In the matter of an application pursuant to s 171 C of the Conciliation and Arbitration Act 1904 by the Professional Radio and Electronics Institute of Australasia

WOOD (ON BEHALF OF THE INDUSTRIAL RELATIONS BUREAU) v. LORD MAYOR, COUNCILLORS
AND CITIZENS OF THE CITY OF MELBOURNE (1979) 41 FLR 1
Conciliation and Arbitration - Companies

COURT

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL DIVISION
Smithers J.(1)

CATCHWORDS

Conciliation and Arbitration - Prosecution for offence - Dismissal of employee - Whether dismissal by reason of circumstance that employee refused or failed to join in industrial action - Whether substantial and operative factor in dismissal - Reversal of onus of proof in relation to reason actuating dismissal - Statutory presumption underlying reversal of onus - Inherent improbability of dismissal on account of employee continuing to work - Union pressure exerted on employer to dismiss non-striker - Submission to pressure - Conciliation and Arbitration Act 1904 (Cth.), s. 5 (1) (aa), (4).

Conciliation and Arbitration - Prosecution for offence - Standing down of employee - Whether employee injured in employment by reason of circumstance that employee refused or failed to join in industrial action - Whether position of employee altered to his prejudice - Employee ready and willing to perform ordinary duties - Consequences of industrial action taken by unions - Absence of useful work to be performed by employee - Conciliation and Arbitration Act 1904 (Cth.), s. 5 (1) (aa), (4).

Companies - Corporate responsibility for actions of officers acting within their authority - Ascertainment of reason actuating action of corporate entity - Absence of evidence by officer of corporation in relation to standing down of employee - Whether inference should be drawn from failure to call officer as witness - Evidence of conversations between officers - Whether heresay evidence.

HEADNOTE

The Conciliation and Arbitration Act 1904 provides by s. 5 (1) that an employer shall not dismiss an employee, or injure him in his employment, or alter his position to his prejudice by reason of the circumstance that the employee "(aa) has refused or failed to join in industrial action".

Subsection (4) provides that in any proceedings for an offence against the section, if all the relevant facts and circumstances, other than any reason or intent set out in the charge as being the reason or intent of an action alleged in the charge, are proved, it lies upon the person charged to prove that that action was not actuated by that reason or taken with that intent.

K., a member of an organization of employees registered under the Act, resigned his membership of the organization and ceased to participate in a stoppage of work by members of the organization employed by the Melbourne City Council. After K. had resumed his employment, bans were imposed by members of the organization and of other unions upon the supply of goods to the depot where K. was employed and upon vehicles on which K. had performed work, in support of a demand by the organization that K. be dismissed. K. was stood down by the acting town clerk and subsequently dismissed by the town clerk. Charges were laid under s. 5 (1) (aa) of the Act by an officer of the Industrial Relations Bureau: (1) in relation to the dismissal, and (2) in relation to the standing down of K. The defendant pleaded not guilty to the charges.

(1) Where an employer submitted to union pressure to dismiss a non-striker, there was little likelihood that the dismissal would be actuated by the reason actuating the union: the reason actuating the dismissal would be the placation of the union and this did not constitute a contravention of s. 5 (1) (aa).

(2) On the evidence, K.'s failure to stay on strike was not a substantial and operative factor in the defendant's dismissal of him and accordingly, as the defendant had established, on a balance of probabilities, that it did not dismiss K. by reference to that circumstance, the information should be dismissed.

(3) On the the evidence, K. was stood down not because he reported for work but because, having reported for work, K. could not be usefully employed.

(4) It was a question of fact where in particular circumstances the mind of a corporate entity may be located: on the evidence, the proper inference was that substantially the town clerk was the dominant officer of the council in relation to the standing down of K., and it was he who was responsible for the relevant action taken by the acting town clerk during the former's absence interstate on council business. Accordingly, as the defendant had established that the reason actuating its standing down of K. was one in which the circumstance that K. had refused or failed to join in industrial action was not a substantial and operative factor, the remaining informations should be dismissed.

HEARING

Melbourne, 1979, April 9-12; May 9. #DATE 9:5:1979

INFORMATIONS.

Informations for offences under s. 5 of the Conciliation and Arbitration Act 1904 were laid by an officer of the Industrial Relations Bureau in relation to the dismissal and standing down of an employee of the Melbourne City Council.

The full facts are set out in the judgment.

W. F. Ormiston Q.C. and D. M. Ryan, for the informant.

K. D. Marks Q. C. and A. R. O. Rowlands, for the defendant.

Cur. adv. vult.

Solicitors for the informant: Alan R. Neaves (Commonwealth Crown Solicitor).

Solicitors for the defendant: Mallesons.

MAUREEN HICKEY

JUDGE1

May 9.

SMITHERS J. delivered the following judgment.

On 8th March, 1978, one Frank Richard Kane, who was then an employee of the defendant in the capacity of a motor mechanic, was stood down by the defendant. On 30th March, 1978, he was dismissed by the defendant, By s. 5 (1) (aa) of the Conciliation and Arbitration Act 1904 (the Act) as amended by the Conciliation and Arbitration Amendment Act (No. 3) 1977 (No. 108 of 1977) it is a crime for an employer to dismiss his employee or to injure him in his employment by reason of the circumstance that the employee has refused or failed to join in industrial action. There can be no doubt that to dismiss or stand down an employee is to injure him in his employment. Industrial action is defined in s. 4 (1) of the Act in terms which clearly include strike action. Thus s. 5 (1) (aa) makes it a crime for an employer to dismiss or stand an employee down by reason of the circumstance that he has refused or failed to join in strike action. Relevant parts of s. 5 are in the following terms:

"5 (1) An employer shall not dismiss an employee, or injure him in his employment, or alter his position to his prejudice, by reason of the circumstance that the employee -

(aa) has refused or failed to join in industrial action; . . .

