Textile Clothing and Footwear Union of Australia v Huyck. Wangner Australia Pty Ltd
[2008] FCA 1504
•26 September 2008
FEDERAL COURT OF AUSTRALIA
Textile Clothing & Footwear Union of Australia v Huyck. Wangner Australia Pty Ltd [2008] FCA 1504
TEXTILE CLOTHING AND FOOTWEAR UNION OF AUSTRALIA v HUYCK. WANGNER AUSTRALIA PTY LTD (ACN 004 624 015)
VID 747 OF 2008
JESSUP J
26 SEPTEMBER 2008
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 747 OF 2008
BETWEEN:
TEXTILE CLOTHING AND FOOTWEAR UNION OF AUSTRALIA
ApplicantAND:
HUYCK. WANGNER AUSTRALIA PTY LTD (ACN 004 624 015)
Respondent
JUDGE:
JESSUP J
DATE OF ORDER:
26 SEPTEMBER 2008
WHERE MADE:
MELBOURNE
UPON the applicant by its counsel undertaking:
(a)to submit to such order (if any) as the court may consider to be just for the payment of compensation, to be assessed by the court or as it may direct, to any person, whether or not a party, adversely affected by the operation of Order 1 below or any continuation (with or without variation) thereof; and
(b)to pay the compensation referred to in (a) to the person there referred to.
THE COURT ORDERS THAT:
1.Until the hearing and determination of this proceeding or further order, the respondent be restrained from implementing any of the changes to shift structure and working arrangements referred to in the memorandum to all production operators and maintenance personnel dated 8 September 2008, being exhibit 'JK-6' to the affidavit of Jenny Kruschel affirmed on 18 September 2008.
2.On or before 8 October 2008, the respondent make discovery by verified list of the following categories of documents:
(a)documents relating to the decision taken by the respondent's management on 5 September 2008 to make the changes set out in the memorandum referred to in the previous order;
(b)documents referred to in the affidavit of Geoffrey David Charnley affirmed on 24 September 2008 and documents to which the deponent had reference for the purpose of making that affidavit; and
(c)in respect of the respondent's financial years of 2006 and 2007, documents of the kind referred to in par 13 of that affidavit and there described as Profit and Loss Statements, Cash Flow Statements and Sales Details.
3.On or before 8 October 2008, the applicant make discovery by verified list of documents referred to in the affidavit of Jenny Kruschel affirmed on 26 September 2008 and documents to which the deponent had reference for the purpose of making that affidavit.
4.Subject to such proper objections on the ground of privilege, confidentiality or otherwise as may arise:
(a)on or before 10 October 2008, the respondent provide for inspection the documents, or copies of the documents, specified by the applicant by 5pm on 9 October 2008;
(b)on or before 10 October 2008, the applicant provide for inspection the documents, or copies of the documents, specified by the respondent by 5pm on 9 October 2008.
5.On or before 17 October 2008, the applicant file and serve such further affidavit or affidavits as it proposes to rely on at trial.
6.On or before 24 October 2008, the respondent file and serve such further affidavit or affidavits as it proposes to rely on at trial.
7.On or before 29 October 2008, the applicant file and serve such affidavit or affidavits in reply to those filed and served by the respondent as it proposes to rely on at trial.
8.On or before 31 October 2008, the parties exchange outlines of the cases which they propose to advance at trial.
9.The proceeding be fixed for trial at 10:15am on 3 November 2008 with an allowance of three days.
10.The proceeding be referred for mediation by a Registrar, pursuant to the Rules of Court, at a time and date to be notified.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 747 OF 2008
BETWEEN:
TEXTILE CLOTHING AND FOOTWEAR UNION OF AUSTRALIA
Applicant
AND:
HUYCK. WANGNER AUSTRALIA PTY LTD (ACN 004 624 015)
Respondent
JUDGE:
JESSUP J
DATE:
26 SEPTEMBER 2008
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
The applicant, the Textile Clothing and Footwear Union of Australia, seeks an interlocutory injunction in this proceeding, which was commenced on 18 September 2008 under s 448 of the Workplace Relations Act 1996 (Cth) (“the Act”). The application relates to employees of the respondent, Huyck. Wangner Australia Pty Ltd, who are members of the applicant. The applicant has standing to commence the proceeding by reason of s 448(7)(b) of the Act.
