• Legal database
Legal database

Electrolux Home Products Pty Ltd v Australian Workers' Union

[2004] HCA 40

(Decision by: McHugh J)

Electrolux Home Products Pty Ltd
vAustralian Workers' Union

Court:
High Court of Australia

Judges: Gleeson CJ

McHugh JGummow 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

Decision by:
McHugh J

[28] 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").

[29] 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.

[30] 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.

[31] In my opinion, these questions should be answered:

(1)
No.
(2)
Yes.
(3)
No.
(4)
Yes.

Statement of the case

[32] 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.

[33] 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.

[34] 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.

[35] 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.

[36] 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.

[37] 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.

[38] 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).

[39] 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] ..

The Act

[40] 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] ..

[41] 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."

[42] 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".

[43] 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.

[44] 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] ..

[45] 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] ..

[46] 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.

[47] 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] ..

[48] 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] ..

[49] 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.

[50] 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.

[51] 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.

[52] 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] ..

The issues

[53] 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.

[54] It is appropriate to consider each proposition in turn.

1. Characterisation of the bargaining agent's fee claim

[55] 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.

[56] 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)

[57] 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.

[58] 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] .

[59] 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] .

[60] 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 Assn 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.

[61] 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] ..

[62] 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)

[63] 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".

[64] 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] .

[65] 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)

[66] 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.

[67] 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] .

[68] 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.

[69] 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] .

[70] 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] .

[71] 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.

[72] 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.

[73] 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.

[74] 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

[75] 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.

[76] 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] ..

[77] 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

[78] 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.

[79] 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] ..

[80] 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.

[81] 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

[82] 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"

[83] 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.

[84] 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

[85] 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.

[86] 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.

[87] 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] ..

[88] 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

[89] 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.

[90] 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

[91] 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."

[92] 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.

[93] Neither the Explanatory Memorandum to the Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Bill 2002 (No 2) (Cth) nor the second reading speeches for the Bill mention the decision of the Full Federal Court. However, the enactment of the Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Act does not suggest that the Full Court's decision is correct.

[94] Accordingly, none of the matters relied on to distinguish the earlier cases justifies a departure from their holdings. The bargaining agent's fee clause does not concern a matter pertaining to the requisite relationship.

2. Certification of an agreement which contains a term that is not a matter pertaining to the requisite relationship

[95] If the bargaining agent's fee clause is not a matter pertaining to the requisite relationship, can the Commission certify an agreement that contains such a clause?

[96] Merkel J held that s 170LI "does not require that all of the terms of the proposed agreement must pertain to the requisite relationship" between employer and employee [102] .. In his Honour's view, the section [103] .:

requires that the agreement be characterised as one that is about matters pertaining to the relationship. If a term of the agreement does not pertain to that relationship it does not follow that the agreement is not about matters pertaining to the relationship. For example, the term may be ancillary or incidental to, or a machinery provision relating to, a matter pertaining to the employment relationship. Thus, an agreement may be about the requisite matters notwithstanding that some of its terms may not, strictly, be about such matters.
(original emphasis)
However, Merkel J held that [104] .:
If one of the substantive matters provided for in the agreement is not within the required description and that matter is discrete and significant then the proposed agreement may properly be characterised as about matters that are within the relationship and a matter that is not. While it is arguable that s 170LI only requires that the agreement in question be characterised as one that is 'substantially' or 'primarily' about the requisite matters it would be inappropriate to add those words absent a clear legislative purpose in favour of that construction: see Saraswati v The Queen (1991) 172 CLR 1 at 22 per McHugh J.
(original emphasis)

[97] Thus, Merkel J distinguished between ancillary, incidental or machinery provisions in an agreement -- which for the purposes of certification need only relate to a matter pertaining to the employment relationship -- and a substantive matter that is both discrete and significant -- which must pertain to the employment relationship. Such an approach is consistent with the decision of this Court in Shell [105] . and an obiter statement of Stephen J in Portus [106] . about an ancillary aspect of a claim.

[98] In contrast, the Full Federal Court suggested (without deciding the issue) that while it may be necessary to consider an agreement "as a whole" [107] .:

We do not see why the presence of one or more provisions that do not pertain to the relationship necessarily takes an agreement outside the description embodied in s 170LI(1). As counsel for the Unions pointed out, s 170LI(1) does not refer to the terms of an agreement. It talks about 'an agreement ... about matters pertaining to the relationship'. So it is necessary to characterise the agreement itself, considering it as a whole. An agreement for the sale of a house is an agreement pertaining to real estate, notwithstanding it includes a provision regarding furniture.
Nothing in the statutory scheme suggests that a certified agreement that, considered as a whole, answers the description of s 170LI(1) may not include a particular term that does not.

