Qantas Airways Ltd v Transport Workers' Union of Australia

[2011] FCA 470

FEDERAL COURT OF AUSTRALIA

Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470

Citation:

Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470

Parties:

QANTAS AIRWAYS LTD v TRANSPORT WORKERS' UNION OF AUSTRALIA, TONY SHELDON, MICK PIERI, SCOTT CONNOLLY, JOHN LOADER, ALEX GALLACHER, MICHAEL MAGREE, MATTHEW SPRING and RICK BURTON

FAIR WORK OMBUDSMAN v TRANSPORT WORKERS' UNION OF AUSTRALIA, TRANSPORT WORKERS' UNION OF AUSTRALIA QUEENSLAND BRANCH, ANTHONY SHELDON, SCOTT CONNOLLY, JOHN LOADER and RICK BURTON

File numbers:

NSD 340 of 2009
NSD 1204 of 2009

Judge:

MOORE J

Date of judgment:

13 May 2011

Catchwords:

INDUSTRIAL LAW – whether conduct constituted industrial action in contravention of s 494 of the Workplace Relations Act – whether conduct of union delegates and officials can be taken to be conduct of union – whether authorisation or agreement of the employer under s 420(1)(e) can be given after conduct has occurred – whether applicant made false or misleading statements contravening s 401.

TORTS – whether tort of interference with trade or business a part of common law of Australia – whether tort of inducing breach of contract made out – vicarious liability of employer – nuisance.

CONTRACTS – "four hour rule" - contractual obligations of the employee under contract of employment where the employer cannot discharge its contractual obligation to pay the employee for at least four hours by operation of s 507 of the Workplace Relations Act.

TRADE PRACTICES – secondary boycott – meaning of conduct "in concert" – "dominant purpose"
PRACTICE AND PROCEDURE – role of the court where "gap" exists in legislation – scope of the power to make an order for compensation to remedy the effects of industrial action.

Legislation:

Criminal Code Act 1995 (Cth) s 5.4
Evidence Act 1995 (Cth) s 140
Federal Court of Australia Act 1976 (Cth) s 32
Trade Practices Act 1974 (Cth) ss 4(2), 45D, 45DB, 45DD, 76, 80, 82, 87
Workplace Relations Act 1996 (Cth) ss 4(5), 187AD, 253ZX, 298U, 351, 401, 420, 448, 494, 507, 508, 717, 719, 728, 826

Cases cited:

A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union (2007) 165 IR 94
Alfred v Wakelin (No. 2) (2008) 176 IR 430
Allstate Life Insurance Company v Australian and New Zealand Banking Group Ltd (1995) 58 FCR 26
Amcor Packaging Australia Pty Ltd v The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Australia (2006) 157 IR 32
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Luxottica Retail Australia Pty Ltd (2009) 185 IR 164
Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (2010) 187 FCR 293
Briginshaw v Briginshaw (1938) 60 CLR 336
Building Workers Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Corke Instrument Engineering Australia PtyLtd (2005) 223 ALR 480
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Laing (1998) 89 FCR 17
Construction, Forestry, Mining and Energy Union v Clarke (2007) 164 IR 299
Deepcliffe Pty Ltd v Council of the City of Gold Coast (2001) ACA 342
Email Ltd v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (2000) FCA 1932
Emwest Products Pty Ltd v Automotive Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 117 FCR 588
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89
Glamorgan Coal Company, Limited v South Wales Miners' Federation [1903] 2 KB 545
Gould v Vaggelas (1985) 157 CLR 215
Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530
Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157
J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (1992) 44 IR 264
Jones v Dunkel (1959) 101 CLR 298
L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 253
Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 154 IR 228
Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375
Lek v Minister for Immigration, Local Government and Ethnic Affairs (1993) 43 FCR 100
L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 253
McFadzean v Construction, Forestry, Mining and Energy Union (2007) 20 VR 250
Migration Agents Registration Authority v Goldsmith (2001) 184 ALR 723
Miles v Wakefield Metropolitan District Council [1987] AC 539
Miller v Minister of Pensions [1947] 2 All ER 372
Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518
Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566
Mogul Steamship Co Ltd v McGregor, Gow and Co  (1889) 23 QBD 598
New South Wales v Lepore (2003) 212 CLR 511
OBG Ltd v Allan [2008] 1 AC 1
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1
Printing and Kindred Industries Union v Vista Paper Products Pty Ltd (1994) 127 ALR 673
R v Associated Northern Collieries (1912) 14 CLR 387
Reid v Australian Institute of Marine Power Engineers (1990) 33 IR 463
Rural Export & Trading (WA) Pty Ltd v Hahnheuser (2008) 169 FCR 583
Roy Morgan Research Centre Pty Limited v Commissioner of State Revenue of The State of Victoria (2001) 207 CLR 72
Sanders v Snell (1998) 196 CLR 329
Scott v Pedler [2003] FCA 650
Seamen's Union of Australia v Utah Development Co  (1978) 144 CLR 120
Thomson v Deakin [1952] Ch 646
Walsh v Ervin [1952] VLR 361
Zhu v Treasurer of New South Wales (2004) 218 CLR 530

Date of hearing:

6, 7, 8, 9, 13, 14, 16 and 17 December 2010; 28 February 2011; 1, 2, 3, 4, 8, 9, 10, 11, 29, 30 and 31 March 2011

Place:

Sydney

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

489

Counsel for the Applicant (Qantas):

F Parry SC and C O'Grady

Solicitor for the Applicant (Qantas):

Freehills

Counsel for the Applicant (Fair Work Ombudsman):

J Bourke SC

Solicitor for the Applicant (Fair Work Ombudsman):

Clayton Utz

Counsel for the Respondents:

A Hatcher SC and M Gibian

Solicitor for the Respondents:

Maurice Blackburn

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 340 of 2009

BETWEEN:

QANTAS AIRWAYS LTD
Applicant

AND:

TRANSPORT WORKERS' UNION OF AUSTRALIA
First Respondent

TONY SHELDON
Second Respondent

MICK PIERI
Third Respondent

SCOTT CONNOLLY
Fourth Respondent

JOHN LOADER
Fifth Respondent

ALEX GALLACHER
Sixth Respondent

MICHAEL MAGREE
Seventh Respondent

MATTHEW SPRING
Eighth Respondent

RICK BURTON
Ninth Respondent

JUDGE:

MOORE J

DATE OF ORDER:

13 MAY 2011

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The proceedings be adjourned for further hearing at 10.00 am on 26 May 2011.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1204 of 2009

BETWEEN:

FAIR WORK OMBUDSMAN
Applicant

AND:

TRANSPORT WORKERS' UNION OF AUSTRALIA
First Respondent

TRANSPORT WORKERS' UNION OF AUSTRALIA QUEENSLAND BRANCH
Second Respondent

ANTHONY SHELDON
Third Respondent

SCOTT CONNOLLY
Fourth Respondent

JOHN LOADER
Fifth Respondent

RICK BURTON
Sixth Respondent

JUDGE:	MOORE J
DATE OF ORDER:	13 MAY 2011
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.        The proceedings be adjourned for further hearing at 10.00 am on 26 May 2011.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 340 of 2009

BETWEEN:

QANTAS AIRWAYS LTD
Applicant

AND:

TRANSPORT WORKERS' UNION OF AUSTRALIA
First Respondent

TONY SHELDON
Second Respondent

MICK PIERI
Third Respondent

SCOTT CONNOLLY
Fourth Respondent

JOHN LOADER
Fifth Respondent

ALEX GALLACHER
Sixth Respondent

MICHAEL MAGREE
Seventh Respondent

MATTHEW SPRING
Eighth Respondent

RICK BURTON
Ninth Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1204 of 2009

BETWEEN:

FAIR WORK OMBUDSMAN
Applicant

AND:

