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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Daru Blocklaying Ltd. & Anor v. Building and Allied Trades Union & Ors [2002] IEHC 125 (12 July 2002) URL: http://www.bailii.org/ie/cases/IEHC/2002/125.html Cite as: [2002] IEHC 125 |
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2002 No 8502p
BETWEEN
And By Order
Plaintiffs
Defendants
JUDGMENT of Mr Justice Kelly delivered the 12th day of July, 2002
Introduction
The plaintiffs seek a series of interlocutory injunctions against the defendants. The object of such injunctions is to bring to an end industrial action in the form of picketing, watching and besetting which has been conducted by the defendants at a site at Bunbury Gate, Swords, Co Dublin.
The Parties
The first plaintiff (Daru) is a limited company which carries on business as a block laying sub-contractor. It provides a block laying service to the construction industry. It is carrying on that business at eight sites in the Dublin area and in particular the Swords site already mentioned. The second plaintiff is the parent company of Daru. It has entered into a contract with an entity called Kingscroft Developments Limited for the block laying work for a substantial number of houses at the Swords site. That contract contains a prohibition on the assignment or subletting of any portion of the works save with the prior consent of Kingscroft. The works in question are in fact being carried out by Daru but this is being done without objection on the part of Kingscroft.
The eponymous first defendant is a registered trade union and the second and third defendants are fully paid up members of it.
Method of Work
Apart from two apprentice block layers and a labourer Daru does not employ any other building workers. The labourer is the only employee deployed by Daru on the Swords site. In carrying out its work Daru follows what it contends is a wide spread practice in the construction industry. It engages independent subcontractors to do the block laying work. It does not employ them as direct employees. At any one time approximately 40 - 50 block layers would be so contracted. Payment to them is by way of cheque with 35% being deducted from the payment prior to it being made. That sum is forwarded to the Revenue Commissioners and the recipients are then issued with a C45 certificate confirming that the deduction has occurred. This arrangement has been in place for in excess of fifteen years and Daru's accountant has given evidence that it has never been questioned by the Revenue Commissioners.
The first defendant (BATU) has no liking for such an arrangement. Its general secretary has said that it is and has been for many years the policy of BATU to have block layers employed directly as employees paying PAYE and PRSI. He and the union are of the view that direct employment produces a better quality of employment for block layers than when they work as subcontractors. They believe that they get better rates of pay and conditions of employment including a better health and safety regime when directly employed.
The Events Complained Of
As this is an application for interlocutory relief I am precluded from making final or binding determinations of either fact or law. In the course of this judgment I do not purport to do so. Some facts are not in dispute but a great deal are and where such is the case I will so indicate where necessary.
It appears to be common case that the first contact which Daru had with the second defendant (Mr McCormack) was when the latter contacted Mr Michael Lynch, the managing director of Daru. Mr McCormack was seeking work for himself and some other block layers who comprised what in the trade is known as a "gang". Mr Lynch agreed to engage them. On the evidence of Mr McCormack, (rather surprisingly perhaps), there was no discussion about pay or conditions. He says that he assumed that he would be employed on a PAYE basis and went to work together with his colleagues on the Swords site. Mr Lynch says that when the gang commenced work he was not provided with any documents to suggest that the individuals were intending to be employees of the plaintiff and neither a P60 nor a P45 certificate was produced. He also says that the gang varied in size from day to day. He furthermore says that he negotiated with Mr McCormack on the price for doing the job. He has sworn that he agreed that he would pay the gang by a method calculated on the "bottom" of a pair of houses which means the laying of blocks from the ground floor to the first floor and not by numbers of individual blocks. The gang was not paid by time worked. Accordingly, work would commence at irregular times and Mr Lynch says that he had no day to day control over the gang which determined its own manner of work. He would make out a cheque to either Mr McCormack or one of the other members of the gang for the total amount owing to the gang. It was then up to the payee of the cheque to divide the money amongst the gang. Mr Lynch says that he had no say as to how this was done. He contends that he negotiated the price for the job and payment for it with Mr McCormack.
