HIGH COURT OF AUSTRALIA
GLEESON CJ,
McHUGH, GUMMOW, KIRBY, HAYNE, CALLINAN AND HEYDON JJELECTROLUX HOME PRODUCTS PTY LIMITED APPELLANT
AND
THE AUSTRALIAN WORKERS' UNION & ORS RESPONDENTS
Electrolux Home Products Pty Ltd v Australian Workers' Union
[2004] HCA 40
2 September 2004
S245/2003, A211/2003 and A212/2003ORDER
1. Appeals allowed.
2. Set aside the orders of the Full Court of the Federal Court of Australia made on 21 June 2002 and, in place thereof, order that each of the appeals to the Full Court Nos S6/2002, S11/2002 and N18/2002 be dismissed.
On appeal from the Federal Court of Australia
Representation:
F Parry SC with C B O'Grady for the appellant (instructed by Cutler Hughes & Harris)
S C Rothman SC with S J Howells for the first to seventh respondents (instructed by Lieschke & Weatherill, Taylor & Scott and Moloney & Partners)
H J Dixon SC with M P McDonald for the eighth respondent (instructed by Blake Dawson & Waldron)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Electrolux Home Products Pty Ltd v Australian Workers' Union
Industrial law (Cth) – Industrial action – Whether industrial action protected action – Industrial action in support of claims in respect of proposed certified agreement – Where proposed agreement included bargaining agent's fee payable to unions – Where bargaining agent's fee to be paid by all employees including non-union members – Whether bargaining agent's fee provision about matter pertaining to the relationship between employer and employee – Whether proposed agreement an agreement about matters pertaining to the relationship between an employer and its employees – Whether "protected action" in s 170ML of the Workplace Relations Act 1996 (Cth) includes industrial action in support of a proposed agreement that is not capable of certification under Div 4 of Pt VIB.
Industrial law (Cth) – Industrial action – Whether prohibition on industrial action in s 170NC of the Workplace Relations Act 1996 (Cth) includes industrial action in support of a proposed agreement that is not capable of certification under Div 4 of Pt VIB – Legislative objective of s 170NC.
Statutes – Interpretation – Presumption against abrogation of common law rights – Presumption against depriving persons of access to courts – Scope of interpretative presumptions – Application of presumptions to ss 170ML and 170MT of the Workplace Relations Act 1996 (Cth).
Workplace Relations Act 1996 (Cth), ss 170LI, 170ML, 170MT, 170NC.
GLEESON CJ. The outcome of these appeals turns upon three questions of construction of Pt VIB of the Workplace Relations Act 1996 (Cth) ("the Act").
The first question is whether a claim by a trade union that an employer should agree to deduct from the wages of future employees who do not join the union a "bargaining agent's fee", and pay it to the union, is a matter pertaining to the relationship between the employer and persons employed in the business of the employer, within the meaning of s 170LI of the Act. If the answer to that question is in the affirmative, the other questions do not arise.
The second question is whether, if the answer to the first question is in the negative, an agreement containing a term providing for such deduction and payment can satisfy the description of "an agreement ... about matters pertaining to the relationship between ... an employer ... and ... all persons who ... are employed in [the employer's] business" within the meaning of s 170LI. If the answer to that question is in the affirmative, the third question does not arise.
The third question is whether, if the first and second questions are answered in the negative, industrial action by a union in support of claims made for a proposed agreement including a bargaining agent's fee is "protected action" within the meaning of s 170ML of the Act. The answer to that question has consequences for the operation of the immunity conferred by s 170MT, and the prohibition in s 170NC.
The relevant facts, and the history of the proceedings, are set out in the reasons of other members of the Court.
The first question
A negative answer to the first question is required by the decisions of this Court in R v Portus; Ex parte ANZ Banking Group Ltd[1], and Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees[2]. There is no occasion to depart from those authorities, and every reason to follow them.
[1](1972) 127 CLR 353.
[2](1994) 181 CLR 96.
In Alcan the Court, applying Portus, deciding unanimously[3] that a demand by a union that an employer deduct union dues from employees' wages and remit them to the union did not pertain to the relationship between employer and employees. The Court said[4]:
"There are, in our view, three matters which tell persuasively against reconsideration of Reg v Portus. The first is that the principle on which it proceeds, namely, that for a matter to 'pertain to the relations of employers and employees' it must affect them in their capacity as such, has been accepted as correct in a number of subsequent cases, with no question ever arising as to whether the principle was correctly applied in the case. The second is that Parliament re-enacted, in s 4(1) of the Act, words which are almost identical with those considered in Reg v Portus. There is abundant authority for the proposition that where the Parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already 'judicially attributed to [them]', although the validity of that proposition has been questioned. But the presumption is considerably strengthened in the present case by the legislative history of the Act. The Committee of Review into the Australian Industrial Relations Law and Systems, whose report preceded the enactment of the Act, recommended that the jurisdiction of the tribunal be extended to the limits of the constitutional power under s 51(xxxv). Yet Parliament adopted, in almost identical terms, the language of the former Act into the Act, and the Minister acknowledged in his Second Reading Speech that the jurisdiction was to be limited by 'the requirement that disputes relate to matters concerning employers and employees'. These considerations reinforce the presumption that Parliament did not intend to overturn Reg v Portus.
The third matter that tells against a reconsideration of Reg v Portus is that, academic criticism notwithstanding, there is no reason to think it is in any way affected by error. The considerations which lead to the conclusion that a dispute as to deduction of union dues (at least, where authorized by individual employees) is an industrial dispute within s 51(xxxv) of the Constitution, tend in favour of the conclusion that the subject matter does not pertain to the relationships of employers and employees in their capacity as such. Those considerations, which depend on the nature and role of trade unions in Australia, show that although the subject matter pertains to a relationship between employers and employees, it is a relationship involving employees as union members and not at all as employees. That appears even more clearly if, as earlier suggested, the industrial character of the claim for the purposes of s 51(xxxv) comes about only in the case of a claim for employee-authorized deductions. Finally and so far as the statutory definition of 'industrial dispute' is concerned, the character of a claim for the deduction of union dues is not altered simply because it is bound up with a claim for a wage increase equivalent to the dues to be deducted." (footnotes omitted)
[3]Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ.
[4](1994) 181 CLR 96 at 106-107.
The second of the matters referred to in those passages applies with at least equal force in the present case. Two years after the decision in Alcan, and in the light of the long legislative history there considered, Parliament, in defining in s 170LI the nature of an agreement that may be a certified agreement for the purposes of Pt VIB, used the expression "an agreement, in writing, about matters pertaining to the [employment] relationship". No doubt there are circumstances in which it is artificial, and unpersuasive, to attribute to Parliament a consciousness of a judicial interpretation which might have been placed upon an expression, perhaps years before, and in some different context. But it is hard to think of a clearer case of parliamentary adoption of an expression, with a judicially settled meaning, to be applied in a particular context, than the present.
In one sense, anything that is capable of being made the subject of an agreement between an employer and employees could be said to be a matter pertaining to their relationship. An employer could agree, for example, to make regular donations to a particular political party. The established principle, however, is that, in the context with which this legislation is concerned, it is matters which affect employers and employees in their capacity as such that "pertain to the relations of employers and employees". Furthermore, a particular application of the principle, settled by authority, is that a proposal that an employer deduct amounts from the wages of future employees and remit them to a trade union is not one that affects employers and employees in their capacity as such. In Portus[5], Barwick CJ said:
"In my opinion, the demand that the employer should pay out of earned wages some amounts to persons nominated by the employee is not a matter affecting the relations of employer and employee. It does not seem to me to advance the matter that the intended payee is the organization registered under the Act of which the employee is a member."
[5](1972) 127 CLR 353 at 357.
The Court[6] approved statements in R v Kelly; Ex parte State of Victoria[7] to the effect that "the relations of employers and employees" refers to the industrial relationship, and not to matters having an indirect, consequential and remote effect on that relationship. The actual decision in Portus, approved and applied in Alcan, was that for an employer to collect money from employees and remit such money to a third party on behalf of the employees had an insufficient connexion with the industrial relationship to fall within the statutory description.
[6](1972) 127 CLR 353 at 359 and 362.
[7](1950) 81 CLR 64 at 84.
The dispute in Portus was held not to be "with respect to a matter pertaining to the relations of employers and employees"[8]. The words "with respect to" are no narrower than the word "about"[9]. The use of the preposition "about" does not widen the scope of the expression "matters pertaining to the [employment] relationship" beyond that identified in Portus and Alcan. And the introduction into industrial legislation of the concept of certified agreements does not create a new context in which it can be said, with any degree of conviction, that the expression takes on a new and different meaning.
[8](1972) 127 CLR 353 at 357-358 per Menzies J.
[9]Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 186 per Latham CJ.
The second question
The second question must be considered in the wider context of Pt VIB, the object of which is to facilitate the making, and certifying by the Australian Industrial Relations Commission, of certain agreements, particularly at the level of a single business or part of a single business (s 170L). Applications may be made to the Commission to certify certain agreements. Where an application is made to the Commission in accordance with Div 2 or Div 3 to certify an agreement, the Commission must certify the agreement if, and must not certify the agreement unless, it is satisfied that certain requirements, set out in s 170LT, are met. An agreement comes into operation when it is certified (s 170LX). While in operation it prevails over an award or order of the Commission (s 170LY), and over terms and conditions of employment specified in a State law (s 170LZ). The binding effect of a certified agreement is prescribed by Div 6. Division 8 of Pt VIB deals with negotiations for certified agreements, bargaining periods and, in s 170ML, "protected" industrial action. Section 170MT provides:
"(2)Subject to subsection (3), no action lies under any law (whether written or unwritten) in force in a State or Territory in respect of any industrial action that is protected action unless the industrial action has involved or is likely to involve:
(a)personal injury; or
(b)wilful or reckless destruction of, or damage to, property; or
(c)the unlawful taking, keeping or use of property.
(3)Subsection (2) does not prevent an action for defamation being brought in respect of anything that occurred in the course of industrial action."
A central provision of Pt VIB is s 170LI, which defines the nature of an agreement which may be a certified agreement. It provides:
"(1)For an application to be made to the Commission under this Division, there must be an agreement, in writing, about matters pertaining to the relationship between:
(a)an employer who is a constitutional corporation or the Commonwealth; and
(b)all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement."
Reference has already been made, in the course of answering the first question, to authorities on the meaning of the concept of an industrial dispute with respect to matters pertaining to the relationship of employers and employees. Here we are concerned with the concept of an industrial agreement about matters pertaining to that relationship. The context is not materially different.
It is argued that, even if a claim, a dispute, or a term of a proposed agreement, about a bargaining agent's fee is not about a matter pertaining to the relationship referred to in s 170LI, that does not necessarily require a conclusion that an agreement containing a term about a bargaining agent's fee is not an agreement of the nature described in s 170LI. It is true that, theoretically at least, it might be possible to describe an agreement as one about matters pertaining to the relationship referred to if it contained even one term that was about a matter pertaining to the relationship, regardless of whatever else was in the agreement. No party contended for this construction of s 170LI, and the reason is obvious. When regard is had to the statutory context in which s 170LI appears, to the purpose of certification, to the powers and procedures of the Commission in respect of certification, and to the legal consequences of certification, it is impossible to conclude that s 170LI bears such a meaning.