(4) In any proceedings for an offence against this section, if all the relevant facts and circumstances, other than the reason or intent set out in the charge as being the reason or intent of an action alleged in the charge, are proved, it lies upon the person charged to prove that that action was not actuated by that reason or taken with that intent." (at p3)

In respect of the dismissal and stand down of Mr. Kane three charges have been brought against the defendant under s. 5 (1) (aa) of the Act. The three may be summarized as follows:

V1 of 1979: That the defendant did between about 8th March, 1978, and 29th March, 1978, contrary to the provisions of s. 5 (1) (aa) of the Act, injure Mr. Kane in his employment by reason of the circumstance that he had refused or failed to join in industrial action. Particulars (as amended) are: "(a) Of injury of the said Mr. Kane in his employment: The council being bound to pay to the said Mr. Kane the wages and to accord him the conditions prescribed by the Metal Industries Award 1971, between about 8th March, 1978, and 29th March, 1978, stood down and the said Mr. Kane from his said employment and refused or failed to pay him in the manner and at the time prescribed by the said award or at all, the wages which he would otherwise have been entitled to be paid. (b) Of refusal or failure to join in industrial action: The said Mr. Kane refused or failed on or about 6th and 7th March, 1978, to join in a strike by members of the Victorian branch of the Amalgamated Metal Workers and Shipwrights Union employed by the council at its Green Street depot and elsewhere."

V2 of 1979: That the defendant did between about 8th March, 1978, and 29th March, 1978, contrary to the provisions of s. 5 (1) (aa) of the Act alter the position of Mr. Kane to his prejudice by reason of the circumstance that he had refused or failed to join in industrial action. The particulars given of the alteration of Mr. Kane's position to his prejudice are identical to those given in V1 of 1979 of injury to Mr. Kane in his employment and the particulars of the refusal of Mr. Kane to join in industrial action are also identical to the particulars given in V1 of 1979.

V3 of 1979: That the defendant on or about 30th March, 1978, contrary to the provisions of s. 5 (1) (aa) of the Act dismissed Mr. Kane from his employment by reason of the circumstance that he had refused or failed to join in industrial action. Similar particulars to those in V1 and V2 of the refusal or failure to join in industrial action are given. (at p4)
The charges are brought by one Colin Keith Wood as an officer of the Industrial Relations Bureau pursuant to the powers of that body under Pt VIa of the Act as inserted by s. 10 of the Conciliation and Arbitration Amendment Act 1977 (Act No. 64 of 1977). To each of the charges the defendant pleaded not guilty. (at p4)
In these cases, by reason of s. 5 (4) of the Act, the onus of proving that the refusal and failure of Mr. Kane to join in strike action was not a substantial and operative factor influencing the defendant to take the adverse actions that it took against Mr. Kane lies upon the defendant. The defendant is a corporate body, the supreme authority in which is in the council, meeting in business session. But much of the business of the council is conducted by its executive officers of whom the chief is the town clerk, Mr. Rogan. The council is responsible for the actions of those officers when they are acting within their authority. When they so act, their acts and their relevant states of mind in performing those acts are the acts and the state of mind of the council. This is of importance in this case because the dismissal of Mr. Kane on 30th March, 1978, was the act of the town clerk and the standing down of Mr. Kane on 8th March, 1978, was, as a matter of form, the act of Mr. Reilly the deputy town clerk, although as appears below, the probabilities are that in substance it was the act of Mr. Rogan. It is clear that at all material times Mr. Kane, to the knowledge of the defendant, had both refused and failed to join in industrial action. The fact that for the first three days of the strike Mr. Kane had joined in such action is irrelevant. From 6th March, 1978, he refused and failed to remain on strike in conjunction with his fellow employees. The strike continued from 1st March until 31st March, 1978. The critical question before the court is whether in dismissing Mr. Kane or standing him down the defendant did so by reason of the circumstance that Mr. Kane refused and failed to join in that strike.
CONSTRUCTION OF S. 5 (1) (aa) (at p5)
It is necessary to consider what is involved in the conception of refusing or failing to join in industrial action. Section 5 (1) (aa) being a statutory provision creating a crime, all the elements of the crime must be ascertained upon a proper construction of the words used by Parliament. Those words indicate that the crime is committed when an employer has dismissed or otherwise injured the employee in his employment "by reason of the circumstance that the employee has refused or failed to join in industrial action". In construing these words special consideration is necessary to the meaning of the expressions "refused to join" and "failed to join". What is wrapped up in the word "join" is of special significance. Section 5 (1) (aa) contemplates that the employee might have joined with others in industrial action taken by employees acting in concert. The significance of the word "join" is that it indicates the relevant refusal or failure is a refusal or failure to enter into the implied agreement with fellow employees involved in participating in concert in industrial action. (at p5)
In my opinion, upon the proper construction of s. 5 (1) (aa), the concept of dismissing an employee or injuring him in his employment by reason of the circumstance that he refused or failed to join in industrial action involves more than dismissing him merely because he continues to perform his duties in his employment when others are, for instance, on strike. It involves that the employer has something more than that in his mind as a factor influencing him to dismiss or take other action against the employee. That something more is that the employee has not "joined" in, for instance, the strike. On this basis a dismissal in contravention of s. 5 (1) (aa) is one carried out as a reaction not only to the employee continuing to work but also to the aspect of his conduct in his not joining in the strike, not consenting to be a participating member of, so to speak, the team composed of the other employees acting in concert in the industrial action. (at p5)
