CHAPTER 8
Industrial Action
Secondary Boycotts (Sections 45D and 45E of the Trade Practices Act)
8.1 The Reform Act 1993 removed Sections 45D and 45E from the Trade
Practices Act 1974 and transferred these provisions (to the extent that
they related to industrial relations matters) to the Industrial Relations
Act. These amendments reflected Australia's international obligations
by providing for a limited right to strike in a bargaining context,
and emphasising the resolution of disputes by conciliation rather than
legal process. These amendments involved the following changes:
- Confining the operation of section 45D to secondary boycotts. Primary
boycotts (strikes by employees against their own employer) were no
longer directly prohibited;
- An exemption from the prohibition on industrial secondary boycotts
where the boycott action was taken in support of claims that directly
affect the persons taking the action or where sympathy action is taking
place in a corporation which is legally related to the corporation
in which a strike is occurring; and
- The removal of boycott activity as a criminal offence (section 163F)
and the removal of significant pecuniary penalties.
8.2 Under the current Act access to injunctions or damages (from the
Court) is conditional on obtaining a certificate from the AIRC (section
163P). This allows the Commission time (a maximum of 72 hours) to attempt
to settle the dispute by conciliation. If the Commission thinks that
it is not likely to be able to settle the dispute promptly, it must
immediately certify to that effect (subsection 163D(1)). In addition,
if the Commission considers that it would cause the party (who wishes
to commence proceedings) substantial injustice to delay, it must immediately
certify to that effect (subsection 163D(3)). If the dispute is not solved
within 72 hours, the Commission must issue a certificate immediately.
8.3 The Bill returns the law to that generally prevailing when sections
45D and 45E were introduced into the Trade Practices Act. This results
in a reduced scope for lawful industrial action (by outlawing certain
primary boycotts) and on encouraging parties to rely on adversarial
court proceedings to prevent unlawful secondary boycott action. The
main provisions are as outlined below.
8.4 The provisions will again be directed against both primary boycotts
(in some circumstances) and secondary boycotts. Proposed section 45DB
will prohibit two persons acting in concert where the purpose and effect
(or likely effect) of the conduct is to prevent or substantially hinder
a third person (the target) from engaging in territorial, interstate
or overseas trade or commerce. This section applies to both primary
and secondary boycott activity.
8.5 Where the boycott activity by unions and employees is directly
related to the terms and conditions of employment covering their workplace,
this will not constitute a contravention (proposed subsections 45DD(1)
and 45DD(2)).
8.6 Increased penalties will apply for conduct in contravention of
the provisions. Under proposed section 76(1A), fines of up to $750,000
may be imposed on corporate bodies (including unions) for breaches of
proposed sections 45D, 45DB, 45E or 45EA. For anti-competitive practices,
a penalty of $10 million may be imposed (proposed section 45DA and paragraph
76(1A)(b)).
8.7 While the Commission can still attempt to conciliate boycott disputes,
a party's ability to commence judicial proceedings for damages, penalties
or injunctions is not restricted (proposed section 158). In addition,
if proceedings are before the Court, and the Australian Competition
and Consumer Commission (ACCC) is a party, the Commission may not exercise
its powers of conciliation unless the ACCC consents (proposed subsection
158(2)).
8.8 Employer groups welcomed the changes provided by the legislation.
As the Australian Chamber of Commerce and Industry (ACCI) stated:
It is essential that the proven s.45D and 45E, which have repeatedly
shown themselves to provide thorough protection against the indefensible
union tactic of secondary boycotting, be restored and that employers
receive proper protection. [1]
8.9 In attempting to indicate why the Bill's provisions were superior
to the existing provisions, ACCI argued that the 1993 amendments were
so complex and difficult to apply that they had never been used. [2]
8.10 However, a number of concerns about the proposed changes were
raised in evidence to the Committee. The two major concerns related
to the 72-hour 'cooling off' period, and 'peaceful picketing'.
8.11 The Workplace Relations Bill will remove the maximum 72 hours
'cooling off' period in which the Commission can conciliate a boycott
dispute before legal action is commenced.
8.12 The ACTU argued that there was little value in repealing this
requirement for conciliation given that it does not represent a significant
limitation on the right of employers to take common law action, following
the issuing of the certificate. Balanced against the short delay to
employers, is the interests of all parties involved in having the dispute
settled by an industrial tribunal rather than a court. The ACTU argued
in its submission that:
… given the lack of any serious disadvantage to the applicant
in such a matter [the Committee] should ensure that the Commission has
a proper opportunity to attempt to resolve a dispute prior to commencement
of actions in tort which have the potential to damage significantly
all parties. [3]
8.13 Further, the Union argued that while there is formally scope for
conciliation (but only where both parties agree), the immediate access
to the legal process may have the effect of undermining such efforts.
