Australian Workers' Union v BHP Iron-Ore Pty Ltd - [2001] FCA 3

FEDERAL COURT OF AUSTRALIA
Australian Workers' Union v BHP Iron-Ore Pty Ltd [2001] FCA 3
CONSTITUTIONAL LAW – Commonwealth powers – corporations power – validity of ss 298K, 298L & 298M of Workplace Relations Act 1996 (Cth)
INDUSTRIAL LAW – industrial relations – freedom of association – employer offering workplace agreements – whether injury of employees or alteration of their positions to their prejudice – whether offer of workplace agreements made for prohibited reasons – whether employer by threats or promises or otherwise inducing employees to stop being members of industrial association – relevance of employer’s intent to inducement considered – whether employer’s obligation under award to refrain from entering into contracts inconsistent with award expressly incorporated in employees’ contracts of employment
CONTRACTS – terms – whether express incorporation of terms of industrial award into contract of employment – whether obligation not to enter into contracts inconsistent with award a term or condition of employment – whether breach of contract for employer to enter into workplace agreements inconsistent with award
WORDS AND PHRASES – “induce”, “member of an industrial association”
Workplace Relations Act 1996 ss 3, 298A, 298C, 298G, 298K, 298L, 298M, 298U, 298V
Workplace Relations and Other Legislation Amendment Act 1996
Industrial Relations Reform Act 1993
Workplace Agreements Act 1993 (WA)
Industrial Relations Act 1979 (WA)
Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 cited
Re Dingjan; ex parte Wagner (1995) 183 CLR 323 considered, applied
The Commonwealth v Tasmania (1983) 158 CLR 1 referred
Quickenden v O’Connor (1999) 91 FCR 597 referred
Rowe v Transport Workers’ Union (1998) 90 FCR 95 referred
Victoria v The Commonwealth (1996) 187 CLR 416 discussed, followed
Re Pacific Coal Pty Ltd; ex parte Construction, Forestry, Mining and Energy Union [2000] HCA 34 referred
R v Australian Industrial Court; ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235 referred
National Wage Case (1987) 17 IR 65 cited
National Wage Case (1988) 25 IR 170 cited
National Wage Case (1991) 39 IR 127 cited
Safety Net Review – Wages (1997) 71 IR 1 cited
Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 referred
Bowling v General Motors-Holden’s Pty Ltd (1980) 50 FLR 79 referred
David’s Distribution Pty Ltd v National Union of Workers (1999) 165 ALR 550 considered
Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2000] FCA 1008 cited
Burnie Port Corporation Pty Ltd v Maritime Union of Australia [2000] FCA 1768 cited
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 cited, distinguished
BHP Iron Ore Pty Ltd v Australian Workers’ Union (2000) 171 ALR 680 explained, followed
CPSU, Community and Public Sector Union v Telstra Corporation Limited [2000] FCA 844 referred
Finance Sector Union v Commonwealth Bank of Australia [2000] FCA 1372 cited
Human Rights & Equal Opportunity Commission v Mount Isa Mines Ltd (1993) 118 ALR 80 referred
IW v City of Perth (1997) 191 CLR 1 referred
Australian Municipal, Administrative, Clerical & Services Union v Greater Dandenong City Council [2000] FCA 1231 referred
General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 distinguished
Moore v Doyle (1969) 15 FLR 59 referred
Byrne v Australian Airlines Ltd (1995) 185 CLR 410 cited
Moama Bowling Club Ltd v Armstrong (No 1) (1995) 64 IR 238 distinguished
Cliffe v Hoechst Australia Ltd (unreported, IRCt, 21 October 1996, case 514/96) cited
Australian Airline Flight Engineers Association v Ansett Australia Ltd [2000] FCA 1299 referred
AUSTRALIAN WORKERS’ UNION & ORS v BHP IRON-ORE PTY LTD
V 24/00
KENNY J
MELBOURNE
10 JANUARY 2001

INDEX

HEADING PARAGRAPH No.

introduction [1]

the parties [2]

industrial regulation at bhpio [7]

constitutional challenge [12]

construction of sections 298K, 298L and 298M [33]

(a)   Legislative history [34]

(b) Construction of s 298K [51]

(c) Construction of s 298M [70]

the development and implementation of the wpa proposal [84]

(a)   Management changes at BHPIO [85]

(b)   Voluntary redundancy offers and equipment reduction [89]

(c)   Amending the IR agreement [90]

(d)   The due diligence exercise with Hamersley Iron [95]

(e)   Project Phoenix – BHPIO reviews its operations [111]

(f)    The commitment to WPAs [118]

      (i)     First Review – August 1999 [121]

(ii) The Section 72A case and the ACTU [123]

      (iii)     The second review – September 1999 [128]

      (iv)     Third review – end September 1999 [138]

(g)   Moving to WPAs [142]

(h)   The decision to offer WPAs [146]

(i)    Negotiations relating to a new EBA [160]

bhp’s reasons for workplace agreements [171]

(a)   The identity of the decision-maker [171]

(b)   Kirby’s reasons [174]

(c)   Instances of alleged union inflexibility [191]

(d)   The accrued sick leave option and the backdating of pay       increases [200]

the applicants’ case under s 298K [201]

the applicants’ case under s 298M [212]

the contract case [246]

conclusion [258]

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V24 OF 2000

BETWEEN:

AUSTRALIAN WORKERS' UNION
First Applicant

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
Second Applicant

AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
Third Applicant

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
Fourth Applicant

TRANSPORT WORKERS' UNION OF AUSTRALIA
Fifth Applicant

DOUGLAS STEAD
Sixth Applicant

ROSS KUMEROA
Seventh Applicant

IAN BURTENSHAW
Eighth Applicant

PHILLIP ROONEY
Ninth Applicant

ROSS BEGGS
Tenth Applicant

AND:

BHP IRON-ORE PTY LTD
Respondent

JUDGE:

KENNY J

DATE:

10 JANUARY 2001

PLACE:

