TWU v DHL Exel Supply Chain (Australia) Pty Ltd

[2008] FMCA 604

FEDERAL MAGISTRATES COURT OF AUSTRALIA

TWU v DHL EXEL SUPPLY CHAIN (AUSTRALIA) PTY LTD [2008] FMCA 604

INDUSTRIAL LAW – Contravention of Workplace Relations Act – Requirements for employees’ approval of union collective agreement – majority approval must be obtained in manner foreshadowed in information statement – reasonable opportunity for all employees to participate in approval process – contraventions arising from informal show of hands at meeting without notice after negative secret ballot – whether false, misleading or threatening statements made by management – lodgement of agreement lacking approval – whether Court should declare agreement void – effect of 2008 amendments to Workplace Relations Act.

INDUSTRIAL LAW – Contravention of Workplace Relations Act – inducement of employees to cease to belong to a union – employer secretly negotiating union collective agreement with new union – promotion of membership of new union – discriminatory access to employees given to new union – contravening object or intention of employer inferred – standing of Federal branch of union to apply to Court – whether injunctive relief appropriate.

Federal Magistrates Act 1999 (Cth), s.16
Workplace Relations Amendment (Transition to Forward with Fairness) Act2008 (Cth), Sch.7B cl.2(1)),
Workplace Relations Amendment (Work Choices) Act 2005 (Cth)
Workplace Relations Act 1996 (Cth), ss.328, 333, 337, 340, 341, 347, 400, 401, 405, 407, 409, 412, 431, 778, 779. 794, 807, 809

Allan v Transurban City Link Ltd (2001) 208 CLR 167
Allina Pty Ltd v Federal Commissioner of Taxation (1991) 99 ALR 295
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Australian Workers’ Union v BHP Iron-Ore Pty Ltd (2000) 106 FCR 482
BHP Iron Ore Pty Ltd v Australian Workers’ Union (2000) 102 FCR 97
Connolly v AC & MS Services Pty Ltd [2007] FMCA 139
Ricegrowers Co-operative Mills Ltd v Bannerman (1981) 38 ALR 535
Shop Distributive & Allied Employees’ Association v Karellas Investments Pty Ltd [2008] FCAFC 42
Shop, Distributive and Allied Employees’ Association v Karellas Investments Pty Ltd (No.2) (2007) 166 IR 51

Applicant: TRANSPORT WORKERS UNION OF AUSTRALIA

Respondent: DHL EXEL SUPPLY CHAIN (AUSTRALIA) PTY LTD

Intervenor: NATIONAL UNION OF WORKERS

File Number: SYG 2135 of 2007

Judgment of: Smith FM

Hearing dates: 4-8 February, 28 March & 9 April 2008

Delivered at: Sydney

Delivered on: 19 May 2008

REPRESENTATION

Counsel for the Applicant: Mr A Hatcher

Solicitors for the Applicant: Maurice Blackburn Lawyers

Counsel for the Respondent: Mr I Taylor

Solicitors for the Respondent: Australian Business Lawyers

Counsel for the Intervenor: Mr A Joseph

ORDERS

1. The application is adjourned to 19 June 2008 at 10.15 am for further submissions in relation to the imposition of civil penalties.

2. Any list of authorities, written submission or summary of argument relied upon by a party shall be filed and served no later than 4pm on 18 June 2008.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2135 of 2007

TRANSPORT WORKERS UNION OF AUSTRALIA

Applicant

And

DHL EXEL SUPPLY CHAIN (AUSTRALIA) PTY LTD

Respondent

NATIONAL UNION OF WORKERS

Intervenor

REASONS FOR JUDGMENT

1. This case concerns a strategy implemented by DHL Exel Supply Chain (Australia) Pty Ltd (“DHL Exel”) in February and March 2007, to move about 146 of its wages employees into a union collective agreement which it made under s.328 of the Workplace Relations Act 1996 (Cth) with the National Union of Workers (“the NUW”). The employees had been covered by an enterprise agreement certified under NSW legislation in 2005 and preserved by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth), in which they were represented by the Transport Workers Union of Australia NSW Branch (“the TWU(NSW)”). Neither the employees nor the TWU officials were aware of the negotiations for the new agreement, and the NUW had no historical connection with the principal workplace, a warehouse at Matraville in Sydney. On 27 February 2007 they were presented with copies of the new agreement, and were invited to approve it in a secret ballot held on 6 March 2007. In the intervening period, TWU officials were excluded from the workplace by DHL Exel’s managers, and the employees were introduced to NUW officials. Unexpectedly, a majority of the employees voted against the agreement in the secret ballot. However, when the results were announced at a staff barbeque held on 9 March, DHL Exel’s managers conducted an impromptu show of hands, and they thought that they had counted a sufficient majority. They lodged the agreement with the Employment Advocate on 13 March 2007.

2. Under the provisions of the Workplace Relations Act as they stood at the time, the Employment Advocate had no role in examining the contents of a union collective agreement, nor the approval by the employees to be covered, but was obliged to issue a receipt if it was accompanied by an employer’s declaration. According to s.347(1) “a workplace agreement comes into operation on the day the agreement is lodged”, and s.347(2) provided that this happened “even if the requirements in Divisions 3 and 4 and section 342 have not been met in relation to the agreement”. Those Divisions prescribed pre-lodgement procedures, including giving employees at least 7 days access to the agreement and an information statement under s.337, and requirements for the obtaining of the employees’ approval under s.340.

3. Once the agreement came into operation, the previous 2005 State registered enterprise agreement ceased to be in operation, and it “can never operate again” in relation to the employees, even if there were serious deficiencies in the approval procedures, and even if the Court later declared it void under s.409 (see Sch.8 cl.15G(3) – a situation which is unchanged by the Workplace Relations Amendment (Transition to Forward with Fairness) Act2008 (Cth), (“the 2008 amendments”). DHL Exel therefore took the position that it was no longer bound under cl.21 of the 2005 agreement to recognise that the relevant employees could request to be represented by the TWU(NSW), and that it was not bound under cl.6 to negotiate with that union for a replacement to the 2005 agreement. Moreover, as a result of the 2006 ‘work choices’ amendments, the entitlements of the relevant employees must now be entirely determined under the Workplace Relations Act.

4. The significant number of relevant employees who belonged to the TWU(NSW) also had dual membership of the present applicant, the Transport Workers’ Union of Australia (“the TWUA”), which is an organisation registered under the Workplace Relations Act (I shall refer to “the TWU” where it is unnecessary to distinguish between the organisations or where the reference is obvious). Its application seeks orders imposing pecuniary penalties under Part 8 of the Workplace relations Act on DHL Exel for breaches of s.341, which prohibits the lodging of an agreement which was not approved in accordance with s.340. It also seeks the imposition of penalties for breaches of ss.400 and 401, which prohibit the making of threatening, false or misleading statements relating to the approval of a workplace agreement. Consequential relief is sought under s.409 of the Workplace Relations Act or the Court’s power in s.16 of the Federal Magistrates Act 1999 (Cth), seeking an order declaring the 2007 agreement to be void.

5. It is not contested that it has standing to seek this relief under s.405(1)(d) and (3)(a), as “an organisation of employees that represents an employee who is or will be bound by the agreement” and which has been requested by such an employee, Ms Anaki. The NUW, on its own application, has been joined to the proceeding as an intervenor in opposition to the giving of this relief.

6. The application also seeks the imposition of a pecuniary penalty under Part 16 for a breach of s.794, which prohibits an employer from inducing an employee not to become a member of an industrial association or to cease to be a member of an industrial association, including a State registered association. It is alleged that DHL Exel’s exclusionary conduct in relation to the negotiation, presentation, approval, lodgement and implementation of the 2007 agreement was of this character, in relation to the relevant employees’ membership of either or both of the State and Federal branches of the TWU. Consequential orders are sought under s.807(1)(c), directing DHL Exel to allow the applicant to represent any employee in relation to any workplace agreement, grievance or industrial matter, and to grant access to its officials to meet employees in their lunchroom. The applicant’s standing to seek any remedy under Part 16 is challenged by DHL Exel, on the ground that the TWUA is not “a person affected by the contravention” within s.807(4)(b).

7. The taking of evidence in the application occupied five days allocated to the hearing, and it was then necessary to adjourn to receive written and oral submissions. Although there is a substantial area of uncontroversial background to the events, there were also numerous points of differences between the witnesses. The background and factual issues were very thoroughly presented to the Court in opening and closing written submissions from counsel, and I do not propose in this judgment to give more than the brief background which I have set out above, nor to refer to the evidence except when necessary to address the issues requiring my attention.

8. Counsel agreed that the hearing should receive all the evidence relevant to the allegations of contravention and the appropriate remedies. They agreed that in my present judgment I should make all necessary findings in relation to these matters, other than the amount of the appropriate pecuniary penalties which could be imposed on DHL Exel under ss.407(1)(b) or 807(1)(a). It was agreed that, if I found a contravention, I should receive further submissions on the quantum of penalties and on the precise terms of any declarations or injunctions.

The statutory requirements for approval

1. At the relevant time, s.341 provided that an employer contravenes a civil remedy provision if it lodges a workplace agreement which “has not been approved in accordance with section 340”. The term “workplace agreement” includes a “union collective agreement” made in writing under s.328 with “one or more organisations of employees” which has at least one member whose employment would be subject to the agreement and has industrial coverage for that member’s work. Section 333(c) provided that such an agreement was “made” at “the time when the employer and the organisation or organisations agree to the terms of the agreement”.

