Australian Paper Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

[1998] FCA 321

AUSTRALIAN PAPER LIMITED v COMMUNICATION, ELECTRICAL, ELECTRONIC, ENERGY INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA ("CEPU"), DEAN MIGHELL, PETER MOONEY, MICHAEL MONTEBELLO AND THE PERSONS NAMED IN THE SCHEDULE TO THE APPLICATION (which will be the fifth to the one hundred and fifty eighth respondents)
No. VG 82 of 199
FED No. 321/98
Number of pages - 17
Industrial Law

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

NORTH J

Industrial Law - Workplace Relations Act 1996 (Cth) s 127(7) - Interim injunction to restrain Union and officials from organising strike action in contravention of orders of Industrial Relations Commission - Whether serious issue to be tried - Whether past and proposed action protected - Balance of convenience - Loss incurred by site owner/builder - Loss of wages by employees of contractors - Particular caution to be exercised against grant of interim injunction - Other discretionary considerations - No evidence about employers' attitude to grant of interim injunction - Uncertainty about validity of Commission order - Jurisdictional arguments - Whether serious issue to be tried is sufficient

Workplace Relations Act 1996 (Cth) ss 3(b), 127(1), 127(5), 127(6), 127(7), 170MI, 170MK, 170ML, 170MM, 170MN, 170MO, 170MP, 170MT, 170MV, 170MW, 170MZ, 170N, 178(5)

Acts Interpretation Act 1901 (Cth) s 33(2A)

Ricegrowers' Co-operative Ltd v Howling Success Australia Pty Ltd (1987) ATPR 48,489, considered

Martin Engineering Co v Trison Holdings Pty Ltd (1988) 81 ALR 543, considered

ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248, considered

Australian Coarse Grains Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 46 ALR 398, considered

Tableland Peanuts Pty Ltd v Peanut Marketing Board (1984) 52 ALR 651, considered

Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, considered

Murphy v Lush (1986) 65 ALR 651, considered

Epitoma Pty Ltd v Australasian Meat Industry Employees' Union (1984) 3 FCR 55, applied

Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464, considered

Re Printing & Kindred Industries Union; Ex parte Nationwide News Pty Ltd (1994) 122 ALR 303, considered

Slater Walker Superannuation Pty Ltd v Great Boulder Gold Mines Ltd [1979] VR 107, applied

Magna Alloys & Research Pty Ltd v Coffey [1981] VR 23, applied

National Workforce Pty Ltd v Australian Manufacturing Workers' Union (Supreme Court of Victoria, Court of Appeal, 6 October 1997, unreported), considered

Optus Networks Pty Ltd v City of Boroondara (1997) 2 VR 318, applied

Boys Markets, Inc v Retail Clerks Union, Local 770 (1970) 398 US 235, considered

NWL Ltd v Woods [1979] 1 WLR 1294, considered

Coal & Allied Operations Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (Australian Industrial Relations Commission, Munro J, Harrison DP, Leary C, 20 June 1997, Print P2071), approved

Inner & Eastern Health Care Network v Health Services Union of Australia (Marshall J, Federal Court of Australia, 11 Nov 1997, unreported) considered

R v Hickman; Ex parte Fox & Clinton (1945) 70 CLR 598, considered

O'Toole v Charles David Pty Ltd (1991) 171 CLR 232, considered

OD Transport Pty Ltd v Western Australian Government Railways Commission (1987) 13 FCR 270, considered

MELBOURNE, 12-13 & 16-17 March 1998 (hearing), 2 April 1998 (decision)

#DATE 2:4:1998

Appearances

Counsel for the Applicant: Mr F Parry

Solicitor for the Applicant: Freehill, Hollingdale & Page

Counsel for the Respondent: Mr M Bromberg

Solicitor for the Respondent: Maurice Blackburn & Co

THE COURT ORDERS THAT:

1. The motion, notice of which was filed by the applicant on 10 March 1998, is dismissed.

   2. The directions hearing is adjourned to a date to be fixed in consultation with my Associate.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

NORTH J

This is an application for an interim injunction under s 127(7) of the Workplace Relations Act 1996 (Cth) (the Act) brought against the first, second, third and fourth respondents (the relevant respondents) to restrain them from continuing to organise industrial action. The applicant, Australian Paper Limited, operates the Maryvale paper mill near Morwell, which is the largest pulp and papermaking complex in Australia. The mill has four papermaking machines in operation and one under construction. The project for the construction of the fifth machine, known as the M5 project, will lift capacity from 412,000 tonnes per annum to 575,000 tonnes per annum. The construction cost is $330,000,000. The applicant now hopes to complete the project in June 1998.

The applicant has engaged four electrical contractors for the maintenance of the Maryvale site and construction of the M5 project. The electrical contractors are Siemens Ltd (Siemens), Wamjam Enterprises Pty Ltd (Wamjam), Primaweld Engineering Pty Ltd (Primaweld) and CGC Construction Pty Ltd (CGC). They employ 154 people on the site. These employees are the 5th-158th respondents. Siemens employs approximately 75 people on the construction of the M5 project and the other contractors employ the remaining people on maintenance work on the existing machinery. The first respondent (the Union) is an organisation of employees registered under the Act and the relevant respondents are officials or employees of the Union. The other respondents are members of the Union.

The wages and conditions of the employees of Wamjam, Primaweld and CGC have been governed by agreements which have not been certified by the Industrial Relations Commission (the Commission) under the Act. Siemens has a certified agreement with the first respondent. Whether it applies to the employees at Maryvale is a matter to which I will return.

On 19 February 1998, the employees of the four contractors went out on strike over the rejection of a claim for increased wages. On 25 February 1998, the Commission ordered that the respondents cease engaging in industrial action or being party to such industrial action. This order was made under s 127(1) of the Act, which provides:

"If it appears to the Commission that industrial action is happening, or is threatened, impending or probable, in relation to:

(a) an industrial dispute; or

(b) the negotiation or proposed negotiation of an agreement under Division 2 of Part VIB; or

(c) work that is regulated by an award or a certified agreement;

the Commission may, by order, give directions that the industrial action stop or not occur."

