Construction, Forestry, Mining and Energy Union v Newlands Coal Pty Ltd

[1997] FCA 1110

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW - application by union for an interlocutory injunction to prevent an employer from dismissing or threatening to dismiss any employee wholly or partly because the employee is proposing to engage, or is engaging in “protected action” - whether contravention of s 170MU of the Workplace Relations Act 1996 (Cth) (‘the Act’) - serious question to be tried as to whether decision to terminate employment was partly in response to union’s proposal to engage in “protected action” - balance of convenience - preservation of ‘status quo’.

INDUSTRIAL LAW - application by union for an interlocutory injunction to restrain employer from threatening to dismiss employee, in order to coerce employee into signing an agreement under Division 2 or 3 of Part VIB of the Act - contravention of s 170NC seriously arguable - whether interlocutory injunction should be granted where intention to coerce employees into signing workplace agreement replaced by intention to dismiss employees.

Workplace Relations Act 1996 (Cth) ss 170MI, 170NC, 170MU and 170NG

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v NEWLANDS COAL PTY LTD
No QG 162 of 1997

SPENDER J
BRISBANE
17 OCTOBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 162  of   1997

BETWEEN:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION APPLICANT
AND:	NEWLANDS COAL PTY LTD ACN 010 082 578 RESPONDENT
JUDGE(S):		SPENDER J
DATE OF ORDER:		17 OCTOBER 1997
WHERE MADE:		BRISBANE

THE COURT ORDERS THAT:

Upon the usual undertaking as to damages being given by the applicant union by its counsel, pending the final determination of application QG162 of 1997 or earlier order, the respondent, by itself, its servants or agents, refrain from dismissing or threatening to dismiss any production and engineering employee who is as at today’s date a member of the Construction, Forestry, Mining and Energy Union, wholly or partly because the employee is proposing to engage or is engaging in protected action, other than in relation to the forty-two production and engineering positions the subject of notices of retrenchment on 19 September 1997.

THE COURT GRANTS liberty to apply on forty-eight hours’ notice.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 162 of 1997

BETWEEN:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION APPLICANT
AND:	NEWLANDS COAL PTY LTD ACN 010 082 578 RESPONDENT

JUDGE(S):	SPENDER J
DATE:	17 OCTOBER 1997
PLACE:	BRISBANE

REASONS FOR JUDGMENT

The court is presently concerned with an application by the Construction, Forestry, Mining and Energy Union (‘the CFMEU’), for an interlocutory injunction against the respondent, Newlands Coal Pty Ltd (‘Newlands’).  In an affidavit of Michael George Menzies, the General Manager, Operation Services - Mining for MIM Holdings, he says that Newlands is “part of the MIM group”.  He says:

The Newlands Collinsville Abbot Point Project (“NCA”) is a joint venture between Mount Isa Mines Limited (‘MIM’) and Itochu Coal Resources Australia Pty Ltd (‘Itochu’) which owns 25% of the equity in NCA but has provided the vast majority of funding for NCA.  Itochu’s role in control of management of NCA comes from a right to approve annual budgets otherwise MIM is responsible for the management of Newlands.

In the present application for interlocutory relief, the CFMEU relies on ss 170NC and 170MU of the Workplace Relations Act 1996 (‘the Act’). These provisions are found in Part VIB of the Act which deals with certified agreements. Section 170L of the Act provides that the object of Part VIB is to facilitate the making, and certifying by the Australian Industrial Relations Commission (‘the Commission’) of certain agreements, particularly at the level of a single business or part of a single business.

By way of preliminary comment, because of the exigencies of the industrial imperatives involved in these present proceedings, I do not have the luxury of time to give polished or elegant reasons for my conclusions.  However, against that, my reasons have to be seen against the background of the somewhat socratic dialogue between the court and Mr Crawshaw of counsel for the CFMEU, and Mr Martin and Mr Murdoch severally for Newlands.  Secondly, because this is an interlocutory application and because there is a limited opportunity in those circumstances for the testing of evidence, (and in any event the evidence is unlikely to be the same as it would be on a final hearing), any findings or expressions of conclusion in relation to my reasons in this interlocutory application ought not to be misunderstood.  It is not intended, nor can it be, that there is a determination of a final kind, in respect of any matter that might be an issue in the principal proceedings.

In relation to the interlocutory application, I proceed on the basis of the well known principles in Epitoma Pty Ltd v Australian Meat Industry Employees Union (1984) 3 FCR 55 where it was said that on an interlocutory application, the proper approach for the court is to consider whether there is a serious question to be tried and, if there is, where the balance of convenience lies. Those two questions are not necessarily unrelated.

