Friday, 25 November 2011

The Untold Story: The ACCC’s role in the Waterfront Dispute - Part 5 - First Moves

Part 5: First moves

Office of Employment Advocate

As stated in Part 3 of the Untold Story, the Howard Government had very high expectations of the OEA in the event of a dispute with the MUA. However, these expectations were not met. Very soon after the dispute broke out, the OEA expressed the view that it did not have jurisdiction to get involved in the dispute. In other words, the OEA ended up vacating the field and leaving the entire enforcement effort to the ACCC.

As I understood the OEA's reasons at the time, they claimed that as the MUA staff had been sacked by Corrigan they were no longer technicially employees and as such the OEA did not have jurisdiction.

However, one can understand OEA’s position. The expectation prior to the sacking had been that Corrigan may seek to use non-union labour at some of his stevedoring facilities. Clearly if the MUA had sought to impede non-union workers getting to their workplaces, the OEA would have been expected to assure the safe passage of these non-union workers through picket lines. Indeed, there were reports in relation to other disputes, that OEA officers had boarded trains and trucks to assist non-union workers employed in other industries to get though picket lines

The problem which the OEA faced in the current case was that Corrigan’s actions in sacking his entire MUA workforce looked very much like a clear breach of the Freedom of Association provisions of the WRA – ie the MUA workers had been sacked for the sole reason that they belonged to a union. There was a very strong argument that the OEA’s priority should have been to investigate Corrigan for breaching the WRA, rather than helping Corrigan to get non-union workers through the picket lines.

Despite the dilemma which the OEA faced, the way it chose to get out of this dilemma was highly unprincipled. It decided not to assist either party to the dispute – ie it did not help Corrigan get non-union labour through picket lines nor did it investigate Corrigan for a Freedom of Association breach for sacking his entire MUA workforce. Ultimately, the OEA’s decision to do nothing during the Waterfront Dispute severely damaged it’s credibility as an organisation.

At the ACCC we were very disappointed by the OEA’s decision to stay out of the dispute - this meant we would have to do the whole job ourselves.

MUA’s first moves

The MUA was very quick to move after the sackings. Indeed, it was very impressive to see just how fast they were able to pursue so many different strategies simultaneously.

First, the MUA were able to mobilise a great number of protestors to get down to the wharves by skilfully playing the media. Having said that, it was not too hard for the MUA to get the media’s sympathy given the extreme nature of Corrigan’s actions. The MUA clearly had a flare for dealing with the media, particularly John Coombs who was very articulate and flamboyant. Corrigan on the other hand was very poor at dealing with the media because he came across as he was, namely cold and unsympathetic.

Second, the MUA went to the Federal Court to get interim injunctions preventing Corrigan from:
  • sacking his MUA workforce;
  • disposing of any assets or 
  • using alternative workers. 
The MUA were very fortunate to get Justice North as the judge on their matter. He was probably the best federal Court judge for the MUA as he was clearly quite sympathetic to the union movement. Indeed, he made his name as a silk by representing unions in various in high profile boycott cases.

In particular, Justice North had been the counsel for the Australasian Meat Industry Employees Union (AMIEU) which had been taken to court on a number of occasions for allegedly contravening the boycott provisions of the TPA.

Justice North granted the interim injunctions sought by the MUA.

Third, the MUA appeared to have already approached the ITF to try to get them involved in the dispute. Mr Kees Marges, the ITF Docker’s Section Secretary was quoted as saying the day after the dispute:
Shipping lines should be aware that if their ships use Patrick in the future they will be targeted in ports around the world.[1]
Fourth, the Australian Workers Union (AWU) announced that it was contemplating taking boycott action to close down the whole Australian oil industry in support of the MUA.

Mood within the ACCC

It is fair to say that virtually nobody in ACCC enforcement wanted to work on the Waterfront Investigation, particularly in Sydney.

The main reason enforcement staff did not want to assist was because many of them had a philosophical objection to doing the work. Most enforcement staff, particularly in Sydney sympathised with the MUA and believed that Patrick had done the wrong thing. Ironically, the entire Waterfront Team also believed that Corrigan had done the wrong thing. However, we also knew that because Corrigan had not breached the TPA in sacking his MUA staff, there was nothing the ACCC could do about his conduct.

