Qantas Airways Limited & Anor v Transport Workers Union of Australia

[2022] HCATrans 205

[2022] HCATrans 205

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S84 of 2022

B e t w e e n -

QANTAS AIRWAYS LIMITED
ACN 009 661 901

First Applicant

QANTAS GROUND SERVICES PTY LTD ACN 137 771 692

Second Applicant

and

TRANSPORT WORKERS UNION OF AUSTRALIA

Respondent

Application for special leave to appeal

GAGELER J
GLEESON J
JAGOT J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 18 NOVEMBER 2022, AT 9.30 AM

Copyright in the High Court of Australia

MR J.T. GLEESON, SC:  May it please the Court, I appear with MR T.O. PRINCE and MS N.D OREB for the applicants.  (instructed by Herbert Smith Freehills)

MR N.C. HUTLEY, SC:  If your Honours please, I appear with my learned friends MR M. GIBIAN, SC and MR P.A. BONCARDO for the respondent.  (instructed by Maurice Blackburn Lawyers)

GAGELER J:   Thank you.  Mr Gleeson.

MR GLEESON: Your Honours will appreciate from the papers that the application at its narrowest concerns the proper scope of section 340(1)(b) of the Fair Work Act.  I say “at its narrowest” because the dispute as to whether workplace rights which do not yet exist, may never exist and in the case of prohibited industrial action cannot yet presently exist goes to the heart of that provision, but also goes to the heart of the entirety of Division 3.  So, the issue is broad in that sense.  We frame the special leave questions ‑ ‑ ‑

GAGELER J:   You mean it is a narrow legal question with broad consequences.

MR GLEESON:   Yes.

GAGELER J:   Yes.

MR GLEESON: So, we frame the two separate questions. The first is whether rights which do not presently exist and may never exist can be the subject of section 340(1)(b) on page 316: is it a civil penalty contravention to take adverse action to prevent the exercise of such a right? That is the first question we frame.

The second question is more narrow, which is:  can it be the prevention of the exercise of a right which is positively denied to the employees at that time in the employment relationship?  We frame it that way because, at page 320, in section 417, there is a positive prohibition upon industrial action, unless the enterprise agreement has passed its nominal expiry date and a protected ballot vote has been carried out, under certain further provisions.

In the case of these two Qantas employers – in one case, the enterprise agreement had not reached its nominal expiry date, and for that reason industrial action was prohibited. In the case of the other, while it had passed the nominal expiry date, the protected ballot process had not been commenced. So the facts then reduced to a very short compass, which was whether when Qantas in late 2020 announced the decision to outsource all of its ground‑handling operations for good commercial reasons – as found, it would save hundreds of millions of dollars – but, being unable to disprove an additional purpose, which was an appreciation that, if a decision was taken then, they would not face – that is, Qantas would not face – protected industrial action, whereas, if the decision were delayed into the following year, it may – did that contravene section 340(1)(b)?

So, we submit that, in terms of the general importance, it would not only cover the intersection between section 340 and the prohibited industrial action provisions, but it will also affect a far more common and real‑worldly situation which are the unfair dismissal provisions.  It is the identical question which arises ‑ ‑ ‑

GAGELER J:   This is the additional provisions you have asked us to look at, is it?

MR GLEESON:   I have asked your Honours to look at those provisions because, under section 194(c), it becomes unlawful to include terms which improve the positions of employees beyond those in the unfair dismissal regime.

The unfair dismissal regime is on page 319.  Under section 383, those additional protections do not come in until either six months or 12 months after the commencement of the employment.  So, when section 194(c) is placed on top of that, it becomes positively unlawful to agree to give the employee earlier and better access to the unfair dismissal provisions.  Yet, the logic of the Full Court’s decision was that if an employee were dismissed for good reason – as in, had not proved up to standard – after five months and the employer could not disprove that the employer, well‑versed in the law, knew that the unfair dismissal protections could not be activated then but could be activated in 30 days’ time, that would be a contravention of section 340.  That illustrates the importance of ascertaining the intersection between these protections, on the one hand, and section 340 on the other hand.  The position – I am sorry ‑ ‑ ‑

GLEESON J: Mr Gleeson, I do not understand what relationship section 340(1)(b) has to section 340(1)(a) on your construction. In what circumstance would an employer take adverse action against another person to prevent the exercise of a workplace right without taking action because a person has a workplace right?