The application is supported by two affidavits of Jenny Kruschel, affirmed on 18 and 26 September 2008. She is the Assistant Secretary of the Victorian branch of the applicant, and gives evidence both from her own knowledge and from information provided to her by others, which she believes to be true. The respondent relies on the affidavits of Geoffrey David Charnley, the Managing Director of the respondent, and of Philip Scott, the Production Manager – Forming Fabrics Line of the respondent, each sworn on 24 September 2008.
The respondent operates a textile manufacturing plant at Breakwater, near Geelong. It is a wholly owned subsidiary of Xerium Technologies Inc (“Xerium”), a United States company. There are 155 employees in the respondent’s factory, of whom 139 are eligible to be members of the applicant. Of those, according to Ms Kruschel, the overwhelming majority are in fact members. Those employees are covered by an agreement certified under the Act, to which the applicant and the respondent are parties, namely, the Huyck Australia Pty Ltd – TCFUA Certified Agreement 2004. The nominal expiry date of the agreement was 1 June 2006.
Employees of the respondent at Geelong work in a number of different departments. The detailed working arrangements differ as between departments. For some 81 of them, 12-hour shifts are worked over seven days. In such cases, the arrangements entitle the employees to penalty rates at various levels: double time, time and a half and shift penalties as the occasion requires. As would be expected, employees working 12-hour shifts work less than five days per week on average. Other employees work eight-hour shifts, and are entitled to one rostered day off per month. Depending upon the department, all employees are entitled to either two or three paid crib breaks per shift.
In some respects, the current shift arrangements to which I have referred are the subject of the Certified Agreement. However, for present purposes it is sufficient to note, and I would find it provisionally established as a matter of fact, that the applicant’s members in the employ of the respondent generally enjoy working conditions, and benefits associated with those conditions, more favourable to them than would exist in the case of the conventional 5-day, 38-hour, working pattern.
For some months, the applicant and the respondent have been engaged in the negotiation of an agreement to take the place of the Certified Agreement. By notice to the respondent dated 8 July 2008, the applicant initiated a bargaining period in relation to those negotiations. The bargaining period has subsisted since then. Having secured a favourable result from a protected action ballot under Div 4 of Pt 9 of the Act, on 4 September 2008 the applicant notified the respondent that its members proposed to engage in industrial action in support of its position in relation to the proposed new agreement, commencing on 10 September 2008. It is established at the prima facie case level that the industrial action (proposed by the applicant) would have been protected action within the meaning of s 448(1) of the Act.
Ms Kruschel also states, and the respondent has not denied, that the respondent has not given notice of any industrial action in which it proposed to engage, and has not, during the negotiations, indicated that it wished to change its shift structure. Relevantly to the present matter, the respondent has made no demands upon the applicant or its members, other than in relation to wages and productivity bonuses.
The present application arises because of an announcement made by the respondent to its employees on 8 September 2008. This announcement was communicated to employees in a series of meetings on each shift commencing on that day, and by way of a memorandum to all production operators and maintenance personnel, in the following terms:
Subject: Proposed change of shift structure.
The purpose of this memo is to notify all production staff of a proposed change to the shift structure that would come into effect 22nd September 2008.
These changes will be made in accordance with the Textile Industry Awards 1994 and 2000.
We believe that this change will aid in strengthening the competitiveness of our business, and will support the long term viability of our Geelong plant.
Effective from Monday 22nd September 2008, the following shift structure for a five day working week (Monday – Friday) would apply to all areas of production…
Day Shift: 7:30 AM – 3:36 PM
Afternoon Shift: 3:30 PM – 11:36 PM
Night Shift: 11:30 PM – 7:36 AMThere would be a 30 minute unpaid lunch break and rostered days off would not be applicable.
To facilitate the change over to the new structure, it is proposed that the plant would be shut from Saturday 20th September at 7:30PM until the start of the new shift at 11:30PM Sunday 21st September 2008.
Please refer to the enclosed shift roster regarding these proposed changes to your specific department or work group.
If you have enquiries or constructive feedback please contact your immediate manager.
Regards,
Production Management Team.
According to Ms Kruschel, the changes announced in this memorandum, if implemented, would have the following effects on employees:
(a)Weaving Employees will lose their paid crib breaks and suffer a reduction in their weekly income owing to the loss of the penalties associated with their weekend shift work and the two hours of double time paid for each 12 hour shift. If Weaving Employees are transferred to permanent day or afternoon shifts, they will lose roster penalties of between 20-30% depending on whether they currently work night shift on a fixed or rotational basis.