TRANSPORT WORKERS' UNION OF AUSTRALIA
First Respondent

TRANSPORT WORKERS' UNION OF AUSTRALIA QUEENSLAND BRANCH
Second Respondent

ANTHONY SHELDON
Third Respondent

SCOTT CONNOLLY
Fourth Respondent

JOHN LOADER
Fifth Respondent

RICK BURTON
Sixth Respondent

JUDGE:	MOORE J
DATE:	13 MAY 2011
PLACE:	SYDNEY

1........ . INTRODUCTION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[1]
2........ . EVIDENCE AND FINDINGS OF FACT (OTHER THAN DAMAGES)....	[13]
2.1...... Introduction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[13]
2.1.1... Introductory comments........ ........ ........ ........ ........ ........ ........ .......	[13]
2.1.2... The general approach........ ........ ........ ........ ........ ........ ........ ........ .	[17]
2.1.3... The onus and burden of proof and other evidentiary matters...	[19]
2.2...... The past decade – labour hire and outsourcing........ ........ ........ ........ ..	[39]
2.2.1... The witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[39]
2.2.2... The unfolding story........ ........ ........ ........ ........ ........ ........ ........ .....	[40]
2.3...... General events leading to 30 March 2009........ ........ ........ ........ ........ ....	[77]
2.3.1... The witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[77]
2.3.2... The events........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[78]
2.4...... Sydney – 30 March 2009........ ........ ........ ........ ........ ........ ........ ........ ........	[102]
2.4.1... The witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[102]
2.4.2... Sydney generally and the week before........ ........ ........ ........ ........	[104]
2.4.3... Sydney Domestic Terminal on the day........ ........ ........ ........ .......	[129]
2.4.4... Sydney International Terminal on the day........ ........ ........ ........	[137]
2.4.5... The aftermath........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[181]
2.5...... Brisbane – 30 March 2009........ ........ ........ ........ ........ ........ ........ ........ .....	[182]
2.5.1... The witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[182]
2.5.2... Generally and the weeks before........ ........ ........ ........ ........ ........ ..	[184]
2.5.3... Brisbane domestic terminal on the day........ ........ ........ ........ ......	[193]
2.5.4... Brisbane International Terminal on the day........ ........ ........ .....	[216]
2.5.5... The aftermath........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[222]
2.6...... Adelaide – 30 March 2009........ ........ ........ ........ ........ ........ ........ ........ .....	[223]
2.6.1... The witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[223]
2.6.2... Generally and the weeks before........ ........ ........ ........ ........ ........ ..	[224]
2.6.3... The Adelaide Airport on the day........ ........ ........ ........ ........ ........ .	[230]
2.6.4... The aftermath........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[251]
2.7...... Perth – 30 March 2009........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[255]
2.7.1... The witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[255]
2.7.2... Generally and the weeks before........ ........ ........ ........ ........ ........ ..	[256]
2.7.3... The Perth Airport on the day........ ........ ........ ........ ........ ........ ......	[266]
2.7.4... The aftermath........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[295]
3........ . THE CLAIMS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[307]
3.1...... Introduction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[307]
3.2...... Breach of s 494........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[308]
3.2.1... The statutory provisions........ ........ ........ ........ ........ ........ ........ ......	[308]
3.2.2... The authorities........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[313]
3.2.3... The interaction between s 507 and the contract of employment........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[333]
3.2.4... The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[351]
3.2.5... Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[356]
3.2.5.1....... Generally........ ........ ........ ........ ........ ........ ........ ......	[356]
3.2.5.2....... Mr Sheldon........ ........ ........ ........ ........ ........ ........ ....	[358]
3.2.5.3....... Mr Pieri........ ........ ........ ........ ........ ........ ........ ........ ...	[364]
3.2.5.4....... Mr Connolly........ ........ ........ ........ ........ ........ ........ .	[365]
3.2.5.5....... Mr Loader........ ........ ........ ........ ........ ........ ........ ......	[368]
3.2.5.6....... Mr Gallacher........ ........ ........ ........ ........ ........ .......	[369]
3.2.5.7....... Mr Magree........ ........ ........ ........ ........ ........ ........ .....	[370]
3.2.5.8....... Mr Spring........ ........ ........ ........ ........ ........ ........ ........	[371]
3.2.5.9....... Mr Burton........ ........ ........ ........ ........ ........ ........ ......	[372]
3.2.5.10..... The TWU........ ........ ........ ........ ........ ........ ........ ........ ..	[374]
3.2.6... Remedies........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[375]
3.3...... Breach of the agreement........ ........ ........ ........ ........ ........ ........ ........ ........	[396]
3.3.1... The statutory provisions........ ........ ........ ........ ........ ........ ........ ......	[396]
3.3.2... The terms of the agreement........ ........ ........ ........ ........ ........ ........	[397]
3.3.3... Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[398]
3.4...... Contravention of the Trade Practices Act........ ........ ........ ........ ........ ...	[403]
3.4.1... The statutory provisions........ ........ ........ ........ ........ ........ ........ ......	[403]
3.4.2... The authorities........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[407]
3.4.3... The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[414]
3.4.4... Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[420]
3.5...... The tort of interference with trade or business........ ........ ........ ........ ...	[422]
3.5.1... The applicable principles........ ........ ........ ........ ........ ........ ........ ....	[422]
3.5.2... The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[431]
3.5.3... Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[435]
3.6...... The tort of inducing breach of contract........ ........ ........ ........ ........ .......	[436]
3.6.1... The applicable principles........ ........ ........ ........ ........ ........ ........ ....	[436]
3.6.2... The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[452]
3.6.3... The defence of justification........ ........ ........ ........ ........ ........ ........ .	[454]
3.6.4... Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[459]
3.7...... The tort of nuisance........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[463]
3.7.1... The applicable principles........ ........ ........ ........ ........ ........ ........ ....	[463]
3.7.2... The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[466]
3.7.3... Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[468]
3.8...... The TWU's Cross Claim........ ........ ........ ........ ........ ........ ........ ........ ........	[471]
3.8.1... Introduction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[471]
3.8.2... The statutory provisions........ ........ ........ ........ ........ ........ ........ ......	[472]
3.8.3... The authorities........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[472]
3.8.4... The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[477]
3.8.5... Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[479]
4........ . DAMAGES........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[487]
4.1...... Some general observations........ ........ ........ ........ ........ ........ ........ ........ ....	[487]
5........ . CONCLUSION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[489]

REASONS FOR JUDGMENT

1.               INTRODUCTION

1. Qantas Airways Ltd's (Qantas) labour costs in providing bag handling and other ramp services at Australian airports have been viewed as uncompetitive and unsustainable.  Qantas believes it needs to reduce those costs and has attempted to do so.  The Transport Workers Union of Australia (TWU) and its members employed by Qantas in bag handling and other ramp services want to retain their jobs and preserve their existing incomes and conditions of employment for both present and future employees.  They have attempted to achieve this.  These competing objectives are potentially irreconcilable.

1. Qantas has commenced these civil proceedings suing the TWU and some of its officials alleging steps the TWU has taken in pursuing its objective are unlawful.  It has sought injunctions against the TWU and the officials and the payment of compensation for losses Qantas claims the TWU's conduct has caused.  It seeks the imposition of penalties.  In response, the TWU has sued Qantas alleging steps Qantas has taken to achieve its objective are unlawful.  The TWU seeks the imposition of penalties.  This judgment deals with these issues.

2. Monday 30 March 2009 is a critical day in these proceedings.  That day Qantas employees and others held meetings at a series of Australian airports organised by the TWU.  Qantas argues in these proceedings the meetings, in conjunction with other conduct, were unlawful.  In particular, it is said to have been unlawful industrial action organised by the TWU.  It had the effect of disrupting its operations and causing it loss and damage.

3. Qantas is an international airline headquartered in Sydney.  It employs ramp services employees who provide services involved with the ramp, baggage handling, fleet presentation, water/waste, pushback and freight operations at Australia's major airports. Those services are provided for Qantas' own aircraft and for those of a number of other client airlines. A significant number of the Qantas employees in this area of its operations are members of the TWU. Several Qantas subsidiaries are relevant in these proceedings, including Jetstar Airways Ltd (Jetstar), Qantas Catering Group Ltd and Qantas Ground Services Pty Ltd.

4. The Fair Work Ombudsman (Ombudsman) has brought separate but similar proceedings against the TWU though only seeks the imposition of penalties.  The Ombudsman is a statutory office authorised to bring proceedings for remedies for contraventions of the Workplace Relations Act 1996 (Cth) ("WR Act"): see 13(1) of Part 3 of Schedule 18 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). The TWU is an organisation of employees registered under the WR Act.

5. The second to ninth respondents inclusive in the Qantas proceedings were officers or employees of the TWU at the time.  The second respondent, Anthony Sheldon, was the federal secretary of the TWU.  Sheldon attended Sydney International Airport Terminal 1 (SIT) on 30 March 2009.  The third respondent, Mick Pieri, was an employed organiser of the TWU in its NSW branch. Pieri attended SIT on 30 March 2009.  The fourth respondent, Scott Connolly, was a member of the Federal Council of the TWU and an employed organiser undertaking the roles of executive officer of the TWU in its Queensland branch and national airline coordinator.  Connolly attended Brisbane airport on 30 March 2009. The fifth respondent, John Loader, was an employed organiser of the TWU in its South Australian/Northern Territory branch. Loader attended Adelaide airport on 30 March 2009. The sixth respondent, Alex Gallacher, was the federal president of the TWU and the secretary of the South Australian/Northern Territory branch. Gallacher attended Adelaide airport on 30 March 2009. The seventh respondent, Michael Magree, was an employed organiser of the TWU in its South Australian/Northern Territory branch.  Magree attended Adelaide airport on 30 March 2009.  During the hearing the proceedings were discontinued against the eighth respondent, Matthew Spring, an employed organiser of the TWU in its South Australian/Northern Territory branch.  The ninth respondent, Rick Burton, was a member of the Federal Council of the TWU and an employed organiser of its Western Australian branch. Burton attended Perth airport on 30 March 2009.

6. The TWU, Sheldon, Connolly, Loader and Burton are respondents to the Ombudsman proceedings.  At a relatively early stage of proceedings the Ombudsman discontinued its claim against the Queensland branch of the TWU.

7. On 21 May 2010 I made orders by consent in the Ombudsman proceedings providing that the trial be held jointly with the trial in the Qantas proceedings.  Those orders provided that evidence filed in either matter stands for evidence filed in both, and the defences of the respondents in the Qantas proceedings stand as defences in the Ombudsman proceedings.  The orders were made having regard to a number of undertakings given by the Ombudsman limiting his involvement in the proceedings.  Shortly afterwards, on 17 June 2010, I made orders by consent in the Ombudsman proceedings providing that all parties in both matters be served with any document filed and served in either matter and that they be permitted to inspect any document filed in either proceeding.  The effect of these two sets of orders was to make the Qantas proceedings the vehicle for resolving both proceedings.

8. The parties initially agreed to conduct the trial in two parts.  Counsel for the respondents referred to A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union (2007) 165 IR 94 at [87]-[89]. In the result, the evidence as to both liability and damages would be heard together. I would then publish reasons for judgment addressing the liability of the respondents for the tortious and statutory claims. I would also assess what damages or other compensation should be paid to Qantas. If a further hearing was necessary to determine penalties, that would occur. Final orders would then be made. During final submissions in the first stage the parties agreed to a proposal advanced by me that any judgment dealing with the quantification of damages would follow a judgment on liability which also dealt with damages but only at a level of principle.

9. From this point in these reasons, I mainly discuss Qantas' case though, when doing so, it can generally be taken to be a commentary on the Ombudsman's case as well but on the basis that the latter is more narrowly focused in the sense that the respondents are fewer in number.  However the Ombudsman's pleaded case is, in some respects, cast more widely.  Ultimately this did not matter as counsel for the respondents accepted that, in substance, the case they had to meet was really an amalgam of the two cases which was cast widely though obviously confined to the facts raised against them.  In these reasons I provide at various points a summary of Qantas' pleaded case.  It should be understood that in doing so, I am conscious that the Ombudsman's case is pleaded differently.  Ultimately I will be considering the case against all respondents having regard to the amalgam to which I just referred.

10. In its application dated 23 April 2009, Qantas sought relief, in terms:

    Application is made:

    (a)under sections 494(5) and 728 of the Workplace Relations Act 1996 (Cth) ("the Act") for injunctive and other relief in relation to contraventions of section 494(1), or alternatively, section 719 and 728 of the Act.

    (b) Sections 45D, 45DB, 76, 80, 82, 87 of the Trade Practices Act 1974 (Cth);
    (c)       Common law damages; and

    (d)Injunctions pursuant to the accrued and associated jurisdiction of the Court including pursuant to section 32 of the Federal Court of Australia Act 1976 (Cth).

11. Common law damages were claimed by Qantas on the footing that the respondents or some of them committed the torts of inducing breach of contract, interference with trade or business by unlawful means and nuisance.  Qantas contended it suffered loss and damage and is entitled to compensation for the costs of dealing with mishandled baggage, passenger accommodation, passenger transport, passenger meals, labour, including overtime and the allocation of additional resources, flight interruption manifests, the waived ground handling fees payable otherwise by client airlines who were affected by the industrial action, fuel and loss of goodwill and business reputation.

