| [2016] FWCFB 2654 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT CATANZARITI |
DARWIN, 4 MAY 2016 |
Appeal against decision [2015] FWC 7345 of Commissioner Riordan at Sydney on 23 November 2015 in matter number AG2015/1040, AG2015/1055, AG2015/1139 & AG2015/1248.
[1] This decision concerns an appeal under s.604 of the Fair Work Act 2009 (the Act) against a decision of Commissioner Riordan (the Decision) 1 not to allow the Construction, Forestry, Mining and Energy Union (CFMEU) to be heard in relation to applications by each of MGI Piling (NSW) Pty Ltd, Bauer Foundations Australia Pty Ltd, AVO Piling Management (NSW) Pty Ltd and Piling Contractors Pty Ltd (collectively the Piling Contractors) to have their enterprise agreements approved by the Fair Work Commission (the Commission).
[2] Having dismissed the CFMEU’s application to be heard in relation to the approval of the enterprise agreements, the Commissioner is ready to consider whether the enterprise agreements meet the statutory preconditions for approval. 2 That process has been put on hold pending the outcome of this appeal.
Standing and permission to appeal
[3] The matter was listed for hearing of both the application for permission to appeal and the appeal on 27 April 2016. At that time Mr J Pearce of counsel appeared with permission for the CFMEU and Mr B Hodgkinson of senior counsel appeared with permission for the Piling Contractors.
[4] A person who is aggrieved by a decision made by the Commission may appeal the decision with the permission of the Commission (s.604(1) of the Act). We are satisfied that the CFMEU has standing to appeal the Decision on the basis that it is a person aggrieved by the Decision. 3
[5] Without limiting when the Commission may grant permission to appeal, it must grant permission if it is satisfied that it is in the public interest to do so (s.604(2) of the Act). The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 4 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.” 5
[6] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 6 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.7
The Decision
[7] Although the CFMEU has members employed by each of the Piling Contractors who are covered by the new enterprise agreements, all of them appointed bargaining representatives (other than the CFMEU) during bargaining for the new enterprise agreements. The Commissioner found that the CFMEU was “not appointed as a bargaining representative by any employee of the four companies” and the CFMEU “did not qualify as a default bargaining representative either”. 8 There was no challenge by the CFMEU to any of those findings.
[8] The CFMEU’s case below was effectively put on two grounds:
(a) First, the Commission is bound to observe the rules of natural justice. That means that a person whose rights will be directly affected by an order made by the Commission must be given a full and fair opportunity to be heard before the order is made. The CFMEU contends that it has rights which will be directly affected by any decision by the Commissioner to approve the new enterprise agreements. Accordingly, the CFMEU contends that it has a right to be heard in relation to the applications by the Piling Contractors for the approval of their new enterprise agreements; and
(b) Secondly, even if the Commission finds that the CFMEU does not have a right to be heard because it is not a person whose rights will be directly affected by an order made by the Commission, the Commission should exercise its discretion pursuant to s.590 of the Act to give the CFMEU the opportunity to be heard in relation to the applications by the Piling Contractors for the approval of their new enterprise agreements.
[9] The Commissioner found that the CFMEU would not lose any of its “alleged rights” by reason of any decision to approve the new enterprise agreements, and the “alleged rights” identified by the CFMEU pertained to the protection of the employees, not the CFMEU. 9 Further, the Commissioner decided not to exercise his discretion pursuant to s.590 of the Act to give the CFMEU the opportunity to be heard in relation to the applications by the Piling Contractors for the approval of their new enterprise agreements.10
Nature of the Appeal
[10] Insofar as the appeal challenges the finding that the CFMEU does not have a right to be heard on the grounds of natural justice because it is not a person whose rights will be directly affected by a decision to approve the new enterprise agreements, the decision is not discretionary. The decision relates to a question of jurisdictional fact. Accordingly, the Full Bench must consider whether the Commission at first instance reached the right conclusion, not simply whether the decision was reasonably open at first instance. 11
[11] Insofar as the appeal challenges the Commissioner’s decision under s.590 of the Act, it is clearly a discretionary decision and the principles in House v K 12 are applicable.