MR GLEESON:   Yes.  Your Honour, the different work, we would submit, is this:  that the cause limb, which is the primary limb, covers three situations where the person has a workplace right – that is, the right is capable of existence or, of course, has existed in the past; the past is not a problem, contrary to the Full Court – and it covers three situations where your adverse action can causally be said to be related to either the having or the right, the exercise of the right, or the proposal to exercise the right.  What the prevent limb does, in our submission – it is a secondary or a complementary provision – it is targeted at action which seeks to remove the circumstances in which that right could be exercised by the employee.  So, it does not become the primary, as it were, aspect of this contravention.  It is the complementary aspect. 

So, in a case where – perhaps to give your Honours a very practical example – let us assume the workers have the right to protected industrial action.  They have got the ballot, they are ready to go.  If the employer, for example, directed the employees that they could not meet the at the time otherwise specified to have the discussion about what further industrial action they would take – that is, removed the conditions for the exercise of that right – that would be a 340(1)(b) case.  It would not ‑ ‑ ‑

GLEESON J:  Why would that not be a 340(1)(a)(i) case?

MR GLEESON:   Because the target of it is the prevention of exercise in the sense of removing the conditions which will allow the exercise, whereas a 340(1)(a)(i) case – a classic one would be where the worker goes to the meeting to discuss the protected industrial action and as a sanction or a consequence for that, the worker’s pay is downgraded or the worker is denied otherwise legitimate entitlements.  It is not to suggest they are in completely different universes, they may sometimes overlap.  But, prevention, which was not there in any of the previous legislation as an express complementary limb – it was there in suggestions here and there – has been brought in as the belts and braces to ensure that the first limb does its work.

Our critical argument would be – perhaps if I would identify the four places in the Full Court where, we submit, the error emerges.  The first is at paragraph 99, on pages 184 to 185.  The logic that because “prevent” looks to a “future exercise” of a right, leads you to a conclusion that it must include rights which do not exist and may never exist, we submit, falls down.

Your Honours will see at the end of 99, the last sentence, the Full Court has narrowed the case of rights which were in existence to section 340(1)(a)(i).  What the Full Court is saying is made clear then at paragraph 120, where the court says the only part of section 340 which is limited to presently held rights is – it is a typographical error on the third line of page 193, it should be section 340(1)(a)(i) – and the court says the rest of 340(1)(a)(ii) and (iii), as well as (1)(b), are not restricted to presently held rights.

In other words, within the neatly drafted section 340, and notwithstanding that the workplace right is defined in 341 in a singular fashion for the whole of the division, a distinction has now been introduced that the only part of the provision that is concerned with presently held rights is 340(1)(a)(i) and everything else may include present or future rights.  Now that, we would submit, raises a fairly profound question, whether that dichotomy has arisen, not just in our case of prevention, but whether it has arisen in (a)(ii) and (a)(iii).

On the Full Court’s logic, looking at (a)(iii), if the employee says, I propose next year if I get a protected action ballot to do certain things, or I propose after the six‑month period to assert wrongful dismissal rights against you even though they do not yet presently exist, adverse action because of that would be caught by subsection (1) on the Full Court’s view, which, we would submit, is an error.