    2.               EVIDENCE AND FINDINGS OF FACT (OTHER THAN DAMAGES)

    2.1             Introduction

    2.1.1Introductory comments

12. In this section of the judgment I make findings of facts concerning events on which Qantas' case and Ombudsman's case on liability are based. I also do so in relation to Qantas' liability on the TWU's cross-claim. I also mention, later in these reasons, some of the evidence which is specific to the individual respondents. The focus of this consideration of the evidence is on liability only. I may not have resolved all factual issues (arising from the evidence I review) which ultimately might need to be resolved to quantify the compensation payable to Qantas and to determine the penalty each of those respondents who have contravened s 494 should be ordered to pay. If so, then the parties can address those issues and the relevant evidence during the next phase of this litigation.

13. Before descending into detail, it is appropriate to make some general observations about the evidence.  A large number of witnesses gave evidence.  Some gave evidence about the conduct and attitude of Qantas and the TWU over the use of labour hire and outsourcing in the decade or so preceding the events of 30 March 2009.  Many more gave evidence about the events of 30 March 2009 or events immediately preceding or following that day.  There were often some differences in the accounts of very many of these witnesses.  Some of the differences were minor and insignificant and others were not.

14. Occasionally a judge will hear a witness give evidence and it is obvious the witness is lying, that is deliberately giving false evidence.  That may be apparent from the witness' demeanour or the gross inconsistency between the witness' evidence and known or proven objective facts or both.  More often, however, it is neither possible nor appropriate to conclude a witness is lying even though, ultimately, the evidence given might not be accepted either in whole or part.  Human memory is generally imperfect and often witnesses strive to give an honest account of their recollection of events but their recollection is wrong, perhaps in significant respects or perhaps only in minor respects.  It is not unusual for witnesses with an interest in the proceedings (which can be either a direct or indirect interest) to give a partisan account of events favouring the party with which they are aligned.  Sometimes this is intentional, other times it is not.  Ultimately the Court must do its best to determine where the truth lies notwithstanding that it is likely the evidence is imperfect in the ways just discussed. In this case I mostly gained the impression that the witnesses were endeavouring to give an honest account of their recollection of events though sometimes with a partisan bias.

15. Often the surest guide of what occurred is evidentiary material which records, contemporaneously, the events as they are unfolding.  It may take the form of letters, e-mails, phone records, CCTV footage and other material not likely to depend on the recollection of individuals.  Also important is what is inherently likely to have occurred having regard to known or uncontested facts.  While human behaviour can, at times, be entirely irrational, unpredictable and unstructured often it is not. 

    2.1.2The general approach

16. The following narrative reflects findings of fact I have made having regard to the evidence as a whole.  Generally I only deal with conflicting evidence and explain why I have resolved the conflict in a particular way if it concerns a factual issue of some significance.  Also, I do not recount what were, to me by the time the hearing concluded, obviously irrelevant or unimportant matters of detail even if there was conflicting evidence about them.  At various points in the proceedings the parties have prepared documents which set out the facts as they see them. In many ways, though by no means always, these accounts painted a very similar or even identical picture.  I have, for convenience, incorporated in these reasons extracts from these accounts though without identifying when I am doing so or the source.  I have done this either because the incorporated account is uncontroversial or, if it is, I am satisfied it is an account made out on the evidence.

17. However before recounting the facts and discussing the evidence it is necessary to say something about both the burden of proof, the standard of proof and other evidentiary matters.

    2.1.3The onus and burden of proof and other evidentiary matters

18. In a civil case the onus of proof will normally lie with the party making the claim and will involve adducing sufficient evidence to satisfy the civil standard of proof on the "balance of probabilities".  In these proceedings it is necessary for Qantas to prove the facts upon which its case, in its various manifestations, is based and to do so to the civil standard. Similarly it is necessary for the TWU to prove the facts upon which its cross-claim is based to the civil standard.  Much has been written about what that standard entails.  Without, I hope, dwelling unduly on decided cases, some should be mentioned.  Lord Denning explained in Miller v Minister of Pensions [1947] 2 All ER 372 at 374:

    That degree [the civil standard] is well settled.  It must carry a reasonable degree of probability, not so high as is required in a criminal case.  If the evidence is such that the tribunal can say: "We think it more probably than not", the burden is discharged, but if the probabilities are equal, it is not.

19. However the civil standard is not entirely rigid. The quality of the evidence necessary to prove facts to the civil standard can be influenced by the nature of the case advanced.  A classic statement of this concept is found in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361 - 362 when Dixon J said:

    The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.

20. The common law is reflected in s 140 of the Evidence Act1995 (Cth) which provides:

    (1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.

    (2) Without limiting the matter that the court may take into account in deciding whether it is so satisfied, it is to take into account:

    (a) the nature of the cause of action or defence; and
    (b) the nature of the subject-matter of the proceeding; and
    (c) the gravity of the matters alleged.

    The standard of proof under s 140(1) is the satisfaction of the court on the "balance of probabilities". Section 140(2) requires three matters to be taken into account when assessing whether the requisite state of satisfaction has been reached.

21. More recently, the majority of the High Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 said at 171 that "the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove".

22. The Full Court of the Federal Court in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 discussed at [30] the standard of proof required in proceedings for the recovery of pecuniary penalties, commenting at [30] that, "The mandatory considerations which s 140(2) specifies reflect a legislative intention that a court must be mindful of the forensic context in forming an opinion as to its satisfaction about matters in evidence. Ordinarily, the more serious the consequences of what is contested in the litigation, the more a court will have regard to the strength and weakness of evidence before coming to a conclusion." It was held at [38] that "the ACCC had to establish that the circumstances appearing in the evidence gave rise to a reasonable and definite inference, not merely to conflicting inferences of equal degrees of probability" that a contract or arrangement had been made or an understanding arrived at. Reference was made to the judgment of the High Court in Rejfek v McElroy (1965) 112 CLR 517 where it was noted at 521 that "the standard of proof to be applied in a case and the relationship between the degree of persuasion of the mind according to the balance of probabilities and the gravity or otherwise of the fact of whose existence the mind is to be persuaded are not to be confused."

23. The Briginshaw principles have been applied and discussed recently by the majority of the in High Court British American Tobacco Australia Services Limited v Laurie (2011) 273 ALR 429 at [117], by the Full Court of the Federal Court in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88 at [110] and by a single judge of the Federal Court in Construction, Forestry, Mining and Energy Union v Stuart-Mahoney [2011] FCA 56 at pars [24] – [28].

24. Another legal principle concerning the evidence should be mentioned.  Jones v Dunkel (1959) 101 CLR 298 is authority for the proposition that if a party did not call a witness with knowledge of the relevant facts, that the party might be expected to call, the inference could be drawn that that witness' evidence would not assist that party's case. As Menzies J said at 312:

    (i) that the absence of the defendant Hegedus as a witness cannot be used to make up any deficiency of evidence; (ii) that evidence which might have been contradicted by the defendant can be accepted the more readily if the defendant fails to give evidence; (iii) that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstances that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.

25. In Lek v Minister for Immigration, Local Government and Ethnic Affairs (1993) 43 FCR 100 Wilcox J observed at 124:

    Jones v Dunkel…is often cited for its statements about the effect of a party failing to call a person with knowledge of the relevant facts; the matters discussed in Menzies J's second and third propositions.  People sometimes overlook that these statements were made against the background of findings by all three majority judges that there was material entitling the jury to infer negligence.  In that situation the defendant's failure to call Hegedus could be taken into account in determining whether the inference should in fact be drawn.  The statements in Jones v Dunkel give no support to the proposition that the failure to call a witness may itself provide the basis of an adverse inference.  An inference must be founded in evidence.  As Menzies J said, the absence of a particular witness "cannot be used to make up any deficiency of evidence".

26. More recently Barker J in Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (2010) 187 FCR 293 at [44] – [48], referred to the difficulty in drawing inferences and considered at [45]:

    In circumstances where some of the facts essential to an applicant's case are peculiarly within the knowledge of the respondent party, and the respondent party fails to give evidence about them, courts have been more willing to draw available inferences.

1. His Honour referred to the observations of Jordan CJ in De Gioia v Darling Island Stevedoring and Lighterage Co Ltd (1941) 42 SR (NSW) 1 at 4 where his Honour considered that when there is very slight evidence pointing to the existence of facts which are peculiarly within the knowledge of the defendant, it may be sufficient to justify finding they do exist but only if there is no explanation of that evidence by the defendant.

2. In in Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union  Barker J discussed the principles in Jones v Dunkel as explained by J D Heydon in Cross on Evidence (8th Australian ed, 2010) at 40 - 42:

   The unexplained failure by a party to give evidence, to call witnesses or to tender documents or other evidence or produce particular material to an expert witness may (not must) in appropriate circumstances lead to an inference that the uncalled evidence or missing material would not have assisted that party's case.
   …
   While the rule in Jones v Dunkel permits an inference that the untendered evidence would not have helped the party who failed to tender it, and entitles the trier of fact to take that into account in deciding whether to accept any particular evidence which relates to a matter on which the absent witness could have spoken, and the more readily to draw any inference fairly to be drawn from the other evidence by reason of the opponent being able to prove the contrary had the party chosen to give or call evidence, the rule does not permit an inference that the untendered evidence would in fact have been damaging to the party not tendering it. The rule cannot be employed to fill gaps in the evidence, or to convert conjecture and suspicion into inference. Nor does the rule prevent any inference favourable to the party who has failed to call the witness being drawn: other evidence may justify the drawing of the inference.
   …
   The rule only applies where a party is required to explain or contradict something. What a party is required to explain or contradict depends on the issues in the case as thrown up in the pleadings or by the course of evidence in the case. No inference can be drawn unless evidence is given of facts requiring an answer. If there is no issue between the parties on a matter, there is nothing to answer. If there is an issue between them but the party bearing the burden of proof has tendered no evidence of it, the opponent is not required to answer.

3. In considering whether to draw inferences from the material before the Court, regard can be given to the failure to offer any explanation or give evidence concerning the matter, despite the existence of a privilege against exposure to penalties, where this was within the persons' knowledge: Council of the NSW Bar Association v Power (2008) 71 NSWLR 451 at [29], Coe v NSW Bar Association [2000] NSWCA 13 at [21] and New South Wales Bar Association v Meakes [2006] NSWCA 340 at [70] - [78].