The application in the present proceedings was filed on 13 October 1997. It is an application under Divisions 8 and 10 of Part VIB of the Act, together with s 412 of the Act and ss 20 and 21 of the Federal Court of Australia Act 1976 (Cth). The application, as framed, was focused on s 170NC of the Act. The reference to s 170MU of the Act came in the course of submissions on the first day of the interlocutory hearing.

The application as filed sought orders for a declaration that the respondent had contravened s 170NC, in that Newlands had threatened to take action, being the retrenchment of all production and engineering employees employed by the respondent, with intent to coerce the production and engineering employed by the respondent to agree to the making of an agreement under Division 2 or 3 of Part VIB of the Act. It also sought orders that penalties be imposed on Newlands pursuant to s 170NF of the Act. As a result of the contraventions of s 170NC it sought final injunctive relief, and by way of interlocutory relief the application sought an order that:

Pending the final determination of this Application or further order, the Respondent by itself, its servants or agents, refrain from contravening or directing to contravene section 170NC of the Act by threatening to retrench or retrenching production and engineering employees other than 40 production and engineering “positions” the subject of present notification of retrenchment.

The orders being sought, as formulated by counsel on behalf of the CFMEU in the course of submissions, are as follows:

One, pending the final determination of the application in QG162 of 1997 or further order, the respondent by itself, its servants or agents, refrain from contravening or continuing to contravene s 170NC of the Workplace Relations Act 1996 by threatening to retrench, giving notice of retrenchment to, or retrenching production and engineering employees employed by the respondent other than in relation to 42 production and engineering positions subject to notices of retrenchment on 19 September 1997.

Secondly, pending the final determination of the application in QG162 of 1997 or further order the respondent by itself, its servants or agents, refrain from contravening or continuing to contravene s 170MU of the Workplace Relations Act 1996 by threatening to retrench, giving notice of retrenchment to, or retrenching production and engineering employees employed by the respondent other than in relation to 42 production and engineering positions subject to notices of retrenchment of 19 September 1997.

Division 8 of Part VIB deals with certified agreements. Section 170MI(1) deals with ‘INITIATION OF BARGAINING PERIOD’. It provides:

170MI(1)  If:

(a)an employer; or

(b)an organisation of employees; or

(c)an employee acting on his or her own behalf and on behalf of other employees;

wants to negotiate an agreement under Division 2 or 3 in relation to employees who re employed in a single business or a part of a single business, the employer, organisation or employee (the initiating party) may initiate a period (the bargaining period) for negotiating the proposed agreement.

Note: This subsection has effect subject to subsections 170MW(10) and 170MZ(7).

Section 170MI(2) says:

The bargaining period is initiated by the initiating party giving written notice to each other negotiating party (see subsection (3)) and to the Commission stating that the initiating party intends to try:

(a)to make an agreement with the other negotiating parties under Division 2 or 3; and

(b)to have any agreement so made certified under Division 4.

Section 170MI(3) provides:

In this Division, each of the following is a negotiating party to a proposed agreement:

(a)the initiating party;

(b)if the initiating party is an employer who intends to try to make an agreement under section 170LJ or 170LL or Division 3 - the organisation or organisations who are proposed to be bound by the agreement;

(c)if the initiating party is an employer who intends to try to make an agreement under section 170LK - the employees at the time whose employment will be subject to the agreement;

(d)if the initiating party is an organisation of employees - the employer who is proposed to be bound by the agreement;

(e)if the initiating party is an employee acting on his or her own behalf and on behalf of other employees - the employer who is proposed to be bound by the agreement and the employees whose employment will be subject to the agreement.

It was suggested on behalf of Newlands that the applicant had failed to establish compliance with the requirements of s 170MI, in that there was no evidence to establish that there had been a communication with the Commission as required by s 170MI(2).

In the light of the whole of the evidence, in particular Exhibit RB7 to the affidavit of Mr Barker (the Vice-President of the CFMEU), the negotiations between the applicant and the respondent which are the subject of detailed evidence in both the evidence of Mr Menzies and, to a lesser extent, in relation to the affidavit evidence of Mr Rutherford, I am quite satisfied that this technical objection is without merit.

Section 170ML deals with “protected action” and provides:

170ML(1)  This section identifies certain action (protected action) to which the provisions in section 170MT (which confers certain legal immunity on protected action) are to apply.