The Waterfront team was of the view that if Corrigan had breached the Workplace Relations by sacking his MUA staff that it was up to the OEA to pursue him for that conduct. By the same token, if Corrigan had engaged in any illegal corporate activities, such as asset stripping it was up to ASIC and the ATO to look into that conduct.

Another reason why some Sydney enforcement staff did not want to help was because they were concerned about the violence which was a daily occurrence on the picket lines. This was an entirely legitimate concern.

Nobody in senior management wanted to force anybody to assist in the waterfront investigations against their will. Unfortunately, the consequence of this was that the ACCC’s Waterfront Team remained very small – ie three officers for the duration of the dispute. Occasionally, we would get some assistance from a Regional Director for a specific task but that was quite rare. Accordingly, the small ACCC team and the external legal team ended up working enormously long hours.

Unfortunately, some senior enforcement staff could not help but share their opinions about the ACCC’s role in the Waterfront Dispute with the Waterfront team. On one occasion, a senior ACCC enforcement colleague called me a “Nazi” and "a collaborator” to my face and in front of some junior staff because of my role in the ACCC’s Waterfront investigation.

I responded by saying that the ACCC could not concern itself with whether Corrigan had done the wrong thing. Rather the ACCC had to fulfil its statutory function and enforce the TPA. The important principle was that for the ACCC to respect and uphold the rule of law. This was particularly important in circumstances where every other party involved in the dispute was breaking or ignoring laws with impunity and every other regulator was just sitting on the sidelines and doing nothing.

I added that the ACCC could not simply choose which laws it wanted to enforce. If the ACCC turned a blind eye to the blatant and premeditated breaches of the TPA by the MUA, the ACCC would lose its integrity and credibility as an enforcement body.

Unfortunately, my arguments did not convince my senior colleague of our bona fides. Accordingly, it was with some frustration that I facetiously asked him whether there were any other particular sections of the TPA that he was philosophically opposed to enforcing. I suggested that ACCC management could circulate a questionnaire to all enforcement staff asking them to identify which sections of the TPA they were happy to enforce and which they did not want to enforce!

Later, another fairly senior enforcement staff member decided to organise a collection in the office to raise money to support the MUA financially. I kept this information to myself as I doubt more senior ACCC management would have been very impressed with his actions in collecting money for the MUA. Indeed, it would have been a major media coup for the MUA if they had been able to say that even ACCC staff were contributing to the MUA cause.

ACCC’s response

As stated in Part 3 of the Untold Story, the ACCC had been investigating the ITF for some time prior to the sackings. Accordingly, the ACCC was quite advanced in its understanding of the way the ITF operated, how it was structured and where it possessed true industrial power.

Accordingly, Professor Fels was in a good position to make the following statement as soon as the ITF started making threats against Australian shipping:
We are focusing quite closely on the ITF threat – we are investigating that matter both in marketplace and legal terms at the moment…The ITF and any person in Australia associated with it, directly or indirectly would more than likely be in breach of the act if they attempt to apply boycotts in support of the MUA.
Even at this early stage, we believed we had an effective legal strategy for dealing with ITF threats to Australia shipping. The starting point was section 5 of the TPA which states:
Parts IV, IVA and V (other than Division 1AA) extend to the engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia or by Australian citizens or persons ordinarily resident within Australia.
Part IV of the TPA contained the relevant boycott provisions – sections 45D, 45DB, 45DA, 45E and 45EA.

Section 76 of the TPA created accessorial liability – namely a person would be liable for aiding, abetting, counselling, procuring, inducing or attempting to induce, being knowingly concerned, or conspiring with others to engage in a breach of the TPA.

The MUA was also a body corporate incorporated in Australia.

Therefore, we believed that we would be able to take action against the MUA in Australia for aiding, abetting, counselling, procuring, inducing or attempting to induce, being knowingly concerned, or conspiring with the ITF or any overseas unions or entities to engage in a boycott of ships which had been loaded in Australia by non-union labour.

The ACCC also believed that it could take legal action against MUA and ITF officials who aided, abetted, counselled, procured, induced or attempted to induce, or were knowingly concerned in, or conspired with the ITF or any overseas unions or entities to engage in a boycott of ships which had been loaded in Australia by non-union labour if these individuals were Australian citizens or persons ordinarily resident in Australia. 

