Bhp decision - injunction granted

Cases

Bhp decision - injunction granted

The Federal Court of Australia has ordered BHP Iron Ore Pty Ltd to cease offering, entering into, formalising, or registering individual contracts with any of its employees.

WantToReadMore

Get unlimited access to all of our content.

The Federal Court of Australia has ordered BHP Iron Ore Pty Ltd to cease offering, entering into, formalising, or registering individual contracts with any of its employees. The decision to grant an interlocutory injunction is significant. Not only has the Court brought to a temporary halt BHP's bid to introduce individual workplace agreements, but it has also held that:

In determining whether an employee's employment has been injured or altered, there does not need to be an actual diminution in the terms and conditions of employment. Offering superior benefits to some employees, coupled with a refusal to offer the benefits to others is arguably conduct amounting to injury in employment or alteration of an employee's position.

Inducement to stop employees being union members need not be by way of threats or promises, nor does it have to be intentional.

In Australian Workers' Union v BHP Iron Ore Pty Ltd [2000] FCA 39 (31 January 2000), the task before Gray J was to consider whether the unions raised serious questions to be tried that BHP had engaged in and were likely to continue to engage in conduct that was unlawful. If this was determined to be the case, his Honour then had to consider whether the balance of convenience, between the unions and BHP, favoured the granting of an interlocutory injunction.

Background

As a wholly owned subsidiary of the Broken Hill Proprietary Company Ltd, BHP Iron Ore Pty Ltd carried out iron ore production and processing in the Pilbara region in Western Australia. Pilbara employees had their terms and conditions of employment governed by an award and a series of collective agreements.

In November 1999, BHP refused to negotiate collectively with respect to the terms and conditions of award employees, and offered each award employee an individual workplace agreement. Once registered under the State Workplace Agreements Act 1993(WA), such an agreement would override the statutory effect of the award and the collective agreements. According to BHP as of 24 January 1999, 481 out of the 1039 award employees had signed workplace agreements.

Relief sought

The unions sought relief pursuant to the Workplace Relations Act 1996(Cth) on a number of fronts. Firstly they sought orders pursuant to s298Uto remedy the effects of conduct that was alleged to have contravened s298Kand s298M. These allegations relate to injuring, discriminating and altering the position of employees because they are union members; and inducing employees to cease being union members. Secondly, the unions sought a declaration that the agreements made pursuant to the Western Australian Actwere void to the extent that they facilitated the loss of entitlements of employees under an award or collective agreement. The unions also sought damages for breach of contract. Thus, interlocutory relief of a number of kinds was initially sought.

The submission of the unions relied on three separate grounds. The first related to the union claim that BHP embarked on a course of conduct aimed at injuring and altering the positions of award employees, for prohibited reasons or reasons which included prohibited reasons. The second ground of the unions' case was that by registering individual workplace agreements pursuant to the WA Act, BHP induced those employees to stop being members of the relevant trade union. The third pillar of the union case was the claim that by entering into individual workplace agreements with some award employees, BHP committed breaches of the contracts of employment of other award employees.

Injury in employment and alteration of position

The unions contended that as some award employees had entered into workplace agreements with BHP, the remaining award employees were injured or had their positions altered for the purposes of s298Kof the Workplace Relations Act 1996(Cth). Whilst both parties agreed that there had been no change to the terms and conditions on which the remaining award employees performed their work, the unions argued that the effect of the change was to place the continuing award employees in a position which was disadvantageous when compared with the position of workmates who accepted the individual workplace agreements. Therefore, the Federal Court was asked to determine whether such a relative change could amount to injury in employment or to alteration of an employee's position.

Referring to Health Services Union of Australia v Tasmania (1996) 73 IR 140 and Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899, his Honour felt obliged to take a similar view. Thereby holding that it is arguable that, by offering significant benefits only to those who are prepared to enter into workplace agreements, and by refusing to alter the terms and conditions on which the remaining award employees are employed, BHP injured the remaining award employees in their employment, or altered the position of each of them. That is to say, that the offer of superior terms and conditions to some employees, coupled with a refusal to offer them to those who wish to have their employment regulated in a collective way, is arguably conduct which falls within s298K(1)(b) or (c), if engaged in for a prohibited reason. 

This position suggests that it is not necessary that an actual diminution in the terms and conditions of employment of an employee be identified for an employee to be injured in employment or have their position altered.

Prohibited reasons

Conduct that comes within the scope of s298K(1)(b) or (c) is only a contravention of s298Kif done for a prohibited reason. Section 298Vcasts upon the respondents, in this matter BHP, the onus of providing that the conduct was not carried out for any prohibited reason. In this instance, his Honour was of the view that BHP did not discharge the onus resting on it under s298V. To this end, is was held that there existed a serious question to be tried as to whether BHP engaged in conduct that amounted to a contravention of s298K(1) of the Workplace Relations Act 1996(Cth).

Inducement to stop being union members

The unions also claimed that contrary to s298M, BHP induced employees to stop being union members. The inducement was not by way of threats or promises, nor is it alleged to have been intentional. Rather, the unions argued that membership was less attractive to employees if their conditions and terms were not determined collectively. The unions also submitted evidence based upon similar disputes at Hamersley and Robe River, that employees who entered into individual agreements tended to relinquish their union membership. In this dispute the total number of persons for whom union dues were collected by the company, fell from 805 in November 1999 to 636 at 24 January 2000.

Gray J was satisfied that it was likely that union membership would decline substantially among those who became parties to workplace agreements. It was therefore held that there existed a serious question to be tried that the effect of BHP's conduct would be to induce a substantial number of its employees to stop being members.

Breach of contract

The allegations of breaches of contracts arose by way of a subsidiary point. The argument was founded upon the claim that the contract of employment of each employee expressly incorporated by reference, the terms and conditions of the award into the contract of employment - thereby making the terms of the award, terms of the contract of employment. 

One of the terms of the award, namely cl 5(14)(a), provided that no contract of employment should be made between the employer and any employee which contains any term or condition which is inconsistent with award provisions. His Honour noted that:

If the terms of the award are terms of each award employee's contract of employment, on its face this term would operate to give each award employee a contractual entitlement, as against the respondent (BHP), to have the respondent refrain from entering a contract of employment inconsistent with the award with any other award employee. In other words, it would be a breach of the contract of employment of one employee if the respondent entered into a contract inconsistent with the award with another employee.

In this matter, his Honour again found there to be a serious question to be tried, finding that it is arguable that the terms of the award were expressly incorporated by reference into the contract of employment of each award employee, and that one of the terms of the award so incorporated prohibited BHP from entering (with any award employee) into contracts of employment that would be inconsistent with the award.

Balance of convenience

Having found there to be serious questions to be tried, his Honour needed to consider whether the balance of convenience was such so as to consider the option of granting an interlocutory injunction. It was held that it was appropriate that an injunction be granted, thereby restraining BHP from entering into further workplace agreements until the hearing and determination of this matter. Should BHP suffer any loss, those losses would be recoverable at a later stage.

 
Post details