MELBOURNE

REASONS FOR JUDGMENT
introduction

In this proceeding, the applicants seek relief of various kinds under the Workplace Relations Act 1996 (Cth) (“the WR Act”), the Judiciary Act 1903 (Cth) and the accrued jurisdiction of the Court. The Court is, however, presently concerned only with the claim for final injunctive relief based on alleged breaches of ss 298K and 298M of the WR Act and alleged breaches of contracts of employment. Interlocutory injunctions were granted earlier this year by a single judge ([2000] FCA 39; (2000) 96 IR 422) and substantially continued by the Full Court ([2000] FCA 430; (2000) 171 ALR 680). The application arises out BHPIO’s decision to offer workplace agreements (“WPAs”), pursuant to the Workplace Agreements Act 1993 (WA) (“the WPA Act”), to each employee who had hitherto been covered by the Iron-ore Production and Processing (Mt Newman Mining Company Ltd) Award (No 29 of 1984) (“the Award”).
the parties
The first five applicants (“the union applicants”) are employee organisations registered under the WR Act or its predecessors. Each of the sixth to tenth applicants claims to be a member of one of the union applicants and an employee of the respondent, BHP Iron-Ore Pty Ltd (“BHPIO”).
Each union applicant has a counterpart union in Western Australia that is registered under the Industrial Relations Act 1979 (WA) (“the WAIR Act”) (collectively “the state unions”). For the first applicant (“the AWU”), this is the Australian Workers’ Union, Industrial Union of Workers (“the state AWU”). For the second applicant (“the CFMEU”), this is the Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia – Western Australia Branch (“the state CFMEU”). For the third applicant (“the AMWU”), this is the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Workers – Western Australia Branch (“the state AMWU”). For the fourth applicant (“the CEPU”), this is the Communication, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Workers Union of Australia, Engineering and Electrical Division WA Branch (“the state CEPU”). For the fifth applicant (“the TWU”), this is the Transport Workers’ Union, Industrial Union of Workers WA Branch (“the state TWU”).
The rules of the state AWU, the state CEPU and the state TWU provide that the union is “incorporated with” and is “a branch of” the AWU, the CEPU and the TWU respectively, and that membership of the state union is “synonymous with membership” of the AWU, the CEPU or the TWU (as the case may be). Members of the state CFMEU and the state AMWU were enrolled as members of the CFMEU and the AMWU respectively.
BHPIO, a wholly-owned subsidiary of the Broken Hill Proprietary Company Limited (“BHP”), carries on operations in the Pilbara in Western Australia. These operations include the mining of iron ore at Mt Newman and the transportation of ore, principally by rail, some 450 kilometres to Port Hedland. At Port Hedland, BHPIO has processing and ship-loading facilities on Finucane Island and Nelson Point.
The Minister for Employment, Workplace Relations and Small Business (“the Minister”), on behalf of the Commonwealth, has intervened in the proceeding in the public interest pursuant to s 471 of the WR Act. His submissions were confined to issues of the construction and validity of the WR Act.
industrial regulation at bhpio
On 5 November 1999, BHPIO employed 486 employees at Mt Newman who were within the scope of the Award. The Award was made by The Western Australian Industrial Relations Commission (“WAIRC”) pursuant to the WAIR Act. Besides BHPIO, the parties to the Award were unions registered under the WAIR Act or its predecessors and not under Commonwealth law. Also within the scope of the Award were 472 employees at Nelson Point and 145 employees on Finucane Island. BHPIO had other employees, described as “staff” and performing managerial and supervisory roles, who did not fall within the Award.
Under the WAIR Act, no party is under any obligation to negotiate or bargain (collectively or otherwise) in relation to an industrial matter. Further that Act contains no machinery for collective bargaining. If, however, an employer declines to enter into negotiations with an organisation as to an industrial matter, the organisation may refer the matter to the WAIRC under s 29.
Since 1993, the state unions have joined together to create a single bargaining unit (“SBU”) for collective bargaining purposes. Notwithstanding that the WAIR Act provides no machinery for collective bargaining, the terms and conditions of most of BHPIO’s employees have, until recently, been determined by that process. Besides the Award, there have been a number of agreements registered under s 41 of the WAIR Act, first in July 1993, then in November 1995, and then in January 1998 (the last mentioned being “EBA 3”). Further, there was an unregistered agreement between BHPIO and the state unions which was negotiated in 1988 and renegotiated in 1997 (“the IR agreement”). As will be seen, the IR agreement was varied in July 1999.
The offers of WPAs with which this case is concerned were made under the WPA Act. Under that Act, WPAs are agreements between employers and employees “providing for some or all of the rights and obligations that [they] have in relation to one another” (s 5(1)). Such an agreement may be made between an employer and all or some of its employees collectively, or between an employer and an individual employee: see ss 9 and 10. Where a workplace agreement is in force, no award or registered industrial agreement applies to the parties to it: see the definition of award in s 3 and s 6(1). Generally speaking, the collective provisions of the WAIR Act are rendered inapplicable to the parties to a workplace agreement by virtue of Part IA of the WAIR Act, although the Minimum Conditions of Employment Act 1993 (WA) does apply “despite any provision of a workplace agreement”: see the WPA Act, s 17.
Although the State and Commonwealth statutory regimes differ significantly, WPAs made under the WPA Act are comparable in some respects to the “Australian Workplace Agreements” (“AWA”) for which provision is made in Part VID of the WR Act, as amended by the Workplace Relations and Other Legislation Amendment Act 1996 (“the WROLA Act”). Pursuant to s 170VF of the WR Act, an employer and an employee may make an AWA that deals with matters pertaining to the relationship between them. Part VID makes extensive provision for the filing and approval of AWAs. Once an AWA comes into effect, it operates to the exclusion of any award that would otherwise apply (s 170VQ(1)) and to the exclusion of any certified agreement that exists at the time, unless the certified agreement has not yet passed its nominal expiry date (s 170VQ(6)).
constitutional challenge
In this proceeding, BHPIO challenged the constitutional validity of ss 298K, 298L, 298M and associated provisions of Pt XA of the WR Act, on the ground of want of legislative power.
Part XA of the WR Act, which is headed “Freedom of Association”, only applies to the extent provided for in Division 2: see s 298C. Section 298G applies Pt XA to constitutional corporations (as defined). Subsection 298G(1) reads:
This Part applies to:
(a)conduct by a constitutional corporation; and
(b)conduct that adversely affects a constitutional corporation.
A “constitutional corporation”, as defined in s 4(1), is a corporation of the kind specified in s 51(xx) of the Commonwealth Constitution, a body incorporated in a Territory, or a Commonwealth authority. BHPIO admits that it is a constitutional corporation, being a trading corporation of the kind referred to in s 51(xx).
The provisions with which this case is specifically concerned are s 298K(1)(b) and (c), s 298L(1)(a) and (h), and s 298M. All are found in Pt XA of the WR Act, the objects of which are referred to in s 298A, which provides:
As well as the objects set out in section 3, this Part has these objects:
(a)to ensure that employers, employees and independent contractors are free to join industrial associations of their choice or not to join industrial associations; and
(b)to ensure that employers, employees and independent contractors are not discriminated against or victimised because they are, or are not, members or officers of industrial associations.
Subsection 298K(1) relevantly provides:
An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:
…
(b) injure an employee in his or her employment;
(c) alter the position of an employee to the employee’s prejudice … .
Subsection 298L(1) relevantly states:
Conduct referred to in subsection 298K(1) … is for a prohibited reason if it is carried out because the employee …
(a)is, has been, proposes to become or has at any time proposed to become an officer, delegate or member of an industrial association; or
…
(h) is entitled to the benefit of an industrial instrument or an order of an industrial body; or
….
Section 298M provides:
An employer, or a person who has engaged an independent contractor, must not (whether by threats or promises or otherwise) induce an employee, or the independent contractor, (as the case requires) to stop being an officer or member of an industrial association.
I accept that, as BHPIO and the Minister contended, the central question is whether the challenged provisions, applied in conformity with s 298G(1)(a), constitute laws that come within s 51(xx) of the Constitution (“the corporations power”). It may be recalled that s 51(xx) confers power on the Commonwealth Parliament to make laws with respect to “Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth”. If a law is found to be a law on a particular subject and if that subject is found to be one within the power of the Commonwealth, then the law is within power, providing it does not infringe some other constitutional tenet: cf Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 605 per Gummow J, quoting Berwick Ltd v Gray (1976) 133 CLR 603 at 611 per Jacobs J.
The scope of the corporations power has been delineated in a series of decisions of the High Court. Plainly enough, the subject-matter of the power is the corporations to which it refers. On the one hand, it is now generally accepted that the power is not confined in its application to the trading activities of trading corporations or to the financial activities of financial corporations: see, e.g., Re Dingjan; ex parte Wagner (1995) 183 CLR 323 (“Re Dingjan”) at 333 per Mason CJ, 336 per Brennan J, 352 per Toohey J, 364 per Gaudron J, and 368 per McHugh J. On the other hand, as Deane J observed in The Commonwealth v Tasmania (1983) 158 CLR 1 at 272, a law does not necessarily come within the corporations power “simply because” it happens to apply to constitutional corporations. See also Re Dingjan at 344-5 per Dawson J.
In Re Dingjan, four of the seven members of the Court acknowledged that a law which regulates the business functions, activities and relationships of corporations of the kind referred to in s 51(xx) is within power: see 183 CLR at 333-4 per Mason CJ, 364 per Gaudron J (with whom Deane J agreed at 342) and 368 per McHugh J. According to the reasons for judgment of their Honours, the power may very well extend further, presumably to the regulation of all the activities and relationships of constitutional corporations. It is unnecessary in this case to decide whether or not it does.
I turn first to McHugh J in Re Dingjan. His Honour said at 369:
Where a law purports to be ‘with respect to’ a s 51(xx) corporation, it is difficult to see how it can have any connection with such a corporation unless, in its legal or practical operation, it has significance for the corporation. That means that it must have some significance for the activities, functions, relationships or business of the corporation. If a law regulates the activities, functions, relationships or business of a s 51(xx) corporation, no more is needed to bring the law within s 51(xx). That is because the law, by regulating the activities, etc, is regulating the conduct of the corporation or those who deal with it. Further, if, by reference to the activities or functions of s 51(xx) corporations, a law regulates the conduct of those who control, work for, or hold shares or office in those corporations, it is unlikely that an further fact will be needed to bring the law within the reach of s 51(xx). It is not enough, however, to attract the operation of s 51(xx) that the law merely refers to or operates upon the existence of a corporate function or relationship or a category of corporate behaviour. The activities, functions, relationships and business of s 51(xx) corporations are not the constitutional switches that throw open the stream of power conferred by s 51(xx). [Citations omitted].
Compare the observations of Mason CJ at 333-334.
Gaudron J, with whom, as I have already noted, Deane J agreed, observed at 365:
[T]he power conferred by s 51(xx) extends, at the very least, to the business functions and activities of constitutional corporations and to their business relationships. And those functions, activities and relationships will, in the ordinary course, involve individuals, and not merely individuals through whom the corporation acts, as in Fencott v Muller (1983) 152 CLR 570, or the control of whose conduct is directly connected with the regulation or protection of the corporation, as in Actors and Announcers Equity Association (1982) 150 CLR 169.
Once it is accepted that s 51(xx) extends to the business functions, activities and relationships of constitutional corporations, it follows that it also extends to the persons by and through whom they carry out those functions and activities and with whom they enter into those relationships.
Although Mason CJ, Deane, Gaudron and McHugh JJ adopted similar approaches to the corporations power, they did, as the respondent points out, differ in the result. The difference related principally to the characterisation of the law in question (which sought to regulate the conduct of persons other than s 51(xx) corporations). Whilst the Chief Justice, Deane, Gaudron and McHugh JJ all construed s 51(xx) broadly, McHugh J came to a different result for reasons that have little relevance to this case. I note, of course, that Mason CJ, Deane and Gaudron JJ were in the minority in the result on the corporations power aspect of the case.

