Sec 170nc coercion defined as compulsion that is exerted illegitimately

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Sec 170nc coercion defined as compulsion that is exerted illegitimately

The Federal Court of Australia has held that in determining whether a party has taken or threatened action to coerce another party into making, varying, terminating or extending a certified agreement, two issues ought to be considered.

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The Federal Court of Australia has held that in determining whether a party has taken or threatened action to coerce another party into making, varying, terminating or extending a certified agreement, two issues ought to be considered. The first being whether the action or pressure exerted amounted to compulsion, and secondly, whether the pressure exerted was legitimate and lawful.

In Finance Sector Union of Australia v Commonwealth Bank of Australia, [2000] FCA 1468 (17 October 2000), the Federal Court ruled that a union did not coerce an employer simply because it sought a court interpretation of award and agreement clauses that were at the centre of enterprise bargaining negotiations. 

 
Background

At the centre of these proceedings were three industrial instruments:- 

  • the Commonwealth Bank of Australia Officers Award 1990;

  • various certified agreements including the Commonwealth Bank of Australia Enterprise Bargaining Agreement 1998, which were certified on 1 April 1998 and were the subject of a bargaining period initiated by the union in April 2000; and

  • the Commonwealth Bank of Australia Employees Award 1999. 

On 16 June 2000, the Finance Sector Union of Australia (the union) made two separate applications to the Federal Court of Australia. One was for an interpretation of an award under s413of the Workplace Relations Act 1996, while the second application was pursuant to s413Aand was for an interpretation of a certified agreement. The applications related to a dispute between the union and the Bank as to whether new procedures relating to the assessment of the performance of employees were in accordance with the awards and certified agreements. 

In response to the union applications, the Commonwealth Bank of Australia (the Bank) filed a cross-claim on 26 July 2000. The cross-claim was for a declaration that the proceedings initiated by the union were brought when they were, and in the form they were, in order to coerce the Bank in relation to negotiations which were on foot for a certified agreement. Such coercion, the Bank argued was contrary to s170NC(1). 

Section 170NC

Section 170NCof the Workplace Relations Act 1996prohibits action or threatened action that is intended to coerce another into agreeing or not agreeing to the making, varying, termination or extension of an agreement under Division 2 or 3 of Pt VIB of the Act. 

According to Gyles J, the '...proper construction and application of s170NChas not been settled - indeed, there has only been one reported decision of a superior court on anything but an interlocutory basis, and that was an appeal from a magistrate'. 

The decision referred to by his Honour was Hanley v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union, [2000] FCA 1188, which was reported in HR Link 105/2000. In this instance Gyles J was of the view that it would be a waste of the time and resources of the Federal Court and the parties to undertake both a contested interlocutory hearing and a final hearing. His Honour, decided to fix an early hearing of the matter rather than complete the interlocutory hearing. 

Decision

The critical question before Gyles J was the meaning of the word 'coerce' in s170NC. In addressing this question, his Honour referred to the interlocutory judgement of Finkelstein J in Finance Sector Union v CBA, [2000] FCA 1372, (reported in HR Link 121/2000), where coercion was considered in the context of s298M. Finkelstein J said: 

What constitutes coercion? Presumably it is no more than one form of inducement, but a particularly nasty form. A person will coerce another to act in a particular way if the first person brings about that act by force. It is for that reason that a threat will amount to coercion. Coercion will cause a person to act in a way that is, in a sense, non-voluntary... 

Gyles J was also of the opinion that whilst it related to the meaning of the word 'duress' in s170WG, the decision of the Full Bench in Schanka v Employment National (Administration) Pty Ltd [2000] FCA 202 (3 March 2000)(reported in HR Link 029/2000), provided authoritative guidance. If there is a difference between duress and coercion, it is not, in in the opinion of Gyles J, material here. The Schankadecision in turn referred to the decision of Lord Scarman in Universe Tankships Inc of Monrovia v International Transport Workers Federation, [1983] 1 AC 366 where his Lordship identified two elements in the wrong of duress. The first being pressure that amounted to compulsion of the will of the victim, and the second being the illegitimacy of the pressure exerted. There must be pressure, the practical effect of which is compulsion, which is generally considered or described as coercion. 

In relation to the question of whether the union intended to put the Bank in a position where it had no practical choice but to accept the agreement as proposed by the union, Gyles J believed the answer to be 'No'. His Honour reasoned that having established the need for compulsion if coercion is to be intended, there was no direct evidence that the union believed, let alone intended that the commencement of proceedings would compel the Bank to do something it did not wish to do. In this regard, his Honour took into account the characteristics of the allegedly coerced party; 'The Bank is one of Australia's largest corporations, not likely to be easily coerced'. 

If the Court concluded that the union had intended to put the Bank in a position where it had no real choice, it would have then been necessary examine whether the means intended to be utilised where unlawful or otherwise illegitimate. Whilst not required to examine whether the means of the union's action was unlawful or illegitimate, his Honour noted that subject to claims that the union abused the process of the Court, the means utilised by the union were certainly not unlawful or illegitimate. It would according to Gyles J be a very odd thing, if in the process of exercising the statutory jurisdiction of the Court to settle a genuine dispute, the act of instituting such an application were to be regarded as unlawful or illegitimate. 

The Bank's cross-claims were therefore dismissed and the initial applications of the union allowed to proceed to hearing.

 

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