In Search of the Magic Pudding
The Dollar Sweets Story
'I acknowledge receipt of your Telex of 24th July,
and advise that the Department of Employment and Industrial
Relations is maintaining contact with the ACTU in an
attempt to satisfactorily (sic) resolve this dispute'.
R.J.L Hawke, 26 July 1985.
'The Secretary of the ACTU, Mr. Bill Kelty, yesterday
intervened in the long-running Dollar Sweets Dispute
and pledged the union movement's support for the reinstatement
of sacked workers'.
'The owner of Dollar Sweets Confectionery might take
Court action to gain union compensation for the dispute
at his factory ... the ACTU Secretary, Mr. Bill Kelty,
said yesterday any damages claim would make it much
harder to settle the dispute.'
'I hope they don't go ahead with it because it would
simply make the whole thing harder to settle.'
The Sun, 30 September 1985
'If the defendants continue with their picketing, in
the form in which they have chosen to conduct it, they
may well succeed in forcing the plaintiff family company
out of business. This indeed would seem to be their
object, although I find it extremely difficult to rationalise
such apparently stupid and nihilistic acts.'
Mr. Justice Peter Murphy, (Dollar Sweets Pty. Ltd.
v. Federated Confectioners' Association of Australia
& Ors.  V.R 383, 390)
History throws up unlikely heroes. The Dollar Sweets
Company is now part of Australian industrial folklore.
At the beginning of 1986, few Australians would have
known the company existed, although its 'Hundreds and
Thousands' had fed the sweet tooth and imagination
of Australian children for a generation. No one would
have anticipated that in 1985 it would become the subject
of a vicious industrial campaign, and few would have
predicted that events at Dollar Sweets would signal
a turning-point in Australian industrial history.
In the words of the anti-hero of the H R Nicholls
Society, Henry Bournes Higgins, the Dollar Sweets Company
ushered in 'a new province for law and order' in Australian
industrial relations. On one side was Fred Stauder,
Manager of a small family company. On the other side
was Carlo Frizziero, the Secretary of the small but
militant Federated Confectioners' Association. Fred
is easy-going, practical and down-to-earth. He is no
ideologue. Over the years he had got on quite well
with the union and all his employees on the factory
floor were union members. Like thousands of small businessmen,
all he wanted to do was to run a business and keep
Carlo Frizziero was an ideologue. He had taken his
union into close association with the small group of
far-Left unions which used to congregate around Bill
Hartley and the Food Preservers' Union. This group
is sometimes called 'the tomato Left' of the Victorian
ALP 3Ú4 not because they are in the business of food
preserving, but because of the one-time use of rotten
tomatoes thrown at Right-wing union leaders attempting
to enter an ALP conference. Carlo has been a visitor
to Gaddafi's Libya.
To fully understand the Dollar Sweets story, we need
to remember the times. In March 1983, the first Hawke
Government was elected and a National Economic Summit
was convened to map out economic policies. An invited
audience which included representatives of employer
and union bodies found remarkable agreement on the
direction future policies should take. In particular,
there was unanimous agreement at the Summit on a return
to centralised wage fixing.
The Arbitration Commission duly introduced centralised
wage fixing in September 1983. For the following two
years it automatically increased wages in line with
prices. All a union had to do was give a commitment
it would abide by the Arbitration Commission's principles
and its members would receive an increase. The Federated
Confectioners' Association was one of the few unions
that refused that commitment.
By so refusing the FCA denied its members the automatic
wage increases approved by the National Wage Bench.
Dollar Sweets was not legally obliged to pay any such
increases to its employees as a result. But the company
and its employees came to an agreement in November
1985. If the employees agreed to abide by the principles
(which the union would not), the company would pay
them the increases denied by the union's intransigence.
Fred Stauder's 27 employees, through factory representatives,
were only too happy to agree to this proposal. All
went well until the month of July 1985.
The relevant award for confectionery workers in July
1985 prescribed a 40-hour week (it still does). Dollar
Sweets was paying employees full wages for a 38-hour
week. This was not enough for the union. It demanded
a reduction in hours (at full pay) from 38 to 36 hours.
