Electrolux Home Products Pty Ltd v Australian Workers' Union

[2004] HCA 40

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(Judgment by: Gleeson CJ)

Electrolux Home Products Pty Ltd
vAustralian Workers' Union

Court:

Judges:
Gleeson CJMcHugh J
Gummow J
Kirby J
Hayne J
Callinan J
Heydon J

Legislative References:
Workplace Relations Act 1996 (Cth) - Pt VIB; Div 2; Div 8; s 170ML; s 170LI
Industrial Relations Act 1988 (Cth) - s 4(1); Section 170MD
Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Act 2003 - The Act
Workplace Relations Act 1996 - Pt VIB; s 170L; s 170NI)
Conciliation and Arbitration Act 1904 - s 4(1)

Hearing date:
Judgment date: 2 September 2004

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Judgment by:
Gleeson CJ

[1] The outcome of these appeals turns upon three questions of construction of Pt VIB of the Workplace Relations Act 1996 (Cth) ("the Act").

[2] 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.

[3] 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.

[4] 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.

[5] The relevant facts, and the history of the proceedings, are set out in the reasons of other members of the Court.

The first question

[6] 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.

[7] 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)

[8] 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.

[9] 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.

[10] 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.

[11] 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.

The second question

[12] 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.

[13] 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.

[14] 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.

[15] 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.

[16] 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.

[17] 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

[18] Protected action is defined in s 170ML. Subsections (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)).

[19] 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.

[20] In Coco v R ^[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)

[21] 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.

[22] 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 paras (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.

[23] 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.

[24] 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.

[25] 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.

[26] 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

[27] 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.