Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Mainteck Pty Ltd
[2017] FCA 301
•8 March 2017
FEDERAL COURT OF AUSTRALIA
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Mainteck Pty Ltd [2017] FCA 301
File number: QUD 891 of 2016 Judge: RANGIAH J Date of judgment: 8 March 2017 Catchwords: INDUSTRIAL LAW – preliminary discovery against prospective respondent – whether prospective applicant reasonably believes it may have a right to obtain relief from the Court – whether reasonable inquiries have been made – whether prospective applicant reasonably believes the prospective respondent has or is likely to have relevant documents – application allowed in part Legislation: Fair Work Act 2009 (Cth) s 50
Federal Court Rules 2011 (Cth) rr 7.23, 7.23(1)(a), 7.23(1)(b) and 7.23(1)(c)(ii)
Cases cited: EBOS Group Proprietary Limited v Team Medical Supplies Proprietary Limited (2012) 199 FCR 533
Reeve v Aqualast Proprietary Limited [2012] FCA 679
Date of hearing: 8 March 2017 Registry: Queensland Division: General Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 18 Counsel for the Prospective Applicant: Mr CA Massy Solicitor for the Prospective Applicant: Hall Payne Lawyers Counsel for the Prospective Respondent: Mr B Cross Solicitor for the Prospective Respondent: Mackinnon Finch Solicitors ORDERS
QUD 891 of 2016 BETWEEN: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
Prospective Applicant
AND: MAINTECK PTY LTD
Prospective Respondent
JUDGE:
RANGIAH J
DATE OF ORDER:
8 MARCH 2017
THE COURT ORDERS THAT:
1.The prospective respondent give discovery of any documents in its control brought into existence between 1 March 2015 and 1 April 2016 evidencing any steps taken by the prospective respondent to ensure that employees of ARA Electrical Engineering Services Pty Ltd received the same terms and conditions as if they were employed under the terms of the Mainteck Pty Ltd Grosvenor Project Union Greenfields Agreement 2012.
2.There be no order as to costs.
Endorsement pursuant to Rule 41.06
To: The prospective respondent
You will be liable to imprisonment, sequestration of property or punishment for contempt if:(a) for an order that requires you to do an act or thing – you neglect or refuse to do the act or thing within the time specified in the order; or
(b) for an order that requires you not to do an act or thing – you disobey the order.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
EX TEMPORE REASONS FOR JUDGMENT
RANGIAH J:
This is an application for preliminary discovery pursuant to r 7.23 of the Federal Court Rules 2011 (Cth) (“the Rules”). The prospective applicant, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“the CEPU”), is considering commencing proceedings against the prospective respondents, Mainteck Pty Ltd (“Mainteck”), for contravention of s 50 of the Fair Work Act 2009 (Cth) on the basis of Mainteck’s alleged failure to comply with cl 22(c) of the Mainteck Pty Ltd Grosvenor Project Union Greenfields Agreement 2012 (“the Agreement”).
Clause 22 of the Agreement provides:
22 Temporary/Peak Work Requirements
(a) The parties recognise that in certain circumstances there may be a need to engage the use of Independent contractors, labour hire companies or subcontractors to meet temporary/peak work requirements for work which falls under the scope and classifications included in this Agreement.
(b)The Union parties will be informed regarding any decision by the employer to engage independent contractors and/or labour hire and/or sub-contractors.
(c) The following will apply should the employer wish to engage such labour:
…
(3) Use of Sub-contractors
Employees of Sub-contractors shall receive the same terms and conditions as if they were employed under the terms of this Agreement.
In about September 2015, Mainteck engaged another company, ARA Electrical Engineering Services Pty Ltd (“the subcontractor”), to perform work at the Grosvenor Mine Construction Project near Moranbah in Central Queensland. The CEPU alleges that one of its organisers was informed by a number of subcontractors’ employees that they were receiving a lower rate of pay than provided for under the Agreement.
The CEPU’s solicitors have written to Mainteck asking for voluntary production of documents and records concerning the engagement of the subcontractor and the conditions afforded to its employees. Mainteck has not been willing to provide such documents.
The CEPU’s originating application seeks preliminary discovery of the following documents:
1. documents, as defined in the dictionary to the Evidence Act 1977 (Cth), evidencing the steps taken by Mainteck Pty Ltd to ensure compliance with clause 22(c)(1) of the Mainteck Pty Ltd Grosvenor Project Union Greenfields Agreement which was approved by the Fair Work Commission on 5 December 2012 in a decision recorded at [2012] FWAA 10027 (the Agreement), in respect of the use of ARA Electrical Engineering Services Pty Ltd at the Grosvenor Project;
2. documents, as defined in the dictionary to the Evidence Act 1977 (Cth), evidencing the steps taken by Mainteck Pty Ltd to ensure compliance with clause 22(c)(3) of the Agreement in respect of the use of ARA Electrical Engineering Services Pty Ltd at the Grosvenor Project;
3. documents, as defined in the dictionary to the Evidence Act 1977 (Cth), evidencing the terms and conditions afforded by ARA Electrical Engineering Services Pty Ltd to its employees working on or in connection with the Grosvenor Project; and
4. any and all contract(s) or agreement(s) between Mainteck Pty Ltd and ARA Electrical Engineering Services Pty Ltd in respect of the work to be performed by ARA Electrical Engineering Services Pty Ltd at the Grosvenor Project.