2. This is in distinction with an “employee collective agreement”, which is an agreement between the employer and an employee intended to be bound by it, and is not “made” until it is approved in accordance with section 340 (see ss.327 and 333(b) – but note that the implication drawn by Raphael FM in Connolly v AC & MS Services Pty Ltd [2007] FMCA 139 at [18], was not accepted by the Full Court in Shop Distributive & Allied Employees’ Association v Karellas Investments Pty Ltd [2008] FCAFC 42 at [28]-[29]).

3. However, although the present “union collective agreement” might be characterised as an “agreement” in the parlance of ordinary language, contract law and the Workplace Relation Act, it had no legal effect on those employees’ conditions of employment until it was “lodged” and came into operation pursuant to s.347(1) and (2). From that time it acquired the statutory effects set out in ss.348, 349, 350 and 351, of displacing any earlier collective agreements, relevant awards and prescribed conditions of employment, and of binding the employer, NUW and employees who were subject to its terms.

4. Relevant to the present case, two important pre-lodgment procedures were required to be followed by DHL Exel before it could lodge the agreement which it had made with NUW. 

5. The first procedure involved the provision of “ready access and information statement” to employees under s.337. Section 337(1) requires the employer to take reasonable steps to ensure that all eligible employees in relation to the agreement either have a copy of the agreement or have “ready access” to it during the period beginning “7 days before the agreement is approved” and ending “when the agreement is approved”. Section 337(7) makes clear that if the content of the agreement changes during that period, “the change results in a separate workplace agreement for the purpose of this section”, so that the procedure of providing the amended agreement and a new information statement must be repeated. Compliance with this procedure can be waived by all eligible employees only “in writing” (see s.338).

6. Section 337(2) requires the employer to take reasonable steps to ensure that all eligible employees in relation to the agreement are given “an information statement at least 7 days before the agreement is approved.” The statement is required under s.337(4)(a) to contain “information about the time at which and the manner in which the approval will be sought under section 340”. 

7. After provision of the agreement and information statement, the second pre-lodgment procedure required to be followed by an employer concerns the approval of the agreement. Section 340(2) governs agreements such as the present:

   (2)An employee collective agreement or union collective agreement is approved if:

   (a)the employer has given all of the persons employed at the time whose employment will, or would but for the operation of an ITEA that has passed its nominal expiry date, be subject to the agreement a reasonable opportunity to decide whether they want to approve the agreement; and

   (b)either:

   (i)     if the decision is made by a vote–a majority of those persons who cast a valid vote decide that they want to approve the agreement; or

   (ii)     otherwise– a majority of those persons decide that they want to approve the agreement.

8. The effect of this provision, and its relationship with s.337(4)(a) was debated in submissions before me. DHL Exel submitted that there was no implicit requirement that the “reasonable opportunity to decide” to be given under s.340(2)(a) must involve an opportunity to participate in a particular “manner” of approval indicated to the employees in an information sheet given at least 7 days previously. Nor did the “reasonable opportunity to decide” need to be given in relation to the particular manner of approval in which the employer actually obtained a majority decision for the purposes of s.340(2)(b), i.e. either by the casting of a vote or “otherwise”. In its submission, the obligation in s.340(2)(a) to afford a “reasonable opportunity to decide” took a meaning divorced from any reference to s.337 or s.340(2)(b). It required no more than that every employee should have a “reasonable opportunity” to reach a subjective conclusion on whether to approve the agreement, if ever given an opportunity to manifest his or her decision. It did not require every employee to be given a reasonable opportunity to participate in any particular procedure for manifesting or recording his or her decision.

9. Thus, in DHL’s submission, once every employee had been given a copy of the agreement, with an information sheet and other advice from its human resources department and the NUW, and 7 days had elapsed, a valid approval could be obtained by following any conceivable procedure, or variety of procedures, which ultimately obtained favourable decisions from a majority of the employees.  It did not matter if this was not the “manner” of approval foreshadowed to the employees in the information sheet. Nor did it matter if not all employees were given the opportunity to participate in the procedure in which a sufficient number of decisions were obtained. As in the present case, the employer could foreshadow a secret ballot to be taken on a particular date, but could ignore its adverse outcome, and could lodge the agreement as soon as the approvals of a majority of employees were obtained by a variety of informal processes.

10. In my opinion, the language, context, and policy of s.340(2) are contrary to the construction submitted by DHL Exel.

11. It is usual to construe a statutory reference to “decide” or “decision” as one which refers to an intended form of manifestation or expression of mental processes, and not just to a mental process of “deciding” (cf. Ricegrowers Co-operative Mills Ltd v Bannerman (1981) 38 ALR 535 at 543-544, Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 335). In my opinion, in a context referring to a decision to be taken by the members of a group of employees on whether to adopt proposed conditions of employment which will bind that group collectively, and not just bind those employees who accept an agreement, the natural reference of these words in s.340(2)(a) and (b) is to an overt process of taking and recording the group’s collective decision. The language of paragraph (a) confirms this, by referring to “all of the persons” and “whether they want to approve the agreement”. These plural terms, in effect, compress the meanings of “each and all of the persons”. The natural meaning of the paragraph is that the “reasonable opportunity” is to be afforded to the whole of the group whose approval is required to be sought as well as to each of its members. The “reasonable opportunity” relates to the “manner” or procedure in which the employer obtains the decision of the group. A process of decision-making must be afforded to all of the members, and all of them are to be given a reasonable opportunity to participate in the process in which a majority of the group’s individual decisions is obtained.

12. This reading of paragraph 340(2)(a) is confirmed when it is read with paragraph (b). It must be so read, since they form part of one sentence. It is clear, in my opinion, that the reference in (b) to “the decision” is to the process in which the “reasonable opportunity to decide” has been afforded. The connection between both paragraphs is also confirmed by the reference in (b) to “those persons”. Grammatically, in my opinion, the “reasonable opportunity to decide” relates to either a process in which all of the group have an opportunity to “vote”, or to another procedure for obtaining the decisions of all members of the group. In my opinion, the language of s.340(2) does not allow an employer to obtain a “majority” of approving decisions by following a procedure in which each and all employees were not given a reasonable opportunity to participate in forming that majority, whether that procedure be by way of “vote” or “otherwise”.

13. Moreover, although it may not be essential to my conclusion as to a contravention of s.341 in the present case, I consider that the combined effect of s.337(2) and (4)(a), and s.340(2), is to provide a scheme in which the procedure in which the majority decision is taken, must be consistent with the “time” and “manner” for seeking approval which was foreshadowed to all the employees in the information statement. This is because it is difficult to see any purpose in requiring such foreshadowing, if it was not intended to inform the obligations imposed by s.340(2). Also, the notion of “reasonable opportunity to decide” would include the provision of reasonable notice of the procedure for taking the collective decision, and the 7 days period provided in s.337(2) appears to be intended to provide the minimal sufficient notice of the process intended to be followed under s.340(2)(b).

14. The object of the provisions of ss.337 and 340(2), is to allow all the eligible employees to be aware of the proposed manner for seeking a majority approval of the agreement which will bind them all, so that they can discuss its contents, take individual and collective advice, and assist each other to arrive at their collective decision. In my opinion, the construction submitted by DHL Exel, would allow an employer to follow procedures inconsistent with this object, and is inconsistent with the objectives of the Act generally which support collective decision-making by employees (cf. s.3 paragraphs (d), and (e)).

1. I do not accept the submission of DHL Exel that a construction which requires the employer to have obtained a majority by following the procedure which has been foreshadowed in the information statement, and which has afforded all employees a reasonable opportunity to participate in the making of the majority decision, could give rise to difficulties or impracticalities. Every employee must be given a “reasonable opportunity” to participate in the decision, but this allows that exceptional circumstances might arise where some employees may not in fact be able to participate. There is no great inconvenience in requiring an employer to give a further 7 days notice to all employees of a second or alternative procedure for seeking a majority, if the procedure originally foreshadowed in the information sheet proves to be impossible or is unsuccessful. In my opinion, the Act intends that this should happen.

The approval process followed by DHL Exel

1. The employees who were intended to be covered by the agreement with the NUW were first informed of this intention and of the proposed terms at meetings convened by DHL Exel on Tuesday 27 February 2007 and subsequent days. At the Matraville site, where operations were continuous, 24 hours a day, there were four meetings held on 27 February 2007 with the employees at work for each of the four shifts. Similar meetings were held with the remaining employees on 1 March 2007 at the Prestons and Smithfield work sites.

2. The meetings were conducted by Mr Schloeffel, general manager of DHL Exel, who was accompanied by other managers and by staff from the company’s human resources department. The employees were addressed orally and with an 18 page complex “powerpoint” slide presentation, while also being given copies of the proposed agreement. This is a document of 37 pages, containing 43 clauses and attachments of closely typed employment conditions and schedules of wage rates.

3. The agreement provided for a restructuring of existing wage classifications, and significant modifications of other employee conditions, including access to bonuses and allowances. It was expressed to operate from 8 January 2007 until 8 January 2010. It was made with the NUW, and recognised the NUW as the employees ‘union’. It required the employer to discuss any changes in the workplace with that union only (cl.8).