[99] Whether an agreement containing a term that is not a matter pertaining to the relationship between an employer and employees may be certified under Pt VIB depends upon the proper construction of s 170LI. Integral to the construction of the section is whether it is directed to the nature of the agreement proposed for certification, looked at as a whole, or to each substantive provision by which, in aggregate, such an agreement is comprised [108] ..

[100] Critical to the operation of s 170LI is that, for the purposes of certification under Div 2 of Pt VIB, there must be

an agreement, in writing, 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.

Nothing in Pt VIB nor in the rest of the Act suggests that s 170LI should not be given its plain and literal meaning. The statutory context in which s 170LI appears, the purpose of certification, the powers and procedures of the Commission in respect of certification and the legal consequences of certification suggest that s 170LI only permits the certification of an agreement where all the terms of the agreement are about matters pertaining to the requisite relationship or about matters ancillary or incidental to those matters or machinery provisions with respect to those matters.

[101] Part VIB does not provide for the certification of part of an agreement made under Div 2. Subject to one exception [109] ., if the Commission is satisfied that the requirements of ss 170LT and 170LU are met, the Commission must certify the agreement. If not, the Commission must not certify the agreement [110] .. Section 170LT requires that the agreement, viewed as a whole, pass the "no-disadvantage test" (or not be contrary to the public interest), and include certain provisions, such as a procedure for settling disputes arising under the agreement. Under s 170LU, an agreement may not be certified if any provision contravenes certain sections of the Act, for example, is inconsistent with the termination provisions in Div 3 of Pt VIA of the Act [111] ., is discriminatory [112] . or permits conduct that would contravene Pt XA (the freedom of association provisions) [113] .. With one exception, each of the matters identified in ss 170LT and 170LU pertains to the employment relationship between the employer and the employees [114] .. The focus of Pt VIB is therefore on matters pertaining to the employment relationship.

[102] There is nothing in the statutory scheme which suggests that a certified agreement should not be considered as a whole. Indeed, the Commission is expressly required to characterise the overall effect of the agreement when applying the "no-disadvantage test" in s 170LT(2) [115] .. Section 170LU requires the Commission to have regard to each of the provisions of the agreement. The agreement "as a whole" may pertain to the requisite relationship, but if it contains a single proscribed provision, then, absent an undertaking given under s 170LV, the entire agreement must not be certified.

[103] To the extent that the parties agree that non-compliant terms of an agreement are to have legal effect, the efficacy of those provisions depends on the general law [116] ., not the Act. The Commission may certify such an agreement only if the non-compliant terms may be made the subject of undertakings under s 170LV(1) or if the non-compliant terms are deleted.

[104] Thus, the scheme suggests that -- ancillary, incidental and machinery provisions aside -- the entire agreement must be "about matters pertaining to the [requisite] relationship". This is consistent with the Explanatory Memorandum to the Workplace Relations and Other Legislation Amendment Bill 1996 (Cth) ("the Bill"), which states that the provisions of the new Pt VIB:

are intended to give employees and employers, particularly at the single business level, greater responsibility for developing the terms and conditions of their employment relationship , and to make agreements more accessible, more easily made, and clearly distinct from awards. [117] .

The emphasised phrase supports the conclusion that an agreement under Pt VIB is concerned with the employment relationship between employers and employees and not matters extraneous to the employment relationship.

[105] The above construction of s 170LI is also consistent with the principal object of the Act expressed in s 3. The Act has the purpose of providing a framework for co-operative workplace relations by:

(b)
ensuring that the primary responsibility for determining matters affecting the relationship between employers and employees rests with the employer and employees at the workplace or enterprise level; and
(c)
enabling employers and employees to choose the most appropriate form of agreement for their particular circumstances, whether or not that form is provided for [under the] Act [118] ..

The reference in s 3(b) to matters "affecting the relationship between employers and employees" impliedly supports the contention that the focus of the Act and, by analogy, Pt VIB of the Act, is that requisite relationship. Section 3(c) recognises that employers and employees may choose "the most appropriate form of agreement" and expressly acknowledges that such an agreement may be one for which the Act does not necessarily provide. This suggests that not all agreements between employers and employees will be covered by the Act. Such an inference is also supported by the Explanatory Memorandum to the Bill, which explains that the purpose of the Act is to provide [119] .:

•
a more direct relationship between employers and employees and greater emphasis on wages and conditions being determined as far as possible by agreement at the enterprise or workplace level [paragraphs (b), (d), (h)]; [and]
•
more effective choice and flexibility as to the appropriate form of agreement for parties reaching agreements, including forms not provided by the Act (such as unregistered over award agreements) [paragraph (c)].