(b)Formex Employees will lose their paid crib breaks and suffer a reduction in their weekly income owing to the loss of the penalties associated with their weekend shift work and the two hours of double time paid for each 12 hour shift. If Formex Employees are transferred to permanent day or afternoon shifts, they will lose the night shift penalty they currently receive.
(c)Needling Employees will lose their paid crib breaks and suffer a reduction in their weekly income owing to the loss of the penalties associated with their weekend shift work and the two hours of double time paid for each 12 hour shift. If Needling Employees are transferred to permanent day or afternoon shifts, they will lose roster penalties of 30%.
(d)Finishing Employees will lose their paid crib breaks and suffer a reduction in their weekly income owing to the loss of the penalties associated with their weekend shift work and the two hours of double time paid for each 12 hour shift. If Finishing Employees are transferred to permanent day or afternoon shifts, they will lose roster penalties of 30%.
(e)Lappers will lose their paid crib breaks and suffer a reduction in their weekly income owing to the loss of the two hours of double time paid for each 12 hour shift. If Lappers are transferred to permanent day or afternoon shifts, they will lose roster penalties of 30%.
(f)Winders will lose their paid crib breaks and their paid Rostered Days Off.
(g)Warpers will lose their paid crib breaks and their paid Rostered Days Off.
(h)Blend/Needle Employees will lose their paid crib breaks and their paid Rostered Days Off.
(i)Joining Employees will lose their paid crib breaks and their paid Rostered Days Off. If Joining Employees on an afternoon shift are moved off that shift to day shift they will no longer receive 15% shift penalty for working that shift.
(j)Burling/Mending Employees will lose their paid crib breaks and their paid Rostered Days Off.
(k)Shipping Employees will lose their paid crib breaks and their paid Rostered Days Off. If Shipping Employees on an afternoon shift are moved off that shift to day shift they will no longer receive the 15% shift penalty for working that shift.
(l)Stores Employees will lose their paid crib breaks and their paid Rostered Days Off.
In the case of the delegate by whom Ms Kruschel is informed, the implementation of the shift changes would lead to a reduction in gross remuneration of between $280 and $300 per week. Ms Kruschel also says that she has spoken to a large number of the respondent’s employees, who had indicated to her that the changes would involve them losing about $300 per week. According to Mr Charnley, the after-tax effect of a $300 per week reduction in gross pay would be about $200 per week.
Since the announcement of 8 September 2008, and since the affirmation of Ms Kruschel’s first affidavit, the respondent has reconsidered, to an extent, the nature of the changes that it desires to implement. The state of the evidence now is that the respondent does not intend to remove rostered days off or to deny employees their crib breaks (or “paid meal breaks” as they were described). The present interlocutory application has been conducted on the assumption that the changes which the respondent would implement, if not restrained by injunction, would be to replace the 12-hour seven-day shift pattern with an eight-hour five-day shift pattern for the 81 employees who would be affected thereby.
As a result of the memorandum of 8 September, on 15 September 2008 the applicant’s solicitors wrote to the respondent in the following terms:
Changes to working conditions of members of the Textile Clothing and Footwear Union of Australia
We act for the Textile, Clothing and Footwear Union of Australia (TCFUA).
We are instructed that Huyck Wanger Australia Pty Ltd (the Company) was on 4 September given notice by our client in accordance with section 441 of the Workplace Relations Act 1996 (the Act) that our client’s members intended to take industrial action.
The industrial action which was so notified had been the subject of a Protected Action Ballot pursuant to an Order made by the Australian Industrial Relations Commission on 11 August 2008. The result of the Protected Action Ballot was declared on 2 September 2008, overwhelmingly in the affirmative. There is no question that the industrial action notified by our client is protected industrial action.
We are further instructed that on 8 September 2008, the Monday following the Thursday on which our client gave notice of the intention to take industrial action, the Company issued a memo to “production operators & maintenance personnel” describing changes to working conditions which the Company intends to implement on 22 September 2008. We are instructed that these changes to working conditions include the following:
- A change to the shift structure;
- The abolition of Rostered Days Off; and
- Abolition of paid meal breaks (the changes)The effect of the changes will include reduction of weekly wages and the diminution of working conditions. The changes would, if implemented, constitute injury to employees in their employment and/or alteration of the position of employees to their prejudice as referred to in section 448(1)(a) of the Act. At the present time, the notification of the changes constitutes a threat to so injure or alter the position of employees as referred to in section 448(1)(b) of the Act.