4. The employees at each meeting were also presented with a 15 page “information statement for employees” using the form issued by the Office of the Employment Advocate. The first 7 pages contained a not easily digested official description of “what is a collective workplace agreement”. On page 9, provision was made for the employer to indicate “how and when they will seek the approval of you and your workmates to the collective agreement”. The page allowed the employer to foreshadow its proposed manner of approval either “by vote” or “another approval method”. Only the former method was indicated to these employees, and the information statement said: “On this date 07/03/07, the employer DHL Exel Supply Chain (Australia) Pty Ltd will: … Hold a vote to approve the collective agreement by: SECRET BALLOT” (the emphasis shows the insertions). The information sheet contained a “community language information” page in 25 languages, which invited the reader to call the OEA through the translating and interpreting telephone service, “if you cannot read English and need help to understand this information”. 

5. In addition, each employee was given a three page closely typed “questions and answer sheet”, and a one page “comparison document” which compared wages and allowances and suggested amounts of “back pay” if the agreement were approved. The former document contained these statements:

   7.  When would I get paid the new rates if the Agreement is voted in?

   The vote will take place by secret ballot in 7 days from the day that you attended the presentation.  All voting will be completed by 8 March 2007.  All employees will be advised of the outcome of the vote on 9 March 2007.  The first pay with the new rates will be paid on 15 March 2007.  The back pay to 1 January 2007 will be processed on 22 March 2007.

   …

   13. Do I have to join a union?

   No-one has to join any union.  Of course, you can if you wish.  The National Union of Works is the union which covers the work that you perform.  They have coverage over the work which is performed by DHL Exel Supply Chain warehouse employees, which is why the NUW is a party to the proposed agreement.  Regardless of whether you are member of the Union or not, if this Enterprise Agreement is voted in, it will cover your terms and conditions of employment

   14. What happens if I have already joined the TWU?

   Union membership is completely voluntary.  If you wish to remain a member of the TWU, you are entitled to remain a member.  If you are currently a member of the TWU and want to join the NUW, you should address your queries and concerns with the NUW.

6. The agreement had been negotiated for many months between DHL Exel and the NUW at meetings held in Melbourne. Neither the employees nor their current union representatives, the TWU officials, were informed of these negotiations. The overwhelming inference from all the evidence before me is that this secrecy was deliberate and was probably agreed with the NUW.

7. Also agreed, was that the NUW would be introduced to the employees by DHL Exel’s managers at the meetings which presented the documents to the employees. An email sent on 26 February 2007 to the NUW from an important human resources manager at DHL Exel, Ms Tritsaris, confirmed “the presentation plan for tomorrow at Matraville”, and noted:

   The first hour of each presentation will be DHL presentations, and the second hour can be for NUW to discuss with the employees.  This will provide us with ample time to go through all issues.  If your representatives would like to come to the site at around 7.45 that should be sufficient.

   Another DHL Exel officer had on 23 January 2007 informed his human resources colleagues by email:

   I advised [a local NUW organiser] that NUW federal office in the loop and [Ms Brooks, the DHL Exel national HR manger] would call him re the process of locking in new EBA.  Note the agreement is done not a negotiation, however NUW can assist to ensure we get YES vote a.s.a.p. – can you put your minds together so we can keep them on side and manage their involvement … (punctuation and spelling corrected)

8. An employee at Matraville, Ms Anaki, gave evidence which I generally accept and prefer to that of the managers of DHL Exel (although her dating of events was at times unreliable). She impressed me as an honest, careful, and candid witness, whereas the witnesses called for DHL Exel often appeared reluctant to depart from their prepared statements, and often sought to avoid rather than answer pertinent questions. At times, they maintained versions of events which were unbelievable, or were disingenuous in their evidence (e.g. Ms Tritsaris at transcript 415 line 35). This was particularly the case when they referred to their dealings with officials of the NUW and TWU.

9. Ms Tritsaris maintained that at the 27 February meetings, the employees were told:

   On the front of the Agreement you will see that the NUW name is on the agreement.  This is because the NUW covers the work that you perform such as picking and packing and that the NUW is the appropriate union for the industry that we are in.  The company does not have a preference, and doesn’t care if you want to join a union, any union, or not, and we do not need to know about it. …

   Because the NUW was involved in the negotiations for the EBA, they have asked to be here today to meet with you and answer any questions that you have.  The NUW officials are going to come into the room in a minute.  It is completely up to each of you if you want to stay in the room and talk to the NUW or if you want to leave.

10. The emails I have quoted above support Ms Anaki’s evidence that in reality there was an active promotion of the NUW to the employees by the DHL Exel managers. She recalls NUW officials first coming onto the Matraville site on 23 February 2007, when they were allowed into the employees’ canteen instead of the anticipated TWU officials. They told her: “NUW is the only union Exel are going to use in their factory… we’re the union that’s going to be here.  We need you to join up now so that if you have any problems we can discuss them”. Another employee, Mr Taurima, gave similar evidence which I accept.

11. Ms Anaki said that at the meeting on 27 February, Mr Schloeffel told the employees:

    We’re here to discuss a new EBA.  The union are also here and after we’re done you can talk to them. We have the (NUW) delegate from [another DHL site] present as well. …

    The NUW are here.  It’s up to you what union you join, but they’re the union that Exel use.

12. Another employee, Mr Pineda, who also impressed me as a truthful witness, recalled that Mr Schloeffel said:

    We have here an agreement that we’ve negotiated with the National Union of Workers.  All our sites are NUW and we deal with the NUW.  They’ll be here later and you can talk to them if you want.

    When Mr Pineda met the NUW officials, they told him: “it’s our site and the TWU have no rights here. …All the Exel sites are NUW and we’ve got members on all of them.  If you join us we have the numbers and can represent you.”

13. Mr Crosby, a TWU official, was told on 5 March by a NUW official: “DHL contacted us and asked us to be the union here now, you know how the game works”.

14. The NUW called no witness to dispute how its officials were introduced to the DHL Exel employees, nor the statements made by them to the employees and TWU officials. Nor did it lead any evidence explaining its agreed arrangements with DHL Exel managers, which assisted it to promote the proposed agreement and membership of the NUW. DHL Exel also led no evidence concerning these arrangements.

15. I find that the above, and similar statements, were made by the NUW officials to the DHL Exel employees with the intention of discouraging their continuing their membership of the TWU or taking out membership of the TWU. I find that the recruitment activities of the NUW were probably made with the knowledge and approval of relevant DHL Exel managers, and that their likely adverse effects on TWU membership would have been obvious to those managers and intended by them. This was an inevitable consequence of DHL Exel’s policy that it, rather than the employees at Matraville, should choose which union should represent the employees in negotiations with the company (admitted by Mr Schloeffel at transcript p.327-328, and Ms Tritsaris at transcript 420).

16. Moreover, the commencement of the NUW recruitment activities was accompanied by a policy which completely altered the previous basis upon which TWU officials were allowed onto the worksite, and gave control of this to the human rights managers who had made the new agreement with the NUW, and were supervising the intended process for its approval (see Mr Wootton’s evidence at transcript p.357-360).

17. Until mid February 2007, TWU officials were regularly allowed access to the employees in their Matraville lunch room and outside recreation area, by simple arrangement with a site manager, Mr Wootton. During late 2006 and early 2007, they had increasingly exercised this access without encountering, or causing, any apparent problems, so as to engage in recruitment activities which they thought would lead to the commencement of negotiations for a union collective agreement in succession to the 2005 State preserved agreement. DHL Exel managers undoubtedly must have been aware of these activities and their purpose.

18. At a meeting on 15 February 2007 with the human resources managers, Ms Brooks and Ms Tritsaris, the TWU officials were told that in future no access would be permitted without Ms Brooks’ prior and personal approval. However, they were refused access on 22 February, and their requests for access after learning of the NUW’s recruitment activities and the proposed agreement were rebuffed several times in the subsequent days for reasons which, in my opinion, were probably contrived or spurious (cf. Ms Tristaris at transcript p.413-415). On 5 March 2007, the TWU made application for access orders from the Australian Industrial Relations Commission, and succeeded in obtaining permission to speak to employees in the lunch room briefly on 6 March 2007, but only through the personal intervention of a Commissioner (see Mr Crosby’s affidavit of 9 November 2007, paragraphs 64 to 73). After Ms Brooks lodged the agreement on 13 March 2007, the TWU legal rights of access became significantly diminished, and, moreover, were conceded by DHL Exel during April and May 2007 in proceedings in the Commission upon conditions which appeared to the TWU and its members to be deliberately obstructive of adequate on-site access to the workers. In my opinion, the circumstances lent substance to their belief.

19. I have concluded that I do not need to review the evidence as to the TWU’s difficulties of obtaining access to the Matraville site after the lodgement of the NUW agreement. It is enough that I note that the new system of access introduced on 15 February 2007 operated significantly to restrict the TWU access to employees on the worksite during the critical period when DHL Exel sought the employee’s approval of the new agreement. I find that over that period, the new access policy was implemented with the object and effect of giving preferential access to the NUW (cf. Ms Tritsaris at transcript p.415-417). I have no doubt that during this period, and while the AIRC proceeding was pending, the relevant managers were very conscious that once the agreement with the NUW came into effect, the TWU would cease to enjoy its rights of representation and access under the 2005 agreement (cf. Mr Wooten’s affidavit paragraphs 35 and 38, and Mr Schloeffel’s equivocation at transcript p.309-323), and that DHL Exel would not be required to negotiate a new agreement with the TWU pursuant to cl.6.2 of the 2005 agreement (cf. Ms Brooks at transcript p.291) nor under the bargaining period provisions of the Workplace Relations Act.