Let it be accepted that the corporations power does extend, as Mason CJ, Deane, Gaudron and McHugh JJ would have it, at the least to a law which operates on the business functions, activities or relationships of constitutional corporations: cf Quickenden v O’Connor (1999) 91 FCR 597 at 603 (on appeal to the Full Court) and Rowe v Transport Workers’ Union (1998) 90 FCR 95 at 104-5. A law that regulates the industrial rights and obligations of a constitutional corporation and its employees may well constitute a law operating on the corporation’s business functions, activities or relationships.
Presumably it was with this in mind that the plaintiffs in Victoria v The Commonwealth (1996) 187 CLR 416 conceded, at 539, that, pursuant to the corporations power, the Parliament has power to legislate on the industrial rights and obligations of constitutional corporations at issue in that case. The concession was, I note, applied and the validity of s 152 of the Industrial Relations Act 1988 (as it then stood) upheld: see 187 CLR at 540. The Court also held that s 164 (the immunity provision) of that Act operated directly on a subject within s 51(xx) and with respect to its trading activities: see 187 CLR at 557-8. Thus, the decision in Victoria v The Commonwealth provides a basis not only for s 298G(1)(a) but also for s 298G(1)(b) and s 298G(2).
Whether the corporations power necessarily extends to the regulation of the industrial rights and obligations of constitutional corporations and their employees does not arise in the present case, however, although McHugh and Gaudron JJ have expressed the view that it does. Besides the statement by McHugh J in Re Dingjan at 369 (set out above), Gaudron J said, obiter dictum, in Re Pacific Coal Pty Ltd; ex parte Construction, Forestry, Mining and Energy Union [2000] HCA 34 at [83] that:
I have no doubt that the power conferred by s 51(xx) of the Constitution extends to the regulation of the activities, functions, relationships and the business of a corporation described in that sub-section, the creation of rights, and privileges belonging to such a corporation, the imposition of obligations on it and, in respect of those matters, to the regulation of the conduct of those through whom it acts, its employees and shareholders and, also, the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business. More relevantly for present purposes, I have no doubt that it extends to laws prescribing the industrial rights and obligations of corporations and their employees and the means by which they are to conduct their industrial relations.
In the present case, it is sufficient for validity that the laws in question have, by virtue of their character, a sufficient connection with the subject matter of power, whether because they operate on the subjects of power and their business functions, activities and relationships (as, for the reasons set out below, they do) or because they satisfy the approaches of Brennan and Toohey JJ. As Toohey J indicated in the passage set out below, the consensus of judicial opinion in Re Dingjan was that the approach adopted by Dawson J in that case was too narrow.
In Re Dingjan at 336, Brennan J explained his approach to s 51(xx) in the following way:
A law supported by s 51(xx) will … be characterised by its effect on corporations of a kind mentioned in that paragraph, that is, trading or financial corporations formed within the limits of the Commonwealth. In the Act, those corporations are called ‘constitutional corporations’ …. To attract the support of s 51(xx), it is not enough that the law applies to constitutional corporations and to other persons indifferently. To attract that support, the law must discriminate between constitutional corporations and other persons, either by reference to the persons on whom it confers rights or privileges or imposes duties or liabilities or by reference to the persons whom it affects by its operation. A validating connection between a law and s 51(xx) may consist in the differential operation which the law has on constitutional corporations albeit the law imposes duties or prescribes conduct to be performed or observed by others. [Citations omitted].
Plainly enough, the laws under challenge in this case do not apply indifferently to constitutional corporations and other persons. The laws discriminate between constitutional corporations and others by reference to the persons whose conduct is proscribed and by reference to the liabilities that the laws impose.
In Re Dingjan, Toohey J referred to the narrower construction of the power accorded by Dawson J, saying, at 352-353:
To say that a law cannot be a law with respect to trading or financial corporations unless the fact that the corporation is a trading or financial corporation is significant in the way in which the law relates to it may be to focus too narrowly on the process of characterisation. … It is true that corporations are identified as the subject matter of the power. But in the end the question is whether there is a sufficient connection between the law and the subject matter to be able to say that the law is one with respect to that subject matter.
It may be said that some circularity is involved in the proposition expressed in these terms. But there is a qualitative assessment to be made and sufficiency of connection draws attention to the need for such an assessment. It emphasises that the connection must be substantial, not merely tenuous. The law must be one which ‘in reality and substance’ is a law upon the subject matter. And that is so whether the subject matter is identified by reference to persons or otherwise. In each case: ‘It is not enough that a law should refer to the subject matter or apply to the subject matter’. In the case of s 51(xx) the law must operate on the rights, duties, powers or privileges of corporations in such a way as to evidence a sufficient connection between the law and the corporations. It is not enough to identify corporations as a reference point so as to affect the activities of others. [Citations omitted]
Compare and contrast 183 CLR 344-346 per Dawson J. For the reasons given below, there is a sufficient connection between the laws in question in this case and the subject matter of the power.
The character of the challenged laws depends on the rights, powers, liabilities, duties and privileges they create or, more generally, on the way they affect constitutional corporations. The respondent’s case was that ss 298K, 298L and 298M are “laws with respect to employers, and their character does not change merely by providing, elsewhere, that they apply only if the employer happens to be a trading corporation (sic)”. In written submissions, the respondent wrote, in connection with s 298M, as follows:
Does a law which provides that a trading corporation shall not induce a person to stop being a member of an industrial association fall within s 51(xx)? It is submitted not, for the following reasons.
(a)The law has not yet reached the point where any law which is addressed only to trading corporations will be valid. Individual members of the High Court have certainly gone that far, but the Court itself has not.
(b)The constitutional link is not provided by the nature of the inducement. Any manner of inducement, having nothing to do with the character of the corporation as a trading one, would be caught.
(c)Neither is the link provided by the fact that it is employees whom the trading corporation must not induce. Having employees is not an unique mark of a trading corporation. Churches, for example, have employees.
(d)Neither is the link provided by the concern of the section with membership of industrial associations. Given the definition of that term in s 298B of the WR Act, it takes the matter no further than the reference to employees.
(e)Neither is the link provided by the scope of the provision in context. Part XA is concerned with freedom of association, not with trading corporations. Section 298M seems to be in the nature of legislation which says ‘a corporation shall not’, and then proceeds to impose a proscription which is irrelevant to the corporation’s nature as such.
The respondent submitted that “the same applied, mutatis mutandis, to ss 298K and 298L”.
I reject the respondent’s challenge to the validity of ss 298K, 298L and 298M. To begin with, Part XA, within which these provisions fall, is not a law with respect to employers generally. As already noted, Division 2 limits the operation of Part XA to employers of a particular description; relevantly, ss 298C and 298G extend its operation to constitutional corporations acting in their capacity as employers. A subject of the laws with which this case is concerned is, therefore, constitutional corporations.
The provisions expressly affect the rights of those corporations, by forbidding them from engaging in certain conduct relating to employees who are members of industrial associations. As far as the operation of the enterprise of a corporation is concerned, the relationship of the corporation to its own employees is directly germane to its business. This is not to say that all aspects of that employment relationship are permissible subjects of regulation under s 51(xx), but, on the test favoured by Mason CJ, Deane, Gaudron and McHugh, the laws in question in this case are. In the case of s 298M, the subject of the law is a constitutional corporation inducing an employee to stop being an officer or member of an industrial association. In the case of s 298K, the subject of the law is a constitutional corporation injuring its employees in employment, or prejudicially altering its employee’s position for reasons that include a “prohibited reason” (as defined in s 298L). Such a reason concerns, broadly speaking, membership of an industrial association. Each proscription directly governs a central aspect of the industrial arrangement between the constitutional corporation as employer and the employees who carry out its business. As this case illustrates, the connection between the relevant prohibitions and the corporation’s business is a real and practical one. Under the scheme of industrial regulation established by the WR Act, in protecting an employee’s freedom of industrial association (including the right to join or not to join a union), these laws protect a matter of foundational importance to the employment relationship. They have, therefore, the requisite significance for the business of a constitutional corporation.
In this sense, Part XA is readily distinguishable from the laws held beyond power in Re Dingjan: they applied to certain contracts to which a constitutional corporation was not a party and which might have been only tenuously (or not at all) related to the corporation’s business. Sections 298K, 298L and 298M, as qualified by ss 298C and 298G, are capable of characterisation as laws directly operating on the subject of power and, moreover, on their business relationships.
Of course, many employers who are not constitutional corporations have employees. That fact is immaterial. Further, validity does not in this case depend on whether the nature or manner of the prohibited inducement (in s 298M) or the prohibited reason (in ss 298K and 298L) has any particular or independent relationship to the character of the corporation as a constitutional corporation. Having established that the laws operate directly on a subject of power as described above, no additional connection between the laws and s 51(xx) need be shown.
Whether the industrial association in contemplation was registered under State or Commonwealth law is also immaterial for present purposes. The crucial question is whether the laws are properly characterised as an exercise of the corporations power because they regulate the conduct of constitutional corporations as employers in relation to their employees and, in consequence, the business of those corporations.
I also reject the respondent’s submission that the drafting technique used by the Commonwealth provides another objection to validity. The Commonwealth has used similar drafting techniques on other occasions. The technique in Part XA is not relevantly different from that which constrained the operation of s 164 of the Industrial Relations Act 1988, the validity of which was sustained in Victoria v The Commonwealth at 556-8. The observation of Barwick CJ in R v Australian Industrial Court; ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235 at 238 may be adapted to this case. That is, the effect of Division 2 of Part XA is to produce “what is in substance a series of enactments, none of which are inconsistent with each other, and each of which is separately supported by a head or heads of legislative power”.
It follows that there is no need to rely, as the applicants did, on s 51(xxix) of the Constitution to support the provisions under challenge. It suffices to find that they are a valid exercise of s 51(xx) of the Constitution.
construction of sections 298K, 298L and 298M
This case also raises for determination the proper construction of ss 298K, 298L and 298M. In order to evaluate the parties’ submissions on the issues of construction, it is necessary to examine the legislative history of these provisions. The issues arise from the enactment of the WROLA Act. The WROLA Act renamed and amended the Industrial Relations Act 1988 (“the IR Act”) which became the current WR Act. The IR Act had, in turn, replaced the Conciliation and Arbitration Act 1904 (“the C & A Act”).
(a)Legislative history
The settlement of interstate industrial disputes over wages and conditions by means of conciliation and arbitration, as well as industry awards, was central to the regime established by the C & A Act, and remained central to Australian industrial organisation for many years.
Beginning in 1987, the Conciliation and Arbitration Commission (later the AIRC) progressively sought to encourage greater structural efficiency in the system of industrial relations, ultimately by introducing enterprise bargaining principles: see National Wage Case (1987) 17 IR 65 at 66-67; National Wage Case (1988) 25 IR 170 at 179; and National Wage Case (1991) 39 IR 127. The shift in emphasis was accompanied by changes in Commonwealth legislation. The Industrial Relations Reform Act 1993 (“the 1993 Reform Act”), which amended the IR Act, introduced enterprise flexibility agreements together with provisions designed to facilitate the bargaining process between employers and trade unions.
The WROLA Act, whilst repealing enterprise flexibility agreement provisions, continued the trend of devolving responsibility for industrial arrangements to the enterprise level by introducing AWAs and providing for collective agreements between an employer and “a valid majority” (as defined) of employees. See, in this connection, Safety Net Review – Wages (1997) 71 IR 1, especially Attachment A – Statement of Principles, at 70.
The Explanatory Memorandum to the WROLA Act commenced by stating:
The Act is framed to give primary responsibility for industrial relations and agreement making to employers and employees at the enterprise and workplace levels. They are the best placed to develop more co-operative, productive and competitive working arrangements. The industrial relations system needs to provide them with effective choices about the arrangements
which suit their particular circumstances. The Act provides such choice …. [Explanatory Memorandum, May 1996, p 1]
Amongst what the Memorandum called the key reforms were “providing for effective choice and flexibility in reaching both collective and individual agreements …” and “ensuring freedom of association and the choice to join or not to join industrial associations …”.
In his second reading speech, the Minister for Industrial Relations also emphasised that the manner of industrial arrangements was a matter for employers and employees. The speech read, in part:
Employers and employees in the federal jurisdiction will be able to choose whether they want informal over-award arrangements, or whether they want to formalise their agreements. For those who want formalised individual agreements, we have provided Australian workplace agreements, AWAs. If they prefer formalised collective agreements, they will be able to choose certified agreements, CAs, made with unions or made directly between employers and employees. For those who want agreements under a state jurisdiction, we are providing access to such agreements, bearing in mind that it is a matter of consent for the parties if they choose to go that way. The bill does not discriminate in favour of one form of agreement over another – collective or individual, union or non-union. These are matters for decision by employers and employees, according to their own circumstances and their own perception of how their interests are best served. (Hansard, 23 May 1996, House of Representatives, p 1300).
The WROLA Act amended the statement of objects in s 3, presumably to signal the change of direction. Section 3 relevantly reads:
The principal object of this Act is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by:
(a)…
(b)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; and
(c)enabling employers and employees to choose for the most appropriate form of agreement for their particular circumstances, whether or not that form is provided for by this Act; and
(d)providing the means:
(i)for wages and conditions of employment to be determined as far as possible by the agreement of employers and employees at the workplace or enterprise level, upon a foundation of minimum standards; and
(ii)to ensure the maintenance of an effective award safety net of fair and enforceable minimum wages and conditions of employment; and
(e)providing a framework of rights and responsibilities for employers and employees, and their organisations, which supports fair and effective agreement-making and ensures that they abide by awards and agreements applying to them; and
(f)ensuring freedom of association, including the rights of employees and employers to join an organisation or association of their choice, or not to join an organisation or association; and
(g)ensuring that employee and employer organisations registered under this Act are representative of and accountable to their members, and are able to operate effectively; and
(h)enabling the Commission to prevent and settle industrial disputes as far as possible by conciliation and, where appropriate and within specified limits, by arbitration
….
According to par 3(c), a principal object of the WR Act is to enable the parties to determine freely the form of an industrial agreement. In conformity with this, the Act prohibits “any action with intent to coerce another person to agree or not to agree” to make or terminate a certified agreement: s 170NC. Compare ss 170WG, 170MU, 170WE and 170WF. As par 3(c) indicates, the WR Act does not reflect a preference for any particular kind of agreement (e.g., a collective certified agreement) over any other (e.g., an individual agreement made directly with an employee). Relevantly, it does not prefer an agreement provided for under Commonwealth law over an agreement made pursuant to State legislation. Indeed, the WR Act contains specific provisions that recognise the operation of State legislation and State industrial systems: see e.g., s 111AAA(1). Although the WR Act indicates a preference for bargaining to occur at the workplace level, in contrast to former provisions of the IR Act, it contains no provision requiring an employer to enter into negotiations with a union for an agreement. The WR Act provides, of course, for situations in which employers and employees fail to agree. For example, it provides a limited immunity from suit for protected industrial action taken by employers, employees and unions in pursuit of claims, including claims for a particular type of agreement: see Part VIB, Div 8 and Part VID, Div 8. It is, however, only in relatively limited circumstances that the AIRC may terminate bargaining and industrial action and proceed to arbitrate a dispute: ss 170MW and 170MX.

