1
Fair Work Act 2009
s.604—Appeal of decisions
AWX Pty Ltd trading as AWX
(C2013/5709)
Industries not otherwise assigned
DEPUTY PRESIDENT SMITH
DEPUTY PRESIDENT LAWRENCE
COMMISSIONER BULL MELBOURNE, 11 NOVEMBER 2013
Appeal against decision [2013] FWCA 4490 of Commissioner Simpson at Brisbane on
9 August 2013 in matter number AG2013/5788.
Introduction
[1] On 9 August 2013 Commissioner Simpson handed down a decision1 in which he
granted an application made by a number of persons to terminate the AWX Pty Ltd Employee
Collective Agreement—Meat Industry Employees 2006—2009 [AC304195](the Agreement).
The Agreement was made on 22 December 2006 and had a nominal expiry date of
23 December 2009 but continued to operate as a collective agreement-based transitional
instrument pursuant to Item 2(5)(c)(v) of Schedule 3 of the Fair Work (Transitional
Provisions and Consequential Amendments) Act 2009 (TPCA).
[2] The Commissioner’s decision was appealed2 by AWX Pty Ltd (AWX) and this
decision deals with that appeal for which permission3 is required.
Background
[3] The background of the matter is well set out by the Commissioner and we do not
intend to repeat that detail. It is sufficient for us to record that this matter involves a labour
hire company which provides, amongst other clients, labour to meatworks in Queensland,
New South Wales and Victoria. The Commissioner records that the employees of AWX are
predominately refugees under humanitarian visas involving approximately 15 foreign
languages4 and that the Agreement contains terms and conditions which are less favourable
1 AG2013/5788.
2 23 August 2013.
3 s.604(2) of the Fair Work Act 2009.
4 Transcript before Simpson C, PN51.
[2013] FWCFB 8726
DECISION
E AUSTRALIA FairWork Commission
[2013] FWCFB 8726
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than the Meat Industry Award 2010 [MA000059]. When the matter was before the
Commissioner, attention was given to the provisions of ss.225 and 226 of the
Fair Work Act 2009 (the Act) which provides:
“SECTION 225 APPLICATION FOR TERMINATION OF AN
ENTERPRISE AGREEMENT AFTER ITS NOMINAL EXPIRY DATE
225 If an enterprise agreement has passed its nominal expiry date, any of the
following may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
226 WHEN THE FWC MUST TERMINATE AN ENTERPRISE
AGREEMENT
226 If an application for the termination of an enterprise agreement is made under
section 225, the FWC must terminate the agreement if:
(a) the FWC is satisfied that it is not contrary to the public interest to do
so; and
(b) the FWC considers that it is appropriate to terminate the agreement
taking into account all the circumstances including:
(i) the views of the employees, each employer, and each employee
organisation (if any), covered by the agreement; and
(ii) the circumstances of those employees, employers and
organisations including the likely effect that the termination will
have on each of them.”
[4] AWX sought to persuade the Commissioner that, in truth, the application was being
made by the Australasian Meat Industry Employees Union (AMIEU) rather than the named
employees. The named applicants authorised the AMIEU to act on their behalf. Secondly, that
if a ballot were to be conducted to ascertain the views of employees, then it should be a secret
ballot conducted at the workplace. The applicants sought a postal secret ballot.
The Commissioner found that the application was properly made5 and that it was appropriate
to have a secret postal ballot.6 The parties to the proceedings agreed upon the material to be
submitted and AWX supplied the Australian Electoral Commission with the list of employee
names and addresses. The voting material was translated into approximately 15 different
5 [2003] FWCA 4490 at paragraph 26.
6 Transcript PN84.
[2013] FWCFB 8726
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languages and both AWX and the AMIEU (as the applicants’ representatives) were permitted
to attach a statement of not more than 400 words.
[5] In the result, 41 out of an eligible 475 employees voted and the Commissioner, after
considering this information together with the submissions of the parties, decided that it was
not contrary to the public interest to terminate the Agreement. The Commissioner decided the
matter on 9 August 2013 and fixed an operative date for the termination of the Agreement for
2 September 2013.
Principles on appeal
[6] It is well established that the applicable appeal principles in dealing with the
discretionary decisions involved in this matter, are those stated by the High Court in
House v R
“The manner in which an appeal against an exercise of discretion would be determined
is governed by established principles. It is not enough that the judges composing the
appellate court consider that, if they had been in the position of the primary judge, they
would have taken a different course. It must appear that some error has been made in
exercising the discretion. If the judge acts upon a wrong principle, if he allows
extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he
does not take into account some material consideration, then his determination should
be reviewed and the appellate court may exercise its own discretion in substitution for
his if it has the materials for doing so. It may not appear how the primary judge has
reached the result embodied in his order, but, if upon the facts it is unreasonable or
plainly unjust, the appellate court may infer that in some way there has been a failure
properly to exercise the discretion which the law reposes in the court of first instance.