Further, it is clear that the changes have been proposed wholly or partly because the employees who are TCFUA members are proposing to engage in protected action. Accordingly, the Company has contravened section 448 of the Act and threatening further contraventions thereof.
In view of the above, we require the Company to confirm in writing by the close of business on Tuesday 16 September 2008 that it will not proceed with the changes. Failing such receipt of confirmation, legal proceedings may be commenced in the Federal Court of Australia without further notice, including an application for urgent interlocutory orders to restrain the company from implementing the changes.
On 16 September 2008, the respondent replied to the solicitors’ letter in the following terms:
I acknowledge receipt of your letter dated 15th September 2008 in reference to announcements we have made at our business recently.
The announcements about the changes relates to current business conditions which we have been discussing with all concerned for the last four months to which we have made little progress. We are proposing these changes to ensure the long term viability of our business.
As previously advised to our staff and the Union, we will continue to discuss the proposed changes with our staff to ensure that we consider all points of view about the changes. In the end we need to make significant changes to the operation in Geelong.
Now that we have concluded our communications to our staff, we have invited the Unions for further discussions on the matter on the 17th September. We have not had a response to this as yet.
In her affidavit sworn on 18 September 2008, Ms Kruschel effectively disputes the justification provided by the respondent in its letter of 16 September 2008. I shall read from pars 20-25 of that affidavit:
Contrary to what Mr Charnley implies, changes of the nature proposed in the memo have never been raised at any bargaining meeting. I am informed by Mr John Irvine of the Australian Manufacturing Workers Union and Mr Danny Timmers of the Electrical Trades Union that they were not made aware of the changes by the respondent before 8 September 2008 either.
On 17 September 2008, I attended a meeting at the respondent’s premises to discuss the changes proposed in the memo (“the Meeting”). The respondent was represented at the Meeting by Mr Geoff Charnley (CEO), Mr Phil Scott (Production Manager – Formex), Mr Mario Russo (Production Manager – Felts), Mr Rob Day and Ms Grace McKelly. Also present were Mr John Irvine of the Australian Manufacturing Workers Union, Mr Paul Circuit, a delegate of the Australian Manufacturing Workers Union, Mr Danny Timmers of the Electrical Trades Union, Mr Bob Cranwell, a delegate of the Electrical Trades Union, Ms Bernie King and Mr Craig Sleep, delegates of the TCFUA and Mr Bob Corker.
In the course of the Meeting, I stated that I believed that the respondent was not entitled to implement changes proposed in the memo without the Agreement of the employees and asked Mr Charnley to explain on what basis he thought the respondent was entitled to do so. Mr Charnley replied that he did not know and would require advice.
In the course of the Meeting, Mr Charnley stated that the changes proposed in the memo were related to ensuring the respondent’s viability. Mr Timmers asked Mr Charnley what the financial problem was. Mr Charnley in reply said words to the effect of “It’s the economy, it’s the competition, its [sic] about saving money, its [sic] about the selling price”. Mr Charnley said that there could be $1 million in savings however he could not be sure because the output would be going down. Mr Charnley also stated that the respondent’s largest competitor in Australia had closed.
In the course of the Meeting, Mr Timmers said to Mr Charnley words to the effect of “are you prepared to remove the changes”. Mr Timmers asked Mr Charnley this question around 8-10 times and Mr Charnley was vague in his response. Mr Timmers asked for a “yes or no answer” to which Mr Charnley replied “It depends what the alternatives are”. Mr Charnley added that the respondent sought 8 hour shifts Monday to Friday but would still seek “flexibility”.
Given that Mr Charnley could not explain the extent of any savings or the expected production outcomes and was prepared to discuss alternatives, I formed the view that the changes proposed in the memo are not genuine but are a response to the protected industrial action of the TCFUA.
In his affidavit, Mr Charnley clarified what he meant by the expression “current business conditions” which, according to his letter of 16 September 2008, had been under discussion for the last four months. He said that this was not an intended reference to “the specific changes to shift structures proposed on 8 September”.