On the third or fourth Friday after commencing work it is contended that Mr Lynch called to Mr McCormack and suggested that it would be better to spread the cheques around so that a single individual would not be hit for all the tax. Mr McCormack thought that there was something 'fishy' about this arrangement and says that he made contact with an official of BATU. He explained the circumstances of his employment and after that a letter was written by BATU to Daru to which I will turn in a moment.
It is clear that there will be substantial conflict at the trial as to the terms of engagement between Daru and the second and third defendants. That cannot be resolved at this stage. There is in my view a serious issue which arises as to what occurred as a matter of fact at the time of engagement and indeed as to the legal consequences which flow from the engagement.
The Letters
On the 14th May, 2002 BATU wrote to Daru in the following terms:
"Dear Sir
I would be grateful if you would contact me with a view to arranging a meeting as per the fastrack disputes procedure to discuss the union's claim as follows:
(a) Regularisation of PAYE status of our members employed by your company.
(b) Rates of pay including piece work rates to be agreed.
(c) General conditions of employment including compliance with a construction operatives' pension scheme.
As negotiations as per stage 1 of the procedure must take place within three days, 1 would appreciate you contacting me at 087-2742894 with a view to agreeing a mutually convenient time, date and venue for our meeting. Thanking you for your attention.
Yours faithfully Brendan O'Sullivan Regional Organiser"
This letter was followed by a further one on the 22nd May which informed Daru that as it had failed to adhere to the agreed procedures the members of BATU, following a ballot, had voted to serve notice of intent to engage in industrial action up to and including the placing of pickets on sites where Daru operated with effect from Thursday 30th May, 2002. On the 30th May, 2002 Daru replied to both letters. It said:
"No employee of Daru Blocklaying Limited is a member of your trade union and this company has no issues to discuss with you. Consequently, you have absolutely no right whatsoever to place pickets on any site where this company operates and any attempt by you to do so will be challenged before the courts if necessary".
No further correspondence between the parties has been exhibited.
On the 7th June, 2002 it is alleged that a conversation took place between Mr Lynch and Mr McCormack where they discussed unfinished work. It is said that Mr McCormack and his two colleagues were to come in on the following day which was a Saturday to complete this work but they did not do so, nor did they attend on the following Monday or Tuesday. However, on the 12th June, 2002 a picket was placed on the Swords site commencing at 7.00 a.m. It remained in place throughout the day and it is alleged that between fifteen and twenty persons participated in it.
There is much debate concerning complaints as to the quality of the work carried out and the productivity on the site. These disputes cannot be resolved at this juncture. What is not in dispute is that a picket was placed on the 12th June. It is accepted by the defendants that there may have been as many as nine persons attending on that date but it is alleged that since then a smaller number has been involved. The defendants contend that this picket was placed on foot of the authorisation of the ballot and that it complied with the provisions of the Industrial Relations Act, 1990.
Conduct on the Picket
There is a major dispute as to the way in which the picket has been operated. For the plaintiff it is contended that large numbers of people have been engaged on picketing (between fifteen and twenty) and that it has been characterised by conduct and behaviour which far
exceeds the lawful purposes of such picketing. Examples of threats being issued, physical violence, picketers positioning themselves in such a way as to prevent access to the site are described. The defendants contend that these are untrue and that the picketing has been carried out in a peaceful and proper fashion. This is a further issue which cannot be resolved at this juncture but I ought to say that I am satisfied that a serious issue arises for determination at trial as to whether this picketing was peaceful or carried out for the purposes permitted by statute.
The Registered Agreement
The plaintiff alleges that BATU and the other defendants are bound by the provisions of an agreement which is applicable to the building works at the Swords site. This is a collective agreement in writing for the construction industry which has been registered with the Labour Court pursuant to the provisions of the Industrial Relations Act, 1946. It is said that this agreement regulates the conditions of engagement of workers on construction sites and contains an express 'no strike clause' until the disputes' mechanism contained in that agreement is exhausted. It is said that the disputes mechanism has not been exhausted and consequently the industrial action is being conducted in breach of the agreement. As the agreement is registered it is binding, not merely on BATU but also on the other defendants.
