Thursday, 2 February 2012

The Untold Story: The ACCC’s role in the Waterfront Dispute


Part 14:  The Litigation

Introduction
When we commenced the litigation against the MUA, we expected to be widely criticised not only by the MUA and its supporters, but also by Patrick. We thought that Patrick and Chris Corrigan would be critical of the ACCC for having taken so long to commence legal proceedings.  What we did not expect were the allegations of collusion that arose immediately after we commenced our legal proceedings.

Alleged collusion
It was strange for the ACCC, as the competition regulator, to be accused of collusion but that is exactly what happened immediately after we commenced our proceedings.

Quite coincidentally, on the very same day that the ACCC commenced its legal proceedings, Patrick commenced its own proceedings against the MUA alleging a range of misconduct, including contraventions of the Trade Practices Act. As reported in the media at the time:

The nation's competition watchdog and Patrick stevedores yesterday launched a two-pronged legal assault on the Maritime Union of Australia, including the pursuit of massive damages and the deregistration of the union.

In dramatic developments in the long-running waterfront dispute, Patrick applied to the Federal Court to have the unions registration cancelled and damages sought under the Trade Practices Act.

At the same time, the Australian Competition and Consumer Commission announced it was seeking an injunction against the union to prevent any international ban on ships or any domestic boycotts.[1]

Professor Fels was quick to dismiss any suggestion that the ACCC had colluded with Patrick in relation to its litigation.  In this regard, he stated:

We didn't know that they (Patrick) were going to court… And they certainly didn't know that we were going to court because we told no one outside organisation.[2]

It was pure coincidence that Patrick commenced its legal proceedings against the MUA on the same day we commenced our proceedings.  As stated in earlier posts, the relationship between the ACCC and Patrick was not a positive one, primarily because Patrick was of the view that the ACCC should have taken action against the MUA immediately.

There was also considerable evidence to show that the ACCC and Patrick had not colluded.

For example, Patrick had commenced legal proceedings against the MUA in relation to particular conduct which they claimed breached the Trade Practices Act. The ACCC had also pleaded the same conduct in its case.   However, it would not make sense for two parties who were colluding to take legal action against the MUA for the same conduct. Rather, if there had been some collusion it would have made more sense for each party to have pleaded different conduct to avoid duplication.

Another major difference between the two actions was that the ACCC only pleaded breaches of the Trade Practices Act. However, Patrick alleged a wide range of other alleged illegal conduct, including breaches of industrial legislation and a number of common law torts. If we were colluding it made more sense for the ACCC to take action under the Trade Practices Act and for Patrick to pursue the alleged breaches of industrial legislation and a number of common law torts.  

Finally, there was also a significant difference between the two actions in terms of the remedies being sought. In addition to seeking damages, Patrick had sought an order to deregister the MUA.   The ACCC on the other hand, did not seek either pecuniary penalties or damages in its action. Rather, the ACCC had sought findings of fact which, if made, would have facilitated private actions by businesses and individuals against the MUA. 

ITF and ILWU
One unfortunate consequence of the ACCC proceedings against the MUA, related to the ACCC’s inadvertent identification of the various ships which had been loaded and unloaded by non-MUA labour in Australia.

On the very same day that the ACCC commenced legal proceedings against the MUA, the Harry Bridges Action Brigade, which was an affiliate of the ILWU, placed the following message on its website:

SCAB-LOADED SHIPS FROMA AUTRALIA: HERE’S THE BEEF

We must acknowledge the encouragement and assistance of Prof Allan Fels, chair of the Australian Competition and Consumer Commission in providing this list of scab cargo for dockworkers around the world to support their fellow wharfies “down under”. Should the government persist in its devious efforts to destroy the MUA, disregard this list and ban all Australian cargo! [3]

The Harry Bridges Action Brigade then listed twenty vessels which had been loaded or unloaded in Australia by non-MUA labour during the dispute. 

The most disconcerting aspect of this post was the fact that the list which the Harry Bridges Action Brigade had obtained and posted on their website was taken directly from Annexure A to the ACCC’s Application which had been filed earlier that same day.

It appeared to us that the MUA must have immediately provided this list of ships to its overseas affiliates, including the Harry Bridges Action Brigade, so they would know which ships to boycott.  There was simply no other way that these overseas affiliates could have obtained a copy of this list so quickly unless they got it from the MUA.

The ITF and ILWU were also very active at this time in taking steps to facilitate and coordinate overseas boycotts of Australian vessels which been loaded or unloaded using non-MUA labour. The following is a good example of the type of information which these affiliates were posting on their websites:

MAY 21: OAKLAND ALERT! MORE SCAB LOADED SHIPS HEADED TO THE U.S!

The Direct Kea and other scab ships are headed towards Oakland. The shipping companies know that Oakland’s union town and have changed their schedules. We are not sure exactly when it will be in, so keep calling. A Coastal Scab Cargo Watch is now in effect. Call (501) 845–0540 for further information. Be sure you leave your name and telephone number.