It was put that the effect of this repeal would be prolonging of action,
through protracted court procedures, and the shifting of attention away
from the original industrial issues and on to technicalities of the legal
action. [4] As was submitted:
As soon as courts get involved in labour disputes, the resolution of
the subject matter of that dispute becomes all the more difficult. Questions
of costs become critical and questions of resisting the injunction become
the important focus of the union or worker activity. Attention from
the employer's point of view is usually directed towards briefing their
lawyers, being in court every day and the exhaustive process of conducting
that litigation. Usually what happens in the meantime is that the dispute
festers and runs away. [5]
8.14 The second major concern related to section 162A of the Industrial
Relations Act which exempts 'peaceful picketing' from the prohibition
on secondary boycotts. This allows groups of people to gather outside
particular premises for the purposes of communicating with people entering
or leaving the premises, or attempting to persuade people not to enter
or leave the premises providing that their conduct does not involve
any obstruction, molestation or intimidation of any of those people.
This exemption has been removed by the Bill, a move which was criticised
by a number of witnesses as unnecessarily restrictive.
Peaceful picketing, it seems to us, is the sort of thing which does
not offend the notions of a democratic society. Indeed, one would have
thought, the right to communicate peacefully with others about one's
causes, was a fundamental aspect of the right to free speech. The non-exclusion
… of peaceful picketing from boycott conduct returns this aspect
of the law to the bad old days. [6]
8.15 Other concerns expressed in submissions from the various unions
and academics were:
- the increased non-compliance with Australia's international obligations;
- the substantial penalties for breaches of the sections which have
the potential to bankrupt unions, officials and individual members;
- the reintroduction of vicarious liability, by making a union responsible
for any action done in concert by two of its members; and
- the failure to specify whether the 'dominant purpose' means the
'ultimate purpose' or the 'immediate purpose'.
8.16 Finally, concerns were expressed about the Government's proposals
in relation to secondary boycotts and other forms of industrial action,
in particular, the increased access to injunctive relief. This is considered
further below.
Conclusions
8.17 The majority of the Committee views with concern the direction
that the Government has taken in relation to the amendments concerning
secondary boycotts. The increased reliance on punitive provisions and
legal process and the reduced reliance on conciliation to resolve difficulties
represents, in the majority of the Committee's view, a retrograde step.
A demonstrable case should be made before these steps are taken. No
such case was made before us.
8.18 The only case made against the existing provisions was that their
complexity prevented their use. This is not consistent with either the
face of the Act or other evidence presented.
8.19 In the view of the majority of the Committee, sections 162 and
163 of the Industrial Relations Act are no more complex than were sections
45D and 45E of the Trade Practices Act.
8.20 Further, Bills Digest No. 96 prepared by the Parliamentary Research
Service, notes that `comprehensive statistics are not available on the
operation of the Reform Act provisions but it appears that there has been
little reluctance among employers to use the current provisions with the
number of actions commenced in the AIRC at least keeping paid with the
number commenced in the Federal Court under the previous law'. [7]
8.21 This conclusion was endorsed by Mr Richard Naughton, Senior Lecturer
in Law at Melbourne University. He stated that the reintroduction of sections
45D and 45E 'appears to be a policy decision made without regard to the
success or otherwise of the changes that were made in this area by the
Reform Act of 1993. The period since has been noticeably free of industrial
strife. There is simply no evidence of a need to establish (or reinstate)
this legal regime to inhibit strike action (or at least strike action
outside the statutory bargaining period)'. [8]
8.22 In relation to the particular concerns raised, no evidence was
presented to the Committee that demonstrated that a 72 hour 'cooling
off' period unduly prevented access to proper protection from unlawful
action. The majority of the Committee also believes that it is intuitively
correct that there is a far greater chance for conciliation to resolve
problems if it is not being undertaken at the same time as court proceedings.
The majority of the Committee believes that a time limit of the order
that prevails is an appropriate balance between providing a litigation-free
environment within which conciliation may be allowed to try to achieve
a resolution and the ability of an employer to access legal remedies
within a reasonable time from the commencement of industrial action.
8.23 Finally, the majority of the Committee agrees with those witnesses
who suggested that peaceful picketing is consistent with the notions
of a democratic society. As long as picketing is peaceful, there seems
to be no overwhelming public interest that would justify infringing
such activities. No such case was presented to the majority of the Committee.
8.24 The Labor members of the Committee therefore recommend that
the proposal to reintroduce sections 45D and 45E of the Trade Practices
Act should not be implemented.
8.25 The Australian Democrats member of the Committee is sympathetic
to the analysis but disagrees with the recommendation and has made additional
recommendations in his Supplementary Report.
8.26 The Government members of the Committee disagree with the conclusion
and oppose the recommendation.
