Employment Law Update - Developments in the reach of “industrial activity” and the application of s 361 in coercion cases

Employment & Industrial
Malcolm Harding Headshot

In this note brief consideration is given to the scope of the statutory concept of “industrial activity” in s. 347 of the Fair Work Act (the FW Act), as it has emerged from single judge decisions of the Federal Court, and the reverse onus in s. 361 of the FW Act as it applies to coercion. The motivation for doing so is the discussion of these topics in two prosecutions brought by the Australian Building and Construction Commissioner (the ABCC) against the Construction, Forestry, Mining and Energy Union (the CFMEU).

The Bay Street Case - The reach of ‘industrial activity”

On 13 February 2018, ABCC v CFMEU (the Bay Street Case) [2018] FCA 83 was handed down by Bromberg J. Briefly stated, the ABCC had alleged that two officials of the CFMEU, Mr Long and Mr Benstead, had taken adverse action against and action with the intent to coerce a building contractor, called BPM Built contrary, to s. 346(b) and s. 348 of the FW Act. The “action” was said to comprise the organisation of a work stoppage (which was engaged in by BPM Built workers) in response to a refusal by BPM Built to accede to a request by the CFMEU for more site amenities, “including more shed space and a dedicated female toilet for female workers”.

Both s. 346(b) and s. 348 are concerned with actions taken by one person against another in circumstances where the second person has engaged in “industrial activity”. The first provision, relevantly, prohibits the taking of adverse action because the other person has engaged or proposes to engage in industrial activity. The second provision prohibits the organising or the taking of action, or threats to do either, with the intent to coerce that person “to engage in industrial activity”.

The term “industrial activity” is exhaustively defined by s. 347 of the FW Act. Section 347(b) captures action by a “person” as action that “engages in industrial activity” if that person does or does not do one or more of the things listed in (a) to (g) of the list set out in the provision.

The ABCC contended in the Bay Street Case that BPM Built had engaged in “industrial activity” because:

(a)          It had not complied with a lawful request (namely, the CFMEU’s site amenities request) made by an industrial association (the CFMEU), engaging thereby s. 347(b)(iv);

(b)          It had not represented or advanced the views, claims or interests of an industrial association by not acceding to the CFMEU’s site amenities request, engaging thereby s. 347(b)(v).

The ABCC’s s. 347(b)(v) claim failed on the facts. The Court concluded that BPM Built had not refused to represent or advance the views of the CFMEU because, on the facts, it had not been asked to do so. The ABCC was however successful on the s. 347(b)(iv) claim.

ABCC contended for a literal reading of s. 347(b)(iv), deriving support for this construction from statements made by Jessup J in Esso Australia Pty Ltd v The Australian Workers Union [2015] FCA 478 and more recently and fully in ABCC v Australian Manufacturing Workers Union (the Australian Paper Case) [2017] FCA 167. On this reading of the provision, any person who complies, or doesn’t comply, with any lawful request, or requirement, of an industrial association is taken to engaging in “industrial activity”. There seemed to be no doubt that this reading extended the reach of s. 347. In the Australian Paper Case, Jessup J said:

“It is, I accept, possible that the drafter of s 347 understood that he or she was engaged in the task of setting out instances of conduct by way of participation in the affairs of industrial associations. It is possible that he or she did not realise what was the potential reach of para (b)(iv), if read and applied literally. But what the drafter had in mind, subjectively, is not the point: Certain Lloyd’s Underwriters v Cross [2012] HCA 56(2012) 248 CLR 378, 390 [25]. The point is the intention of the legislature to be discerned in the words used, having regard to history, background and context, and to such materials as are properly available conformably with s 15AB of the AI Act.

At base, the respondents’ problem is that pointing to participation as the limiting context for s 347(b)(iv) does not take them the distance required. Read literally, that provision may indeed appear to travel beyond the kind of situations which the legislature had in mind, but the court does not know what it would have done about the problem had it been drawn to its attention”.

Bromberg J considered that for reasons of comity he was bound to hold that s. 347(b)(iv) was not limited to the participation or non-participation of members of an industrial association in its activities or affairs. However, but for authority (which, his Honour decided, could not be dismissed as plainly wrong), Bromberg J would have held that the request or requirement of the industrial association had to at least concern its activities or affairs; a request or request or requirement that invited or directed the person to whom it was addressed to “associate in or with the industrial association”. This construction, his Honour concluded, would give effect to the purpose of the provision as one that, like its statutory predecessors, grew out of the need to protect the human right of employees to freedom of association.

The literal view gains support however from the text of the provision and judicial acceptance that Part 3-1 of the FW Act did more than merely re-express the existing law.  Indeed, specifically in relation to s. 347, Bromberg J observed that, in terms, the provision parted ways with the status-based conception of freedom of association adopted by its statutory predecessors and embraced an activities based approach.