Just concluding on paragraph 120, in the fourth and the fifth line the court says to hold otherwise would be to put an implication into the provision.  We say no, it is just the plain working‑out of the provision in the light of the definition in 341.  Then what is raised at the end of 120 is a red herring, with respect.  The Full Court says, well, our argument means that if you take adverse action in response to a workplace right the person had, even though it is now expired, then that would escape our construction.  Well, of course, it would not.  We are looking at workplace rights which presently exist, or have existed, and we are excluding those which do not exist and may never exist.

Your Honours, the next place where we assert error in particular is at paragraphs 103 and 104.  In 103, the Full Court has marginalised the text of the definition of “workplace right” in section 341 as telling us nothing about whether the rights have to be presently held where, as a clear reading of 341 – for instance, (1)(a) – you have a right if you are entitled to certain benefits under a relevant instrument.  It appears to be something you must have rather than something you may never have until future events occur.

As to 104 – and coming back to your Honour Justice Gageler’s original question to me – this illustrates, correctly – although we come to the opposite answer to the question – that understanding whether workplace rights have the limitation we contend for would apply across the whole of the division.  To take an example of section 343, which is given by the Full Court, that provision is on page 339.  The prohibition against coercion, which is targeted to the exercise of workplace rights, we would submit, by parity of reasoning is workplace rights which are presently existing, capable of being exercised, not workplace rights which cannot presently exist and may never exist or be capable of exercise.  It certainly illustrates the breadth of the question because, on the Full Court’s approach, coercion could have this far wider reach.

GAGELER J:   The Full Court is contemplating that these expressions will have a consistent meaning.

MR GLEESON:   The Full Court is contemplating, yes, that there must be a consistent meaning, but the one exception to that, which appears to follow from what I have been to at 120, is that 340(1)(a)(i) is somehow limited to presently existing rights because of the word “has”, whereas in every other context it is not so limited.  In every other context, it can have the broader conception of rights that do not exist, may never exist, and so on.

GAGELER J:   Do you take any issue with what the Full Court says at paragraph 125 and following about the meaning of the word “prevent”?

MR GLEESON:   I am sorry, your Honour, about the ‑ ‑ ‑

GAGELER J:   Meaning of the word “prevent”.

MR GLEESON:   Yes, we do.  We do, your Honour.  What the Full Court seems to suggest, particularly around 127 in this larger section, is that what one does is have a factual inquiry into the subjective mind or the perception of the person taking the adverse action.  That is the language in 127.  So, one tries to ascertain in the mind of the employer how likely is it that you think that the person might at the future date have the right and exercise the right.  In the case of protected industrial action, that appears to be a subjective inquiry into how likely is it that you think that a protected ballot might be applied for, might be passed, and so on.  That, we submit, is far removed from the text, which is once one understands that it must be a right that is capable of exercise, prevention is an objective exercise:  have I removed the conditions under which that right could be exercised?

Your Honours, the final part where we – at least in this summary presentation – submit error was in respect to paragraphs 133 to 134.  Mr Hutley’s written submissions say this illustrates the problems with our argument.  The court found what was said to be a series of anomalies.  None of the situations in paragraph 133 are an anomaly, because we accept, as one must, that there can be rights which are presently existing but whose enjoyment depends upon accrual over time.  Annual leave, sick leave, they are the most obvious rights.  The right to take on the role of a health and safety representative, they are rights rights which exist under the scheme, your enjoyment of them will depend on your position from time to time.  The radical difference with protected industrial action and with unfair dismissal is that those additional rights are positively denied to employees at certain times during the employment relationship.

Your Honour Justice Gageler, I gave half of our answer on section 194, I then needed to refer to 194(e), which is the direct provision relevant to our case, which is that it would be unlawful to put a term in the agreement inconsistent with Part 3‑3 dealing with industrial action, confirming the parliamentary choice that, in the balance of this scheme, there is to be a period of time in which the employer is not to be faced with protected industrial action.  At other parts in the relationship, the employer may be faced with that action, depending on whether a protected ballot has got up.  That fundamental choice that protected industrial action is denied to the employees for the benefit of the employer during certain parts of the relationship is undermined by the construction that has been given in the present case.