Common Law Actions
8.27 Under the existing Division 8 of Part V1, an action in tort cannot
be commenced under the law of a State or Territory against a union or
its members in relation to an industrial dispute unless a certificate
is first gained from the Commission stating that the conduct is unlikely
to stop. This has the benefit of creating a 'cooling off' period during
which the Commission can examine the merits of the dispute and seek
to conciliate an outcome. There is the same maximum 72 hour conciliation
period as for secondary boycotts. The Workplace Relations Bill removes
this provision and permits immediate access to common law remedies.
8.28 The majority of the Committee recommends that this component
of the Workplace Relations Bill be revoked.
8.29 The Australian Democrats Member of the Committee supports these
conclusions and recommendations but has made additional comments in
his Supplementary Report.
8.30 The Government members of the Committee disagree with the conclusion
and oppose the recommendation.
Industrial Action and Injunctions
8.31 The Government maintains that the powers of the Australian Industrial
Relations Commission to stop or prevent unlawful industrial action will
be strengthened by the Bill. Under the present Act, if industrial action
is preventing the performance of work the employer may apply to the
Commission to have a bans clause inserted in the award. A bans clause
prohibits any behaviour that hinders or prevents observation of the
award or the performance of work in accordance with the award. There
are fines of up to $1,000 for each breach of a bans clause.
8.32 Bans clauses will be replaced with a new directions mechanism
in proposed section 127, whereby the Commission may order that industrial
action cease or not occur. If a party contravenes such an order of the
Commission, a person affected may apply to the Federal Court for an
injunction to enforce compliance with the order. Obviously, breaching
the terms of an injunction is a contempt of the Court.
8.33 Bans clauses are not only inserted into awards to restrain breaches
of the award by employees or their unions. They have also been inserted
into awards (on the application of a union) to restrain employers from
continued breaches of awards. Thus, although bans clauses will be removed,
unions will not be able to apply to the Court for an injunction to prevent
a breach of an award.
It is unfair to make injunctory relief available only to employers;
to be consistent it ought to be possible for the Court to grant injunctions
to restrain actual or proposed breaches of awards or agreements by employers.
[9]
8.34 The increased reliance on injunctions as the primary enforcement
mechanism was criticised by a number of witnesses.
8.35 The Hon Jeff Shaw QC, Attorney-General of NSW did not endorse
the new emphasis on injunctive relief:
I believe that in an industrial relations statute the emphasis should
overwhelmingly be on conciliation and arbitration, not on sanctions
and punishment. The trouble is that, if you have a system which places
too great an emphasis on court injunctions, you can often exacerbate
industrial situations which would be better dealt with informally before
a specialist industrial tribunal. [10]
Conclusions
8.36 The majority of the Committee believes that injunctions should
not be readily available to prevent the taking of industrial action.
The majority of the Committee cannot support the use of interlocutory
injunctions (either on an ex parte application or on a contested basis)
because the evidence strongly suggested that these are a very blunt
instrument. In effect, such an injunction terminates the industrial
action without any time to permit the parties to argue the merits of
the dispute. As to final injunctions, the majority of the Committee
can see that the courts should have the capacity to make an order stopping
illegal industrial action. However, this should only occur after the
merits of the case have been completely examined and argued.
8.37 The Labor members of the Committee therefore recommend that
the provisions in the Bill which permit the granting of an injunction
should be amended to prohibit interim injunctions and to permit final
injunctions only after a full hearing on the merits.
8.38 The Australian Democrats member of the Committee is sympathetic
to the analysis but disagrees with the recommendation and has made additional
recommendations in his Supplementary Report.
8.39 The Government members of the Committee disagree with the conclusion
and oppose the recommendation.
Protected Action
8.40 While the Bill retains many of the arrangements associated with
protected bargaining, some matters were raised with the Committee that
are worthy of comment.
The Existing System
8.41 Under the current system, unions and employers seeking to make
a certified agreement may take protected industrial action in support
of their claims. Such industrial action is not subject to action under
State laws (either written or unwritten) or to orders of the Commission.
8.42 To engage in protected action, a party must have first initiated
a bargaining period. This is obtained by providing written notice to
the other party or parties (and to the Commission) stating that the
initiating party wants to reach an agreement and have it certified (section
170PD). The bargaining period begins seven days after this notice is
given (section 170PF).
8.43 Once the bargaining period has commenced, the initiating party
must give 72 hours' notice of the intention to take industrial action
(section 170PH). In addition, the industrial action is not protected
action unless the party has tried to reach agreement with the other
party and has complied with any Commission orders regarding bargaining
in good faith (section 170PI).