Section 127(5) provides:

"A person or organisation to whom an order under subsection (1) is expressed to apply must comply with the order."

The employees remain on strike. On 10 March 1998, the applicant filed an application in this Court for injunctions under ss 127(6) and 127(7) of the Act. Section 127(6) provides:

"The Court may, on the application of a person or organisation affected by an order under subsection (1), grant an injunction on such terms as the Court considers appropriate if it is satisfied that another person or organisation:

(a) has engaged in conduct that constitutes a contravention of subsection (5); or

(b) is proposing to engage in conduct that would constitute such a contravention."

The present application is brought under s 127(7), which provides:

"If, in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (6)."

The power to grant an injunction is a discretionary power in very wide terms. The word "may" in s 127(6) is used in a permissive sense (Acts Interpretation Act 1901 (Cth) s 33(2A)). Even if the Court determines to grant an injunction, the terms may be moulded to meet the needs of the particular circumstances. The power to grant an interim injunction is in equally wide terms.

The jurisdiction of the Court arises only if there is an order made by the Commission and a person or organisation has contravened or proposes to contravene that order. Sections 127(6) and (7) are sometimes loosely referred to as provisions for the enforcement of orders of the Commission by the Court. While this approach describes the result in some cases, it does not adequately explain the role of the Court. The Court only acquires jurisdiction if the Commission has made an order, but the mere fact that the Commission has made an order does not mean that the Court is bound to, or will grant, an injunction. The grant of an injunction is an independent function performed by the Court. The Court is not entitled to grant an injunction without satisfying itself that an injunction is appropriate in all the circumstances. In performing its function, the Court will determine whether the respondents have contravened, or propose to contravene, the Commission's order and will take into account the circumstances of such industrial action to establish whether the circumstances justify the grant of an injunction. The proceedings in the Commission leading to the making of the order under s 127(1), the positions put by the parties to the Commission, the decision of the Commission, and the responses of the parties to that decision may well be relevant facts bearing on whether the Court should grant an injunction. The independent function of the Court follows from the different roles the Court and the Commission perform under s 127. The order of the Court may be enforced through contempt proceedings, by fine, sequestration or imprisonment. Thus, in determining whether to grant an injunction, the Court must consider whether, if there were to be conduct in breach of the injunction, it would be of such nature or effect that, in all the circumstances, it should carry the possible consequence of a fine, sequestration or imprisonment. These considerations do not arise when the Commission makes an order under s 127(1).

By conferring a power on the Court expressed in terms of a power to grant an injunction, Parliament intended that the Court would be guided by the principles established by equity for the grant of an injunction. The Act does not modify the principles applicable to injunctive relief as do some statutes providing for a remedy by way of injunction. Examples of such statutes are collected by Gummow J in Ricegrowers' Co-operative Ltd v Howling Success Australia Pty Ltd (1987) ATPR 48,489, at 48,492; Martin Engineering Co v Trison Holdings Pty Ltd (1988) 81 ALR 543, at 548; and ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248, at 254. See also I.C.F. Spry, Equitable Remedies, 5th ed (1997), at pp 444-446.

The established approach of the Courts to the grant of an interim injunction is to consider whether the applicant has made out a serious issue to be tried and whether it has established that the balance of convenience favours the grant of an injunction: Australian Coarse Grains Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 46 ALR 398; Tableland Peanuts Pty Ltd v Peanut Marketing Board (1984) 52 ALR 651, at 653; Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, at 153-154; Murphy v Lush (1986) 65 ALR 651, at 652; Epitoma Pty Ltd v Australasian Meat Industry Employees' Union (1984) 3 FCR 55, at 58-59. A consideration of these matters is a proper starting point in determining whether to grant an injunction under s 127(7). Further, there is a relationship between the two matters. In Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464, at 472, Woodward J, with whom Smithers and Sweeney JJ agreed, said that the serious issue to be tried and balance of convenience factors:

".... need not be considered in isolation from each other. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises 'a serious question to be tried') may still attract interlocutory relief if there is a marked balance of convenience in favour of it".

The same approach was taken by Mason ACJ in Castlemaine Tooheys at 155, and see also Re Printing & Kindred Industries Union; Ex parte Nationwide News Pty Ltd (1994) 122 ALR 303, at 316, Slater Walker Superannuation Pty Ltd v Great Boulder Gold Mines Ltd [1979] VR 107, at 110, and Magna Alloys & Research Pty Ltd v Coffey [1981] VR 23, at 28. In the present case, on both the question of the establishment of a serious issue to be tried and the balance of convenience, much of the argument was concerned with the issues whether the action taken was protected action under the Act and whether proposed action would be protected action under the Act. It is therefore desirable to sketch the statutory scheme providing for protected action.

Immunity from legal action is granted to industrial action that is protected action (s 170MT(2)). Protected action, for present purposes, is industrial action organised by a union or its officers which is taken during a bargaining period for the purpose of supporting or advancing claims made in respect of a proposed agreement (s 170ML(2) (a), (c) and (e)). Although not relevant in the present case, the immunity is also given to industrial action taken by employers for that purpose. A bargaining period is initiated by giving notice to the other negotiating party and to the Commission, stating that the initiating party intends to try to make an agreement under Division 2 or 3 of Part VIB of the Act and have it certified by the Commission (s 170MI). The bargaining period commences seven days after the notice is given (s 170MK). Action within a bargaining period is not protected unless three days' written notice of intention to take the action is given (s 170MO(2)(b)), a genuine attempt to reach agreement with the other negotiating party is made (s 170MP) and the action is not engaged in or organised by persons who are not protected (s 170MM). The bargaining period ends if it is terminated by the Commission (s 170MV(c)). The Commission may terminate or suspend a bargaining period where a negotiating party is not genuinely trying to reach an agreement with the other negotiating parties or has failed to comply with a direction of the Commission relating to a proposed agreement or a matter that arose in negotiations for the agreement (s 170MW(2) (b) and (c)). An application for termination or suspension of a bargaining period under s 170MW(8)(a) may only be made by a negotiating party. The Commission cannot exercise arbitration powers during a bargaining period (s 170N). Once an agreement has been certified, employees, for the duration of the agreement, must not engage in industrial action in respect of employees whose conditions are governed by the agreement (s 170MN(1)(a)). Any such action is not protected (s 170MN(3)). These provisions are in aid of the object contained in s 3(b) of the Act, as follows:

"ensuring that the primary responsibility for determining matters affecting the relationship between employers and employees rests with the employer and employees at the workplace or enterprise level".

The purpose of this statutory scheme is to allow negotiating parties, both employer and employee, maximum freedom consistent with a civilised community to take industrial action in aid of the negotiation of agreements without legal liability for that action. It is central to the statutory scheme that an order made by the Commission under s 127(1) does not apply to protected action.

It will be recalled that the terms and conditions of employment of the employees of Wamjam, Primaweld and CGC are not governed by a certified agreement. On 28 June 1997, for the purpose of negotiating such an agreement, the Union gave notice to Wamjam, Primaweld and CGC of the initiation of a bargaining period under s 170MI. On 10 February 1998, the Union gave notice under s 170MO to each of Wamjam, Primaweld and CGC of the intention to engage in industrial action in support of the making of the certified agreement. On 19 February 1998, a joint meeting of the employees of Wamjam, Primaweld, CGC and Siemens was held. The meeting resolved to take the industrial action about which complaint is now made.

The position with Siemens is different. Siemens and the Union entered into an agreement which the Commission certified on 18 July 1997. The application of the agreement was provided for in cl 1 as follows:

"1. APPLICATION OF ENTERPRISE AGREEMENT

This Enterprise Agreement (herein known as the Agreement) will apply in respect to all employees who are employed by SIEMENS LTD TECHNICAL SERVICES INSTALLATION DEPT (herein known as the Company) and engaged in any occupations specified in the Electrical Contracting Industry Award 1992, except in the following circumstances:

1.1 Where a site agreement signed by the CEPU (Electrical Division) exists that provides better wages and conditions than those contained in this Agreement.

1.2 Where the company undertakes to do work at a specific site or project with a total project value in excess of $56.2m the parties may negotiate a specific site agreement in addition to this agreement. Every endeavour will be made by the parties to negotiate the specific site agreement prior to the close of tender by the electrical contractor."

The Union and Siemens initially applied the agreement to electrical employees at Maryvale. In February 1998, a dispute arose as to the rates of pay in the agreement in respect of employees engaged on the M5 project. In proceedings in February before the Commission the Union accepted that the agreement was applicable to those employees. However, upon further consideration, the Union now asserts that it is entitled, under cl 1, to seek an additional certified agreement for the Siemens employees engaged on the M5 project. As a result of this view, and in the light of the strike at Maryvale, the Union served a notice of initiation of bargaining period on Siemens on 24 February 1998. On 4 March 1998, the Union gave to Siemens a notice of intention to engage in industrial action pursuant to s 170MO, to commence from 6 March 1998.

Mr Parry, who appeared as counsel for the applicant, argued that the continuation of the strike after 25 February 1998 was a contravention of the order of the Commission. He contended that the commencement and continuation of the strike was not protected action. He argued that the notices of intention to take industrial action given to Wamjam, Primaweld and CGC did not comply with s 170MO(5), in that they did not state the nature of the intended action on the day it was to begin. He also argued that s 170MM(2)(b) applied to render the action not protected. As I understand this submission, it had two aspects. Siemens employees were engaged in the strike which could not be protected action on 25 February 1998 because, while the notice of initiation of a bargaining period was given on 24 February 1998, no notice of intention to take industrial action was given until 4 March 1998 for action to commence from 6 March 1998. Further, the employees of the contractors voted to take action against all the contractors. The action of the employees which followed was not protected because they resolved to take action against not only their employer but in support of claims made against all the contractors. Thus, it was contended that the strike was engaged in in concert with persons who were not protected and it was organised by the relevant respondents with this intention. Consequently, protection was denied by operation of s 170MM. These arguments raise difficult questions on which there is either no direct authority or very limited authority. For the purpose of the present application, I will assume that the applicant has established serious issues to be tried on these matters.

It must be emphasised that this assumption relates to past conduct. For the purpose of deciding whether to grant an interim injunction in this case, it is important to consider whether the applicant has established a serious issue to be tried that the proposed industrial action will contravene the Commission's orders by not being protected, and whether the balance of convenience favours the grant of an injunction, because it is the proposed action which will result in continuing loss and damage to the applicant. I turn to those matters now.

The relevant respondents clearly intend to pursue further action if it is protected. So much was stated by their counsel. Indeed, the day after the initial hearing of this application on 13 March 1998, when Mr Parry criticised the notices of intention to take industrial action dated 10 March 1998 given to Wamjam, Primaweld and CGC, the Union gave further notices of intention to take industrial action commencing on the fourth day after the giving of the notices. Mr Parry accepted that it was open to the employees of Wamjam, Primaweld and CGC to take industrial action in the future which would be protected action, provided that the requirements of the Act were observed. He did not attack the notices initiating the bargaining periods given to Wamjam, Primaweld and CGC but maintained that the existing notices of intention to take industrial action were bad, or could not be given without a cessation of the present strike. Thus, he contended, there would be a delay of at least three days between the giving of a proper notice and the ability to take protected action. Furthermore, to comply with the Act, the employees could not act together, as they had done up to date, and would have to make a genuine attempt to reach agreement prior to taking any further action.