170ML(2)  During the bargaining period:

(a)an organisation of employees that is a negotiating party; or

(b)a member of such an organisation who is employed by the employer; or

(c)an officer or employee of such an organisation acting in that capacity; or

(d)an employee who is a negotiating party;

is entitled, for the purpose of:

(e)supporting or advancing claims made in respect of the proposed agreement; or

(f)responding to a lockout by the employer of employees whose employment will be subject to the agreement;

to organise or engage in industrial action directly against the employer and, if the organisation, member, officer or employee does so, the organising of, or engaging in, that industrial action is protected action.

170ML(3)  Subject to subsection (6), during the bargaining period, the employer is entitled, for the purpose of:

(a)supporting or advancing claims made by the employer in respect of the proposed agreement; or

(b)responding to industrial action by any of the employees whose employment will be subject to the agreement;

to lock out from their employment all or any of the employees whose employment will be subject to the agreement and, if the employer does so, the lockout is protected action.

...

Section 170MO(2) provides, concerning the notice of action to be given in respect of protected action, as follows:

The requirements are that:

(a)if the action is in response to, and is taken after the start of, a lockout of employees by the employer in respect of the proposed agreement - the organisation, or the employee who is a negotiating party, has given the employer written notice of the intention to take the action; or

(b)in any other case - the organisation, or the employee who is a negotiating party, has given the employer at least 3 working days’ written notice of the intention to take the action.

The evidence in this case establishes - and I will more particularly refer to the documentation later - that the requirements of that subsection have been met.

Section 170MU, which is directly relevant in respect of the orders which I propose to make, is headed ‘EMPLOYER NOT TO DISMISS EMPLOYEE ETC FOR ENGAGING IN PROTECTED ACTION’ and provides:

(1)  An employer must not:

(a)dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee’s prejudice, or

(b)threaten to dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee’s prejudice;

wholly or partly because the employee is proposing to engage, is engaging, or has engaged, in protected action.

Section 170MU(3) provides:

In proceedings under section 170NF for an alleged contravention of subsection (1) of this section, it is to be presumed, unless the employer proves otherwise, that the alleged conduct of the employer was carried out wholly or partly because the employee was proposing to engage, was engaging, or had engaged, in protective action.

The question of onus referred to in that subsection is not of present relevance in these proceedings because, in my view, these are not proceedings under s 170NF for an alleged contravention of s 170MU, and the decision in the present case falls to be decided according to the ordinary onus that he who asserts has to establish.

Section 170MV deals with when a bargaining period ends.  It provides:

The bargaining period ends if any of the following events occurs:

(a)an agreement under Division 2 or 3 is made by the employer and any one or more of the other negotiating parties; or

(b)the initiating party tells the other negotiating party or each of the other negotiating parties in writing that the initiating party no longer wants to reach an agreement under Division 2 or 3 with that other party or those other parties; or

(c)the Commission terminates the bargaining period.

Having regard in particular to s 170MV(b), it seems to me that it is not competent for a person who is not the initiating party to terminate unilaterally the bargaining period.  I indicate that that issue is lurking so close to the surface of the present dispute as to be of concern.

Division 9 of Part VIB of the Act sets out s 170NC which was the section on which the CFMEU brought its application. It provides:

170NC(1)  A person must not:

(a)take or threaten to take any industrial action or other action; or

(b)refrain or threaten to refrain from taking any action;

with intent to coerce another person to agree, or not to agree, to:

(c)making, varying or terminating, or extending the nominal expiry date of, an agreement under Division 2 or 3; or

(d)approving any of the things mentioned in paragraph (c).

Note: The Court has certain remedial powers in relation to a contravention of this section: see Division 10.

Subsection (2) provides:

Subsection (1) does not apply to action, or industrial action, that is protected action (within the meaning of Division 8).

Division 10 of Part VIB deals with enforcement and remedies. By s 170ND(c) and (e), both ss 170MU and 170NC are “penalty provisions”. By s 170NE, the Federal Court of Australia is an “eligible court” for the purposes of Division 10.

Section 170NF(1) provides:

A contravention of a penalty provision is not an offence.  However, an eligible court may make an order imposing a penalty on a person who contravenes a penalty provision.

Subsection (2) provides:

The penalty cannot be more than $10,000 for a body corporate or $2,000 in other cases.

Subsection (3) provides:

An application for an order under subsection (1) that relates to a contravention of section 170MDA may be made by:

(a)the employees making the request mentioned in that section; or

(b)an organisation of employees of which any of the employees making that request is a member; or

(c)an inspector; or

(d)any other person prescribed by the regulations.

Section 170NF(5) has a relevance to the question of to whom, or on behalf of whom the injunction ought to be given and provides:

An application for an order under subsection (1) that relates to a contravention of section 170MU may be made by:

(a)the employee concerned; or

(b)an organisation of employees of which that employee is a member; or

(c)an inspector; or

(d)any other person prescribed by the regulations.

