BlueScope Steel (AIS) Pty Ltd v Australian Workers' Union (No 1)
[2012] FCA 935
FEDERAL COURT OF AUSTRALIA
BlueScope Steel (AIS) Pty Ltd v Australian Workers’ Union (No 1) [2012] FCA 935
Citation: BlueScope Steel (AIS) Pty Ltd v Australian Workers’ Union (No 1) [2012] FCA 935 Parties: BLUESCOPE STEEL (AIS) PTY LTD v AUSTRALIAN WORKERS’ UNION and AUSTRALIAN WORKERS’ UNION, NEW SOUTH WALES File number: NSD 1238 of 2012 Judge: PERRAM J Date of judgment: 28 August 2012 Catchwords: INDUSTRIAL LAW – Industrial action – application for interlocutory injunction restraining proposed industrial action at blast furnace – where industrial action of certain duration and/or frequency could require ‘dumping’ of hot metal – whether proposed industrial action was immune from suit – whether proposed industrial action would result in ‘reckless destruction of, or damage to, property’ – whether serious question to be tried – whether damages an adequate remedy – whether balance of convenience favours injunction Legislation: Fair Work Act 2009 (Cth) ss 408, 409, 415(1)
BlueScope Steel (AIS) Pty Ltd – Port Kembla Steelworks Employees Award 2006 cl 37.3
Cases cited: Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (2000) 104 FCR 80 distinguished
Date of hearing: 27 August 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 30 Counsel for the Applicant: G Hatcher SC, M Seck Solicitor for the Applicant: Duncan Cotterill Lawyers Counsel for the Respondents: S Crawshaw SC Solicitor for the Respondents: Maurice Blackburn Lawyers Pty Ltd
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1238 of 2012
BETWEEN: BLUESCOPE STEEL (AIS) PTY LTD
ApplicantAND: AUSTRALIAN WORKERS’ UNION
First RespondentAUSTRALIAN WORKERS’ UNION, NEW SOUTH WALES
Second Respondent
JUDGE:
PERRAM J
DATE OF ORDER:
28 AUGUST 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The parties provide short minutes of order to the Associate to Perram J by 6 pm this evening.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1238 of 2012
BETWEEN: BLUESCOPE STEEL (AIS) PTY LTD
ApplicantAND: AUSTRALIAN WORKERS’ UNION
First RespondentAUSTRALIAN WORKERS’ UNION, NEW SOUTH WALES
Second Respondent
JUDGE:
PERRAM J
DATE:
28 AUGUST 2012
PLACE:
SYDNEY
REASONS FOR JUDGMENT
The applicant (‘BlueScope’) owns and operates a blast furnace at Port Kembla, South of Sydney. This furnace is 42m high, operates 24 hours per day and seven days per week. It produces 300 tonnes of molten iron ore per hour or, to put it another way, 7,200 tonnes per day.
The persons who operate this blast furnace are each members of the Australian Workers’ Union which is the first respondent. Last Wednesday, that is 22 August 2012, the Branch Secretary of the AWU, Mr Phillips, wrote to BlueScope and gave notice of the intention of its members to take ‘protected industrial action’ (of which more later). This action was to commence today at the commencement of the members’ ordinary hours of work and to conclude 24 hours later.
Because they are critically related to the operation of the blast furnace the terms of the proposed stoppage are of importance. What was proposed was that the day shift would stop for four hours between 10 am and 2 pm and that the night shift would also stop for the last four hours of their shift. It is not clear to me when that shift began or ended but it is clear that the four hour stoppages contemplated by the letter of 22 August could not be separated by 16 hours of continuous operation.
BlueScope’s basic complaint is that action of that kind, if taken, would pose very serious economic risks to it. As it happens, on the eve of the present hearing, the AWU indicated that the industrial action it had formally notified would not proceed on Tuesday as had originally been planned. But it did not undertake that no such further action would be taken in the future.