Grounds of Appeal
Grounds 1 and 2
[12] The CFMEU contends that the Commissioner erred as a matter of law in failing to make the order sought by the CFMEU because it had a right to be heard for the following reasons or a combination of the following reasons:
(a) the CFMEU has constitutional coverage of the work proposed to be performed under the new enterprise agreements;
(b) the CFMEU has a long history of industrial representation of the work proposed to be performed under the new enterprise agreements;
(c) the CFMEU is a party to the relevant modern award, namely the Building and Construction On-site Award 2010;
(d) the CFMEU has members in all of the Piling Contractors except Bauer where only two employees are to be covered by the new enterprise agreement;
(e) in the future, given the nature of the companies’ businesses it is likely that other members of the CFMEU will be employed in classifications covered by the new enterprise agreements;
(f) the CFMEU is a party to the existing enterprise agreements covering the employees of the Piling Contractors. Those enterprise agreements have not been terminated;
(g) by operation of s.58 of the Act, the effect of approving the new enterprise agreements will mean that the existing (CFMEU) enterprise agreements will no longer apply to the employees of the Piling Contractors and instead the (non-CFMEU) enterprise agreements will apply to them;
(h) the removal of the employees from coverage by a (CFMEU) enterprise agreement will adversely affect the ability of the CFMEU to represent and recruit members from amongst employees of the Piling Contractors;
(i) the CFMEU has enterprise agreements with other piling companies in New South Wales and the CFMEU continues to be interested in the terms and conditions of employment regulating the work performed under the Piling Contractors’ new enterprise agreements;
(j) the CFMEU has enterprise agreements with other piling companies in other States and it continues to be interested in the terms and conditions of employment regulating the work performed under the Piling Contractors’ new enterprise agreements;
(k) the CFMEU will have the right under s.604 of the Act to appeal any decision to approve the new enterprise agreements; and
(l) the CFMEU was actively involved in negotiating the new enterprise agreements with the Piling Contractors until February 2015.
[13] As the Commissioner rightly pointed out 13, many of these arguments were considered and rejected by the Full Bench in CFMEU v Collinsville Coal Operations Pty Ltd14 (Collinsville). We agree with the decision and reasoning of the Full Bench in Collinsville.
[14] We are satisfied that the decision and reasoning of the Full Bench in Collinsville effectively disposes of the contentions set out in subparagraphs [12(a) to (e), and (h) to (l)] above. The one point of potential distinction between the present case and Collinsville relates to the contentions set out in subparagraphs [12(f) to (g)] above.
[15] In Collinsville, the Full Bench held (at [60]) as follows:
“Sixthly, the CFMEU’s reliance on rights that it had under agreements which previously applied to work at the Collinsville coal mine is misconceived in that whatever else might be said about the content of those agreements, they did not cover the employees who are now covered by the Agreement when the agreement was made and they did not cover Collinsville. Consequently the CFMEU had no particular right under those agreements vis-à-vis the employees or Collinsville, and so no right of the CFMEU is affected by the approval of the Agreement.”
[16] Unlike the situation in Collinsville, in the present case there are employees of the Piling Contractors who are members of the CFMEU and who are covered by enterprise agreements which will cease to apply to those employees if the new enterprise agreements the subject of applications for approval before the Commission are approved (s.58(2)(e) of the Act). The CFMEU is covered by the existing enterprise agreements, and asserts it has rights under those enterprise agreements.
[17] In our view, this point of distinction from Collinsville (at [60]) raises issues of importance and general application such that the public interest is enlivened.