The contention of the appellant, and of the Minister for Employment and Workplace Relations, is that, for an agreement to be of the nature described in s 170LI, it must be wholly about matters pertaining to the relationship referred to. This contention, which was accepted by Merkel J at first instance, is consistent with the context, and, in particular, the purpose and effect of certification of an agreement. It is also consistent with the legislative history reflected in decisions such as Portus and Alcan. Part VIB does not provide for certification of part of an agreement. The focus of the legislative provisions about the certification procedure, and the consequences of certification, is upon matters pertaining to the employment relationship. If an agreement contains terms about matters extraneous to that relationship it is difficult to accommodate that agreement to the scheme of Pt VIB.
Counsel for the union respondents argued for an intermediate position. It was submitted that an agreement which contains a term or terms about matters pertaining to the employment relationship, and a term or terms about other matters, must be subjected to a process of characterization, by which its real or essential nature can be determined, and, in some cases, the requirements of s 170LI can be satisfied. There are at least two difficulties with this argument. The first is that it leaves unanswered the problem of what is to be done, in relation to the certification procedure, and in relation to the legal effect of a certified agreement, about those parts of the agreement which, by hypothesis, are not about matters pertaining to the employment relationship. The second is that it gives no guidance as to how the process of characterization is to proceed. There may be cases in which a matter extraneous to the employment relationship may be so trivial that it should be disregarded as insignificant. Putting such cases to one side, all the terms of an agreement ordinarily constitute part of the consideration flowing from one side or the other, and there is no way of knowing whether, or what, the parties would have agreed about the other terms if one term were excluded from the legal operation of the agreement. The argument appears to amount to the proposition that, if an agreement is mainly about the matters referred to in s 170LI, then the fact that it is partly about other matters as well is immaterial. In many cases, it will be impossible to say what an agreement is mainly about, but, in any event, there is no support, either in the text, or in the scheme of Pt VIB, for a conclusion that an agreement that is, in part, about matters other than the matters referred to in s 170LI may be a certified agreement. If it were otherwise, it is difficult to see any logical stopping place short of a proposition that an agreement would fall within the section if it contained even one term about the relevant matters.
The third question
Protected action is defined in s 170ML. Sub-sections (2) and (3) of s 170ML protect action, during the bargaining period, by employees and employers, for the purpose of supporting or advancing claims made in respect of the proposed agreement, that is to say, the proposed certified agreement the subject of negotiations (s 170MI). Section 170NC prohibits coercion in respect of certified agreements, but the prohibition does not apply to protected action (s 170NC(2)).
Reliance was placed in argument upon what was said to be a general principle of construction that, where a statute takes away or interferes with common law rights, then it should be given, if possible, a narrow interpretation[10]. The generality of that assertion of principle requires some qualification. It is true that courts do not impute to the legislature an intention to abrogate or curtail fundamental rights or freedoms unless such an intention is clearly manifested by unmistakable and unambiguous language[11]. It is also true that there is a presumption, relevant for example to the construction of privative clauses, that the legislature does not intend to deprive the citizen of access to the courts, other than to the extent expressly stated or necessarily to be implied[12]. However, as McHugh J pointed out in Gifford v Strang Patrick Stevedoring Pty Ltd[13] modern legislatures regularly enact laws that take away or modify common law rights. The assistance to be gained from a presumption will vary with the context in which it is applied. For example, in George Wimpey & Co Ltd v British Overseas Airways Corporation[14], Lord Reid said that in a case where the language of a statute is capable of applying to a situation that was unforeseen, and the arguments are fairly evenly balanced, "it is ... right to hold that ... that interpretation should be chosen which involves the least alteration of the existing law". That was a highly qualified statement and, if it reflects a presumption, then the presumption is weak and operates only in limited circumstances.
[10]See, for example, Melbourne Corporation v Barry (1922) 31 CLR 174 at 206.
[11]Coco v The Queen (1994) 179 CLR 427 at 437; Plaintiff S157/2002v Commonwealth (2003) 211 CLR 476 at 492 [30].
[12]Public Service Association (SA) v Federated Clerks' Union (1991) 173 CLR 132 at 160; Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at 492-493 [32].
[13](2003) 214 CLR 269 at 284 [36].
[14][1955] AC 169 at 191.
In Coco v The Queen[15], Mason CJ, Brennan, Gaudron and McHugh JJ said:
"The insistence on express authorization of an abrogation or curtailment of a fundamental right, freedom or immunity must be understood as a requirement for some manifestation or indication that the legislature has not only directed its attention to the question of the abrogation or curtailment of such basic rights, freedoms or immunities but has also determined upon abrogation or curtailment of them. The courts should not impute to the legislature an intention to interfere with fundamental rights. Such an intention must be clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose if they do not specifically deal with the question because, in the context in which they appear, they will often be ambiguous on the aspect of interference with fundamental rights." (footnote omitted)
[15](1994) 179 CLR 427 at 437.
The joint judgment in Coco went on to identify as the rationale for the presumption against modification or abrogation of fundamental rights an assumption that it is highly improbable that Parliament would "overthrow fundamental principles, infringe rights, or depart from the general system of law" without expressing its intention with "irresistible clearness"[16]. In R v Home Secretary; Ex parte Pierson[17], Lord Steyn described the presumption as an aspect of the principle of legality which governs the relations between Parliament, the executive and the courts. The presumption is not merely a common sense guide to what a Parliament in a liberal democracy is likely to have intended; it is a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted. The hypothesis is an aspect of the rule of law.
[16]The quotation is from Potter v Minahan (1908) 7 CLR 277 at 304, where O'Connor J cited a passage from Maxwell on Statutes, 4th ed (1905) at 122.
[17][1998] AC 539 at 587, 589.
We are here concerned with the meaning of provisions (ss 170ML and 170MT) which have as their immediate purpose and effect the conferring of an immunity from civil liability for a certain kind of conduct. The legislature, recognizing that parties to disputes, and third parties, might suffer actionable damage as a result of such conduct, has conferred a limited immunity from action. The immunity given by s 170MT(2) is qualified by pars (a)-(c). The rights of action taken away are common law rights of a kind frequently modified by statute in the industrial context with which the legislation is concerned.
The present case gives rise to no issue concerning the principle of legality or the rule of law. Furthermore, there is no uncertainty in the meaning of the statute that is not capable of being resolved by an examination of the legislative text and purpose.
The Full Court of the Federal Court, overruling the decision of Merkel J, held that action is protected by s 170ML(2) even if it is partly in support of claims that are not matters pertaining to the employment relationship, and even if the presence of those claims means that the proposed agreement in support of which the action is taken does not satisfy the requirements of s 170LI.[18] The reasoning was that s 170ML(2) requires only the existence of a genuine intention of supporting or advancing claims made in respect of a proposed agreement. On that approach, if there is a proposed agreement, if claims are made in respect of it, and if the industrial action is undertaken with a genuine purpose of supporting or advancing those claims, the statutory protection applies.
[18](2002) 118 FCR 177 at 195.
The reference in s 170ML(2) to "the proposed agreement" is a reference to an agreement of the nature identified in s 170LI. The fact that parties to industrial action may be acting under a mistake of law as to whether a proposed agreement is of that nature is no more relevant to the protection given by s 170ML(2) than would be the fact that they neither knew nor cared whether the proposed agreement was of that nature. The protection conferred by s 170ML(2) is attracted by a combination of two circumstances: the purpose of supporting or advancing claims the subject of a proposed agreement; and the nature of the proposed agreement. The kind of proposed agreement being supported is not at large. It is not merely the fact of the proposal and support that is sufficient to gain protection; the nature of that which is proposed is also material. Section 170ML appears in Div 8 of Pt VIB, which deals with negotiations for certified agreements. It relates to action taken during the bargaining period. The bargaining period is for the negotiation of an agreement under Div 2 or Div 3 (s 170MI). Reference has earlier been made to s 170L, which identifies the object of Pt VIB as the facilitation of the making and certifying by the Commission of certain agreements. That is the statutory purpose which is furthered by the protection and immunity in question, and that protection and immunity does not extend beyond action in support of agreements of the nature of the agreements with which Pt VIB is concerned, that is to say, agreements of the kind identified in s 170LI.
Counsel for the union parties argued that, on this approach, when it comes to the application of s 170NC, the appellant is hoist with its own petard. If an agreement the object of concern is not an agreement under Div 2 or Div 3, then, so it is argued, the prohibition against taking action with intent to coerce cannot apply. That does not follow. The elements of the conduct prohibited by s 170NC, so far as presently relevant, are action, or threats of action, with intent to coerce another to agree, or not to agree, to the making of an agreement under Div 2 or Div 3. An accurate appreciation of the legal nature of the agreement in question is not an element of the intent required by s 170NC. It is possible to intend to coerce another person into making, or not making, a certified agreement, even if the agreement the object of the coercive intent, as a matter of law, is not capable of being certified.
Conclusion
The decision of Merkel J was correct. The appeals should be allowed. The orders of the Full Court of the Federal Court should be set aside, and it should be ordered that the appeals to that Court be dismissed.
McHUGH J. These appeals concern the interpretation and application of Pt VIB of the Workplace Relations Act 1996 (Cth) ("the Act") and, in particular, Divs 2 and 8 of that Part, including ss 170ML and 170LI. In negotiations with the appellant, an employer, the respondent trade unions claimed that the appellant should:
(a)advise new employees that a bargaining agent's fee would be payable to the union by non-union members;
(b)require new employees to pay the fee; and
(c)provide a direct debit facility to enable the payment of the fee (together, "the bargaining agent's fee claim").
The employer rejected the claim. As a result, the unions took industrial action against the employer and claimed that it was "protected action" within the meaning of s 170ML of the Act and immune from civil action. The Full Court of the Federal Court upheld the unions' claim[19]. Subsequently, this Court gave the employer special leave to appeal against the decision of the Full Court.
[19]Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Electrolux Home Products Pty Ltd (2002) 118 FCR 177 ("AMWU").
The questions in these appeals are:
1.whether the bargaining agent's fee claim is "about matters pertaining to the relationship between an employer ... and all persons who ... are employed in a single business ... of the employer" within the meaning of s 170LI(1) of the Act;
2.whether the presence of a term in a proposed agreement that is not "about matters pertaining to the relationship" between an employer and its employees within the meaning of s 170LI of the Act makes the agreement not one about such matters for the purposes of that section and therefore not capable of being the subject of an application for certification by the Australian Industrial Relations Commission ("the Commission");
3.whether industrial action taken by a union in support of claims in respect of a proposed agreement under Div 2 of Pt VIB of the Act constitutes "protected action" within the meaning of s 170ML(2)(e) of the Act where one of the claims does not pertain to the relationship between an employer and its employees; and
4.whether industrial action taken by a union in support of a claim in respect of a proposed agreement under Div 2 of Pt VIB of the Act about a matter that does not pertain to the relationship between an employer and its employees within the meaning of s 170LI(1) constitutes a breach of s 170NC of the Act.
In my opinion, these questions should be answered:
(1) No.
(2) Yes.
(3) No.
(4) Yes.