The future conduct of the relevant respondents which the applicant seeks to restrain will only contravene the Commission's orders if the relevant respondents fail to comply with the requirements of the Act which render action protected. The relevant respondents intend to comply. The alleged noncompliance in respect of past conduct has been outlined by the applicant in the course of argument in this proceeding. The relevant respondents have so far sought to remedy the suggested noncompliances to the extent possible. I have no reason to suppose, on the evidence before me, that they will not seek to comply with the requirements of the Act in the future. Thus, as matters presently stand, the applicant has not established a serious issue to be tried that proposed action of Wamjam, Primaweld and CGC will contravene the Commission's orders.

In relation to Siemens, Mr Parry contended that there was a serious issue to be tried that the proposed industrial action could not be protected. There is a certified agreement in place, and s 170MN(1)(a) and (2) provides:

"(1) From the time when:

(a) a certified agreement; ....

comes into operation until its nominal expiry date has passed, an employee, organisation or officer covered by subsection (2) must not, for the purpose of supporting or advancing claims against the employer in respect of the employment of employees whose employment is subject to the agreement or award, engage in industrial action.

(2) For the purposes of subsection (1), the following are covered by this subsection:

(a) any employee whose employment is subject to the agreement or award;

(b) an organisation of employees that is bound by the agreement or award;

(c) an officer or employee or such an organisation acting in that capacity."

This argument depends upon construing the application clause of the agreement, set out earlier in these reasons, to mean that, while the parties could negotiate further conditions upon the existing base, the certified agreement continues to apply until its specified expiry date. This construction lays emphasis on the words "in addition to this agreement" to establish the continued operation of the certified agreement as such. On this view, the certified agreement continues in force at Maryvale at all relevant times and, consequently, s 170MN(1) prohibits industrial action in relation to employees covered by the agreement. The wording of the application clause, however, commences with the phrase that the agreement applies except in the circumstances set out in the subclauses which follow. Subclause 1.2 provides that the agreement does not apply where Siemens undertakes work on a project with a value over $56.2 million. In those circumstances, the subclause provides that the parties may negotiate a specific site agreement. In my view, the wording indicates that the certified agreement applies to a project such as the M5 project, which has a value over $56.2 million, unless, at any time during the project, either party opts to negotiate a specific site agreement. If the option is exercised, the certified agreement ceases to apply and a new agreement has to be negotiated. The statutory scheme for the process of bargaining becomes available for the negotiation of the new agreement. On this basis, s 170MN(1)(a) does not apply to the present situation. The Union has opted to seek different wages from those set under the agreement and the Union was, therefore, entitled to initiate a bargaining period for that purpose and to take protected action in support of the negotiations for a new certified agreement to apply for the M5 project. The view I have formed on the construction of the agreement is a preliminary view, based on limited argument on the issue. The applicant's contrary argument is not untenable, but it is weak. The applicant has therefore established a serious issue to be tried on this question, but I will take into account the weakness of the argument in the final balancing of all relevant factors.

The terms of s 170MN(1) present a greater obstacle to the applicant's success. There is a curiosity about the section in the overall context of Division 8. The section only prohibits engaging in industrial action during the period of the certified agreement, and not to organising industrial action in that period. Throughout Division 8, there is a distinction drawn between engaging in industrial action and organising industrial action (see ss 170ML(2) and 170MM(1) and (2)). Engaging in industrial action is the taking of direct action which interferes with usual work patterns, while organising industrial action involves procuring others to take the direct action. A union official or employee who is not employed at the worksite which is the subject of disruption does not engage in industrial action for the purposes of Division 8 by encouraging employees to stop work. This conduct amounts to organising industrial action. Section 170MN(1) is only contravened by engaging in industrial action while a certified agreement is in place. If, contrary to my preliminary view, the agreement with Siemens continues in force as a certified agreement, the relevant respondents would not contravene s 170MN(1) by organising industrial action during the period of the agreement, even if the employees would contravene the section by engaging in industrial action in that period. This construction further reduces the strength of the applicant's case that the relevant respondents' proposed action against Siemens will not be protected action.

It was suggested by the applicant that one way to accommodate any right of the respondents to take protected action in the future is to grant an injunction against the taking of industrial action but to exempt conduct "in the exercise of the rights, if any, which the respondents have pursuant to Division 8 of Part VIB of the Act". An example of this form of injunction can be found in National Workforce Pty Ltd v Australian Manufacturing Workers' Union (Supreme Court of Victoria, Court of Appeal, 6 October 1997, unreported). In my view, this approach is wrong in principle. The proviso is so pregnant with legal complexity and uncertainty that the recipient of the injunction has little prospect of taking the intended benefit of the proviso. The only safe course for the recipient would be to desist entirely from further action. The present case illustrates the problem. Whether future action of the employees of Wamjam, Primaweld and CGC will be protected depends on the answer to at least the legal question concerning the validity of the notices of intention to take industrial action, the legal question whether the existing notices, even if valid, provide protection where some conduct has already taken place, and the legal question whether the conduct is engaged in together with other persons who are not protected persons. To expect the recipient of an injunction in such terms to grapple with the legal complexities arising from this undeveloped area of the law is rather like visiting a civil liability for trespass on a person whose only means of learning that the property which he entered was private was a sign written in a foreign language. The principle which guides the content and formulation of interlocutory injunctions was explained by Charles JA in Optus Networks Pty Ltd v City of Boroondara (1997) 2 VR 318, at 336-337, as follows:

"The relevant principles relating to the wording of interlocutory injunctions are well-settled, although their application is often a matter of difficulty. Because a restraining injunction prevents the person affected from acting in a particular way, on pain of penalties for contempt of court, it is essential that the injunction be certain in its terms, so that the defendant may know precisely what may or may not be done pursuant to the injunction. Imprecision and ambiguity must, so far as possible, be avoided in the language used: Australian Consolidated Press Ltd v Morgan (1964) 112 CLR 483 at 503, 515; Redland Bricks Ltd v Morris [1970] AC 652 at 666-7; Meagher, Gummow and Lehane, Equity, Doctrines and Remedies, 3rd ed, (1992), pp 619-20. Furthermore an interlocutory restraining injunction should be made no wider in ambit than is necessary: National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386 at 556-9."