The CEPU no longer presses its application in respect of the first category of documents.
Rule 7.23 of the Rules provides:
7.23 Discovery from prospective respondent
(1)A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant:
(a)reasonably believes that the prospective applicant may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and
(b)after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and
(c) reasonably believes that:
(i)the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent’s control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and
(ii)inspection of the documents by the prospective applicant would assist in making the decision.
(2)If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1)(c)(i).
In Reeve v Aqualast Pty Ltd [2012] FCA 679 at [65], Yates J summarised the relevant principles as follows:
(a)The test of reasonable belief is an objective test.
(b)The provision does not allow for third party discovery. Preliminary discovery may be ordered only against the person from whom there is reasonable cause to believe the applicant is or may be entitled to obtain relief.
(c)A document relating only to the question whether a judgment against a person is likely to be enforceable is not within the rule and such a document is therefore not discoverable. If the only reason why an applicant has not sufficient information to enable a decision to be made whether to commence a proceeding is that the applicant lacks sufficient information as to the respondent’s capacity to satisfy a judgment, preliminary discovery will not be available.
(d)The measure of any preliminary discovery to be ordered is the extent of information that is necessary, but no more than that which is necessary, to overcome the insufficiency of information already possessed by the applicant after the making of all reasonable inquiries, to enable a decision to be made whether to commence a proceeding.
(e)The stronger the relevant evidence already available to an applicant of its right to obtain relief the weaker will its position be to obtain preliminary discovery.
(f)While a respondent to an application for preliminary discovery is entitled to remain passive, the applicant must place before the Court all of the evidence already available to it relevant to the sufficiency of the information it possesses to enable a decision to be made whether to commence a proceeding. The applicant must not hold back information. This obligation on the applicant to be forthcoming arises from the special and intrusive nature of preliminary discovery and the fact that ordinarily the respondent will not know, or be in a position to expose, the full extent of the information already available to the applicant.
(g)While the notion of reasonable belief may set the threshold “at quite a low level”, there must be some tangible support that takes the existence of the alleged right beyond mere “belief” or “assertion” by the applicant.
In EBOS Group Pty Ltd v Team Medical Supplies Pty Ltd (2012) 199 FCR 533 at [100]-[101], Katzmann J accepted that “likely” in r 7.23(1)(c)(i) of the Rules means no more than that the prospective respondent may well have the documents.
The CEPU submits that its evidence demonstrates that the requirements of r 7.23(1)(a)-(c) are satisfied. Mainteck submits that the CEPU has not demonstrated that requirements have been met and that accordingly the application should be dismissed.
Mainteck submits, firstly, that the CEPU’s case proceeds on a fundamental misconstruction of cl 22 of the Agreement and that the Agreement is not breached by any failure to ensure that employees of subcontractors receive appropriate terms and conditions. Further, Mainteck submits that the clause applies only to “Temporary/Peak Work Requirements” and there is no evidence that the engagement of the subcontractor falls within that description. Mainteck’s submission is that there is no reasonable basis for the CEPU’s belief that cl 22 may have been breached. It is enough to say that the CEPU’s construction of cl 22 of the Agreement is reasonably arguable. I consider that r 7.23(1)(a) is satisfied.
Mainteck next submits that the CEPU has not placed before the Court all the relevant evidence available to it. The CEPU’s affidavits point to other documents being in the possession of the CEPU. Those documents have now been placed before the Court, and I consider that the defect has been remedied.
Mainteck then submits that the CEPU has not made reasonable inquiries as is required by r 7.23(1)(b) of the Rules. Mainteck points out that there are 15 union members identified in the affidavits who are alleged to have been underpaid by the subcontractor. I accept that documents in the third category of documents sought by the CEPU could be obtained from those 15 union members. I do not accept that the CEPU has made reasonable inquiries in relation to documents in the third category it seeks.
Mainteck submits that the requirement of r 7.23(1)(c)(ii) of the Rules is not met because in correspondence between the parties, the CEPU has stated that it has enough evidence to commence a proceeding in respect of a breach of the notification provision in cl 22(b) of the Agreement. However, that is a separate allegation of breach. The issue is whether the CEPU has enough information concerning the possible breach of cl 22(c). I accept that r 7.23(c)(ii) is satisfied in respect of the possible breach of cl 22(c).
Mainteck submits that the terms of the second category of documents sought are too vague and wide and, additionally, lack any explicit temporal limitation. There is force in that submission, but category 2 can be redrawn to make it more specific.
There is no need for a specific order requiring discovery of documents in the fourth category, because if such documents are relevant, they will fall within the second category.
The prospective applicant has satisfied r 7.23 of the Rules and the Court’s discretion should be exercised in favour of ordering discovery of a limited class of documents. That class consists of documents evidencing steps taken by Mainteck to ensure that employees of the subcontractor who worked on the Grosvenor mine construction project received the same terms and conditions as if they were employed under the terms of the Agreement. The parties are agreed that the order should be limited to documents coming into existence between 1 March 2015 and 1 April 2016.
I will make orders accordingly.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah. Associate:
Dated: 23 March 2017
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