The relief BlueScope seeks is an interlocutory injunction restraining the industrial action occurring. Three issues arise for determination:
(a)whether BlueScope has demonstrated an arguable case for relief;
(b)whether damages would be an adequate remedy; and
(c)where the balance of convenience lies.
It is convenient to deal first with whether there is a serious question to be tried.
A number of elements arise here for consideration, some factual, some legal. Factually, the evidence read before me suggests that whilst there is no risk generally posed by a stoppage of up to four hours duration, this was not so in two circumstances. The first was that there had not already occurred before the commencement of the stoppage some form of disruption of or irregularity within the blast furnace. If such an event had already occurred then, depending on its nature, a stoppage of four hours might not be able to be tolerated. The second was that, even with smooth-running operations, it was not feasible to have two stoppages of four or more hours unless there was at least 16 hours between the two stoppages.
All of these difficulties flow from the fact that there are considerable difficulties attending the turning on and deactivation of the blast furnace. In broad terms, these relate to the blast furnace’s size, its contents and the extreme temperatures at which it operates. Every three hours or so, the furnace must be emptied of the molten iron ore which has accumulated at its base. This is called ‘tapping’. If this is not done, the level of the molten iron ore will gradually rise up the inside of the furnace and will do significant internal damage to it. It is thus required that the furnace be regularly tapped.
Ordinarily, tapping leads to the molten iron being placed in specially-built railway transportation vessels called torpedo ladles and moved to the next phase in the steel production process. If this is not done, the molten iron ore must be ‘dumped’ and this is done by moving the torpedo ladles out to large basins the size of Olympic swimming pools where the hot metal is dumped, cools and solidifies. Later, it is smashed to pieces and reused as scrap metal. The value of that scrap metal is considerably less than the value it previously had as iron ore.
The evidence establishes to the requisite standard that there are various problems of both a safety and financial kind associated with the dumping of hot metal. Smashing the solidified iron is time-consuming; using the torpedo ladles for hot metal dumping carries with it a safety risk; and there are financial difficulties. There are other problems. I will not dwell on them: it is obvious that a continually operating blast furnace is going to give rise to problems if its dangerously hot end product cannot be readily removed to the next stage of production.
It would be possible to give a much more detailed explanation of the problems which exist but I do not think it is necessary, given the timeframe, to do so. Both parties ultimately accepted that the evidence showed that the difficulties which existed would arise if there were stoppages of four hours duration which were less than 16 hours apart. BlueScope added the additional constraint that this was premised on there not already being some form of disruption underway. I accept this.
BlueScope puts its case for relief, based on those facts, as follows: it was true that the proposed industrial action was ‘protected industrial action’ under s 408 of the Fair Work Act 2009 (Cth). This was because it was ‘employee claim action’ under s 409 which was for the purposes of a proposed enterprise agreement. Consequently, it was true also that, prima facie, the AWU and its members were immune from suit insofar as the protected industrial action was concerned. This was because of s 415(1) which provides:
415 Immunity provision
(1)No action lies under any law (whether written or unwritten) in force in a State or Territory in relation to any industrial action that is protected industrial action unless the industrial action has involved or is likely to involve:
(a) personal injury; or
(b) wilful or reckless destruction of, or damage to, property; or
(c) the unlawful taking, keeping or use of property.
However, the potential abandonment or neglect of the blast furnace in the manner foreshadowed in the letter of 22 August 2012 would mean that the AWU’s industrial action had ‘involved or is likely to involve:…(b)…reckless destruction of, or damage to, property’. It followed that the immunity conferred by s 415(1) was lifted and, provided BlueScope could otherwise identify a basis for relief, it was entitled to succeed.
What was its entitlement for relief? By the time of the hearing, BlueScope sought only an equitable interlocutory injunction to prevent the commission of three torts. These were the torts of conspiracy, inducing a breach of contract and interference with economic relations. The first two of these were to be seen as the civil consequences of strike action; the third related to some of the broader financial consequences to BlueScope of the dumping of hot metal and/or damage to the blast furnace.