[18] The CFMEU contends that, at paragraph [60] of Collinsville, the Full Bench acknowledged that if the former CFMEU enterprise agreements had continued to cover the employees or the employer at the time that approval of the new agreement was under consideration, then the CFMEU would have been directly affected by the proposed approval of the enterprise agreement. 15 We disagree. The Full Bench in Collinsville did not need to, and did not, consider the content of the existing enterprise agreements and whether they conferred rights on the CFMEU, because the argument was “misconceived”. The flaw in the CFMEU’s argument in Collinsville was that the previous enterprise agreements did not cover the employees who were covered by the new enterprise agreement and they did not cover Collinsville, with the result that any right the CFMEU may have had under those previous enterprise agreements vis-à-vis the employees or Collinsville was not affected by the approval of the new enterprise agreement.16
[19] In Collinsville, the Full Bench made clear that:
[20] The CFMEU submits that the following “corporate rights and entitlements” it has under each of the existing enterprise agreements would be lost if the new enterprise agreements were approved: 19
(a) the CFMEU would no longer be a party to the enterprise agreements that apply to employees of the Piling Contractors;
(b) the CFMEU would not be a member of the Company consultative committee;
(c) the CFMEU would no longer be notified if any work was to be sublet to another contractor;
(d) the CFMEU would no longer be consulted if supplementary labour was required or utilised;
(e) the CFMEU would not necessarily be involved in any dispute; and
(f) the CFMEU would not necessarily be involved in any future negotiations.
[21] As to the contention that the CFMEU would no longer be a party to the enterprise agreements if the new enterprise agreements were approved, it is important to recognise that the statutory framework is such that enterprise agreements 20 are made principally between an employer and employees.21 Although the existing enterprise agreements that apply to the Piling Contractors make reference to the CFMEU in the clause entitled “Parties and Persons Bound and Covered”22, this clause must be construed in the context of the Act under which it was approved. Under the Act, the CFMEU has no right to be a “party” to such an enterprise agreement. The CFMEU had the right to be covered by the current enterprise agreements because it was a bargaining representative in relation to those agreements.23 Indeed, the decisions approving the current enterprise agreements for the Piling Contractors note that the CFMEU “has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) of the Act I note that the Agreement covers the organisation”.24 Accordingly, the existing enterprise agreements cover, and apply25 to, the CFMEU, but it is not a “party” to them.
[22] A consequence of the CFMEU being covered by the existing enterprise agreements is that the CFMEU has standing under s.539 (item 4) of the Act to sue any of the Piling Contractors in respect of any contravention of a term of the existing enterprise agreements. The CFMEU would have had the same standing to sue under the new enterprise agreements (assuming they are approved), if it was a bargaining representative for any of its members (or other employees) covered by the new enterprise agreements and it had given the Commission a written notice under s.183 that it wanted to be covered by the new enterprise agreements. It follows that the principal reason the CFMEU will not have standing under s.539 (item 4) of the Act to sue any of the Piling Contractors in respect of any contravention of a term of the new enterprise agreements (assuming they are approved) is because the CFMEU is not a bargaining representative in relation to any of the new enterprise agreements.
[23] Further, in light of our conclusions below that the Piling Contractors’ existing enterprise agreements do not confer on the CFMEU any of the rights for which it contends, the CFMEU would only be able to use its standing under s.539 (item 4) of the Act to sue any of the Piling Contractors in respect of any contravention of a term of the existing enterprise agreements on behalf of its members for breaches by the Piling Contractors of their obligations to the employees under the existing enterprise agreements. As the Commissioner pointed out, such “issues pertain to the protection of the employees – not the Union”. 26 The approval of the new enterprise agreements will not have any impact on the CFMEU’s right to represent any of its members in proceedings against any of the Piling Contractors in respect of any contravention of a term of the new enterprise agreements.27
[24] As to the contention that the CFMEU would not be a member of the Company consultative committee, clause 9 of the Avopiling EA 28 states that: “The Company may establish and maintain, where appropriate, a Consultative Committee as a forum for effective communication between the parties. The Consultative Committee will be made up of an equal number of management representatives and Employee representatives elected by the Employees. The parties agree that there will be a maximum of three representatives from management and three from the site workforce”. It is clear from this clause of the Avopiling EA that the CFMEU does not have a right under the existing enterprise agreements to “be a member of the Company consultative committee”.