There is considerable authority as to what is necessary to satisfy the critical requirement of s. 5 (1) (aa) that the adverse action taken by the employer is taken "by reason of the circumstance" that some specified event has occurred. It is clear that the requirement is not satisfied unless the specified event is a substantial and operative factor influencing the employer to take that adverse action. If this requirement is satisfied it is not to the point that other factors were also substantial and operative factors. See Mikasa (N.S.W.) Pty. Ltd. v. Festival Stores (1972) 127 CLR 617 ; General Motors-Holden's Pty. Ltd. v. Bowling particularly per Mason J. (1976) 51 ALJR 235, at p 241 ; Roberts v. General Motors-Holden's Employees' Canteen Society Inc. (1975) 25 FLR 415 and Cuevas v. Freeman Motors Ltd. (1975) 25 FLR 67 .
THE PRESUMPTION S. 5 (4) (at p6)
It is convenient at this stage to give consideration to the statutory presumption arising from s. 5 (4) of the Act. As originally enacted s. 5 was directed to the protection of employees from dismissal or other injury in their employment, at the hands of employers who disapproved of employees being unionists or engaging in union activities, no matter how legitimate. It was recognized by Parliament that an employee who suffered dismissal or other injury in his employment because of his union membership or union activities would be in great difficulty in proving that fact in the absence of special evidentiary provisions. Accordingly Parliament enacted s. 5 (4) which imposed on an employer, against whom a dismissal or other injury of a unionist was proved, the burden of proving that the action taken by him was not taken by reason of the employee's union membership or activity. In such a case the presumption sits comfortably alongside its basic assumptions namely that it is probable that some employers would take hostile action against active unionists and that in any particular case there would be difficulty in proving that the dismissal, or other hostile action, was taken because the employee was an active unionist. (at p6)
But it sits less comfortably alongside par. (aa) of s. 5 (1) because in general it is unlikely that any employer will dismiss or take other hostile action against an employee because he has refused or failed to join in a strike or other industrial action. There is ordinarily no inducement to an employer to dispose of any employee who continues to work when others go on strike. But there is the possibility that there will be union pressure on the employer to dismiss or otherwise injure the non-striker in his employment. Such pressure may well take the form of a refusal to negotiate a settlement of the strike unless the employer takes action and the employer may well submit to that pressure. The reason for such pressure would normally be union resentment against the employee for not acting in concert with the strikers. But even if the employer does bow to that pressure there is little likelihood that his dismissal of the employee will be actuated by the reason which actuated the union. The actuating reason will be to placate the union. The reasons producing hostility in the union against the striker are unlikely to be those which would influence the employer to dismiss the employee even in the course of submitting to the union pressure. And in any event to dismiss an employee merely to placate a union would not be a contravention of s. 5 (1) (aa). (at p6)
It is apparent therefore that, in a case like the present, there is an element of artificiality in the statutory presumption arising from s. 5 (4). Accordingly, it is the more readily displaced. When the defendant contends that what the statute prima facie presumes is not the fact, he is asserting what is inherently probable. (at p6)
When the strike commenced on 1st March, 1978, Mr. Kane was a member of the Amalgamated Metal Workers' and Shipwrights' Union (A.M.W.S.U.) to which his fellow employees of his category belonged. But he resigned five days later in circumstances which gave rise to criticism and acrimony as between himself and the union. Before the strike had started a meeting was held to consider strike action in support of a log of claims. Mr. Kane and a number of other employees opposed such action and it was decided to hold a secret ballot. Mr. Kane acted as scrutineer. He said that the question on which the ballot was held was whether a further secret ballot should be held on the question whether the employees should actually go on strike. The result of the ballot was twenty-five affirmative and eleven negative votes. It appears that on this result being announced the employees acted as if the question voted on had been whether actually to go on strike. Accordingly, the affirmative vote was treated as a vote for the strike. All employees including Mr. Kane went on strike as from 1st March, 1978. (at p7)
On 6th and 7th March, Mr. Kane reported for work and thereafter until he was dismissed he was to the knowledge of the defendant, ready and willing to perform his ordinary duties and desired to do so. (at p7)
The fact that Mr. Kane failed to join in the strike after 6th March contributed, directly or indirectly, to various consequences: (a) certain members of the union developed a strong antipathy towards him; (b) on 7th March unionists established picket lines to obstruct Mr. Kane in his approach to his place of work at the Green Street garage in North Melbourne and there was a risk of violence; (c) by 8th March the Municipal Employees' Union (M.E.U.) had declared black the Green Street garage where Mr. Kane worked and drivers of vehicles, repaired at that depot by the apprentice, who was exempt from the strike, refused to use such vehicles; (d) by 8th March the tool shop and parts store was declared black by the Municipal Officers' Association (M.O.A.) so far as Mr. Kane was concerned; (e) in the week ending 10th March the drivers of all the seventy-nine cleansing vehicles of the defendant returned such vehicles as unserviceable and could accordingly be taken to have refused duty; (f) by 8th March the M.O.A. and M.E.U. had declared support for the strike at the depot and a claim of the three unions - A.M.W.S.U., M.O.A. and M.E.U. or their members that Mr. Kane be dismissed had developed; (g) a reasonable fear arose in the defendant that to permit Mr. Kane to attempt to do any work on any vehicle in the garage would lead to an indefinite ban on the use of that vehicle; (h) by 8th March it had become impossible for the defendant usefully to employ Mr. Kane; (i) in the course of negotiations to settle the claims which had given rise to the strike, statements were made by representatives of the employees including Mr. Halfpenny, the Victorian secretary of the A.M.W.S.U., as a result of which the town clerk, the Lord Mayor and various councillors became convinced that the issues arising from the log of claims could not be settled and the employees would not return to work unless Mr. Kane were dismissed; (j) by 17th March the accumulation of garbage in the city streets constituted a serious danger to the health of the public. (at p8)