The protection conferred by s. 347(b), on the literal view of the provision, thus emerges as one that is potentially very wide indeed. It is clear that an employer (or any other person) can avail itself of the protection conferred by s. 347(b)(iv). Logically there appears no reason why that is not also so with respect to at least (ii), (iii), (v) or (vi) of s. 347(b). Further, it would appear that the subject matter of the request or requirement is not necessarily confined and may embrace subject matter that may have no connection to freedom of association, or even employment.

So far, I have used the term “union” to refer to the other industrial participant in the industrial activity, but that is not a true statement of the content of the statutory conception of “industrial association”. The term, as defined by the FW Act, is broader.

An industrial association may be an informal group of workers who associate for the purpose of protecting their employment interests: see (b) of the definition in s. 12 of the FW Act. For instance, a meeting of workers who come together, perhaps at the instigation of a local shop steward, to consider something related to their employment and resolve to and do make a request of their employer. This meaning received some attention in the Bay Street Case. The fact that the FW Act brings into the conception of “industrial association” informal collectives of individuals, as Bromberg J termed them, that went, he held, some way to explain why the definition of industrial activity in the form enacted by the FW Act in s. 347 may be thought to have moved away from a concern only with the industrial activities of members and officers of unions acting in those capacities.

There is potential for the broader conception of s. 347 to benefit employees due to the expansion in the range of circumstances in which a person may be taken to have engaged in a protected activity, including because of the activities of informal collectives (who may or may not also be union members). However, so far the broader field of operation has delivered greater benefit to applicants in cases where the other parties have been unwilling to call decision maker evidence to discharge the reverse onus in s. 361. This raises the potential for the broader view of s. 347(b) to result in union officials and/or their union falling foul of s. 346 or s. 348 (directly or as a person involved under s. 550(1)) in a greater range of circumstances. One example that springs to mind is where adverse action (in the Bay Street Case it was the organising of industrial action) or coercive action is organised against an employer because that employer has refused to comply with a request made by an informal group of union members.  

Section 361

It is well settled that the phrase “intent to coerce” as it appears in s. 343 and s. 348 of the FW Act has two elements: the negation of choice (the first element) by means that are unlawful, illegitimate or unconscionable (the second element).

In the Bay Street Case, Bromberg J re-stated what he had said in an earlier case, Fair Work Ombudsman v Australian Workers Union [2017] FCA 528, about the operation of s. 361 of the FW Act in coercion cases, namely that the presumption in s. 361 applies only to the subjective element, the intent to negate choice. An applicant does not have the benefit of the presumption with respect to the second element.

In ABCC v CFMEU (2017) F267 IR 130, handed down on 24 February 2017, Reeves J reached a contrary conclusion, and, ironically, did so citing Bromberg J in CFMEU v McCorkell (2013) 232 IR 290 at [231] and the Full Court appeal in Victoria v CFMEU (2013) 218 FCR 172, which on this aspect held that Bromberg J had not exhibited any error in principle in his application of s. 361. As Reeves J read Bromberg J’s reasons in McCorkell, the uncontroversial proposition that “intent to coerce” in s. 343 and s. 348 consists of both elements, resulted in both elements forming the particular intent referred to in s. 361.  What is curious is that Bromberg J took a different view of his McCorkell reasoning in Fair Work Ombudsman v Australian Workers Union (he did not refer to Reeves J judgement in ABCC v CFMEU). There, he held that consistent with the approach he took in McCorkell only the first element attracted the operation of s. 361. With respect, this does not appear to be so from a plain reading of the paragraph cited by Reeves J.

Despite the dissonance, the confinement of s. 361 to the first element is consistent with the focus of s. 361 on the actual mental processes of the decision maker that has emerged since Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 549 and the text of the section, which speaks of “particular intent”. In Esso Australia Pty Ltd v Australian Workers’ Union (2016) 245 FCR 39, Buchanan J (with whom Siopis J agreed) observed that the requirement of intent applies to the first element, the negation of choice. The second element, he held, was objective.

The Full Court’s judgment was considered by the High Court in Esso v AWU (2017) 271 IR 210, which was handed down in December 2017. The High Court did not address Buchanan J’s conception, observing only, without deciding, that it was not apparent why the second element was necessary. The Court also speculated that it may be possible that intent to coerce as it appears in s. 348 (as distinct from s. 343) could extend to negations of choice by lawful and legitimate means, a factor of potential significance given the broader conception of s. 347.

The rejection by the High Court in Esso of the AWU’s argument that for there to be an “intent to coerce” there must exist an intention to negate choice as well as an intention to do so by unlawful, illegitimate or unconscionable rather suggests that Buchanan J was correct to confine intention to the first element. It is incongruous that a purely objective element should form part of someone’s subjective intention. As the High Court said, a person may be mistaken about whether their actions were unlawful, illegitimate or unconscionable but still be found to have acted in one of those ways. The view expressed by Bromberg J in the Bay Street Case and in Fair Work Ombudsman v Australian Workers Union is also one that better corresponds with the subjectivity that now governs the operation of s. 361 in its application to other parts of Part 3-1. 

Malcolm Harding Headshot

Malcolm Harding S.C is a trial and appellate barrister with extensive litigation experience

Share on