This was in breach of Arbitration Commission wage-fixing
principles. This was in breach of the 1983 agreement
Fred had reached with his employees. This was beyond
In July 1985, strikes commenced in support of a 36-hour
week. Dollar Sweets informed its employees that if
they wished to work a 36-hour week, they would have
to find an employer who could afford to pay it 3Ú4 Dollar
Sweets could only afford to pay them for working a
38-hour week. Fred Stauder offered to open up the books
of his company so union officials could examine them
and ascertain for themselves that the company could
not afford a 36-hour week. The union did not take up
An offer was therefore put to the 27 employees. If
they wished to continue, as agreed, to receive over-award
pay for a (below award) 38-hour week, they could do
so. If they wanted to work a 36-hour week, they would
have to find it elsewhere. Twelve of the company's
27 employees agreed to work on the existing conditions.
The other 15 refused to work unless a 36-hour week
was introduced. They continued to strike under the
direction of the union. The company advertised for
employees to fill their places. It was flooded with
offers and 15 new employees commenced work on a 38-hour
week almost immediately.
From 22 July 1985 the 15 'concomitants' and their
union officials commenced a continuous picket of the
Dollar Sweets factory in the Melbourne suburb of Malvern.
Despite the fact that the picketers slept in vehicles
parked outside the premises, the local council was
unable to find any breach of health regulations. However,
acting on an anonymous 'tip off', the council 'revealed'
to the company that a back door was not fully fly-proofed
and workers were wearing their overalls to and from
work in breach of the Cleanliness (Food Drugs and Substances)
At first the picketers merely tried to stop employees
entering and leaving the premises. Later, the focus
turned to drivers. After a few weeks events at the
factory became more serious. Fred Stauder received
death threats. Bomb threats were made against the factory.
The locks on the factory doors were destroyed and part
of the premises was set alight in an attempted arson.
In mid-August, a driver making a delivery was assaulted
and his truck was vandalised. Some of the picketers
were subsequently convicted of criminal assault in
relation to this incident.
The company appealed to the Premier and the Minister
for Police to station a police guard at the premises.
The Premier and Minister thought this was unnecessary.
In any event, they advised, this was a matter for the
Chief Commissioner of Police. The Chief Commissioner
did not seem to think a permanent police presence was
The company's insurers were under no such doubt. They
threatened to void the insurance policy because they
considered the factory a bomb and arson threat, and
insisted that the company pay for armed security guards
to be stationed 24 hours a day at the premises as a
condition of insurance. For the duration of the picket
the company paid $70,000 for armed security guards.
In August 1985, all telephone and telex wires to the
factory were deliberately severed. When Telecom was
called to repair the line, its employees refused to
cross the picket.
Eventually, Telecom management repaired the line late
at night, apparently escaping the notice of the picketers.
It was not just the company, its management and its
employees that were subjected to intimidation. Most
of the major transport companies refused to make deliveries
to Dollar Sweets because this would involve 'crossing
a picket line'. Some of the large suppliers refused
to supply Dollar Sweets at all lest they incurred the
wrath of the union. One or two courageous individuals
were prepared to take deliveries in and out of Dollar
Sweets. For his trouble, one of them was assaulted
and he suffered permanent damage to his eyes. In a
military-style operation, union officials mounted a
'tail' on those drivers who braved the picket lines.
The irony was that the company was only doing what
was required of it by the wage-fixing principles. The
wage-fixing principles prohibited a reduction in the
working week. In blatant defiance of the Commission's
principles, the union sought it. Since it was scrupulously
abiding by the Arbitration Commission's own principles,
the company sought the assistance of the Arbitration
Commission to relieve its plight.
The Arbitration Commission intervened. It gave a recommendation.
It recommended that the picket be disbanded. It was
ignored by the union.
Mr Hawke and Mr Willis promised to get their Departments
to look into the matter. These Departments promised
to get the ACTU to help. Mr Cain promised that his
Department would look into it. The ACTU looked into
it and decided to support the union. The company kept
on bleeding. Its employees kept on being harassed.