Section 170NF(7) provides:

An application for an order under subsection (1) that relates to a contravention of section 170NC may be made by:

(a)an employee whose employment is subject to the agreement concerned or will be subject to the proposed agreement concerned; or

(b)any other person bound by the agreement concerned or who will be bound by the proposed agreement concerned; or

(c)the person who allegedly was intended to be coerced; or

(d)an organisation of employees of which that person is a member; or

(e)an inspector; or

(f)any other person prescribed by the regulations.

Section 170NG provides:

An eligible court may grant an injunction requiring a person not to contravene, or to cease contravening, a penalty provision.

I indicated earlier that there was an important question for industrial relations concerning Part VIB of the Act, but that it was not necessary to answer that question in the present proceedings. That question is whether, during a negotiating period for a certified agreement an employer can say, “Because you do not agree to enter into an agreement in these terms, your employment is to be terminated”. That conduct, it seems to me, is not proscribed by s 170NC, nor is it conduct which is proscribed by s 170MU. It was submitted on behalf of the respondent that an employer is entitled unilaterally to terminate employment of an employee for the reason that the employer was not prepared to enter into a certified agreement in the terms proposed by the employer.

The consequences of such demands, and the legality of them, and whether any consequential termination is unlawful conduct are not matters that have to be considered by the court on this present application but, as I have said, they are close to the surface in the factual circumstances with which I am dealing.

On the evidence before me, the relevant facts are as follows.

There are 207 members of the CFMEU at the Newlands Open-Cut Lodge (‘the Lodge’).  The mine is situated at Glenden, 220 kilometres west of Mackay.  It is currently facing difficult economic circumstances because the open-cut is nearing the end of its life.

The respondent is of the view that the size of the workforce and management needs to be substantially reduced.  There is evidence to suggest that the mine, as presently configured, is losing money in considerable sums.  In an affidavit by Mr Menzies filed on 16 October 1997, he indicates that there were concerns between representatives of MIM Holdings and Itochu, who were concerned about the increasing strip ratios at the respondent’s mine and decreasing steaming coal prices.

There was an operations review conducted, which identified that a change in the mine configuration was necessary, which included ceasing pre-strip operations and moving to a deep drill and blast and post-strip operation, utilising new haulage equipment with new haulage procedures.  Mr Menzies indicates that at the end of July 1997, there were discussions between the Managing Director of MIM Holdings and the Managing Director of Thiess Contractors Pty Limited (‘Thiess’), concerning whether the best economic outcome for Newlands was to contract out all of its operations to Thiess.  Mr Menzies says:

While we accepted the economic argument put by Thiess, we still had a desire to attempt to look after, by keeping in employment, as many of our own people as we could.  We believed that in spite of the economic argument we at least owed them one more opportunity.  At the same time, we were under pressure from Itochu over our failure to provide a firm budget.  The difficulty for us in providing a budget was that the issues surrounding the re-configuration of Newlands and what equipment, manpower and new capital was required, had not yet been settled.

Mr Barker, in an affidavit filed on 13 October 1997, in support of the application filed on that day, says that:

The principal employment at [the respondent’s] operations is in the open cut with...some 330 employees.  The underground mine is still in the establishment phase of creating a long-wall.  Presently it employs some 50 persons.

It is apparent from the evidence before me that Glenden is essentially a community whose predominant focus is on the Newlands mine.  There is subsidised housing for its employees, and about half of the workforce live in single-person quarters.  There are uncertainties affecting the workforce (as, no doubt, it is affecting other people,) about the long-term future of the mine.

On 26 February 1997, an application was filed to remove clause 24, “reduction of hands”, from the Local Mining Industry (Production and Engineering) Interim Consent Award 1990 (‘the Interim Award’).  That application was referred to conciliation by the Commission.  On 14 April 1997, a recommendation was made by Commissioner Harrison in relation to that reference, which recommendation is annexed to Mr Barker’s affidavit.

The parties were not able to achieve consensus.  A number of draft versions of the certified agreement were made.  Throughout July, August and September 1997, numerous meetings were held for the purpose of achieving agreement on a certified agreement.  It was always an express intention of the parties to the proposed agreement that it would be registered with the Commission.

According to Mr Barker, certain clauses (cl 37, reduction of hands, and cl 8, flexibilities), have already been specifically endorsed by an executive of the District and Lodge members in advance of the primary agreement.  Mr Barker says that this was done because Newlands saw these clauses as fundamental.  On 4 August 1997, Mr Menzies said at a meeting of Newlands representatives and the Single Bargaining Unit unions that:

If the agreement is not in place by 31 August 1997, Newlands will contract out the whole of its operations.

