Greyhound Australia Pty Ltd v Transport Workers' Union of Australia

[2015] FWC 1685

[2015] FWC 1685

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.418—Industrial action

Greyhound Australia Pty Ltd
v
Transport Workers’ Union of Australia
(C2014/6921)

COMMISSIONER WILLIAMS PERTH, 13 MARCH 2015

Application for costs.

[1] This decision concerns an application for costs made under section 611 of the Fair Work Act 2009 (the Act). The applicant is Greyhound Australia Pty Ltd (Greyhound or the applicant) and the respondent is the Transport Workers’ Union of Australia (the TWU).

Background

[2] Greyhound and its employees (some of whom are represented by the TWU) are currently engaged in enterprise bargaining negotiations in relation to Greyhound’s workforce on Chevron’s Wheatstone Project (Wheatstone) in northern Western Australia.

[3] Greyhound’s work at Wheatstone is for the daily bus transportation of the several thousand construction workers on that site.

[4] On 21 October 2014, the TWU provided a notice of intention to take industrial action to Greyhound in the form of a ‘one hour stop work meeting’ commencing at 5.00 a.m. on Saturday, 25 September 2014 (Notice).

[5] Greyhound (through its representatives) responded to the Notice in writing later on 21 October 2014 to the TWU arguing that the proposed industrial action:

(a) would be taken more than 60 days following the date of the declaration of the results of the protected action ballot order (being 26 August 2014); and

(b) would therefore be unprotected and unlawful on the basis that it would be contrary to section 459(1)(d) of the Act.

[6] In that letter, Greyhound requested that the TWU, by 3.00 p.m. on 22 October 2014:

(a) withdraw the Notice; and

(b) provide written undertakings to Greyhound that it and its representatives would not organise industrial action in reliance on the Notice, or any other unprotected industrial action.

[7] Greyhound put the TWU on notice that if it did not do so, Greyhound would lodge a section 418 application without further notice and would seek its costs in doing so.

[8] This letter was sent by email to Mr Tim Dawson, Mr Mick Connolly and Mr Paul Aslan all from the TWU at 4.44 p.m. on 21 October 2014.

[9] The TWU did not withdraw the Notice or provide the requested undertakings by 3.00 p.m. on 22 October 2014 and accordingly, a section 418 application was prepared and filed that day.

[10] A hearing of the section 418 application was listed by the Commission for 2.00 p.m. on 23 October 2014.

[11] At 8.27 a.m. on 23 October 2014, Greyhounds representatives Herbert Smith Freehills received a letter by email from the TWU which withdrew the Notice and provided the requested undertakings.

[12] The reason the TWU gave for not complying with the 3.00 p.m. deadline the previous day was that “Mr Dawson has been attending to other matters and he is now been [sic] in a position to respond to the matters raised in your above letter”.

[13] Shortly afterwards at 8.36 a.m., the TWU sent an email to the Commission confirming the withdrawal of the Notice and requesting that the 2.00 p.m. hearing be vacated.

The applicant’s submissions

[14] The TWU is aware that Greyhound is required to protect itself from industrial action taken by its workforce and ensure that there is no disruption to its services. Failure to do so would almost certainly result in significant loss and damage not only to Greyhound but would also have significant flow on effects to other employers on Wheatstone given that their employees would not be able to get to and from the work site.

[15] Greyhound submits that the TWU’s actions in failing to withdraw the Notice and provide the undertakings in the timeframe requested was unreasonable because the TWU was aware that:

(a) any action taken pursuant to the Notice would be unlawful and unprotected;

(b) if the TWU took action pursuant to the Notice Greyhound would be forced to make the section 418 application to prevent unprotected and unlawful industrial action (and its resultant loss and damage) from occurring.

[16] The deadline imposed by the applicant was not arbitrary. It was designed to ensure that:

(a) the applicant had adequate time to file and serve the application and ensure that it had the required personnel at any hearing;

(b) the Commission had adequate time to schedule a hearing; and

(c) the applicant then had adequate time to notify the relevant employees of the outcome of the hearing and, in the event industrial action proceeded, put in place contingency plans to ensure no disruption to services on Wheatstone.

[17] It is not appropriate to leave section 418 applications to the last minute and then pressure the Commission to list at very short notice especially where an intention to take industrial action which is not protected is known. Commission members are and have matters listed in advance.

[18] The deadline set by the applicant was appropriate and sensible given the need to obtain an order in sufficient time to prevent industrial action which might well have had a devastating impact on a major project.

[19] These are circumstances where the Commission should exercise its discretion to order that the TWU pay Greyhound’s costs of making the section 418 application.

[20] The costs that are sought are the reasonable costs in preparing the section 418 application and the time spent by the applicant’s legal practitioner in preparing ancillary documents being correspondence to the Commission requesting an urgent hearing, preparation of draft orders and the preparation of an application for substituted service and supporting documents.

The Commission’s power to order costs

[21] Generally, the Commission is a ‘no costs’ jurisdiction where each party must bear their own costs in relation to a matter. However, section 611(2) of the Act outlines the circumstances where the Commission has the power to order a person to bear some or all of the costs of another person in a proceeding. These are where the Commission is satisfied that:

(a) the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.

[22] The current situation does not, at first blush, appear to fall within the above scenarios as the costs incurred by Greyhound were not a result of the TWU making an application or responding to one. However, the relevant ‘response’ by the TWU in this situation was their action in not responding to Greyhound’s request by the deadline in circumstances where they were informed that if they did not withdraw the Notice and provide the requested undertaking, the section 418 application would be filed.

[23] Greyhound submits that the TWU’s actions in the face of a clear and specific threat of an action under section 418 of the Act was a deliberate and unreasonable attempt to use illegitimate and unconscionable means to apply pressure to the applicant to make concessions in the negotiations for a new enterprise agreement.

Prior history

[24] This is not the first time that the TWU has sought to exercise unfair pressure on Greyhound by the provision of a defective notice of intention to take industrial action. On 18 October 2014, the TWU provided a defective notice of intended industrial action scheduled for 22 October 2014. Greyhound (through Herbert Smith Freehills) responded to this notice to highlight the deficiencies.

[25] Accordingly, the letter of 21 October 2014 is not the first time Greyhound has brought a failure to comply with the technical requirements of the Act to the TWU’s attention.

[26] Additionally, in its request for the TWU to withdraw that first notice and provide similar undertakings as outlined above, Greyhound again put the TWU on notice that if it did not do so it would lodge a section 418 application and pursue its costs in doing so.

[27] In this context, the TWU’s motivation in not withdrawing the second Notice by the deadline could not be more transparent. Greyhound provided the TWU sufficient time to action the requests; almost 24 hours. The request was also sent to three officials of the TWU so as to ensure that it could be actioned in the time required. In such circumstances, Greyhound submits that any excuse that Mr Dawson was attending to other matters is wholly insufficient. Others received the letter (and no explanation of their inaction is proffered), and Mr Dawson could have forwarded it to a colleague to action.

[28] Given the above, there is also no basis for the TWU to argue that it was not abundantly clear that, if the TWU did not withdraw the Notice by the deadline, the section 418 application would be filed.

[29] The only reasonable characterisation of the TWU’s course of conduct is that it attempted to ‘game the system’ by circumventing the scheme set out in Part 3-3 of the Act. Their failure to respond by the deadline was calculated so as to put Greyhound to the expense of mitigating the effects of the threatened unprotected industrial action (such as hiring additional labour, lodging the section 418 application etc) while retaining their ability to withdraw the Notice at the last minute so as to ensure that their members did not incur sanctions involved in actually taking unprotected industrial action.

[30] This conduct should be condemned for what it is; a cynical and unlawful tactic which seeks to circumvent the scheme established by Part 3-3 of the Act.

[31] Accordingly, the Commission should exercise its discretion to award the applicant its costs of bringing the section 418 application in order to send a clear and unambiguous message to the TWU, and all other employee organisations, that this type of behaviour has a consequence. In this case, the TWU has sought to gain an unfair advantage, and this should not be rewarded.

[32] The integrity of the system requires all of the stakeholders to play by the rules. Such conduct goes against the scheme of the Act and has the capacity to damage the stakeholders’ and public’s confidence in the system of protected industrial action which Part 3-3 of the Act provides for.

The TWU’s submission

[33] The Commission is a ‘no costs’ jurisdiction.

[34] The circumstances in which the Commission can award costs are set out in section 611 of the Act. That section requires that before it can make an order for costs, the Commission must be satisfied that:

(a) the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or that

(b) it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success.

[35] As the applicant acknowledges on the face of it this matter does not fall into the situations envisaged by section 611(2) of the Act. Consequently the applicant now seeks to extend the operation of section 611(2) of the Act beyond the plain meaning of the words of that section.

[36] Provisions such as section 611(2) of the Act should be construed narrowly, and it is not appropriate for the Commission to extend the operation of that section in the manner that the applicant is seeking.

[37] This is not a case where the TWU’s response to the applicant’s application has been either “vexatious or without reasonable cause”. The TWU gave the applicant the undertakings that it sought, and this meant that the applicant did not have to attend a hearing in relation to the section 418 application. It is submitted sub-section (b) of section 611(2) of the Act is not relevant.

[38] The TWU had previously responded positively when the applicant had pointed out to the TWU that a prior notice of intended protected industrial action was defective and in that instance the TWU withdrew the defective notice. The applicant was therefore aware that the TWU was prepared to properly consider such matters when they were brought to the TWU’s attention.

[39] The TWU had its own process to go through in relation to responding to the applicant’s letter dated 21 October 2014. As well, the Branch Secretary, Mr Tim Dawson, had other matters that he to attend to. The TWU responded to the applicant’s letter at around 8.30 a.m. on Thursday, 23 October 2014, which was, effectively, two working hours after the deadline imposed by the applicant for a response. This was a deadline that was arbitrary, as after the expiration of that deadline there were still two full business days before the day of the intended industrial action.