BATU says that there is another employment agreement for the construction industry which has also been registered with the Labour Court. In that agreement it is provided that all workers in the industry must be covered by an approved pension scheme. Neither of the plaintiffs are members of the Construction Industry Federation operatives' pensions scheme it is said.. In addition under the Programme for Prosperity and Fairness an employment status group was established because of the growing concern that there might be increasing numbers of individuals categorised as self-employed where the indicators were that employee status would be more appropriate. Furthermore, it is contended that the registered agreement relied upon by the plaintiff was between July, 1982 and December, 1996 effectively suspended because the joint industrial council referred to in the disputes resolution machinery was suspended because of differences between employer and union representatives. Subsequently, both the Construction Industry Federation and BATU were unhappy with the operation of the disputes resolution machinery and so under the auspices of the National Implementation Body set up under the Programme for Prosperity and Fairness they entered into an agreement for the fastrack resolution of disputes in the industry. It was that fastrack arrangement which was sought to be implemented on the 14th May, 2002 by BATU, but no response was received to its letter.
The current status of the registered agreement relied upon by the plaintiff, its efficacy in the light of subsequent developments which I have just outlined and the effect of the second registered agreement referred to are all matters upon which I am precluded from expressing any concluded view at this stage. It is sufficient for me to find that I am satisfied that a serious issue for trial has been raised by the plaintiffs concerning the binding nature of the registered agreement and whether or not the defendants are in breach of contract by the industrial action which has been undertaken.
The Plaintiffs Submissions
The plaintiff submits that it is entitled to injunctive relief on the following basis.
1. None of the individual defendants has ever been in the employment of the plaintiff. They are independent contractors and therefore do not fall within the protection afforded by section 11(1) of the 1990 Industrial Relations Act (the Act). I have already held that there is an issue to be tried as to the facts which existed when the second and third defendants came into a contractual relationship with Daru. Equally I am of the view that there is a serious issue to be tried as to the legal consequences which will flow from the facts as so found. The arguments which have been made by counsel on behalf of the plaintiff and the defendant as to whether or not protection applies in these circumstances are virtually identical to the arguments which were made to Laffoy J. by the same counsel in the case of .G & T Crampton Limited v BATU In the course of her judgment she said
"I do not propose to rehearse in detail the very comprehensive arguments advanced by Mr Kerr on behalf of the defendants for the proposition that the picketers are entitled to the protection of section 11(1) and by Mr Horan on behalf of the plaintiff for the proposition that they are not so entitled. Suffice it to say that the nub of Mr Horan's argument is that, as regards the union member picketers, the plaintiff is not 'their employer' in the context in which that expression is used in section 11(1), whereas Mr Kerr contends that it is, having regard to the definition of employer in section 8 of the 1990 Act which defines that word as meaning inter alia 'a person for whom one of more workers ... seek to work having previously worked for that person'. On the evidence before me I have no doubt that the plaintiffs contention that the picketers are not entitled to the protection of section 11 raises a fair case to be tried between the parties".
Precisely the same reasoning applies here and I so hold.
2. Even if there is an entitlement to picket it has been lost as a result of the conduct on the picket lines. There is a huge conflict of fact as to what occurred and as I have already indicated I am quite satisfied that there is a serious issue to be tried in that regard. Likewise there is a serious issue to be tried as to the legal consequences which flow should it be that this picketing was not carried out peacefully or for the statutory purposes. Mr Horan says that once that is shown the right to picket is lost. Mr Kerr argues that if there has been unlawful picketing the only injunction that ought to issue is one which will enjoin the unlawful conduct but that peaceful picketing should be permitted.
3. Because the picketing is in breach of contract i.e. the registered agreement, it should be enjoined. In this regard it seems to me that there is a serious issue to be tried as to the status of the registered agreements one with the other and their legal effects in the context of industrial action which is in the form of a picket which is allegedly carried on in breach of an express no strike clause.