Had this statement been carried into effect, the effect would be that independent contractors would operate the mining operations of Newlands.  This would affect the production and engineering employees including those employees, members of the applicant union, as well as the management of the mine.  The intimation of Mr Menzies of 4 August 1997 was not carried out.

An interim enterprise agreement which is the Draft 7 Certified Agreement (‘the Agreement’) in evidence before me, was registered with the Commission and the final draft of the agreement is dated 6 September 1997. Both parties proposed that this Agreement would replace the Interim Award. By cl 4 it operates to the exclusion of all other awards. According to Mr Barker, the only outstanding issue between the parties relates to bonuses. He says in his affidavit that until this issue is resolved, the agreement cannot be made available to the members in compliance with the Act.

This assertion has been the subject of vigorous disputation.  It is an important matter to identify, in the general context of the dispute, what truly are the differences between the parties and whether, in fact, the employer has been carrying out negotiations, as a front, having a different agenda completely.

On 17 September, 1997, notices were issued by Newlands to each of its production and engineering employees as to whether they would be retained or retrenched.  Ninety members of the CFMEU were to be retrenched, of whom a number was prepared to go voluntarily.  As I understand it, approximately forty-two forced retrenchments are the subject of challenge.  It was contended for the CFMEU that cl 37 had not been complied with.  Mr Barker in his affidavit at paragraph 79 says:

On Wednesday 2 October, 1997 we issued a dispute notification in relation to Newlands as it was apparent to us that all the matters would not be completed by the end of the notice period and further time was required to complete the processes based on the proposition that had been put to Mr Ryan.

This is a reference to Mr Mike Ryan who had recently accepted a position of some importance in relation to the Newlands mine.

On 9 October 1997, according to Mr Barker, Newlands unilaterally cancelled the hearing of any further challenges.  According to him, they did not advise why this was done, but indicated orally to the SBU delegates that they would find out what they were doing the next day.

This brings me to the first of two letters which are central to these proceedings.  The first, which appears as RB4 to the affidavit of Mr Barker, is a letter addressed to him from Newlands Coal Pty Ltd dated 10 October 1997.  It is, I think important to set out a substantial part of this letter.

The letter commences:

In January of this year the CFMEU, other unions and the Newlands Open Cut workforce were made aware of the difficult economic circumstances confronting our open cut operations, and the reasons for that.  Essentially the open cut is nearing the end of its life and is confronted with both rapidly escalating strip ratios, and declining prices for steaming coal.  For the operation to survive at all it was evident to all that a major revamp of the operation was required.

All were advised that to survive, the operation would require the type of improvement that had occurred at Collinsville as a result of contracting the operation out.  That is, we would require a dramatic improvement in productivity and would need to achieve output per person employed of in excess of 15,000 clean coal tonnes per year - an increase of 50% or more.

Later, in the third paragraph, the letter said:

Given the short remaining life of the open cut, the recapitalisation requirement made extensive use of contractors on its face appear attractive.

The letter continued:

You were also advised that we recognised the obligation to retain in employment as many of our best employees as we could, and we would prefer to obtain the cultural and industrial changes that had been achieved t Collinsville while retaining our own workforce.
[My emphasis]

Later, at page 3.8, the letter said:

By the end of the first week in August, almost no progress on key issues had been achieved.

At that point the SBU and their State Officials were advised that the uncertainty over the future of the operation and employment could not be allowed to continue, and unless a new EBA in terms that would allow us to operate successfully was concluded by 31 August [1997], the company would contract out all remaining open cut operations.

Later, at page 4.6:

By the 31st August, although the original timetable had not been adhered to strictly, in that the workforce had not been copied in on the new agreement, nor had they voted, all outstanding issues, with the sole exception of remuneration had been negotiated and agreed.

We were advised that apart from the money we had agreement in principle.

In the first week of September, Mike Ryan’s first week on site, he was advised by the SBU that in spite of agreement having already been achieved, that the replacement clause for Clause 24 was unacceptable.  This was the apparent result of a visit to Glenden of job delegates from Curragh and Hunter Valley No 1.

The union at State level was again advised by the Company that this matter was critical and any reneging on it would be regarded by us a “show stopper”.  Subsequently the final draft of the new Agreement and monetary offers were provided to you, with the only non-agreed matter at that stage being the final offer on money.

At page 5.6 the letter said:

As you are aware, retrenchment notices were issued on 17 September to take effect on 17th October.  We now have a request from you to extend that for two weeks in the case of disputed selections.

