MR BORENSTEIN: What makes up de-isolation, we would submit, is a matter of fact.

NETTLE J: Yes.

MR BORENSTEIN: And in terms of the section, what we had to do was to take action which as a matter of fact corresponded with the description in the notice of action which we gave to the employer, and there was extensive evidence about what the employees understood as a matter of fact to constitute de-isolation and then what the employer did and the judge made a decision about that.

Now, we have outlined in our written submissions that we submit that the phrase “intent to coerce” must include – must look to the subjective intent of the individual in the same way as the Court held in Barclay and the cases that followed that. I interpolate that in relation to this section, the reverse onus provisions in section 361, which were in play in Barclay as well, apply to the question of intent. So, we say, you must firstly look to the subjective intent of the alleged perpetrator and that that intent must be an intent to coerce.

Now, we say, that in order to coerce it must be an intent to seek to negate the will of someone else by a particular action because when you go back to – because if you do not address the question of the nature of the action, then you do not address the meaning of the word “coerce”. Now, the court below held that all that is necessary is an intent to negate the will. We say that that gives insufficient attention to the word “coerce” because will can be negated in various ways, and unless it is negated – there is an intention to negate it by action which is “unlawful, illegitimate, or unconscionable”, then the action is not taken with an intent to coerce.

So, in a nutshell, that is our proposition. The court was against us. We say that Justice Merkel’s judgment in Seven Network supports our proposition. Justice Merkel, as we have indicated to your Honours in our outline canvassed the cases dealing with intent in criminal law, drew attention to the expressed requirement that there be knowledge of the facts which make the conduct unlawful and then proceeded to apply it to the case before him.

In the case before him he found that the subjective position of the union officials was such that they did not believe – I am sorry, he did not believe the evidence of the union officials as to their subjective belief and, on that basis, he rejected or he found against them.

Now, your Honours were taken to court book page 69, at paragraph 161 of Justice Jessup’s judgment where his Honour sets out an extract from paragraph [43] of Justice Merkel’s judgment, which we say is consistent with our position. He says there, quoting from Justice Merkel:

It follows from the foregoing discussion that Seven Network must establish that:

(a) the respondents’ threats of industrial action were made with intent to negate Seven Network’s choice by the exertion of pressure that was, in the circumstances, unlawful –

et cetera. And, secondly:

(b) the respondents had actual knowledge of the circumstances that made their conduct coercive in the sense discussed in (a) above.

Now, that is our position and that is the position that was rejected. And we say this is a significant and an important issue to be resolved by the Court. It has not been considered previously and we say it is a matter of general public interest because it leaves the possibility, as occurred in this case, where a party which has acted genuinely and honestly seeking to comply with the Act has been found, after a trial of some four or five days, to have made a mistake about what the facts were and been held culpable for a contravention of the Act. So that is our submission on section 343. Section 348 is framed in precisely the same terms in relation to intent to coerce, so it applies there as well.

In relation to the next ground that we seek to make out, which is a ground that calls up the operation of section 341 and section 347, the reason why those sections are called up is because of the parallel operations of sections 343 and 348, both of which seek to prohibit coercion.

Now, in section 343, the prohibition on coercion, and again, this is at court book 398 – is to have another person:

exercise or not exercise ... a work place right –

and a workplace right is defined on page 396 in section 341(2)(e). Section 348, on the other hand, which the Court will find at court book 400, says:

A person must not organise or take . . . any action against another person with intent to coerce the other person, or third person, to engage in industrial activity.

Now, “engaging in industrial activity” is defined in section 347, and that is on page 399. The relevant provision here that was relied upon was in paragraph (b)(iv), that is, does not:

comply with a lawful request made by, or requirement of, an industrial association –

and the case that was put was that the request in question or the requirement in question was to make an enterprise agreement with the Union. So your Honours will see the overlap between 347, which is expressed in the broadest of terms, and the workplace right definition at page 396 of the court book, which is expressed in specific terms. What has happened in this case is that proceedings have been issued under 343 in respect of the workplace right, and then under 348 in respect of engaging or not engaging in industrial activity based on the same facts, the same requirements of the Union and the same coercive conducted alleged.

Now, what we wish to raise is the interaction between section 347 and section 341(2)(e) and we do so for the reason that, if what is done here is available - in other words, if 347 is apt to cover the workplace rights, then 343 is left with no work to do. It renders 343 otiose. There is no need to go to 343 if you can rely on section 347.

What we seek to advance is that, by reason of section 341 specifically identifying the particular workplace rights, section 347 should be interpreted, particularly in this regard, as not covering the same ground as is covered under section 341(2)(e) and, therefore, section 348 does not cover the same ground as section 343 and section 343 has work to do in this area.

In a nutshell, again, that is our proposition. We have articulated it a little bit greater length in our outline but that is in a nutshell our proposition. It has nothing to do with the double jeopardy proposition. It is simply to do with the construction of the overlap between 347 and the other section. Now, in relation to the double jeopardy, our point is that the bringing of proceedings, as has been done here, for a contravention of 343 and then on the same facts, the same circumstances, a completely overlapping provision – claim under 348 constitutes, in effect, a double jeopardy or an abuse of process as was described by Justice Gummow in Pearce.