The apparently differing views between on the one hand the Supreme Court in Becton Dickinson and Company Limited v Lee [1973] IR 1, Kenny J. in the High Court in Irish Biscuits Limited v Mile v (unreported 3rd April, 1972) followed by him in Merchants Warehousing Company v McGrath (unreported 27th April, 1974) and in Waltham Electronics Ireland Limited v Dovle (unreported 15th November, 1974) and the views of O'Higgins J. (then a High Court judge) in Kire Manufacturing Company Limited v O'Leaa (unreported 29th April, 1974) eloquently demonstrate the existence of a serious issue for trial concerning this argument.
4. The plaintiff also argues that there is here on the facts no trade dispute because it is said the second named defendant, when he took up his employment, never raised any issue or had any dispute concerning his tenure. On the facts therefore, it is said the lack of any bona fide or genuine dispute excludes the existence of a valid trade dispute. Again it seems to me that these are issues of fact which will have to be canvassed at trial and I am satisfied that a fair issue for decision at trial has been shown. Coupled with this submission was a suggestion that this dispute has little enough to do with any sense of grievance which the second and third named defendants might have, but rather is a further chapter in an ideologically driven saga of objection on the part of BATU to block layers being employed other than as PAYE employees. That is obviously a matter that can be explored at trial as part and parcel of the plaintiffs' contention that there is no genuine dispute, still less a trade dispute in existence here.
As is clear therefore, I take the view that the plaintiffs have raised a serious issue for trial under a number of different headings and therefore have surmounted the first hurdle which confronts any applicant for an interlocutory injunction. In such circumstances the court normally proceeds to consider the next question, namely, adequacy of damages. If it concludes that damages would not be an adequate remedy it then considers the balance of convenience. That is the course which I propose to adopt in the present case and I will then deal finally with the submission which has been made by the defendants arising under the provisions of section 19(2) of the 1990 Act.
Adequacy of Damages
The injunction in the present case is sought only in respect of Daru. The second plaintiff was joined during the course of the hearing because it is the one which has the actual contractual arrangement with Kingscroft Developments Limited. I am satisfied however, on the evidence, that the picketing which has been engaged upon has been wholly effective. Very substantial losses have been suffered to date and I am quite satisfied that the picketing has effectively brought all activity of Daru on the Swords site to an end. That will mean not merely a loss of income in the present case but as is said, will have a catastrophic effect on the plaintiff s business with the probability of it having to cease its operations at the site with resulting unemployment for other persons who are not involved in the dispute. I am of opinion that the damages which are being suffered are irreparable since it is not merely the loss being suffered on this contract but also, as is deposed to, the plaintiffs commercial credibility is being threatened. As far as Kingscroft is concerned it has indicated that it will not utilise the plaintiffs' services in the future. The plaintiffs have been in business for very many years and in my view have demonstrated that their commercial viability has been jeopardised. Irreparable damage is being caused by the picket.
Balance of Convenience
It is my intention to offer an early trial to this case. But if an injunction is not granted in the meantime there is every reason to believe that the industrial action will persist with losses accruing on a daily basis. If the injunction is granted the defendants will admittedly be precluded from exercising what may at the trial of the action be demonstrated to have been their lawful entitlement. In such event it seems to me that they will be adequately compensated by an award of damages and can at that stage, of course, resume the activity complained of at present. There is no reason to doubt the undertaking as to damages which is being proferred by both plaintiffs. In these circumstances the balance of convenience lies in favour of the grant rather than the refusal of the injunction. So, if ordinary principles concerning injunctions were applicable, I would be prepared to grant the injunctive relief which is sought here. It is at this juncture that I must now turn to the argument which has been made pursuant to the provisions of section 19(2) of the Industrial Relations Act, 1990.
Section 19 of the Industrial Relations Act, 1990
The defendants rely upon the provisions of section 19(2) of the Act. It provides as
follows:
"Where a secret ballot has been held in accordance with the rules of a trade union as provided for in section 14, the outcome of which or, in the case of an aggregation of ballots, the outcome of the aggregated ballots, favours a strike or other industrial action and the trade union before engaging in the strike or other industrial action gives notice of not less than one week to the employer concerned of its intention to do so, a court shall not grant an injunction restraining the strike or other industrial action where the respondent establishes a fair case that he was acting in contemplation or furtherance of a trade dispute".
It is quite clear that this subsection brings about a considerable change in the law governing the granting of interlocutory injunctions in trade disputes. As was said by Keane J. (as he then was) in Nolan Transport (Oaklands) Limited v Halligan and Others (unreported 22nd March, 1994)
"Clearly the object of subsection 2 is to ensure that in cases where there is at least a fair case that the trade union was acting in contemplation or furtherance of a trade dispute, such injunction should not be granted where they would have been previously granted on the basis of irreparable damage which would not be remediable by an award of damages. "
Later in that judgment he went on to say –
'I pause here to say that whilst there appears to be no authority on the section, it seems to me that as a matter of first impression that the onus must be on the person resisting the injunction to establish that the provisions of section 14 have been complied with, which seems to me to be crucial to the operation of the section. If the section has been complied with, then the Oireachtas goes on to provide for this unusual and special situation where the court must apply particular considerations to the granting of an interlocutory injunction, considerations which otherwise would not apply. Before a trade union is afforded the protection of section 19 and, conversely, an employer is deprived of a protection that he would normally have at common law in relation to the obtaining of an interlocutory injunction in circumstances where his business is or could be affected, I would take the view that the court must be satisfied on the evidence before it that section 14 has been complied with. "
A similar approach was taken by Laffoy J. in G 8t T Crampton Limited v BA TU. Section 14 of the Act requires the rules of every trade union to contain the provisions set out therein on secret ballots. These provisions are comprehensive. Paragraph (a) precludes union involvement in a strike or other industrial action without a secret ballot and requires that entitlement to vote in the secret ballot should be accorded equally to all members whom it is reasonable at the time of the ballot for the union concerned to believe will be called upon to engage in the strike or other industrial action.
Section 19(2)(f) provides that as soon as practicable after the conduct of the ballot, the union shall take reasonable steps to make known to its members entitled to vote in the ballot - (1) the number of ballot papers issued, (2) the number of votes cast, (3) the number of votes in favour of the proposal, (4) the number of votes against the proposal and (5) the number of spoilt votes.
Mr Brendan O'Sullivan, a trade union official attached to BATU, having referred to the correspondence which I have already set forth, averred that in the absence of a response he caused a secret ballot to be conducted of the members of the union concerned in the dispute. He says this was done in accordance with the rules of the union and the provisions of the Act. He then exhibits the ballots cast by the three members in question. He says that the outcome of the ballot was unanimously in favour of industrial action and, in accordance with section 19 of the Act, he gave notice of industrial action to take effect from the 30th May, 2002. The notice was sent by registered letter dated the 22nd May, 2002. To facilitate a resolution of the dispute by negotiation he says the union deferred the placing of pickets on the site in question until the 12th June, 2002. The ballot papers read as follows
"Building and Allied Trades Union Official Ballot Paper
22nd May, 2002
Subject: To engage in industrial action with Daru Blocklaying Limited up to and including the placing of pickets on company sites.
in favour against"
In the first affidavit sworn by Mr Lynch on behalf of the plaintiffs he said it was unclear as to how BATU purported to conduct its alleged ballot in circumstances where none of its members were employed on the Swords site. That of course begs the question as to the status of the persons who were working there. Be that as it may the major criticism which was made during the course of the hearing was that the ballot in order to be valid for the purposes of section 19(2) of the Act had to comply with the requirements of section 14(1). The ballot ought to have been conducted in circumstances where the entitlement to vote would be accorded equally to all members whom it was reasonable at the time of the ballot for the union concerned to believe would be called upon to engage in the strike or other industrial action. Only three persons were balloted. On the day the picketing commenced it is accepted by the defendants that there may have been as many as nine persons attending on the picket. The plaintiffs contend for a much larger number. Since then it is said that the only persons who have been picketing are the second and third defendants, a Mr Brendan Conroy and a Mr Stephen McPeake, both of whom are bricklayers and Mr Thomas O'Dowd, a labourer. Mr McPeake joined the union subsequent to the ballot being held. In addition Mr O'Sullivan and another official of the union accompanied the picket on occasions. Furthermore, a number of members of the branch committee of the union picketed on the first day of the picket.
A constituency of just three persons was balloted. Yet on the first day of the picketing on the defendants own evidence, up to nine persons picketed. Assuming that all three who voted in favour did so and that Mr McPeake was not a member of the union at the time, that still leaves five persons who picketed to be accounted for. The evidence in this regard which is set forth at paragraph 11 of the affidavit of Mr McCormack (and not Mr O'Sullivan) is not informative as to who was involved on the first day. Even interpreting what is averred to therein in as benign a fashion as possible from the defendants' point of view, it does not in my view adequately account for the fact that only three persons were balloted whilst a much larger number picketed. The only explanation as to how the voters were chosen is to be found at paragraph 11 of Mr O'Sullivan's affidavit. He says there that he caused a secret ballot to be conducted of the members of the union concerned in the dispute in accordance with the rules of the union and the provisions of the Act. But that is not the appropriate criterion in deciding the constituency of persons who are entitled to ballot. The union is obliged to ensure that all members whom it is reasonable at the time of the ballot for the union concerned to believe will be called upon to engage in the strike or other industrial action be balloted. There is nothing on affidavit to suggest that that exercise was carried out. Moreover there is no evidence at all of compliance with section 14(2)(f).
In my opinion the onus is upon the defendants to satisfy the court as to compliance with the provisions of section 14. That onus is not discharged in this case by a bald assertion that the ballot has been carried out in accordance with the rules of the union and the provisions of the Act. Evidence of sufficient weight must be given of such compliance. I am fortified in this view by the observations of Murphy J. giving the leading judgment in the Supreme Court in Nolan Transport (Oaklands) Limited -v- Halligan [1999] 1 IR 128. There he said
"Where a significant statutory benefit is conferred on one litigant at the expense of another upon express statutory terms, the benefit should not be available if the terms are not fulfilled". Later in the judgment he said "... but I would find it difficult to escape the conclusion reached by Keane J. and accepted by Laffoy J. that the onus lies upon the party resisting an application for an interlocutory injunction to show that a secret ballot as envisaged by section 14 has been held. Moreover, it could hardly be sufficient to establish the existence of a stateable case in relation to the compliance with the rules required to be adopted by a union pursuant to section 14 aforesaid. The decision of a court on an interlocutory application as to whether or not the particular immunity granted by section 19(2) is available is itself a final decision and determines finally whether that statutory benefit is available to the trade union".
Further on in the judgment Murphy J. said
"I am confident that the trade union movement will, if it has not already done so, arrange that the rules of all unions are amended so as to comply with the requirements of section 14 and, of equal importance, that secret ballots will be conducted not merely in accordance with the terms of such rules but also under professional and independent guidance which will guarantee that all appropriate conditions are complied with and facilitate the union in proving that such was the case ".
In the present case whilst BATU has certainly gone further than it did before Laffoy J. in the Crampton case in that is has put the result of the ballot in evidence before me, it has not in my view discharged the onus required to demonstrate a full and complete compliance with section 14. That is particularly so in the choice of the constituency of just three persons who were asked to ballot.
As the onus has not in my view been discharged by the defendants, having regard to what I have already said, injunctive relief will be granted.
In these circumstances it is not necessary for me to consider the further interesting argument made to the effect that even if the defendants had successfully availed themselves of section 19(2) nonetheless an injunction should be granted to restrain the activity complained of because the picketing to date has not been carried out for the statutory purposes.
