PR946290

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AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996

s.45 appeal against decision [PR944258] and order [PR944259]

issued by Commissioner Whelan on 9 March 2004

The Age Company Limited

(C2004/2046)

s.127(2) applications to stop or prevent industrial action

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

and

The Age Company Limited

(C2004/1641)

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

and

The Age Company Limited

(C2004/1651)

Printing industry

   

JUSTICE GIUDICE, PRESIDENT

 

SENIOR DEPUTY PRESIDENT HARRISON

 

COMMISSIONER SIMMONDS

MELBOURNE, 11 MAY 2004

Appeal - whether termination of employment industrial action - Workplace Relations Act 1996 ss.4(1) and 127.

DECISION

[1] This is an appeal, for which leave is required, by The Age Company Limited (The Age) against an order made by Commissioner Whelan pursuant to s.127(2) of the Workplace Relations Act 1996 (the Act) on 9 March 2004.1

[2] John Fairfax Holdings Limited (Fairfax) produces a number of journals in Victoria for distribution in the Melbourne metropolitan area. Those journals include "The Age", "Australian Financial Review" and a number of community newspapers, including the "Knox Journal", the "Dandenong Journal" and the "Werribee Banner". In 1999 Fairfax decided to build a new print facility at Tullamarine, a suburb of Melbourne. At that time it was intended that production of "The Age" and the "Australian Financial Review", which had for many years been carried out at Fairfax's premises in Spencer Street, Melbourne, would be transferred to the new print facility in July 2002.

[3] There was a number of disputes concerning the transfer of operations from Spencer Street to Tullamarine. As the Commissioner said in her decision of 9 March 2004:

[4] It is sufficient to note that The Age made an agreement with the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) in July 2001. The agreement was certified by the Commission and is entitled Spencer Street Print Facility Agreement 2002 (the 2002 agreement). 3 The agreement is still current. Clause 4.4 of the 2002 agreement deals with redundancy. Clause 4.4.1(a) provides:

[5] In February 2004 The Age announced that it intended to close its Spencer Street premises with effect from 12 March 2004. On 4 February 2004 The Age sent letters to the employees remaining at Spencer Street advising them of the decision to close the premises and that their employment would end due to redundancy on 12 March 2004.

[6] On 6 February 2004 the AMWU and the CEPU filed applications for orders against The Age pursuant to s.127(2) of the Act. The unions submitted that The Age, by its actions in closing down the Spencer Street facility and terminating the employment of the remaining employees, was engaging in industrial action in relation to work regulated by an agreement, namely the 2002 agreement. The Commissioner granted the application. The substantive part of her order was:

[7] The Age seeks leave to appeal from that order. The Minister for Employment and Workplace Relations intervened in the public interest on behalf of the Commonwealth to support the appeal. Mr McDonald of counsel appeared with Mr Gostencnik on behalf of The Age. Mr Bourke of counsel appeared on behalf of the Commonwealth. Mr Bromberg of senior counsel appeared on behalf of the AMWU and the CEPU.

[8] Section 127 reads where relevant to this appeal as follows:

[9] It was contended on behalf of The Age and the Commonwealth that termination of employment is not industrial action for the purposes of s.127(1) and accordingly the Commissioner's order is invalid.

[10] It was submitted on behalf of The Age that the termination of employment of employees on the ground of redundancy cannot constitute industrial action because:

[11] It was submitted on behalf of the Commonwealth that:

[12] The narrow question before us is whether the giving of notice to the employees of termination of their employment for redundancy constituted industrial action within the meaning of that expression as it is used in s.127(1) of the Act.

[13] So far as we are aware this is the first occasion on which this issue has been squarely raised on appeal. In making that observation we take the view that the decision in Construction, Forestry, Mining and Energy Union v MP Group Pty Ltd (CFMEU v MP Group),5 to which we shall refer, is of limited precedent value for the reasons we shall give. We are of the opinion that the matter is of such importance that in the public interest leave to appeal should be granted. We grant leave. It was submitted on behalf of the AMWU and the CEPU that in deciding the appeal we should not entertain arguments advanced by The Age on appeal which were not advanced by it before the Commissioner. We reject that submission. The scope of the definition of industrial action governs the breadth of the power conferred on the Commission by s.127. It would not be appropriate to artificially limit our consideration of this important legal question.

