National Union of Workers v AB Oxford Cold Storage Company Pty Ltd
[2017] FCA 1220
•12 May 2017
FEDERAL COURT OF AUSTRALIA
National Union of Workers v AB Oxford Cold Storage Company Pty Ltd [2017] FCA 1220
File number: VID 474 of 2017 Judge: BROMBERG J Date of judgment: 12 May 2017 Catchwords: PRACTICE AND PROCEDURE – interim injunctions – where the applicant union alleges that the respondent companies engaged in a system of labour hire having the effect of denying employees the opportunity to bargain for an EBA – where employees’ current employer, the second respondent, proposed to cease operating on 15 May 2017 – whether serious question to be tried – circumstances give rise to a serious question under s 340(1) of the Fair Work Act 2009 (Cth) whether first and second respondents have taken or propose to take adverse action motivated by a prohibited reason – whether balance of convenience favours grant of relief – interim orders made subject to applicant’s usual undertaking as to damages Legislation: Fair Work Act2009 (Cth) ss 340, 341, 342, 360 Cases cited: Maritime Union of Australia v Patrick Stevedores No 1 Pty Ltd (1998) 77 FCR 456
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1
Date of hearing: 12 May 2017 Registry: Victoria Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 16 Counsel for the Applicant: Mr A Solomon-Bridge Solicitor for the Applicant: Holding Redlich Counsel for the Respondents: Mr T Donaghey Solicitor for the Respondents: HR Legal ORDERS
VID 474 of 2017 BETWEEN: NATIONAL UNION OF WORKERS
Applicant
AND: AB OXFORD COLD STORAGE COMPANY PTY LTD (ACN 005 104 361)
First Respondent
COLDUNIT PTY LTD (ACN 162 234 906)
Second Respondent
HAGSON CONSULTING PTY LTD (ACN 615 303 672)
Third Respondent
JUDGE:
BROMBERG J
DATE OF ORDER:
12 MAY 2017
ON THE APPLICANT THROUGH ITS COUNSEL GIVING THE USUAL UNDERTAKING AS TO DAMAGES, THE COURT MAKES THE FOLLOWING ORDERS:
1.Until 5pm on 19 May 2017 or further order:
(i)The First Respondent (“AB Oxford”) and the Second Respondent (“Coldunit”) by themselves, their servants, and agents, are restrained from taking any further step to give effect to AB Oxford's decision to terminate the labour supply agreement with Coldunit relating to the operations of AB Oxford at Laverton North (“site”) and must continue to treat that agreement as on foot and give effect to its terms.
(ii)Coldunit by itself, its servants, and agents, is restrained from giving effect to or taking any further step to give effect to its decision to dismiss its employees working at the site.
(iii)AB Oxford and the Third Respondent by themselves, their servants, and agents are restrained from performing or giving effect to the labour supply agreement between them relating to the supply of labour to the site.
(iv)There be liberty to apply in relation to this order.
2.On or before 5pm on 17 May 2017 the Respondents file and serve any affidavits they seek to rely upon.
3.On or before 5pm on 18 May 2017 the Applicant file and serve any affidavits in reply.
4.The Applicant’s application for interlocutory relief be adjourned for further hearing at 10.15 am on 19 May 2017.
5.Costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BROMBERG J:
The applicant’s (“NUW”) application for interim injunctions was essentially conducted on an ex parte basis in circumstances where, although the respondents are represented by counsel, the respondents have had little or no time in which to file material and prepare submissions. In those circumstances, where the matter will return for consideration of whether or not interlocutory injunctions should be granted it is appropriate that I keep these reasons short.
I am persuaded on the basis of the material before me at the moment that there is a serious question to be tried on at least two of the causes of action upon which the NUW relies.
The first is an alleged breach of s 340(1) of the Fair Work Act 2009 (Cth) (“FW Act”), in relation to which the NUW relies on ss 340(1)(a)(i), (ii) and (iii) and s 340(1)(b). The NUW asserts the “workplace right” involved to be that defined by s 341(1)(b), that is, the ability to initiate or participate in a process under the FW Act. Section 341(2)(e), defines a “process” as referred to in s 341(1)(b) as including the making, varying or terminating an enterprise bargaining agreement (“EBA”).
In broad terms, the NUW complains that because employees it represents employed by the second respondent (“Coldunit”) have exercised or propose to exercise their workplace right to make, vary or terminate an EBA with Coldunit, the first respondent (“AB Oxford”), who operates a cold storage facility at Laverton North where the relevant employees work, threatens to terminate a labour supply contract it has with Coldunit. That conduct is said to constitute “adverse action” as described by s 342.
As to the second cause of action relied upon, each of the paragraphs and subparagraphs of ss 340 and 341 that I have mentioned are similarly relied upon, and it is alleged that, by virtue of the holding, exercise, or proposed exercise of the workplace right of employees of Coldunit to make, vary or terminate an EBA with Coldunit, Coldunit is taking “adverse action” by threatening to dismiss its employees.
In relation to each cause, the NUW at trial will have the assistance of s 360 of the FW Act, which provides that a person takes action for a particular reason if the reasons for the action include that reason. The NUW will also likely have the benefit of s 361(1) which creates a presumption that the action impugned was or is being taken for the alleged reason or intent. In essence, the provision reverses the onus of proof on the question of the operative reason for the adverse action. The adverse action relied upon, as I have indicated, is the threatened termination of the labour supply agreement and the threatened dismissal of employees.
Section 342(2) provides that adverse action includes threatening to take action covered by the table in s 342(1). I am satisfied that there is at least a serious issue to be tried that the adverse action alleged to have been taken, or threatened to be taken, by AB Oxford falls within the terms of item 3 of the table in s 342(1), and that the adverse action alleged against Coldunit falls within the elements identified in item 1 of the table. The material before me is sufficient to persuade me that the threatened action relied upon exists, namely, that the employments in question are threatened by termination, and that the labour supply agreement in question is also threatened by termination.