20. In all these circumstances, I do not accept that any manager of DHL Exel ever genuinely believed that no employees would be discouraged in relation to TWU membership by the managers’ actions when promoting the new agreement with the NUW. I find, contrary to their disclaimers, that the relevant managers probably expected, and intended, that their actions, in tandem with those of the NUW officials, would cause most of the employees to cease to regard the TWU as the union covering the worksite once the agreement was approved, and that they would give up or not seek membership of that union.

21. Not unnaturally, the unexpected announcement of a new collective agreement, made with a different union, caused considerable excitement among the DHL Exel wages employees. There were obvious difficulties facing this group of employees in properly understanding and assessing the effect of the bulky documentation given to them. 65% of the employees were from non-English speaking backgrounds. Even a strong character such as Ms Anaki had difficulties: she said that she “was too busy trying to find out what the meeting was really about” by reading the proposed agreement, to be able to follow the powerpoint presentation. The employees’ concerns were exacerbated by the contemporaneous exclusion of officials of the TWU from the Matraville worksite during nearly all of the short period allowed for consideration of the proposed agreement.

22. Mr Schloeffel gave evidence that he became aware of rumours adverse to acceptance of the agreement. He held further meetings with employees at Matraville on Friday 2 March, and allowed them to meet together to discuss the proposed agreement. However, concurrently, the TWU officials remained excluded from the site, and no attempt was made to allow them any access to the employees equivalent to that given to the NUW officials. Indeed, I find, as was conceded by Ms Brooks, that DHL Exel was not prepared to facilitate the TWU giving its view of the agreement to the employees.

23. It is not in contest between the parties that a secret ballot of employees was held in the period of 6 to 8 March 2007, consistently with the procedure for approval which was foreshadowed in the Information Statement. Nor is it in contest that the employees’ vote was against approval of the Agreement, by 68 to 63 submitted votes.

24. This outcome was a significant disappointment to Mr Schloeffel. He asked Ms Anaki and the others who had conducted the count, to keep the results secret until he could announce it to the wages and salaried employees who attended a regular Friday lunchtime employees barbeque on Friday 9 March 2007 at the Matraville site. No notice of any intention by DHL Exel to conduct a second procedure for approval of the agreement was given, necessarily, since this happened completely without any planning.

25. On that day, a number of employees who were at work at Matraville on the morning shift, together with a proportion of the afternoon shift who had arrived early for the barbeque, and some other employees who attended from other sites, were called together in the warehouse at about 11am. There is no dispute that a significant proportion of the afternoon shift and of the night shifts at Matraville were not in attendance, and that some other employees were absent through illness or other cause. No attendance record was made, and the evidence before the court contains different estimates of the total number of wages staff who attended this meeting.

26. Ms Tritsaris later wrote an account of the meeting, which asserts that 78 relevant employees were present. Ms Anaki thinks there were “no more than 50”, and Mr Tauima thought there was “probably about 40 to 50 employees throughout that time”. The accuracy of all of the evidence as to the total attendance of employees who might be covered by the proposed agreement, and as to the counting of hands which took place, is highly dubious, since people were crowded together, other people who would not be covered came and went, and an unknown number of people held up two hands.

27. Ms Tritsaris’ note includes the follow narration of events at the barbeque meeting:

    David [Schloeffel] made the announcement that overall the Proposed agreement was voted down and therefore the employees would remain under their existing agreement. Many questions were raised on the floor about if we would consider making changes to the agreement, increasing the rates, if they could have individual contracts with the new agreement, could they have their own Matraville vote etc. David confirmed as we had previously said to them that this was the agreement that we had put forward and for commercial reasons based around our current clients that we have tendering for, as well as the viability of us winning new customers we were not able to increase rates and would not change the terms of the agreement. One employee asked if we would consider putting them onto the Exel Agreement, and again David discussed the viability of our business if we went to our customers with these costs.

    [An address to the meeting by Ms Marlene Anaki is described.]

    Several people said that they wanted to vote again for Matraville and not to have the other sites involved if they didn’t want the agreement and that could they have a vote again. Marlene said that they could, and David said that the majority needed to want to vote to vote again for the agreement. Marlene asked for those to raise their hands if they wanted to have another vote for the agreement. Majority raised their hands and was agreed by both Marlene and Mick.

    Employees were then asked if they wanted to vote to be covered by the Proposed Agreement and to raise their hands if they did.  Three employee representatives were selected to count votes: Marlene Anaki, Mikaele Lenisurua, Ricky Proffit and counted 55 raised hands.  Lauren Castellari and I also counted to the same effect. Prior to any counting headcount was at 78 employees in total.

    Result was announced that the agreement was voted in and employees would be covered by this agreement. David advised that since that was the case employees would be paid new wages for their pay this coming Thursday, and back payed as agreed the following Thursday.

1. I have noted Ms Anaki’s opinion that there were fewer than 55 relevant employees present when the two shows of hands were called.  She said that she agreed with the suggested consensus of 55, because: “I came up with a number of 55, but they were people with two hands up.”  Although she did not notice the person who first called for a vote, other evidence suggests that it was an employee and not a manager. I find, however, that the two votes were only taken, and were taken by way of a show of hands, because Mr Schloeffel accepted the proposal and directed the procedure of the meeting. He then called for the show of hands (see transcript p.339), and announced that the vote was successful.

2. Ms Anaki’s account of the meeting provides what, in my opinion, is probably an accurate perspective on the nature of the proceeding:

   We normally have a barbecue once a month on a Friday, but we thought we were just going to be told the results of the voting, but then they were told that we were having a barbecue, so everybody who was in the warehouse that morning came to the front of the warehouse for the meeting.  It was really – when we did counting, people had two hands up, and there were a lot of people who didn’t vote at all, nothing, they didn’t vote. …

   It wasn’t planned, it was just someone in the workforce was worried about their jobs and wanted to vote again. …

   [She did not accept that the vote was a majority] Because there were people there who had two hands up.  If you call that a vote – one person, they – they were hiding behind each other with two hands up.  It just got out of hand.  I just stopped counting from there, and there was a group that wasn’t voting at all.  They just were too frightened to put their hands up to say whether they were going to vote yes or vote no; so the group that had their hands up – there was only one side, and they had two hands up.

3. No attempt was made to obtain a second decision from those of the employees at Matraville who had not attended the barbeque. However, armed with what they thought were 55 favourable decisions, the DHL Exel human resources managers sought to obtain additional approving votes from employees at other workplaces.

4. After the barbeque meeting, Ms Tritsaris telephoned Ms Brooks and told her: “a second vote has taken place at Matraville and the employees at Matraville have said that they want the agreement in place.” The human resources personnel at the Prestons, Smithfield and Homebush work sites, then took steps to invite second decisions from their relevant employees. Procedures to obtain these were conducted on Monday 12 March. Mr Newton, at Prestons, held a meeting of 9 employees, and they all voted in favour of the agreement in a show of hands. Ms Rowe held a meeting at Smithfield, and all 12 employees “stood up and voted YES”. Ms Castellari told Ms Brooks in an email, that Ms Stjelja had conducted a vote at Homebush, and that “her team” had “all signed a paper with their yes votes recorded on it”. The evidence before me is obscure as to these people, and the signed paper was not tendered by DHL Exel.

5. These procedures were explored in cross-examination of Ms Brooks, Mr Newton and Ms Rowe, and were criticised by counsel for the TWU in submissions. It is unnecessary for me to rule upon his points, since I have decided that a breach of s.341 is sufficiently established by reference to the procedures followed at Matraville in relation to the most substantial group of the relevant employees. However, I find that the other employees probably gave approval upon the belief that the procedures conducted at Matraville had been legally effective to bring the agreement into effect for the Matraville employees alone, and that they were voting only to bring it into effect for employees at their own sites (cf. Ms Rowe’s evidence at transcript p.371-372).

6. Early in the morning of Tuesday 13 March 2007, Ms Brooks completed electronically the employer’s declaration and lodged the agreement with the Employment Advocate. She told the Court that at that time she didn’t consider that the process by which the employees’ approval was obtained was problematic under the Workplace Relations Act, and I find that she took no steps to obtain legal advice about this. Nor had Mr Schloeffel sought any legal advice after the failure of the secret ballot (see transcript p.330).

7. Although the Act allowed 14 days to lodge the agreement, Ms Brooks appears to have been concerned to do this immediately “we had a valid majority”. I am inclined to think that her haste was motivated significantly by a desire to improve DHL Exel’s position in its future dealings with the TWU, particularly in the dispute in the Australian Industrial Relations Commission, which on 13 March was relisted for 14 March 2007.

8. Ms Brooks’ declaration to the Employment Advocate asserted that 146 employees were covered by the agreement. However, in her evidence to the Court, she said that she calculated that a majority of employees were in favour of the agreement, by reference to a computer printout showing 142 wages employees, and based upon information from Ms Tritsaris, Ms Rowe, Mr Newton and other people that there were 88 employees in favour. Under cross-examination upon the company’ records produced on subpoena, she conceded that the list of 142 was inadequate, and omitted a possibly significant number of relevant employees. She also could not explain to my satisfaction the derivation of 12 approvals which she included in her figure of 88, and which she claimed were obtained from relevant employees at sites other than Matraville, Prestons and Smithfield. I shall consider below, the TWU submission that it is possible to draw a conclusion from evidence elicited by it, that in fact only a minority of all employees at all sites gave their approvals in their various meetings.