[14] The term "industrial action" is defined in s.4 of the Act. The definition, preceded as it is by the opening words of the section, is as follows:

[15] The opening words of s.4, "unless the contrary intention appears", indicate that the defined meaning of a term may not apply if the text of a particular provision evidences a legislative intention that the term should have another meaning. No party suggested that the term "industrial action" should be given a meaning other than its defined meaning. Nothing in the context or subject matter of s.127 indicates an intention that when used in that section the term should be given a meaning other than its defined meaning.

[16] Turning first to paragraph (a) of the definition, for the paragraph to have any application at least one of two essential elements must be present. Either there must be the performance of work in a manner different from that in which it is customarily performed or the adoption of a particular practice in relation to work. The first element, which is concerned with the way in which work is performed, involves action by an employee or employees. That element is not present where an employer terminates the employment of an employee. The second element involves the adoption of a practice in relation to work. That element is not present when an employer terminates the employment of an employee. It follows that paragraph (a) of the definition can have no application.

[17] Paragraphs (b) and (c) of the definition both require a "ban, limitation or restriction on the performance of work, or on acceptance of or offering of work". These terms have been considered by the Commission in a number of cases to which we were referred. A brief survey of those decisions may be useful.

[18] In Australian Federation of Air Pilots v Flight West Airlines Pty Ltd6 the Australian Federation of Air Pilots contended that by engaging contract pilots during the course of an industrial dispute about pilot salaries the employer airline was "adopting a practice" in relation to the work of the pilots it employed. It can be seen that this argument was directed at paragraph (a) of the definition, which we have already found does not apply in this case. The Commission's decision, however, was based on a consideration which, if valid, might equally apply to paragraph (b). The Commission found that the employer's action did not constitute industrial action because it had been motivated by the commercial realities of the employer's business rather than to inflict industrial action on the organisation and its members.

[19] In National Union of Workers v Geoffrey Thompson Fruit Packing Co Pty Ltd (Thompson Fruit Packing)7 the Commission found that an employer was engaging in industrial action by demanding that employees either perform work pursuant to the terms of a particular award or perform no work at all. Prior to the demand, the employees had worked pursuant to the terms of another award with the concurrence of the employer. When the employees refused to accept the change in award, the employer refused to accept the performance of any work at all. The Commission found that the employer's behaviour constituted a "limitation or restriction" on employees' "acceptance of or offering for work" within paragraph (b) of the definition.

[20] In Australian Airline Flight Engineers' Association v Qantas Airways Limited (AAFEA v Qantas)8 the Commission held that the termination of an employee's employment can amount to industrial action by an employer. Referring to the decision in Thompson Fruit Packing,9 Commissioner Whelan in her decision held that termination of employment is an act which limits and restricts the ability of employees to work in accordance with the terms and conditions prescribed by the relevant award or agreement. In the circumstances of that case the employer had given the employees notice of termination and the Commission found that in the period after the notice had been given the employer was restricting the employees from performing their work in accordance with the relevant agreement.

[21] In CFMEU v MP Group,10 an appeal decision, the Commission declined to interfere with the conclusion expressed by the member at first instance that in the circumstances termination of the employment of a workers' health and safety representative did not come within paragraph (b) of the definition of industrial action.

[22] The facts of that case were unusual. The employee in question was employed by a sub-contractor on a building site and was also the elected health and safety representative on site. The principal contractor issued a direction to the sub-contractor that the employee should be removed from the site within seven days. In the course of the decision under appeal the Commissioner decided that if the sub-contractor were to terminate the employee's employment, in response to the principal contractor's direction, the termination would not constitute industrial action within the definition. The principal argument with which the Commissioner was required to deal was that the termination would constitute industrial action because the relevant industrial agreement dealt in detail with the role of workplace health and safety representatives. The agreement also provided, it was argued, that employees were entitled to the health and safety representative of their choice. It was submitted that for those reasons termination of the employment of a health and safety representative would constitute a relevant limitation or restriction on work. The Commissioner rejected this submission as did the Full Bench.

[23] While the Full Bench found, among other things, that termination of employment did not constitute industrial action, the circumstances of the case and the nature of the arguments limit the precedent authority of that finding.