The respondent contends that the announcement of 8 September 2008 arose from a legitimate operational decision made by the respondent on financial grounds, and had nothing to do with the protected action proposed to be taken by members of the applicant. The respondent is, each year, required to report to Xerium on financial matters, and to include therein a forecast of sales volume and price, of projected expenses, of proposed capital spending, of the results for the current financial year (ie, in the present case, ending on 31 December 2008), and of the results for the subsequent financial year (ie, in the present case, calendar 2009). The report is due for submission to Xerium around September each year.
For the purposes of this report, Mr Charnley and those advising him gathered together certain financial information, including information from sales, information about likely future expenditure by the respondent and likely future purchase orders from its main clients, and data on the market in which the respondent operates. As a result, there were created profit and loss statements, balance sheets, cash-flow statements and sales details, amongst other documents. Mr Charnley first examined this information, and these documents, in about late August or early September 2008. He and Mr Dale Smith, the respondent’s financial controller, then prepared what is described as a “profit plan document” to be forwarded to Xerium. That document was contained in a confidential exhibit to Mr Charnley’s affidavit, and set out –
a. detailed financial information, over the calendar year 2008;
b. a written analysis (in United States dollars) of the value of sales;c. a record of income and expenditure, in terms specific enough so that the value of particular lines or sales may be examined;
d.record of provision for income taxation; and
e. other financial matters, such as a projection for the balance of 2008 and a forecast for amounts for calendar year 2009.
As a result of this work, by late August 2008, it appeared to Mr Charnley that the most urgent question for the respondent was that of cutting its costs, and that, without some form of reduction in expenditure, the future of the respondent was in some doubt.
On 5 September 2008, a meeting of management of the respondent was held. This was described by Mr Charnley as a “planning workshop”, and it was attended by himself, by an engineering supervisor, by a processing engineer (quality control) and by the five members of the “production management team”. In Mr Scott’s affidavit, that team is said to consist of the night-shift superintendent, the afternoon-shift superintendent, the finishing manager, the production manager for press felts, and himself (ie, Mr Scott).
At the meeting on 5 September, Mr Charnley outlined the financial position facing the respondent and asked each of those present for their suggestions. Discussions on the subject of cutting costs ensued over the next 30-45 minutes. It seems that someone suggested the abandonment of 12-hour shifts as a means of reducing costs. Mr Charnley surmises that it may have been Mr Scott, but Mr Scott says nothing to that effect in his own affidavit. Mr Charnley is not aware of any notes having been taken at the meeting. The fact is that someone suggested that, for the 81 employees who were working 12-hour, seven-day shifts, those shifts should be changed to eight-hour shifts over five days. Mr Charnley describes this as “the strongest suggestion” which came out of the meeting. He adopted it. In his affidavit, he then said:
The decision to implement from 22 September was made by the production management team, and I agreed as managing director.
According to Mr Charnley, there was no discussion at the meeting on 5 September about the negotiations for a new enterprise agreement. His affidavit continues:
There was limited discussion of the forthcoming protected industrial action and any discussion only referred to the fact that the industrial action was going to take place and that we have made our final position to staff clear. Protected Action was in my mind during the discussion but it was not the reason we had the discussion with the group on Friday 5 September. The Respondent received a notice concerning protected industrial action on 4 September 2008, so naturally it was in my mind. But it was not in my reasoning on 5 September. Nothing about the 5 September meeting or its consequences was taken by me because of the protected action notice we had received. It was not any part of my reason to adopt the recommendation of the production management team on 5 September 2008.
Mr Charnley said that his concern was the viability of the respondent, which took precedence over all other matters. He did not consider the industrial action foreshadowed by the applicant as a threat to the viability of the respondent.
The only other participant in the meeting on 5 September to give evidence on this interlocutory occasion was Mr Scott. Of what occurred at the meeting, he said only that they discussed generally the financial state of the respondent, and ways to alleviate it. He said that this included discussions about changes to shift arrangements, which ultimately led to the decision which was communicated to employees in the memorandum of 8 September 2008. He continued:
At no stage prior to or since the decision to change the roster arrangements has it been suggested that the company should do so as a response to the industrial action which the employees had been engaging in.