In such a case, although the nature of the error may not be discoverable, the exercise of
the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”7
[7] The High Court in Coal and Allied Operations Pty Ltd v Australian Industrial
Relations Commission considered discretionary judgements as follows:
“‘Discretion’ is a notion that ‘signifies a number of different legal concepts’. In general
terms, it refers to a decision-making process in which ‘no one [consideration] and no
combination of [considerations] is necessarily determinative of the result.’ Rather, the
decision-maker is allowed some latitude as to the choice of the decision to be made.
The latitude may be considerable as, for example, where the relevant considerations
are confined only by the subject-matter and object of the legislation which confers the
discretion. On the other hand, it may be quite narrow where, for example, the decision-
maker is required to make a particular decision if he or she forms a particular opinion
or value judgment.”8
[8] We have approached these matters against the background of those decisions.
7 (1936) 55 CLR 499 in the following terms at 504-5.
8 203 CLR 194 at paragraph 19.
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Arguments on appeal
[9] It is appropriate to begin with the arguement that the application was, in truth, made
by the AMIEU and because it lacked standing to make such an application, then the
proceedings were not properly founded. Section 225 of the Act describes who can make an
application. It is argued that the AMIEU solicited employees to make the application as part
of an industrial campaign and therefore there was no genuine application by those named
employees. AWX pointed to what it said were irregularities in the application. This was
carefully considered by the Commissioner9. He examined each applicant and the role of the
AMIEU. The Commissioner removed some people from the list, but in the result concluded
that a proper application was on foot.
[10] We see no error in the Commissioner’s consideration of the matter. Whatever be the
contextual circumstances surrounding the applications, there was compliance with the
provisions of the Act. There is no suggestion that the persons named did not make the
application or that they were not genuine applications other than it was said to be a part of an
AMIEU campaign. Even if such a process was taken simultaneously with a campaign to
achieve an enterprise agreement it does not invalidate the application. The reason or otherwise
for seeking the termination of an enterprise agreement will be a merit consideration having
regard to the statutory directions contained in s.226 of the Act.
[11] We now move to the gravamen of the appeal, namely that s.225 was not applied
because of the low response rate to the questionnaire and the context in which the AMIEU ran
the case. It was argued by the appellant that the AMIEU portrayed AWX as a predator that
was engaged in systemic exploitation of a group of vulnerable employees and this should be
an important consideration when considering how best to establish the views of employees. It
was argued that the problem was compounded by the fact that:
these employees were from refugee backgrounds where many have no tradition of
the written word, and
there is a deep distrust of government, bureaucracy or officialdom.
[12] Against this background, it was submitted that it was naïve to take a course without
considering the particular circumstances of the cohort of employees who were being asked
about their views.
[13] AWX submitted that the Commissioner was also in error by relating his duty under
s.226(b)(i) of the Act with the test under s.182(1) of the Act. We turn firstly to this matter as
other considerations follow. The Commissioner stated:
I compared the submission of the Respondent with the approach adopted by the
Commission for the purpose of approval of enterprise agreements that involves the
daily and routine approval of enterprise agreements where the ballot result
demonstrates a majority of employees voting yes satisfied the requirement at s.182(1)
for the making of an agreement despite that majority who voted regularly being a
9 [2003] FWCA 4490 at paragraphs 11-26.
[2013] FWCFB 8726
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minority of employees.44 It is worth noting that Subdivision D of Division 7 of that Act
falls with Part 2-4. The requirement for the making of an agreement and its
subsequent approval in Division 4, or for variation or termination of an in-term
agreement in Division 7 does not require the support of a majority of employees; only
a majority of those who vote subject to other legislative requirements for proper
consultation. I do not accept that the ballot as conducted by the AEC was a failure
based on the number of ballots returned.10
[14] We note that the Commissioner footnoted that aspect of the decision which relates
to s.182(1). The relevant section of the transcript discloses:
The purpose of section 226, particularly when looked at in comparison to processes in
other matters - as I said, this is the high water mark for the purposes of trying to elicit
the views of employees. I guess I would add, when you look at the process for
agreement making where a ballot is conducted, it's a very common for turn outs in
ballots to be a minority of employees who are entitled to vote sometimes significantly
less than half the workforce but daily and routinely in this place those ballots are
accepted for the purposes of determining the approval of agreements11
[15] When properly read the Commissioner was not using s.182(1) as a test for the purpose
of s.226(b)(i) but simply illustrating that low turnouts in voting occur in applications for
certification of agreements and as such may not be unusual. It appears to us that he took that
no further. The Commissioner concluded that:
The evidence indicates efforts were made by the AMIEU and the Respondent over and
above the ballot process itself including the distribution of explanatory material in all
of the relevant languages in order for employees to consider the competing arguments
before voting. The Respondent had face to face discussions on 13 May with
interpreters present as referred to above to explain the process. Ms Giles said the
Respondent followed up employees by phone or email on 22 May. Certain employees
were provided email based on their known preferences and the Union separately
arranged face to face meetings at certain sites. Part of the explanation for the low
number of ballots returned may well be as discussed above that the outcome of the
ballot would have no direct bearing on the wages and conditions of many employees
being balloted and hence saw no reason to participate. For all of the reasons set out
above I am satisfied that the results of the secret ballot conducted by the AEC are
sufficient for me to be capable of taking account of the views of the employees for the
purposes of this application.12
[16] We are satisfied that the Commissioner did not apply the test contained in s.182 (1)
and as such this aspect of his decision is not infected by error. The statute simply requires that
the views of employees must be considered along with other matters. There is no fetter on that
consideration and s.182 (1) is not relevant for the purpose of taking the views of employees or
the employer into consideration. Section 226(b)(i) contains a requirement to consider views,