4. Of some significance, several individuals who were involved, possibly in a material way, in the events leading up to 30 March 2009 and the events of that day were not called by the respondents to give evidence.  They were Pieri, Danny Dooley (at 30 March 2009 Qantas baggage handler at SIT and TWU delegate), Jim McGiveron (branch secretary of the Western Australian branch of the TWU), Grant Mitchell (Qantas baggage handler at Brisbane international and TWU delegate), James Brennan (Qantas baggage handler at SIT and TWU delegate), Wayne Forno (secretary and treasurer of NSW branch of TWU), Gallacher and Craig Moir (at 30 March 2009 Qantas baggage handler at Adelaide airport and TWU delegate).  This failure attracts the principle in Jones v Dunkel other than probably for Dooley for whom an explanation has been given for not calling him.  It also has a result that evidence given by other witnesses about their interaction with these individuals (mainly conversations) should be accepted unless, having regard to their cross examination or other facts proved or agreed, the evidence of the other witnesses should be rejected.  Also, as pointed out by Qantas, in cases involving circumstantial evidence all facts in combination can sustain an inference about an ultimate fact in issue citing Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125.

5. An issue arose in the proceedings about whether statements made by delegates could be treated as admissions made by or on behalf of the TWU.  This is an evidentiary question.  Some of the submissions canvassed a broader question, namely whether the conduct of delegates was conduct for which the TWU could be vicariously liable.  It is convenient to deal with these two issues at this point in the judgment.

6. I deal first with the evidentiary question. The combined operation of ss 81 and 87 the Evidence Act is to render admissible a previous representation of a person (the delegate) as an admission by a party (the TWU) if it is reasonably open to find that when the representation was made the person had authority to make statements on behalf of the party in relation to the matter with respect to which the representation was made. Alternatively the previous representation is admissible if the person otherwise had authority to act for the party and the representation related to a matter within the scope of the person's authority.

7. This is not a case where the evidence only reveals that the delegates were elected or appointed by the workers and, as such, were to be viewed as speaking on their behalf only and not on behalf of the union.  That was the situation in Construction, Forestry, Mining and Energy Union v Clarke (2007) 164 IR 299, an authority relied upon by the TWU. Rather the evidence in this case is that, overwhelmingly, the delegates, while acting for and representing the members at the workplace also acted on behalf of the TWU and were, from day to day, its voice at the workplace. It is unnecessary to rehearse the details of this evidence. Much of it is referred to in [23] to [28] of the submissions of the Ombudsman on this topic in schedule A to submissions dated 18 March 2011. In any event all that s 87 demands it is that it is reasonably open to me to find that the delegate had authority to make statements on behalf of the TWU in relation to the matter with respect to which the representation was made. Without, at this point, descending into detail, I am satisfied that this precondition has been satisfied in relation to such representations as are material to Qantas' case and the case of the Ombudsman.

8. As to the broader question of whether the conduct of delegates can be taken to be conduct of the TWU, I am satisfied, at a level of generality, it can. The statutory touchstone for determining this question is s 826 of the WR Act which is set out later in these reasons. That section provides that conduct engaged in by an agent of a body corporate within the scope of his or her apparent (or actual) authority shall be taken to have been engaged in also by the body corporate. The matters mentioned in the preceding paragraph identified in the submissions of the Ombudsman point to the existence of that apparent authority. It is not sufficient to point to the rules of the TWU and say the role of a delegate is narrowly cast and constrained and certainly do not confer authority to engage in unlawful action. This approach was rejected by a Full Court in Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530 at [83] and following. I will discuss the details concerning particular conduct later in those reasons. However it seems to me that such of the conduct (involving contravention of s 494) of the delegates potentially attributable to the TWU gives rise to liability in the TWU.

9. Apart from s 826, the common law provides that an employer can be vicariously liable for the torts of the employee if they are committed within the course of employment. There must be a close nexus between the work the employee is employed to do and the conduct. If, however, the employee is on a "frolic of his own" it has been held that the connection between the employer and the tortious act is too tenuous to render the employer liable.

10. The scope of vicarious liability was discussed in New South Wales v Lepore (2003) 212 CLR 511 at [40] - [74]. Reference was made by Gleeson CJ at [42] to the formulation of the test in Salmond, Law of Torts, first edition, 1907:

    An employer is liable even for unauthorised acts if they are so connected with authorised acts that they may be regarded as modes – although improper – modes of doing them, but the employer is not responsible if the unauthorised and wrongful act is not so connected with the authorised act as to be a mode of doing it, but is an independent act.

11. The required connection was found by Gyles J to exist in A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union. His Honour considered the conduct of union officials in inducing a breach of contract for services made between a contractor and a subcontractor and held at [85]:

    Each of the individual respondents was a full time official of either the CFMEU or CFMEU NSW.  Each was engaged in what may broadly be called union business on the days in question. No one was on a frolic of his own. For relevant purposes, officers of each organisation were cooperating or acting in concert to achieve a result. The conduct of each was in the course of employment. Each organisation is liable on ordinary principles of vicarious liability in tort New South Walesv Lepore (2003) 212 CLR 511 per Gleeson CJ at [40][41]).

    2.2             The past decade – labour hire and outsourcing

    2.2.1The witnesses

12. In this section I discuss the conduct and attitude of Qantas together with the TWU's response in relation to the use of labour hire in ramp services and the outsourcing of that function in the last decade or so. Evidence was given on behalf of Qantas by Peter Smith (Qantas manager of industrial relations), Sue Bussell (Qantas executive general manager of industrial relations), Ian Oldmeadow (director of Oldmeadow Consulting), Dean Durban (Qantas head of airport services), Mark Dal Pra (Jetstar chief operating officer), Glen Rutherford (Aero-Care chief executive officer) and Nicholas Ogilvie (solicitor acting for Qantas).  On behalf of the TWU, evidence was given by Connolly, Sheldon and Wayne Mader (at 30 March 2009 assistant secretary of Victorian and Tasmanian branch of TWU).

    2.2.2The unfolding story

13. Qantas began to engage in enterprise bargaining in the early 1990s.  Each enterprise agreement it has negotiated which has applied to TWU members since the very first agreement has colloquially been known by its number.  Thus the second agreement entered into was known as EBA 2 and so on.  The currently applicable agreement is Transport Workers Union (Qantas Airways Ltd) Enterprise Agreement 7 (2008 – 2011) (EBA 7).

14. The initial enterprise agreements were multi-union agreements in which the Australian Council of Trade Unions (“ACTU”) took a leading role. In connection with those early agreements, the ACTU negotiated a protocol concerning outsourcing by Qantas or its subsidiary companies (“the ACTU Protocol”). This occurred in 1996. The terms of the protocol were as follows:

    PROTOCOL FOR CONTRACTING OUT AND OUTSOURCING QANTAS AIRWAYS LTD AND SUBSIDIARIES AND ACTU

    1.        Where Qantas management wishes to make arrangements to "contract out" services in particular business and financial circumstances it should only do so:

    after weighing up all alternative options;
    with a comprehensive consultation process and a reasonable time frame for consideration with all Qantas’ employees affected by such an option;
    ensuring the provision of offset work of quality where possible /practical /viable in any contracting out option.

    2.        The unions will have access to all necessary company information about any contracting out proposal, which impacts or may impact on staffing. This includes the provision of copies of all contracting-out proposals under serious consideration to unions and union representatives affected by a contracting-out proposal.

    3.        Qantas shall resource training necessary for union representatives to deal with contracting out. This shall include paid time off for union representatives under the auspices of trade union training leave provisions and payment where required for travelling, accommodation and incidental expenses.

    4.        Qantas will provide reasonable paid time for union nominees to attend joint reviews and address union members at meetings to respond to the business case of a contracting-out proposal and prepare specific in-house bids.

    The members and nominees shall not lose pay as a result of this involvement.

    If requested by the unions, Qantas will give union nominees access to internal departmental expertise where such a request may assist in the process. If it is mutually agreed to be necessary, Qantas will provide external expertise and meet associated costs.

    5.        The Company in contracting out will be conscious of promoting Australian products/services as this may be in the interest of employees affected by outsourcing under this clause.

15. In or about 1998, it was agreed that Qantas would negotiate separate enterprise agreements with the various unions covering its workforce. Thus, EBA 4, EBA 5 and EBA 6 were negotiated directly with the TWU.

16. EBA 3, EBA 4, EBA 5 and EBA 6 enterprise agreements included the ACTU Protocol as an operative provision, with it forming an annexure to each agreement.

17. In probably early 1997, Qantas advanced a proposal to introduce a system of competitive tendering for all airport services work that was performed by its own employees at airports in Australia.  Competitive tendering meant that the work could go to the market and may be done by an external contractor, and not by Qantas and its employees.  This was of concern to the TWU, since it made it likely, from its perspective, that many of its members would lose their jobs and that the work would be performed by other employees on inferior rates of pay and conditions.

18. The TWU engaged in negotiations with Qantas about the proposal. It was unsuccessful in persuading Qantas to abandon the competitive tender process at least in relation to Melbourne.  Mader gave evidence, which I accept, that in those negotiations Qantas agreed that tenderers would be required to pay their employees the same rates and conditions as applied to Qantas employees.  He also gave evidence which I accept that, in relation to Melbourne, Qantas employees prepared an in-house bid which, while not initially successful, ultimately did succeed which involved some concessions about part-time employment and also some voluntary redundancies.  What happened elsewhere is unclear though Qantas continued to be engaged in baggage handling and ramp services functions at Australian airports and to use its own employees for that purpose.  However at about this time Qantas began to use labour hire companies for the first time to provide labour to perform work in baggage handling, ramp services and fleet services.  This was initially done to provide supplementary casual labour.

19. There was an issue about whether, by 2002 or thereabouts, the use of labour hire companies had become widespread and significant in scope and about whether there was an agreement, arrangement or practice whereby Qantas required labour hire companies providing employees to work alongside Qantas employees to pay the same rates as those paid to the Qantas employees doing the same work.  This appears to have come to be known in the industry as the payment of "site rates" and this was certainly an expression embraced without dissent in these proceedings.