I remember doing nationality checks on a number of senior officials of the ITF and other overseas unions to find out whether, just by chance, any of them were Australian citizens. For example, I discovered that until 1977 the head of the International Longshore and Warehouse Union (ILWU), based on the West Coast of the US, was an Australian, namely the legendary Harry Bridges.

We did not believe that we could take legal proceedings against the ITF directly as it was not engaging in conduct in Australia nor did it satisfy the other elements of section 5. We also did not believe there would be much point taking action against the ITF in Australia under the boycott laws if we would be unable to enforce our orders overseas where the ITF was based.

While the ACCC had a good legal theory about how to prove the MUA’s liability, it did not yet have the evidence to prove its legal theory or even know how to go about getting this evidence. Getting evidence that the MUA was conspiring with the ITF to organise a global boycott of Australian shipping was not going to be an easy task.

I am also sure that most of the unions who supported the MUA by joining picket lines during the Waterfront dispute never understood how easy it would have been for the ACCC to take action against them under the TPA for their conduct.

Under section 45DC(1), if two or more persons who were members or officials of the same union were involved in a picket line, the union would be automatically deemed to be involved in the picket line. The union would then have to prove that they were not involved in the picket line because, for example, it had been an independent decision of the two members or officials to get involved.

Section 45DC(2) also provided that any loss or damage caused by the conduct of two or more members or officials of the union would be automatically deemed to have been caused by the union. Again the union had the onus of proof in relation to displacing this presumption.

I doubt the MUA or ACTU ever explained these legal technicalities to these other unions.

Despite the ease with which the ACCC could have taken action against these other unions, it decided to focus its attentions exclusively on the MUA because it appeared to be the party which was orchestrating all of the boycott conduct.

ACCC’s Investigation

Investigating the MUA’s conduct during the Waterfront Dispute was a unique experience.

A significant amount of the evidence which the ACCC used in its cases came from media reports. Senior officials of the MUA would often hold press conferences in which they would brag about how they had engaged in illegal boycott activity or had encouraged other groups to engage in such conduct. Indeed, it got to the stage where the ACCC’s evidence collection often involved no more than putting a blank video cassette in the video recorder, turning on the TV and pressing record every time a MUA official, usually John Coombs, appeared on television to make admissions about the MUA’s latest boycott.

I always thought that my mum should have been put on the ACCC payroll at that time, as she was remarkably diligent in recording any such televised admissions by the MUA at that time and then sending me copies of her videos. Given how few ACCC staff were involved in the investigation, I was grateful for any investigatory assistance I could get.

What was more difficult was actually obtaining witness statements from industry players. We would generally try to get statements from individuals who had been the victim of boycott action or who had witnessed such a boycott. Unfortunately, most industry players did not want to give evidence to the ACCC for fear of reprisals from the MUA or other unions in the future.

Another problem we faced were the time frames in which we had to obtain evidence. It was simply taking us too long to get detailed statements from the few industry witnesses who were willing to give evidence.

Accordingly, we knew we had to work out a better way of obtaining and presenting evidence if we were going to be able to commence urgent litigation to try to stop the boycotts.

First ACCC action

The first major action by the ACCC related to the threats by the AWU to go on strike in support of the MUA. As stated above, the AWU had threatened to close down the Australian oil industry by going on strike in all refineries and off shore oil rigs.

The ACCC responded to the threat from the AWU by writing a very threatening letter advising them that the ACCC would take immediate legal action against the union if it went ahead with its threat. Indeed, we explained to the AWU that their conduct would have been a clear contravention of section 45DA which prohibits secondary boycotts which substantially lessen competition. Section 45DA carried a maximum penalty of $10 million per contravention. 

We told the AWU in no uncertain terms that if they went ahead with their threat the ACCC would commence legal proceedings against them seeking the maximum penalties available under the TPA.

The AWU backed down very quickly. Indeed, I think AWU wanted to save face by stating publicly that they would make good their threat if they were asked to by either the MUA or the ACTU. In reality, the AWU must have realised that if the ACCC had taken legal proceedings against them we would have won the case and the financial costs arising from the case would have most probably have destroyed the union.

We were fairly happy with ourselves for having averted the threatened closure of the Australian oil industry by the AWU. Indeed, this became a major focus of the ACCC’s activities over the next few weeks – trying to prevent the dispute from spreading by stopping other unions from taking sympathy action in other industries in support of the MUA.

[1] “International action may see ships boycotted”, Australian Financial Review, 9 April 1998, p. 7.

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