[24] The issue of termination of employment was considered again in an application for orders pursuant to s.127 in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Australia v TMP Worldwide Pty Ltd (AFMEPKIU v TMP Worldwide).11 In that case Senior Deputy President Williams found that in certain circumstances a termination of employment could constitute industrial action. In doing so he relied upon the decision in Thompson Fruit Packing.12 Nevertheless he found that in the circumstances before him the terminations in question did not constitute industrial action of the type described in s.127(1) or s.4(1).

[25] A Full Bench was required to consider a different but related issue in NMHG Distribution Pty Ltd t/as Yale Asia Pacific v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.14 In that case a ban had been imposed by certain employees of a corporation on the performance of work by employees of a contractor to the corporation at the corporation's premises. The question which arose was whether the imposition of the ban by the employees of one employer on the performance of work by employees of another employer constituted industrial action. The Full Bench decided that it did. It can be seen that this is an issue which is largely irrelevant to the question to be decided in this case.

[26] In Australian Federation of Air Pilots v Kendall Airlines (Aust) Pty Ltd (AFAP v Kendall)15 an order was made pursuant to s.127(2) of the Act restraining an employer from taking any steps to make an employee, or declare an employee to be, compulsorily redundant. It was alleged in that case that any attempt by the employer to terminate the employment of one or more of a particular group of airline pilots would be a breach of the terms of the relevant certified agreement. Senior Deputy President Watson took the view that if the threatened terminations were in breach of the agreement then they constituted industrial action for the purpose of the definition in s.4(1) and could be restrained by an order pursuant to s.127(2). He found that the threatened terminations would indeed involve the employer in breaches of the certified agreement and that they constituted industrial action in the relevant sense.

[27] Reference was also made to Senior Deputy President Lacy's decision in Australian Workers' Union v Skyway Executive Pty Ltd (AWU v Skyway).16 In that case the Senior Deputy President held that an employer which had directed an employee not to attend for work was applying a ban within the meaning of that term where it appears in paragraph (b) and (c) of the definition of industrial action.

[28] Against the background of that review we turn to consider the Commissioner's decision in this case. In the operative part of her decision the Commissioner referred to her own decision in AAFEA v Qantas17 for the proposition that termination of employees' contracts can amount to industrial action because it is an act which prevents employees from performing work in accordance with the relevant award or agreement. She then dealt with a submission that she should reconsider her decision in light of two decisions of the Federal Court of Australia.18 The thrust of the submission was that the only conduct by an employer which is within the definition of industrial action is a lockout. She rejected that submission. In doing so she referred to the decisions in AFAP v Kendall19 and AWU v Skyway20 and then continued:

[29] She noted, perhaps as an alternative finding, that the term lockout is not confined in its application to circumstances in which the employment continues. She also referred to the definition of the term in the Macquarie Dictionary, a definition which includes within it "dismissal of employees by the employer".

[30] Consistently with those conclusions the Commissioner went on to find:

[31] The Commissioner's conclusion was based in substance upon the conclusion that the words "ban, limitation or restriction on the performance of work" extend to conduct which severs the employment relationship. As our review of the cases shows, this view was expressed by the Commissioner herself in the earlier case of AAFEA v Qantas21 and adopted subsequently in AFAP v Kendall,22 although in different circumstances in the latter case. While some support might be found for the Commissioner's view in AFMEPKIU v TMP Worldwide,23 properly analysed the decision in that case is authority for the contrary proposition.

[32] In our view, the giving of notice of termination of employment does not fall within the proper construction of paragraphs (b) and (c) of the definition. In particular, termination of employment is not a ban, limitation or restriction on the performance of work in the ordinary meaning of those words. There are a number of reasons for this conclusion.

[33] First, it would put undue strain on language to construe the definition to mean that conduct which brings the employment relationship to an end is industrial action. The concept of termination of employment is to be distinguished from a ban, limitation or restriction on the performance of work. It may be possible to describe termination of employment as a permanent ban or restriction imposed by an employer on the performance of work by an employee. With respect to the Commissioner, it is an unusual description and a technical one. It is not a natural meaning. The matter might be tested by putting the position the other way and asking what the use of the expression "a permanent ban or restriction on the performance of work" might signify in industrial relations parlance. Ordinarily those words would be taken to refer to a permanent change in the way in which work is to be performed during the employment. It is difficult to imagine circumstances in which the words might be taken to refer to a termination of the employment.