In spite of numerous undertakings of co-operation and commitment to a new way of operating, this has without exception proven to be a one way street.

Mike Ryan has received no visible signs of the sort of support and culture change necessary to encourage the Company to recapitalise open cut operations.  In fact the reverse has occurred.  With each attempt at compromise on the Company’s part, have come more demands.

At page 6.5 the letter summarised:

In summary we have the view that on a number of occasions the unions have reneged on commitments and agreements made during this process.  When we were convinced that total contract was the best outcome for the operation, it was Mike Ryan who convinced us that we should take on more of the mining work in order to retain as many of our own people as possible.  Mike went out on a limb for the employees of Newlands and the thanks he gets for this is a complete lack of support from the union representatives.

Then, in a passage which is crucial to the present proceedings, the letter said:

We note your letter of 8th October seeking a state level conference in Emerald, and are prepared to meet you in Brisbane, on Monday.  Before you commit to that meeting you will no doubt wish to consider the following matters of which we now provide you with formal notice:

(1)  No extensions to the retrenchment timetable for employees already notified will be agreed to.  You have at all times been aware that the appeals process is to be completed within the month’s notice period, and 9 months have already been spent in attempting to reach a resolution.

(2)  With the sole exception of the operation and maintenance of the Coal Prep Plant, all other functions undertaken by Newlands production and engineering employees in open cut operations will be contracted out.

(3)  Employees not yet notified of retrenchment will be provided with retrenchment notices which will provide sufficient time for interviews to be conducted by Thiess to evaluate those wishing to take employment with Thiess to have the opportunity to do so.  Similar interview opportunities will be provided to employees who have already received notification.  The period of notice will also be designed to enable an orderly hand over.

(4)  The only circumstances in which the decision to contract all operations out will be reviewed is if by not later than 4.00 pm Monday 13 October 1997, the following conditions have been met.

AThe proposed EBA, including all its provisions on future terms and conditions of employment at Newlands (including reinsertion of “commitment to the Company” as the basis on which length and quality of service is considered in future retrenchments) is accepted by a majority of employees in a mass meeting convened before that time, and such acceptance is communicated to the Company in writing.

BThat selection of employees for retention and retrenchment as it stands at completion of appeals to the General Manager and final discussion with state officials before the end of next week be accepted as final and binding with no further disputation.

CThat tangible evidence of a preparedness to operate and work cooperatively be provided to the Company.

The letter is signed by Mr V P Gauci, Executive General Manager Mining, and Mr T M Ryan, General Manager NCA Project.  The NCA is a reference to the joint venture project of Newlands, Collinsville and Abbot Point.

In a letter dated 10 October 1997 Newlands wrote to Mr Barker again and said:

Consequent upon your request that we extend the deadline for response to our letter of earlier today of 4.00 pm Monday 13 October 1997 to 4.00 pm Tuesday 14 October 1997 and the time and place for a State Level Conference from Monday in Brisbane to Tuesday at Newlands, we hereby agree to that extension on the basis that the Monday deadline is insufficient time to enable you to either get to Newlands or convene a union meeting.

During cross-examination, the reference in the letter dated 10 October 1997 to Mr Barker that:

The only circumstances in which the decision to contract all operations out will be reviewed...

was said by Mr Menzies not to indicate that if the three conditions were met the decision contracting out of all operations would be revoked.  He says it meant that the extent of contracting out would be less extensive than it otherwise would be in the absence of compliance with those conditions.  He suggested that “review” was not the same as “revocation”.

In an affidavit of 16 October 1997, Mr Menzies said at paragraph 63:

Attached to this affidavit and marked “MGM2” is a copy of the notification
of the CFMEU’s intent to take industrial action.  On the face of the document it is apparent that it was not faxed to Newlands until 16.53 on 10 October 1997.  It was faxed to my office at 17.20.  As I had by then gone home, it was sent to my home by courier with other documents on Friday evening.  I took no particular notice of the notification, seeing it is a matter of normal form for the CFMEU having received two such notifications in previous disputes at Oaky Creek early in the year, neither of which resulted in any direct industrial action being taken.  The notice of intended industrial action was received well after discussion between Mike Ryan and Murray Fox, myself and Murray Fox, and well after a decision had been made to terminate the employment of the vast majority of remaining employees.