Unless your Honours have questions, they are our submissions in‑chief.

GAGELER J:   Thank you, Mr Gleeson.  Mr Hutley.

MR HUTLEY:   The applicant’s case amounts – in the circumstances of this case – to this:  if, on 30 November 2020, Qantas had announced that it was making the outsourcing decision to prevent the exercise by workers of workplace rights – being the right to organise or engage in protected industrial action – and enterprise bargaining in 2021, its conduct would simply not infringe this section.  That is, in substance, what they are saying.  We say that all seems to turn on the use of section 341(1), which describes when a person has a right.  It is not – and your Honours will find the section at pages 335 and 336.

GAGELER J:   Or 316 and 317 of these provisions.

MR HUTLEY:   Yes.  The only advantage of that is, I am going to take your Honours to 343 and 345, and they are closer.  I will leave it to your Honour to use whichever one you want, of course.

GAGELER J:   So, Mr Hutley, where you are going with this is to say the Full Court is dead right.

MR HUTLEY:   Dead right, for the right reasons. 

GAGELER J:   It is an important question, is it not?

MR HUTLEY:   Your Honour, when one speaks of an important question, yes, it is an important piece of legislation.

GAGELER J:   And this question within this legislation has significant ramifications.

MR HUTLEY:   This case is a significant ramification.  I accept that.  But the question requires, in our respectful submission, making 341 do an extraordinary amount of work using the word “is”.  It is not a definition section as such.  In a sense, it cannot be read back into section 340.  It is a descriptive provision.  Section 340 has a whole lot of provisions which deal with temporal circumstances.  It says at 340(1):

(i)has a . . . right –

That is a temporal provision, existing:

(ii)has, or has not, exercised a workplace right –

I will move over that.  My learned friend has addressed it:

(iii)proposes or proposes not to, or has at any time proposed or proposed not to –

In other words, one can propose to exercise a workplace right before one has it.  In fact, often I will say, I propose to exercise this right as and when it arises.

It is, in our respectful submission, the use of, in effect, the word “is”, in 341 to drive a construction of 340 which will lead to essentially bizarre results whereby whether one, in effect, is acting properly or improperly, will depend upon a legal minute.  For example, take our current situation, to exercise protected industrial rights, there has to be a termination of an enterprise agreement.  There has to then be an application to the Industrial Court for leave to bring a ballot.  There then has to be a ballot.  It has to pass.  Then there has to be a letter sent which has to give three days’ notice of proposed conduct before one has the right.

Our learned friend’s case seems to be for this we can, in effect, do anything up until the expiry of the moment when the letter takes place, when the ballot is passed, when the agreement ends.  It just leads to the most perverse – and can I say – simply perverse conclusions, which depend upon legal minutes.  The whole case will be, you can act in whatever way you want until that legal minute, although the exact same psychological state exists in what we call “the wrongdoer”.  The purpose of the wrongdoer does not change one iota.  The description of it does not change an iota across that legal moment, but, according to our learned friends, it is perfectly legitimate up until that legal moment.

We say that can only be driven by giving 341 – the present tense – this over‑dominant control over ordinary English in 340.  We do say although it will lead – and we cannot see any rational way where it will not lead – to similar absurd results under 343 and 34, because there is no apparent way in which one can distinguish a workplace right between 340, 343 and 345.

Thus, as you can lie to people about their workplace rights up until the moment they have them, you can coerce people about their work raise rise up until the legal moment when they have them, and you can prevent them, and on it goes.  This is, in effect, a division which is aiming – its objects are – to protect workplace rights.  We just think, in our respectful submission, the construction advanced is utterly perverse.

It is important, and it would be extraordinarily important, if the court came to the conclusion of an utterly perverse construction, but, in our respectful submission, the chances of that realistically are nil.  Therefore, the Full Court’s reasoning is clearly right, and there are literally no real prospects of a contrary conclusion, because it could involve in instantiating construction which was utterly perverse and for which no policy identified anywhere in this legislation has been erected, or could be erected.