It is convenient to observe that although it is a crime to stand down an employee by reason of the circumstance that he has refused or failed to join in strike action, it is not a crime under the Act, at any rate, to dismiss an employee by reason of the conduct of other persons, although that conduct may have been induced by the employee's refusal or failure to go on strike. And in the situation which arose out of Mr. Kane's refusal and failure to join in the strike, Mr. Rogan, the town clerk, had clearly in his mind the distinction between his and the council's attitude to Mr. Kane's conduct and the attitude of the unions to that conduct. So far as Mr. Rogan was concerned he had no antipathy to Mr. Kane for failing to stay on strike and indeed was sympathetic to him and the principle of personal independence by which he appeared to be influenced. It was Mr. Rogan's view that the unions' attitude to Mr. Kane was determined largely by Mr. Kane's failure to remain on strike, his resignation from the union, and the alleged circumstances thereof. But equally clearly Mr. Kane's failure to remain on strike was in itself action in respect of which Mr. Rogan had no criticism. The defendant desired that none of its employees should be on strike.
THE DISMISSAL - 30TH MARCH, 1978 (at p8)
So far as the dismissal is concerned it appears that at an early stage of the strike Mr. Rogan realized that there was considerable opposition on the part of the unionists employed by the council, not only members of the A.M.W.S.U. but also of the M.E.U. and the M.O.A., to returning to work alongside Mr. Kane. By 15th March, after a conference with representatives of the A.M.W.S.U., Mr. Rogan had realized that opposition to working with Mr. Kane was hardening. According to Mr. Rogan, Mr. Halfpenny reported that two different groups in his union had rejected any possibility of working with Mr. Kane in the future. On the afternoon of 29th March, Mr. Halfpenny attended a council meeting, at which, according to Mr. Rogan, there was a discussion of the general situation, the log of claims and whether the men would work with Mr. Kane. Mr. Rogan had been working diligently to bring about a compromise whereby Mr. Kane might be moved to another department, and this compromise had been discussed more than once. However, Mr. Rogan said that at this council meeting Mr. Halfpenny reported that there had been a leak of the proposed compromise and his members had rejected it. (at p8)
So far as Mr. Rogan was concerned he came to the conclusion at that stage that the compromise, for which he hoped and worked, was simply not attainable. It was his belief that council members were of the same opinion and that there was a general view in council that, because of the health situation in the city, Mr. Kane would have to be dismissed. He said that at the council meeting Mr. Halfpenny had explained to council the reasons why, as he understood it, the membership would not work with Mr. Kane. Council passed a resolution referring to the staff board consideration of the continuance of Mr. Kane's employment, with an intimation that if Mr. Kane failed to refute Mr. Halfpenny's allegations it should dismiss Mr. Kane. On Thursday 30th March Mr. Kane attended the staff board meeting which after questioning him decided that he had not failed to refute the allegations of Mr. Halfpenny and accordingly it had no authority to dismiss him. At this stage Mr. Rogan considered that as chief executive officer of the council it was his duty to deal with the situation on his own initiative. The engagement of staff of Mr. Kane's category and the termination of the employment of such staff were ultimately matters in his area of authority. He knew that he had taken every step possible to continue the employment of Mr. Kane in some area of the council's activities and believed that while he persisted in such efforts the men would not return to work and the health situation in the city would continue to deteriorate alarmingly. He believed that it was the view of councillors generally that Mr. Kane had to be dismissed so that the strike could be settled. As that was his own view he concluded that he must dismiss Mr. Kane himself, that is, that he must himself order the dismissal. He told the Lord Mayor that the staff board could not dismiss Mr. Kane under the council's resolution, but notwithstanding that fact he, Mr. Rogan, had come to the conclusion that Mr. Kane must be dismissed and that it was his duty to dismiss him. He informed the Lord Mayor that the responsibility was his and his alone. He said that judging from the comments of councillors of 29th March he was satisfied that they regarded dismissal as inevitable on grounds of public health and he was sure that the Lord Mayor would also be so satisfied. Mr. Rogan said that, having regard to the position in the city, the grave dangers to the health of the public and the official warnings which had been given to him and the council in that respect, he proposed to dismiss Mr. Kane. The Lord Mayor commented, in effect, that he did not see what else the town clerk could do. Mr. Rogan immediately told the board that Mr. Kane was to be dismissed forthwith and he was dismissed. Mr. Rogan is the chairman and senior member of the staff board which is composed of senior council officials. (at p9)
It is not clear whether Mr. Rogan told the board that he intended to dismiss Mr. Kane or whether he instructed the board that it would have to dismiss Mr. Kane. But the point is of no consequence. The council's direction to the board had misfired and the question of dismissal was at that stage again within the area of Mr. Rogan's authority. There is no doubt that whether the board was the formal instrument of the dismissal or whether the dismissal proceeded directly pursuant to the personal instructions of Mr. Rogan, by-passing the board, the dismissal proceeded according to a decision made by Mr. Rogan personally and for reasons which actuated him. (at p10)
It is accordingly the reasons which actuated Mr. Rogan which are critical to this case. Mr. Rogan was certainly an acceptable witness. He stated that the fact that Mr. Kane had refused or failed to stay on strike, "to join in industrial action", was not a factor actuating him in dismissing Mr. Kane. It was his view throughout that Mr. Kane should not be disadvantaged in his employment because he refused to remain on strike. It was also his view that Mr. Kane should be free to decide for himself whether he went on strike or stayed on strike and that he should not be victimized in any way for deciding to continue to perform his duties. It was also council policy that the council's activities should not proceed in "closed shop". It was council policy that staff be employed without distinction between unionists and non-unionists. Mr. Rogan was well aware of the general nature of the objections of the strikers and the unions to the conduct of Mr. Kane, which he believed were the factors which had influenced them in forming their attitude to the further employment of Mr. Kane. But his reasons for dismissing Mr. Kane were not the reasons he believed to be those actuating the strikers and the unions in relation to Mr. Kane. Mr. Rogan was concerned and concerned only to create a situation in which the employees generally would resume duty and clear the streets. (at p10)
It was argued, as I understood, that logically in these circumstances the defendant cannot escape a finding that it was actuated by the circumstance that Mr. Kane had failed to stay on strike, because, substantially, it was from that circumstance that all the factors by reference to which Mr. Rogan ultimately dismissed Mr. Kane followed. But this is unsound. One must go to the words of the section, as expounded by the High Court, look into the mind of Mr. Rogan and ask what were the substantial and operative factors in his mind. This is to be determined not as a matter of logic but of fact. If one looks into his mind it is clear that the failure to stay on strike was just not present as an operative factor. The operative factors in the mind of Mr. Rogan included the attitudes and reactions of other persons to, amongst other matters, the failure of Mr. Kane to stay on strike, but his own attitude to that failure did not induce and would never have induced him to take hostile action against Mr. Kane. (at p10)
It follows that I am satisfied that in respect of the charge that the defendant dismissed Mr. Kane on or about 30th March, by reason of the circumstance that he had refused or failed to join in industrial action, the defendant has established, as on the balance of probabilities, that it did not dismiss Mr. Kane by reference to that circumstance. The information must therefore be dismissed. The dismissal discussed above was the decisive event in the employment relationship of Mr. Kane with the defendant. However, the charges numbered V1 and V2 of 1979 referred to above relate to the earlier event of 8th March when the defendant stood down Mr. Kane.
THE STAND DOWN - 8TH MARCH, 1978 (at p11)
I turn to the charges concerning the events of 8th March, 1978. Mr. Kane resigned from the A.M.W.S.U. on 6th March and later that day he informed the personnel officer of the defendant that he had so resigned and intended to take no further part in the strike. The personnel officer directed Mr. Kane to report for work at the Green Street depot at 1 o'clock on that same afternoon. He was the only motor mechanic who reported for duty although an apprentice, who was not involved in the strike, also reported. He was directed to work on a "Halflinger" pavement cleaner on which there appeared to be about eight days work for one mechanic. On 7th March Mr. Kane again attended for work. When he arrived at the depot he was met by a picket line composed of members of the A.M.W.S.U. and possibly others. Mr. Kane passed through the picket line but not without opposition. Later on 7th March Mr. Kane was told by the supervisor not to report for work on 8th March, although he would be paid at normal rates for that day. The inference to be drawn is that it was desired to avoid a repetition of the picketing incidents, in which there had been a distinct possibility of violence. (at p11)