An outcome of this legislative history is that numerous provisions in Part XA have direct counterparts in the IR Act as it stood immediately prior to the enactment of the WR Act. For example, the antecedents of s 298K and s 298L are to be found in s 334 of the IR Act as it formerly was.
Section 298M was introduced as subs (3A) of s 334 of the IR Act by par 33(c) of the 1993 Reform Act. The Reform Act, in pars 33(a) and (b), also made other amendments to s 334 which related particularly to the introduction of enterprise flexibility agreements. In relation to the amendments made by s 33 of the 1993 Reform Act, the Explanatory Memorandum stated:
This clause amends section 334 of the Act to prohibit action against employees that is inconsistent with the notion that they should be free to choose whether or not to participate in the certified agreement or an enterprise flexibility agreement.
The introduction of s 298M may, as the applicants and the respondent submitted, have reflected a legislative concern to ensure that the capacity of registered organisations to participate in enterprise flexibility agreements and their negotiation would not be improperly subverted by employers who sought to undermine their membership in the workplace.
Referring to passages in Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 266 and Bowling v General Motors-Holden’s Pty Ltd (1980) 50 FLR 79 at 94 concerning the policy and purpose of s 5 of the C & A Act, the applicants submitted that Part XA encompasses the policy and purposes of its predecessor provisions, namely, to protect the existence and functioning of organisations previously protected by s 5 of the C&A Act and, subsequently, s 334 of the IR Act. The amendments introduced by the WROLA Act did not, so the applicants submitted, diminish the scope of that protection.
The respondent submitted that, on the contrary, the WROLA Act amendments had effected a fundamental change. In relation to s 298M, the respondent submitted:
[A]lthough one may examine the circumstances and purpose behind the enactment of s 298M as s 334(3A) by the Reform Act, the setting and purpose of the section was so changed by the WROLA Act amendments as to render such an examination useful but not conclusive. The section is no longer concerned with the integrity of the agreement-making process. It is not concerned to encourage the place or promote the role of unions. It is, rather, focussed upon the individual employee, and upon the integrity of his or her choices in the matter of union membership. Part XA of the Act appears to be based upon a philosophy that ‘free’ means free from inducement by threats, promises or otherwise.
More generally, the respondent submitted:
The enactment of Part XA – in name and purpose encapsulating a fundamental human right (freedom of association) not previously recognised by the legislation – must be accorded the significance it clearly warrants. It brought with it substantive and procedural enhancements to the previously limited range of protections available to employees who had been dismissed on account of union membership, for instance.
Referring to the Explanatory Memorandum to the WROLA Act, the Minister contended that the fundamental purpose of Part XA was to protect an employee’s “right to join or not to join a union”. The Explanatory Memorandum relevantly stated:
This [Part] proposes amendments which will give effect to the principles of:
·freedom of choice;
·freedom of association (the choice to be in a union, the choice of which union and the choice not to be in a union); and
·equal treatment before the law.
[Explanatory Memorandum, May 1996, paragraph 16.1]
Part XA was not, so the Minister submitted, intended to guarantee that “as a member of a union, an employee is entitled to have his or her terms and conditions of employment regulated by an agreement to which his or her union is a party”. In particular, the Minister submitted that:
[T]he freedom of association provisions in Part XA of the WR Act do not confer rights on union members to engage in collective bargaining as to their terms and conditions of employment ….
The seemingly irreconcilable conflict between the applicants on the one hand and the respondent and the Minister on the other diminishes significantly when the terms of Part XA are examined. First, Part XA must be read in its statutory context: see David’s Distribution Pty Ltd v National Union of Workers (1999) 165 ALR 550 (“David’s Distribution ”) at 583 per Wilcox and Cooper JJ.
Secondly, the objects of the WR Act, set out in s 3, fall for consideration. They are numerous and the pursuit of one may, in some circumstances, be detrimental to the attainment of another. Compare par 3(g) (the effective operation of registered organisations) with par 3(f) (freedom of association). Bearing in mind that all objects in s 3 are “principal” objects, the legislature presumably intended that, so far as possible, the Act should be construed so as best to accommodate all of the relevant objects set out in that section. The emphasis of the WR Act is apparently different from that of the IR Act. Paragraph 2(e) of the previous legislation which referred to encouraging “the organisation of representative bodies of … employees” no longer appears. Paragraph 3(f) has been added, although there are also par 3(g), par 3(d)(ii) (referring to an effective award safety net) and par 3(h) (referring to AIRC’s conciliation and arbitration functions).
The additional objects of Part XA, set out in s 298A, serve to emphasise that the Part is directed to ensuring that employees enjoy the freedom to join or not to join a union as they see fit and, if they join, that they can join the union of their choice. That is made explicit by par (a) of s 298A. Par (b) expresses a consequential object, namely, that an employee is protected from discrimination or victimisation in consequence of that choice. In protecting an employee’s right to choose, Part XA protects the right to belong to a union and to participate in its affairs: see, for instance, s 298K and pars 298L(1)(a), (e) and (f). Employees are also protected against action by an employer to induce them to relinquish their union membership (s 298M) as well as against a range of prohibited conduct by industrial associations: see, e.g., ss 298Q and 298R.
A further indicium of the purpose of Part XA is that it does not confine its attention to organisations registered under the WR Act but protects an employee’s choice to belong to a State or Territory registered or recognised body as well.
A consequence of the protection afforded by Part XA is that in a workplace in which employees choose to join unions (and to accede to collective bargaining on their behalf), the unions (and the collective bargaining process) also receive protection. This was recognised by Wilcox and Cooper JJ in David’s Distribution where their Honours said at 583:
In the context of the Act, Part XA does not stand alone. It is aimed at ensuring that employees may band together, if they wish, for collective bargaining of the type provided for in the Act to achieve the broader objectives of the Act as contained in s 3. [Emphasis added]
That is, in the context of that case, their Honours observed that employees had the right to choose whether to join together to participate in collective action. See also Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2000] FCA 1008 at [48] and Burnie Port Corporation Pty Ltd v Maritime Union of Australia [2000] FCA 1768 at [26]. Other provisions of the Act facilitate the collective bargaining process: see, e.g., Part VIB, Div 8.
(b)Construction of s 298K
The applicants contended, and the respondent denied, that there has been conduct by the respondent which amounts to injury and prejudice within the meaning of pars (b) and (c) of s 298K(1) of the WR Act. The applicant’s case was that:
To the extent that the spread of WPAs progressively diminishes the influence and effect of collective action by the group members …, at the very least, their position must be held to have been altered to their prejudice, and it may also be characterised as an injury in their employment.
The applicants further contended that:
[T]ogether with its offer of WPAs BHPIO gave employees who entered into WPAs the option of receiving a lump sum payment for accrued sick leave. Employees who did not sign WPAs were not given the option of having their sick leave paid out in this manner.
The concepts of injury and prejudice in s 298K(1)(b) and (c) are not narrow. The High Court said in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 (“Patrick”) at 18 that:
[Paragraph] (b) covers injury of any compensable kind; par (c) is a broad additional category which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question.
The relevant injury or prejudice is that done, or threatened to be done, by an employer to an employee. In this connection, the Full Court said at an earlier stage of this proceeding (on an appeal from the grant of interlocutory relief) that:
It has to be borne in mind, in construing s 298K, that it proscribes conduct by ‘an employer’ directed to ‘an employee’ or ‘other person’ (emphasis added). That use of the singular suggests that the alleged injury or alteration of position has to be examined in the light of the circumstances of each individual employee. (It is not the point that in the interpretation of statutes, the singular ordinarily includes the plural; here we are concerned with the indications of legislative intention to be discerned from the actual language used.) It is also significant that the conduct struck at by each paragraph of s 298K is expressed by an active verb: ‘dismiss’, ‘injure’, ‘alter the position’, ‘refuse to employ’, and ‘discriminate’. That implies that the proscription is essentially against an intentional act of the employer directed to an individual employee or prospective employee.
See BHP Iron Ore Pty Ltd v Australian Workers’ Union (2000) 171 ALR 680 at 689.
Section 298K(1) is, upon this view, concerned with the conduct of an employer that is directed to an individual employee. This does not mean that in dismissing one employee who is a union member for a prohibited reason, an employer commits a civil wrong, and that wrong is not committed if, for the same reason, the employer dismisses all employees who are union members. The Full Court was directing its attention to the nature of the injury contemplated by the provision. That is, the conduct in question must injure an employee individually in the sense that it would have injured him or her, regardless of whether it was actually done to an individual employee or a group of employees. The relevant inquiry is whether an employer has, by the employer’s conduct, injured the position of an employee individually: cf CPSU, Community and Public Sector Union v Telstra Corporation Limited [2000] FCA 844 at [24] per Finkelstein J. The Full Court must have intended to exclude conduct that injured individuals only when directed to a class of employees.
Before s 298K(1) can apply, it must be possible to say of an employee that he or she is, individually speaking, in a worse situation after the employer’s acts than before them; that the deterioration has been caused by those acts; and that the acts were intentional in the sense that the employer intended the deterioration to occur.
In the Full Court, the applicants failed to establish that their claim under s 298K raised a serious question to be tried. On that occasion, the Court said at 689:
[I]t was contended that BHPIO injured certain employees when it made a general offer of improved terms and conditions, subject to entry by each offeree into an individual workplace agreement. Deciding whether or not to accept such an offer involved, so it was argued, the making of an ‘invidious choice’ by each employee. To impose such an invidious choice was to ‘injure’ the employee in his or her employment as contemplated by s 298K.
A second point at which BHPIO is said to have injured those employees who did not accept its offer occurred, on the unions’ argument, when BHPIO commenced to extend, to those who did accept the offer, the improved remuneration and conditions for which it provided. By refusing to extend the same remuneration and conditions to employees performing similar work who have not accepted the offer, BHPIO is said to have again ‘injured’ those employees or altered their position to their prejudice.
The Full Court held, at 690, that in offering WPAs to its employees, BHPIO:
did not change, in either absolute or relative terms, the remuneration or any of the conditions of employment of the employee to whom the offer was made. A change in absolute terms occurred only upon acceptance of the offer and the consequent coming into existence of a new contract of employment.
It said, also at 690:
It is true that, after some offers had been accepted by individual employees, a change can be discerned in the remuneration and conditions of employment of those employees, viewed in relation to the remuneration and conditions of employment of those employees who have not accepted the offer. However, the position of each of the latter employees has not been changed to his or her detriment by an intentional act of the employer. The relative charge which we have just identified is brought about by the acceptance by some employees, and the rejection by others, of an offer made indiscriminately to all employees.
The applicants sought to circumvent this reasoning in two ways.
First, as already noted, the applicants endeavoured to reformulate the injury and prejudice suffered by them as the diminution of “the influence and effect of collective action” by the employees who did not accept BHPIO’s WPA offers. This reformulation does not, in my view, relevantly diminish the applicability of the Full Court’s reasoning. The injury, as reformulated, does not flow directly from BHPIO’s acts in offering WPAs; and no conspiracy to injure is alleged, as in Patrick. On the applicants’ case, if injury has been done, it has been done because, BHPIO having made the offers, (1) a sufficiently large proportion of the workforce has accepted, or proposes to accept, them; or (2) a sufficiently large proportion of the workforce has accepted, or proposes to accept, the offers and has resigned, or threatens to resign, from the unions to which they formerly belonged. It is unclear whether the applicants assert (1) or (2).
The alleged injury occurred as the cumulative result of BHPIO’s making WPA offers to each and every employee previously covered by EBA 3, many of whom accepted them. Had the company made only a few WPA offers, or had only a few employees accepted, then the remainder of the workforce could scarcely have suffered injury of the kind alleged.
The applicants also contended that BHPIO’s entry into WPAs with some employees to the prejudice of other employees (i.e., those who did not accept the offer) “is directly analogous with the scheme entered into by the employer in Patricks with other persons”. The High Court did not, so the applicants submitted, construe s 298K as either requiring an intentional act directed to an individual employee or as excluding from its ambit a prejudicial act constituted by an employer’s agreement with “a stranger to the employment contract”.
There is not, I think, any contrariety between the interlocutory judgment of the Full Court and the judgment of the High Court in Patrick. The points considered by the Full Court were not at issue in the High Court. In Patrick, the case proceeded on the facts as pleaded, it being assumed for the purposes of the appeal that Patrick’s employees were necessarily affected as individuals by the company’s conduct. The case made against Patrick was that it participated in a scheme leading to the appointment of administrators, thereby creating a situation which immediately threatened the employment of each and every one of its employees, considered as individuals. The critical distinction between Patrick and this case is that the position of each of Patrick’s employees was necessarily directly affected by what Patrick did. Contrast this case. The allegation here is not that BHPIO injured its employees as a direct result of what it did but, rather, indirectly. That is, injury occurred because a sufficiently large proportion of the workforce accepted the WPA offers and resigned from the unions, thereby weakening the unions’ bargaining position, especially with respect to EBA 4.
The applicants’ case under s 298K is not improved by their argument that a further injury was done employees who did not accept the WPA offers because they were unable to exercise the accrued leave pay-out option. In considering a different but conceptually similar argument, the Full Court observed, at 693, that:
[A] continuing award employee who receives a promotion or some other beneficial change in his or her employment may not achieve the same increase in remuneration as a similar employee on an individual workplace agreement. However … that will be a consequence of an election between different contractual regimes for the regulation of the employment of the two groups of employees. It will not have been brought about by the active, intentional, conduct of the employer which is struck at by s 298K.
Much the same may be said of the accrued leave option. It was open to all employees to decide whether or not to accept the company’s WPA offer. In so doing, employees would doubtless have considered the merits and demerits of one or other course. The difference regarding the option entitlement is a consequence of the choice made by an employee as to whether he or she would accept or reject the WPA offer made, on terms, to him or her.
There are other difficulties with the applicants’ s 298K(1) claim. Conduct within s 298K(1) is not impermissible unless done “for a prohibited reason, or for reasons that include a prohibited reason”, as defined in s 298L(1). The applicants’ case was that BHPIO injured the non-accepting employees because they were members of industrial associations (s 298L(1)(a)), or because they were entitled to the benefit of an industrial instrument (s 298L(1)(h)). (In final submissions, the applicants abandoned their earlier reliance on s 298L(1)(l)).
Let it be assumed (contrary to the view expressed above) that the alleged injury (or prejudice) fell within s 298K(1)(b) (or (c)). It would then be presumed in this proceeding that the conduct was, or is being, carried out by BHPIO for the reasons alleged by the applicants, unless BHPIO could prove to the contrary (s 298V). Notwithstanding that s 298V would confer a significant forensic benefit on the applicants, I do not consider that their submissions on s 298L(1)(a) and (h) withstand analysis.
The conduct to which s 298L(1) applies is the conduct referred to in s 298K(1), that is, relevantly, the doing of the injury or prejudice referred to in pars (b) and (c). The applicants’ case under s 298L(1)(a) must be that BHPIO diminished the collective bargaining power of a non-accepting employee, and made him or her ineligible for the accrued leave option, for reasons that included that the employee was a member of an industrial association. These are difficult propositions to maintain on the undisputed facts.
It is undisputed that BHPIO offered WPAs to all of its Award employees. Did BHPIO disadvantage the non-accepting employees because of their union membership? The applicants contended that it did. They said that BHPIO diminished the bargaining power of the unions to which the non-accepting employees belonged for the reason that the non-accepting employees were union members. If BHPIO did diminish the unions’ bargaining power, it could not have done so on the undisputed facts because an injured employee was a union member. Given that at the time of the alleged injury virtually all the employees to whom a WPA was offered were union members, if this injury was done because of union membership, then all employees should have been the victims of it. The applicants’ case was not, however, that the injury under s 298K(1) was done to all the employees. If the applicants’ contention was correct, conduct that affected all employees equally resulted in injury to some but not to others, notwithstanding that the reason for the injury was a characteristic that they all shared. This is an improbable result and highlights the fact that the injury complained of in fact flowed from the independent acts of the employees who accepted the WPA offers.