In paragraph 72 of his affidavit he said:

At about 7.45 pm on 13 October I then received a copy of a letter from Nall Payne Solicitors in which it became apparent that an attempt was to be made to have the matter not only mentioned, but bought (sic) on for hearing the following day Tuesday, 14 October.  At approximately 7.20 Mr Mike Ryan who was with me [at] the Country Motor Inn received a phone call from Ray Barker.  Ray asked Mr Ryan whether or not I had arrived yet.  Ray then advised Mike that the Union was bringing proceedings in the Federal Court, he would not be attending Newlands for the conference the following day but that officials from the AMWU would attend the mine site.  I believe that Mr Barker by his failure to notify me that he was not going to Newlands on Monday and failing to notify us until 7.20 pm of the fact that he would not attend the conference was deliberate and designed to disadvantage the company in responding to the unions (sic) application.

Then, at paragraph 82, Mr Menzies says:

In no way have any of the decisions that have been made in relation to the contracting out of operations, or termination of employment of individuals been motivated affected or influenced by any threat or proposal by any union to engage in protected industrial action.  In this case notification, by the CFMEU of the intent to commence industrial action was received well after our decision to contract out had been made and conveyed to the CFMEU at midday Friday 10 October.  At the time of advising the workforce of all of these decisions, no notification of an intention to take industrial action had been received from either the CEPU or AMWU.

I have specifically referred to those provisions and those contentions by Mr Menzies because they are directed to establishing that the communication concerning employment to employees about contracting out is in no way because the employee or employees generally were proposing to engage, or engaging, or had engaged in “protected action”.

If those statements are correct, then of course, a serious question does not arise to be tried in connection with s 170MU. However, having regard to the letter of Mr Menzies of 14 October 1997, it seems to me that there is a serious question to be tried as to whether the decisions to contract out and to terminate employment of certain employees are at least partly attributable to the CFMEU’s proposal to engage in “protected action”.

I come to that conclusion because in an affidavit filed on 14 October 1997, Mr Menzies says:

Following a detailed consideration of all the circumstances prevailing at the Newlands Coal Mine, a decision has been made to carry out all operations on site (including mining and operation of the coal preparation plant) by the use of contractors.  This is a decision which has been made following a consideration of the future of Newlands and discussions with Thiess, a contractor who has expressed interest in performing work at Newlands for many months.

As a result of this decision, Newlands does not need nor does it require a certified agreement to be entered into with the CFMEU or any other union in respect to Newlands.

It seems to me that this communication is the first communication which is directed at or indicates a termination of the ‘bargaining period’ for a certified agreement.  It seems to me that such termination is not within s 170MV(b).

There may also be other questions concerning the powers of the Commission in relation to conduct without notice to the other parties during a negotiating period concerning a cessation of negotiation by one of the respondent parties.

In any event, a letter of 14 October 1997 seems to me to permit the conclusion, which I make, that part of the threat concerning employment was as a response to the intention to commence industrial action against Newlands.

Late yesterday afternoon, your solicitors Nall Payne approached the solicitors for Newlands Coal Pty Ltd, Blake Dawson Waldron, to ask if they would accept service of an application proposed to be filed in the Federal Court by your organisation.  It was indicated in making that request that the application sought to restrain Newlands from retrenching its workforce and that the Court would be requested to list the application for mention today 14 October 1997.  I gave instructions at approximately 5.40 pm to Blake Dawson Waldron to accept service on that basis.

At about 7.44 pm last night I received a copy of a letter from Nall Payne to the Deputy Registrar of the Federal Court requesting an urgent interlocutory hearing of the proposed application.

The application alleges that Newlands has acted contrary to section 170NC of the Workplace Relations Act. On behalf of Newlands I emphatically deny any such breach.

I, as you know, made arrangements to travel to Mackay and on to Glenden on 13 October 1997 in order to meet you in Glenden, assuming that there was a good purpose in doing so having regard to the extension of time for a meeting requested by you and agreed by Newlands.  Without informing me, it appears that you changed your own arrangements and proceeded to instruct Nall Payne to initiate the above proceedings against Newlands instead.

I note also that your organisation has now notified the AIRC of the intention to commence industrial action against Newlands and has requested Commissioner Harrison to re-list the matter CNO:21758 of 1997 for a further conciliation conference.

I wish also to record that I take issue with many of the assertions or implications made in your affidavit in support of the application to the Federal Court.

Newlands has been forced to decide what course to adopt having regard to he foregoing and from the conduct of your organisation as a whole and the letter from Nall Payne to the Federal Court.  It is abundantly clear there is no realistic prospect of the culture change necessary to make Newlands successful occurring regardless of whether or not we have a new EBA.

In the circumstances, Newlands has decided that the course it will adopt is as follows:

1.Newlands will contract out the whole of its open cut and surface operations including the Coal Preparation Plant.