The AWU saw things differently. There were three arguments. The immunity created by s 415(1) was not defeated, so it was said, unless the damage was the direct result of the industrial action. But here the cause of the damage to the blast furnace (potentially) and the hot metal itself was the result of the usual, or at least expected, operation of the plant when there was a delay and this was not to be seen as being caused directly by the industrial action. Even if indirect damage were sufficient for s 415(1) there could be no conclusion that there was wilful or reckless damage to the furnace or the hot metal. In fact, whilst the evidence before this Court did suggest that stoppages of the kind contemplated by the letter of 22 August 2012 were a problem, the first time this was known to the AWU was when BlueScope’s evidence had been served which was, importantly, after 22 August 2012. This was no idle matter. In earlier litigation between the parties before Fair Work Australia in July 2012, BlueScope’s evidence had been that stoppages of more than four hours could not be tolerated. There had been, at that time, no mention of the need to have at least 16 hours between two such successive stoppage events.
Nor was it shown, so Mr Crawshaw SC submitted on the AWU’s behalf, that there was any risk of damage. Largely following from the point just made he emphasised that the letter of 22 August 2012, seen in the context of what BlueScope had told Fair Work Australia in July, demonstrated a lack of any intention on its part to cause the harm which BlueScope apprehended. Although the AWU did not undertake not to take any industrial action, it was not required so to do. When there was no evidence of any threat to act recklessly towards the integrity of the furnace or the hot metal itself, no grounds existed to grant an injunction.
I do not accept these arguments. As to the first argument, there is plainly a triable issue as to whether s 415(1) extends to indirect damage. My present reading of the provision is that it is unlikely to contain the limitation for which the AWU contends. But even if I am wrong in that, the question of whether it does do so is plainly a triable one.
As to the second and third arguments of whether the letter of 22 August 2012 should be seen as containing a threat wilfully or recklessly to destroy property, I agree that, understood in the context of the prior evidence before Fair Work Australia, there may be much to be said, ultimately, for the view that what the AWU was seeking to achieve was to avoid causing harm to the furnace and the hot metal. But the letter of 22 August 2012 is not the only material. On the same day that Mr Phillips wrote the letter to BlueScope notifying the industrial action, a recording of his voice was played on the ABC radio news for the Illawarra at 12.30 pm. The newsreader introduced the story and then the recording of Mr Phillips was played:
Newsreader: The Australian Workers’ Union says BlueScope employees will start dumping steel next week if a deal isn’t reached with management over an ongoing dispute about working conditions.
The AWU has this morning notified the steel maker that thousands of workers will walk off the job for several hours on Tuesday. If the industrial action proceeds, it will bring production to a standstill.
The union’s Port Kembla branch secretary Wayne Phillips says workers will also dump metal to create extra costs for BlueScope.
Wayne Phillips: If we have to dump metal, and that is a consequence of the company not agreeing to our claims, then that’s what will happen.
Certainly, we don’t want to get to that dramatic step, that drastic…we haven’t dumped metal for probably a decade now. But if we’re left with no other option, then that’s what will happen, yeah.
The AWU invited me to disregard the newsreader’s remarks, particularly the assertion that the AWU members would ‘dump hot metal’. Even without these remarks, however, it is clear that Mr Phillips was both aware of and comfortable with the possibility of hot metal being dumped. I do not need to decide whether this statement proves that the AWU was threatening to cause a dump of hot metal. The threshold is lower. In my opinion there is a triable issue as to whether the AWU does have in mind causing a dumping of hot metal.
That conclusion means that the second and third arguments fail. That is, there is an issue to be tried as to whether the AWU’s industrial action may involve a reckless destruction of property; there is a triable issue as to whether it may be threatening to do so.