8.44 The Commission may suspend or terminate the bargaining period
if a party is not genuinely trying to reach an agreement or if the party
has not complied with directions regarding bargaining in good faith
(section 170PO). The Commission may also suspend or terminate a bargaining
period where there is a serious risk to the life, personal safety or
the welfare of the population or a part thereof, or significant damage
to the economy or an important part of it.
Concerns Raised
8.45 In an overall sense, concerns were raised that the increasing emphasis
on limiting the right to take industrial action was contrary to appropriate
social mores. Thus it was suggested by the Catholic Commission for Justice
Development and Peace, if the proposed dispute settling mechanism failed
or was inadequate, it is possible that employees might have the moral
right to strike in extreme circumstances. In this case, the Catholic Commission
recommended, they should not be subjected to the criminal sanctions proposed
by the legislation. [11]
8.46 One concern raised has been the interrelationship between secondary
boycott provisions and protected action. It was suggested that the reintroduction
of a prohibition against primary boycotts, as well as secondary boycotts,
may undermine the efficacy of the protected actions provisions as industrial
action which came within these prohibitions would not be protected. It
was also suggested that there were other situations where employees should
have access to protected action, for example, where employees have legitimate
occupational health and safety concerns. [12]
8.47 Another concern was raised in the context of multi employer agreements;
actions taken in the pursuit of which, do not have the status of protected
action. The ACTU criticised this as particularly unjust given that multi-employer
awards can be reduced to 18 conditions, but those employees have no right
to strike in support of their existing entitlements being preserved on
a multi-employer basis in certified agreements. [13]
This was also criticised as being contrary to ILO Conventions. Findings
in relation to New Zealand legislation support this assertion. [14]
8.48 Another concern raised has been the availability of protected
action in relation to the negotiation of AWAs. It was suggested there
was a manifest unfairness in giving an employer the ability to lockout
individuals in relation to the negotiation of an AWA. It was suggested
that not only was it a clearly unfair use of bargaining power but it
also made a mockery of the prohibition on duress in relation to entering
into AWAs.
8.49 Professor Creighton appearing on behalf of the International Centre
for Trade Union Rights advised that most common law countries have abolished
common law liability in respect of industrial action, and that, even in
Great Britain, there was a cap on the amount of damages which could be
awarded against a trade union. The upper limit is currently £250,000
but there is a sliding scale depending on the size of the union. [15]
8.50 Another concern raised was that while there is a purported freedom
of choice by an employee about the nature of the industrial instrument
which regulates their conditions of employment, and the mode of bargaining,
this does not extend to being able to take any action to support their
choice. [16]
Conclusions
8.51 The majority of the Committee concludes that there should be a
maximum limit on the amount of damages that a union should be required
to pay for industrial action. There should be further consideration
of the amount of the limit. However, the majority of the Committee notes
that useful guidance can be obtained from provisions to this effect
which were introduced by the Conservative Government under Mrs Thatcher
in the United Kingdom.
8.52 The majority of the Committee is concerned that unlimited damages
have the potential to prevent an organisation from properly presenting
the interests of its members. In the view of the majority of the Committee,
the threat of being effectively sued out of existence provides a positive
disincentive to unions acting to advance the legitimate interests of
their members.
8.53 The majority of the Committee therefore recommends that provision
in the Bill which permit the award of damages against unions should
be amended in line with the UK legislation to provide maximum limits
on the amount of the award.
8.54 The majority of the Committee endorses the major thrust of the
Government's proposals to maintain a limited right to strike in the
pursuit of bargaining. The majority of the Committee believes that people
should be concerned about attempts to unduly limit this ability.
8.55 The majority of the Committee recommends that secondary boycott
provisions be redefined to exclude primary boycotts; and protected action
be made available in the context of bargaining for multi employer agreements.
8.56 Government members of the Committee disagree with the above
conclusions and oppose the recommendation.
Footnotes
[1] Submission No. 905, p. 50, ACCI.
[2] Submission No. 905, p.51, ACCI.
[3] Submission No. 1017, p.119, ACTU.
[4] Submission No. 1017, p.119; & Submission
No. 1018, p.37.
[5] Evidence p. E 824.
[6] Evidence p. E 1117.
[7] Department of the Parliamentary Library,
p. 47. The Digest also makes the important point that the remedies available
under the respective provisions are not strictly comparable.
[8] Submission No.1159, p. 4-5, Mr Richard
Naughton.
[9] ACTU Draft Response to the Federal Government's
Draft Workplace Relations Bill 1996
[10] Evidence p. E 715.
[11] Submission No. 1141, p.6, Catholic Commission
for Justice Development and Peace.
[12] Evidence p. E1274.
[13] Submission No. 1017, p. 22, ACTU.
[14] Submission No. 904, p. 37, International
Centre for Trade Union Rights.
[15] Evidence. p. E 116.
[16] Submission No. 1017, p. 22, ACTU.