20. There is no doubt there was a dispute in Melbourne in 2003 about the use of labour hire. It resulted in industrial action and proceedings in the Australian Industrial Relations Commission ("AIRC").  Qantas sought to characterise this dispute as a dispute restricted to Melbourne and the terms upon which it was settled as likewise restricted to Melbourne.  This, in a sense, is true and is borne out by the evidence.  However statements made by Qantas' representative recorded in the transcript of proceedings before the Commission make it tolerably clear and I find, that labour hire was being used in other ports (Perth, Cairns and Adelaide were specifically mentioned) and the employees provided by labour hire firms were paid rates payable to Qantas employees under the then prevailing enterprise bargaining agreement (EBA 3).  Remarks made by the Commissioner suggest he held the view this was a "national policy".  Even though the settlement in Melbourne was, in terms, restricted to Melbourne it was approved by senior management in Sydney, which is consistent with the issues which had arisen in Melbourne as having wider significance.

21. Some of the Qantas' witnesses (significantly Smith, Bussell and Oldmeadow) resisted the suggestion there was an agreement to pay site rates, though Oldmeadow volunteered, in his evidence in chief, the description of "practice" to describe the process of labour hire firms paying site rates.  The same expression had been used by Smith in proceedings before the Commission in 2010.  I am satisfied that Qantas adopted a practice in 2002 or 2003 of requiring labour hire companies providing labour hire employees to work in baggage services and related areas alongside Qantas employees to pay those employees the same rates and conditions as Qantas paid to its own employees for the same work (I will, for my purposes, describe this as the “the Site Rates Arrangement”).  I am also satisfied that the practice flowed from an undertaking offered by Qantas during negotiations to settle the 2003 dispute in Melbourne.  I am also satisfied that, on the evidence, there have been no instances since 2002 or 2003 where the Site Rates Arrangement has not been given effect to when labour hire employees have been provided by labour hire companies to work alongside Qantas employees in baggage services and related areas.  It appears to have been accepted by the TWU that the Site Rates Arrangement did not of itself place any restriction upon Qantas’ use of labour hire companies.

22. In late 2006 or early 2007, it became apparent to the TWU that Qantas intended to re-visit the issue of competitive tendering of ramp services work.  The TWU remained concerned about the effect such competitive tendering would have on the job security and wages and conditions of TWU members.  Connolly raised the TWU's concerns about the impact on job security with various Qantas managers including Brad Moore (then Qantas executive manager airport services), Bussell, Smith, Oldmeadow and Durban, and sought an assurance that the Site Rates Arrangement would continue to apply.  The Qantas representatives did not give any such assurance.  Accordingly, the TWU determined to re-agitate this issue in the next enterprise bargaining round.

23. In mid-2007, Qantas advised the TWU that it intended to cease flying to Hobart and Launceston airports leaving Jetstar as the sole carrier in the Qantas group flying to those airports.  This would involve the contract out of work currently performed by Qantas employees to the other market providers.  As a result, some work currently performed by Qantas employees would be lost.  Mader negotiated a number of voluntary redundancies with Qantas at these airports in order to minimise job losses.

24. At about the same time, Qantas announced that it would cease flying to Coolangatta airport.  Simultaneously, Jetstar announced that it intended to put out to competitive tender its baggage room services at Coolangatta airport, which were at that time performed by Qantas employees.  As a result, 30 to 40 Qantas employees were made redundant.  There was an issue about whether the ACTU Protocol should have been and was applied to the tendering process.  The import of Connolly's evidence was that the ACTU Protocol was applied at least in the sense that he facilitated discussions with local management, delegates were provided with time off and they were involved in the preparation of a bid though it was ultimately unsuccessful. In his affidavit he described this as a process involving "TWU members put[ting] in an in-house bid".  No documents were furnished to support this characterisation of the bid.  This characterisation was put in issue by Qantas which relied on the evidence of Dal Pra to the effect that such bids as had been made by Qantas employees, were made by local Qantas management.  Having regard to his evidence which was corroborated by contemporaneous documents together with the vagueness of Connolly's evidence, I accept that an unsuccessful bid was made by local Qantas management only.  Whether this can be characterised as an "in-house" bid for the purposes of paragraph 4 the ACTU Protocol is another question though the paragraph appears, in context, to contemplate a bid by employees representing a union (in this case the TWU) membership.  This did not occur in Coolangatta.  It was, in contrast, the process adopted in the tendering process concerning Perth discussed in the following paragraphs which did result in a bid prepared by the TWU membership.

1. In December 2007, Qantas announced an intention to put out to competitive tender (involving a request for proposal ("RFP")) the work of the baggage section at Adelaide and Perth airports.  On 11 December 2007, a meeting occurred at Adelaide Airport between Qantas managerial personnel and TWU local representatives (including Loader and a number of TWU delegates).  At this meeting, the Qantas representatives advised that it intended to undertake a formal review into the operation and efficiency of the belt room section in the ramp services operation at Adelaide Airport, which was to involve a competitive tender process involving external suppliers being asked to quote on the supply of belt room functions.  This raised the prospect of the belt room work being outsourced to an external supplier, with a consequential loss of jobs of TWU members and with inferior rates of pay and conditions to apply to the performance of the work.  The TWU representatives strongly objected to this review process proceeding.

2. On 12 December 2007, commencing at about 12.00 pm, employees of Qantas in ramp services at Adelaide Airport engaged in industrial action in relation to the review proposal.  This industrial action was supported by employees of Qantas at Melbourne Airport, who refused to handle baggage for flights arriving from or departing to Adelaide Airport.  The industrial action ended at about 9.00 pm on the same day following negotiations between Qantas and the TWU.

3. Following further negotiations between Qantas and the TWU (which involved Gallacher and Mader), Qantas ultimately agreed not to proceed with the review process on the basis that belt room employees at Adelaide Airport would adjust various work practices in order to produce savings for Qantas.  At the national level, Qantas committed itself to a moratorium on any further competitive tenders across Australia for a period of twelve months.  This arrangement also brought to an end the competitive tendering process for Perth.  However it is clear from the evidence that during the period in which the possibility existed that the baggage room operations might be taken over by a tenderer who had succeeded in the tender process using its own workforce, Qantas was making clear to the TWU that tenderers were not obliged to agree to pay their employees, the rates of pay which had, till then, been paid to Qantas employees doing that work.  In other words, Qantas made clear that the tenderers would not be obliged to pay site rates.

4. Indeed, this issue of whether the tender proposal had to be based on "Qantas Collective Agreement" employment terms and conditions was the subject of a written inquiry from Gallacher to Qantas in a letter dated 2 January 2008.  Jeffries replied in writing the same day saying in his letter:

   Proposed pay and conditions are a matter for each of the prospective suppliers and their workforce. Qantas does not require any particular industrial instrument to be applied.

5. In early 2008, the TWU reached agreement with Qantas in relation to the introduction of fixed term labour hire employees to work in fleet presentation at the SIT.  On or about 20 March 2008, Brendan Fitzgerald, the then general manager of airports NSW/ACT for Qantas sent a letter to Pieri.  Relevantly the letter stated:

   Any fixed term employee including those sourced through an external labour hire company will be paid in accordance with EBA 6. This includes all shift penalties and leaves [sic] entitlements being paid for employees as Part Time employees.

6. There were no further attempts by Qantas to outsource work performed by TWU members prior to the commencement of negotiations for EBA 7 in about July 2008.

7. Connolly and Mader took the lead role in the negotiations for EBA 7. Mader's role was largely confined to face-to-face meetingswith Qantas and the TWU's EBA negotiating committee and face-to-face meetings with the TWU's members.  Connolly was involved in the face-to-face meetings with members, but also took the lead role in the behind-the-scenes work connected with the negotiations.

8. In March 2008, Connolly organised for a questionnaire to be sent to all the TWU's Qantas members, which was intended to survey members to identify their primary concerns for the upcoming round of negotiations.  The questionnaire identified a number of potential issues in the negotiations, and asked members to rank them in their order of perceived importance.  The returns to that survey identified protection of job security by limiting outsourcing and the payment of "site rates" (that is, the rates of pay and conditions provided by Qantas to its own employees) to labour hire employees.

9. Once the results of the survey were in, a national delegates' meeting was convened by Connolly and Mader in Melbourne on or about 1 May 2008.  At this meeting, the results of the questionnaire were discussed, and a log of claims for EBA 7 was formulated.  It was also determined at the meeting that a negotiating committee would be formed which included representatives of the TWU membership from each airport.  After the national delegates' meeting, Connolly organised for a flyer to be sent out to the TWU's Qantas membership setting out the results of the national delegates' meeting.

10. The TWU's log of claims for EBA 7 was sent to Qantas on 3 June 2007 in the form of a letter.  The log of claims included a claim for a provision requiring Qantas to ensure that "site rates" were paid to labour hire employees, namely, the inclusion of provisions that:

    (e)  Require the company to ensure any labour hire employees engaged to work for its benefit are paid the wages and allowances provided in this agreement.

11. The subsequent EBA 7 negotiations with Qantas took place at three levels.  Firstly, there were formal meetings between Qantas and the negotiating committee.  Secondly, there were side meetings between a smaller group representing the TWU generally consisting of Connolly, Mader and Johnston, and Qantas, at which discussions occurred on a less formal and more frank basis.  The authority to conduct such side meetings was obtained from the negotiating committee, and the outcome of the side meetings was reported to the negotiating committee.  Thirdly, Connolly from time to time engaged in private discussions with various Qantas managers to resolve particular issues.

12. The principal representatives of Qantas at meetings to negotiate EBA 7 were Bussell, Oldmeadow and Smith. Bussell and Oldmeadow took the leading role at all of the meetings.  At the smaller side meetings, Bussell and Oldmeadow, and sometimes Justine Oldmeadow, represented Qantas.

13. At the meetings involving the negotiating committee and Qantas, the procedure was generally to work through the TWU log of claims.  During the course of the negotiations, Qantas refused to entertain the proposition that EBA 7 contain a provision requiring it to ensure that labour hire companies pay "site rates" to their employees when performing Qantas work.  

14. According to Connolly, he sought a side agreement whereby Qantas would agree in writing that it would continue to ensure that labour hire companies would pay "site rates".  Qantas, on his account, refused to do this.  According to Connolly and Mader in or about August 2008 at a side meeting they attended with Bussell and Oldmeadow, Bussell said words to the following effect in response to the TWU’s claim for a side agreement:

    You are never going to get a document confirming site rates.  However, I can assure you that there’ll be no change to the existing labour hire site rates arrangements.