Substantively, I did not apprehend that, if these matters were surmounted, the AWU took issue with the constituent elements of the three nominated torts. There was certainly no argument about those matters. That position, correctly taken in my opinion, reflects the common experience that, prior to provisions such as s 415(1), strike action frequently was found to constitute a commission of what are now loosely known as the industrial torts.
I conclude, in those circumstances, that there is a serious issue to be tried as to BlueScope’s entitlement to relief.
I turn, then, to whether damages are an adequate remedy. The evidence shows, and I accept, that the dumping of hot metal and/or the retardation of the blast furnace processes are likely to have significant economic effects whose precise scope is difficult to ascertain in advance. A stop in production at the plant could have adverse effects on third parties, including customers, co-workers and, ultimately, the Illawarra economy. Of course, there are obvious economic effects on BlueScope itself. I conclude, in those circumstances, that damages would not be an adequate remedy.
That leaves the balance of convenience. To an extent, this turns on questions of relief. The AWU and its members have a legal right to engage in protected industrial action, unmolested by civil litigation. The only injunctive relief I am prepared to countenance – I return to this below – are orders directed at the protection of the physical integrity and continuing operation of the blast furnace and the need to avoid the dumping of hot metal. If the relief is limited in that way then I think the balance of convenience favours the granting of relief. This AWU will be able to continue its protected industrial action provided the integrity of the blast furnace is not threatened and the dumping of hot metal is avoided.
I turn than to the relief sought. BlueScope sought an interim order that the AWU (and its state branch) comply with clause 37.3 of the BlueScope Steel (AIS) Pty Ltd – Port Kembla Steelworks Employees Award 2006. Clauses 37.3.1 and 37.3.2 of that Award provide:
37.3.1 Plant operations will continue at normal production rates unless there is industrial action, which extends more than 8 hours, in one of the following major departments and where that action would prior to the BHP Steel Port Kembla Operations Enterprise Agreement 2002 have resulted in the dumping of hot metal.
The major departments are: Blast Furnaces, Rail Operations, BOS and Slab Caster.
37.3.2Recognising that this provision is designed to avoid destruction of product and not to retain normal operations in the event of industrial action in one of the above areas, the Blast Furnaces will, where the industrial action in one of the major departments referred to in subclause 37.3.1 runs for more than 8 hours, operate at a reduced level. That level will be nominally 90% of full production level – that being the level necessary to maintain stable furnace operations and to return to normal operating levels immediately after the industrial action.
The basis on which BlueScope relies is an equitable injunction to restrain the commission of certain torts. No view of that source of rights could lead to an order that cl 37.3 be enforced. The topics pass like ships in the night. BlueScope submitted that support for such an order was to be found in Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (2000) 104 FCR 80. Amongst various propositions, the Full Court there concluded there that, whilst one could not, by injunction, directly enforce an award, if one were authorised to grant relief on some other basis the mere fact that this latter relief might result in the enforcement of an award was no reason not to grant the relief: at [92].
In this case, that principle has no application. The orders which will prevent the commission of the torts has nothing to do with cl 37.3. I will not make such an order. It will be for the parties to agree a form of order but its critical features will be:
*Stoppages not to exceed four hours in duration;
*Stoppages to have at least sixteen hours between them; and
*There is to be no stoppage if a disruption event is underway at the time of the stoppage’s commencement.
If the parties are unable to agree the form of that order by 6 pm this evening I will resolve the issue at 9.30 tomorrow morning. I should say, for completeness, that BlueScope has proffered the usual undertaking as to damages.
Finally it remains to note the position of the second respondent. It is the State-based manifestation of the AWU. There is no evidence that it has any involvement in the present dispute as its counsel expressly submitted to me. It is inappropriate in those circumstances to make any orders about it.
The parties are to bring in short minutes of order by 6 pm this evening by emailing them to my Associate. Costs should be costs in the cause. Failing agreement I will list the matter for further directions tomorrow at 9.30 am.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate:
Dated: 31 August 2012
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