Contravention of s.341 of the Workplace Relations Act

1. Based upon the construction of s.340(2) which I have explained above, it is clear that DHL Exel was in contravention of s.341 when it lodged the agreement with the NUW. My conclusion that “the agreement has not been approved in accordance with section 340”, is arrived at by reference to uncontested elements in the above narrative, as well as elements which were not conceded. Thus, I am comfortably satisfied that there are four separate reasons for finding a contravention of s.341:

   a)The approvals relied upon by DHL Exel were not obtained at the time and in the manner foreshadowed in the information statement last given to the employees under s.337. In fact, that procedure produced a majority decision of the relevant employees not to approve the agreement.

   b)DHL Exel did not give all of the relevant employees “a reasonable opportunity” to give their decisions in the decision-making process by which the approvals it relies upon were obtained. Most obviously, this was because a significant number of them, mostly employed at the Matraville site for the afternoon and evening shifts on 9 March 2007, but also others at all sites who were absent through illness or other reasons, were given no notice of an intention to conduct a second vote at the meetings held on that day at Matraville and on 12 March at the other sites.

   c)Moreover, I consider that there was a disturbed atmosphere at the Matraville workplace arising from DHL Exel’s secret negotiation of the agreement, its discriminatory restriction on access by the employees’ union recognised under the 2005 agreement, and its promotion of a different union with no historical connection with the workplace. In these circumstances, the conducting of an improvised vote by a show of hands under the supervision of the managers was not a reasonable procedure for obtaining a second decision from the employees. If a second decision were to be sought, in my opinion, it required a procedure which allowed the employees sufficient time to absorb the outcome of the secret ballot, to take advice, and to arrive at a decision uninfluenced by the managerial pressure inherent in the circumstances of the 9 March meeting. It required a voting process to be conducted in which the proposition put to the employees was clear to them, and was clearly recorded, and in which the voting was properly supervised, counted and recorded. The procedures at the 7 March 2007 meeting lacked all of these attributes. For all these reasons, also, they were denied a reasonable opportunity to make a second decision.

   d)Finally, the show of hands which was taken at Matraville on 9 March 2007 did not approve the agreement which was lodged by DHL Exel, but approved a substantially different agreement.  This was because the employees who raised their hands were indicating that they wished to adopt an agreement which would apply only to relevant employees working at Matraville, and not to other employees working at other sites who had previously participated in the secret ballot.  The agreement which was lodged lacked that significant qualification, since its coverage shown in clauses 2 and 12 was unlimited geographically.

2. My conclusions in relation to the first two findings are based upon uncontested facts. The third finding is a conclusion based upon my evaluation of the events which I have narrated above. The fourth finding was contested by DHL Exel, and requires some further reference to the evidence.

3. The evidence includes narratives of many witnesses as to what led to the taking of the show of hands at the 9 March 2007 meeting, and they were cross examined on their recollections. No contemporaneous minutes was taken by any person, in particular of the substantive motion which was before the meeting. Indeed, there was no agreement among witnesses as to who orally called for the show of hands and the words which he or she used. Mr Schloeffel maintained that Ms Anaki called for the show of hands, but she denied this, and I prefer her evidence in this respect. I consider that it was probably Mr Schloeffel, himself, and prefer the evidence of Mr Wooton, who gave his recollection in his affidavit that “David [Schloeffel] asked for a show of hands in favour of the new EBA”.

4. The actual words which Mr Schloeffel used are unclear, but on all accounts, they were not defining of the terms of the motion which was being adopted in the show of hands. This had been incoherently formulated in propositions from the floor, which Mr Schloeffel was putting back to the meeting, firstly, by calling for a show of hands on having a second vote, and secondly, by calling for a show of hands on agreeing with the proposition that an agreement should be reached with the company immediately covering the Matraville employees alone. The significant element in the proposition to approve an agreement was that it would be an agreement “for Matraville”, separately from the other employees at other sites who were thought to have shown their opposition in the secret ballot.

5. Evidence of the qualified nature of the approval of the previously circulated agreement, is found in the note prepared later by Ms Tritsaris which I have quoted above. She recorded that the vote responded to calls by people “that they wanted to vote again for Matraville and not to have the other sites involved if they didn’t want the agreement”. In the context, I would understand “if” as having the meaning “since” or “because”. Some other witnesses had the same recollections.  Although in oral evidence Ms Tritsaris initially appeared to retreat from this, she ultimately adhered to her note (see transcript pp.399 and 400-404).

6. Moreover, the subsequent actions of the managers confirms that they understood that the vote had adopted the agreement only for the Matraville site. Mr Schloeffel immediately told the Matraville employees that they would receive the increase on their wages and back pay in the next two pay days. Other managers told their colleagues at the other sites that the agreement would be coming into effect at Matraville only, and it was the relating of this fact which caused the other employees to hold their own votes. This emerged very clearly in the evidence of Ms Rowe (see transcript p.371, and Ms Tritsaris at 407), and in the evidence as to what was said at meetings at the other sites. I am therefore satisfied that the employees at Matraville did not approve the terms of the agreement, as lodged.

7. In addition to the above four grounds for finding contravention of s.341, the TWU argued that the employees had been denied “a reasonable opportunity to decide” at the 9 March 2007 meeting, because of the making of two misrepresentations by Mr Schloeffel which also form the basis of the alleged contravention of s.401 which I shall address below. It relied upon Shop, Distributive and Allied Employees’ Association v Karellas Investments Pty Ltd (No.2) (2007) 166 IR 51 at [43]-[55], where Graham J held that a breach of s.340(2)(a) could arise by misinformation about the effect of a proposed collective agreement being given to employees, which was likely to “contaminate” their minds when considering whether they wanted to approve it. His Honour’s reasoning was accepted on appeal. In the Full Court’s judgment, the court said at [2008] FCAFC 42 [54]:

   An employee who is given false and misleading information that may affect his or her decision on whether to approve an agreement is, by the very provision of that information, denied a reasonable opportunity to decide whether to approve the agreement.  That is, because there is information available to the employee which has the capacity to distract him or her on voting on the agreement and from considering its actual effect.  A decision that is capable of being affected by false and misleading information is not a decision about approving the agreement, but a decision about extraneous matters not given effect to by the agreement.

8. At [55], the Full Court accepted that to find a breach of s.341 it would not be necessary to be satisfied as to all the elements which need to be addressed under s.401, particularly the issue of causation raised by s.401(1)(c). They therefore upheld findings that a breach of s.341 but not of s.401(1)(c) had occurred as a result of misleading statements about an agreement contained in a document given to some employees.

9. However, in the present case, as I shall explain below, I am not satisfied that Mr Schloeffel made the first misleading statement which is alleged, and I am not satisfied that the second alleged misleading statement could have had any material effect. I would not, therefore, identify among the deficiencies of the proceedings on 7 March 2007, the making of false or misleading statements to the employees by any manager of DHL Exel.

10. The TWU also invited me to find that, in fact, fewer than a majority of relevant employees indicated their approvals at the Matraville meeting on 7 March 2007, and at meetings or other procedures at other sites on 12 March 2007. It faced a daunting task to do this, since DHL Exel’s records as to exactly who were the relevant employees at the various sites were far from clear, and Ms Brooks’ evidence about her list of 142 employees was, as I have pointed out above, unsatisfactory. The TWU submitted that its exploration of individual employee records established that, in fact, the true number of total employees was “at least 154, and possibly more”, identifying 12 employees not on Ms Brooks’ list who were “definitely to be covered”, and another 7 who “may have been covered by the agreement”. It also submitted that I should find that only 76 approvals were given, and invited me to find that this was one short of a majority from 154 employees.

11. I have difficulty being persuaded to draw this conclusion with any confidence. I accept that the basis of Ms Brooks’ understanding of 88 approvals is dubious on the evidence before me, and that she applied an incomplete list of relevant employees. However, these findings would not cause me to draw inferences adverse to DHL Exel from the absence of better evidence. This is because I think that the explanations for the absence of better evidence are the inadequacy of its record-keeping, and the haste with which Ms Brooks lodged the agreement. Ultimately, I have decided that I do not need to set out and analyse the relevant evidence, since my above findings have already identified clear reasons why the process of counting which Ms Brooks relied upon when lodging the agreement was incapable of satisfying the approval requirements of s.340(2).

12. In my opinion, the serious flaw in the second approval process relied upon by DHL Exel occurred when the managers present at the meeting of Matraville employees on 7 March 2007 failed to reflect upon the requirements of s.340(2) of the Workplace Relations Act, and upon their obligation to conduct a second decision-making process only after proper notice was given to all relevant employees, and after all employees were given, individually and collectively, a reasonable opportunity to reconsider their earlier decision and participate in a new and properly conducted process of decision.