15. Mader but not Connolly, gave evidence that Bussell made the same or similar statements at later meetings though, Connolly but not Mader, gave evidence that Oldmeadow made similar statements at later meetings. Bussell denied making the statement and Oldmeadow's evidence was that he did not hear her make such a statement.  I have no reason to doubt that the four witnesses were giving an honest account of their recollection of what occurred at these meetings.  The issue that arises is whether, in the face of this diametrically opposed evidence, I should find that, as a matter of fact, Bussell made this statement.

16. While the evidence of Bussell and Oldmeadow was in accord about whether the contentious statement was made, it was in other respects at odds about discussions concerning site rates.  Bussell did not accept (or at least could not recall) that the TWU sought a side letter in respect of site rates and her recollection was there had been very little discussion about site rates at all.  Oldmeadow's evidence was that the issue of site rates was one which was seriously advanced by the TWU.  His evidence was also that once Qantas made it clear it viewed labour hire and site rates as something which was prohibited content and could not be included in the EBA, the TWU sought a side letter in which Qantas would commit itself to what it sought in the claim concerning labour hire and site rates. However probably what this reveals is that Bussell's recollection was less complete than that of Oldmeadow.  It does not point to a conclusion that Oldmeadow's recollection was flawed bearing in mind his evidence was that Bussell did not say the contentious words.

17. There can be no doubt that site rates were raised in discussions.  This is reflected in several notes Bussell made and also a note Smith made at various times during the negotiations. One of Bussell's notes read "Labour Hire existing arrangements" and another was "+ Understanding L.H. site rates".  As to the second notation, Bussell thought, when cross-examined about it, it was a note of a topic being foreshadowed for discussion at the next meeting.  As far as I can ascertain and recall, no questions were asked of her about what happened at the next meeting either in cross-examination or re-examination.

18. Of some importance, in my opinion, is that both Mader and Connolly gave evidence that they reported back to the TWU negotiating committee that Qantas had indicated it would not walk away from paying site rates.  Of perhaps slightly greater importance is that Seage, who was a member of the negotiating committee gave evidence that Mader and Connolly reported to the meeting that Qantas had indicated it would not agree to formalise the site rates agreement but did not intend to walk away from it.  This evidence was not challenged by Qantas in the cross examination of Seage.

19. I am satisfied, on the balance of probabilities, that Bussell did say something along the lines of the contentious statement set out earlier which was understood by Connolly and Mader to be an indication that Qantas would not seek to change existing labour hire arrangements.  Whether, however, this misrepresented Qantas' position is another question discussed later in these reasons.

20. I should note, at this point, that the TWU negotiating committee included Burton and Mark Bebich (a Qantas baggage handler at Perth and a TWU delegate).  It was clear from their cross examination that they each had become aware during the RFP process for Perth in late 2007 and early 2008, that Qantas did not require tenderers to base their tenders on Qantas rates of pay.  Each knew that tenderers could base their tenders on their own rates which may have been different to and lower than the Qantas rates.  Each would have been aware that a commitment of Qantas not to walk away from existing site rate arrangements did not involve a commitment to require tenderers in an outsourcing plan or proposal, to tender on the basis of agreeing to pay Qantas rates of pay.  They would have known the commitment was more narrowly focussed.

21. Qantas also refused in the negotiations to agree to any provisions restricting its capacity to engage in outsourcing.  However, in a side meeting that occurred in August or September 2008, Bussell or Oldmeadow (or both) said that Qantas would agree to continue to adhere to the ACTU Protocol and, because it regarded the inclusion of the terms of the ACTU Protocol in EBA 7 would constitute "prohibited content", agreed to confirm its continued adherence to the ACTU Protocol in a separate letter to be issued after EBA 7 was approved.

22. In a letter dated 11 December 2008 and signed by Bussell, the following was said:

    We refer to discussions between the parties regarding Transport Workers Union (Qantas Airways Limited) Enterprise Agreement 7.

    Further to those discussions, we confirm that Qantas will continue to observe the provisions of the Appendix B: Protocol for Contracting Out and Outsourcing Qantas Airways Ltd and Subsidiaries and ACTU of the Transport Workers Union (Qantas Airways Limited) Enterprise Agreement 6. The clause is attached.

    We trust this clarifies the position.

23. Substantive negotiations on EBA 7 were completed in late September or early October 2008, although some matters of detail remained to be concluded.  Agreement between Qantas and the TWU concerning the final form of EBA 7 was reached on or about 30 September 2008.

24. In or about late September 2008, Geoff Dixon (chief executive officer and managing director of Qantas until 28 November 2008) attended a national meeting of Qantas delegates in Sydney and congratulated them on their achievement in negotiating a new agreement and advised them that it would lead to job security and industrial harmony.  Dixon represented to the delegates that the terms of EBA 7 would give members job security.  In November 2008, the proposed EBA 7 was put to a vote of employees to whom it was to apply.  The TWU recommended to its members that they approve the proposed EBA 7, upon the advice of the TWU Negotiating Committee.

25. EBA 7 took effect on 12 December 2008, it having been lodged with the Workplace Authority and having met the relevant statutory requirements.  It bound the TWU, Qantas, and the Qantas subsidiary Qantas Catering Limited.  It had a nominal expiry date of 1 July 2011.

    2.3             General events leading to 30 March 2009

    2.3.1The witnesses

26. Against the background discussed in the preceding section, I discuss in this section events concerning Qantas' ramp operations and the activities of the TWU in the months leading to 30 March 2009.  Evidence was given by Mader, Connolly, Sheldon, Bussell, Oldmeadow, Smith, Dal Pra, Ogilvie and Durban.

    2.3.2The events

27. In or around Christmas 2008 or early January 2009, Connolly was informed by Smith that Qantas was going to put the operating of the Perth baggage room out to competitive tender.  When Sheldon was made aware of this he was not particularly concerned as, in his experience, Qantas had made such announcements before to create opportunities to negotiate productivity and efficiency savings with the TWU and keep the work in-house.

28. On or around 29 January 2009, an announcement was made in the Qantas employee newsletter "Horizons" that Jetstar had decided to put baggage and ramp work out to tender at SIT, Hobart and Adelaide.  That work was being done by Qantas employees covered by EBA 7.  The announcement was made without prior notice to or consultation with the TWU. 

29. Officers of the TWU made various representations to Qantas in relation to the decisions to outsource baggage operations at Perth and the decisions to outsource Jetstar baggage and ramp work at SIT, Hobart and Adelaide.

30. Throughout February 2009, Connolly held a series of discussions with Qantas managers, including Durban, Smith and Tony Dumbrill (Qantas general manager of commercial ground handling and ramp business services) and sought assurances that Qantas did not intend to return to competitive tendering generally or in relation to Perth. Qantas refused to give such a commitment. 

31. On 19 February 2009, Sheldon wrote to Alan Joyce (Qantas CEO and managing director) about the proposed outsourcing of work by Jetstar at SIT, Hobart and Adelaide.  From the TWU's perspective, no substantive response was received to this letter.  Pieri, Connolly and Gallacher were aware that Sheldon had written to Joyce on 19 February 2009 in respect of the RFP made by Jetstar regarding the provision of ramp services.  In fact, the letter to Joyce was forwarded to Bruce Buchanan (Jetstar CEO) who did respond on 2 March 2009.

32. In about February 2009, Qantas encouraged officials of the WA Branch of the TWU to prepare an "in-house bid" for the work in the baggage room at Perth airport.  The WA Branch officials together with employees in the baggage room agreed to do this in order to preserve the jobs of TWU members, but were unable to gather the necessary information and other material in order to do this.  The TWU requested, and Durban and Dumbrill on behalf of Qantas agreed, to provide assistance in preparing the in-house bid including the provision of an accountant at Qantas' expense.  The employees in the Perth baggage room were closely involved in the preparation of the in-house bid. In or around early March 2009, the WA Branch of the TWU submitted the bid.

33. The in-house bid was based on the rates and conditions contained in EBA 7.  However, shortly after the in-house bid was submitted, Burton was informed by a manager of WFI, which supplied a large proportion of the labour in the Perth baggage room and paid EBA 7 rates and conditions, that Aero-Care had been permitted by Qantas to submit a bid based on the inferior minimum rates and conditions contained in the industry award, and as a result had won the competitive tender.

34. Connolly and Burton immediately engaged in discussion with Qantas about this matter.  Although Qantas agreed to defer the formal announcement of the successful tenderer for the Perth baggage room until April, Qantas' position was that it was entitled to allow competitive tendering upon the minimum award rates and conditions.

35. The TWU viewed the decision by Qantas to outsource the work in the baggage room at Perth airport and the work in relation to Jetstar at the SIT, Hobart airport and Adelaide airport as constituting a direct threat to the job security of members of the TWU, the wages and conditions of employment of members of the TWU, and a risk to security and safety of those employees. 

36. Connolly continued to hold discussions with Qantas managers, including Smith, Durban and Dumbrill, in an attempt to have Qantas reconsider the outsourcing exercises that were being undertaken, but without success.  Qantas' advice with respect to the Jetstar outsourcing was that this had nothing to do with Qantas.

37. On 11 and 12 March 2009 the TWU's Federal Committee of Management met. Those present included Gallacher, Sheldon, McGiveron, Hugh Williams (TWU Queensland branch state secretary), Connolly and Forno.  There was an extensive discussion about the outsourcing of the Jetstar work at SIT, Hobart and Launceston as well as the Perth baggage room.  A view was expressed that these outsourcing proposals were inconsistent with representations Qantas had made during the negotiations of EBA 7.  It was viewed, as Sheldon described it, as a declaration of war by Qantas. Gallacher said "We as a union must draw a line in the sand and fight for our members".  Those present thought the fundamental interests of the TWU in the aviation industry were at stake.

38. On 12 March 2009 a telephone conference of all TWU Qantas delegates was arranged for Monday, 16 March 2009 at 12.30 pm AEDT.  It was in fact held on 17 March 2009.  The agenda for the meeting was "an update on the company's contract out plans in Perth, SIT and Tasmania and the TWU response".  Connolly was involved in setting up the telephone conference.  The meeting passed the following resolution (drafted by Connolly):

    That the National TWU delegates resolve to take all necessary steps to oppose the current attack on the workplace safety, job security and employment conditions by Qantas' attempts to further contract out work currently performed by TWU members under EBA [7] to the lowest possible bidder at Perth Airport.

    Delegates (members) resolve to undertake to seek the support of all members for this resolution at information meetings across the country over the next 7 days and to reconvene next Tuesday March 24^th.

    In addition, delegates request the TWU national office to seek urgent meetings with the company to arrange a postponement of the current RFP processes to allow for proper discussions to take place as a matter of urgency.