There was a great deal of this type of information on websites, particularly in the US, seeking to organise boycotts. The difficulty for the ACCC was trying to work out who was behind these particular websites. Very often these websites would be set up without any details of the individuals or organisations behind the site. Accordingly, it was very difficult for the ACCC to get evidence that the people behind these websites had been in communication with the MUA.

Interlocutory injunctions
As stated in the last post, the ACCC had sought urgent interlocutory injunctions against the MUA. The hearing in relation to the ACCC’s application for these urgent orders was held on  27 May 1998 before Justice Beaumont of the Federal Court.

The ACCC argued that the MUA and its senior officials (John Coombes, National Secretary of the MUA and Trevor Charles, the local ITF representative ) had been active in inciting overseas unions to boycott Australian vessels which had been loaded and unloaded using non-MUA labour. The focus of the ACCC's evidence was on boycott action on the US East Coast, particularly in relation to the Columbus Canada.

The ACCC put on evidence to show that this particular vessel had been prevented from unloading its cargo in Los Angeles after action by the ILWU.  The owners of the vessel had also provided evidence to the ACCC that they believed that the actions of the ILWU had been initiated by the MUA.

The MUA were in a difficult position at the hearing. On the one hand, they were continually denying that they were involved in initiating the overseas boycotts. On the other hand, they were adamant that they did not want to consent to the orders being sought by the ACCC.  The ACCC submitted somewhat cheekily to the Federal Court that if the MUA had not engaged in the illegal conduct and were not intending to engage in any illegal conduct in the future, then there was no reason why they couldn’t agree to the injunctions.

We pointed out to the Court that under the relevant provisions of the Trade Practices Act, the Court could grant an injunction whether or not it appeared likely that a party would engage in particular conduct in the future.

After hearing the evidence and the arguments, Justice Beaumont granted the ACCC interim orders, until 4 June 1998, restraining the MUA, Coombs and Charles, from taking any action to bring about the boycotts of certain ships loaded or unloaded in Australia using non-MUA labour.[4]

Justice Beaumont also ordered that the MUA inform the ITF that it:

·       makes no call on the ITF or its affiliates to boycotts or take other action to hinder the movement or unloading of either the Columbus Canada or the Direct Kea; and
·       withdraws any calls for assistance, whether made expressly or by implication, for international boycotts or similar action.

The ACCC also took the opportunity in its news release to respond to the allegations made by the MUA during the interlocutory hearing that the ACCC had been colluding with Patrick. Indeed, the MUA had gone as far as suggesting that they were proposing to take legal proceedings against the ACCC in relation to this collusion allegation. The ACCC stated:

The ACCC action follows the failure of the MUA to address issues of concern to the ACCC raised in discussions between the parties aimed at averting continuing breaches of the Act. In today's proceedings counsel for the MUA appears to have implied that the commencement of the ACCC proceedings was for an improper purpose and associated with Patrick Stevedores lodgement of a counterclaim on Friday.

The first the ACCC knew about the action was via a radio program on Friday afternoon after the ACCC had gone to court that day. If the MUA proceeds with the foreshadowed court case based on the allegations, the ACCC will seek a speedy resolution of the unfounded claims and will seek full indemnity costs.[5]

The MUA never commenced this foreshadowed action against the ACCC.

Second ACCC action
In addition to obtaining urgent interlocutory injunctions against the MUA and its officials, the 27th of May 1998 was memorable because it was the day that the  ACCC commenced its second set of legal proceedings against the MUA.

The ACCC had not been sitting back waiting for the first hearing in the legal proceedings after commencing on 22 May 1998.  Rather the ACCC had been working diligently on preparing a second case against the MUA concerning further boycotts. This second case related to boycott activity by the MUA against P&O customers in Newcastle and Adelaide

The ACCC described the second legal proceeding in the following way in its news release:

In other developments today, the ACCC has begun further proceedings against the MUA in relation to the boycotts of stevedores serving ships formerly contracted to Patrick Stevedores who refuse to use labour from the Patrick labour hire companies. The ACCC has alleged that the MUA and/or certain MUA officers have formed an understanding and an intention to make sure that all stevedoring work for vessels formerly contracted to Patrick at ports where Patrick has ceased operations (including Newcastle and Port Adelaide) was performed by employees of the Patrick labour hire companies, now under administration.

As part of that plan, the ACCC has alleged that the MUA put in place boycotts of P&O terminals at Newcastle and Port Adelaide on the loading and unloading of the Althea and the Bay Bonanza, which formerly been contracted to Patrick Stevedores. P&O had won the right to stevedore those ships when Patrick Stevedores ceased operating in those ports. In addition, it is alleged that the MUA threatened boycotts have led to a number of shipping lines and shippers (including K-Line, Wilhelmsen, Pasminco and Newcastle Ships Loader) only using stevedores who were prepared to use employees of the Patrick Stevedores labour hire companies.

The ACCC has claimed that this conduct was engaged in for the purpose, and has had the effect, of preventing or substantially hindering those shipping lines from engaging in trade or commerce involving the international movement of goods, in breach of s.45DB of the Trade Practices Act 1974.