As to the reason or reasons for the alleged adverse action, the material demonstrates that the employees of Coldunit have, over the last month or two, been engaged in the process of bargaining with Coldunit for a replacement EBA. The material also demonstrates that insofar as Coldunit has participated in the bargaining, it has done so with some reluctance. During that period of bargaining, and on or about 3 May 2017, some of Coldunit’s employees received a memorandum stating that Coldunit would cease operating on 15 May 2017, that arrangements had been sought for another entity to offer employment to its employees after that date, and that failure to accept an offer of employment would result in that employee’s leave entitlements being paid out. On 4 May 2017, employees of Coldunit received an offer of employment from the third respondent (“Hagson”). The offer of employment with Hagson appears to be an offer for the employees to continue to perform the same functions as performed for Coldunit at the Laverton North operations of AB Oxford.
Hagson has an EBA which covers it and its employees, and which was made under the FW Act, with a nominal expiry date of 13 April 2021. If the employees of Coldunit are terminated in their employments and take up the offers of employment with Hagson, they will be covered by Hagson’s EBA and, by operation of the FW Act, they will be effectively denied the capacity to bargain for and make any new EBA with Hagson until 13 April 2021.
The material before me suggests that in relation to the supply of workers, or at least store persons and logistical workers working at AB Oxford’s Laverton North site, there have been, over some time, arrangements which appear to involve some coordination within a group of companies that, if not related, appear at least linked in purpose. The arrangements, broadly stated, show a pattern in which employees working at the site are offered employment by a labour hire company with an existing EBA, and that at some time close to the nominal expiry date of that existing EBA, the labour hire company ceases operations and indicates to its employees that another company will offer the employees employment. That other company, also a labour supplier, happens to already have an EBA with a distant nominal expiry date some years into the future.
In the case of employees currently employed by Coldunit, the material indicates that a previous company called Apita Pty Ltd employed employees under an EBA with a nominal expiry of 1 January 2014. Sometime before that expiry date, Coldunit was registered as a corporation and made an EBA commencing on 6 June 2013 with a nominal expiry date of 29 May 2017. Hagson, which has made the offer of employment to Coldunit’s employees, was registered on 12 October 2016. It has an EBA which commenced on 20 April 2017 with a nominal expiry date of 13 April 2021.
Each of the companies have minimal share capital and the material suggests some close relations between the controlling directors. For instance, the sole director of Coldunit, Leanne Chesser, is the mother of the sole director of Hagson, Hamish Chesser, who the material tells me is about 20 years old and lives at the same address as his mother.
It is also relevant to observe that both the EBA of Coldunit and that of Hagson were made with the approval of only two or three employees in each case. As the material stands at the moment, there is at least some basis for the assertion made by the NUW that arrangements between the corporations that I have identified are orchestrated and are, in essence, a device for denying workers working on the premises at AB Oxford an effective opportunity to bargain for the terms and conditions of an EBA that will cover them. Those circumstances give rise to the existence of a serious question that AB Oxford and Coldunit have been motivated to take the adverse action alleged against them for reasons including the workplace rights, or their exercise, of the kind that I have earlier mentioned.
On the question of balance of convenience, it seems to me that there is some importance in maintaining the status quo so far as the Court can. Without some holding of the status quo the opportunity which the relevant employees seek, that is, the opportunity to bargain for and make an EBA with Coldunit, may be lost. There is potential for irremediable harm and I am satisfied that damages would not be an adequate remedy. Although the respondents appear at short notice and without material, there was no suggestion made of any particular prejudice that might be inflicted upon them if interim holding orders of the kind sought are made. The orders sought are unusual, but by no means unprecedented and, to some extent, they reflect the interlocutory orders made by North J in Maritime Union of Australia v Patrick Stevedores No 1 Pty Ltd (1998) 77 FCR 456, which were substantively upheld in appeal in Patrick Stevedores Operations No 2 v Maritime Union of Australia (1998) 195 CLR 1.
Whilst the Court ought be cautious about making orders which have the effect of requiring employment relationships to be maintained and requiring corporations to continue operations which they may not wish to continue, I am satisfied that the balance of convenience, particularly given the intended short operation of the orders I will make, favours the NUW. I take into account as well that the respondents will be protected by the usual undertaking as to damages which has been proffered on behalf of the NUW.
I will make orders in the following terms:
(1)Until 5pm on 19 May 2017 or further order:
(i)The First Respondent (“AB Oxford”) and the Second Respondent (“Coldunit”) by themselves, their servants, and agents, are restrained from taking any further step to give effect to AB Oxford's decision to terminate the labour supply agreement with Coldunit relating to the operations of AB Oxford at Laverton North (“site”) and must continue to treat that agreement as on foot and give effect to its terms.
(ii)Coldunit by itself, its servants, and agents, is restrained from giving effect to or taking any further step to give effect to its decision to dismiss its employees working at the site.
(iii)AB Oxford and the Third Respondent by themselves, their servants, and agents are restrained from performing or giving effect to the labour supply agreement between them relating to the supply of labour to the site.
(iv)There be liberty to apply in relation to this order.
(2)On or before 5pm on 17 May 2017 the Respondents file and serve any affidavits they seek to rely upon.
(3)On or before 5pm on 18 May 2017 the Applicant file and serve any affidavits in reply.
(4)The Applicant’s application for interlocutory relief be adjourned for further hearing at 10.15 am on 19 May 2017.
(5)Costs be reserved.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. Associate:
Dated: 16 October 2017
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