The reason for this principle is of the utmost importance. The rule of law upon which our society is based depends for its viability on community acceptance of the decisions of the Courts. Just as this acceptance depends on decisions being made in accordance with the law and impartially, so community acceptance depends upon orders of the Courts clearly and simply defining the conduct necessary to comply with the orders. The failure of an interlocutory injunction to state clearly the conduct restrained, especially an injunction which applies in the often heated and polarised circumstances of an industrial dispute, tends to prejudice the proper administration of justice by diminishing the authority of the Courts. Therefore, if respondents propose to engage in industrial action only if it is protected and there is a reasonable likelihood that the proposed action will conform to the requirements of protected action, there are strong reasons for exercising the discretion against granting an interlocutory injunction. This is particularly so because the Act provides a mechanism by which the Commission can determine whether proposed action should continue to be protected. Under s 170MW, a negotiating party can apply to have the bargaining period suspended or terminated. Industrial action taken during a period of suspension or after termination is not protected. In determining whether to terminate or suspend the bargaining period, the Commission must consider issues which go to the heart of the dispute between the parties, namely, whether there has been a genuine attempt to reach an agreement. Given the potential consequences of a breach of an injunction granted by the Court, it is appropriate that the Court is the last resort for vindicating rights in an industrial dispute. The absence of any application under s 170MW by Wamjam, Primaweld, CGC and Siemens tends against the grant of an interim injunction in this case.

In considering the balance of convenience, a strong factor in favour of the grant of an injunction is the ongoing loss being suffered by the applicant as a result of the industrial action. The applicant claims loss and damage is being suffered at the rate of $74,000 per day for each day of delay of the M5 project. I am prepared to accept this evidence at face value, although the explanation of the basis of the calculation of the sum was not very revealing. The loss from the delay of the M5 project can be attributed to the action taken by employees of Siemens engaged on the construction project. However, about half of the employees involved in the industrial action are concerned with maintenance of the existing plant and not construction of the M5 project. No specific evidence of loss occasioned by their action was put before the Court. While not seeking to minimise the significance of the losses experienced by the applicant, the Court must take into account all the matters which bear upon the occurrence of loss and damage. In this case, for example, it is relevant to take into account that the industrial action is also causing loss to the employees of the contractors because they are losing wages during the strike.

Furthermore, the suffering of loss and damage and other discretionary considerations must be viewed against the background that the injunction is sought in the context of an industrial dispute. Courts have commonly approached the grant of an interlocutory injunction in the course of an industrial dispute in the way described in I.C.F. Spry, Equitable Remedies, 5th ed (1997), at 502, as follows:

".... if the plaintiff is on general equitable principles entitled to interlocutory relief, the court does not refuse to intervene because the defendant is his employee or employer, or because the defendant is a union. .... If, for example, a union threatens to commit or continues to commit a trespass or a nuisance or other wrongful behaviour, it may be enjoined to the same extent as any other wrongdoer may be restrained. Neither employers on the one hand nor unions on the other hand have been treated for these purposes as in a specially favoured category, and the protection of equity is not to be denied merely because the relevant matters have arisen in an industrial law context."

This approach is correct so far as it goes, but it does not go far enough. It fails to take into account the likely significance of a number of characteristic features of industrial disputes. The guiding principle for the exercise of the discretion is outlined in I.C.F. Spry, Equitable Remedies, 5th ed (1997), at 503, as follows:

"It has been said that whether or not an injunction should be granted before the legal rights of the parties have been established 'depends upon a great variety of circumstances, and it is utterly impossible to lay down any general rule upon the subject, by which the discretion of the court ought in all cases to be regulated' (Saunders v Smith (1838) 3 My & Cr 711, at 728, 40 ER 1100, at 1107. See also American Cyanamid Co v Ethicon Ltd [1975] AC 396, at 408). It must be remembered that in every case the ultimate issue is whether in the particular circumstances the most just course is to restrain the defendant from carrying out the relevant acts until the matters that are in issue between the parties can be finally disposed of by the court. Any particular fact or matter is treated as material or immaterial according to whether or not it is relevant to that issue."

By reason of these recurring features of industrial disputes, ordinarily, justice will be best served if the Court approaches the grant of an interim injunction against industrial action with particular caution. I emphasise that this is not a universal or inflexible rule or precondition, but rather an approach which will be applicable in most cases because of the usual features of such cases. A number of such features immediately come to mind. The first is that, usually, the parties to litigation concerning an industrial dispute include persons or bodies who are professional negotiators. Their everyday function is resolving disputes between themselves about industrial issues. There is good sense in courts maintaining a degree of restraint against intervention between parties who are experienced in techniques for dispute resolution. Furthermore, the disputants usually have a relationship which has been built up over some time and must continue after the current issue between them is long past. The philosophy of the Act is to allow workplace relationships to be negotiated by the parties with the minimum of third party intervention. Thus, the Act has scaled back the role of the Commission in regulating the wages and conditions of employees. The statutory objects imply that courts should exercise a degree of restraint before intervening in the relationship between industrial parties. The second feature is related to the first. Often, an interim injunction to restrain industrial action is sought for predominantly tactical or strategic purposes in the course of a dispute. The injunction constitutes another bargaining chip which can be used to further the interests of the applicant. Whether this is so in a particular case will depend on the facts put before the Court. It was not suggested in the present case that the applicant seeks an injunction for tactical reasons. Consequently, I do not have regard to that consideration in this case. However, if the Court is persuaded that an injunction is sought primarily for tactical reasons, there is good reason for the Court to be particularly cautious about granting an injunction. It is not the function of the Court to provide an advantage to one side in an industrial dispute. To do so creates the risk that the Court will be seen to be partisan. The necessary confidence in the Court as an impartial adjudicator of disputes will be reduced. In my experience, the too ready grant of interim injunctions by courts in industrial disputes results in the diminution of the authority of the Court. Where interim injunctions have been granted without a sufficiently cautious approach by the Court, industrial disputants bound by the orders have simply ignored them. On the other hand, it has been extremely unusual for the industrial disputant who has obtained an injunction to take contempt proceedings against their opponent for breach of the injunction. Both responses recognise that the grant of such injunctions has been inappropriate in the particular setting. Both responses signify a reduction in the authority of the Court. The problem of an over-readiness of Courts to grant injunctions in industrial disputes arose in the United States in the 1930s. The response was the passing of the Norris-LaGuardia Act, which prevented federal courts from granting injunctions to restrain industrial action. The background of the legislation was set out in the majority opinion of Brennan J in Boys Markets, Inc v Retail Clerks Union, Local 770 (1970) 398 US 235, at 250-251, as follows:

"The Norris-LaGuardia Act was responsive to a situation totally different from that which exists today. In the early part of this century, the federal courts generally were regarded as allies of management in its attempt to prevent the organization and strengthening of labor unions; and in this industrial struggle the injunction became a potent weapon that was wielded against the activities of labor groups. The result was a large number of sweeping decrees, often issued ex parte, drawn on an ad hoc basis without regard to any systematic elaboration of national labor policy. See Drivers' Union v Lake Valley Co, 311 US 91, 102 (1940).

In 1932 Congress attempted to bring some order out of the industrial chaos that had developed and to correct the abuses that had resulted from the interjection of the federal judiciary into union-management disputes on the behalf of management. See declaration of public policy, Norris-LaGuardia Act, ß2, 47 Stat 70. Congress, therefore, determined initially to limit severely the power of the federal courts to issue injunctions 'in any case involving or growing out of any labor dispute ....' ß 4, 47 Stat 70."

Third, it is accepted that special caution should be exercised where the grant of an interim injunction is likely to determine the matter finally. In NWL Ltd v Woods [1979] 1 WLR 1294, the House of Lords upheld the refusal of an interlocutory injunction in an industrial dispute. Lord Diplock said, at 1307:

"Where, however, the grant or refusal of the interlocutory injunction will have the practical effect of putting an end to the action because the harm that will have been already caused to the losing party by its grant or its refusal is complete and of a kind for which money cannot constitute any worthwhile recompense, the degree of likelihood that the plaintiff would have succeeded in establishing his right to an injunction if the action had gone to trial, is a factor to be brought into the balance by the judge in weighing the risks that injustice may result from his deciding the application one way rather than the other."

As interim injunctions restraining industrial action usually have this effect, it is appropriate, on ordinary principles, for the Court to hesitate before granting an injunction in such circumstances. Again in Woods, Lord Diplock said, at 1305:

".... (3) that it is the nature of industrial action that it can be promoted effectively only so long as it is possible to strike while the iron is still hot; once postponed it is unlikely that it can be revived; (4) that, in consequence of these three characteristics, the grant or refusal of an interlocutory injunction generally disposes finally of the action; in practice actions of this type seldom if ever come to actual trial",

And, again, United States experience is instructive. In their pioneering work, The Labor Injunction, written in 1929, Felix Frankfurter (later Justice Frankfurter) and Nathan Greene dealt with the same issue in the US context of that time, at 78-80, as follows:

"For the most part, however, courts have granted the injunction [against taking industrial action] despite grave doubt, on the theory that the preliminary injunction does not pass finally on the merits of the controversy.At least for labor disputes such a rationale must be rejected. Of eighty-eight temporary injunctions revealed by the Federal Reporter, sixty-eight never were appealed from, and fifty-six, whether appealed or not, never went to final hearing on the merits. In New York, of thirty-five injunctions pentente lite issued during the five-year period 1923-1927, in no instance was there further lis. These statistics reveal a situation peculiar to labor disputes. The strike - this is true in a great many of the cases - may have ended; the strikers may lack funds for litigation; the strikers may be convinced 'that there is nothing to be gained by fighting injunctions issued by judges who are hostile to organized labor.' Whatever the reason, it is undeniably the fact that the preliminary injunction in the main determines and terminates the controversy in court. The tentative truth results in making ultimate truth irrelevant." (footnotes omitted)

In an article, 'Labour Injunctions in the State Courts - Part II: A Critique', in Virginia Law Review, (1964) Vol 50:1147, at 1157-1158, Benjamin Aaron commented, in relation to subsequent events in the United States, as follows:

"In a great many, if not the majority, of cases, however, the restraining order or preliminary injunction spells defeat for the defendant's cause. Every objective study of injunctions in action since the publication of the pioneer work by Frankfurter and Greene has noted this result. Such a result is wrong, not because we can be sure that the defendant's cause is just and its objectives lawful - they frequently are not - but because the judicial power has been used prematurely and unfairly to aid one party to a private dispute."

Finally, it is often argued that, if a stoppage of work in the course of an industrial dispute causes loss of production and other monetary loss, the balance of convenience is "all one way" in favour of the grant of an injunction. This argument also lacks the necessary balance required in the consideration of the grant of an interlocutory injunction. It ignores the interest which employees have in furthering their industrial claims by taking direct action. When the Court prevents further monetary loss by granting an injunction to the employer, it concurrently deprives the employees of the means of advancing their industrial interests by direct action. The emphasis which the Court will give to each interest is a matter of judgment in every case. But it is wrong to view the interest of employees in pursuing direct action as failing to provide a consideration to be placed in the balance against the interest of the employer in preventing further monetary loss and damage. In order to substantiate the interest of employees in advancing industrial claims, it is necessary for the Court to have evidence of the claims and of the reasons advanced for them. In the present case, the underlying merits of the industrial claims were touched upon briefly. The treatment of the issue does not allow me to regard it as either militating in favour of or against the granting of an injunction.