[106] The following comments of the Full Bench of the Commission in Atlas Steels are pertinent [120] .:

In the first place, it appears to us that an agreement which contains provisions some of which are about matters pertaining to the relationship and some of which are about matters which do not so pertain cannot be described, at least without straining language, as an agreement about matters pertaining to the relationship. Secondly, this construction gives rise to uncertainty in the application of the section and of the Division. It requires a weighing-up or balancing of provisions which are about matters which do pertain and those which do not in order to reach a conclusion as to whether the agreement as a whole is about matters which pertain. That might involve difficult value judgments in particular cases. Thirdly, the construction contended for might lead to some irreconcilable results. Some agreements deal only with one or two matters. Others deal comprehensively with the terms and conditions of employment. An agreement containing one or two matters only, being matters which do not pertain to the relationship, could not be the subject of a valid application for certification. An agreement containing the same one or two matters, but also containing a large number of matters that do pertain to the relationship, could be the subject of a valid application for certification. The legislature is unlikely to have intended the section to operate in such a capricious way. All of these considerations tell against the submission.

[107] The Full Federal Court said that [121] .:

The only effect of certification is that prescribed by ss 170LY and 170LZ. Certification provides a statutory override of certain inconsistent awards and orders. A term dealing with matters outside the employer-employee relationship is unlikely to be inconsistent with, and therefore to override, any award or order.

[108] With respect, certification is significant. Even if a term dealing with matters outside the employer-employee relationship is unlikely to be inconsistent with an award or order, certification confers other statutory privileges. The effects of certification include that the agreement:

•
overrides awards and certain orders of the Commission to the extent of any inconsistency [122] .;
•
may be varied only in certain circumstances [123] .;
•
is available for enforcement by way of the penalty provisions [124] .;
•
permits an employee to sue for payment of any amounts due to the employee under the agreement [125] .;
•
gives a right of entry into the workplace for certain union officials [126] . and third parties [127] .;
•
comes within Part XA which contains certain prohibitions [128] .;
•
binds a new employer in the case of a transmission of business [129] .;
•
operates to restrict employers' common law rights of contract, tort and property; and
•
prevails over terms and conditions of employment specified in certain prescribed Commonwealth laws [130] . or in a State or Territory law, award or employment agreement to the extent of any inconsistency [131] ., subject to certain exceptions. The exceptions relate to State and Territory occupational health and safety laws, workers' compensation laws, unfair dismissal laws and the like [132] ..

[109] It would seem anomalous if the Act conferred such statutory privileges in relation to substantive matters that did not pertain to the requisite relationship. Moreover, while it is understandable that Parliament wishes to enforce penalties against those who breach certified agreements, it seems unlikely that Parliament would want to enforce, by way of penalties, breaches of other provisions which do not relate to the requisite relationship.

[110] In addition, the Act does not provide any guidance as to the characterisation of individual provisions and the characterisation of agreements. For example, the Act does not specify when, or even stipulate any criteria to assess whether, a discrete and significant term or terms renders the agreement not an agreement that "as a whole" is about matters pertaining to the requisite relationship. The Act is also silent on the procedure for certifying an agreement which contains terms about matters that do not pertain to the requisite relationship, and on the effect of certification of such an agreement. Even if such a term would be effective under the general law [133] ., a question would remain as to whether the parties would have agreed to the term if it did not have legal operation as a term in a certified agreement.

[111] Accordingly, when characterised as a whole, the agreement must be an agreement about matters pertaining to the requisite relationship. It may not include discrete and substantive matters that do not so pertain.

3. Whether industrial action in support of a proposed (non-certifiable) agreement is "protected action"

[112] If a proposed agreement containing a bargaining agent's fee clause cannot be certified under Div 2, is industrial action taken by a negotiating party during a bargaining period in support of such a proposed agreement "protected action" within the meaning of s 170ML(2) with the result that such action attracts the legal immunity conferred by s 170MT? In the present case, each Union was a negotiating party and the bargaining period was the period for negotiating the proposed agreement in question. To determine this issue, it is necessary to construe s 170ML(2) in the context in which it appears and in light of the objects and purposes of Pt VIB and the Act.