By 8th March, threats were received by the council staff from the M.O.A. that if Mr. Kane were allowed to work at the depot by himself, he would not be allowed to obtain from the store any spare parts or equipment, which he needed to perform his work, and in fact the store was locked against him. In addition by 8th March the garage was declared "black" and it was reasonably feared by Mr. Rogan, and no doubt by Mr. Reilly, that if Mr. Kane were allowed to work on any vehicle that vehicle could be declared, and could remain black, for some indefinite period much to the inconvenience of the council. From Monday 6th March until Saturday 11th March Mr. Rogan, the town clerk, was in Adelaide with the Lord Mayor on council business. (at p11)
During Mr. Rogan's absence Mr. Reilly was the acting town clerk and authorized to act as such. Mr. Rogan was expected to return to duty in Melbourne on Monday 13th March. On 7th and 8th March, by frequent telephone conversations, Mr. Rogan was kept fully informed by Mr. Reilly of all developments in relation to Mr. Kane. A meeting had been held on 8th March between officers of the A.M.W.S.U., the M.E.U., the M.O.A. and the council staff board. The acting town clerk and officers of the council attended the meeting. The meeting discussed the aspects of the strike up to that time, including the incident involving the picketing of the morning of 7th March, and the fact that police had been in attendance. The union queried the classification of Mr. Kane and asserted that he was only paying dues to the union on the basis of being a tradesman's assistant. Opposition was expressed to the continued employment of Mr. Kane. After lengthy discussions the staff board proposed to the unions that Mr. Kane should be transferred from the Green Street garage to the electricity supply department providing the union's members would work with him there. The union agreed to put the proposal to the membership, on the conditions that Mr. Kane be requested to become a union member by joining a trade union, that he give an undertaking to abide by that union's policy decisions and that he donate to the Lord Mayor's fund the moneys earned while the strike was in progress. Mr. Reilly informed Mr. Rogan of the proposal and advised that he would be speaking with Mr. Kane later in the day and seeking his reactions. Mr. Rogan informed Mr. Reilly that, having regard to the fact that there was a black ban on the garage and the store had been closed, it did not appear that the council could employ Mr. Kane in any way that was useful to the council and accordingly if Mr. Kane did not accept the transfer he would have to be stood down. Mr. Rogan was of the belief that the relevant award provided for Mr. Kane's standing down in such circumstances. Later that same day Mr. Reilly reported to Mr. Rogan that Mr. Kane would accept the transfer but not on the conditions offered. (at p12)
Mr. Reilly confirmed that because of the bans there was no useful work for Mr. Kane to do and Mr. Rogan advised Mr. Reilly that in the circumstances Mr. Kane should be stood down. Mr. Rogan in evidence, said that he was firmly of the belief that Mr. Kane could not be usefully employed, because he could not actually repair any vehicles and if by some method in the absence of stores he did manage to repair a vehicle, that vehicle might be declared black because the garage had been so declared. He feared that if that happened the particular vehicle could remain black even after the strike was over and the council would have any waste collection vehicles, on which he worked, out of use indefinitely. In all this Mr. Rogan had no criticism of Mr. Kane for deciding to come to work. He said: "I do not think you could be critical of a man wishing to work even though it was causing you troubles." Also he said that the council's general attitude "has always been that it never inquires whether a person is a unionist or not". He said that there had been considerable union pressure to declare sections of the council's operations "a closed shop" but the council had never agreed. (at p12)
Mr. Rogan said that technically the actual decision to stand Mr. Kane down, which was made on the afternoon of 8th March, was made by Mr. Reilly pursuant to his authority as acting town clerk. In substance however, as indicated below, there can be little doubt that Mr. Rogan was the controlling officer. (at p13)
It appears however, that so far as can be gathered from conversations between Mr. Reilly and Mr. Rogan, they were both of one mind, namely, that in the circumstances not only could Mr. Kane do no useful work for the council working by himself at the depot without access to stores, but that the risk of the extension of the black bans and in particular the risk of vehicles being declared black was such that, in the interests of the council, Mr. Kane had to be stood down. (at p13)
In a situation such as that which arose an employer is required to consider his position. So far as the Conciliation and Arbitration Act is concerned he must not injure his employee by reason of the circumstance that he has refused or failed to join in industrial action. But it may well be that, because of the conduct of other people, he can continue to employ the non-striker only to his own disadvantage. He is entitled to consider his own interests. According to those interests, but subject to the law, he is entitled to decide his own course of conduct. His decision may be made by reason of the total situation, in which case, it would be correct to say, that it was made by reason of each aspect or part of that situation. But equally he may make his decision under the influence of one or other of the aspects of the total situation to the exclusion of the others. In the situation existing on 8th March, 1978, there were a number of identifiable aspects which might have influenced the defendant in its relations with Mr. Kane. It is conceivable, but not likely, that it would have been influenced by the fact that Mr. Kane did not stay on strike. But there were other aspects of the total situation having a distinct bearing on the interests of the defendant. The general body of its employees were on strike. That strike threatened the cleanliness and health of the city. Strikers had developed a hostility to Mr. Kane expressed in a disinclination to work with him. Mr. Kane's place of work had been declared black, because of Mr. Kane's efforts to continue to work there, and further bans were either threatened or reasonably feared if Mr. Kane were permitted to work on any vehicle and Mr. Kane could not be usefully employed. (at p13)
If the employer's course of conduct in dismissing or standing Mr. Kane down was decided upon by the employer by reference to any or all of these aspects of the total situation and was not a response or reaction to the aspect that Mr. Kane did not join in the strike then, there was no contravention of the section. In that situation it could not be said that the employer had injured Mr. Kane, by reason of the circumstance that Mr. Kane had refused or failed to join in the strike. He was injured because other people had created conditions impinging upon the employer's interests and the employer had acted by reason of those conditions. The fact that some of those conditions had been created by the strikers or the unions in response to Mr. Kane's failure to stay on strike does not alter that. The reason for their actions is not transferred to the employer in his response to those conditions. (at p14)
Mr. Reilly did not give evidence. It appears he was on long service leave. No application was made for an adjournment so that he might give evidence. It was argued on behalf of the informant that, Mr. Reilly not having been called as a witness, the court should not be satisfied that in standing down Mr. Kane, Mr. Reilly was not actuated by the circumstance that Mr. Kane had not remained on strike. In some cases a sinister inference might have been made from these matters but I do not think this is such a case. Mr. Rogan gave advice to Mr. Reilly as to the course he should take in relation to Mr. Kane and the reasons why it appeared to him that Mr. Kane should be stood down. From the discussions between the two men it is to be inferred that Mr. Reilly concurred in Mr. Rogan's view. Technically it was Mr. Reilly who stood Mr. Kane down on 8th March. He had authority so to do and if he stood Mr. Kane down in the exercise of his own authority, his action and the reasons which actuated him in taking that action would, for the purposes of this case, be the act and reasons of the defendant. The onus would lie on the defendant to prove as on a balance of probabilities that the fact that Mr. Kane had refused or failed to join in industrial action was not a "substantial and operative factor" influencing Mr. Reilly in standing Mr. Kane down. Mr. Reilly was the only person who could prove this positively and his testimony on the point was not available. (at p14)
It is, however, always possible to draw an inference as to the state of a man's mind from relevant circumstances. To my mind the proper conclusion to be drawn from those circumstances in this case, is that it is probable that, the fact that Mr. Kane has refused or failed to join in industrial action was not a substantial and operative factor influencing Mr. Reilly to stand Mr. Kane down or indeed a factor at all. When there is a strike, in which certain employees do not join, the employment of the non-striking employees frequently poses problems for the employer. In such cases the employer may well be unable to provide useful work for the employee to perform. In recognition of this, many awards of the Conciliation and Arbitration Commission contain provisions that employees for whom, because of industrial action, no useful work can be provided, may be stood down. The Metal Industry Award 1971, which is relevant to the employment of the motor mechanics, does contain such a provision in cl. 6 (e) (i) thereof. By 8th March, 1978, as Mr. Kane was not a member of the A.M.W.S.U. it may be that although the defendant remained bound to observe the provisions of that award its right to stand Mr. Kane down pursuant to the award was in doubt. But this possibility is irrelevant. Whether the standing down proceeded under the award or otherwise, does not affect the question whether in standing down Mr. Kane the defendant acted by reason of the circumstances that he had refused or failed to join in industrial action. (at p15)