Statement of the case
In April 2001, the respondent unions ("the Unions") commenced negotiations with the appellant, Electrolux Home Products Pty Ltd ("Electrolux"), concerning a new certified agreement. During the negotiations the Unions produced a draft proposed national agreement. The draft contained a claim for a bargaining agent's fee:
"46.0 BARGAINING AGENTS FEE
46.1 The company shall advise all employees prior to commencing work for the company that a 'Bargaining Agents' Fee of $500.00 per annum is payable to the union.
46.2 The relevant employee to which this clause shall apply shall pay the 'Bargaining Agents fee' to the union in advance on a pro rata basis for any time which the employee is employed by the company. By arrangement with the union this can be done in quarterly instalments throughout the year.
46.3 The employer will, at the request of the employee to whom this clause applies, provide a direct debit facility to pay the bargaining agents fee to the union."
The negotiations failed. In September 2001, the Unions notified Electrolux that they intended to take industrial action. They believed that this action would be "protected action" within the meaning of s 170ML of the Act. Later, the Unions took industrial action falling within the terms of the notices.
Electrolux instituted proceedings in the Federal Court against the Unions alleging that the industrial action was not "protected action". Whether the industrial action was "protected action" depended on whether it fell within s 170ML. In turn, that depended on whether the Unions had undertaken the action "for the purpose of supporting or advancing claims made in respect of the proposed agreement" within the meaning of s 170ML(2)(e) of the Act.
In the proceedings, Electrolux accepted that the Unions' claim in respect of the bargaining agent's fee was genuinely made. However, Electrolux claimed that the industrial action was not protected because cl 46 of the proposed agreement was not about a matter pertaining to the relationship between Electrolux and its employees. That was because the inclusion of this term in the proposed agreement meant that the proposed agreement did not satisfy the requirements of s 170LI of the Act and was therefore not capable of being certified. This in turn meant that the industrial action taken by the Unions could not be "protected action" within the meaning of s 170ML(2)(e) of the Act.
The primary judge, Merkel J, accepted Electrolux's contentions[20]. His Honour found that the bargaining agent's fee claim was "substantive, discrete and significant" and that the claim did not pertain to the relationship between Electrolux and its employees[21]. Merkel J held that the proposed agreement, containing the claim, was not an agreement that would comply with s 170LI of the Act and could not be certified. Accordingly, he held that industrial action taken for the purpose of supporting or advancing such a claim was not "protected action" under the Act.
[20]Electrolux Home Products Pty Ltd v Australian Workers Union [2001] FCA 1600.
[21]Electrolux [2001] FCA 1600 at [52]-[54] .
Merkel J subsequently made declarations to the effect that the action taken by the Unions was not protected action within the meaning of s 170ML of the Act and that the action breached s 170NC of the Act[22]. The Unions appealed to the Full Court of the Federal Court against Merkel J's decision.
[22]Electrolux Home Products Pty Ltd v Australian Workers Union [2001] FCA 1840.
The Full Court (Wilcox, Branson and Marshall JJ) allowed the Unions' appeals. The Full Court held that, for the purposes of s 170ML(2)(e) of the Act, the only essential matter is that the claim be genuinely made "in respect of the proposed agreement"[23]. In a joint judgment, their Honours held that, because the Unions' claim in respect of the bargaining agent's fee was genuinely made, "whether or not the insertion of a provision along the lines of the bargaining fee claim would give rise to a certification difficulty under s 170LI(1)"[24] did not matter. Hence, because the Unions' claim was genuinely made, the Court concluded that the purpose of the Unions' industrial action fell within s 170ML(2).
[23]AMWU (2002) 118 FCR 177 at 194.
[24]AMWU (2002) 118 FCR 177 at 195.
Although it was not necessary to decide the issue, the Full Court also held that, for the purpose of s 170LI, the presence of one or more provisions that do not pertain to the relationship of employer and employee does not necessarily take an agreement outside the description embodied in s 170LI(1). That is, the presence of a term in the agreement that does not pertain to the relevant employment relationship does not mean that the agreement itself does not so pertain[25].
[25]AMWU (2002) 118 FCR 177 at 196-197.
The Act
The critical provisions of the Act for the purposes of these appeals are ss 170LI and 170ML, located in Pt VIB of the Act. Part VIB, entitled "Certified agreements", provides for formalised collective agreements, known as "certified agreements", made between employers and unions or made directly between employers and employees. Part VIB sets out a regime for the making and certifying of agreements. Part VIB therefore furthers the principal object of the Act of providing "a framework for cooperative workplace relations" by "enabling employers and employees to choose the most appropriate form of agreement for their particular circumstances"[26].
[26]Section 3(c).
Division 1 of Pt VIB deals with preliminary matters and sets out the object of the Part. Section 170L states the object of the Part "is to facilitate the making, and certifying by the Commission, of certain agreements, particularly at the level of a single business or part of a single business."
Division 2 is entitled "Making agreements with constitutional corporations or the Commonwealth". The Division sets out requirements that must be satisfied for applications to be made to the Commission to certify certain agreements between employers who are constitutional corporations and either organisations of employees or employees[27]. Electrolux is a "constitutional corporation" as defined in s 4 of the Act. The Unions are "organisations of employees".
[27]Section 170LH.
Section 170LI sets out two important requirements in relation to an application for certification of an agreement under Div 2 of Pt VIB. First, the agreement must be in writing. Second, the agreement must be one that is about matters pertaining to the relationship between the employer and the persons employed in the single business or part of the business of that employer to which the agreement relates[28]. Section 170LI(1) provides:
"For an application to be made to the Commission under this Division, there must be an agreement, in writing, about matters pertaining to the relationship between:
(a)an employer who is a constitutional corporation or the Commonwealth; and
(b)all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement."
[28]Australia, Workplace Relations and Other Legislation Amendment Bill 1996 (Cth) Senate Explanatory Memorandum, (1996) at 69 ("Explanatory Memorandum").
Division 3 of Pt VIB covers agreements concerning industrial disputes and industrial situations. The Division sets out requirements that must be satisfied for applications to be made to the Commission to certify certain agreements to settle, further settle or maintain the settlement of, or to prevent, industrial disputes; or to prevent industrial situations from giving rise to industrial disputes[29].
[29]Section 170LN.
Division 4 prescribes the process for certification. Where an application is made to the Commission in accordance with Div 2 to certify an agreement, the Commission must certify the agreement if, and must not certify the agreement unless, it is satisfied that the requirements of s 170LT are met[30]. The Commission must also refuse to certify an agreement in certain other circumstances[31], but may certify an agreement that contains certain non-compliant provisions upon the acceptance of undertakings from the parties to the agreement[32].
[30]Section 170LT(1).
[31]See, eg, ss 170LT and 170LU.
[32]Section 170LV(1)(a).
Division 5 sets out the effect of certified agreements. An agreement comes into operation when it is certified[33]. While an agreement is in operation, it prevails over an award or order of the Commission to the extent of any inconsistency[34]. With a number of limited exceptions, a certified agreement also prevails over conditions of employment specified in a State or Territory law[35]. For enforcement purposes, a certified agreement has an effect similar to an award[36]. The finding by the Full Federal Court[37] that the "only" effect of certification is that prescribed by ss 170LY and 170LZ of the Act is, with respect, incorrect.
[33]Section 170LX(1).
[34]Section 170LY(1).
[35]Section 170LZ.
[36]See, eg, ss 178 and 179.
[37]AMWU (2002) 118 FCR 177 at 196.
Division 6 prescribes the binding effect of certified agreements. Relevantly, a Div 2 certified agreement binds the employer and the employees who are the subject of the agreement[38]. It also binds unions if the unions made the agreement with the employer in accordance with s 170LJ or s 170LL[39].
[38]Section 170M(1).
[39]Section 170M(2).
Division 7 provides for certified agreements to be varied. Significantly, the Commission must not approve a variation unless the Commission "would be required to certify the agreement as varied if it were a new agreement whose certification was applied for under [Pt VIB]."[40] The Commission may approve a variation of an agreement, in respect of which the Commission otherwise has grounds to refuse, on the acceptance of an undertaking in relation to the operation of the agreement as varied[41].
[40]Section 170MD(3)(b).
[41]Section 170ME(1)(a).
Division 8 is headed "Negotiations for certified agreements etc". The Division outlines when, how and by whom a "bargaining period" may be initiated and when a bargaining period commences[42]. The Division also permits unions which are negotiating parties to take "protected action" during a bargaining period. Each Union was a "negotiating party". Section 170ML is located in Div 8. The section identifies particular types of industrial action, termed "protected action", which attract certain legal immunity from civil action under s 170MT. Section 170ML(1) provides:
"This section identifies certain action (protected action) to which the provisions in section 170MT (which confers certain legal immunity on protected action) are to apply."
[42]Sections 170MI-170MK.
Section 170ML(2) deals with employee action during a bargaining period and provides:
"During the bargaining period:
(a)an organisation of employees that is a negotiating party; ...
is entitled, for the purpose of:
(e)supporting or advancing claims made in respect of the proposed agreement; ...
to organise or engage in industrial action directly against the employer and, if the organisation, member, officer or employee does so, the organising of, or engaging in, that industrial action is protected action."
Division 9 prohibits coercion of persons to make, vary or terminate certified agreements. Section 170NC relevantly prohibits persons from taking or threatening to take industrial action (other than "protected action") with intent to coerce another person to agree to the making of an agreement under Div 2.
Division 10 deals with enforcement and remedies. The Division provides that whilst a breach of s 170NC is not an offence, an eligible court such as the Federal Court may impose a penalty on a person who is found to have contravened s 170NC[43]. Injunctive relief is also available in relation to a contravention[44].
[43]Sections 170ND, 170NE, 170NF(1).
[44]Section 170NG.
The issues
Electrolux contends that the immunity in respect of "protected action" conferred by ss 170ML and 170MT of the Act does not apply where a proposed agreement under Div 2 contains a provision that is not
"about matters pertaining to the relationship between an employer … and … all persons who, at any time when the agreement is in operation, are employed in a single business … of the employer and whose employment is subject to the agreement" ("the requisite relationship").
Electrolux contends that a bargaining agent's fee claim is not such a matter. This contention involves four propositions:
1.that the bargaining agent's fee claim is not a "[matter] pertaining to the relationship between an employer … and … all persons who, at any time when the agreement is in operation, are employed in a single business … of the employer and whose employment is subject to the agreement" within the meaning of s 170LI(1);
2.that an agreement or proposed agreement which contains such a term is not "an agreement … about matters pertaining to the relationship between an employer … and … all persons who, at any time when the agreement is in operation, are employed in a single business … of the employer and whose employment is subject to the agreement" within the meaning of s 170LI(1);
3.that industrial action by a union in support of a claim in a proposed agreement that includes a bargaining agent's fee claim is not "protected action" within the meaning of s 170ML; and
4.that in the circumstances of the case the Unions breached s 170NC by taking industrial action that was not "protected action" within the meaning of s 170ML.
It is appropriate to consider each proposition in turn.
1. Characterisation of the bargaining agent's fee claim
The bargaining agent's fee claim consists of three elements: an obligation on the employer to advise employees prior to commencing work for the company that a so-called "bargaining agent's fee" is payable to the Union; an obligation on the employee to pay an annual fee to the Union, apparently for the provision of bargaining services by the Union; and an obligation on the employer, at the employee's request, to provide a payment facility to pay the bargaining agent's fee to the Union.