1. This claim was abandoned by Qantas during final submissions.  However I should note several matters before moving on to other aspects of the proceedings.

2. Public nuisance can arise in a diversity of circumstances involving interference with rights of the public at large, including obstructing public highways or waterways as distinct from private nuisance which traditionally relates to interference with an interest in the use and enjoyment of land.  Public nuisance is only actionable by an individual where there is proof that particular damage has occurred beyond that suffered by the rest of the public.  In Walsh v Ervin [1952] VLR 361, Sholl J reviewed the early English authorities and the history of this tort in considerable detail at [363]. His Honour concluded at [371]:

   (1) An individual person or corporation cannot sue in his or its own name in respect of a nuisance to a public highway, except for "particular damage" occasioned to him or it thereby.
   (2) "Particular damage" is not limited to "special damage" (in the sense of actual pecuniary loss).
   (3) It may consist of proved general damage, e.g., inconvenience and delay—as in the present case—provided that it is substantial, that it is direct and not consequential, and that it is appreciably greater in degree than any suffered by the general public.
   (4) Since such particular damage must be thus proved, it follows that mere nominal damages cannot be recovered, since there is no presumption of particular damage.
   (5) But I see not reason why exemplary damages might not in a proper case be awarded.

3. More recently in McFadzean v Construction, Forestry, Mining and Energy Union (2007) 20 VR 250 the Court of Appeal of Victoria considered whether there had been a public nuisance committed by the respondents in parking their vehicles on and across a forest access road, so hindering the free passage of the public, in particular members of a pro-logging group (who were the plaintiffs and appellants) along the road to the extent required to constitute a significant obstruction and public nuisance. The Court concluded that while there was sufficient obstruction to cause a public nuisance, the appellants did not have a right of action in respect of that public nuisance because particular substantial injury was not suffered by them, beyond that suffered by other members of the public. At [131] the Court said:

   …an injury for public nuisance is not actionable unless it be the "direct, necessary, natural and immediate consequence of the wrongful act".  Consequently, as Lord Hanworth MR and Lawrence LJ both held in Harper [Harper v G N Haden & Sons Ltd [1933] Ch D 298] a private individual cannot maintain an action in respect of wrongful obstruction of the highway unless the individual has suffered particular substantial injury beyond that suffered in common by all other members of the public affected by the nuisance. A claimant may establish "particular" damage where he or she has suffered injury or inconvenience which is a direct and not merely consequential result of the public nuisance and is of a substantial character so as to distinguish it from the inconvenience suffered by the public at large. And, as Sholl J explains in Walsh v Ervin, "particular damage" in the sense of actual pecuniary loss.  But such general damage, usually in the form of inconvenience and delay, must be appreciably greater in degree than that suffered by the general public (although the fact that there may be numerous plaintiffs who may have suffered the same or similar "particular" damage will not disqualify them from bringing action).

   3.7.2The pleaded case

4. It is alleged by Qantas that the conduct of the Sheldon and Pieri involved obstruction to members of the public who were seeking to enter or exit SIT and so interfered with their rights and the ordinary use of SIT by Qantas and members of the public.

5. In particular Sheldon and Pieri "induced, asked, persuaded, advised or procured" Qantas employees and others to impede the access and egress from SIT by blocking the road in front of and immediately proximate to SIT and by blocking the footpath in front of and immediately proximate to SIT.  Sheldon and Pieri also entered and remained on premises occupied by the applicant at SIT.

   3.7.3Consideration

6. Qantas acknowledged that it was necessary for it to have suffered special damage in order to be able to sue.  It put it in terms that "standing to bring an action for public nuisance requires the applicant to demonstrate they suffered an interference with rights different in kind or greater in extent from that suffered by the public at large".  It identified its special position as being firstly the blockage constituted obstruction and besetting of members of the public and customers of Qantas seeking to enter and leave SIT (though this was put various ways) and that the event was the widely reported as conduct by Qantas employees which necessarily damaged the brand and reputation of Qantas.

7. As the claim was abandoned it is not necessary to consider whether there was any evidence to support any of those propositions.

8. The claim in nuisance should be dismissed.

   3.8             The TWU's Cross Claim

   3.8.1Introduction

9. Having been drawn into litigation by Qantas' claims, the TWU has cross-claimed. It contended that certain representations were made by Qantas in negotiations which led to the making of EBA 7 which were false or misleading. This involved, so it was contended, a contravention of s 401 of the Act and a penalty should be imposed.

   3.8.2The statutory provisions

   401
   (1) A person contravenes this section if:

   (a) the person makes a false or misleading statement to another person; and
   (b) the person is reckless as to whether the statement is false or misleading;

   and

   (c) the making of that statement causes the other person:

   (i) to make, approve, lodge, vary or terminate a workplace agreement; or
   (ii) not to make, approve, lodge, vary or terminate a workplace agreement.

   (2) Subsection (1) is a civil remedy provision.
   Note: See Division 11 for provisions on enforcement.

   3.8.3The authorities

10. To establish contravention of s 401 it is necessary to show that a person has made a false or misleading statement, the person must have been reckless as to whether the statement was false or misleading and the making of the statement must have caused the person to whom it was made to make or approve a workplace agreement. An examination of the circumstances established by the evidence in the proceedings will be necessary to prove that a false or misleading statement caused another person to act in a particular way. The representation must be a real inducement or one of the real inducements to engage in the conduct which occasions the loss: San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 at 366.

11. The Full Court of the Federal Court in Shop Distributive & Allied Employees' Association v Karellas Investments Pty Ltd (2008) 166 FCR 562 discussed the operation of s 401 in relation to two documents circulated by the respondent employer containing false and misleading information about penalty rates and a pay rise in a proposed collective agreement. The operations manager of the respondent signed the documents for the respondent and he was aware of the contents of the 2003 agreement and the proposed 2007 agreement. He was also aware that the documents were being published to induce the employees to vote in favour of the 2007 agreement. The Court inferred that the operations manager was aware of the substantial risk that the misstatements might induce employees to vote in favour of the 2007 agreement and he did not deny this in sworn testimony. Section 5.4 of the Criminal Code Act 1995 (WR Regulations 8.15) was considered.  This section provides:

    (1) A person is reckless with respect to a circumstance if:

    (a) he or she is aware of a substantial risk that the circumstances exists or will exist; and

    (b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.

    (2) A person is reckless with respect to a result if:

    (a) he or she is aware of a substantial risk that the result will occur; and

    (b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.

    (3) The question whether taking a risk is unjustifiable is one of fact.

    (4) If recklessness is a fault element for a physical element of an offence, proof of intention, knowledge or recklessness will satisfy that fault element.

    The respondent was held to be reckless as to whether or not the statements that the trial judge found to be false and misleading were, in fact, false and misleading.

12. It is also necessary, in this matter, for the TWU to prove that the statements caused the making or approval of the 2007 agreement.  Reference was made to statements of principle listed by Wilson J in Gould v Vaggelas (1985) 157 CLR 215 at 236 where his Honour referred to the discussion of the law by the trial judge arising from an analysis of Smith v Chadwick (1884) 9 App Cas 187 at 196, Arnison v Smith (1889) 41 Ch D 348 at 369, Holmes v Jones (1907) 4 CLR 1692 at 1710 and Cheshire and Fifoot on the Law of Contract (4^th Aust ed) at [1028] and [1029].  His Honour re-stated the applicable principles as follows:

    1.   Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case.

    2.   If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation.

    3.   The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation.

    4.   The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract.

    (Emphasis added)

13. In Shop Distributive & Allied Employees' Association v Karellas Investments Pty Ltd there was no evidence adduced that any employee, apart from one, who had read or considered the documents that contained the false and misleading statements, relied on the false or misleading documents.  In the circumstances it was difficult to draw the inference that the employees agreed to the 2007 agreement because of the representations made in the documents.  The appeal was dismissed.

14. The principles discussed in Shop Distributive & Allied Employees' Association v Karellas Investments Pty Ltd were applied by Cowdroy J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Luxottica Retail Australia Pty Ltd (2009) 185 IR 164. In Luxottica it was claimed by the union that the information provided to employees relating to the vote for a new industrial agreement for 2009 was misleading. His Honour held at [33]:

    [T]he court must have some evidence before it that the employees were aware that the proposed agreement was clearly more advantageous to the Award, that is, whether the employees were aware of the content of the Award.  In Karellas No 1 the information provided to the employees was sufficient to enable the court to find that it was misleading and was likely to "distract" the employees…It was self-evident that the misinformation was likely to have provided an incentive to vote for the agreement. Without similar evidence the court is unable to find the "likely effect" of the alleged misinformation, since any such finding would be wholly speculative. The evidence is inadequate to warrant a finding that the statements caused employees to be distracted in their voting.

    3.8.4The pleaded case

15. The TWU (cross-claimant) alleged that there was contravention of s 401(1) of the WR Act in that the ACTU Protocol representation and the site rates representation made by Qantas were false and misleading statements and/or Qantas was reckless as to whether they were false and misleading statements. These representations caused the respondents to agree to the EBA 7 agreement with Qantas. In the respondents' further amended defence and cross-claim the cross-claim is pleaded in [28] and [66] – [69] as follows:

    28. As to paragraph 28 of the statement of claim:
    (a) The Respondents say:

    (i)there has been a long running dispute between the First Respondent, the Applicant, and subsidiaries of the Applicant, concerning the outsourcing of work by the Applicant and its subsidiaries with the objective of procuring labour at lower rates of pay;

    (ii)during the course of negotiations between the First Respondent and the Applicant in respect of the Transport Workers Union (Qantas Airways Ltd) Enterprise Agreement 7 (2008-2011) ("The Agreement") the Applicant represented to the First Respondent that, in respect of outsourcing, that in future:

    (A) it would maintain the current agreement between the Applicant and the First Respondent that any outsourcing that occurred would not undercut the rates and conditions of the Agreement ("the Site Rates Representation") and

    (B) the Applicant and its subsidiaries would comply with the ACTU Protocol concerning outsourcing ("the ACTU Protocol Representation");

    Particulars

    (1)The ACTU Protocol required that the Applicant and its subsidiaries engage in an extensive consultation process before engaging in any outsourcing of work.

    (2)A copy of the ACTU Protocol may be inspected at the offices of the solicitors for the Respondents by appointment.