[113] Section 170ML(2)(e) protects action for the purpose of supporting or advancing claims made in respect of the "proposed agreement". The "proposed agreement" is identified in s 170MI(1) as that which the initiating party "wants to negotiate", being "an agreement under Division 2". It is the agreement proposed to be certified under Div 2 that is the subject of negotiations [134] .. The reference in s 170ML(2) to "the proposed agreement" is a reference to an agreement of the nature identified in s 170LI. In the context of Pt VIB, the term "under" must be understood to mean meeting the requirements or specifications set out in Div 2. This conclusion is reinforced by s 170LH, which provides that Div 2 "sets out requirements that must be satisfied for applications to be made to the Commission to certify certain agreements" between the relevant parties. The stated requirements are those that must be met for a certification application to be made to the Commission. Accordingly, the "proposed agreement" identified in s 170ML(2) must be an agreement which would satisfy the requirements for the making of an application to the Commission for certification. Those requirements include the nature of the agreement that is mandated by s 170LI(1).

[114] The protection conferred by s 170ML(2) operates if the following two criteria are satisfied:

1.
the action has the genuine purpose of supporting or advancing claims the subject of a proposed agreement; and
2.
the nature of the proposed agreement satisfies the requirements of s 170LI.

[115] This construction is consistent with the objects and purposes of Pt VIB and the Act. Section 170L identifies the object of Pt VIB as facilitating the making and certifying by the Commission of certain agreements, such as certified agreements. The Part also has the purpose of protecting certain industrial action taken in support of claims made in respect of a proposed agreement during the bargaining period. However, the legal immunity conferred by ss 170ML and 170MT is confined to industrial action taken in furtherance of the stated statutory purpose. Hence, the protection and immunity do not extend beyond action in support of a proposed agreement that would satisfy the requirements of s 170LI.

[116] The immunity has two important consequences:

1.
the Commission cannot make an order under s 127 to stop or prevent the action [135] .; and
2.
subject to certain exceptions [136] ., no action lies under any law -- whether written or unwritten -- in force in a State or Territory in respect of that action [137] ..

[117] The "no action" immunity precludes not only actions sought to be brought by the negotiating parties, but also by any third parties who may be affected by and suffer actionable damage as a result of the protected action. Thus, by conferring specific immunity from civil liability, ss 170ML(2) and 170MT effectively abrogate the common law rights both of participants to the negotiations and of third parties who may suffer actionable damage as a result of such action.

[118] A basic principle of statutory construction is the presumption that legislatures do not intend to abrogate or curtail fundamental common law rights or freedoms unless such an intention is clearly manifested by unmistakable and unambiguous language [138] .. Another basic principle of statutory construction is that, in the absence of express words or necessary implication, courts presume that legislatures do not intend to deprive persons of access to the courts [139] .. Given that modern Parliaments routinely enact laws which adversely affect or modify common law rights, the application of each presumption varies according to its context. In Gifford v Strang Patrick Stevedoring Pty Ltd [140] . I said:

There is a presumption -- admittedly weak these days -- that a statute is not intended to alter or abolish common law rights unless the statute evinces a clear intention to do so. In Malika Holdings Pty Ltd v Stretton, however, I warned of the need for caution in applying this presumption: nowadays legislatures regularly enact laws that infringe the common law rights of individuals. The presumption of non-interference is strong when the right is a fundamental right of our legal system; it is weak when the right is merely one to take or not take a particular course of action. Courts should not cut down the natural and ordinary meaning of legislation evincing an intention to interfere with these lesser rights by relying on a presumption that the legislature did not intend to interfere with them. Given the frequency with which legislatures now abolish or amend 'ordinary' common law rights, the 'presumption' of non-interference with those rights is inconsistent with modern experience and borders on fiction. If the presumption still exists in such cases, its effect must be so negligible that it can only have weight when all other factors are evenly balanced.
(footnotes omitted)

[119] In the present case, the natural and ordinary meaning of the legislation evinces an intention to curtail the common law rights of negotiating parties and third parties who suffer actionable damage as a result of certain industrial action to take civil action against the person who took the industrial action. However, the curtailment is not absolute. The protection conferred by ss 170ML(2) and 170MT operates only if the action has the genuine purpose of supporting or advancing claims the subject of a proposed agreement and the nature of the proposed agreement satisfies the requirements of s 170LI.

[120] Given these limiting conditions, the natural and ordinary meaning of s 170ML is consistent with the two presumptions of statutory construction to which I have referred. Indeed, those presumptions support the proposition that the scope of "protected action" is limited and that industrial action is only protected if it is in support of a claim in a proposed agreement that is capable of being certified under Div 2 of Pt VIB.