There are several further discretionary considerations raised in this case. An important matter is that Wamjam, Primaweld, CGC and Siemens played no part in the current proceedings and the applicant did not adduce any evidence of their attitude to the grant of an injunction. It was the applicant, as the owner and builder of the project, which sought orders under s 127 from the Commission. But it was the employees of Wamjam, Primaweld, CGC and Siemens who were on strike. No doubt the industrial action had a serious effect on the applicant but it is probable that the action had a serious and immediate effect on Wamjam, Primaweld, CGC and Siemens as well. If Wamjam, Primaweld, CGC and Siemens had opposed the grant of an injunction, there would have been a strong reason for the Court to refuse an injunction to the applicant. While the silence of Wamjam, Primaweld, CGC and Siemens cannot be construed as opposition, the absence of any indication of their attitude is a consideration against the grant of an injunction.

Another consideration relevant to the exercise of the discretion in this case is the doubt surrounding the making of the orders by the Commission. The Commission has not yet provided reasons for the making of the orders. However, the transcript of the proceedings in the Commission is in evidence before me. The Court should be very cautious in having recourse to statements of the Commission made in the course of argument. Often such statements are made to test the propositions being argued and are not indicative of the final view of the Commission. But exercising the necessary caution, I think there is some assistance to be gained from the transcript in the present case, in the absence of reasons for decision. In proceedings on 24 February 1998, the Commissioner said to the representative of the Union:

"Mr Cleary, I asked the question about whether notices of bargaining and notice of intending to take industrial action, in other words, protected action for want of a better term, have been issued. That does not mean that if those notices have been issued that this Commission is precluded from issuing certificates pursuant to section 127. It is then for the Court to decide which part of that action is protected and which is not. It is not for me to decide. The Act is fairly clear about that, and decisions of the Federal Court have been very clear about it." (emphasis added)

This passage reflects the apparent view of the Commissioner that he was not to decide whether the industrial action which had been taken or was proposed was protected action. The Commission cannot make a binding determination that action was, or that proposed action would be, protected action. However, whether the action was, or the proposed action would be, protected is a relevant and important factor to be considered by the Commission in the exercise of the discretion to make orders under s 127. Indeed, in a most comprehensive decision concerning the exercise of the discretion under s 127, the Full Bench of the Commission in Coal & Allied Operations Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (Australian Industrial Relations Commission, Munro J, Harrison DP, Leary C, 20 June 1997, Print P2071) said, at 25:

"It follows in our view that as a general rule in the exercise of the discretion under section 127, an order should not be made in relation to industrial action that is considered to be protected action, or plainly likely to be protected action."

This view is clearly correct. One important reason for the Commission forming a view as to the protected nature of the action is captured in the immediately following sentence, at 25, as follows:

"If the intervention of the Commission is sought in relation to industrial action that is likely to be considered to be protected action, the appropriate course would normally be for an interested negotiating party to apply under section 170MW."

The decision of the Commission to make the orders under s 127(1) is currently under challenge in an application by the Union for revocation of the orders. Further, the Union intends to appeal against those orders. The totality of the material before me suggests that the Commission's discretion in making the orders may have miscarried. It is for the Commission to determine any appeal against the orders. As Mr Parry pointed out, even if the discretion did miscarry (which I am not in a position, nor do I have the function, to determine), such an appeal requires the appellant to satisfy the Full Bench that the matter is of such importance that it is in the public interest for the Full Bench to entertain the appeal (s 45(2)). The relevant fact for the purpose of this proceeding is that the validity of the orders is under challenge and the challenge does not appear to be groundless. The grant of an injunction by the Court is a serious step. The uncertainty surrounding the orders in this case is a consideration which tends against the grant of an injunction at this time.

In summary, I have assumed in the applicant's favour that the conduct of the relevant respondents after the Commission made the orders under s 127(1) until the hearing of this application raised a serious issue to be tried that those respondents acted in contravention of the orders of the Commission as provided in s 127(6)(a). For the purposes of granting an interim injunction, the more important question is whether the applicant has established a serious issue to be tried that the relevant respondents are proposing to engage in conduct that would constitute contravention of the Commission's orders, as is provided in s 127(6)(b). The applicant has not satisfied me that there is a serious issue to be tried that the proposed action by the relevant respondents against Wamjam, Primaweld and CGC would contravene the orders of the Commission, because the conduct is likely to be protected action. In relation to the proposed industrial action against Siemens, the applicant has established a serious issue to be tried but the case is a weak one. In the event that I am wrong in holding that the applicant has not established a serious issue to be tried in relation to the proposed action against Wamjam, Primaweld and CGC, I have considered the balance of convenience in relation to the proposed action against those contractors and Siemens. For instance, I have had regard to the loss being suffered by the applicant, the loss being suffered by the employees of the contractors while the strike continues, the absence of reference to the attitude of Wamjam, Primaweld, CGC and Siemens to the grant of an injunction, and the uncertainty surrounding the making of the orders by the Commission. It is unnecessary for me to exercise the particular caution against granting interim injunctive relief in industrial disputes referred to earlier in these reasons because I have formed a clear view, after balancing the factors discussed in these reasons, apart from those which are referred to as supporting the exercise of such caution, that the application should be refused at this time. That is not to say that an injunction may not be appropriate as further developments occur in the dispute between the parties. While it is not necessary, in light of my conclusion, to deal with a number of the arguments put by the relevant respondents to the effect that the Court does not have jurisdiction to hear the case, it may be useful for me to make some observations about some of those arguments.