    (iii)the First Respondent relied upon these representations in entering into the Agreement;

    (iv)the Agreement came into operation on 12 December 2008;

    (v)in late December 2008, the Applicant informed the First Respondent that the operations of the baggage room at Perth Airport, in which members of the First Respondent worked, would be reviewed with the objective of outsourcing the work performed there;

    (vi)the First Respondent with the assistance of the Applicant prepared its own in-house bid for the work at the Perth Airport Baggage room;

    (vii)the First Respondent's in-house bid was prepared with the assistance of external accountants paid for by the Applicant at a cost of approximately $30,000;

    (viii)the First Respondent's in-house bid was based upon the rates and conditions of the Agreement, in reliance upon the Site Rates Representation;

    (ix)in early 2009, the First Respondent learned that the Applicant had awarded the Perth baggage room contract to Aero-Care Pty Ltd ("Aero-Care"), which had tendered at rates and conditions significantly below those provided for in the Agreement;

    (x)in early 2009, and before 30 March 2009, the First Respondent was advised by a representative of the Applicant that the Applicant would not honour the Site Rates Representation;

    (xi)at all relevant times prior to March 2009, the baggage room operations at Sydney International Air Terminal of Jetstar Airways Pty Ltd ("Jetstar"), a wholly owned subsidiary of the Applicant, had been performed by employees of the Applicant under the terms of the Agreement or its predecessors;

    (xii)in early March 2009, Jetstar announced that its baggage room operations at Sydney International Air Terminal were to be outsourced to Aero-Care;

    (xiii)neither the Applicant nor Jetstar engaged in any consultation with the First Respondent or its members in accordance with the ACTU Protocol or at all prior to this announcement;

    (xiv)Aero-Care employees who perform the Jetstar baggage room work at Sydney International Air Terminal consequent upon this announcement do so upon rates and conditions significantly below those provided for in the Agreement;

    (xv)The First Respondent has at all relevant times held the view, and it was in fact at all relevant times the case, that the use of outsourced labour by the Applicant and its subsidiaries created a greater risk to the endangerment of safety and security at Australian airports, since such labour is frequently inadequately trained, not subject to proper security checks, and due to the transient nature of their employment vulnerable to direction to perform work in an unsafe and insecure way;

    (xvi)The First Respondent discussed the above matters at the meetings on 30 March 2009 referred to in paragraphs 15(b), 18(a), 20(a) and 25(a) above;

    (xvii)After 30 March 2009, the Applicant did not proceed with the outsourcing of the Perth Baggage Room;

    and otherwise does not admit the paragraph.

    [66]
    The Site Rates Representation and the ACTU Protocol Representation made by the Cross-respondent were false and misleading statements and/or the Cross-respondent was reckless as to whether they were false and misleading statements.
    [67]
    The Site Rates Representation and the ACTU Protocol Representation caused the Cross-claimant to make the Agreement with the Cross-respondent.
    [68]
    By reason of the matters stated in paragraphs 66 and 67 above, the Cross-respondent contravened s 401(1) of the Workplace Relations Act 1996.
    [69]
    The conduct of the Cross-respondent in contravention of s 401(1) of the Workplace Relations Act 1996 has caused loss and damage to the Cross-claimant and its members employed or formerly employed by the Cross-applicant.
    (Emphasis added)

16. The TWU claims that a pecuniary penalty should be imposed on Qantas under s 407 of the WR Act and an order made that it be paid to the TWU under s 841 of the WR Act, as well as an order that members of the TWU employed or formerly employed by Qantas under s 413. Pecuniary penalties should be imposed on Qantas under s 807(1)(a) of the WR Act because of the contraventions of s 792(1) and an order made that these pecuniary penalties be paid to the TWU under s 841 of the WR Act. An order should also be made for compensation to be paid to the TWU and members of the TWU formerly employed by Qantas in the Perth Airport baggage room under s 807(1)(b) due to contravention of s 792(1) of the WR Act.

    3.8.5Consideration

17. At the heart of TWU's cross-claim is whether things were said or written during the negotiations leading to and bringing about the making and approval of EBA 7 concerning Qantas' intentions which were false and misleading.  Did Qantas misrepresent its intentions?  The cross-claim will be made out if the TWU establishes what Qantas' intentions were and what was said misrepresented them or was otherwise misleading and deceptive. 

18. I deal first with the ACTU Protocol.  The agreement, if that is the correct way of describing a protocol, is ambiguous in at least one respect.  It is, in terms and having regard to its heading and content, an agreement intended to apply to Qantas and its subsidiaries.  At the time the agreement was made there was only one subsidiary, Qantas Catering Group Ltd.  Jetstar had not been incorporated nor, necessarily, had its business been created.  Immediately there is a question of whether the agreement was originally intended to apply only to subsidiaries then existing or, additionally, to subsidiaries which may later be created.  It is not my task in this case to construe the document and express a view about the scope of its operation.  That would not ordinarily depend on the subjective intentions of the parties: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352.

19. But the cross-claim centrally concerns the intentions of one party, Qantas.  Has the TWU established that Qantas understood the agreement, when made, was to apply to subsidiaries created in the future or formed that view later, possibly as and when new subsidiaries were created or represented to the TWU that it would act on this basis or acted as if it did apply to new subsidiaries?  If so, it may have misrepresented its position in the latter part of 2008 if it then intended not to apply the agreement to subsidiaries created since the ACTU Protocol was first adopted (and Jetstar in particular).  However, there is no direct evidence that Qantas, through any employee or agent, adopted the position that the ACTU Protocol applied to subsidiaries created after the Protocol was agreed in the 1990's.  Nor is there other evidence which might establish by inference that Qantas intended it apply in this way.  Nor is there cogent evidence it represented to the TWU that it intended to apply the ACTU Protocol to new subsidiaries or acted as if it did. Events at Coolangatta do not, as discussed earlier, provide that evidence.  Nor is there evidence, directly or indirectly (through inference) that would sustain a conclusion that Qantas represented to the TWU that it intended to apply the ACTU Protocol to new subsidiaries irrespective of whether it did intend to apply it.

1. The preceding comments have been seen in the context of the TWU bearing the burden of proving its case to the civil standard in proceedings for a penalty.  Unless I am satisfied that Qantas intended the ACTU Protocol to apply to a subsidiary created after the mid 1990s, had represented that it would apply it in such a situation had acted as if it would at the time it wrote the side letter on 11 December 2008 or understood the TWU believed it would operate this way and did not disabuse it of this belief, then this aspect of the cross-claim fails at what is really the threshold.  I am not so satisfied. 

2. A similar analysis applies to the site rates representation.  There was a fundamental difference apparent in the evidence between Qantas and certain of the TWU witnesses about the scope of the operation of the site rates arrangement.  Of course, what is an arrangement in this context is itself an elusive notion.  What then does the evidence establish about Qantas' intentions concerning the practice of paying site rates?  And this analysis has to be undertaken bearing in mind that the false or misleading characteristic of Qantas' conduct, as it has been pleaded, is that it did not intend to adhere to the practice when it said it would because it was apparent shortly after EBA 7 was concluded, it did not require parties tendering for ramp work at Perth and, as to Jetstar, SIT (and perhaps Hobart and Adelaide as well) to agree to pay site rates.

3. It is tolerably clear that Qantas adopted a practice of requiring the payment of site rates to employees of labour hire firms working alongside Qantas employees and that it followed that practice.  However, it is equally clear that the evidence does not establish, either directly or indirectly (by inference), that Qantas intended, at least in the last decade, the practice to have any application to, or scope to operate on, employees of contractors who successfully tendered to take over an aspect of Qantas' operations as a result of a decision by Qantas to outsource that operation.  Nor does the evidence establish that Qantas, through its employees or agents, said anything to the TWU, its officers, employees or members which suggested it intended to apply the practice more widely or had acted as if it would. 

4. It is true that in probably 1997 Qantas had put out to tender its baggage handling and ramp services operations in Melbourne on the footing that the successful tenderer would have to pay site rates.  But by the time Bussell said what she did in August 2008 about not walking away from or changing existing labour hire site rates arrangements, it was clear that Qantas, if seeking to outsource an entire area of operation or activity, would not be requiring tenderers to commit to paying site rates.  That had been the position in Perth and Adelaide and known to some and probably all the members of the negotiating committee and TWU officials.  The statement of Bussell would only have been intended to be, was and should have reasonably been taken to be concerned only with labour hire employees provided by labour hire firms working alongside Qantas employees doing similar work.  That was the only field of operation of "existing arrangements".  This aspect of the cross-claim is not made out.

5. The cross-claim should be dismissed.

   4.               DAMAGES

   4.1             Some general observations

6. There are probably two matters I should advert to concerning the question of what various respondents might be liable to pay Qantas as compensation for the contravening conduct. The first is whether I should exercise the discretion under s 494(5)(b) to make an order to remedy the effects of the contravention at all and, if so, against whom should the order be made. I presently see no compelling reason not to make such an order though equally I presently see no compelling reason to make an order against any respondent other than the TWU. The second is whether I need to assess the effect of the contravening conduct on Qantas’ operations taking into account the failure of Qantas employees to work during the period following Qantas' intimation, dictated by s 507, that its employees would not be paid. This really involves an evaluation of the nature of the power to order the payment of compensation in the statutory context in which power is conferred. The analysis, in point of principle, would appear to be much the same as that undertaken by the High Court in I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109. That is, if the industrial action led to a sequence of events including Qantas adopting a position having regard to s 507, then the adverse financial consequences on Qantas of all those events should be viewed as "the effects" of the industrial action for the purposes of s 494(5)(b). There would be no room to suggest Qantas, by its own actions, was responsible for some of the effects and, accordingly, the respondents were not. On the approach I presently consider is appropriate, the TWU would be ordered to pay compensation for such damage as Qantas suffered directly or indirectly from the industrial action and irrespective of the effect of Qantas' intimation it would not pay employees for four hours on the 30 March 2009.

7. The conclusions in this section are expressed tentatively because the parties did not know (when the wide ranging submissions were made in the first phase of these proceedings) what conclusions I would reach about the operation of both s 494(5)(b) and s 507 together with those about the availability of damages at common law. I do not suggest that I have an entirely open mind on the issue of who should pay compensation and how it should be assessed. I do not but nor are my views immutable. The parties may, if they wish, address these issues in the next phase of these proceedings on 26 and 27 May 2011.

   5.               CONCLUSION

8. I propose to sit on the dates earlier agreed to determine what orders should be made.  Accordingly, I stand the matter over for further hearing on 26 May 2011.

I certify that the preceding four hundred and eighty-nine (489) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate:

Dated:       13 May 2011