[25] As to the contention that the CFMEU would no longer be notified if any work was to be sublet to another contractor, clause 24.1 of the Avopiling EA states that: “If the Company wishes to sub-let a contract or part of a contract to a bona fide contractor to perform work that might be performed by Employees under this Agreement, the Company must first consult in good faith with the potentially affected Employees and their Representative(s)”. Whether any particular employee engages the CFMEU to act as their representative is a matter for the employee. It is clear that the existing enterprise agreements do not confer any right on the CFMEU to “be notified if any work was to be sublet to another contractor”.
[26] As to the contention that the CFMEU would no longer be consulted if supplementary labour was required or utilised, clause 24.2 of the Avopiling EA states that: “Where there is a need for supplementary labour to meet temporary/peak work requirements, such labour may be accessed from the bona fide labour hire companies following consultation with the Company Consultative Committee and/or workplace delegate”. The CFMEU does not have a right under the existing enterprise agreements to be a member of the Consultative Committee, nor is the CFMEU a “workplace delegate”. It follows that the existing enterprise agreements do not confer any right on the CFMEU to “be consulted if supplementary labour was required or utilised”.
[27] As to the contention that the CFMEU would not necessarily be involved in any dispute, clause 26 of the Avopiling EA sets out the dispute resolution procedure under the enterprise agreement. It provides (at subclause 26(b)) that: “an Employee or Employees may appoint another person or Union representative to support or represent them at any stage of discussions and/or the grievance procedure to resolve the concern or dispute”. Subclause 26(f) of the Avopiling EA is also relevant. It states that:
“Parties to a dispute may appoint a person or organisation of their choosing to represent them in the dispute settlement process. In the absence of any express appointment to the contrary, Union members shall be represented by their Union at all stages of the dispute settlement process. The Company agrees to engage with the Union in good faith for the purposes of dispute resolution by allowing the relevant Union official to enter the workplace to assist with representing Employees to deal with a dispute under the terms of this dispute resolution procedure provided however this clause shall not be construed as providing any rights which are inconsistent with s.194(f) or (g) of the Fair Work Act.”
[28] It is apparent from these provisions of the Avopiling EA that employees can appoint any person or organisation of their choosing to represent them during a dispute. Accordingly, the existing enterprise agreements do not confer any right on the CFMEU to “necessarily be involved in any dispute”. Further, the new enterprise agreements, if they are approved, must contain a dispute settlement procedure that allows for the representation of employees covered by the enterprise agreement for the purposes of that procedure (s.186(6)(b) of the Act). It follows that the CFMEU will not lose its capacity to represent its members, if any of its members wish to be represented by the CFMEU, in a dispute under the dispute settlement procedure in the new enterprise agreements.
[29] As to the contention that the CFMEU would not necessarily be involved in any future negotiations, clause 5 of the Avopiling EA states that: “No later than three (3) months before the expiration of this Agreement the parties may commence discussions concerning a future Agreement. The Employees may be represented by the Union in accordance with s.176 of the Fair Work Act 2009 as one of the Bargaining Representative(s).” The use of the word “may” in clause 5 suggests that it is not mandatory for the parties to “commence discussions concerning a future Agreement”. However, even if the word “may” were construed to mean “must”, it is plain from clause 5 that the CFMEU’s role in negotiations for a future enterprise agreement would (a) only arise if it was a bargaining representative for any employee covered by the new enterprise agreement and (b) be limited to its capacity as a bargaining representative for one or more employees. Accordingly, the existing enterprise agreements do not confer any right on the CFMEU to “necessarily be involved in any future negotiations”.
[30] In addition, the Act places obligations on and grants privileges to any person or entity that is a bargaining representative for a proposed enterprise agreement, including standing to apply for a bargaining order if the good faith bargaining requirements are not being met by other bargaining representatives. 29 It follows that the CFMEU will not lose its capacity to be involved in negotiations for an enterprise agreement, if it is a bargaining representative for one or more employees to be covered by the agreement.