Merkel J at first instance described the first and second elements of the bargaining agent's fee claim as follows[45]:
"The claim, implicitly if not explicitly, is that Electrolux is to act as the union's agent in entering into a contract with new employees which requires the employees, who are not union members, to employ the unions as their bargaining agent to reflect the unions' service in negotiating agreements with Electrolux under the Act.
The relationship between the employer and the employee that would be created were the claim acceded to is, essentially, one of agency; Electrolux is to contract with its employees on behalf of the relevant union, as its agent. The agency so created is for the benefit of the union, rather than for the benefit of the employee upon whom the contractual liability is to be involuntarily imposed. The resulting involuntary 'bargaining' agency is, as a matter of substance, if not form, a 'no free ride for non-unionists' claim, rather than one by which the union is undertaking its traditional role of representing the interests of union members in respect of the terms of employment of employees. Although the claim was argued as if it were a claim for future services, it may also be characterised as a claim for payment for the unions' services in securing the new employee's terms and conditions of employment in the proposed certified agreement, notwithstanding that the new employee will only have commenced employment after the date of the agreement. ... Thus, payments claimed for bargaining 'services' prior to re-negotiation of a new agreement would appear to relate, primarily, to bargaining services rendered prior to the non-union member having commenced employment." (original emphasis)
[45]Electrolux [2001] FCA 1600 at [40]-[41].
His Honour described the third element of the bargaining agent's fee claim as follows[46]:
"The other aspect of the claim, the bargaining fee debit facility, is analogous to a demand by unions that an employer pay its employees' union dues by making deductions and payments from salary due and payable to employees in accordance with authorities provided by them."
[46]Electrolux [2001] FCA 1600 at [42].
Merkel J described the claim for payment of a bargaining agent's fee as "substantive, discrete and significant (ie, in the sense that it is substantial) … [and] was treated by [the parties] as such."[47] He held that the claim was not a matter pertaining to the relationship between an employer and persons employed by the employer[48] and concluded that the bargaining agent's fee claim "relates to a substantive, discrete, and significant matter that does not pertain to the employment relationship."[49]
[47]Electrolux [2001] FCA 1600 at [53].
[48]Electrolux [2001] FCA 1600 at [45].
[49]Electrolux [2001] FCA 1600 at [54].
The Full Federal Court disagreed with Merkel J's conclusions. The Full Court acknowledged that everything depends upon the precise formulation of the claim or term[50]. However, their Honours held that, because the words of s 170LI(1) differed significantly from those contained in the definition of "industrial dispute" in previous enactments, "[c]ases decided with reference to that definition may not apply."[51] Without expressing a concluded view, their Honours said that the claim by the Unions that Electrolux impose a requirement (being a condition of their employment) upon future employees "might give rise to a matter pertaining to the relationship between Electrolux and those employees, notwithstanding that the relevant Union, and its members, will benefit from the imposition"[52]. In addition, the requirement of a direct debit facility seemed to their Honours "to be merely facilitative and intended to be there for the benefit of those who wish to use it."[53]
[50]AMWU (2002) 118 FCR 177 at 196.
[51]AMWU (2002) 118 FCR 177 at 196.
[52]AMWU (2002) 118 FCR 177 at 196-197.
[53]AMWU (2002) 118 FCR 177 at 197.
This Court has consistently held that the rejection of demands of an academic, political, social or managerial nature does not create a dispute about matters pertaining to the relationship between employer and employee[54]. Neither does the rejection of a demand that the employer act as a financial agent for employees in their dealings with the union[55]. The cases emphasise that "matters pertaining" to the relations of employers and employees must pertain to the relation of employees as such and employers as such, that is, employees in their capacity as employees, and employers in their capacity as employers[56]. The Court has not followed statements in earlier cases – Australian Tramway Employes Association v Prahran and Malvern Tramway Trust ("Union Badge Case")[57] and Federated Clothing Trades of the Commonwealth of Australia v Archer[58] – that an industrial dispute arises whenever employers refuse union demands to do something that is within the power of the employers to concede and carry out[59]. However, all the cases rejecting this approach were decided before the enactment of Pt VIB of the Act. The Unions claim that they are not decisive of the issues arising under Pt VIB of the Act. It is necessary, therefore, to examine the reasoning in those pre-Act cases.
[54]See, eg, Australian Tramway Employes Association v Prahran and Malvern Tramway Trust ("Union Badge Case") (1913) 17 CLR 680 at 705 per Higgins J, 718 per Powers J; R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 at 371 per Stephen J; R v Coldham; Ex parte Fitzsimons (1976) 137 CLR 153 at 163-164 per Stephen J.
[55]Portus (1972) 127 CLR 353; Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96.
[56]See, eg, Portus (1972) 127 CLR 353 at 357 per Menzies J (Barwick CJ and McTiernan J agreeing), 368 per Walsh J; Coldham (1976) 137 CLR 153 at 163-164 per Stephen J; Federated Clerks' Union (Aust) v Victorian Employers' Federation (1984) 154 CLR 472 at 481-482 per Gibbs CJ, 488 per Mason J; Re Manufacturing Grocers' Employees Federation of Australia; Ex parte Australian Chamber of Manufactures (1986) 160 CLR 341 at 353; Re Finance Sector Union of Australia; Ex parte Financial Clinic (Vic) Pty Ltd (1993) 178 CLR 352 at 363 per Mason CJ, Deane, Toohey and Gaudron JJ; Re Alcan (1994) 181 CLR 96 at 106-107.
[57](1913) 17 CLR 680.
[58](1919) 27 CLR 207.
[59]See R v Kelly; Ex parte State of Victoria (1950) 81 CLR 64 at 85; Portus (1972) 127 CLR 353 at 358-359 per Menzies J.
In Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees[60], decided two years before the enactment of the Act, the Court held that a demand by a union that an employer deduct union dues from its employees' wages and remit them to the union did not pertain to the relationship between employers and employees. The issue in Re Alcan was whether a dispute about such a demand was an "industrial dispute" within the meaning of the Industrial Relations Act 1988 (Cth). Section 4(1) of that Act defined "industrial dispute" as "an industrial dispute ... that is about matters pertaining to the relationship between employers and employees". The Court described the expression "matters pertaining to the relationship between employers and employees" as relating to matters "pertaining to the employment relationship involving employers, as such, and employees, as such."[61] The Court said that "for a matter to 'pertain to the relations of employers and employees' it must affect them in their capacity as such."[62] It also said that the matter must "pertain to the relationships of employers and employees in their capacity as such."[63] It concluded that a dispute about the deduction of union fees pertained to "a relationship involving employees as union members and not at all as employees"[64]. The Court said that a claim directed to strengthening the position of a union or union members is not, without more, a matter pertaining to the employment relationship involving employers, as such, and employees, as such[65].
[60](1994) 181 CLR 96.
[61]Re Alcan (1994) 181 CLR 96 at 106.
[62]Re Alcan (1994) 181 CLR 96 at 106.
[63]Re Alcan (1994) 181 CLR 96 at 107.
[64]Re Alcan (1994) 181 CLR 96 at 107.
[65]Re Alcan (1994) 181 CLR 96 at 106.
In Re Alcan, the Court refused to reconsider its previous decision in R v Portus; Ex parte ANZ Banking Group Ltd[66], handed down over 20 years earlier, for the following reasons[67]:
"The first is that the principle on which it proceeds, namely, that for a matter to 'pertain to the relations of employers and employees' it must affect them in their capacity as such, has been accepted as correct in a number of subsequent cases, with no question ever arising as to whether the principle was correctly applied in the case. The second is that Parliament re-enacted, in s 4(1) of the Act, words which are almost identical with those considered in R v Portus. There is abundant authority for the proposition that where the Parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already 'judicially attributed to [them]', although the validity of that proposition has been questioned. But the presumption is considerably strengthened in the present case by the legislative history of the [Industrial Relations Act]. The Committee of Review into the Australian Industrial Relations Law and Systems, whose report preceded the enactment of the [Industrial Relations Act], recommended that the jurisdiction of the tribunal be extended to the limits of the constitutional power under s 51(xxxv). Yet Parliament adopted, in almost identical terms, the language of the former [Conciliation and Arbitration Act 1904 (Cth)] into the [Industrial Relations Act], and the Minister acknowledged in his Second Reading Speech that the jurisdiction was to be limited by 'the requirement that disputes relate to matters concerning employers and employees'. These considerations reinforce the presumption that Parliament did not intend to overturn R v Portus.
The third matter that tells against a reconsideration of R v Portus is that, academic criticism notwithstanding, there is no reason to think it is in any way affected by error. The considerations which lead to the conclusion that a dispute as to deduction of union dues (at least, where authorized by individual employees) is an industrial dispute within s 51(xxxv) of the Constitution, tend in favour of the conclusion that the subject matter does not pertain to the relationships of employers and employees in their capacity as such. Those considerations, which depend on the nature and role of trade unions in Australia, show that although the subject matter pertains to a relationship between employers and employees, it is a relationship involving employees as union members and not at all as employees. That appears even more clearly if, as earlier suggested, the industrial character of the claim for the purposes of s 51(xxxv) comes about only in the case of a claim for employee-authorized deductions. Finally and so far as the statutory definition of 'industrial dispute' is concerned, the character of a claim for the deduction of union dues is not altered simply because it is bound up with a claim for a wage increase equivalent to the dues to be deducted." (footnotes omitted)
[66](1972) 127 CLR 353.
[67](1994) 181 CLR 96 at 106-107.
In Portus, the Court held that a demand by a union that an employer make deductions and payments from the salaries due and payable to its employees in accordance with authorities provided by them did not affect the industrial relationship of employers and employees. Accordingly, the refusal of the demand did not give rise to a dispute about an "industrial matter" within the meaning of s 4 of the Conciliation and Arbitration Act, which defined "industrial matters" to mean "all matters pertaining to the relations of employers and employees".
Menzies J (with whom Barwick CJ and McTiernan J agreed), pointed out that not every dispute between a union and employers is an industrial dispute. That was so even if employers refuse a demand from a union or employees to do something that is within the power of the employer to do. His Honour said that "[t]o fall within that description the dispute must, in the most general terms, be with respect to a matter pertaining to the relations of employers and employees"[68]. He said that the relationship that would be created by the obligation sought to be imposed would be:
"a financial relationship of debtor and creditor arising from the earning of salary, not the industrial relationship in which the salary has been earned and has become payable. What is sought, in reality, is to make the employer the financial agent of the employee for the benefit of the association."[69]
[68]Portus (1972) 127 CLR 353 at 357-358, citing Kelly (1950) 81 CLR 64, see also at 359.
[69]Portus (1972) 127 CLR 353 at 360.
Walsh J warned that:
"[W]hilst the Court has laid stress on the requirement that the relationship to which an industrial matter must pertain is that between an employer as employer and an employee as employee, a narrow view is not to be taken of what may arise out of that relationship or may be sufficiently connected with it to bring a demand within the description of an industrial matter."[70] (emphasis added)
[70]Portus (1972) 127 CLR 353 at 363.
Nevertheless, Walsh J found that[71]:
"[A] provision for the payment by employers of subscriptions due by their employees to their union has no real connexion with the relations of the employers and the employees. The payment of subscriptions is a matter pertaining to the relationship between the employees and their union. In my opinion it is not a matter with which the employer, as such, has any concern and it does not become an 'industrial matter' merely because the association makes a demand upon the employers to which they are not willing to accede."