We say the principle is designed to avoid unfairness to a respondent or defendant and it should be applied here so that the applicant nominates or

chooses to either go under one provision or the other but not to expose the defendants or respondents to a double penalty – a double conviction. Our friends rely on section 556 which is reproduced at page 407 of the court book but, your Honours, that section deals only with the question of penalty, it does not deal with the question of conviction. Your Honours, they are our submissions on the two applications.

KIEFEL J: Yes, thank you. Mr Parry, anything in reply?

MR PARRY: With regard to section 418, my learned friend raised the argument about broadness of the orders and his submission in some ways suggested that the order could apply to other action that was protected. The legislature has made very clear that that circumstance cannot arise via section 422 which is in the court book at page 371. Page 371 sets out section 421 at the top of the page and it is about contravening orders and as is made clear they are:

A person to whom an order under section 418, 419 or 420 applies must not contravene a term of the order.

That is straightforward. Subsection (2)(b):

However, a person is not required to comply with an order if:

(b) the industrial action to which the order relates is, or would be, protected industrial action.

Therefore, if as a fact, the industrial action is protected, the person bound by the 418 order does not have to comply with it. So the scope of the order extending hypothetically to protected action is not a submission in accordance with the legislative scheme. As to section 413(5), a question was asked from the Court about contravention occurring. The court below – the Full Court held at page 248 that, in effect – and we make this submission in our primary submissions – that the industrial action is only to be unprotected for so long as the contravention occurs, which seems to suggest – and my learned friend seems to confirm this – that the contravention needs to be occurring when one comes along and seeks to take industrial action.

But again, even assuming the construction is correct regarding the order applying at the time of the making of the application or taking the industrial action, even if one assumes that, section 413(5) itself refers to the term “contravention”. Contravention – 413(5) must not have contravened. It does not say, “be contravening”. That would have been an easy circumstance to deal with, but there is no suggestion there that there is any requirement for that contravention.

Regarding the other matter, the PABO argument – that is, why is this not in an earlier part of the Act. Well, for the obvious reason that when one comes to assess whether industrial action is protected, one looks at the common requirements in section 413. They all do not find their way in the PABO application. The PABO argument, as in our circumstance, the PABO was passed without any contravention. The contraventions occurred after the PABO order had been made. So that is, with respect, a false issue.

Finally, with regard to section 347, what the argument boiled down to is this. That is, the Court would read down what are industrial activities to exclude industrial activities that deal with the making of enterprise agreements. That would be an outcome that would, for example, prevent us simply taking an action under section 347 and 348. That would mean that any action in respect of an enterprise agreement would have to be taken under section 341. That limitation of section 347 and 348 would be quite a remarkable limitation, given that one of the major industrial activities of industrial associations is seeking enterprise agreements. So that outcome would be a remarkable outcome. If the Court pleases?

KIEFEL J: Thank you. Mr Borenstein, do you have anything in reply?

MR BORENSTEIN: Just briefly, the last comment that our friend made, if you could not take your action under 348, you would be able to take your action under 343 which explicitly refers to taking action about the making of the enterprise agreement. Thank you.

KIEFEL J: The Court will adjourn to consider the course it will take.

AT 11:07 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.11 AM:

KIEFEL J: In application number M81 of 2016, brought by Esso Australia Pty Ltd, there will be a grant of special leave limited to ground 3 concerning section 413(5). And in application M82 of 2016, brought by the Australian Workers’ Union, there be a grant limited to grounds 2 to 5 concerning section 343.

Gentlemen, what would be your estimates of time, given the limits set to those grounds?

MR PARRY: We are confident that it can be done in a day, your Honour, so limited - - -

KIEFEL J: Would you agree with that, Mr Borenstein?

MR BORENSTEIN: I would agree with that estimate, your Honour.

KIEFEL J: Mr Borenstein, could you assist us? In relation to the intent ground, the grounds run from grounds 2 to 6, is that correct?

MR BORENSTEIN: Would your Honour just give me a moment, I will just look it up.

KIEFEL J: Yes.

NETTLE J: Page 374.

MR BORENSTEIN: Yes.

KIEFEL J: Grounds 2 through to 6 inclusive, that covers the section 343 point.

MR BOREINSTEIN: I think it is actually 5. Ground 6 appears to deal with the question of industrial activity under 347.

KIEFEL J: Yes, so it is limited to – from 2 to 5.

MR BORENSTEIN: Unless your Honours wish to change that and go to the next ground.

KIEFEL J: No, that is – thank you for that.

MR BORENSTEIN: Thank you.

KIEFEL J: Would you ensure that your solicitors obtain a copy of the directions necessary.

MR BORENSTEIN: Yes, your Honour.

KIEFEL J: Thank you. The Court will adjourn briefly to reconstitute.

AT 11.14 AM THE MATTERS WERE CONCLUDED