[34] Secondly, if the legislature had intended that the definition include termination of employment it could have done so by express words. It is not inconceivable that employment might be terminated as a tactic in the course of an industrial dispute. Looking at the language used in the Act as a whole, however, it is almost inconceivable that the legislature intended to include termination of employment in the definition of industrial action which it enacted. As counsel pointed out, termination of employment is a concept dealt with in many parts of the Act and the fact that it does not appear in the definition is significant.24

[35] Thirdly, it seems to us that the operation of the definition is predicated on the existence of an employment relationship or relationships pursuant to which various obligations are owed by each party to the other. It is not necessary to specify all of those obligations, but they include the obligation of the employer to pay the employee provided the employee is ready, willing and available to work and the obligation of the employee to comply with the employer's lawful directions. The definition is directed to the disruption of the employment relationship in some way, by the imposition of a ban or a lockout, to take two examples. The termination of the relationship cuts away the basis upon which the definition operates and is outside the definition. The passage from the decision of Senior Deputy President Williams in TMP Worldwide,25 which we have set out earlier, supports this construction.

[36] We note that in 1904 the Supreme Court of Western Australia in WA Supply Co. Ltd v The Registrar of Friendly Societies,26 which we refer to again below, dealt with a case concerning an alleged lockout on the basis that termination of employment could constitute a lockout. There is no indication, however, that the question was in contest. Nor is there any indication of the legal context in which the matter arose, although there does not appear to have been any relevant statutory definition. In the circumstances we do not think that the case sheds any light on the question of construction with which we are concerned.

[37] Before leaving this question we also note that it was submitted on behalf of the AMWU and the CEPU that no concession was made that the notices of termination in this case were lawful. Despite that we have no reason to doubt that the notices of termination were effective in law to terminate the contracts and we have decided the case on that basis.27

[38] In light of our conclusion it is not necessary that we decide a number of propositions advanced by the parties to which we shall now briefly refer.

[39] It was submitted on behalf of The Age that the definition of industrial action is subject to a necessary implication that the action concerned is engaged in to support a demand. Put another way, conduct is not within the statutory meaning unless it is engaged in for the purpose of furthering a relevant claim or claims. On that basis it was submitted that the conduct complained of in this case, being termination of employment on the ground of redundancy, could not be characterised as industrial action because it did not have the requisite purpose. The submission on behalf of the Commonwealth went a little further than that on behalf of The Age in that it was contended that the action must be industrial in character. It was further contended that action which is "driven by normal business considerations" cannot be industrial action.

[40] It was submitted by the respondent unions that this construction is too narrow. While s.127 enables the Commission to make orders stopping or preventing inappropriate conduct related to bargaining, the section also enables the Commission to make orders to stop other inappropriate conduct, such as conduct which is in breach of an award or a certified agreement. It was contended that the references in s.127 to industrial instruments indicate that s.127 is available to maintain settlement of disputes and to protect agreements.

[41] In WA Supply Co. Ltd v The Registrar of Friendly Societies28 the Supreme Court of Western Australia was required to decide whether in the circumstances of the case the employer had committed a lockout. Lockouts were prohibited pursuant to the terms of the prevailing industrial legislation. The employer had dismissed a number of employees during a period in which the employees were in dispute with the employer as to the employment of juniors. In order to answer the question the Court asked whether the dismissal was intended to coerce the employees into accepting the employment of juniors and to take them back once they did agree. It can be seen that the Court looked to the purpose of the employer's conduct in order to decide whether it could be characterised as a lockout. This supports the approach adopted by The Age and the Commonwealth in this case.

[42] There is much to be said for the approach advanced by The Age and the Commonwealth. A requirement imposed by an employer on its employees that they not attend for work during a period when no useful work is available for them, assuming such a requirement to be lawful, bears a different character to a requirement that employees not attend for work pending their agreement to changed conditions of employment. The former conduct is normally referred to as a stand-down of employees. The latter conduct is normally referred to as a lockout of employees. The distinction is explained in the following passage from Bradley v Hoskins:

[43] This passage was adopted by the Full Commission of the Industrial Relations Commission of New South Wales in Advance Glass Technologies of Australia Pty Limited (Receivers and Managers Appointed) v Building Workers Industrial Union of Australia, New South Wales Branch.30

[44] Just as employer conduct is capable of different characterisations depending upon the context, so also is employee conduct. An employee who does not attend for work on account of illness may not be engaging in industrial action, while an employee who does not attend for work in support of a collective demand that the employer agree to alteration of the conditions of employment clearly is so engaged.