The order of the Commission requires the respondents to:

".... cease and refrain from engaging in strikes, bans and limitations on the performance of work and any conduct directly or indirectly party to or concerned in any strike, ban or limitation on the performance of work."

The order is not restricted to industrial action in relation to the negotiation or proposed negotiation of an agreement to be certified. Section 127(1) gives the Commission power to make orders only in respect of industrial action which has a relation to the matters specified in subparagraphs (a)-(c). It was contended by the relevant respondents that the order of the Commission fell outside the power granted because the industrial action restrained was not limited to the specified subject matter. It is highly likely that the Commission intended the order to be limited to the industrial action taken to support or advance the negotiation of the certified agreement. If this is so, the order may be corrected by the Commission. If the only obstacle to the grant of an injunction were the correction of the order, the Court would adjourn the application until that step had been taken by the Commission. In Inner & Eastern Health Care Network v Health Services Union of Australia (Marshall J, Federal Court of Australia, 11 November 1997, unreported) the Court expressed disapproval of an attempt by an applicant to cure alleged invalidities in an order made by the Commission under s 127(1) during the course of an application to the Court for an interim injunction. The disapproval appears to have been directed to the fact that the application to correct the order was made ex parte. Provided that the application to the Commission to correct a slip in the order is made in the proper way, there is no objection to such a step being taken. Indeed, it is important that the Court is concerned with the issues of substance in interim injunction applications, and not with issues which take up time and have no bearing on the fundamental merits of the application. Interim injunction applications are usually made in urgent circumstances with limited time available so that attention must be concentrated on determinative factors rather than peripheral matters.

The relevant respondents contended that the order of the Commission was made without jurisdiction because the applicant had no standing to apply to the Commission for the order. Section 127(2)(b) allows a person directly affected by the industrial action to bring an application for an order and, so it was said, the applicant was not directly affected by the industrial action. Section 150 of the Act, it was argued, did not prevent the Court examining the validity of the order because the order of the Commission was "not reasonably capable of reference to the power given to the body": R v Hickman; Ex parte Fox & Clinton (1945) 70 CLR 598, at 615, per Dixon J; and O'Toole v Charles David Pty Ltd (1991) 171 CLR 232, at 248, per Mason CJ. Further, the relevant respondents contended that the applicant had no standing to bring this application in the Court. Section 127(6) allows the application to be brought by a person "affected by an order" made by the Commission under s 127. While the applicant was affected by any breach of the order, it was not affected by the order. The Act draws a distinction between a person affected by an order and a person affected by breach of an order (see, for example, s 178(5)). These issues are not straightforward and they were not developed in any detail. I would have been satisfied that the applicant had established a serious issue to be tried that it had standing in both the Commission and the Court. But the question arises whether these jurisdictional arguments must be resolved finally at this interlocutory stage, or whether it is sufficient for the applicant to establish a serious issue to be tried with respect to the jurisdictional questions.

In OD Transport Pty Ltd v Western Australian Government Railways Commission (1987) 13 FCR 270, French J considered an application for an interlocutory injunction to restrain the Western Australian Government Railways Commission from undercutting prices charged by the applicant for certain road transport services, in breach of the provisions of the Trade Practices Act 1974 (Cth). At 273-274, he said:

"Counsel for the respondent raised at the outset what he described as a threshold question, a question, he said, which went to the jurisdiction of the court to entertain this application. ....

It was further submitted for the respondent that the court could not, on a claim for interlocutory relief, deal with the jurisdictional issue as it would deal with the other questions before it in such a case. The court, it was said, is obliged to resolve the jurisdictional issue at this stage of the proceedings and cannot limit itself to a consideration whether a serious question of law arises in that regard.

As a proposition of universal application that is not correct. Some questions which go to the jurisdiction of the court may require extensive factual inquiry before they are resolved. According to the circumstances of the case, it may be a desirable and practicable course to adjudicate at the outset upon a jurisdictional question as a preliminary issue, but that is not the only way in which jurisdiction may be determined.

......

Certainly as put by counsel for the respondent, the character of the respondent is a matter to be determined entirely by reference to the statute by which it is established, namely the Government Railways Act 1904. It can be accepted that where a straightforward question of law arises at an interlocutory stage, it will in most cases, be proper to decide it then and there. In fact it has been said to be a general rule that such questions should be so decided: Karaguleski v Vasil Bros & Co Pty Ltd [1981] 1 NSWLR 267. Where, however, time does not permit a proper consideration of questions of law at the interlocutory stage, then the court should not decide them: Hortico (Australia) v Energy Equipment Co (Australia) (1985) 1 NSWLR 545",

and, at 274, he concluded:

"In my opinion it would be quite inappropriate for the court on the materials presently before it and within the present time constraints to attempt definitively to resolve the question of the proper characterisation of the respondent in relation to the conduct complained of by the applicant. In my opinion there is, in connection with the status of the respondent in soliciting and entering into the relevant contracts, a serious question to be tried as to whether or not it acted as an agent of the Crown in right of the State in so doing."

I agree with his Honour that, where the jurisdiction of the Court is in issue, in some cases it will be sufficient for the applicant seeking an interim injunction to establish a serious issue to be tried that the Court has jurisdiction. At first sight, it may appear contradictory that the Court has power to grant an interim injunction where the Court determines at a final hearing that it does not have jurisdiction in the matter. The power to grant interim relief, however, is to allow the Court to intervene in the subject of the dispute for a limited period, and for a limited purpose. Seen in this way, the power to grant interim relief takes account of the fact that cases are not decided as soon as the proceedings are commenced, and injustice may be done as a result of the delay unless the Court intervenes in the meantime. The power to make interim orders is an ancillary power in aid of and complementary to the Court's primary function of making a final determination of the matters in issue.

The orders of the Court are that the motion, notice of which was filed by the applicant on 10 March 1998, is dismissed and the directions hearing is adjourned to a date to be fixed in consultation with my Associate.