The thrust of the respondent’s evidence, including the confidential financial exhibit to which I have referred, was that the changes to shift structures proposed would directly lead to cost savings for the respondent. Those savings would be, it seems, quantified by the reduced levels of remuneration that would be required to be paid to the 81 employees who stand to be affected. As such, they are, or should be, calculable, but the respondent did not proffer, at least by way of evidence, a calculation of the financial benefit which it would achieve as a result of the shift changes. In very broad terms, however, there was little if any dissent from either side to the proposition that a saving of about $24,000 per week would accrue to the respondent if the shift changes were implemented. Having perused the confidential financial data on which the respondent relies, I am prepared to find, provisionally, that a saving of this order should be regarded as valuable and potentially important for the respondent.
The applicant alleges that the respondent is acting, or threatening to act, in contravention of s 448(1) of the Act, which reads as follows:
An employer must not:
(a) dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee’s prejudice; or
(b) threaten to dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee’s prejudice;
wholly or partly because the employee is proposing to engage, is engaging, or has engaged, in protected action.
If a contravention of subs (1) is established, the court may impose a pecuniary penalty upon the contravenor, and/or may make injunctions, and any other orders, that the court considers necessary to stop the contravention or to remedy its effects. Section 448(8) provides as follows:
In proceedings for an order under subsection (4), it is to be presumed, unless the employer proves otherwise, that the alleged conduct of the employer was carried out wholly or partly because the employee was proposing to engage, was engaging, or had engaged, in protected action.
By the present application, the applicant seeks to maintain the status quo pending the hearing and determination of its application under s 448. In such circumstances the questions for the court are whether the applicant has established a prima facie case of contravention in the sense explained by the High Court in ABC v O’Neill (2006) 227 CLR 57, 68, 82-83 and, if so, whether the balance of convenience favours the making of the interlocutory restraint applied for. As Gummow and Hayne JJ said in ABC v O’Neill, what the applicant must show under the first requirement is a “sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial” (227 CLR at 82 [65]).
The matters of substance as to which the applicant must establish a prima facie case, in the context of the present case, are:
(i)that the employees in question were proposing to engage, were engaging, or had engaged, in protected action;
(ii)that the respondent took action in relation to those employees of the kind referred to in pars (a) or (b) of s 448(1); and
(iii)that the action was taken, wholly or partly, because those employees were proposing to engage, were engaging or had engaged, in protected action (as the case may be).
As to the first matter, the applicant has led evidence that, on 4 September 2008, it notified the respondent that protected action would be engaged in by the employees in question, commencing on 10 December 2008. In my view, for the purposes of establishing a prima facie case, and in the absence of evidence to the contrary, the fact that the employees in question are covered by the applicant’s notification is sufficient to establish that they proposed to engage in industrial action. That proposal was extant on 8 September 2008, when the respondent took the action of which the applicant complains.
As to the second matter, it will be sufficient if the applicant establishes, prima facie, that the respondent’s announcement on 8 September 2008 amounted to an alteration of the position of the employees concerned to their prejudice (or would, if implemented, amount to such an alteration), or to a threat to make such an alteration. This concept was explained by the High Court in Patrick Stevedores Operations No. 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1, 18 as covering “any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question”. For the respondent to announce that working arrangements would be changed in such a way as to deprive employees of penalty rates to the extent of about $300 per week, as appears to be the likely consequence of the implementation of the changes announced by the respondent on 8 September 2008, would, in my view, prima facie come within the statutory words in the sense explained by the High Court.
As to the third matter, I would commence with two general observations. First, it will be sufficient if it be found that the respondent acted only partly because the employees in question proposed to engage in protected action. Secondly, the applicant’s task of showing that it has a prima facie case so far as the respondent’s reason for acting is concerned is somewhat simplified by the terms of s 448(8) of the Act, to which I have referred above. The operation of a similar provision, in the context of an interlocutory application, was explained by Wilcox and Cooper JJ in Davids Distribution Pty Ltd v National Union of Workers (1999) 91 FCR 463, 501 [110] as follows:
Where there is an application for interim relief in proceedings under the Division, the onus remains upon the applicant to demonstrate that there is a serious question to be tried that the dismissal occurred for a prohibited reason. If a serious question to be tried is made out in respect of the other ingredients of the alleged contravention, s 298V operates to establish there is a serious question to be tried that the dismissal was for a prohibited reason. It remains available to the employer to demonstrate at the interlocutory stage that the reason for the dismissal was other than for a prohibited reason. The weight of that evidence may be such as to persuade the court there is no serious question to be tried.
Because of the absence from s 448 of a provision in the terms of s 809(2) of the Act, I am spared the complications which confronted Ryan J in Police Federation of Australia v Nixon (2008) 173 IR 132.