So too it was open to all the Award employees, most of whom were union members, to take up the accrued leave option, providing they accepted the terms on which the option was made available. They were to decide for themselves whether they wanted to enter WPAs on the terms being offered by BHPIO. The availability of the option was unrelated to union membership. The applicants’ real case, so far as BHPIO is concerned, is that the company offered WPAs on terms to all its employees as part of a stratagem to reduce union membership (at that time held by most of its workforce) in order to diminish the unions’ bargaining power. This case is properly considered under s 298M.
In written submissions, the applicants referred to remarks of Wilcox and Cooper JJ in Davids Distribution, at 583, and stated that their:
argument that membership of an industrial association was one of the Respondent’s prohibited reasons is based on a concept and understanding of membership as being broader than simply the possession of a membership ticket.
I do not accept this submission. Paragraph 298L(1)(a) refers to membership of and holding office in a union. I do not think it is intended to cover any broader notion than that. Subsection s 298L(1) (which describes what is a prohibited reason for s 298K(1) purposes) consists of fourteen detailed paragraphs and a number of subparagraphs designed to protect an employee’s freedom to join a union and to participate in union activities in a number of disparate situations. In Davids Distribution, their Honours were referring to the protection conferred by s 298L(1), considered as a whole. Their observations do not provide a basis for saying that par (a) of s 298L(1) is concerned with anything other than being, or proposing to become, a member (or an officer or delegate) of an industrial association. The concept of membership is recognised and dealt with in Part IX, Div 9 of the WR Act. There is nothing in the terms of par (a) or elsewhere in the WR Act to justify the applicants’ submission that par (a) is concerned with a person’s activities as a member, officer or delegate of an industrial association. At least some of those activities are protected elsewhere in s 298L(1): see, for example, pars (f), (g), (i), (m) and (n).
Paragraph 298L(1)(h) presents similar difficulties for the applicants. An employee to whom s 298L(1) refers is the employee against whom the conduct referred to in s 298K(1) is, or is threatened to be, taken. If the applicants’ case was that a non-accepting employee has been injured because he or she was entitled to the benefit of the Award, EBA 3 or some other existing industrial instrument, then that case must fail on the undisputed facts. It is undisputed that the non-accepting employees retain the benefits of existing industrial instruments and nothing BHPIO has done, or threatens to do, impinges on those benefits. BHPIO cannot have done the injury because the non-accepting employees remain entitled to benefits under existing instruments.
As already noted, the injury on which the applicants rely is the diminution in union bargaining power said to flow from the WPAs. Injury of this kind is relevant to the creation of new rights under a new industrial instrument, particularly, EBA 4. In reality, the applicants’ case under par 298L(1)(h) is that BHPIO has done the injury complained of in order to prevent or impede the unions’ negotiation of EBA 4 on terms advantageous to the persons they represent. The Full Court has recently held in Burnie Port Corporation Pty Ltd v Maritime Union of Australia [2000] FCA 1768 at [23] that par 298L(1)(h) relates to a benefit to which an employee is entitled at the time of the impugned conduct. It does not relate to prospective entitlements.
In my view, the applicants’ claims under s 298K(1) are misconceived. In the event that I am wrong, however, I set out below the evidence concerning BHPIO’s conduct and its reasons for it. If it were necessary to do so, I would find that BHPIO has rebutted the presumption to which s 298V gives rise.
(c)Construction of s 298M
The applicants’ case in summary was described in their written submissions as follows:
·The Respondent wanted to rid itself of the influence and role of unions in its workplace.
·The Respondent offered inducements to employees which involved those employees eschewing their rights to union representation in collective bargaining by entering into workplace agreements.
·The Respondent knew that in other workplaces when individual agreements were instituted employees overwhelmingly did not retain membership of their union.
·The agreements offered by the Respondent were for a fixed period at the expiration of which employees could bargain for a new agreement.
·The Respondent’s purpose would be frustrated if, at the expiration of their agreements, the employees banded together again and sought to bargain collectively.
·A purpose – or a necessary consequence of the employer’s conduct – was that those employees would leave the unions in which they held membership.
·This is what happened.
Section 298M relevantly prohibits an employer from inducing an employee to stop being a member of an industrial association. In this case, the Full Court has already said, at 696, that:
Construed in its context … it appears to us that s 298M will be contravened by conduct that leads or moves, by persuasion or influence, an employee to stop being a member of a union. It further appears to us that it is essentially a question of fact, to be determined by looking at all the circumstances of the case. To this extent, we do not find it helpful to analyse the issue, as the primary judge did, in terms of an absolute prohibition where intention is irrelevant. On the contrary, in resolving the question of fact which we have just identified, the existence of a particular intention may be a significant consideration.
As Finkelstein J observed in Finance Sector Union v Commonwealth Bank of Australia [2000] FCA 1372 (“Finance Sector Union”) at [38], this is a difficult passage.
The terms of s 298M provide that the section extends to situations in which an employer makes a threat or promise, the carrying out of which is, presumably, conditional upon an employee ceasing his or her union membership. Plainly enough, the provision extends beyond threats or promises as such since it uses the words “or otherwise”. BHPIO submitted that the words “or otherwise” were to be construed by reference to the words “threats or promises”, with the result that the words in parenthesis in s 298M – “whether by threats or promises or otherwise” – set up a genus of relevantly inducing conduct. This conduct was the treatment or proposed treatment upon fulfilment of a condition or conditions. BHPIO contended that conduct would only fall within s 298M in –
a situation in which one person seeks to influence another to act in a certain way by treating, or promising or threatening to treat, that other person differently according to whether he or she acted in that way. There must, in other words, be a condition attached to the treatment or proposed treatment.
There is, I think, no justification for reading the provision as narrowly as this. The words in parenthesis are intended, so it seems to me, to show that s 298M is not limited to the situation where an employer induces by threats or promises or the like. It forbids any employer from inducing an employee to the forbidden end by any means. This accords with the view taken of the provision by the Full Court.
BHPIO submitted, in the alternative, that the concept of “persuasion” referred to by the Full Court –
can extend only to the conscious, ostensible words and acts of the putative inducer directly related to the end to be achieved, and to a situation where that end is in fact intended by that inducer.
I do not agree that the concept of persuasion can be limited only to the use of “ostensible words”. This too would be inconsistent with the approach adopted by the Full Court: see 171 ALR at 700. But is it necessary to show that an employer intended an employee to stop being a member of an industrial association when a contravention, or threatened contravention, of s 298M is alleged? The Full Court touched on this in 171 ALR at 696, in the passage set out earlier. It is not clear, however, when the passage is read in the context of the whole judgment, whether an employer against whom a breach of s 298M is alleged must intend his or her employee to stop being a union member.
On one view, s 298M is not concerned with the employer’s state of mind. It is concerned with the conduct of an employee and with the reason for it. That is, the focus of the provision, as noted by Finkelstein J in Finance Sector Union at [39], is on “ the mind of the allegedly induced person (why did he act) and not on the mind of the defendant (what did he intend to achieve?” Contrast s 298M, which makes no express reference to intent, with ss 298K(1) and 170NC(1), which explicitly incorporate notions of reason or intent.
Finkelstein J concluded, in Finance Sector Union, that intention was an essential ingredient. His Honour said at [38]:
The difficulty arises from the final sentence [of the above passage from the Full Court’s judgment] where it is said on the factual issue raised ‘intention may be a significant consideration’. [Finkelstein J’s emphasis]. On one view of the matter, either intention is or is not a relevant consideration. If it is to provide assistance in only some cases, what is the character of that class of case?
His Honour considered that elsewhere in the Full Court’s judgment the Court indicated that intention was an essential component of a contravention of s 298M: see Finance Sector Union [40] - [41].
As the Full Court said, whether there is conduct in contravention of s 298M is essentially a question of fact. Where an employer’s express threats or promises constitute the inducement, the employer’s intention may be so patent that, in a practical sense, no question concerning intention arises. But where more subtle persuasion or influence are relied upon, the issue of intention may prove to be critical. That is, I think, the qualitative difference in circumstances to which the Full Court was referring when it said, “the existence of a particular intention may be a significant consideration” (emphasis added). Cf Human Rights & Equal Opportunity Commission v Mount Isa Mines Ltd (1993) 118 ALR 80 where, at 86 and 102, Black CJ and Lockhart J adopted a like approach in considering claims under the Sex Discrimination Act 1984 (Cth).
As the respondent said:
[N]o sophisticated investigation into purpose or intention will be necessary in the case of promises, threats or persuasion: here the overt conduct of the employer will supply the necessary evidence of purpose. If an employer in fact promises a pay increase for any employee who leaves his or her union, it will avail the employer nothing to say that a resignation from the union was not really intended.
Conversely, where the connection between the employer’s act and the employee’s resignation from a union becomes more attenuated, evidence about the employer’s state of mind will increase in importance. In the absence of an express promise or threat, there must be something to connect the employer’s words or deeds with the outcome referred to in s 298M. The employer’s state of mind (i.e. intention or purpose or motive) and the understanding of the employee may be the connection. A relevant state of mind may be inferred from all the circumstances of the case, including any communications between the parties. The employer’s state of mind is an important part of the applicants’ case in this proceeding.
The applicants submitted that, if intention were essential to establish an inducement within the meaning of s 298M, then s 298V applied, with the consequence that the requisite intention was presumed unless BHPIO proved otherwise. It was not said that s 298V applied if (as I hold) the employer’s state of mind is at most an important evidentiary component of a s 298M case. If I am wrong, however, and intention is an essential substantive ingredient, I would still hold that s 298V has no application in a s 298M case.
Section 298K(1) makes the element of purpose a distinct constituent of the relevant delict. Conduct of the kind referred to in s 298K(1) is lawful unless carried out for a reason referred to in s 298L(1). There are a number of other provisions in Part XA which turn enlivening conduct into a delict only when a statutorily expressed purpose or intent is established: see, e.g., ss 298P, 298Q, 298R and 298S. Section 298V applies, in terms, to provisions such as these. An allegation that one or other of these provisions has been breached necessarily involves an allegation that “the conduct was … carried out for a particular reason or with a particular intent” (par 298V(a)). Moreover, it is only when the enlivening conduct is carried out “for that reason or that intent” that there is a contravention (par 298V(b)).
Section 298M is different from s 298K(1) (and such provisions as ss 298P, 298Q, 298R and 298S) in the way it operates. Even if there is not a relevant inducement without intention on the employer’s part, the act of inducing the outcome referred to in the section is the delict defined by the statute. Section 298V cannot apply to s 298M because the correct allegation of a s 298M breach is not that there has been lawful conduct that was rendered unlawful because it was done for a particular reason or a particular intent. Instead, the allegation must be that the act of inducing the relevant outcome is itself the contravening act. The effect of the reference in s 298V to “a particular reason” or “a particular intent” is that s 298V is attracted only where a provision in Part XA identifies a specific reason or specific intention as a separate element of the delict defined within the Part. It is the existence of that reason or intent which turns lawful conduct into a civil wrong defined by the WR Act.
Of course, if intention were an essential element of s 298M, then the difference that I describe between s 298M and provisions like ss 298K(1), 298P, 298Q, 298R and 298S may seem merely formal. Section 298M could be rephrased to assume a form resembling these other provisions. It seems to me, however, that the Parliament has deliberately framed s 298V to fit the specific form of 298K(1) and like provisions and the fact s 298M could be rephrased is immaterial on this particular question of construction.
The outcomes referred to in s 298M are “to stop being an officer or member of an industrial association”. They are specific and limited outcomes. The concept of membership is dealt with elsewhere in the Act with some precision: see Part IX, Div 9, especially s 269. There is simply no basis upon which it might be said that s 298M extends to outcomes beyond the cessation of membership or the holding of an office. What s 298M forbids is an employer (or a person who has engaged independent contractors) from inducing an employee (or an independent contractor) to decide to give up his or her union membership or office. The provision does not extend beyond this reach.
Finally, I note the observations of the Full Court, at 697, that:
Taken literally, s 298M appears to contain only a single prohibition, that is, that an employer must not, by a threat or a promise or otherwise, induce an employee to stop being a member of an industrial association. That is, if considered grammatically only, s 298M does not speak of an attempt, or of a threat, to induce. But English industrial legislation speaking of inducement has been purposively interpreted so as to pick up a threat to induce. Section 3 of the Trade Disputes Act 1906 (UK) dealt with ‘[a]n act … that … induces some other person to break a contract of employment … ’. It was held in Morgan v Fry [1968] 2 KB 710 at 728-9 that the verb ‘induces’ used in that context included a threat to induce. It is appropriate to place a similar interpretation upon s 298M, since, in our view, this would give effect to the evident purpose of s 298M. This approach is reinforced by the explicit reference to ‘threats’ in the section.
It is (as the respondent conceded) unnecessary to delve into the question whether s 298M covers an attempt, or threat, to induce. This is because, if I found that there has been what in other contexts would be described as an attempt to induce, then that would be sufficient to ground the applicants’ claim for injunctive relief under s 298U.
the development and implementation of the wpa proposal
The facts of the case must now be considered. Do they show that BHPIO is contravening, or threatening to contravene, Part XA of the WR Act in any one of the ways alleged by the applicants?
(a)Management changes at BHPIO
In February 1999, Robert Kirkby assumed the position of President, Steel Making and Energy Materials Division, with responsibility for coal, iron-ore and HBI (Hot Briquetted Iron) throughout Australia, including BHPIO’s operations. At this time, Kirkby reported to Ronald McNeilly, President of BHP Minerals (a group within BHP that included the operations of BHPIO). Kirkby had, however, final responsibility for major decisions in the areas under his supervision, including BHPIO. In February 2000, following a corporate reorganisation, Kirkby became Chief Operating Officer of BHP Minerals. He retained his responsibility for those parts of BHPIO’s operations relevant to this case.
When Kirkby assumed his presidency in February 1999, BHPIO was operating under a plan called “Vision 2005”. The plan had been introduced in October 1998 and, according to BHPIO’s Vice-President of Human Resources, Jeffrey Stockden, it “focussed on cultural change across the organisation”. Vision 2005 was directed to lowering the costs of production whilst increasing the company’s iron ore output. The plan included a reduction in employee numbers.
In February 1999, following negotiations in Japan, the global participants in the iron ore industry fixed a new global price for iron ore, which, so far as BHPIO was concerned, was to result in a 10 per cent reduction in the iron ore price and a significant drop in tonnages.
BHPIO’s senior managers met at a conference in February 1999 to discuss Vision 2005. Those present included Kirkby, John Hannah (President of BHPIO from 22 September 1997 to 1 December 1999 who reported to Kirkby) and Stockden (who reported to Hannah until October 1999 and then to his successor, Graeme Hunt, as well as to Stephen Keogh, Vice President for Human Resources in BHP Minerals). At the conference, Kirkby stated that, owing to price and tonnage cuts for iron ore, BHPIO did not have until 2005 to cut its costs of production, and that those cuts had to be made as soon as practicable. The company was, he said, lagging behind its competitors (including its major competitor, Hamersley Iron Pty Ltd (“Hamersley Iron”) which also operated in the Pilbara) in terms of profitability, cost per tonne and return on capital. Kirkby charged each of BHPIO’s senior managers to examine how cost efficiencies could best be achieved. Kirkby’s views about BHPIO’s business practices in February 1999 were based on his involvement with the company’s iron ore and coal businesses over a number of years. He had worked for BHP in iron ore as General Manager – Newman from 1989 to 1993. Thereafter, he moved into coal and was Chief Executive Officer of BHP Coal up until February 1999.
(b)Voluntary redundancy offers and equipment reduction
In an attempt to lower production costs by reducing employee numbers, BHPIO opened a voluntary redundancy program from March 1999. As a result, by October/November 1999, the total number of BHPIO employees had dropped from about 2200 to 1700. The evidence does not, however, support the allegation initially made by the applicants (and ultimately not pressed) that, in making its redundancy offers, BHPIO targeted union delegates in the hope that as many as possible would quit its workforce. Further, the downturn in volume meant not only that BHPIO was overmanned but also that it had an excess of machinery. Accordingly, there were also reductions in mining equipment at this time.
(c)Amending the IR agreement