The ACCC has sought declarations that the MUA has breached the Act, injunctions restraining the MUA from engaging in such conduct in the future and findings of fact, which could form evidence in any subsequent private damages action[6].

I always though that the MUA’s conduct, which became the subject of the second ACCC proceedings, was quite bizarre.  As discussed earlier, the MUA's first goal when Patrick sacked its entire MUA workforce and started using non-union labour was to make sure that Patrick had no business.  As a result of the MUA's boycotts, a number of large Patrick stevedoring customers had no choice but to move their stevedoring business to P&O.  The MUA had been happy with this development, given that all the P&O stevedoring workers were also MUA members.

However, once the High Court had decided that the labour hire companies could only hire MUA members, the MUA wanted to ensure the viability of the labour hire companies by making sure they had sufficient business. As a result, the MUA started boycotting the former Patrick customers who were getting stevedoring services from P&O in an effort for force them back to the Patrick labour hire companies.   In other words, after forcing these customers away from Patrick to P&O though the use of boycotts, the MUA were now trying to force these customers back from P&O to Patrick through the use of boycotts. 

What made the situation even more bizarre was that a number of MUA members who had been employed by P&O to do this particular stevedoring work were very unhappy about losing the work. These MUA members objected to the conduct of other MUA members in preventing them from getting this work.

One amusing incident in relation to the second legal proceedings occurred when the AGS and ACCC were settling the pleadings. We had not quite finalised the statement of claim for the second proceedings by the time that we had to go to court for the interlocutory injunctions in the first case.

Accordingly, an AGS lawyer was forced to come to the Supreme Court building with a draft copy of the Statement of Claim for the second proceedings to get me and another AGS lawyer to settle the document before it could be filed and served. The only problem was that we sitting in the court where the interlocutory injunction application was being heard by Justice Beaumont with the MUA lawyers sitting about two meters away from us. 

I remember sitting there in the court trying to listen to what was being said, whilst checking a few facts in the statement of claim and also trying to make sure that I hid what I was doing from the MUA lawyers who were peering at me with a great deal of curiosity.

When we finished our changes to the statement of claim for the second proceedings, we handed the draft back to the AGS lawyer who rushed away to the AGS offices to make the changes, print out the required number of copies and file it in the Federal Court Registry. 

Our plan had been to try to serve the MUA with the originating documents in relation to the second proceeding as they were leaving the court after the interlocutory hearing in relation to the first matter.

I still remember the look of astonishment on the MUA lawyers faces when we served them with the originating documents for the second proceedings just as they stepped out of the NSW Supreme Court building onto Phillip Street, just after our successful application for interlocutory injunctions in the first proceedings.  I think it dawned on them almost immediately that this was what we had been furtively working on during the interlocutory hearing.

Media beat up
There was one incident in relation to the investigation of the conduct leading to the second proceeding which demonstrates the way in which issues were regularly misrepresented by the MUA in the media.

When I first became aware of the MUA’s conduct in trying to force P&O customers back to the Patrick labour hire companies, I was surprised at how blatant the conduct was. There was no pretence that the boycotts were being carried out by members of the community or members of other unions.  It was absolutely clear to everyone that the MUA were running these boycotts.

It was due largely to how blatant this conduct was that I decided to try a different approach to resolving the illegal conduct. I decided to call the senior MUA official, who appeared to be coordinating the boycott conduct in Newcastle, to give him a polite warning . I thought that if I could explain to him that the conduct that he and his colleagues were engaging was a very clear breach of the Trade Practices Act they may decide to stop the conduct.

I remember politely explaining to this senior MUA official both the relevant legislative provisions and the maximum penalties which the ACCC could seek against the MUA for their conduct.  I had hoped that the senior MUA official would have given some serious thought to my polite warning.

Unfortunately, my warning had absolutely no effect on the senior MUA official. Not only did the boycotts continue but the very next day my conversation with the senior MUA official was front page news in Newcastle. The story which was reported in the newspapers and later in radio was that a senior ACCC officer had contacted the MUA to threaten that unless they stopped trying to protect their livelihoods, the ACCC was going to sue them, take away their homes and throw their families out on the street.

I remember receiving a phone call from the ACCC’s then CEO querying me about what I had in fact said to the relevant MUA official. I told the CEO that I had just given the MUA official some free legal advice and a polite warning, and that I had definitely not told the MUA official that we would take away their homes or indeed that we would be throwing their families out onto the street. 

That was the last warning I ever gave to the MUA.






[1] Legal push to destroy dock union, The Age, 23 May 1998, p, A1.
[2] Watchdog denies Patrick collusion, The Daily Telegraph, 25 May 1998, p. 2. See also Fels rejects any collusion against MUA, The Canberra Times, 25 May 1998, p. 3.
[3] ITF thanks Fels for ‘naming’ ships, Daily Commercial News, 23 May 1998, p. 1
[4] ACCC/Maritime Union of Australia, ACCC News Release, 27 May 1998 - http://www.accc.gov.au/content/index.phtml/itemId/87308/fromItemId/378006
[5] Ibid.
[6] Ibid.

No comments: