Hawker de Havilland Aerospace Pty Ltd (ACN 103 165 466) v; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
[2005] FCA 804
•17 JUNE 2005
FEDERAL COURT OF AUSTRALIA
Hawker de Havilland Aerospace Pty Ltd (ACN 103 165 466) v
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2005] FCA 804HAWKER DE HAVILLAND AEROSPACE PTY LTD (ACN 103 165 466) v AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION and THE ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS, AUSTRALIA
VID 1491 of 2004
RYAN J
17 JUNE 2005
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 1491 of 2004
BETWEEN:
HAWKER DE HAVILLAND AEROSPACE PTY LTD (ACN 103 165 466)
Applicant / Cross-RespondentAND:
AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
First Respondent / First Cross-ClaimantTHE ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS, AUSTRALIA
Second Respondent / Second Cross-ClaimantJUDGE:
RYAN J
DATE OF ORDER:
17 JUNE 2005
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.Each party by 15 July 2005 give discovery by filing and serving a list of categories of discoverable documents in that party’s possession or power and by 27 July 2005 permit inspection by the other parties of the documents so discovered.
2.The cross-claimants have leave to file and serve by 15 August 2005 an amended cross-claim conforming generally with the reasons for judgment published this day and incorporating such information derived from the discovery ordered by paragraph 1 of this Order as the cross-claimants may be advised.
3.The cross-respondents file and serve by 29 August 2005 any amended defence to the amended cross-claim referred to in paragraph 2 of this Order.
4.Liberty be reserved to any party to apply on not less than 48 hours notice in writing to the other parties.
5. The direction hearing herein be adjourned to 9 September 2005.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 1491 of 2004
BETWEEN:
HAWKER DE HAVILLAND AEROSPACE PTY LTD (ACN 103 165 466)
Applicant / First Cross-ClaimantAND:
AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
First Respondent / First Cross-ClaimantTHE ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS, AUSTRALIA
Second Respondent / Second Cross-Claimant
JUDGE:
RYAN J
DATE:
17 JUNE 2005
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
The applicant (“Hawker de Havilland”) by motion on notice dated 2 June 2005 seeks an order that the cross-claim of the first and second cross-claimants (“the cross-claim”) be struck out as failing to disclose a reasonable cause of action.
The cross-claim incorporates by reference certain allegations and admissions made respectively in the statement of claim and the defences which have been filed herein. Those allegations are to the effect that Hawker de Havilland and the cross-claimant unions are parties to the Hawker de Havilland Aerospace Pty Ltd (Port Melbourne) Certified Agreement 2004 (“the Certified Agreement”) made under Div 4 of Pt VIB of the Workplace Relations Act 1996 (Cth) (“the Act”).
In pars 8 and 9 of the statement of claim it is alleged that;
‘8.At all material times there was a trust in the United States of America, originally established by the Boeing Company, which was and is known as the Share Value Trust ("the SVT") and under which distributions might be made, in accordance with the rules thereof, to certain employees of that company and of its subsidiaries, in the event that the market price of shares in that company reaches a particular level over a particular period.
9.In or about August 2004, a distribution was made under the SVT ("the distribution").’
The cross-claim then proceeds to allege that the employees of Hawker de Havilland to whom the distribution was made under the Share Value Trust (“the SVT”) were those whose employment was not governed by the Aerospace Technologies of Australia Ltd Award 1998 (“the Award”) or by the Certified Agreement. In the cross-claim the employees to whom payments under the SVT were made are designated as “the beneficiary employees” and the other employees covered by the Award and the Certified Agreement and to whom no payments under the SVT were made are designated as “the union employees”. It is then alleged in par 7 of the cross-claim that Hawker de Havilland;
‘… was a party to and concerned in:
(a)making payments to the beneficiary employees; and
(b)not making payments to the union employees by :
(i) administering the relevant payments;
(ii) identifying the beneficiary employees and the union employees;
(iii)providing information to third persons as to the identity and number of the employees who would receive and who would not receive payment.’
It is next alleged that, by reason of the matters pleaded in par 7 of the cross-claim, Hawker de Havilland has;
‘(a) injured the union employees in their employment;
(b) altered the position of the union employees to their prejudice.’
Finally, pars 9 and 10 of the cross-claim allege;
‘9.The conduct referred to in paragraphs 8(a) and (b) was carried out for a reason or for reasons which included a prohibited reason under section 298L of the Act, such prohibited reasons being:
(a)that the union employees were members of an industrial association (either the first cross claimant or second cross claimant as the case may be) (section 298L(1)(a));
(b)that the union employees were entitled to the benefit of an industrial instrument being either the award or the agreement (section 298L(l)(h)).
10.In the circumstances of the matters alleged in paragraphs 1, 2, 3, 4, 5 and 6 above and by reason of the conduct referred to in paragraph 7 the cross respondent has induced the union employees to stop being members of an industrial association being either the first cross claimant or the second cross claimant as the case may be in contravention of section 298M of the Act.’
The prayer for relief in the cross-claim seeks declarations, the imposition of penalties pursuant to s 298U(a) of the Act and orders for compensation pursuant to s 298U(c). Paragraph G of the prayer for relief in the cross-claim seeks;
‘G.Injunctions against the cross respondent prohibiting it from participating in a scheme of remuneration or bonus payment to employees which differentiates those employees on the basis of either their membership of an industrial association or their entitlement to the benefit of an industrial instrument.’
The Legislation
Section 298K(1) of the Act provides;
‘An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:
(a) dismiss an employee;
(b) injure an employee in his or her employment;
(c) alter the position of an employee to the employee's prejudice;
(d) refuse to employ another person;
(e)discriminate against another person in the terms or conditions on which the employer offers to employ the other person.’
The prohibited reasons for the purpose of s 298K(1) are identified in s 298L(1) which provides, so far as is relevant, that;
‘Conduct referred to in subsection 298K(1) or (2) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned:
(a)is, has been, proposes to become or has at any time proposed to become an officer, delegate or member of an industrial association; or
… … …
(h)is entitled to the benefit of an industrial instrument or an order of an industrial body;’
Section 298V allocates the onus of proof in applications under Div 7 of Pt XA of the Act by providing;
‘If:
(a)in an application under this Division relating to a person's or an industrial association's conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and
(b)for the person or industrial association to carry out the conduct for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person or industrial association proves otherwise.’
The other section of the Act invoked by the cross-claim is s 298M which provides;
‘An employer, or a person who has engaged an independent contractor, must not (whether by threats or promises or otherwise) induce an employee, or the independent contractor, (as the case requires) to stop being an officer or member of an industrial association.’
The contentions of the parties
(i) Hawker de Havilland
Dr Jessup QC, who appeared with Mr Stuart Wood for Hawker de Havilland, contended first that the cross-claim is deficient for failing to allege that union employees suffered any prejudicial alteration of position or injury in their employment. In the same context, it was submitted that a necessary element of a contravention of s 298K(1) is that some entitlement, expectation or course of normal practice has been available to the employees in question and of which their employer has deprived, or threatened to deprive, them. No such entitlement, expectation or course of normal practice has been alleged in the present cross-claim.
It was next argued on behalf of Hawker de Havilland that only the employer of the employee presumptively affected by the injury or alteration of his or her position can contravene s 298K(1); Patrick Stevedores Operations No 2 Pty Ltd v MUA (1998) 195 CLR 1 at 28 [26].
It was further submitted on behalf of Hawker de Havilland that s 298K(1)(b) and (c) do not extend to a change in the relative position of an employee or group of employees vis à vis another employee or group. Counsel referred to specific extrinsic legislation covering discrimination on the grounds of sex, age, disability and race and pointed out that s 170CK of the Act expressly deals with discrimination at the point of termination of employment. Moreover, within s 298K(1) itself, par (e) expressly covers discrimination in the terms and conditions on which employment is offered. It was also submitted in the same context that s 298K(1) does not make it unlawful for an employer to discriminate within employment provided that no employee’s position is altered to his or her detriment and no employee is injured in his or her employment. I take this submission to mean that there will be no contravention of s 298K(1) unless an employee is actually (as distinct from relatively) worse off than he or she was before the discrimination.
The next criticism of the cross-claim by Counsel for Hawker de Havilland was that it is insufficient to allege that an employer was “a party to and concerned” in making of allegedly discriminatory payments. The sub-section, so the argument went, requires an allegation of a positive act done for a proscribed reason. If the decision initiating the act is that of a third person, there can be no contravention of a proscription which fastens on an act of an employer. Here, as I infer, the decisive acts were done by third persons being the trustees or administrators of the SVT. Mere distribution of funds at their direction could not be for a proscribed reason.
In relation to s 298M of the Act, Counsel for Hawker de Havilland submitted that similar considerations to those raised by s 298K(1) preclude the present cross-claim from disclosing a reasonable cause of action. Only an employer can contravene s 298M and, for the reasons already indicated, there has been no relevant act by Hawker de Havilland leading to the outcome stipulated by the section, namely some employee ceasing to be a member of an industrial association.
(ii) The cross-claimants
Mr W Friend of Counsel for the cross-respondents accepted that only an employer can contravene s 298K(1). However, he contended that the sub-section is concerned with “conduct” the meaning of which is expanded by s 4(8) of the Act, which provides;
‘In this Act, a reference to engaging in conduct includes a reference to being, whether directly or indirectly, a party to or concerned in the conduct.’
That provision was relied on by the cross-claimants as supporting the allegation in par 7 of the cross-claim reproduced at [4] above that Hawker de Havilland had been “a party to and concerned in” the acts and omissions enumerated in that paragraph. It was suggested, as I understood the argument, that the “conduct” in which Hawker de Havilland had been directly or indirectly concerned was the administration of the SVT in a way which discriminated against the union employees by reason of their union membership or their entitlement to the benefit of the Award or the Certified Agreement. Counsel referred in this context to Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 117 FCR 588 where Kenny J observed, at 596 [34] of the application of s 4(8) to s 170MN(1) of the Act;
‘The expression “concerned in” is of general import, and it can cover a wide range of activities depending on the context in which it is used and the facts of the relevant case. In Ashbury v Reid [1961] WAR 49 at 51, the Full Court of the Western Australian Supreme Court held that a defendant to a charge under s 54(1) of the State Forestry Act 1918-1954 would be “directly or indirectly concerned in” the commission of the offence if “on the facts it can reasonably be said that the act or omission shown to have been done or neglected to be done by the defendant does in truth implicate or involve him in the offence, whether it does show a practical connexion between him and the offence”. Other courts have attributed much the same meaning or operation to the expression “concerned in”: see Australian Securities and Investments Commission v Doyle (2001) 38 ACSR 606 at [215]; Kilpatrick Green at 15; Lam v R (1990) 46 A Crim R 402 at 405; R v Tannous (1987) 10 NSWLR 303 at 307-8; and R v Buckett (1985) 132 ALR 669 at 674. In Yorke v Lucas (1983) 49 ALR 672 at 682, the Full Court of this Court held that the words “a party to” a contravention in s 75B(c) of the Trade Practices Act 1974 (Cth) referred to a person who is aware of the elements of the contravention, and who participates in, or assents to the contravention. If s 170MN(2) left any room for doubt about the potential application of s 170MN(1) to a union, this doubt is removed by s 4(8) of the Act.’
As to whether Hawker de Havilland had “injured” the union employees in their employment or had “altered” their position “to their prejudice”, Mr Friend submitted that those expressions were of wide import and should not be limited to treatment of an employee which differs from that accorded to the same employee in the past. The question, Mr Friend contended, is whether an employee has been prejudicially “singled out” for a prohibited reason; see BHP Iron Ore Pty Ltd v Australian Workers’ Union (2000) 102 FCR 97, at 112 [48].
In relation to the cause of action under s 298M of the Act, Mr Friend submitted that it depends on an inference being drawn from the facts pleaded. The inference, I take it, is that Hawker de Havilland’s alleged actions were accompanied by the requisite intention to effect, or were sufficiently connected with, the proscribed outcome, namely, that an employee stopped being a member of an industrial association.
The adequacy of the present cross-claim
(i) The cause of action under s 298K(1)
In essence, the cross-claimants are seeking to establish that Hawker de Havilland has administered, or procured the administration of, the SVT in such a way that no benefits have been paid to union members or to employees who are entitled to the benefit of the Award or the Certified Agreement or both. It seems clear from the description of the SVT in Hawker de Havilland’s own statement of claim that it is a scheme or trust established for the benefit of “certain employees” of the Boeing group of companies which includes Hawker de Havilland. It is, therefore, at least arguable that the SVT and its administration is an incident of the employment of those employees who are eligible, according to the terms of the trust when it was established, to receive benefits under it. It may be that no employee of Hawker de Havilland covered by the Award or the Certified Agreement or who is, or eligible to be, a union member was ever eligible to participate in the benefits available under the SVT. However, that does not emerge of necessity from what has been pleaded and the resolution of the issue must await the production, and if necessary, the interpretation of the SVT.
The case under s 298K(1) depends, first, on establishing that the terms of the trust deed or other instrument embodying the SVT do not absolutely exclude union employees of Hawker de Havilland from participation in the distribution of benefits. If it can then be shown that Hawker de Havilland recommended, directed or advised the administrators of the SVT that union employees, whether or not they were so designated in the recommendation, direction or advice, should be excluded from participation in the benefits available under the SVT, that would equally arguably be an “injury” to those employees or an alteration of their position to their prejudice. They would have lost one of the expectations or benefits that went with their employment; (Linehan v Northwest Exports Pty Ltd (1981) 57 FLR 49 at 62).
That would be so even if the expectation or benefit of an individual employee were contingent eg, on the favourable exercise of some discretion conferred by the SVT trust deed or instrument. The members of a class of beneficiaries in respect of whom even a completely discretionary power of appointment exists are entitled to have the discretion exercised in good faith and consistently with the terms of the trust; see eg National Trustees Executors and Agency Co of Australasia Ltd v Federal Commissioner of Taxation (1923) 33 CLR 491 at 504.
(ii) The cause of action under s 298M
The separate cause based on s 298M of the Act requires the cross-claimant to establish that Hawker de Havilland has, by threats or promises or otherwise, induced one or more of its employees to stop being an officer or member of an industrial association. The cross-claim on its face does not suggest that any threat has been made to any of the union employees. Nor has it been specifically pleaded that any union employee has been promised participation in the future distribution of benefits under the SVT if he or she relinquishes his or her union membership. Indeed, it has not been pleaded that there will be, or are likely to be, future distributions of benefits under the SVT.
This deficiency could be cured by an appropriate amendment of the cross-claim indicating how, whether by threats, promises or otherwise, Hawker de Havilland is alleged to have induced one or more of its employees to stop being union members. The particulars may reveal that the threat arose by implication from the exclusion of union members from the last distribution under the SVT and from some statement to the effect that the same criteria, excluding union members, would be applied in making future payments under the SVT. However, a respondent is entitled in proceedings for penalties, like those embodied in the cross-claim, to know with precision the elements of each contravention of the Act which is alleged against it.
Another, even more fundamental, defect in the allegation of a contravention of s 298M is the failure to identify which employees have been “induced” by threats, promises or otherwise, to stop being union members. Unlike other provisions of the Act, such as s 170NC, s 298M requires more than action or a threat of action with intent to bring about a particular result. It requires the employer actually to “induce” an employee to stop being a union member. The Oxford English Dictionary (2nd Ed) defines “induce” in the relevant sense as;
‘to lead (a person) by persuasion or some influence or motive ……… to do something (original emphasis).’
In that sense, inducing is different from holding out an inducement to a person which may or may not have an operative effect on his or her mind.
Accordingly, to make out the cause of action under s 298M, the cross-claimants will have to adduce evidence of at least one employee who was persuaded or influenced by a threat or promise (whether express or implied) or otherwise by Hawker de Havilland to stop being a union member. See also Australian Workers’ Union v BHP Iron Ore Pty Ltd (2000) 96 IR 422 where Gray J found an arguable case of inducement in contravention of s 298M where a significant number of employees had resigned their union membership, many for the stated reason that they had made a workplace agreement with the employer. If there is evidence available to the cross-claimants of employees who have stopped being union members because of some perceived discriminatory administration of the SVT, they should be able to cast the alleged contraventions of s 298M in some more explicit, less elliptical, form than par 10 of the present cross-claim.
Conclusion
It will be apparent from the reasons directed above to each of the causes of action relied on by the cross-claimants that the cross-claim requires significant amendment, particularly to take account of the terms of the SVT. I do not regard this as a case like that discussed by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 where his Honour was persuaded not merely to strike out the statement of claim but to dismiss the plaintiff’s action because it was “not a case in which the plaintiff by amendment of the pleading could improve the position.” By contrast, I have indicated the respects in which the cross-claimants, after access to the SVT, could amend the cross-claim so that, at least arguably, it discloses a cause of action for contravention of each of s 298K(1) and s 298M.
I shall therefore grant the cross-claimants leave to amend their cross-claim as they may be advised in the light of information obtained on discovery and of these reasons. Hawker de Havilland, as a corporation, will be obliged to give discovery notwithstanding its potential to expose it to liability for a penalty; see s 187 of the Evidence Act 1995 (Cth), Environment Protection Authority v Caltex Refining Co Pty Limited (1993) 178 CLR 427 and Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96. In any event, a trustee is obliged to produce on request by a beneficiary a copy of the trust deed and of each document in the trustee’s possession relevant to the administration of the trust; O’Rourke v Darbishire [1920] AC 626. I assume that this obligation extends to those charged with the administration of the SVT.
Consistently with the foregoing reasons, I shall order that each party by 15 July 2005, give, discovery by filing and serving a list of categories of discoverable documents in that party’s possession or power and by 27 July 2005 permit inspection by the other parties of the documents so discovered. The amended cross-claim should be filed and served by 15 August 2005 and any amended defence thereto within a further 14 days of the filing and service of the amended cross-claim. I shall reserve liberty to any party to apply on not less than 48 hours notice in writing to the other parties.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate:
Dated: 17 June 2005
Counsel for the Applicant / Cross Respondent: Dr C Jessup QC with Mr S Wood Solicitor for the Applicant / Cross Respondent: Minter Ellison Counsel for the Respondents / Cross Claimants: Mr W Friend Solicitor for the Respondents / Cross Claimants: Charmaine Chew, AMWU Date of Hearing: 10 June 2005 Date of Judgment: 17 June 2005
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