[45] In a statutory context which is concerned with industrial disputation and enterprise bargaining it might fairly easily be concluded that a definition of industrial action is intended to be confined to action which occurs in the course of an industrial dispute or bargaining in relation to a demand concerning the conditions to be afforded by an employer to its employees. If such were the case, however, as counsel for the unions pointed out, so-called political strikes may not be amenable to an order pursuant to s.127 - a conclusion at odds with a number of Commission decisions and with the decision of the Federal Court of Australia in Communications Electrical Energy Information Postal Plumbing and Allied Services Union of Australia and another v Commissioner Laing of the Australian Industrial Relations Commission and another.31

[46] It seems to us likely that the legislature did not intend to include conduct which stands completely outside the area of disputation and bargaining and that accordingly the definition should be read giving some weight to the word industrial. But precisely how far this qualification might extend is a question of degree. We do not think it is desirable that we go further than is necessary to decide this case. As is clear, we have not found it necessary to go beyond the words of the definition.

[47] Before leaving this issue, we should comment on the contention advanced on behalf of the unions that among the purposes of s.127 is one of securing the observance of awards and agreements. We understood this submission to be made partly in response to the contention advanced by The Age that to come within the definition the conduct complained of must be engaged in to support a relevant demand. As just indicated, we have not found it necessary to rule on that contention. In the circumstances it is sufficient to say that we are unable to discern in the terms of s.127 any legislative intention that s.127 should be available to stop or prevent conduct which is not within the definition of industrial action. Indeed, as we noted earlier, no party submitted that industrial action should be given a meaning other than the one which appears in s.4(1). For that reason the contention advanced by the unions is not to the point. The question still remains whether the definition in s.4(1) includes termination of employment.

[48] Before concluding we should indicate that we do not think it is desirable to rule on the submission made by the Commonwealth that in the case of employers it is only lockout conduct which comes within the definition of industrial action. In the circumstances a ruling on that question is not necessary for our decision and we think it is preferable that the issue be addressed in a case in which it is squarely raised.

[49] For these reasons we have decided that the Commissioner made an error in concluding that the terminations of employment constituted industrial action. It follows that the order pursuant to s.127 was made in error also.

[50] We uphold the appeal and quash the order made by the Commissioner on 9 March 2004.

BY THE COMMISSION:

PRESIDENT

Appearances:

M. McDonald of counsel with V. Gostencnik for The Age.

M. Bromberg of senior counsel for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

J. Bourke of counsel for the Minister for Employment and Workplace Relations on behalf of the Commonwealth.

Hearing details:

2004.

Melbourne:

March 15.

Printed by authority of the Commonwealth Government Printer

<Price code D>

1 PR944259, 9 March 2004.

2 PR944258, 9 March 2004.

3 AG817921.

4 PR944259, 9 March 2004.

5 Print R7493, 23 July 1999.

6 Print P5229, 18 September 1997.

7 (1998) 77 IR 395.

8 Print Q4688, 7 August 1998.

9 (1998) 77 IR 395.

10 Print R7493, 23 July 1999.

11 Print R9437, 23 September 1999.

12 (1998) 77 IR 395.

13 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Australia v TMP Worldwide Pty Ltd, Print R9437, 23 September 1999.

14 (2000) 104 IR 158.

15 PR920361, 23 July 2002.

16 PR940166, 3 November 2003.

17 Print Q4688, 7 August 1998.

18 Construction, Forestry Mining and Energy Union v Australian Industrial Relations Commission (1998) 159 ALR 1 and Davids Distribution Pty Ltd v National Union of Workers (1999) 165 ALR 550.

19 PR920361, 23 July 2002.

20 PR940166, 3 November 2003.

21 Print Q4688, 7 August 1998.

22 PR920361, 23 July 2002.

23 Print R9437, 23 September 1999.

24 For example, Part VIA, Division 3, ss.170MU, 170WE(1)(a) and 298K.

25 Print R9437, 23 September 1999.

26 (1904) Vol. VI, Cases at Law 199.

27 See Birrell v Australian National Airlines (1984) 9 IR 101 at 109.

28 (1904) Vol. VI, Cases at Law 199.

29 (1909) NSW IR 86 at 91.

30 (1993) 51 IR 50 at 53.

31 (1998) 159 ALR 73; (1998) 86 IR 142.