GLEESON J:   Mr Gleeson seems to suggest a matter of balance in the employer and employee rights.

MR HUTLEY:   The conduct involved here is conduct which is admonished against: coercion, misleading conduct, preventing, doing things to people because they have proposed to exercise at any time rights.  Now, that is not a balance which is meaningfully struck at the moment of the rights coming into existence.  It is just an arbitrary dividing line.  To call it “balance” is to erect an arbitrary cut‑off point by reference to the use of the verb “to be” in the present tense in 341 into a so‑called balancing.  We submit that is just utterly perverse.  The Full Court – for those reasons, the Full Court’s reasons are clearly correct. 

The examples given by our learned friends simply go nowhere, because this case is – these provisions are, as one goes to 340:

A person must not take adverse action against another person –

to prevent – that means, in order to prevent.  It is an inquiry into not the actual end sought to be achieved purpose.

GLEESON J:   Do you accept that 340(1)(a) and 340(1)(b) are not coextensive?

MR HUTLEY:   I accept that they are not coextensive.  I must, because 340(1)(a) has a right.  That speaks to:

has a workplace right –

GLEESON J:   I am sorry, I should reformulate that – on Mr Gleeson’s interpretation.

MR HUTLEY:   As my learned friend develops the argument, we say they must be one in the same, because it will be almost impossible to divide a situation where one is seeking to prevent the exercise, and because one has one, because having one is only significant because of the possibility of its exercise.

That points out why there is – that supports our construction between (i) and (ii).  There are a number of other indications, such as a subsection 341 which supports it, but I do not need to go into the detail of that now.  What we say, at the end of the day, is all the examples our learned friend seeks to erect depend upon a failure to concentrate on the proposition.  It is not a question of somebody appreciating they had a right, that is the wrongdoer.  They have got to act to prevent – that is, the end they are seeking to achieve has to be to prevent, it is not just because they realise.

Thus, our learned friends’ characterisation of the finding here of the failure to discharge the onus, it was a failure to discharge the onus that an operative and substantive purpose of Qantas was to achieve that result.  Not just that Qantas appreciated it would have that result.  That is exactly the distinction that does not apply and that is why all the examples of our learned friends go nowhere.  You have to actually prove or, because of the reverse onus, the employer has to fail to satisfy the court that its subjective, substantive, operative purpose was not a precluded purpose.

That is why all the so‑called difficulties – for example, with section 194 – evaporate.  Those cases are simply not engaged by questions of purpose.  That is the point of “to prevent”, and also, with respect of 341(a), “because”.

GAGELER J:   Mr Hutley, was there any meaningful difference between the primary judge’s reasoning and the Full Court’s reasoning on this critical question?

MR HUTLEY:   There was just no factual difference.  The argument, as the Full Court brought out, that was developed by our learned friends in the Full Court was different to the argument they put at trial.  They did not put this precise argument at trial, and therefore – but we accepted it was a pure

question of law.  That is the only difference between the reasoning:  the trial judge did not, in effect, concentrate on this distinction.  This was, in effect, thought up – I do not mean that offensively – but, in effect, was developed for the first time in the Full Court.  That is the distinction your Honours might have observed between the trial judge and the Full Court.

In our respectful submission, I fully accept it is a very important question.  But we submit it is simply a question to which there can only be one sensible answer without, in effect, imaging that wholly perverse legislation has been drafted, and the ordinary use of English – which 340 allows – and 340 is directed to states of mind is completely distorted by use of the word “to be” in 341.

Just in that regard, 341 – the title, “Meaning of a workplace right” is actually strictly not available to assist in the construction of the section.  We have sent your Honours the relevant provisions of the Act – section 40A of the Workplace Act – which incorporates section 13(3) of the Acts Interpretation Act, as at 25 June 2009, which did not allow the headings of sections to be used as construction.  But that is just a minor point.