It may also happen that the continued attendance for work of the non-striking employees may evoke disturbances, possibly involving violence and black bans, of varying scope and intensity. If the non-strikers cannot be usefully employed and the employer stands the employees down for that reason, then, his action is certainly not taken by reason of the circumstance that the employees have refused or failed to join in industrial action. It is true that inability to employ the non-strikers usefully arises from the strike. And no question of employing the non-strikers usefully would arise if they had joined in the strike. But not having joined in the strike the question of their useful employment by the employer immediately arises. If because there is no useful work that can be done he stands them down, that is because he does not wish to pay wages with no benefit accruing to him. The nexus of causation is between the appearance of the non-strikers for work, the absence of useful work to be done and the liability of the employer to pay wages if the men are not stood down. Of course when there is a strike in progress, the appearance for work of non-strikers is a manifestation of their failure to join in the current industrial action. But when they are stood down because no useful work is available, they are not stood down because they came to work. They are stood down because, being persons who have reported for work, there is no work for them. (at p15)
The words of s. 5 (1) (aa) can only be satisfied when it is failure to join with the fellow employees in the strike which actuates the employer to stand down his employee. Those words imply that the employer's hostile action against the non-striker is taken because the employer disapproves of the failure to join with the fellow employees in the strike or at least reacts to that aspect of the situation in a manner injurious to the non-striker. But action taken against the non-striker because of the disruption of the employer's establishment by the strike, or because he fears violence in and around his establishment and the like, does not imply any disapproval of or any reaction to the fact that the non-striker has not joined his fellow workers in the strike. (at p15)
The circumstances relevant to Mr. Reilly's state of mind include the contents of the many telephone conversations between himself and Mr. Rogan on the days of 7th and 8th March, in which were discussed all the events of and incidental to the strike. These comprised Mr. Kane's resignation from the A.M.W.S.U. and the fact that he had reported for work. They discussed the attitude of the strikers to Mr. Kane, the establishment of the picket lines and the turbulence connected therewith, as well as the steps taken to try to arrange for the transfer of Mr. Kane to another section of the council's activities, the difficulty in getting any section of employees to work with him, unless he became a union member ready to conform with union decisions and the problems associated with Mr. Kane's refusal to agree to these latter demands. They discussed the black bans on the garage and on the store, so far as Mr. Kane was concerned, the possibility of bans on vehicles if Mr. Kane worked on any of them and that in the circumstances it was impossible to find useful work for Mr. Kane to do. They discussed what course of conduct the defendant should adopt in relation to Mr. Kane's employment. (at p16)
It is to be noted that Mr. Reilly reported every incident as it occurred and, I would infer, discussed the significance of each event. I would infer also from the contents of the conversations that Mr. Reilly was not speaking to Mr. Rogan as an independent executive who had made up or would make up his own mind as to what he was to do in respect of Mr. Kane, but rather that he was recognizing that the situation was of such delicacy that he was ignoring his temporary technical authority in Melbourne and reacting to the reality of the situation that Mr. Rogan was the senior, whose "advice" would be law, and the person to take the responsibility for what was done. Mr. Rogan's capacity for taking responsibility and strong supervision in his executive role would support this. It is clear that Mr. Rogan expected his "advice" to be followed. (at p16)
It appears that in their discussions Mr. Kane's refusal or failure to join in the strike was not, as such, discussed at all. Certainly that aspect of the situation, as a factor or possible factor having any relevance to the course to be adopted towards Mr. Kane, does not appear to have been mentioned. The evidence of Mr. Rogan contained the following passage:

"Q. It was in the light of that that you concurred with Mr. Reilly's view that he had to be stood down? A. I am not sure that I concurred with the view, I think it was my view and that I advised Mr. Reilly that in view of all the circumstances which included the black ban and inability to use Mr. Kane in a gainful fashion, that should it transpire that this compromise did not work out then Mr. Kane was to be stood down. That was my advice to him and he acted on that subsequently when events turned out that way.

"Q. At that stage are you saying you were not in a sense taking over control of the issue, you were leaving it to Mr. Reilly to make up his mind in the light of your advice? A. Putting it in a polite way, yes, but in actual fact I expected him to take my advice.

"Q. If you in fact had gone to, say, the Lord Mayor at that time and he had advised you to take that course you would have naturally given heed to such advice given by the Lord Mayor?

A. I would have thought about it, I would not have necessarily acted on it. You see, the point is - I follow the line of your questioning, or I think I do, but in my relationship with Mr. Reilly, Mr. Reilly is used to taking instructions from me but I do not take instructions from the Lord Mayor." (at p17)

The fact that Mr. Kane had ceased to be on strike was, of course, basic to the whole situation, but there is no hint that his refusal and failure to stay on strike was in the mind of either man as an aspect of the situation, which could provoke hostile action against Mr. Kane, in relation to his employment. It is clear that to take action against Mr. Kane by reason of that circumstance was certainly not in Mr. Rogan's mind and he would have been most surprised if there had been any suggestion that it was in Mr. Reilly's mind. On the general probabilities of the matter Mr. Reilly knew that it was the policy of the defendant that there should be no discrimination against employees who were not unionists. In addition there is a basic improbability that a man in Mr. Reilly's position would injure one of the defendant's employees in his employment, because he had not joined in industrial action. It would have been an unjust and unfair act. But of course the probability that action might be taken against a non-striker as a result of various kinds of pressures from the strikers or their union is quite a different matter. And as indicated above, if that was the situation no crime was committed. (at p17)
However, notwithstanding the concession by Mr. Rogan, that technically Mr. Reilly was in control of the situation in Melbourne on the relevant days, the proper inference from the evidence is that as a matter of substance, Mr. Rogan was at all times certainly in relation to the standing down of Mr. Kane the dominant officer of the council and responsible for the course taken by Mr. Reilly in that respect. As Mr. Rogan said:

"Q. Did you have any belief as to Mr. Reilly's attitude towards Mr. Kane remaining on pay and employed in the ordinary way as from 9th March in the circumstances? A. Yes. Mr. Reilly put it to me quite plainly over the telephone that because of the bans that were on there was no useful work for Mr. Kane to do.

"Q. And from that you drew a conclusion? A. Yes, that if in fact he did not accept the compromise then he was to be stood down in the sense he was not to be sacked, he was just to be not paid during the period of the strike.

"Q. You thought if things stayed as they were after he had this conversation with you that he would probably do that? A. Yes, because he was answerable to me when I came back. The fact he was on the ground he could disregard me temporarily, he could not disregard me for long.

"Q. His views and yours were more or less in line were they not? A. Yes." (at p18)