Consistently with Davids Distribution and because of the operation of s 448(8), but subject to any evidence relied on by the respondent, I should commence by taking it to have been prima facie established that the respondent’s announcement of 8 September 2008 was made because the employees to whom it was directed proposed to engage in protected action. However, on the present interlocutory application, the respondent has gone into evidence. Mr Charnley has provided a background and a justification for the changes announced on 8 September which are unrelated to the applicant’s proposed protected action. He has effectively denied that the protected action constituted any part of his own reason for changing the arrangements in the working of shifts. Counsel for the applicant drew my attention to a number of pieces of evidence, to some only of which I have referred in these reasons, which might well provide useful material for the cross-examination of Mr Charnley in relevant respects. However, while this material may be sufficient to give rise to suspicions, I do not consider it to be strong enough to override the direct evidence given by Mr Charnley in his affidavit. In other words, I am not disposed to decide the present application on the basis that Mr Charnley might well have been untruthful in what he said in his affidavit.
It was argued on behalf of the applicant that the drift of Mr Charnley’s evidence was that the decision to alter shift arrangements was made at the meeting on 5 September 2008, and was made by those present at that meeting. It follows, according to the applicant, that the respondent cannot discharge the onus of proof which lies upon it without giving evidence of those who favoured (as distinct from opposed) the proposal, and of why they did so. This submission raises the often tricky issue of the reasons of a board, committee or meeting. Much will depend upon the constitution and authority of the meeting in question, particularly whether, as in Australian Municipal, Administrative, Clerical and Services Union v Greater Dandenong City Council (2000) 101 IR 143, 152-153, to be effective the decision had to be made formally by the group concerned or whether, by way of contrast, as in Australian Workers’ Union v BHP Iron-Ore Pty Ltd (2001) 106 FCR 482, 530-531, the power to decide resided in one person, but he or she discussed the matter with, and possibly even secured approval from, a larger group.
In the present case, Mr Charnley did not, it seems, go to the meeting on 5 September with his own view about changing shift arrangements. The suggestion came from a participant at the meeting (not Mr Scott) as to whose views, and reasons, the court knows nothing. Even if the decision were Mr Charnley’s only to make, the fact that the suggestion was made by a person in relation to whom the respondent has not led any evidence might leave open the argument that the reason of that person in effect became a reason (and it does not have to be the reason) of the respondent.
Furthermore, Mr Charnley has sworn that the decision to implement the change to shift arrangements on 22 September was made by the production management team, and that he agreed as Managing Director. I consider it to be reasonably arguable that it is not possible to dissociate the respondent’s reasons for changing the shift arrangements from its reasons for implementing those changes on 22 September, rather than on some other day. In a clear case, it might be possible to say that the decision to make a particular change had nothing to do with the circumstances proscribed by s 448 of the Act, but that the decision to implement that change on a particular day had a lot to do with such circumstances. I could not, of course, hold that the present case falls into this category, but the respondent has led evidence that the timing of the implementation of the decision was a matter for the management team, and has led no evidence as to the reasons of any members of that team, save (to a limited extent) for Mr Scott himself.
There may be short and simple answers to the issues to which I have just referred. However, on the state of the evidence as it stands, it does seem that the suggestion to alter the shift working arrangements was made by someone whose reasons are undisclosed, and that the decision to implement the change on 22 September 2008 was made by the management team, rather than by Mr Charnley. It is true that Mr Scott has sworn that there was never a suggestion that the company should change the shift working arrangements as a response to the industrial action in which the employees had been engaging, but I do not think this goes far enough to serve the respondent’s purpose under s 448(8) of the Act. The fact that no-one had made such a suggestion does not, in my view, exclude the arguable prospect that a majority of the members of the management team, including possibly Mr Scott himself, had the union’s recent announcement that it would take protected action in mind, and used it as at least part of their reasons, when supporting the implementation of the changes on 22 September 2008.
For the foregoing reasons, I consider that the applicant has established sufficient likelihood of success to justify the preservation of the status quo pending the trial. That conclusion is, of course, subject to considerations as to the balance of convenience, to which I now turn.
In that respect, I consider first the situation which would exist if no interlocutory injunction were granted, and the applicant ultimately succeeds in the case. There are two categories of detriment which would seem to be relevant in those circumstances. The first relates to the losses suffered by individual employees. As I have said, on the evidence as it stands, it seems that the applicant’s members employed by the respondent would be significantly worse off financially, and with respect to their days and hours of work, if the shift changes proposed by the respondent were to be implemented. It is true that detriments of this kind could probably be the subject of a compensatory order under s 448(6)(b) at the time of judgment. However, I am reluctant to assume that, in the case of employees working under the Certified Agreement, the need to wait until the day of final judgment, and possibly some time thereafter, before compensation is received would be of little consequence. Particularly given the size of the remuneration losses which appear to be involved, I am disposed to think that the respondent’s proposals would involve considerable shocks to the daily financial arrangements of working men and women, and their families. It requires no evidence to appreciate that the delayed receipt of compensation is likely to be regarded by them as very much a second-best outcome, compared to the retention of the status quo.
The second category of detriment that might arise should the applicant ultimately prevail, and should there be no interlocutory injunction in the meantime, relates to the apparent objects of s 448 itself. The section does not merely protect employees from dismissal, injury in employment etc: it protects them from those outcomes where they propose to engage, are engaging, or have engaged in protected action, and where a reason for the employer’s conduct is that they do so propose, so engage etc. In other words, the evident purpose of the section is to protect the integrity of the bargaining process for which the Act provides, and particularly the ability of employees and their organisations to engage in industrial action of the kind which the Act protects. Should the applicant ultimately succeed in the proceeding, but should the respondent, in the meantime, be permitted to make the changes which it proposes, the practical result, as it seems to me, will have been that a party to an existing bargaining process has been permitted to disadvantage employees because they have undertaken protected action in accordance with the procedures established by the Act, and to do so by means which are not recognised by the Act. The effect on the dynamics of the negotiations currently being undertaken between the parties is too obvious to require elaboration. I emphasise that I make these observations on the assumption, which may not be justified by findings at trial, that the respondent will be shown to have acted in contravention of s 448 in the announcement it made on 8 September 2008. However, on that assumption, it is very difficult to see how the impact which the announcement is likely to have had on the dynamics of the negotiations as between the applicant and the respondent could ever be adequately compensated in damages. The prospect is that, by the time the proceeding is finally resolved, the bargaining process will have run its course, and the damage will have been done.
I next look at the matter from the other perspective, namely, as one in which an interlocutory injunction as sought by the applicant is granted, but in which the applicant ultimately fails to establish that the respondent acted in contravention of s 448 of the Act. Here the respondent will have been prevented by the injunction from implementing changes which, it claims, will aid in strengthening the competitiveness of its business, and support the long-term viability of its plant at Geelong. These are important objectives, and I treat them seriously. Quite clearly, unless its provisions require otherwise, the Act should not be used as an indirect means to shackle legitimate attempts by Australian enterprises to improve their competitiveness or to strengthen their long-term viability.
However, the question is not whether the court should, by order, prevent the respondent from acting to improve its competitiveness or to protect its viability, in the ways referred to in its announcement of 8 September 2008 or otherwise. The question is whether, for the period which elapses between now and judgment in the proceeding, the respondent should be restrained from making the changes foreshadowed in that announcement. Quite obviously, those changes relate to the medium or the long, rather than to the short, term. Both parties have indicated an enthusiasm for expedition and, after giving this interlocutory judgment today, I propose to set a timetable which will bring the proceeding to trial promptly.
The applicant has offered the usual undertaking as to damages, and this will be some measure of protection for the respondent in the event that it is subject to an interlocutory restraint, yet ultimately succeeds in the case. As I have said above, the likely detriment to be suffered by the respondent in the event that an injunction is made is, in effect, the mirror image of the remuneration of which the 81 employees would be deprived. On the evidence before the court, I am disposed to think it more likely that the respondent, a substantial trading entity with a parent company in the United States, will be more able to sustain the temporary losses which an injunction would involve than would the members of the applicant, considered as working men and women, with such family obligations as some or all of them presumably have.
For the above reasons, I take the view that the balance of convenience favours the grant of the interlocutory relief sought by the applicant. I shall make an order in the terms so sought.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. Associate:
Dated: 8 October 2008
Counsel for the Applicant: W Friend Solicitor for the Applicant: Slater & Gordon Counsel for the Respondent: T Donaghey Solicitor for the Respondent: CCI Victoria Legal
Date of Hearing: 26 September 2008 Date of Judgment: 26 September 2008
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