Unless I can be of further assistance ‑ ‑ ‑ 

GLEESON J:   Mr Hutley, is there is any adverse consequence for the affected employees if the litigation does not end today?

MR HUTLEY:   Well, time, your Honour.  The employees have been terminated.  There is an inquiry into damages taking place.  That will be delayed if the Court – as a matter of practicality – were to grant leave.  Beyond that, I cannot identify one.  Excuse me.  It is listed in December for hearing, your Honour, at the moment.

Those are our submissions, your Honours.

GAGELER J:   Thank you.  Mr Gleeson.

MR GLEESON:   We agree, your Honour.  Justice Gleeson, it is listed in December for a substantial hearing on compensation.  There is a separate substantial question about civil penalties which is to be heard at another time.  We are dealing with the largest outsourcing decision in the history of Australia.  It is of grave importance to get finality and the correct result for the employees but for the employer as well.  The civil penalties involved are likely to be significant.

Apart from that, the general importance of this case has not been denied by Mr Hutley, quite correctly.  It is the case – it has never been considered at an appellate level over many years – there is no predecessor provision which, it is said, produced this result, there is no authority under the former Act which produced this result, and it will determine the relationship between these provisions and, in particular, protected action and unfair dismissal. 

You have heard quite a few speeches about perversity, but you have heard nothing from Mr Hutley to address our point:  are these provisions really intended to say that an employer who honestly and reasonably decides to terminate the employee after five months because the employee is not suitable, who fully appreciates – and cannot put out of one’s mind in the real world that, at that point, the Parliament has denied the protections whereas they may be available ‑ ‑ ‑ 

GLEESON J:   And to prevent . . . . .

MR GLEESON:  To prevent – and that is part of what is the substantial legal issue – where there are strong arguments on both sides of the equation, was “to prevent” intended to open the frame to rights which could not yet exist.  We say no, but if it was, in terms of 1(a)(ii) and (iii), and 343 and 345, were they intended to open the frame to rights which did not presently exist, they are part of the critically important question upon which we have, we would submit, good prospects.

Can I say one thing about section 341, which Mr Hutley dismissed as not being a definition, not be capable of being read into 340 and something whose heading you must ignore under section 13 of the Acts Interpretation Act.  Of course, that submission overlooks what this Court said in Mondelez about the use of headings – even under this version of the Acts Interpretation Act – as part of the extrinsic material from which the provision should be properly understood.  It is perfectly possible to read section 341 into section 340 to obtain the full meaning of the expression.  So, for instance, in 340(1):

(b)to prevent the exercise of a workplace right –

What is a workplace right?  Go down to 341(1)(a) and let us focus on 1(b).  You have a workplace right if you are:

able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument –

Then, please go to subsection (2), to the provision Mr Hutley overlooked, that protected industrial action is expressly defined there but also under paragraph (d):

a protected action ballot –

So, part of the choice made by the legislature is that if you are able to initiate or participate in a protected action ballot – that is, the nominal term has expired – as Mr Hutley says, you are able to make your application to the registrar for a ballot, that itself is a protected right.  So, one would then read that back into 340(1)(b).  If you take action to prevent the exercise of the right to go to the registrar and apply for the ballot, you contravene.  So, that illustrates part of the balance that has been expressly recognised in these provisions.

May it please the Court.

GAGELER J:   Thank you.  The Court will adjourn momentarily to consider the course it will take.

AT 10.09 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.13 AM:

GAGELER J:   There will be a grant of special leave to appeal in this matter.  A one‑day case?

MR GLEESON:   Yes, your Honour.

GAGELER J:   The parties will be contacted by the Registry with an amended timetable to take into account the Christmas break.

MR GLEESON:   May it please the Court.

AT 10.13 AM THE MATTER WAS CONCLUDED