The employees were told that they would be sacked once
the union had broken the company. One of the union's
advocates later promised, in proceedings in the Arbitration
Commission, that those employees would never work again
anywhere in Australia.
In December 1985, after all its avenues had been exhausted,
after it was clear that the Arbitration Commission
was powerless to do anything, the company took the
matter to the Victorian Supreme Court. It relied on
general common law principles to seek an end to intimidation,
nuisance and conspiracy to injure its business. Its
claim was upheld. The Supreme Court gave orders to
restrain the picket on 12 December 1985. The picket
ended the next day, after 143 days.
In April 1988, by a settlement between the parties,
the union paid the sum of $175,000 to Dollar Sweets
as compensation for the losses it suffered as a result
of the picket. It is, to my knowledge, the only time
a union has paid common law damages to an employer
for losses suffered through picketing in Australia.
I now wish to draw out some general observations and
lessons from the Dollar Sweets story.
1. It is a very significant legal milestone
Before the December 1985 judgment in the Dollar Sweets
case, there was considerable doubt about whether the
State Supreme Courts would exercise common law jurisdiction
to grant injunctive relief against unions involved
in industrial disputes. It was argued that since the
Commonwealth Parliament had set up a legislative scheme
for dealing with industrial disputes (through compulsory
arbitration), the Courts would not (and ought not)
exercise general reserve common law jurisdiction. Indeed
this was put on behalf of the unions in the case. The
argument was rejected and the Court granted the orders
The Dollar Sweets judgment confirmed not only that
the State Courts will exercise common law jurisdiction
in industrial disputes but that such powers can prove
effective in bringing unlawful action to an end.
2. The case had very significant practical effects
As the Dollar Sweets case illustrated, unions had not,
by 1985, achieved de jure immunity from the common
law. What they had achieved was de facto immunity.
The number of occasions on which successful action
had been taken against unions at common law was so
negligible that, for all practical purposes, the law
was extinct. Those practitioners who were aware of
common law remedies (and there were very few of them)
seldom advised parties of their common law rights,
and if they did, almost universally recommended against
such proceedings. The probabilities of common law actions
being taken were so remote, they certainly had no deterrent
or restraining effect on trade union behaviour.
The Dollar Sweets action shattered conventional thinking
on this issue and, of course, it ended the long period
of practical immunity from the common law which unions
had enjoyed. One of the reasons common law actions
were not taken was a fear of the possible reaction
to the ending of the unions' privileged exemption from
the law. There was no doubt the union movement would
resent attempts to bring it back within the exercise
of common law restraints but there was considerable
anxiety about the form its resentment would take. It
was feared that unions would seek to exert such industrial
pressure as would force the Courts and the litigants
to back down. It was certain that unions would make
the exercise so expensive and the personal cost very
high to ensure others would not be foolish enough to
attempt it. For Dollar Sweets the exercise was expensive
and the personal cost high. But it turned out to be
less expensive and less costly than the nightmare of
intimidation which the Court action ended.
The Dollar Sweets Company not only survived the bringing
of a common law action but recovered compensation for
its losses. Far from becoming an example of the folly
of tackling unions in the Courts, it became an example
of the reverse. Only in one sense was the company turned
into an example of the personal cost of pursuing legal
remedies. This was in the sense that it was labelled,
probably irrevocably, with the modern hate words used
by a significant sector of metropolitan press dailies
'New Right', with all the abuse which many journalists
attach to those words. I will consider the role of
the press later on.
3. The fate of the Industrial Relations Bill 1987
The Commonwealth Industrial Relations Bill 1987 was
the product of the Hancock Report on Australian Relations
Law and Systems 1985. The Bill was withdrawn on the
eve of the 1987 Federal Election as a result of unanimous
and unprecedented opposition from employers and, in
particular, unanimous opposition to proposals to restrict
and modify the application of common law and Trade
Practices actions to trade unions.