[71]Portus (1972) 127 CLR 353 at 364.
His Honour also found that any benefit or privilege that accrued to an employee by having the employer deduct union dues from the employee's salary was "not a benefit or privilege of a kind which has any relevant connexion with the relationship of employer and employee."[72]
[72]Portus (1972) 127 CLR 353 at 365.
Walsh J noted that among the employers there was no practice where the deduction of union dues from employees' salaries was a term of employment of each employee or each employee who belonged to a particular union. He therefore concluded that[73]:
"From the employer's point of view, there is not an obligation owed by the employer to each employee because he is an employee. The making of the deductions depends upon an authority given by an employee, who is free to withdraw the authority if he wishes to do so. The system should, therefore, be regarded, in my opinion, as pertaining primarily to the relationship between an employee and his own union, from which relationship arises the obligation which is discharged by the payment made to the union by the employer. In so far as the practice also involves any relationship between an employee and his employer, this is not, in my opinion, a relationship between the employer as employer and the employee as employee, but is one in which the employer acts as agent for an employee in the making of a payment at his request and on his behalf from money to which he has become entitled."
[73]Portus (1972) 127 CLR 353 at 368.
His Honour also noted that, notwithstanding the important functions that unions have, this did not support
"a conclusion that anything which serves to benefit one of them and to give it additional strength, by increasing its financial stability or otherwise, is to be regarded as an industrial matter within the meaning of the [Conciliation and Arbitration Act]."[74]
[74]Portus (1972) 127 CLR 353 at 369.
Stephen J said that a dispute about an "industrial matter" must
"concern either of the broad aspects with which the relations of employers and employees are concerned, namely the performance of work by the employee and the receipt of reward for that work from the employer."[75]
[75]Portus (1972) 127 CLR 353 at 370.
His Honour found that a matter with respect to a demand for reward for work performed[76]:
"must always pertain to the employer-employee relationship ... The necessary quality of a subject matter demanded which is concerned with reward for work performed is, I think, that it be, of itself, inherently associated with the relationship of employer and employee and not with some other type of relationship."
[76]Portus (1972) 127 CLR 353 at 371.
Accordingly, his Honour took the view that there was[77]:
"no necessary connexion between the service which the association, on behalf of employees, demands should be rendered by the employer banks for their employees and the relationship between them of employer and employee. The subject matter of the demand is concerned with a service to be performed by the employer which, viewed in the abstract and without knowledge of the existing relationships of the parties to the demand, does not bear any appearance of association with the employer-employee relationship. This is because the demand does not seek to operate within the sphere of that relationship but instead would create a new relationship between the parties, in which the employer is agent or debtor and the employee is principal or creditor."
[77]Portus (1972) 127 CLR 353 at 371-372.
Stephen J compared the union's demand with one that the employer accept back a portion of the employees' wages, retain that portion and then pay it to a third party. He held that "such a demand would be seeking to create a new, distinct relationship between the employer and its employees, having no connexion with the pre-existing employer-employee relationship."[78] Accordingly, he concluded that[79]:
"The fact that the present demand is made to operate at a slightly earlier stage, before salary is in fact paid over to employees, thereby obviating one step in the imaginary demand I have postulated, that of the acceptance of money back from employees, does not appear to me to convert a transaction foreign to the relationship of employer and employee into one which pertains to that relationship.
There may, no doubt, be instances where the subject matter of a demand appears to have no connexion with the employer-employee relationship but is nevertheless ancillary to a matter forming part of that relationship and is, for that reason, an industrial matter. This cannot, however, be said of the present case."
[78]Portus (1972) 127 CLR 353 at 372.
[79]Portus (1972) 127 CLR 353 at 372.
The question then is whether the reasoning in Re Alcan and Portus applies to the present claim of the Unions in the context of Pt VIB of the Act and, in particular, to s 170LI. If so, the related question arises whether this Court should depart from that line of authority. The Unions suggest that a number of matters justifies this course.
(a) Constitutional foundation for Div 2 of Pt VIB
The constitutional basis of Div 2 of Pt VIB of the Act is one feature that distinguishes it from the enactments considered in the earlier cases. Unlike the provisions considered in Re Alcan and Portus, the constitutional foundation for Div 2 is "primarily" the corporations power[80], not the conciliation and arbitration power[81]. The corporations power provides a broader basis upon which s 170LI may operate. In so far as it affects a constitutional corporation, a bargaining agent's fee clause in an agreement between a corporation and a third party is a matter capable of regulation under the corporations power. In Re Alcan, however, the Court's construction of "matters pertaining to the relationship between employers and employees" did not depend upon or involve the scope of the conciliation and arbitration power in s 51(xxxv). The Court said[82]:
"The question is not one involving s 51(xxxv); it is simply a question of the meaning of the definition of 'industrial dispute' in s 4(1) [of the Industrial Relations Act]. And although there are some minor differences between that definition and the relevant definitions previously found in the Conciliation and Arbitration Act, the requisite nature of the subject matter of a dispute remains precisely the same, namely, that it pertain to the employment relationship involving employers, as such, and employees, as such."
[80]Constitution, s 51(xx). See Explanatory Memorandum at 68; AMWU (2002) 118 FCR 177 at 180.
[81]Constitution, s 51(xxxv).
[82]Re Alcan (1994) 181 CLR 96 at 105.
The Court also noted that each judgment in Portus was based on the statutory definition of "industrial matters" in the Conciliation and Arbitration Act and not the meaning of "industrial disputes" in s 51(xxxv) of the Constitution[83].
[83]Re Alcan (1994) 181 CLR 96 at 101. The Court held that a dispute as to the deduction of union dues from the wages of employees who authorise that course would constitute an "industrial dispute" for the purposes of s 51(xxxv) of the Constitution: at 103-104, applying R v Coldham; Ex parte Australian Social Welfare Union ("CYSS Case") (1983) 153 CLR 297.) The Court said (at 104):
"In an industrial relations system involving the active participation of trade unions as the recognized representatives of their members, a claim that employers should deduct union dues is, in our view, inherently industrial in character. Certainly, that is so where the claim is for deductions authorized by individual employees."
The Court queried (at 104) whether the constitutional term "industrial dispute" would cover a claim for the deduction of union dues where the deductions are not in some way authorised by at least some of the employees. In such a situation the union would be acting in its own interest, not that of its members as employees, and the Court observed that it may be necessary for the employees' interests to be seen as coinciding with the union's if the matter is to be regarded as industrial.
The terms of s 170LI show that the section is not intended to be commensurate with the scope of the corporations power. The constitutional basis of Div 2 is therefore neither determinative of the scope of the Division nor of itself a reason for distinguishing the earlier cases. The Full Bench of the Commission (Polites SDP, Watson SDP and Larkin C) in Re National Union of Workers ("Health Minders") took the view, correctly in my opinion, that the incorporation of s 170LI into the Act was intended to confine the broad extent of the corporations power[84].
(b) Text of s 170LI differs from sections considered in Re Alcan and Portus
[84](2003) 120 IR 438 at 452.
Unlike the provisions considered in Re Alcan and Portus, s 170LI is not concerned with the meaning of "industrial dispute" or "industrial matter". The expression "matters pertaining to the relationship between an employer … and … all persons who, at any time when the agreement is in operation, are employed in a single business … of the employer and whose employment is subject to the agreement" differs from the expressions considered in those cases. In those cases, the relevant expressions were "matters pertaining to the relationship between employers and employees" and "matters pertaining to the relations of employers and employees". Hence, the matters being assessed fell to be determined by reference to a more generalised notion of the relationship between employers and employees.
Section 170LI, however, does not refer to the relationship between employers and employees generally, but rather to the relationship between the employer bound by the agreement and all persons employed in a single business of that employer. As the Full Bench of the Commission (Giudice J, McIntyre VP and Whelan C) observed in Re Atlas Steels Metals Distribution Certified Agreement 2001-2003[85]:
"The terms of s 170LI(1) indicate that the nature of the matters is to be assessed by reference to the relationship between the employer and the employees to whom the agreement applies rather than by reference to a generalised notion of the relationship between employers and employees."
For example, there may be matters particular to the relationship between an individual employer and the persons employed in a single business of that employer. Those matters may not pertain to the relationship between employers and employees generally in their capacity as such. But they may pertain to the requisite relationship in that workplace and require an examination of the issue or issues between the parties that give rise to the claims[86].
[85](2002) 114 IR 62 at 66.
[86]See Re Printing and Kindred Industries Union; Ex parte Vista Paper Products Pty Ltd (1993) 67 ALJR 604 at 609, 612 per Gaudron J (Brennan, Dawson and Toohey JJ agreeing), 617-618 per McHugh J; 113 ALR 421 at 428, 432, 439-440.
The analytical framework that the Court adopted in Re Alcan and Portus to determine what is a matter that pertains to the relationship between an employer and its employees is whether the matter affects the relationship of employers and employees in their capacity as such. Such an approach applies both to employers and employees generally and to particular employers and the persons employed in their business.
Nothing in the Act suggests that this approach is no longer applicable. The Act still defines "industrial dispute" in s 4(1) as a dispute "about matters pertaining to the relationship between employers and employees". Division 3 agreements operate in respect of "industrial disputes"[87]. These provisions give rise to the inference that Div 2 and Div 3 agreements have a common element, namely, that for such an agreement to be certifiable, it must be about matters pertaining to the requisite relationship or to "the relationship between employers and employees" in their capacity as such. Because the Federal Parliament enacted the Act two years after the Re Alcan decision, the drafters of the Act almost certainly knew of the decision and the interpretation applied by this Court to the expression "about matters pertaining to the relationship between employers and employees". The principle that the re-enactment of a rule after judicial consideration is to be regarded as an endorsement of its judicial interpretation has been criticised, and the principle may not apply to provisions re-enacted in "replacement" legislation[88]. However, industrial relations is a specialised and politically sensitive field with a designated Minister and Department of State. It is no fiction to attribute to the Minister and his or her Department and, through them, the Parliament, knowledge of court decisions – or at all events decisions of this Court – dealing with that portfolio. Indeed, it would be astonishing if the Department, its officers and those advising on the drafting of the Act would have been unaware of Re Alcan.
[87]See, eg, s 170LN.
[88]See, eg, Flaherty v Girgis (1987) 162 CLR 574 at 594 per Mason ACJ, Wilson and Dawson JJ; Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 at 329 per Toohey, McHugh and Gummow JJ.
The bargaining agent's fee claim in question appears to be too general to constitute a matter pertaining to the requisite relationship in Electrolux's workplace. First, the bargaining agent's fee clause requires Electrolux to inform the new employee of a debt due by that person to the Union for purposes which the clause does not specify. Nothing in the clause suggests that the debt relates to the employment relationship. Second, even if a broad view is taken of the requisite relationship and matters pertaining to that relationship, the bargaining agent's fee clause appears to relate to the relationship between the Unions and non-members to be employed at Electrolux's workplace. Third, the claim appears to be directed to strengthening the position of the Unions at Electrolux's workplace, but this, without more, does not make such a clause a matter pertaining to the requisite relationship. Fourth, Electrolux does not undertake to deduct the fee from the employee's wages. Rather, the fee is payable "in advance". Consequently, there is not even an agreement or authorisation from the employee that Electrolux deal with the employee's wages in a particular manner. In other words, there is no nexus between the obligation imposed on Electrolux by the clause and the requisite relationship[89].