[40] It is submitted if the matter was that urgent, then, before the applicant filed the section 418 application in the Commission, its lawyers could have called WA Branch Secretary of the TWU, Mr Tim Dawson, or the Assistant Secretary, Mr Paul Aslan, to see if the TWU still intended to go ahead with the industrial action. However, they did not do this.

[41] There is no basis for the applicant’s assertion that there was something sinister in the TWU not withdrawing the Notice because of the fact that it had previously been advised by the applicant’s lawyers that an earlier notice of proposed industrial action was defective. Rather, as the TWU acted on that information and withdrew that Notice, that showed that the TWU does take such matters seriously.

[42] The TWU submits there is no evidence that by taking two business hours longer than the arbitrary deadline set by the applicant to respond to the applicant’s letter dated 21 October 2014, the TWU was trying to circumvent the scheme set out in part 3-3 of the Act, that the TWU was trying to “game the system”,that the TWU deliberately put the applicant to the expense of making the section 418 application, or that the TWU was engaging in some “cynical and unlawful tactic”,as suggested in the applicant’s submissions.

[43] This rather is a case of the applicant trying to intimidate the TWU, and also its own employees, by making this spurious costs application.

[44] The Commission should refuse the applicant’s application for costs as:

(a) Even on the applicant’s submissions, there is some doubt as to whether this case fails within the ambit section 611(2) of the Act.

(b) There was no need for the applicant to make the section 418 application when it did; it could have waited until the following morning to do so.

(c) If the applicant did consider that the matter was as urgent as it suggests that it was, then the applicant’s representatives could have attempted to ascertain the TWU’s position regarding the intended industrial action by telephone before making the application, however, they failed to do so.

(d) There is no evidence that the slight delay by the TWU in meeting the applicant’s self-imposed deadline was deliberately calculated to cause the applicant to incur legal costs.

[45] The TWU submits, in the circumstances, the Commission should not depart from the usual rule in this jurisdiction, which is that each party should bear their own costs, and it should dismiss the applicant’s spurious application for costs.

Consideration

[46] The relevant factual background to this costs application is not in dispute and is set out above.

[47] The relevant section of the Act, section 611, is set out below.

“611 Costs

(1) A person must bear the person’s own costs in relation to a matter before the FWC.

(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:

(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.

Note: The FWC can also order costs under sections 376, 400A, 401 and 780.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4 1).”

[48] As recognised by the note immediately following section 611 (2) of the Act there are a number of other provisions in the Act that provide the power for the Commission to order costs.

[49] Section 376 of the Act concerns the actions of representatives who are lawyers or paid agents in general protection contravention applications. Section 400A of the Act concerns unreasonable acts or omissions by parties to unfair dismissal remedy applications and section 401 of the Act concerns the actions of representatives who are lawyers or paid agents in such applications. Section 780 of the Act concerns the actions of representatives who are lawyers or paid agents in unlawful termination applications under section 773 of the Act.

[50] None of these additional provisions that empower the Commission to issue an order for costs apply to registered organisations such as the TWU.

[51] Returning to section 611 of the Act, the circumstances here are not that Greyhound is complaining about an application the TWU has made to the Commission nor about the TWU’s response to an application that Greyhound has made to the Commission. These are the only circumstances to which section 611 is directed.

[52] Rather the complaint in this instance is of a delay by the TWU in responding positively to Greyhound’s correspondence, which delay Greyhound argues necessitated Greyhound making an application to the Commission. It is clear in my view that section 611 of the Act is not applicable to this situation.

[53] It is clear from the above that there are limited circumstances in which the Commission is empowered to order costs against registered organisations.

[54] Certainly one can be sympathetic to the situation Greyhound found itself in on this occasion. Had the TWU not provided a Notice that was deficient in terms of section 459 of the Act, the threat of disruption to Greyhound and Wheatstone would not have arisen at all. Further had the TWU responded more promptly as requested by Greyhound there would have been no need for Greyhound to make the section 418 application to the Commission. Greyhound has good reason to be aggrieved by the fact that these multiple failings of the TWU have caused it to unnecessarily incur costs.

[55] The TWU is a registered organisation under the Fair Work (Registered Organisations) Act 2009. As a registered organisation the TWU enjoys a range of positive benefits under the Act. It is entirely reasonable to expect that unions will be fully conversant with and adhere to the requirements of the Act. Notwithstanding this the cost provisions in only the limited circumstances of section 611 hold registered organisations accountable for action they take whether deliberately, or through inefficiency or carelessness that unnecessarily cause costs to be incurred by others. It is difficult to reconcile the fact that other groups, employees, employers, lawyers and paid agents are more exposed under the Act to cost orders being made against them than are unions. This seems particularly anomalous for individual employees and employers who cannot reasonably be expected to understand all the complexities of the legislation. That however is the legislation as it stands.

[56] The scope of section 611 of the Act does not cover the reasons Greyhound unnecessarily incurred costs on this occasion and so this application for cost against the TWU will be dismissed. An order to that effect will be issued in conjunction with this decision.

COMMISSIONER

Final written submissions:

Applicant, 23 October 2014 and 4 November 2014

Respondent, 3 November 2014

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