[31] Having regard to the framework of enterprise bargaining and agreement making established by the Act and the matters set out in the previous ten paragraphs, we are of the view that the CFMEU is not a person whose rights, interests or legitimate expectations will be directly affected by any decision to approve the new enterprise agreements. Taking the CFMEU’s case at its highest, including the fact that the CFMEU will not have standing, in its own capacity, to sue for a breach of the new enterprise agreements (assuming they are approved), the most that could be fairly said is that the CFMEU may be affected, indirectly or consequentially, by a decision to approve the new enterprise agreements. Such an impact is not sufficient to give the CFMEU a right to be heard in the application for the new enterprise agreements. 30
Ground 3
[32] Ground 3 of the Notice of Appeal relates to the Commissioner’s discretionary decision under s.590 of the Act not to allow the CFMEU to be heard in relation to the applications by the Piling Contractors for the approval of their new enterprise agreements. We are not satisfied that there is an arguable case of appealable error in the House v K sense in relation to this discretionary decision by the Commissioner. Nor are we satisfied that there is any other proper basis for permission to appeal to be granted in respect of this part of the Decision. Accordingly, we do not grant permission to appeal in respect of Ground 3 of the Notice of Appeal.
Ground 4
[33] Ground 4 of the Notice of Appeal relates to the Commissioner’s decision not to accede to the CFMEU’s request that he make an order for the production of documents under s.590(2)(c) of the Act. In view of our conclusion that the Commissioner did not err in deciding not to allow the CFMEU to be heard in relation to the application for approval of the new enterprise agreements, there is no arguable case of appealable error in relation to the Commissioner’s decision not to make the order for production of documents sought by the CFMEU. Accordingly, we do not grant permission to appeal in respect of Ground 4 of the Notice of Appeal.
Conclusion
[34] In light of the public interest in the question of whether a union (which is not a bargaining representative) has a right to be heard in relation to an application for approval of an enterprise agreement in circumstances where the union and its members are covered by, and the union allegedly has rights under, an existing enterprise agreement which will cease to apply if a new enterprise agreement is approved, we grant permission to appeal in relation to Grounds 1 and 2 of the Notice of Appeal but dismiss the appeal for the reasons set out above.
VICE PRESIDENT
Appearances:
Mr J Pearce, of counsel, on behalf of the CFMEU;
Mr B Hodgkinson, of senior counsel, on behalf of the Piling Contractors.
Hearing details:
2016.
Sydney:
April, 27.
2 Decision at [25]
3 CEPU & Anor v Main People Pty Ltd [2014] FWCFB 8429 at [5]-[8]; CFMEU v Collinsville Coal Operations Pty Ltd [2014] FWCFB 7940 at [14]
4 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46]
5 [2010] FWAFB 5343 at [27], 197 IR 266
6 Wan v AIRC (2001) 116 FCR 481 at [30]
7 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 288, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28]
8 Decision at [9]
9 Decision at [21]
10 Decision at [22]
11 Pawel v The Australian Industrial Relations Commission (1999) 94 FCR 231 at [16]
12 (1936) 55 CLR 499 at 505
13 Decision at [12]-[22]
15 CFMEU’s outline of submissions dated 29 February 2016 at [27(c)]
16 Collinsville at [60]
17 Collinsville at [71]
18 Collinsville at [65]
19 CFMEU’s outline of submissions dated 29 February 2016 at [28]
20 Other than greenfields agreements (s.172(2)(b) and (3)(b) of the Act)
21 Collinsville at [66]
22 See, for example, clause 3 of the Avopiling Management (NSW) Pty Ltd & Employees & CFMEU Collective Agreement 2011-14 (Avopiling EA) (AB168)
23 s.183 of the Act
24 See, for example, [2012] FWAA 2977 at [3] (AB165)
25 s.52 of the Act
26 Decision at [21]
27 s.596 of the Act
28 We have used the Avopiling EA (AB165) to analyse the rights alleged by the CFMEU. The CFMEU contends that it has these rights under each of the Piling Contractors’ enterprise agreements and it was not suggested by the CFMEU that the content of the enterprise agreements or the rights thereunder differed between the relevant enterprise agreements in any material respect.
29 See Collinsville at [16]
30 Re Ludeke; Ex parte The Customs Officers’ Association of Australia (1985) 155 CLR 513 at 520
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