(c) The use of the word "about"
[89]See, eg, Health Minders (2003) 120 IR 438 at 454; but see Atlas Steels (2002) 114 IR 62 at 68-72.
Predecessor legislation to the Act required that there be a dispute "as to" a matter pertaining to the relationship between employers and employees. Section 170LI requires that there be an agreement "about" matters pertaining to the requisite relationship. Mason CJ, Deane, Toohey and Gaudron JJ observed in Re Amalgamated Metal Workers Union; Ex parte Shell Co of Australia Ltd that[90]:
"As has been seen, the present definition of 'industrial dispute' is satisfied if there is a dispute 'about [a] matter ... pertaining to the relationship between employers and employees'. And that is satisfied by a less direct relationship than might be necessary in the case of a requirement that a dispute be as to an industrial matter."
[90](1992) 174 CLR 345 at 357.
Nevertheless, in Re Alcan the Court rejected the argument that a dispute arising from a demand by a union that an employer deduct union dues from its employees' wages and remit them to the union was a dispute "about" a matter pertaining to the relationship between employers and employees. This suggests that the term "about" does not significantly expand the scope of the matters that must fall within s 170LI for the purpose of obtaining certification of a Div 2 agreement.
(d) Expanding conceptions of employment
It was suggested that expanding conceptions of employment may justify a broader reading of s 170LI, in particular, whether a matter pertains to the requisite relationship. This Court's decision in Hollis v Vabu Pty Ltd[91] was cited as an example. The Unions also referred to the expanded application of Div 2 of Pt VIB of the Act. However, neither the majority decision in Hollis nor the expanded application of Div 2 supports the proposition for which the Unions contend.
[91](2001) 207 CLR 21.
In Hollis, the majority (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ) found that a courier engaged to deliver articles by a company which operated a courier business was an employee of the company. At issue was what constitutes a relationship of employment between a courier and the courier company, rather than whether a particular matter pertained to that relationship.
Division 2 of Pt VIB has an expanded application in respect of:
1.an agreement about matters pertaining to the relationship between an employer who is carrying on a single business or part of a single business in a Territory and employees employed in the single business of the employer or part of same[92];
2.an agreement about matters pertaining to the relationship between an employer (being one of the three specified types of employers: a waterside employer, an employer of maritime employees and a flight crew officers' employer), and the counterpart employees employed in a single business of the employer, or part of same, so far as the matters relate to trade and commerce between Australia or elsewhere, within a Territory or between the States[93]; and
3.an agreement about matters pertaining to the relationship between an employer in Victoria who is carrying on a single business or part of a single business and employees employed in the single business or part[94].
[92]Section 5AA(2).
[93]Section 5AA(3).
[94]Section 494.
Each of the extended applications of Div 2 of Pt VIB has the common feature that the primary requirement for the certification of a Div 2 agreement is that each agreement be about matters pertaining to the requisite relationship. Thus, notwithstanding the expanded application of Div 2 to certain other classes of persons, an application for certification nevertheless falls to be determined according to the "requisite relationship" test[95].
(e) Academic criticism
[95]See Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Unilever Australia Ltd (Unreported, PR940027, Australian Industrial Relations Commission, 31 October 2003, Munro J, Drake SDP and Larkin C) at [34].
The test of sufficient direct effect on the employment relationship remains the key to the statutory limitation in s 170LI. This test has been criticised. Mr Graeme Orr argues that the test has required the Court to affirm a "pedantic distinction" between the employee as employee and the employee as creditor, and between the employer as employer, and the employer as debtor[96]. He contends that bargaining agents' fees are "necessarily incidental to the bargaining and enforcement process without which certified agreements would not exist."[97] On this view, a bargaining agent's fee clause is about[98]:
"each employee, in relation to their particular workplace, mutually insisting that each other (and themselves) contributes to the cost of bargaining and enforcing wages and conditions applicable to that place and class of employment. ... An arrangement mandating that employees contribute to funding [a process of collective negotiation and continuing representation and oversight] is of direct relevance to each employment relationship, whether the representative is a union or an enterprise association."
[96]Orr, "Agency Shops in Australia? Compulsory Bargaining Fees, Union (In)Security and the Rights of Free-Riders", (2001) 14 Australian Journal of Labour Law 1 at 20.
[97]Orr, "Agency Shops in Australia? Compulsory Bargaining Fees, Union (In)Security and the Rights of Free-Riders", (2001) 14 Australian Journal of Labour Law 1 at 21.
[98]Orr, "Agency Shops in Australia? Compulsory Bargaining Fees, Union (In)Security and the Rights of Free-Riders", (2001) 14 Australian Journal of Labour Law 1 at 21.
Notwithstanding that a bargaining agent's fee may contribute indirectly to the enforcement of employment conditions and may be relevant to each employment relationship, this does not alter the characterisation of the relationship created between employer and employee by the bargaining agent's fee clause as an "agency" relationship in which the employer effectively acts as the union's agent in making the relevant payment. Mr Orr also acknowledges that "there is little by way of precedent to suggest that the courts will take such a realistic line in interpreting the federal employment matters requirement"[99], despite the broader constitutional foundation for Div 2 of Pt VIB and the Act itself.
(f) Subsequent amendments to the Act
[99]Orr, "Agency Shops in Australia? Compulsory Bargaining Fees, Union (In)Security and the Rights of Free-Riders", (2001) 14 Australian Journal of Labour Law 1 at 21.
Since the enactment of the Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Act 2003 (Cth), the Act now stipulates that "a provision (however described) of a certified agreement that requires payment of a bargaining services fee" is an "objectionable provision"[100]. By reason of s 170LU(2A), the Commission must now refuse to certify an agreement that contains "objectionable provisions". The Commission must vary a certified agreement so as to remove the objectionable provisions, where it is satisfied that a certified agreement contains objectionable provisions[101]. In addition, s 298Y(2) provides that "[a] provision of a certified agreement is void to the extent that it requires payment of a bargaining services fee."
[100]Section 298Z(5)(b).
[101]Section 298Z.
The term "bargaining services fee" is defined in s 298B as follows:
"bargaining services fee means a fee (however described) payable:
(a) to an industrial association; or
(b) to someone else in lieu of an industrial association;
wholly or partly for the provision, or purported provision, of bargaining services, but does not include membership dues".
The Court in Re Alcan there emphasised the words of the applicable legislation. It rejected the importation of artificial constitutional impediments concerning direct deduction of union dues as outside the scope of constitutional and statutory notions of an "industrial dispute". Given the language of the Constitution s 51(xxxv), the history of its development on this topic, the growth of compulsory arbitration and its dependence in practice upon registered organisations such as unions, this was a natural development in the Court's thinking. In the result, this Court applied the meaning it attributed to the parliamentary language unchanged since the Court's earlier decision in Portus but came to a different conclusion. It would be a great misfortune if this Court were now to reverse this beneficial and well established line of doctrine and returned to a narrow view of the ambit of an industrial dispute and employment relationship and what could be the subject of an award or agreement concerning this. There is no warrant in Re Alcan to do so. At least without a clear and valid statutory warrant to do so, this Court should resist the temptation to turn the clock back, effectively severing the history of decisional authority in this Court in recent years.
Changing statutory connections: Thirdly, when the course adopted by the Court in Re Alcan is considered here, there are two very important changes to the applicable legislative language, since Re Alcan was decided, that affect the usefulness of that decision as an authority. They are critical for the outcome of this point in the present appeals. The first is the insertion of the word "about" in the statutory definition in s 170LI of the Act. It is enough that the "agreement" propounded to the Commission, under the Division, is "about" a matter "pertaining to the [specified] relationship". There are thus two words of connection. Each broadens and deepens the ambit of the linkage that would render the "agreement" one to which the Act applies. "Pertaining to" is already a very wide phrase of connection; but it also appeared in the 1904 Act. What was not in the 1904 Act was the preposition "about".
At the time of the events relevant to the present case, it was enough that the agreement should be about matters pertaining to the relationship. It was not even necessary, as such, that the agreement should actually "pertain to" the relationship itself. Quite clearly, this parliamentary expansion of the ambit of the connection between the claim and the employment relationship was deliberate. It was designed to enhance the permissible scope of the agreement and the connection between its subject matter and the employment relationship. This, then, is the first textual reason for distinguishing the holding in Re Alcan and for declining in this case to follow the same approach on the basis that such a course was mandated there because the Parliament had persisted with the use of the same statutory language. Here, it has not.
Even more important is the signal given in s 170LI(1) that the relationship in question is one between an employee and an "employer who is a constitutional corporation". This makes it clear that the Parliament had decided to cut the Act loose from the controversies arising in the past from implied limitations considered as inherent in the notions of an "industrial dispute", as that phrase is used in s 51 (xxxv) of the Constitution, and to substitute new and additional reliance on the relationships of an employee with a corporation qualifying as envisaged by s 51(xx) of the Constitution. In a stroke, a new constitutional foundation for federal regulation is created. It is no longer necessary to read into the resulting employment "relationship" limitations, broad or narrow, adopted for constitutional reasons in past cases such as Portus and Re Alcan. The Parliament has thus embraced a new constitutional paradigm. It behoves this Court to approach it without the blinkers apt to the old thinking reflected in Portus and continued in Re Alcan for narrow textual reasons of commonality of statutory language. We now have to apply different statutory language. We should re-focus our eyes on the present statutory words, freed from the earlier constitutional thinking.
The correct interpretation of the Act: Fourthly, when this approach is taken, who could doubt that a claim for a "Bargaining Agent's Fee" is at least about matters pertaining to the relationship between Electrolux and its future employees, when those words are considered as words of ordinary language, presenting a question of fact to be decided? The future employees concerned are by definition parties to the employment relationship with Re Alcan. Those to whom the Fee would apply are those who have not joined a relevant union but have stood to gain from the collective bargaining by the union on behalf of employees of Electrolux.
In the context of contemporary employment issues in Australia – where questions of enterprise bargaining, the role of unions in it and the terms of the Act continue to make such issues highly pertinent ones on the shop floor – the notion that the Unions' claim is one about matters pertaining to the employment relationship is irresistible. The only impediment, suggesting that the claim pertains only to the "relationship" between the employees and the unions, is one that derives from old thinking. It is based on the suggested restrictions traced ultimately to discarded constitutional notions of the permissible ambit of an "industrial dispute" as that expression then stood in the statute and was there understood in terms of s 51(xxxv) of the Constitution.
The statute has been changed. The understanding of the Constitution has advanced. A new and different constitutional head of legislative power has been invoked. It is therefore a serious error for this Court, and especially at this stage, to inflict on the interpretation of s 170LI(1) of the Act notions drawn from discarded constitutional doctrines expressed in a significantly different legal context. The real work of s 170LI(1), as it stood at the relevant time, was to exclude from such proposed agreements wholly extraneous demands – such as those concerned with purely political issues, overseas conflicts or matters having no relevant connection to the particular Australian employment relationship. Unions have made such employment demands in the past, concerned with foreign policy, overseas wrongs and international solidarity. This demand was not of that kind. Section 170LI should be read as responding to demands of that extraneous kind. The present demand was on no view such an extraneous "non-employment" demand. It is completely unconvincing to me to say that the Unions' demand for the Fee pertained solely to the relationship between employees and the Unions. Least of all is it convincing to say that it was not about the matters pertaining to the employment relationship. Anyone who thinks otherwise, in my respectful opinion, must have paid no attention to employment controversies in Australia over the past two decades.