No contravention of s.400 or s.401 of the Workplace Relations Act

1. The TWU alleges that contraventions of these sections occurred by reason of two statements made by Mr Schloeffel to the meeting of employees at Matraville on 9 March 2007. He is alleged to have said:

   i)We’ve got the results of the vote and we’re not very happy with the result.  If this EBA is a no I can’t promise you what the future holds.  May be some jobs may go. To keep people in work we need the HP contract.  HP is looking for the cheapest quote.  If we pay you what you want we won’t be able to secure the contract from HP. (some punctuation added)

   ii)A number of staff have approached me confidently telling me their concerns about other staff employing what they thought were bullying tactics, trying to scare people into voting a certain way.  If that is true it is very disappointing as the company has strong policy in relation to these types of things.  If it is found that people have deliberately sought to bully people into voting a certain way then the appropriate disciplinary action will be taken.

2. Section 400(1)(b) relevantly provides that “a person must not … threaten to take … action … with intent to coerce another person to … approve … a collective agreement.”

3. The TWU argues that Mr Schloeffel’s first statement made a threat that job losses were a possible consequence of non-approval of the agreement, which was coercive in nature and was intended to coerce. It argues that the second statement contained a threat of similar nature and intent: that disciplinary action would be taken against a person who had bullied people into voting a certain way during the secret ballot process.

4. Section 401 provides:

   (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.

5. The TWU argues that Mr Schloeffel’s first statement contained a false or misleading statement that job losses might be a consequence of non-approval of the agreement, and that the second statement was false or misleading in stating that there had been bullying and that the person responsible would be held responsible. It argues that he made these statements recklessly, and that the necessary causal consequence could be inferred from the outcome of the show of hands to approve the agreement.

6. I shall assume, without deciding, that both of these contraventions can be established in relation to statements made in the course of approval processes which, in law, were incapable of providing approval according to the requirements of s.340(2). However, I am not satisfied that Mr Schloeffel made the first statement alleged, nor that his second statement carried any of the coercive or misleading effects which are contended.

1. The language of the first statement relies upon Ms Anaki’s reconstruction of her recollections of statements which were made by Mr Schloeffel concerning the uncertainty of a future renewal of the ‘HP contract’, which occupied a significant part of the work at Matraville at the time. This topic appears to have been raised by questions from employees. Other witnesses gave differing recollections of his words, and Mr Schloeffel himself denied that he directly linked the employees’ failure to approve the union collective agreement with the future loss of the contract. I think it more likely that his words attempted only to suggest that the company would have difficulty improving the wage increases agreed with the NUW, due to uncertainties as to its future contracts and the competition which it faced. In fact, the HP contract was subsequently lost to the company, and I do not consider it likely that at this meeting Mr Schloeffel said anything more than pointing out the business conditions which at that time appeared to him to make this a possibility. If so, there was nothing illegitimate in his so informing the employees.

2. I am not satisfied that Mr Schloeffel said anything which threatened or suggested that DHL Exel or HP required the approval of the agreement before the HP contract could be renewed. I am not satisfied that anything he said about the HP contract was intended to coerce any employee to approve the agreement, particularly since at the time that he made his statements to the employees neither he nor any other manager had any plan for putting the agreement back to the employees for their approval. I am also not satisfied that he said anything about the HP contract which was false or misleading in its statements about the future or about DHL Exel’s current intentions in relation to that contract.

3. In relation to the second statement, Mr Schloeffel agreed that he referred to an allegation of bullying, when making a statement to the effect alleged by the TWU. However, there was evidence that he had been told by Ms Anaki that some employees felt they had been bullied before the secret ballot. He agreed in evidence that he had not investigated this further, either before or after the March 9 meeting. However, I am not satisfied that anything he said was intended to coerce the giving of approval, nor that it contained any material misrepresentation made recklessly.

4. I also consider that his statements about bullying were unlikely to have had any significant effect to cause any employee to vote to approve the agreement. No evidence of this was led by the TWU, and on the evidence as to the confused circumstances of the March 9 meeting and the taking of its votes, I would not draw an inference of a causal consequence required by s.401(c)(1) (cf. the Full Court in Karellas Investments (supra) at [39]-[40]).

5. I am not satisfied that any contravention of s.400 or s.401 has been established.

Contravention of s.794 of the Workplace Relations Act.

1. Section 794 relevantly provides: “An employer … must not (whether by threats or promises or otherwise) induce an employee … (c) not to become an officer or member of an industrial association; or (d) to cease to be an officer or member of an industrial association.”  The definitions of “industrial association” and “industrial law” in s.779 have the effect that such conduct might be directed at an employee’s membership of either or both the State registered TWU or its Federal registered entity.

2. The Macquarie Dictionary gives the verb “induce” two meanings which could be applied in the interpretation of s.794: “1. to lead or move by persuasion or influence, as to some action, state of mind, etc: to induce a person to go. 2. to bring about, produce, or cause: opium induces sleep.”  The Full Court in BHP Iron Ore Pty Ltd v Australian Workers’ Union (2000) 102 FCR 97 at [62] gave the word the first meaning when used in a predecessor section of the Workplace Relations Act. I consider that I should do likewise, so that the focus of the section is upon a characterisation of the actions of the inducing actor, rather than an effect produced upon the person acted upon. Consistent with this interpretation, and with the context and objects of the predecessor provision, the Full Court held at [61] that the verb encompassed threats or attempts to induce, so that proof of an effected inducement was not essential.

3. However, the Full Court did not require that it be proved that the actor had an ‘intention’ to effect an inducement, and this appears to retreat from making the actor’s subjective intention or purpose an essential ingredient.  In a difficult passage, they regarded intention as relevant evidence of, but not an essential element in, the characterisation required by the previous provision of the Act (see at [60]). Kenny J considered this passage in Australian Workers’ Union v BHP Iron-Ore Pty Ltd (2000) 106 FCR 482 at [71]-[77]. She concluded at [77]:

   As the respondent said:

   “[N]o sophisticated investigation into purpose or intention will be necessary in the case of promises, threats or persuasion: here the overt conduct of the employer will supply the necessary evidence of purpose. If an employer in fact promises a pay increase for any employee who leaves his or her union, it will avail the employer nothing to say that a resignation from the union was not really intended.”

   Conversely, where the connection between the employer's act and the employee's resignation from a union becomes more attenuated, evidence about the employer's state of mind will increase in importance. In the absence of an express promise or threat, there must be something to connect the employer's words or deeds with the outcome referred to in s 298M. The employer's state of mind (i.e. intention or purpose or motive) and the understanding of the employee may be the connection. A relevant state of mind may be inferred from all the circumstances of the case, including any communications between the parties. The employer's state of mind is an important part of the applicants' case in this proceeding.

4. This produces the result, in the opinion of Kenny J (supra at [78]), that a statutory rebuttable presumption would not apply to prove that conduct was carried out for a proscribed particular reason or with a proscribed particular intention. Such a presumption is now found in s.809 relevant to contraventions of Part 16 of the Workplace Relations Act. Kenny J also thought at [79], by way of obiter, that such a provision would not apply to the predecessor to s.794, even if it required proof of an intention to induce. My factual conclusions in the present case, and my acceptance of her Honour’s explanation of the Full Court’s reference to ‘intention’ in BHP Iron-Ore, mean that it is not necessary for me to consider whether the contextual reasons which informed her Honour’s obiter opinion still arise under the present legislation.

5. In the present case, the TWU alleges that DHL Exel engaged in conduct to induce its employees at Matraville to cease to hold their dual TWU memberships or not to take out a dual TWU membership in the future. Its relevant actions are summarised at [63] in its written submission as:

   i.Removing the capacity of the Applicant and its State counterpart body to negotiate collectively on behalf of its members with respect to wages and conditions

   ii.Removing the capacity of the Applicant and its State counterpart body to access the Respondent’s premises for the purpose of communicating with members and other employees, and recruiting new members.

   iii.Removing the legal right of entry to the Respondent’s premises which the Applicant and/or its State counterpart organisation had had.

   iv.Removing the capacity of the Applicant and its State counterpart body to represent members and other employees in workplace disputes and grievances (where any employee desired such representation).

   v.Encouraging, in a discriminatory fashion, membership of the NUW by covertly negotiating the Agreement with it, identifying it as the only union with coverage of the employees (noting that the coverage of the Applicant and its State counterpart body was not contested in the proceedings), and granting it special rights of access to the employees by which the NUW was able to encourage employees to join the NUW and resign from the Applicant and its State counterpart body.

6. In response, DHL Exel submits that the likely adverse effects of its conduct on TWU membership are merely the consequences of the employees’ approval of its agreement reached with a different union, and do not evidence conduct which could constitute a relevant inducement for the purposes of s.794.  In a situation where DHL Exel had legitimate business motives in preferring to make an agreement with the NUW rather than the TWU, those consequences do not establish that anything in the employer’s conduct had the purpose or object which is a necessary element in a contravention of s.794.  It also submits that the TWU has not proved that, in fact, any person was induced to cease or not to take out membership of the TWU.

7. I consider that this argument glosses over significant elements in DHL Exel’s strategy for procuring the making, approval and effectiveness of its union collective agreement with the NUW, and fails to appreciate the statutory object which is given effect by the prohibition in s.794. 

8. The section appears in Part 16 of the Workplace Relations Act, which is designed to protect “freedom of association”. The first object of the Part is identified in s.778(a) as: “to ensure that employers, employees and independent contractors are free to become, or not become, members of industrial associations”. Section 794 then protects individual rights to make a choice of, in the case of an employee, a union which will advise, support and represent that person in dealing with his or her employer in relation to all aspects of the employment. It protects the collective rights of a group of employees to choose their union for themselves. Its protection is achieved by a proscription on interfering with the employees’ freedom of choice by engaging in any conduct with induces an employee to cease or not to take up a particular union membership (cf. the Full Court in BHP Iron Ore (supra) at [58], and Kenny J (supra) at [34]-[50]). In the face of the unqualified prohibition, it is not a legal justification for conduct designed to induce employees to change their union, that this would give effect to a commendable policy of business, government or industrial relations.

9. In the present case, I am satisfied that DHL Exel’s whole strategy to move its employees at Matraville to a union collective agreement with the NUW can be characterised as having, among other objects, an object of inducing the employees, as individuals, to cease to belong to the TWU and to become members of the NUW. The agreement itself is suggestive of this object, since its practical effect was to substitute for the employees’ union which the employer previously recognised and was bound to deal with when negotiating the work conditions of the employees (i.e. the relevant branch of the TWU), a union chosen by the employer which had no prior connection with the employees or their workplace.

10. The process undertaken by DHL Exel, when making the agreement and seeking its approval by the employees, confirms that the inducement provided by the new agreement to the employees to cease their association with the TWU was an object of the employer’s conduct. That process involved the employer choosing the union which would represent its employees, and which it wished to deal with in the future, conducting negotiations with that union, and making the agreement, without any disclosure to its employees or their chosen union. Its strategy then presented the agreement and the employer’s preferred union to the employees with an implicit invitation to them both to join the NUW and to approve the agreement. Moreover, as well as promoting the new union and the agreement with that union to its employees, DHL Exel presented other disincentives to its employees from continuing to hold or take out TWU membership, in particular, by restricting TWU officers when seeking reasonable access to their members during the approval period and by giving preferential access to the NUW officials. In my opinion, the inducements presented to the employees to change unions are obvious, as is the inference that this effect was one of the objects of these procedures.

11. I do not accept the disclaimers of this object by DHL Exel managers, nor that they genuinely believed their own disclaimers. As I have found above, the likely effects of their conduct on the employees’ future choice of union membership were clear, and I do not accept that these effects were not intended by the DHL Exel managers. I have arrived at a confident satisfaction that their conduct when implementing the company strategy for obtaining the making, approval, and lodgement of the 2007 union collective agreement, involved actions to induce individual employees at the Matraville site to cease to be members of the two TWU unions and not to become members of the TWU unions. I am satisfied that a contravention of s.794 occurred by reason of its conduct.

12. I have above noted that the Full Court in BHP Iron Ore held that it was not necessary to establish that as a consequence of conduct to induce cessation or non-membership of a particular union, such an effect actually occurred. In the present case, it is clear that aspects of DHL Exel’s strategy failed. It seems inevitable to attribute, at least in part, the negative outcome of the employees’ secret ballot to a natural resentment and distrust by employees of the secretly negotiated agreement, the promotion of a strange union, and the exclusion of their familiar union. The TWU officials also gave their members good reasons for continuing their membership, by resisting the DHL Exel strategy, including by taking action in the Australian Industrial Relations Commission, and then in this Court. It has, therefore, been able to retain a substantial proportion of its previous membership.

13. However, I am satisfied that at least one member did resign for his stated reason that “this union is not allowed to support its members at my work site”. I consider it likely that other employees took a similar view of events, and it is quite possible that this influenced some of the other non-renewals and resignations which are shown in the evidence. Moreover, I accept that a previous growth in membership as a result of the TWU’s on-site recruitment activities in early 2007 has ceased, and that this is attributable to the inducements arising from DHL Exel’s conduct when making and promoting the NUW agreement. I also expect that the effect of the inducements will continue into the future, particularly, since I have decided that it is impossible to turn back the clock by voiding the new agreement. I consider that it is likely that TWU membership at the Matraville site will diminish very substantially, if not entirely, in future years.

Remedies under Part 8 of the Workplace Relations Act.

1. Section 407, in Part 8, allows the Court to impose a pecuniary penalty of up to 300 penalty points on a corporation for a breach of s.341 (see s.407(1)(b)). Such a penalty is sought by the TWU and, as agreed, I shall hear further submissions from the parties as to the exercise of this power in the light of my above findings. I have above noted that its standing to apply under Part 8 is not disputed.

2. The TWU also seeks a declaration that the 2007 workplace agreement made with the NUW was void, either from inception or from some other date specified by the Court. Section 409 empowers the Court to make such an order by reason of a contravention of s.341, and under s.412(1) an order may be framed to take effect from the date of the order or a later specified date. However, the power is significantly confined by s.412(2):

   (2)The Court may make an order under section 409, 410 or 411 only to the extent that the Court considers appropriate to remedy the following:

   (a)all or part of any loss or damage resulting from the contravention mentioned in section 408;

   (b)prevention or reduction of all or part of that loss or damage.

3. This provision clearly prevents the Court from voiding a union collective agreement just because this remedy appears the fair and just response to breaches by an employer of the employee approval requirements of s.340(2), even where those breaches had the effect that the agreement was never approved by a majority of the employees which it binds. As a result of s.412(2) it can only void the agreement, if it is affirmatively satisfied that this will “remedy” some “loss or damage” resulting from the absence of approval, and only “to the extent” that this will provide such a remedy.

4. These preconditions govern, and also inform, the nature of the discretion to be applied by a Court.  In effect, it must respect the fact that the legislation in force in March 2007 expected that a collective agreement would take the binding effects provided by the Act, even if it lacked majority approval and should not have been lodged with the Employment Advocate, unless a remedial advantage to the employees from vitiating the agreement can be positively identified.

5. It becomes very difficult, if not impossible, for a Court to arrive at such satisfaction in a case such as the present, for reasons which were identified by Graham J and upheld by the Full Court in the Karellas Investments case (supra). The 2008 amendments may have improved the situation, but, as I shall explain, they do not apply in the present case.

6. As in Karellas Investments, I was addressed in submissions as to the possible meaning of “loss or damage resulting from the contravention”, but do not need to decide this. Even assuming that such loss may include intangible effects of the affront to the rights of employees, or their loss of a chance to approve a better agreement, or the unions’ lost income as a result of losing members, the central difficulty in the present case is the assessment of a consideration which must be at the forefront of relevant discretionary considerations, as focused by s.412(2). This is whether there is any real prospect that the employment conditions of the affected employees will be improved, or at least not harmed, by setting aside the agreement. In the circumstances of the present contravention of s.431, I would not be persuaded to exercise the Court’s discretion under ss.409(a) and 412(1) unless I were satisfied as to this.

7. In the present case, it is common ground that the setting aside of the agreement would not revive the provisions of the 2005 registered State agreement, and the employees would be left to ‘safety net’ employment conditions under the Workplace Relations Act and whatever expectation they might have of being able to negotiate another agreement with DHL Exel. Moreover, it is conceded by the TWU, that the employees generally obtained wage rises under the 2007 agreement, and that “in nominal terms, no employee was worse off as a result of the agreement whilst continuing to be employed” by DHL Exel.

8. There is evidence, however, that their shift loadings and annual leave loading were diminished, and that severance pay benefits on redundancy would be significantly inferior “in many cases (depending upon length of service and age)”. TWU relies on these matters as “losses” which should be remedied, and also invites the court to find that there was an appreciable loss of chance of the negotiation of an agreement on better terms. It points to the fact that some other DHL Exel employees at other sites have a collective agreement on better terms – although DHL Exel has always maintained that its business could not support those terms for the employees at Matraville.

1. The TWU also relies upon the opinion of Mr Aird, a TWU legal officer, given in cross-examination by counsel for the NUW early in the hearing. When invited to identify inadequacy in the 2007 agreement, he said:

   The inadequacy – when you’re looking at pay rates, I mean, you’ve got to look at things as broadly as you can.  It’s a major company; there was a site just up the road at Huntingwood, for example, which has NUW membership, which was employing people performing allegedly exactly the same tasks that are getting a significantly higher rate of pay – I think it’s getting close to, as I recall my calculations, 10 per cent higher rate of pay.  Now, that’s the same company, same city; that’s a massive gap, it’s a massive – it was a significant gap between the wages being paid at this site and wages being paid at other major multinational companies where there’s significant TWU membership, such as Star Track and TNT and Toll and Linfox, for facility workers; and the increase of their base rate, as I recall it … was somewhere around two and a half and three per cent annual increases … which is significantly below inflation.

2. In response to the proposition that no employee suffered a financial loss, Mr Aird said:

   I would have regarded a drop in real wages as a financial loss.  In terms of quantum increases, if you look at it without any sort of inflationary impact, clearly they got an increase in money – they didn’t go backwards; but in terms of financial loss, I would have taken that to encompass a real world account of financial losses.  I mean, I’ve spent most of my time as a union organiser, and if I went out and told a worker that there’s five per cent inflation and you’re getting a three per cent pay rise, they’d regard that as – and quite rightly so – as a reduction in their wages.  I’m not an accountant.  They didn’t go backwards, obviously; but it would have been absolutely outrageous if that had occurred.  In regards to CPI; and they went backwards in regards to what’s happening in the marketplace.  It’s my view that they went backwards, and if you were looking for a broad proposition I would say that they clearly suffered a financial loss as a result of the enterprise agreement.

3. I have given serious consideration to these opinions, which were not answered by any evidence led by the NUW or DHL Exel. However, they were necessarily very impressionistic, and the TWU did not lead any considered evidence from an independent expert in relation to likely outcomes in wages negotiations in circumstances such as the present employees, either in early 2007 or currently. The Court itself cannot take judicial notice of these matters, as perhaps could a specialist industrial agency or tribunal, and it was not invited to. On all the evidence as to the employment terms given to the relevant DHL Exel employees under the agreement lodged on 13 March 2007, I find that it is entirely speculative whether better outcomes could have been achieved in an agreement in which the employees’ preferred union was given an equal bargaining role.

4. I find that the chance that better remuneration could be achieved for all relevant employees, or for even a significant majority of the employees, either in 2007 or now, is so indeterminate on the current evidence, that I cannot be satisfied that it would be appropriate to set aside the current agreement, so as to allow it to be renegotiated with DHL Exel and put to the employees in an approval process complying with s.340(2). There would, moreover, on the evidence remain a real chance that the business circumstances of DHL Exel in relation to the Matraville site have worsened, so that it might not be willing now even to offer the terms of the 2007 agreement. Also, any delays in obtaining a renegotiated agreement would leave the employees covered only by clearly less advantageous ‘safety net’ provisions.

5. For these reasons, I am not persuaded that it would be appropriate to remedy the DHL Exel’s contravention of s.341 by declaring the agreement void, even at a future date so as to allow continuation of the current terms for a period to allow the negotiation of a new agreement.

6. I note that it was not suggested by the TWU that the Court could leave parts of the 2007 agreement intact, so as to preserve the employee’s benefits, but to exercise its powers under s.410 to vary its terms in any particularly inadequate respects. In my opinion, the evidence before me is clearly insufficient for me to contemplate this option.

7. The TWU made submissions which sought to avoid the limitations on the statutory power to declare a workplace agreement void, by requesting the Court to exercise its declaratory power under s.16 of the Federal Magistrates Act 1999 (Cth). It was argued that the agreement lodged on the 13 March 2007 was void of effect, in so far as it purported to bind the employees, by reason of an implication to be drawn from the Workplace Relations Act.

8. At the relevant time, s.347 included the following provisions:

   347  When a workplace agreement is in operation

   (1)A workplace agreement comes into operation on the day the agreement is lodged.

   (2)A workplace agreement comes into operation even if the requirements in Divisions 3 and 4 and section 342 have not been met in relation to the agreement.

   …

   (4)A workplace agreement ceases to be in operation if:

   …(c)the Court declares it to be void under paragraph 409(a).

9. The TWU argued that section 347(1) presupposed that a workplace agreement, to which it gave effect, had been validly lodged under s.341. The approval requirements of s.340 were therefore statutory preconditions to the lodgement requirement of s.341, and hence to the binding effects resulting from lodgement. Section 347(2) did not indicate the contrary, and did not operate to give effect to the present agreement which had not been approved by employees. This is because s.341(1) is not properly characterised as a “requirement” preceding or accompanying lodgement. Rather, it constituted a prohibition against lodgement. When read with s.347(1), it pre-supposed valid lodgement. Since this had not occurred in the present case, the agreement as lodged did not take effect under s.347(1), and the Court should declare accordingly.

10. The TWU sought to draw strength for its argument from amendments made to s.347 by the 2008 amendments to the Workplace Relations Act. Although the transitional provisions to those amendments expressly excluded their application to previous agreements such as the present (see Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Cth), Sch.7B cl.2(1)), it was argued that the amendment could be used as an aid to construction of the unamended s.347(1) and (2), so as to confirm a previously doubtful effect, as submitted above (citing Allina Pty Ltd v Federal Commissioner of Taxation (1991) 99 ALR 295 at 303).

11. As amended, s.347 and a new s.347A now provide:

    347  When a workplace agreement is in operation

    (1)     A workplace agreement comes into operation at whichever of the following times is applicable:

    (a)for an ITEA to which subparagraph 326(2)(b)(i) or (ia) applies, a union greenfields agreement, an employer greenfields agreement or a multiple‑business agreement that would be such an agreement but for subsection 331(1)–the day the agreement is lodged;

    (b)for an ITEA to which subparagraph 326(2)(b)(ii) applies, an employee collective agreement, a union collective agreement or a multiple‑business agreement that would be such an agreement but for subsection 331(1)–the seventh day after the date of issue specified in the notice under subsection 346M(1) or 346Q(2) in relation to the agreement.

    …

    (4)     A workplace agreement ceases to be in operation if:

    (c)the Court declares it to be void under paragraph 409(a).

    …

    347A  Whether certain non‑compliance affects the operation of a workplace agreement

    (1)Despite section 347, a workplace agreement does not come into operation unless the requirements in Division 2 and section 340 have been met in relation to the agreement.

    (2)However, failure to comply with any or all of the following in relation to a workplace agreement:

    (a)the requirements in Division 3;

    (b)the requirements in Division 4 (apart from section 340);

    (c)the requirements in section 342;

    does not prevent the agreement coming into operation.

    Note:     Under Division 11, penalties apply to a person who contravenes a civil remedy provision in Division 3 or 4 or section 342.

12. This was an attractive argument. However, in my opinion, the previous provisions of s.347(2) were not attended by any doubt. I do not accept that the approval provisions of s.340(2) were not intended to be included in the term “the requirement in Divisions 3 and 4”. In my opinion, they plainly were such requirements. Moreover, the Full Court has now confirmed this construction (see Karellas Investments (supra) at [25]). The 2008 amendments, therefore, cannot be invoked as an aid to construction in support of the TWU’s argued construction. Rather, the amendments should be understoond as altering the previous legislation, as a result of a change in policy which now does not want collective agreements such as the present, which were not properly approved by employees, to take any operative effect under the Workplace Relations Act.

13. I therefore must reject the TWU’s application for relief by way of declaration under s.16 of the Federal Magistrates Act.

Remedies under Part 16 of the Workplace Relations Act

1. Standing to apply for the imposition of a pecuniary penalty for a contravention of s.794 is given by s.807(1) to an “eligible person”, which includes under s.807(f)(b) “a person affected by the contravention”.  It was submitted by DHL Exel that the TWUA was not such a person, since the actions complained about affected only the TWU(NSW) in relation to its rights of negotiation, representation and access under the 2005 State registered enterprise agreement. It submitted that, to the extent that the TWUA ever had statutory rights of entry to DHL Exel workplaces or rights to represent members who were its employees, they have not been affected by any of the events during 2007.

2. However, a ‘standing’ concept of “person affected” includes a broad range of affectations, which might not require the identification of an affected interest or right in a legal or economic sense (cf. Allan v Transurban City Link Ltd (2001) 208 CLR 167 at [15]-[17] and [60]). In the context of the Workplace Relations Act, particularly after the ‘work choices’ amendments which gave limited continuing life to State registered agreements with Constitutional corporations, I consider that the present applicant has established a sufficient nexus to the conduct complained of. Part of its complaint is that, as a result of DHL Exel’s conduct when promoting its agreement with the NUW to its employees, leading to its purported approval and lodgement under the Commonwealth legislation, there were inducements to its own members to cease holding or taking out dual membership, and also the loss of a prospect of becoming the union which would represent those employees in any successor agreement negotiated between DHL Exel and the TWU(NSW) pursuant to cl.6.2 of the 2005 agreement. I therefore find that the present applicant has standing to seek relief under Part 16 of the Workplace Relations Act.

3. Under s.807(1)(a) the Court has power to impose a pecuniary penalty of up to 300 penalty units on a body corporate which has contravened s.794. I shall hear the parties’ submissions in relation to the exercise of this power in the light of my above findings.

4. The TWU has also applied for the following orders under s.807(1)(c):

   6. An order under section 807(1)(c) of the Act directing that the respondent allow any employee who so wishes be represented by the applicant in relation to any workplace agreement or grievance.

   7. An order under section 807(1)(c) of the Act directing that the respondent allow officials of the applicant to enter the respondents’ premises for the purpose of holding discussions with employees willing to participate in such discussions in the employees lunchroom during the employees mealtimes and other breaks.

   8. An order under section 807(1)(c) of the Act requiring the respondent issue a statement to its employees that it recognises the employees’ rights to be represented by the applicant if they so wish, in relation to any industrial matter.

5. I have not been persuaded that it is appropriate to exercise the power to make orders in these terms. The imposition of a civil penalty should be sufficient to remind DHL Exel of the seriousness with which the legislation views its attempt to induce its employees to move to a union of its own choosing. To the extent that the TWU is attempting to restore rights of access and representation which were lost by reason of the lodgement of the improperly approved agreement with the NUW, I do not consider that it is appropriate to use powers given in Part 16 to remedy a breach of Part 8 – which has its own code of remedies. Moreover, I am not sufficiently satisfied that there is any employee who is aggrieved by being induced to leave the TWU and who would be substantially assisted by the orders sought. I note that the Workplace Relations Act itself contains provisions which they could invoke if their right to consult and have personal representation from the TWU was threatened. I also have doubts whether the orders sought would involve the Court in an inappropriate supervision of industrial matters, which is better left to other agencies with jurisdiction under this legislation.

6. For all these reasons, I decline to make any of the orders sought under s.807(1)(c). 

7. I shall, however, hear further submissions as to the making of orders under ss.407(1)(b) and 807(1)(a), and any consequential orders.

I certify that the preceding one hundred and twenty-two (122) paragraphs are a true copy of the reasons for judgment of Smith FM

Associate:  Michael Abood

Date:  19 May 2008