One of the findings of the Hancock Report was that
it was 'vain' to assume unions could be made to comply
with arbitral decisions through enforcement procedures
(see Volume 2 pp, 632-3). What the Dollar Sweets case
illustrated was that it was not vain to hope that unions
could be made to comply with judicial decisions.
This is why the proposals in the 1987 Bill provoked
such an outcry. They were designed to restrict and
modify proven enforceable sanctions against unions.
If the Bill had been introduced in 1985, there would
have been no similar outcry. It would only have proposed
taking away theoretical rights 3Ú4 rights which might
have theoretically existed but which had not been proven
in practice for a long time. What's more, in 1985 there
was no evidence to show these rights, if taken, could
prove effective or enforceable in the industrial context.
In 1987, after the Dollar Sweets case had proven these
rights, it was clear for all to see that the 1987 Bill
proposed to remove substantive and valuable rights.
4. The judicial safeguard
Most of the overseas and Australian industrial disputes
in which militant unionism has been defeated have involved
a substantial use of state power through the police
force: the Coalminers' and Wapping disputes in the
United Kingdom, the SEQEB dispute in Queensland. State
enforcement agencies played no role in assisting the
Dollar Sweets Company against picketing. To a large
degree it was forced to go to the Courts as a result.
The Courts ordered the picketers to observe the law.
The State enforcement agencies could have effectively
done the same thing and made Court involvement unnecessary.
They certainly could have prevented some of the worst
aspects of the picketing from occurring in the first
The case illustrates the way in which a party can
achieve private law enforcement in the absence of government
5. The reaction of the media
When the Dollar Sweets Company successfully obtained
Supreme Court injunctions, the overwhelming media reaction
(with the exception of 'The Age' which was tepid even
from the beginning) was supportive. The press which
had followed 143 days of violence and intimidation
congratulated the company on bringing an end to its
troubles through the legal process and, in the course
of doing so, blazing a new trail for ending destructive
There was little support for the Confectioners' Union
which was perceived to be a renegade even within the
wider union movement.
Some time later, perhaps with the discovery of the
'clandestine' H R Nicholls Society, there was a shift
in press opinion at least amongst reporters who write
on industrial affairs. The Dollar Sweets action came
to be frequently described as 'confrontationist' or
'New Right'. Presumably, it was 'confrontationist'
to seek the assistance of the Courts in upholding the
law. This was possibly based on the naive belief that
everything can be settled by agreement with unions,
and the involvement of the Courts amounts to wielding
a big and unwarranted stick.
Part of this reaction was just sheer ignorance of
what had occurred at Dollar Sweets. Part of it was
caused by a very good publicity campaign by the union
movement which whipped up hysteria (at least amongst
journalists) over the so-called 'New Right'. Part of
it was created by the aversion of certain journalists
to some who grandstanded over the case.
The suggestion that the company was confrontationist
is nonsense. The company sought to confront no one.
The company and its employees had a very good working
relationship and a free agreement on working conditions
which substantially benefited the employees. After
it was confronted with demands which were in flagrant
breach of this agreement, it stood firm. Perhaps, like
the victim of a rape, it was expected to roll over
and co-operate. It did not do so. Because it refused
to be ravaged, some silly and immature 'commentators'
concluded it must have been confrontationist.
Although lt is rather mind-numbing to follow all the
twists, turns and self contradictions of various journalists,
one other press development in relation to the Dollar
Sweets case must be mentioned. Ms Pamela Williams writes
on industrial relation for the 'Financial Review'.
She runs a pretty solid industrial relations club-type
line, and is a very good indicator of the prevailing
views amongst that group of journalists at any particular
time. She signalled a new shift in the line on the
Dollar Sweets after the action was settled in April
1988. Far from being confrontationist and beyond the
pale, Pamela decided that the Dollar Sweets action
was pretty standard fare. This was not an unusual situation
at all, Pamela confidently informed her readers, major
employer groups had been doing such things for a long
time and, what is more, they did it quicker and faster.