Conclusion: claim valid and protected: Applying, therefore, the ordinary meaning of the English language to the words used in s 170LI(1), I have no doubt that the claim for the "Bargaining Agents Fee", made in the context, was about a matter pertaining to the relationship of Electrolux as a "constitutional corporation" and its future employees to whom the Fee was to apply. If there could have been any doubt about this under the former definition of "industrial dispute" in the 1904 Act, it is removed by the addition of the word "about", by the inclusion of a double formula for connection and by the substitution of a different foundation for the employment relationship in question (that with a "constitutional corporation").
It follows that, in the Act as it then stood, the claim made by the Unions was not one which would render the agreement propounded by them incompetent in an application to the Commission with the serious and disproportionate consequences that would follow under the Act. The agreement was therefore protected, as the Full Court found. The contrary view does not make practical sense in an Australian industrial context.
The other issues argued in the appeals do not therefore arise for decision by me. The declarations made by the primary judge should not have been made. The Full Court was correct to set them aside.
Order
The appeals should be dismissed.
CALLINAN J. It is necessary in order to resolve these appeals to construe the following statutory language "matters pertaining to the relationship between an employer [and an employee]" contained in s 170LI(1) of the Workplace Relations Act 1996 (Cth) ("the Act").
Facts
The appellant is a manufacturer carrying on business and employing workers in New South Wales and South Australia. It is bound by the Metal Engineering and Associated Industries Award 1998 ("the Award") made by the Australian Industrial Relations Commission ("the Commission"), and the Email National Manufacturing Agreement 1999 ("the Agreement"), an agreement certified by the Commission pursuant to s 170LT of the Act. The Award and the Agreement apply to the appellant's employees. The Agreement was certified by the Commission on 8 October 1999 and was to expire on 30 June 2001. It continued in operation after that date pursuant to s 170LX of the Act. The first, second and third respondents ("the Unions") are organisations registered pursuant to the Act and each is a party to the Award and the Agreement. Members of the Unions are employed by the appellant. Others who are not members of the Unions are also employed by it.
Between April and September 2001, the appellant and the Unions negotiated for a fresh certified agreement to replace the Agreement. In June and July 2001, each of the Unions issued and served "Notices of Initiation of Bargaining Period" under s 170MI(2) of the Act. Each notice stated that the Unions intended to try to reach an agreement with the appellant under Div 2 of Pt VIB of the Act and to have the agreement certified under Div 4 of Pt VIB of the Act. Further notices were issued and served in early September 2001 to the same effect. The second set of notices stated, in accordance with s 170MJ(c), various matters proposed to be covered by such an agreement including the currently contentious matter of payment of a bargaining agent's fee. The matter was one of contention in both of the States in which the appellant employed workers.
During negotiations between April and September 2001, the claim for such a fee was made by the Unions in these terms:
"[T]he Unions claim that the employer should advise new employees that an Agent's fee of $500 is payable to the Union by non Union members to the Unions to reflect the service obtained by those non members from the Unions in negotiating agreements, and that those employees should pay the amount and that the employer should provide a direct debit facility for the payments."
The negotiations did not lead to a concluded agreement. One of the matters upon which the parties could not agree was the claim for the bargaining agent's fee. The fee was claimed on the asserted basis that the non-unionists were the beneficiaries of the services of the respondents in negotiating agreements under the Act.
In September 2001, the Unions gave "Notices of Intention to take Industrial Action" to the appellant under s 170MO of the Act: that the Unions and their members intended to organise and engage in industrial action in accordance with the provisions applying to "protected action" set out in s 170ML of the Act. The industrial action was to consist of a series of rolling stoppages of work for two hours.
Industrial action in accordance with the notices was taken on 14, 21 and 22 September 2001. The stoppages were for the purpose of supporting and advancing a number of claims including the bargaining agent's fee, which was held by Merkel J at first instance to be a substantive, discrete and significant claim[218].
[218]Electrolux Home Products Pty Ltd v Australian Workers Union [2001] FCA 1600 at [52].
Previous proceedings
On 17 September 2001 the appellant applied to the Federal Court for various orders and declarations to establish that the industrial action, the stoppages, were not protected action attracting immunity on the basis, relevantly to these appeals, that the claim for the bargaining agent's fee did not pertain to the relationship of employer and employee as required by s 170LI of the Act.
On 20 December 2001 Merkel J made declarations to the effect that the industrial action taken was not protected and that there had been breaches of s 170NC(1) of the Act.
In discussing the bargaining agent's fee his Honour drew attention to the true nature of it[219]:
[219]Electrolux Home Products Pty Ltd v Australian Workers Union [2001] FCA 1600 at [40]-[45].
"The claim, implicitly if not explicitly, is that [the appellant] is to act as the union's agent in entering into a contract with new employees which requires the employees, who are not union members, to employ the unions as their bargaining agent to reflect the unions' service in negotiating agreements with [the appellant] under the Act.
The relationship between the employer and the employee that would be created were the claim acceded to is, essentially, one of agency; [the appellant] is to contract with its employees on behalf of the relevant union, as its agent. The agency so created is for the benefit of the union, rather than for the benefit of the employee upon whom the contractual liability is to be involuntarily imposed. The resulting involuntary 'bargaining' agency is, as a matter of substance, if not form, a 'no free ride for non-unionists' claim, rather than one by which the union is undertaking its traditional role of representing the interests of union members in respect of the terms of employment of employees. Although the claim was argued as if it were a claim for future services, it may also be characterised as a claim for payment for the unions' services in securing the new employee's terms and conditions of employment in the proposed certified agreement, notwithstanding that the new employee will only have commenced employment after the date of the agreement. In that regard, it is relevant to note that the proposed draft agreement is to remain in force until 31 March 2003 (cl 7.0) and, in the meantime, no extra claims are to be pursued by the unions in relation to matters dealt with by the agreement except where consistent with the agreement or national wage case decisions (cl 47.0). Thus, payments claimed for bargaining 'services' prior to re‑negotiation of a new agreement would appear to relate, primarily, to bargaining services rendered prior to the non‑union member having commenced employment.
The other aspect of the claim, the bargaining fee debit facility, is analogous to a demand by unions that an employer pay its employees' union dues by making deductions and payments from salary due and payable to employees in accordance with authorities provided by them. Such a claim has been held to not be within the requisite employment relationship. In Portus, Menzies J observed that such a claim[220]:
'[involved] the same critical question, namely, whether the imposition upon an employer of an obligation to make deductions and payments from salary in accordance with the authority of the employee to whom the salary has become due and payable affects the industrial relationship of employers and employees. The identity of the payee does not seem to me to be significant in determining the character of such a dispute, unless, of course, the payment relates to an incident of the employment such as a deduction for and payment to a superannuation fund. In my opinion, the relationship that would be affected by such an obligation is a financial relationship of debtor and creditor arising from the earning of salary, not the industrial relationship in which the salary has been earned and has become payable. What is sought, in reality, is to make the employer the financial agent of the employee for the benefit of the association.'
Walsh J observed[221] that the benefit of offering an employee the payment facility was 'not a benefit or privilege of a kind which has any relevant connexion with the relationship of employer and employee'. His Honour also observed[222] that recognising the importance of the functions of unions 'does not warrant a conclusion that anything which serves to benefit one of them and to give it additional strength, by increasing its financial stability or otherwise, is to be regarded as an industrial matter within the meaning of the Act'. Stephen J observed[223]:
'If, in the existing circumstances of employment, it was demanded of the employer that it accept back from employees a part of the remuneration paid, retain it for a period of time and then pay it over to a third party, the association, such a demand would be seeking to create a new, distinct relationship between the employer and its employees, having no connexion with the pre-existing employer-employee relationship. The fact that the present demand is made to operate at a slightly earlier stage, before salary is in fact paid over to employees, thereby obviating one step in the imaginary demand I have postulated, that of the acceptance of money back from employees, does not appear to me to convert a transaction foreign to the relationship of employer and employee into one which pertains to that relationship.'
Portus was applied by the High Court in Alcan[224]. In Alcan the High Court confirmed that a demand in respect of payment of union dues did not pertain to the relationship between employers and employees as such.
Although the payment of the bargaining agent's fee purports to relate to the unions' bargaining activities for employees, I do not see that as relating to an 'incident of the employment' any more than payment of union dues for a union representing its members at the workplace relates to an incident of employment (see Menzies J in Portus[225]). The involuntary aspect of the claim confirms that, in pursuing the claim, the unions are acting in their own interest and not that of their members or of non-union employees: cf Alcan[226]. Further, although a union claim that relates to services provided by a union to non-members might fall within the requisite employment relationship there are difficulties with such a claim: see Financial Sector Union[227]. Even if the unions' contention that the claim that payment of the fee by the employer providing a direct debit facility can form the subject matter of an industrial dispute were to be accepted, as was held in Alcan[228], that does not assist in making it one that pertains to the requisite employment relationship. I would add that, although I have treated the claim as one relating to employees who are non-members I would have arrived at the same conclusion had the claim applied to all employees. For the reasons explained above neither claim would pertain to the requisite relationship."
[220]R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 at 360.
[221](1972) 127 CLR 353 at 365.
[222](1972) 127 CLR 353 at 369.
[223](1972) 127 CLR 353 at 372.
[224]Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96.
[225](1972) 127 CLR 353 at 360.
[226](1994) 181 CLR 96 at 104.
[227]Re Finance Sector Union of Australia; Ex parte Financial Clinic (Vic) Pty Ltd (1993) 178 CLR 352 at 361-363 per Mason CJ, Deane, Toohey and Gaudron JJ.
[228](1994) 181 CLR 96 at 103-104.
His Honour determined that the action was not protected for reasons which he expressed in this way[229]:
"The claim by the unions for payment of a bargaining agent's fee is substantive, discrete and significant (ie, in the sense that it is substantial). The evidence of the parties shows that it was treated by them as such. The industrial action pursued by the unions in September 2001 was for the purpose of advancing claims that included that claim. It follows that that action was pursued for the purpose of supporting or advancing claims made in respect of an agreement about matters that did, and a substantive, discrete, and substantial matter that did not, pertain to the requisite relationship. Accordingly, the agreement proposed by the unions is not an agreement about matters pertaining to the requisite employment relationship.
My decision in the present case is on the basis that the claim in question relates to a substantive, discrete, and significant matter that does not pertain to the employment relationship. While I entertain some doubt as to whether a proper characterisation of an agreement for the purposes of s 170LI involves questions of degree, I leave for another case the question of whether a claim in respect of a matter that does not pertain to the employment relationship, but is not of significance, may be included in a certified agreement.
[229]Electrolux Home Products Pty Ltd v Australian Workers Union [2001] FCA 1600 at [53]-[55].
Conclusion
The industrial action taken in September 2001 by the unions, pursuant to the notices issued under s 170MO, was action for the purpose of supporting or advancing claims made in respect of a proposed agreement that was not an agreement about matters that pertained to the relationship between [the appellant] and its employees, as such. Consequently, the industrial action was not protected action under the Act."
The Unions then successfully appealed to the Full Court of the Federal Court (Wilcox, Branson and Marshall JJ) which concluded that it did not matter whether a particular claim could or could not ultimately be included in an agreement complying with s 170LI: that it was sufficient for the Unions genuinely to want provision for the fee to be contained in an agreement it wished to have certified[230]. Their Honours went on to say that for the purposes of s 170LI of the Act, the presence of terms in the agreement not pertaining to a relevant relationship did not mean that the agreement itself did not so pertain: further, and in any event, the claim for the bargaining agent's fee might well give rise to a matter pertaining to the relationship between the appellant and its employees[231].
[230]Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Electrolux Home Products Pty Ltd (2002) 118 FCR 177 at 195 [95]-[96].
[231]Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Electrolux Home Products Pty Ltd (2002) 118 FCR 177 at 196-197 [99]-[102].
The appeals to this Court
In order to obtain immunity from sanctions against industrial action under s 170MT of the Act, a negotiating party must satisfy a number of conditions. First, the party needs to be seeking an agreement under s 170LI. Secondly, it must have given a valid bargaining notice for the purpose of defining a bargaining period (ss 170MI and 170MJ). Thirdly, a valid notice of industrial action must have been given pursuant to s 170MO. Fourthly, there is a negative requirement, of absence of conduct in concert with other (unprotected) persons or organisations (s 170MN). Fifthly, the industrial action must have awaited the expiration of relevant awards and agreements (s 170MN). Sixthly, there may be no industrial action without prior negotiation (s 170MP). Seventhly, authorization of the industrial action proposed must have been given (s 170MR). And last, there must be an application to the Commission for certification of an agreement within 21 days after the day when the agreement with respect to which the industrial action is taken is made (s 170MS).
Section 170ML(2) should be set out:
"Protected action
…
(2) During the bargaining period:
(a)an organisation of employees that is a negotiating party; or
(b)a member of such an organisation who is employed by the employer; or
(c)an officer or employee of such an organisation acting in that capacity; or
(d)an employee who is a negotiating party;
is entitled, for the purpose of:
(e)supporting or advancing claims made in respect of the proposed agreement; or
(f)responding to a lockout by the employer of employees whose employment will be subject to the agreement;
to organise or engage in industrial action directly against the employer and, if the organisation, member, officer or employee does so, the organising of, or engaging in, that industrial action is protected action."
Section 170LI is as follows:
"Nature of agreement
(1)For an application to be made to the Commission under this Division, there must be an agreement, in writing, about matters pertaining to the relationship between:
(a)an employer who is a constitutional corporation or the Commonwealth; and
(b)all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement.
(2)The agreement must be made in accordance with section 170LJ, 170LK or 170LL."
In my opinion the approach and conclusion of the primary judge is to be preferred to that of the Full Court for these reasons. The reasoning of the Full Court involves the implication of the words "wholly or partly" before the word "about" in s 170LI. In general, statutory implications should only be made in cases of necessity of which this is not one. Furthermore, it can be seen that when some partial criterion is intended for the application of the Act, it generally says so in terms. Several examples of this may be given. In order to identify employees who may be excluded by regulation from the operation of Div 3 of Pt VIA of the Act, s 170CC(3)(a) refers to an employee whose remuneration was not wholly or partly determined on the basis of commission or piece rates. Section 170CM(6) makes like provision. Section 170CP makes provision for an application if the applicant has received a certificate with respect to an application made wholly or partly on the ground of the alleged contravention. And, pursuant to s 170MU, an employer must not dismiss an employee wholly or partly because the employee is proposing to engage in protected industrial action.
A party's desire for the inclusion of a particular term of agreement, no matter how genuinely and dearly wished, cannot, absent express words so saying, be determinative of the true nature of the term. Nor can the fact that it may use words such as "employee" or "employer" or refer to the use and application of remuneration or any part of it receivable by the employee, be determinative of its true character.
Whether the agreement pertains to the relationship between an employer and employee is to be objectively determined by the Court. The term providing for a bargaining fee may appropriately be described as one which seeks to impose upon an employer an obligation to act as collecting agent for the union to deduct from an employee's remuneration, an involuntary payment to the union for a "service" which the employee has not sought and which may have been of no benefit to him or her. Such a term pertains to, because it seeks to impose, an involuntary financial relationship between a union and a person who is not a member of it, rather than to a relationship between employer and employee. The only relevant relationship as far as the fee is concerned, between the employer and the non-unionist employee, is of an involuntary contract for the payment of an exaction sought to be made by a third party on the latter.
Section 170MD of the earlier enactment, the Industrial Relations Act 1988 (Cth), provides no assistance in construing s 170LI of the Act. Section 170MD(1) of the former dealt with the Commission's powers to refuse to certify an agreement. The structure and wording of s 170MD(1) are quite different from s 170LI.
Upon the termination of a bargaining period under s 170MW of the Act, if the Commission proceed to exercise its powers of arbitration under ss 170MX(3) and 170MY, it must make an award that deals with the matters that were in contention during the bargaining period. The power to arbitrate conferred on the Commission by s 170MY of the Act contemplates that the matters in contention during the bargaining period be matters which pertain to the relationship of employer and employee.
It is right, as the Minister, who became a party to the appeals, submits, that there is no distinction between awards and certified agreements for the purposes of the enforcement of instruments under s 178 of the Act. An award can only be made in settlement of an industrial dispute with respect to matters which relate to both employers and employees as such[232].
[232]Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96 at 105-107; Re Manufacturing Grocers' Employees Federation of Australia; Ex parte Australian Chamber of Manufactures (1986) 160 CLR 341 at 353.
The conclusion that I have reached is consistent with other cases in which the Court has held that the rejection of demands of an academic, political, social or managerial nature will not generate an industrial dispute capable of being settled by the making of an award[233].
[233]Australian Tramway Employes Association v Prahran and Malvern Tramway Trust (Union Badge Case) (1913) 17 CLR 680 at 705 per Higgins J and 718 per Powers J; R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 at 371 per Stephen J; R v Coldham; Ex parte Fitzsimons (1976) 137 CLR 153 at 164 per Stephen J.
In R v Coldham; Ex parte Fitzsimons[234], Stephen J approved what was said by Menzies J in R v Portus; Ex parte ANZ Banking Group Ltd[235], that the creation of a role of financial agent on the part of an employer did not constitute a relationship between employer and employee.
[234](1976) 137 CLR 153 at 164.
[235](1972) 127 CLR 353 at 360.
The latter of those cases heavily influenced, and correctly so, the reasoning of Merkel J[236]. It was not referred to at all in the reasons of the Full Court. The union there had demanded that an employer deduct and pay from its employees' wages sums of money in accordance with authorities provided by them. It was held that the demand did not give rise to an industrial matter. Barwick CJ, as well as agreeing with Menzies J, said this[237]:
"In my opinion, the demand that the employer should pay out of earned wages some amounts to persons nominated by the employee is not a matter affecting the relations of employer and employee. It does not seem to me to advance the matter that the intended payee is the organization registered under the Act of which the employee is a member."
[236]Electrolux Home Products Pty Ltd v Australian Workers Union [2001] FCA 1600 at [42]-[44].
[237]R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 at 357.
Menzies J (with whom McTiernan J also agreed) said this[238]:
"Each contention, it seems to me, involves the same critical question, namely, whether the imposition upon an employer of an obligation to make deductions and payments from salary in accordance with the authority of the employee to whom the salary has become due and payable affects the industrial relationship of employers and employees. The identity of the payee does not seem to me to be significant in determining the character of such a dispute, unless, of course, the payment relates to an incident of the employment such as a deduction for and payment to a superannuation fund. In my opinion, the relationship that would be affected by such an obligation is a financial relationship of debtor and creditor arising from the earning of salary, not the industrial relationship in which the salary has been earned and has become payable. What is sought, in reality, is to make the employer the financial agent of the employee for the benefit of the association."
[238](1972) 127 CLR 353 at 360.
Walsh J made observations to a similar effect[239]:
"The making of the deductions depends upon an authority given by an employee, who is free to withdraw the authority if he wishes to do so. The system should, therefore, be regarded, in my opinion, as pertaining primarily to the relationship between an employee and his own union, from which relationship arises the obligation which is discharged by the payment made to the union by the employer. In so far as the practice also involves any relationship between an employee and his employer, this is not, in my opinion, a relationship between the employer as employer and the employee as employee, but is one in which the employer acts as agent for an employee in the making of a payment at his request and on his behalf from money to which he has become entitled."
[239](1972) 127 CLR 353 at 368.
And Stephen J said this[240]:
"[t]he demand does not seek to operate within the sphere of [the employment] relationship but instead would create a new relationship between the parties, in which the employer is agent or debtor and the employee is principal or creditor."
[240](1972) 127 CLR 353 at 372.
The present case, as well as factually bearing much similarity to Portus, falls within the principle for which it stands and which is stated generally in unanimous terms in the passages that I have quoted. It is also a principle applied fairly recently by this Court in Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees[241]. It is unlikely that a legislature in enacting the Act would have intended to depart from a meaning settled by a series of cases in this Court the most recent of which was decided only two years earlier. The principle governs this case and provides sufficient and necessary reason to allow the appeals. Neither it nor the other reasons which I have given however exhaust the reasons why the appeals must succeed.
[241](1994) 181 CLR 96.
The statutory conferral of an immunity from suit, specifically the sorts of suits which might otherwise be brought in respect of industrial action, for example, inducement of breach of contract and breach of contract, interferes with or takes away fundamental rights to sue. Another consequence would be that an employee's right to receive his or her remuneration in full from an employer would be seriously reduced. Either of those consequences provides reason to read the relevant sections of the Act as intending to interfere with such rights only to the extent and in respects clearly stated. It certainly provides no reason to import into the statutory language words not actually used and capable of embracing matters beyond the relationship of employer and employee.
If s 170LI were to be read as capable of going beyond the relationship between a particular employee and its present and future employer so that an agreement might be certified which contains matters which pertain to the relationship between specified parties, but not in their respective capacities as employer and employee, there would be little effective limit upon the terms that could be included in an agreement brought for certification under Div 2 of Pt VIB of the Act.
The appeals should be allowed. The declarations made by the primary judge on 20 December 2001 as follows should be restored:
"1.The industrial action of the First Respondent on 14, 21 and 22 September 2001, being action threatened in notices issued by the First Respondent dated 5, 11, 13 and 14 September 2001:
(a)was not protected action within the terms of s 170ML of the Workplace Relations Act 1996 (Cth) and;
(b) breached s 170NC(1) of that Act.
2.The industrial action of the Second Respondent on 14, 21 and 22 September 2001, being action threatened in notices issued by the Second Respondent dated 5 and 14 September 2001:
(a)was not protected action within the terms of s 170ML of the Workplace Relations Act 1996 (Cth) and;
(b) breached s 170NC(1) of that Act.
3.The industrial action of the Third Respondent on 14, 21 and 22 September 2001, being action threatened in notices issued by the Third Respondent dated 6, 11, 13 and 14 September 2001:
(a)was not protected action within the terms of s 170ML of the Workplace Relations Act 1996 (Cth) and;
(b) breached s 170NC(1) of that Act."
Because no party contended that orders for costs be made, there should be no such orders.