In final submissions, the applicants made little of the respondent’s refusal to negotiate any industrial agreement. As we have seen, the unions made no attempt to negotiate as bargaining agents on behalf of any employee or employees. They did seek, however, to commence negotiations for EBA 4. As the respondent noted more than once, it was under no statutory or other legal obligation to do so. BHPIO’s managers, particularly Stockden, gave evidence that they did not think it practicable to proceed with negotiations for a new EBA whilst the WPA offers were outstanding. The applicants did not seriously challenge that explanation. Of course, even if an employee entered a WPA because of the respondent’s refusal to negotiate EBA 4 (there being no evidence of this), it does not follow that that employee would thereafter resign from his or her union.
As will have been seen, I have very largely accepted the evidence given by Kirkby and Stockden on material points. I have not, however, overlooked the applicants’ attack on the credit of Kirkby and, to a lesser extent, Stockden and Hannah. It is convenient to discuss that attack, before turning to other aspects of the applicants’ s 298M case.
Kirkby’s evidence was, so they said, “generally vague and marked by a fluidity of recollection” which was “inconsistent with that of a senior executive charged with undertaking fundamental changes in the operations of BHPIO”. According to the applicants, Kirkby’s evidence showed a lack of candour. It was “given with apparent reluctance and in a seemingly disengaged and uninvolved manner”. Whilst I accept that this is not an inapt description of Kirkby’s manner in giving evidence, for the reasons I am about to give, I reject the proposition that his manner was necessarily indicative of a lack of candour on his part on any material point. Nor do I accept that his poor recollection of some of the events which have occurred at BHPIO since February 1999 are indicative of a lack of frankness.
The applicants cited as indicative of a measure of dishonesty on his part (1) his failure to recall the briefing given to him by Stockden in February 1999; (2) his failure to recall his conservation with Anderson in mid-September concerning WPAs; (3) an alleged error in his evidence as to the date of the dispute between the state AWU and the state CFMEU; (4) his asserted lack of knowledge of the unions’ position at Hamersley Iron; and (5) his failure to recall the draft memorandum sent to him by Hannah in July 1999.
In assessing whether Kirkby’s poor recollection is indicative of a lack of candour on his part, it is to be borne in mind that he had broad responsibilities for matters extending beyond BHPIO. On his own admission, his recollection of a number of events, especially of pertinent details, was poor. He said that, in July 2000, his recollection of events after February 1999 was not at all clear. Memory losses of this kind are consistent with ordinary human experience. Stockden himself could not recall the format of his presentation to Kirkby in February 1999 and even Hannah, who was apparently present, seemed to have little recollection of it. Indeed, Kirkby’s lack of recall is consistent with his evidence that, between February and April 1999, he was not concerned with the form and nature of industrial arrangements in the workforce. Kirkby did not deny (although he did not recall) a conversation with Anderson in mid-September 1999 when, according to Anderson, he had said that it was “a strong possibility” that BHPIO would introduce WPAs. What Kirkby said was that he had not made up his mind about WPAs until October. There is no inconsistency between this evidence and the statement attributed to him by Anderson, and his inability to recall it is not necessarily indicative of mendacity. Much the same may be said of his evidence on the state AWU – state CFMEU dispute. Nor were Kirkby’s answers to questions concerning his knowledge of the position of the unions at Hamersley Iron inconsistent with one another when the precise terms of the questions are examined. I reject the proposition that Kirkby’s inability to recollect Hannah’s draft memorandum justifies a finding that Kirkby deliberately concealed from the Court the nature of the communications to which he was privy. Kirkby was not shown the draft in Court and it was that document which, according to Hannah, was actually sent to him. Instead, Kirkby was shown the final version of the memorandum, as it appeared a few days later. There is no evidence that that document was ever sent to him. Whilst Kirkby was not forthcoming in cross-examination and generally gave short answers in response to the specific terms of the questions asked of him, he did not impress me as untruthful.
In any event, whatever reservations one may have about the reliability of Kirkby’s evidence on pertinent matters, they are overborne by a number of other factors that independently support him. As already noted, save for the instances noted by the applicants, Kirkby’s evidence was generally consistent with that of other BHPIO managers, as well as Anderson and McNeilly. The reasons he gave for endorsing the WPA proposal were entirely consistent with the assessments that other BHPIO managers testified they were making during Project Phoenix. His decision to endorse the WPA proposal was based in part on their assessments. His reasons were also consistent with the appreciations being made by Anderson and McNeilly with whom he had discussions.
The applicants claimed that Stockden was “prepared to tailor his evidence” to suit the company’s case. They referred to two instances which, so they said, could be explained only upon this basis. Those instances related to relatively peripheral matters, however, and Stockden’s evidence, which was given over three days, must be considered as a whole. When so considered, the applicants’ attack on it fails. Stockden too gave his evidence carefully, even cautiously, with a view to what he perceived to be the issues in the case, but again he did not impress me as untruthful.
Hannah’s evidence was adversely criticised by the applicants on the basis that he gave inconsistent evidence as to when he concluded that WPAs should be introduced into BHPIO’s workforce. It is not suggested that precisely when Hannah came to this conclusion is critical. When Hannah’s evidence is read in its entirety, the alleged inconsistencies either disappear or become so slight that they cease to matter. Hannah’s evidence tallies generally with other managers’ accounts of how they came to prefer the WPA route and with the numerous presentations, memoranda and other documents generated in the course of BHPIO’s deliberative process.
A part of the applicants’ case as initially put was that the employees who signed WPAs “almost invariably” resigned from the unions. Whilst this aspect was later reformulated, the applicants’ case remained that the correlation in this case between the making of WPAs and the resignations gave rise to an inference that the resignations were a reasonably foreseeable consequence of the making of WPAs and that, if intent mattered, the company must have intended the resignations to occur. It is to this aspect of the s 298M case that I now turn.
The evidence is largely contained in an affidavit sworn on 4 August 2000 by Vanessa Lee Murphy, a Human Resources Services Officer for BHPIO. She deposed that there were 1103 award employees at the three BHPIO sites in the Pilbara on 5 November 1999, and 1037 award and WPA employees on 28 January 2000. The workforce had, therefore, declined by 6 per cent over the relevant period. Of the 1037 employees whose employment had previously fallen under the award, 474 (45.7 per cent) had signed WPAs by 28 January 2000. That is, a little less than half of the employees eligible for WPAs in November 1999 had accepted them during the period before BHPIO was enjoined from making further WPAs.
BHPIO has agreements with the state unions to deduct union dues and social welfare fund payments automatically from the payroll at an employee’s request. Such deductions are made fortnightly and are remitted directly to union funds. In the absence of any comprehensive direct evidence of union membership, both parties relied upon BHPIO’s payroll deduction records as a means of assessing union membership levels, although that means was not entirely accurate.
The evidence was that as at 5 November 1999 some form of union dues was being deducted for 804 award employees. This represented about 72.9 per cent of the relevant workforce. As at 28 January 2000, however, union dues were being deducted for only 598 employees, or 57.7 per cent of that workforce. This represented a drop of 15.2 percentage points, or about a 20.9 per cent decline in the number of employees for whom BHPIO made union fund deductions over the three months following the offer of WPAs, after accounting for the reduction in the workforce overall. Of the 474 employees who had entered into WPAs by 28 January 2000, union dues were being deducted for 320 on 5 November 1999 and for 164 on 28 January 2000. Thus, the decline in union membership, after allowing for the decrease in the number of employees overall, is almost entirely due to WPA employees leaving the unions.
In summary, the evidence establishes that:
(1)   about 45.7 per cent of eligible award employees entered into a WPA between November 1999 and the end of January 2000;
(2)   about 48.8 per cent of the employees who had been union members and who entered into a WPA resigned from their union in the same period; and
(3)   WPA employees resigning from the unions (for whatever reason) resulted in about a 20 per cent decline in union membership (relative to overall workforce size) by 28 January 2000.
The parties apparently accepted that the payroll deduction records for April 2000 also showed that by 22 April 2000 only 121 (perhaps, 117) of the WPA employees remained union members, bringing the percentage of WPA employees who had been in unions in November 1999 but had subsequently resigned up to 62.2 per cent. The respondent contended, however, that the applicants’ reliance on this statistic was “unacceptable”, because the longer the period elapsing after the signing of a WPA, the more likely it was that a resignation was due to some factor other than the WPA. Further, from February onwards, an injunction restrained other employees from signing WPAs and this, so the respondent said, “means that the denominator employed by the applicants to derive their [percentage figure] was held constant since 31 January 2000, whereas the numerator was under no such constraints”. Putting this debate to one side, the evidence establishes that a significant proportion of WPA employees who had been union members, but by no means most, resigned their union membership after signing WPAs.
The applicants accepted, I think, that a mere correlation between the acceptance of a WPA and resignation from a union was not necessarily indicative of a causal relationship between the two. At the core of the applicants’ case was the proposition that an employee who accepted a WPA had little reason to remain in his or her union and “[o]n any fair view, this would almost inevitably lead those employees to withdraw from the union”. The respondent rejected this proposition. It adduced evidence from twenty-four employees who had signed WPAs and subsequently resigned from either the state CFMEU or the state TWU concerning their reasons for resigning. The applicants challenged this evidence and called a further witness to give his reasons for resigning. They also tendered (without objection) a number of resignation forms received by the state and/or federal CFMEU and the state and/or federal AMWU.
The relevant witnesses fell into three overlapping categories. These were:
(1)witnesses who said that a union was of little or no value after signing a WPA. They included Gordon Clement, Malcolm Wilson, Geoff Jolly, Ian Pike and Les Standen, although Pike’s statement that it was “no use being a member of a Union any longer” must be understood as arising out of his negative experience in the workplace. Perhaps Jeffrey Head fell into this category too. Head’s evidence was that he wanted to represent himself in industrial matters; that he did not believe that his union was providing good enough representation; and that he did not see any more use for the union’s representation of him. Wilson said the “fair bit of stuff coming from individual unions and the unions as a whole” had a big bearing on his decision.
(2) witnesses who resigned for reasons unrelated to the role the unions could play. These included Robert Bouveng, Anthony Holland, Bruce Martin, Murray Hirini, Lance Doherty, Jeffrey Head, Bernard Winiata, Dennis Robinson, Geoff Shore and Steven Brown. Bouveng’s evidence was that he resigned, amongst other reasons, because he did not want to participate in a picket and because “they [the union] turned around and said that they would not support me”. Holland’s evidence was that he “resigned from the union because [he] was becoming very disgruntled with the direction they were taking and the things that were going on site.” Martin remained in the union for nearly six months after signing a WPA and left when a nasty verse (which mentioned him and which he attributed to people in the union) circulated around the workplace. Hirini’s evidence was that he resigned for various reasons, including derogatory conduct directed by union members to WPA employees. Whilst Doherty assigned an incident of alleged harassment occurring six months before his resignation as his reason, in the social climate of the BHPIO workforce (as shown by the evidence), that reason is not entirely implausible. Winiata resigned because he was called a scab, and particularly by “my own race”. Robinson resigned when a 4-day strike was fixed and it seemed obvious to him that he would be required to cross the picket line. Shore’s evidence was that he resigned because of the attitudes and conduct of union officers. Brown formed the view that he could not reasonably expect any support from his union.
(3) witnesses whose stated reasons allegedly related to matters that postdated their resignations. Barry Howell signed a WPA in November 1999 and resigned from his union about the same time. He referred to an incident relating to the January 2000 picket line, although he did not actually say that the incident led to his resignation. Jack McDonald resigned from his union around 7-10 December 1999, having signed a WPA on 3 December. He sent a letter to the union at the time of his resignation, stating, amongst other things, that he was resigning because he would be labelled a scab if he attended work and be subjected to verbal abuse. In his affidavit, he apparently referred to the January 2000 picket, although it is unclear whether he was referring to it as a reason for resignation. In evidence, he also said that he resigned because the unions did not support WPAs and “there was a fair bit of flak going around up on the hill”. Graham Palmer resigned from his union on 7 December 1999, having signed a WPA on 26 November 1999. He referred to a meeting which he thought was before but which he conceded may have been after his resignation, concerning people who were going to come to work and cross the picket line on the 13 December stoppage. On the basis of what was said at the meeting, Palmer believed that his ticket was “worthless, may as well be torn up”. Colleen Stewart and Leanne Wilson may have fallen into this category too. Stewart resigned from her union in December, stating that she did so because of harassment and conduct at the first picket line on 13 December 1999. As the applicants noted, her last payroll deduction was for the fortnight ending 3 December 1999. This is perhaps consistent with her resigning any time up until 17 December, when the next deduction would have been made. Wilson resigned from her union on 8 December 1999 after a meeting at which she believed that a union official had said the union would not represent WPA employees and wanted nothing more to do with them and because of the conduct of other union members at the meeting. Her evidence about the date of the meeting was unclear: it may have been after the first strike on 13 December.
The applicants submitted that the testimony of many of these witnesses was untruthful, unreliable, or vague and uncertain. Without dealing with each witness in turn, it is enough to say that I accept that the evidence about employees’ reasons for resigning is to be treated with caution. Further, of the 68 resignations from the state CFMEU identified by Matt Willie, state CFMEU office-holder, 27 were dated before 10 November 1999, when the WPA offers were made. Of the 41 letters remaining (including some from employees already mentioned), 21 gave no reason for the resignation, 7 referred to retirement or a change of employment, 11 referred to accepting a WPA, and 2 gave other reasons. Those letters which contain a reference to a WPA simply state words to the effect that the member is resigning, having signed a WPA, without offering any more specific insight into the employee’s views. Mossenton identified resignation letters dated between 10 November 1999 and January 2000 from 18 state AMWU members. Of these, 14 referred to a WPA as the reason for their resignation; and another 4 gave no reason or referred to a change of employment. Again those who gave WPAs as their reason for resigning did not explain the perceived link between signing a WPA and resigning from the union.
Plainly enough, the employees who gave evidence are not necessarily a representative sample of the approximately 156 WPA employees who resigned their membership between November 1999 and end January 2000 (or the 200 odd who resigned between November 1999 and May 2000). The witnesses were mostly members of the state and/or federal CFMEU or state and/or federal TWU. Aside from the resignation forms from the state and/or federal AMWU, there is no evidence as to why members of other unions have resigned. Generalisations drawn from the direct evidence of a limited number of employees could well be misleading.
As it turns out, this evidence is not critical, and I place little weight upon it. At most, it demonstrates that, as the respondent contended, the WPA employees who gave evidence made up their own minds about union membership on the basis of what it meant to them, their own experiences, and perception about themselves as WPA employees. I have found that the respondent did not have as its purpose that the WPA employees should leave their unions. In this event, it is beside the point that the respondent might reasonably have foreseen that a reasonable number would do so. Further, the evidence shows that whilst many WPA employees had resigned union membership, not all had done so. Presumably, those employees have decided that there is value in retaining their membership, notwithstanding that they have signed WPAs.
In summary, the applicants have not made out the case under s 298M summarised at [70] above. Further, it has not been shown that “almost invariably” employees who signed WPAs resigned from their union. Some did and some did not. The evidence establishes that some WPA employees made their own judgments about the value of union membership, taking into account all the circumstances, including those peculiar to themselves. As stated before, I accept that the respondent did not offer WPAs to its award employees in order to have them give up their union membership.
the contract case
In addition to their claims under the WR Act, the sixth to tenth applicants (“the individual applicants”) allege that their employment contracts were breached by BHPIO’s conduct in making WPAs with some of its award employees. This claim depends on the proposition that the Award was expressly incorporated into their individual contracts with BHPIO. According to the particulars under par 22 of the amended statement of claim:
That express incorporation is evidenced by inter alia, letters of offer and accompanying information in standard form provided to the Employees by BHPIO at or about the time that their contracts of employment were made.
The provision of the Award upon which the applicants rely is clause 5(14)(a), which provides:
No contract of employment shall be made between the employer and any employee which contains any term or condition which is inconsistent with or contrary to the provisions of this award; … .
By entering into WPAs, some of the terms of which are inconsistent with the Award, the individual applicants claim that BHPIO has violated their employment contracts.

In the earlier appeal, the Full Court held that, on the evidence adduced in the interlocutory proceedings, there was no serious issue to be tried on the contractual claim. The Full Court’s decision was based on a document headed “Information for New Employees at Newman”. The Full Court stated (171 ALR at 701):
[W]e have difficulty accepting that the document relied on by his Honour was intended to have the contractual force suggested. The document is entitled ‘Information for New Employees at Newman’. In our view, that is an appropriate description of its character. In its form and in its substance it is not, and does not purport to be, an independent contract of employment, or a document recording or evidencing such a contract. On the contrary, the document makes it plain that the employment relationship is governed, not by any free-standing contract, but by the award.
The document commences with the statement which we have set out above, under the heading ‘Conditions of Employment’. As has been seen, it is there stated that the conditions of employment are ‘[i]n general … as prescribed in the … Award … and the [EBA] …’ and that ‘[w]here any inconsistencies exist, the conditions as set out in the EBA shall prevail’. This makes it plain, in our view, that the relationship is governed by the award and the EBA to the exclusion of any independent contractual arrangements.
So much is confirmed by the balance of the document. The next heading is ‘Award Conditions’. Under this title, a number of matters are dealt with under separate subheadings: ‘Contract of Employment’, ‘Hours’, ‘Overtime’, etc. Later in the document, under further headings (‘Property Protection’, ‘Relocation of Employees’, etc) other managerial subjects are dealt with.
In our opinion, when the document is read as a whole, it is clear that it was not intended that the terms of the award were to be picked up as a free-standing contract of employment: see Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2) [1972] 2 QB 455 at 490.
The evidence relied on in the interlocutory proceedings was augmented at trial. In his affidavit, Ross Beggs, the tenth applicant, deposed that he had been employed by BHPIO since 1995. There was in evidence a letter, dated 17 October 1995, by which he was offered employment, together with the “Joining Instructions to New Employees at Newman” which accompanied it. These documents referred to the Award in the following terms.
(a)The letter stated that “[i]n general, the terms and conditions of employment are as prescribed” in the award and in certain other agreements, including the 1993 EBA.
(b)The Joining Instructions contained an acknowledgment by Beggs that “in general, the terms and conditions of employment as are prescribed” in the award and those other agreements and that “[w]here any inconsistencies exist, the conditions as set out in the EBA shall prevail”.
Besides referring to the Award, the letter of offer specified a starting date, an annual wage and the personnel to whom Beggs might direct any inquiries. It also requested him to indicate his acceptance by signing and returning a copy of the letter (which he apparently did).
None of the letters of offer sent to the other individual applicants was in evidence, although the “Joining Instructions” given to Ross Kumeroa and Doug Stead were. These Instructions were in relevantly the same terms as those given to Beggs. (I put to one side as irrelevant, for present purposes, the other contractual documents relied on by the applicants since none related to the individual applicants.)
The applicants’ case was not that the terms of the Award were implied terms of their contracts of employment. That possibility was foreclosed by the decision in Byrne v Australian Airlines Ltd (1995) 185 CLR 410. As the Full Court observed at 701:
In Byrne it was held that the obligation to observe an award arose by force of statute, not because the award was imported into a contract of employment independently of the parties’ intention; and that the provisions of the award were not an implied term of the contracts of employment, because their implication was not necessary for their reasonable and effective operation in all the circumstances.
Whether an award is incorporated into an individual contract of employment depends upon the circumstances of the case and, in particular, the terms of the relevant employment contract. In Moama Bowling Club Ltd v Armstrong (No 1) (1995) 64 IR 238, the Industrial Court of New South Wales held that an award was incorporated into an employment contract by virtue of a clause in the contract providing that:
This Agreement shall be deemed to incorporate the whole of the provisions of the Award as the Award stands at the date of this Agreement together with all future variations of the Award and the provisions of any Award made in substitution thereof and the provisions of this Agreement shall be read and interpreted so as to be subject to the provisions of the Award or any Award made in substitution therefor.
This provision can be contrasted with Cliffe v Hoechst Australia Ltd (unreported, IRCt, 21 October 1996, case 514/96) in which Marshall J held that a sentence in a handbook reading, “Termination conditions are provided in Awards and Determinations” did not incorporate an award into the employment contract.
The language of the Beggs letter of offer is plainly distinguishable from the unambiguous terms considered in Moama, and is closer to the language considered in Cliffe. It is to be borne in mind that the Award is given statutory effect by s 37 and is enforceable pursuant to s 83 of the WAIR Act by, amongst others, an employer, or an employee to whom the award applies “on his own behalf”. As in Byrne, there is little reason to suppose that the parties intended to convert their statutory rights and obligations into contractual ones, since that was not necessary to give the Award operative force. In this case, in the context in which they appear, the words “are as prescribed” do not indicate an intention to incorporate the terms of the Award into an employment contract. Instead, there are explanatory or descriptive of the instruments that are applicable to Beggs’ employment. What the letter of offer did was inform him that the Award applied to him, and that his employment relationship with the company was to be governed by it and the agreements to which the letter referred. The letter did not purport to incorporate the terms of the Award and those agreements into an employment contract between BHPIO and Beggs.
The Joining Instructions given to Beggs are in substantially the same terms as the “Information” document that was considered by the Full Court. The Full Court’s reasons for declining to find that that document was intended to incorporate the Award in an employment contract are equally applicable to the Joining Instructions.
The state of the evidence does not permit the position of the other individual applicants to be better than that of Beggs. Accordingly, I reject the applicants’ submission that clause 5(14)(a) of the Award was incorporated into any contract of employment between BHPIO and the individual applicants.
In any event, even if the letter of offer incorporated some of the terms of the Award, it does not follow that it incorporated clause 5(14)(a) into the employment contract. The relevant part of the letter of offer referred to “terms and conditions of employment”. Clause 5(14)(a) does not prescribe any term or condition of employment. What it does is purport to impose a general obligation on both employer and employees not to enter into any contract containing terms inconsistent with the Award. It does not make it a term or condition of an individual employee’s employment that the employer (and, for that matter, other employees) will not enter into such contracts with others.
The applicants referred in final submissions to certain observations of Merkel J in Australian Airline Flight Engineers Association v Ansett Australia Ltd [2000] FCA 1299 at [17] - [21]. Nothing that his Honour there said assists in the resolution of an issue in this case.
The respondent also submitted that if clause 5(14)(a) was an incorporated term of a contract of employment, then the clause as incorporated applied only to the particular employment contract in which it was incorporated. In the alternative, the respondent submitted that the clause was invalid since it was repugnant to the WAIR Act: see s 114(3) and s 7E. In light of the conclusion reached, however, it is unnecessary to express a view on these submissions.
conclusion
Accordingly, for the reasons stated, the applicants have not established entitlement to the final injunctive relief that they seek in this proceeding. The injunction granted by Gray J on 31 January 2000 as varied by the Full Court on 7 April 2000 should be discharged.
I propose to adjourn the matter to enable counsel to prepare short submissions on costs and on any consequential orders that they consider should be made.

I certify that the preceding two hundred and fifty-nine (259) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.
Associate:
Dated: 10 January 2001

Counsel for the Applicants: Mr H Borenstein with Mr W Friend and Mr S Moore

Solicitor for the Applicants: Maurice Blackburn Cashman

Counsel for the Respondent: Dr C Jessup QC with Mr F Parry

Solicitor for the Respondent: Malleson Stephen Jaques

Counsel for the Minister for Employment, Workplace Relations and Small Business, intervening Mr G Pagone QC with Mr B Lawrence

Solicitor for the Minister for Employment, Workplace Relations and Small Business, intervening Australian Government Solicitor

Dates of Hearing: 10 July to 31 July 2000, 2 August 2000, 4 August 2000 and 9 November 2000

Date of Judgment: 10 January 2001

HEADING	PARAGRAPH No.
introduction	[1]
the parties	[2]
industrial regulation at bhpio	[7]
constitutional challenge	[12]
construction of sections 298K, 298L and 298M	[33]
(a) Legislative history	[34]
(b) Construction of s 298K	[51]
(c) Construction of s 298M	[70]
the development and implementation of the wpa proposal	[84]
(a) Management changes at BHPIO	[85]
(b) Voluntary redundancy offers and equipment reduction	[89]
(c) Amending the IR agreement	[90]
(d) The due diligence exercise with Hamersley Iron	[95]
(e) Project Phoenix – BHPIO reviews its operations	[111]
(f) The commitment to WPAs	[118]
(i) First Review – August 1999	[121]
(ii) The Section 72A case and the ACTU	[123]
(iii) The second review – September 1999	[128]
(iv) Third review – end September 1999	[138]
(g) Moving to WPAs	[142]
(h) The decision to offer WPAs	[146]
(i) Negotiations relating to a new EBA	[160]
bhp’s reasons for workplace agreements	[171]
(a) The identity of the decision-maker	[171]
(b) Kirby’s reasons	[174]
(c) Instances of alleged union inflexibility	[191]
(d) The accrued sick leave option and the backdating of pay increases	[200]
the applicants’ case under s 298K	[201]
the applicants’ case under s 298M	[212]
the contract case	[246]
conclusion	[258]

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V24 OF 2000

JUDGE:	KENNY J
DATE:	10 JANUARY 2001
PLACE:	MELBOURNE

Counsel for the Applicants:	Mr H Borenstein with Mr W Friend and Mr S Moore
Solicitor for the Applicants:	Maurice Blackburn Cashman
Counsel for the Respondent:	Dr C Jessup QC with Mr F Parry
Solicitor for the Respondent:	Malleson Stephen Jaques
Counsel for the Minister for Employment, Workplace Relations and Small Business, intervening	Mr G Pagone QC with Mr B Lawrence
Solicitor for the Minister for Employment, Workplace Relations and Small Business, intervening	Australian Government Solicitor
Dates of Hearing:	10 July to 31 July 2000, 2 August 2000, 4 August 2000 and 9 November 2000
Date of Judgment:	10 January 2001