One cannot entirely blame Ms Williams for writing
this line. It was surprisingly similar to that being
pushed by some employers at around the same time. She
was used as a media outlet for those who wanted to
denigrate the significance of the action. It was very
hard to understand, however, why people who had been
sent to Coventry for breaking the rules in taking such
hard, 'confrontationist' and 'New Right' actions against
a union should have suffered so much for doing what
had always been done by those consistently being praised
for being reasonable, moderate and consensual.
This was pointed out in a brilliant rejoinder by the
President of the State Chamber of Commerce and Industry
(Victoria), Michael Pointer (Financial Review 27 April
1988). In reality, Ms Williams's last and second-last
shift in opinion was wrong. The action of the company
was not usual or standard at all. It was highly unusual
and quite irregular. This was why it had attracted
so much press interest. But the company's actions were
not confrontationist they were in self defence.
6. The long-term effects
In the first analysis, we should bear in mind the long-term
effects on the Dollar Sweets Company. It not only won
the dispute (preserving a 38-hour week), it recouped
the losses it suffered through a bitter industrial
dispute. In disputes which come before the Arbitration
Commission, an employer, even if it is found to be
right, never recoups the cost of industrial disputation.
The Dollar Sweets Company is healthier than ever, and
has recently moved to a new and larger property. Although
one could never financially win from a dispute such
as this, the company has not substantially lost.
In the second place, the case has illustrated that
there are alternatives to being overrun by militant
industrial action. On several occasions during the
dispute, Fred Stauder was advised by others in the
industry to give in to the union claims. He was told
he could never win, and it was better to capitulate
early rather than late.
Fred Stauder proved he could win, and did. He serves
as an example to others that acceding to unwarranted
demands is not inevitable. He should not be taken as
an example of the inevitability of winning, however.
What the Dollar Sweets story illustrates is that, in
appropriate cases, the common law provides an effective
remedy against unlawful action.
This is a point which has not been lost on unions.
I would not for a moment recommend that every employer
faced with industrial action sue every union. Legal
action is expensive and time-consuming. The great thing
about Dollar Sweets is that it acts as an example and
a deterrent. It is in the interests of all parties
to industrial relations to know the limits of acceptable
behaviour. Unfortunately, in the past there have been
no limits to acceptable behaviour from unions. As a
result, everything has become permissible. The drawing
of acceptable lines of behaviour circumscribes extreme
and damaging action. Where a company like Dollar Sweets
punishes such action, it not only reinforces the limits
of acceptable behaviour but serves as a warning to
anyone tempted to transgress them in the future.
The Meat Workers' Union in Victoria is a very militant
union and, if not 'tomato Left', certainly close to
it. In the latest issue of its journal ('The Meat Worker'),
it refers to a dispute in which it was engaged at Oakleigh
Abattoirs in Victoria. The union commenced a picket
at the premises on 29 February 1988. On 2 March 1988,
Solicitors for the Abattoirs wrote to the union secretary
in these terms:
'The actions of your union are causing serious loss
and damage, and unless those actions cease immediately
our clients will have no alternative but to obtain
appropriate relief by way of injunction from either
the Supreme Court or the Federal Court, together with
an associated claim for damages. In this connection
we would refer you to the judgment of Murphy J. in
Dollar Sweets Pty. Ltd. v. The Federated Confectioners'
Association of Australia (1985) V.R. 383.'
The remainder of the story is taken up by the above-mentioned
journal (Autumn 1988):
'The threat of legal action contained in the Solicitors'
letters had great substance. The law did allow the
companies to seek rapid relief by way of injunction.
It did afford them an action for damages. The picket
line was lifted.'
The Dollar Sweets company rewrote the manual on what
are the acceptable limits of industrial action by unions.
Its precedent prevented damaging and unlawful picketing
at Oakleigh Abattoirs. The Dollar Sweets Story is the
story of hundreds and thousands of other businesses
around Australia who have and will be assisted by the
Dollar Sweets precedent. And the Dollar Sweets Story
is all about a new development in an old story; the
story of how a small confectionery manufacturer made
Australian industrial relations 'A New Province for
Law and Order'.