From the fact that Mr. Reilly was so insistent in reporting and consulting with Mr. Rogan there is good reason for inferring that Mr. Reilly had no thought of disregarding Mr. Rogan or his views at all. It is more than probable that Mr. Reilly would not have acted for reasons other than those discussed between himself and Mr. Rogan particularly in a matter of such delicacy. So frequent and so comprehensive were Mr. Reilly's interstate telephone calls to Mr. Rogan, interrupting him in the course of his Adelaide business, that his conduct was more like that of an anxious junior repudiating the temporary technical authority that might have been his. The Lord Mayor, who was in Adelaide on joint business with Mr. Rogan, referred to the "whole flurry of telephone calls between Adelaide and Melbourne". (at p18)
Of course as Mr. Ormiston Q.C. senior counsel for the informant said, any statement by Mr. Reilly to Mr. Rogan proved from the testimony of Mr. Rogan is but hearsay in the sense that it cannot be used as establishing the truth of what Mr. Reilly is alleged to have said. But to draw an inference from the terms of the conversations and what matters were discussed therein between Mr. Rogan and Mr. Reilly and to observe that the conversations were frequent and were in the nature of reporting, consulting and conferring, is not so to treat any statements of Mr. Reilly. The subject matter of the conversations is proved by direct evidence. The fact that it was Mr. Rogan who gave firm advice to Mr. Reilly on the critical matter is proved and Mr. Rogan's opinion of the likelihood of Mr. Reilly departing from his advice is proved. Having regard to their long association Mr. Rogan would be expert on this. (at p18)
Mr. Reilly's statements are evidence for the defendant in two respects. What was said by Mr. Reilly substantially formed the basis of fact and opinion by reference to which Mr. Rogan made up his mind as to the course which the defendant should adopt on the question of the standing down of Mr. Kane. Also in the context of the reporting and the consultative procedure adopted by Mr. Reilly, the class and nature of the matters put before Mr. Rogan by Mr. Reilly provide a basis of fact from which an inference may be drawn as to the matters considered by Mr. Reilly to be relevant to that question. The fact that, as Mr. Rogan said: "Mr. Reilly put it to me quite plainly over the telephone that because of the bans that were on there was no useful work for Mr. Kane to do", demonstrates that that factor was regarded as relevant. This is not to accept as true what Mr. Reilly said but from the fact that the words were said there arises an inevitable inference that in Mr. Reilly's mind the circumstance so described, correct or not, was put forward bona fide by him as relevant to the problem which had arisen. In the context of the comprehensive nature of the matters put before Mr. Rogan by Mr. Reilly, the absence of references to Mr. Kane's refusal and failure to stay on strike as a possibly relevant consideration as such, is an indication that Mr. Reilly did not consider it a relevant matter to put before Mr. Rogan and thus not a relevant matter in his mind. It is manifest from the nature of the conversations between Mr. Rogan and Mr. Reilly that Mr. Reilly was putting before Mr. Rogan all relevant considerations for the purpose of obtaining either direction or advice from Mr. Rogan and that Mr. Rogan was expecting him to do so. Although Mr. Reilly had the formal authority to act on his own initiative and for his own reasons, I would infer that he did not intend to do so. Notwithstanding Mr. Reilly's formal authority it is unreal to regard his mind as the decision-making mind in what occurred. (at p19)
The swift reporting of events to Mr. Rogan as they occurred and the comprehensive nature of the telephone discussions, reflected Mr. Reilly's status as junior to Mr. Rogan. They indicate also that Mr. Reilly was seeking the concurrence of Mr. Rogan in the steps to be taken by him in the crisis and was reluctant to take steps other than with that concurrence. It was all in line with Mr. Rogan's evidence, that when Mr. Rogan was absent Mr. Reilly assumes his responsibilities and authority but "the working arrangement is that he endeavours to do it the way he thinks I would do it". (at p19)
In the task of ascertaining the mind of the defendant corporation, with respect to the standing down of Mr. Kane, that mind may be located in the mind of one authorized officer or of more than one person exercising the executive power of the corporation. It is a pure question of fact where in particular circumstances that corporate mind may be located. In a case where two officers are concerned in the solution of an administrative problem and are working jointly to solve it and decide what the corporation is to do and are working in harmony and in full confidence, the one with the other, the mind of the corporation is to be found in the course of conduct agreed upon between them and the reasons which in the end are the operating reasons for the policy agreed upon. In such circumstances where it is clear that one of the officers is junior to the other, and is seeking the co-operation and advice and possibly the direction of the other, obviously for a sharing of responsibility, it is not probable that the junior will have secret reasons not disclosed or act contrary to the advice or direction of the senior. The improbability is increased where the two men have acted for a long time in recurring situations, the junior as a working rule always doing what the senior would desire. (at p19)
Accordingly in this case, I think the better view is that it was Mr. Rogan's mind which was the mind of the defendant. Possibly the mind of the corporation has to be inferred from Mr. Rogan's and Mr. Reilly's joint mind. What is in issue is a decision of the corporation. A decision is defined in the Shorter Oxford English Dictionary as including "the action of deciding" and, notwithstanding that Mr. Rogan characterized his part in the affair as giving advice, the corporation is entitled to have the total transaction looked at objectively by the court. It is the duty of the court to draw such inferences as are proper on the evidence as to who it was that played the decision-making part in the joint administrative activities culminating in Mr. Reilly performing the actual act of standing down. So doing I would attribute the decisive factor in the matter to have been Mr. Rogan's so called advice. A relevant statement of principle in this connexion is to be found in the judgment of Bray C.J. in Brambles Holdings Ltd. v. Carey: "Of course, if mental states like knowledge or belief are to be attributed to a notional and metaphysical entity like a corporation, this can only be done by attributing to it the knowledge or belief actually possessed by some one or more of its officers. . . Very difficult questions can arise in this connection . . . It is enough to say that, in my view, it is a fallacy to say that any state of mind to be attributed to a corporation must always be the state of mind of one particular officer alone and that the corporation can never know or believe more than that one man knows or believes. This cannot be so when it is a case of successive holders of the office in question or of the holder of the office and his deputy or substitute during his absence" (1976) 15 SASR 270, at p 275 . Cf. the authorities discussed in Allen v. Townsend (1977) 31 FLR 431, at pp 446-448, 484-488 . (at p20)
It was argued by Mr. Ormiston that whether or not Mr. Rogan or Mr. Reilly actually gave attention to the fact that Mr. Kane had refused or failed to join in industrial action, in determining the question whether Mr. Rogan or Mr. Reilly dismissed or injured Mr. Kane in his employment by reason of the circumstance that he had refused or failed to join in industrial action, it was a decisive factor that at the time such actions were taken Mr. Kane had become a person characterized as a strike-breaker. It was argued that it followed that the dismissal and standing down of Mr. Kane were actions taken against Mr. Kane as a person so characterized and accordingly were to be seen as having been taken by reason of that feature of the situation. (at p20)
As I understood this argument the substance of it was that the correct approach is to isolate the characteristic of the employee which differentiates him from the other employees, who have not been stood down or injured in their employment. The submission continued that if that approach were adopted it would be manifest that the employer had taken action by reason of that characteristic. It was said that the exclusive characteristic of Mr. Kane was his failure to join in industrial action. Therefore it was concluded that that must have been the circumstance by which the employer acted. But when one stands down or injures an employee, who has a particular characteristic, it cannot necessarily be concluded that it was that characteristic which was the substantial basis of the action taken against him. The whole situation must be considered and the question is whether the person who had the characteristic was dismissed because the employer was influenced by the fact that he had such a characteristic, or by one or more of the many other factors which were relevant to the question whether for instance he should be stood down or dismissed. (at p21)
This argument does not reflect the elements of the crime as defined in s. 5 (1) (aa) of the Act. The section does not make it an offence to dismiss an employee who has broken or attempted to break a strike, or defied his fellow employees, or a union decision to engage in a strike or other industrial action. An offence is only committed when the state of mind of the employer is such that the fact that the employee has refused or failed to join in the strike was itself a substantial and operative reason for dismissing or otherwise injuring the employee. It would be apparent that in the case of an employer whose state of mind was that the fact that the employee had resisted the strike disposed him rather to advantage the employee in his employment, but who nevertheless, in his own interests, was influenced by or indeed forced to dismiss him by circumstances created by other persons he would not act by reason of the circumstance that the employee was a strike-breaker. Similarly no offence is committed by any employer where that latter circumstance is not a substantial and operative factor influencing him to dismiss the employee. (at p21)
In the result I am satisfied that Mr. Rogan had no thought of "advising" that Mr. Kane should be stood down by reason of the circumstance that he did not continue to strike and I am satisfied that Mr. Reilly also had no such thought. For these reasons I am satisfied that the mind of the corporation which decided to stand down Mr. Kane on 8th March, 1978, was one in which the circumstance, that Mr. Kane had refused or failed to join in industrial action, was not "a substantial and operative factor" and in my belief it was not a factor at all. Accordingly I would dismiss all three informations. (at p21)

ORDER

Informations dismissed.

[1979] FCA 41

09 MAY 1979