[121] An honest and reasonable, but mistaken, belief that a proposed agreement satisfies the requirements of s 170LI is a mistake as to the operation of the Act. If a person takes industrial action in respect of such a proposed agreement, it does not assist the person who makes the mistake that he or she believed that the proposed agreement was one which fell within the meaning of Div 2 of Pt VIB and was capable of being certified under Div 4 of Pt VIB. The Act does not refer to a "purported" proposed agreement; nor does it refer to an "honest and reasonable, but mistaken, belief" that a proposed agreement under Div 2 is an agreement capable of certification under Div 4. On the contrary, the nature of the proposed agreement is expressed as an element of the protection conferred by s 170ML.

[122] Accordingly, industrial action in support of a claim for the inclusion of a bargaining agent's fee clause in a proposed agreement that does not meet the requirements for certification "under Div 2" is not "protected action" within the meaning of s 170ML(2).

4. Whether the industrial action taken by the Unions in the present case amounted to a breach of s 170NC

[123] If industrial action does not constitute "protected action" when taken in support of a proposed agreement that is not capable of certification as a "certified agreement" under Div 4, did the industrial action taken by the Unions in the present case breach s 170NC? Section 170NC prohibits coercion in respect of certified agreements but does not apply to protected action.

[124] Section 170NC relevantly provides:

(1)
A person must not:

(a)
take or threaten to take any industrial action or other action; or
(b)
refrain or threaten to refrain from taking any action;
with intent to coerce another person to agree, or not to agree, to:
(c)
making, varying or terminating, or extending the nominal expiry date of, an agreement under Division 2 or 3; or
(d)
approving any of the things mentioned in paragraph (c).

(2)
Subsection (1) does not apply to action, or industrial action, that is protected action (within the meaning of Division 8).

[125] In the present context, the following elements must exist for a contravention of s 170NC(1) to occur:

1.
the taking of or threatening to take industrial action, or the refraining or threatening to refrain from taking any action;
2.
with an intention to coerce another person to agree, or not to agree, to;
3.
the making of;
4.
an agreement under Div 2 of Pt VIB.

[126] It is erroneous to construe the expression "an agreement under Div 2" in s 170NC(1)(c) as applying only in relation to an agreement that meets the requirements of Div 2 of Pt VIB and is an agreement that is capable of certification. If such a construction were accepted, s 170NC would not be contravened by the taking of industrial action by a person who has the intent to coerce another person to agree or not to agree to the making of an agreement that was not capable of certification. Such a result would be anomalous. The Full Federal Court said it would be a lacuna in the law [141] .:

Section 170NC points up the undesirability of narrowly reading s 170ML(2). We think counsel for the appellants are correct in submitting that, on their opponent's argument, there would be a lacuna in the operation of this section. If the making of a claim about a matter that did not pertain to the employment relationship was enough to take a proposed agreement outside the description 'an agreement under Division 2', coercive action in support of such a claim, that was undertaken outside a formal bargaining period, or without a valid s 170MO(2) notice, would not be a contravention of a 'penalty provision'. It would not attract a penalty under s 170NF or injunctive relief under s 170NG.

[127] Although such a construction is possible on a literal reading of the section, it is inconsistent with the legislative objective of the section and the mischief at which the section is directed. The Explanatory Memorandum states that the section "prohibits coercion in relation to making, varying, extending or terminating an agreement [subs (1)]. An agreement does not have to be made or certified for this to apply." [142] . This indicates that the mischief at which the section is directed is the taking of industrial action with the intent to coerce another person to agree to (or not to agree to) a proposed Div 2 agreement. The fact that the agreement may not be capable of certification is not relevant: if an agreement does not have to be made or certified for s 170NC(1) to apply, the inference may be drawn that the section applies notwithstanding that the agreement is not capable of being certified. For the penalty provision to operate, it is sufficient if it can be shown that the person regards the proposed agreement as an agreement of the type which satisfies the requirements of s 170LI for an application for certification under Div 2 of Pt VIB. The requirement that the agreement actually be capable of certification is not a necessary element of the offence.

[128] Accordingly, the industrial action in which the Unions engaged was not "protected action" within the meaning of s 170ML of the Act with the result that such action amounted to a contravention of s 170NC(1).

Order

[129] Because the decision of Merkel J was correct, the appeals must be allowed. As a result, the orders of the Full Court of the Federal Court should be set aside. In their place should be substituted an order that the appeals to that Court be dismissed.


Back to top