2.Newlands will comply with its award and contractual obligations relating to its intended course of action and will accordingly notify all affected employees of their retrenchment.

3.Newlands no longer wants to enter into and will not enter into an enterprise agreement, for certification under the Act, concerning its open cut, surface and Coal Preparation Plant operations.

4.Newlands hereby withdraws its offer to review the contracting out of its operations and the conditions for that review which were set out in our letter to you of 10 October 1997.

You are hereby formally notified of the intentions and matters set out in this letter.

The Company will inform the Federal Court of the matters set out in this letter and will tender a copy of this letter to the Court.

It seems to me, making findings no wider than is necessary for present purposes, that it is at least seriously arguable that the letter of 10 October 1997 constituted a contravention of s 170NC of the Act. However, in the light of the communication by Mr Menzies that Newlands now disavows any intention of entering into, or desiring any certified agreement, it seems to me that there is no point and no basis on which the court should make an order of an injunctive kind relating to a contravention of s 170NC.

The reason for that is that it is not now able to be said that the threat of retrenchment or the indication of retrenchment is “in order to coerce another person to agree to making an agreement under Division 2 or 3”. That is to say that, on the material before me, it seems to me at least seriously arguable that Newlands has contravened s 170NC. There is no continuing intention to coerce another person to agree to make a certified agreement, and in those circumstances an interlocutory injunction ought not be made.

However, so far as s 170MU is concerned, it seems to me to be plain, on the material, including the two letters, (that of 10 October 1997 and that of 14 October 1997), that it is at least arguable that the respondent, Newlands, is threatening to dismiss employees partly because those employees are proposing to engage or are engaging in protected action. I say this because of Mr Menzies’ own words. It is, it seems to me, arguable that when he says, “for the foregoing”, Newlands proposes to adopt a certain course, “the foregoing” encompasses his noting that the CFMEU had indicated to the Commission its intention to engage in industrial action, as referred to in the letter and the notification of which is exhibited to Mr Menzies’ other affidavit.

So far as the balance of convenience is concerned, it was urged on behalf of the respondent that an injunction ought not be granted.  It was said in part that the mine was continuing to make serious losses, that there was a continuing inability on behalf of Newlands to prepare a budget to satisfy its joint venture partner in the NCA project and it was further submitted that there were interests of third parties to be considered, (in particular, the interest of Thiess, the proposed contractor).

I have had regard to those considerations but it seems to me there can be no justification for resisting an interlocutory injunction restraining a proposed or an arguable contravention that third parties may be affected where the third parties are intimately a part of the arguable contravention. This is not as if there are long standing, continuing arrangements with third parties who are at arm’s length. The negotiations concerning contracting out are part and parcel of the conduct which, it is argued on the CFMEU’s behalf, constitutes the contravention of s 170MU.

Further, to the suggestion that damages for unlawful dismissal might be an adequate remedy, it seems to me that that misunderstands the nature of an interlocutory application.  Essentially the idea of an interlocutory application is to maintain as best as possible the status quo if there are serious questions to be tried and it is, on balance, the more convenient course to maintain that position until a final determination of the principal proceedings.

I am far from sanguine that the parties here can approach a serious industrial question in a way which will ultimately be to their mutual benefit.  There is a suggestion in Mr Barker’s material that there is but a small area of disputation left to be resolved.  That sits awkwardly with the tenor of the affidavit material filed on behalf of the respondent, but whether or not there might yet be some sensible resolution of this serious problem is not for me to determine.

For the reasons which I have expressed, I propose to make an order of an interlocutory kind.  I accept the undertaking as to damages offered on behalf of the applicant, the CFMEU.

The orders that I make are these:

Upon the usual undertaking as to damages being given by the applicant union by its counsel, pending the final determination of application QG162 of 1997 or earlier order, the respondent, by itself, its servants or agents, refrain from dismissing or threatening to dismiss any production and engineering employee who is as at today’s date a member of the Construction, Forestry, Mining and Energy Union, wholly or partly because the employee is proposing to engage or is engaging in protected action, other than in relation to the forty-two production and engineering positions the subject of notices of retrenchment on 19 September 1997.  The court grants liberty to apply on forty-eight hours’ notice.

I certify that this and the preceding eighteen (18) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender

Associate:  17 October 1997

Counsel for the Applicant:	Mr S Crawshaw
Solicitor for the Applicant:	Nall Payne
Counsel for the Respondent:	Mr G C Martin on 14 October 1997 and Mr J E Murdoch on 16 October 1997
Solicitor for the Respondent:	Blake Dawson Waldron
Date of Hearing:	14 and 16 October 1997
Date of Judgment:	17 October 1997