10 Ibid at paragraph 41.
11 Transcript before Simpson C at PN290.
12 Ibid at paragraph 53.
[2013] FWCFB 8726
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but those views are not binding and so much was agreed by AWX.13. This is unlike the
scheme of the Act when it comes to the certification of agreements.
[17] We now turn to the submission that because of the low vote, the Commissioner failed
to carry out the duty required of him under the Act and as such did not exercise jurisdiction. It
is put that such a low vote cannot be regarded as considering the views of employees. It was
submitted that because the Commission only had 12.42% of the views of employees it could
not take into account those views and therefore had not complied with the statutory
obligation.
[18] We begin an examination of this aspect by noting that the application of s.226 of the
Act is an exercise in discretion by the decision maker. The provision requires that an
instrument must be terminated if the Commission is satisfied that it is not contrary to the
public interest and after taking account of all the circumstances including the views of the
employees, each employer, and each employee organisation (if any), covered by the
agreement; and the circumstances of those employees, employers and organisations including
the likely effect that the termination will have on each of them.
[19] When asked what level of participation would constitute compliance with the
legislation AWX submitted that it would need to exceed 50%.14 In examining whether or not
the Commissioner had taken into account the views of employees, AWX submitted that it
would be silly to say that it had to be 100%.15 So, even on the submission of AWX, the
section did not require every employee to express a view so as to ground jurisdiction.
Therefore, it must follow that the Commission must be satisfied that employees had an
opportunity to express a view and were fully aware of the issues upon which they were being
asked to express a view.
[20] An examination of what occurred is instructive in this case as no doubt each case will
turn on its own facts. Briefly:
The parties agreed on the terms of the ballot, the ballot agent and the fact that a 400
word yes/no case would be attached to the ballot papers.
Meetings were held by both AWX and AMIEU for each to express its view on the
outcome it sought from the ballot.
For the AMIEU the “for” case highlighted:
(a) The modern award applying in the meat industry; and
(b) The entitlements under that award to penalties for working overtime, shift
allowances and paid rest breaks.
13 Appeal transcript PN196—197.
14 Appeal Transcript PN188.
15 Ibid, PN175.
[2013] FWCFB 8726
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The AMIEU stated that except for minimum wages the employees did not have the
protection of the modern award and highlighted the absence of enforceable
entitlements like overtime rates or shift allowances. The AMIEU highlighted the
nature of the agreement and urged employees to vote for its termination.
For AWX the “against” case highlighted:
(a) The assistance given by the company in relocating and settling in various
communities
(b) The fact that the company has contracts with various clients
(c) These contracts are long term and based on the current agreement
(d) If the agreement is terminated the contracts to provide “your” job may be in
jeopardy
In dealing with the situation of employees voting yes to terminate the agreement
AWX made it clear that employees may not be able to work at the current location;
clients may stop using AWX and “your” role cannot be guaranteed.
[21] It is clear to us, as it was no doubt to the Commissioner below that both sides were
taking this very seriously and communicating with the participants in the ballot. For the
AMIEU, it was highlighting the benefits of the modern award compared with the agreement
under which the employees were engaged. For AWX it was advising employees that a “Yes”
vote put their jobs and their community at risk. The various positions were translated into
employees’ first languages and the ballot was not subject to any criticism of being influenced
by venue. As we mentioned earlier, the employee’s normal place of work was in another
employer’s premises where entry by either the employer or the employees’ representative was
contingent upon the consent of the host employer.
[22] We are satisfied that employees would have well understood the strong views being
articulated by both sides of the argument. Another relevant fact is that the impact of
termination or otherwise of the agreement would only affect about 50% of the employees16 as
those not affected were being paid the same rates as the employees of the host employer or
award rates.
[23] We do not share the view of AWX that a simple examination of the response to a vote
is indicative or conclusive of the exercise of jurisdiction or not. Whether or not the
jurisdiction is exercised, will depend on the particular facts and the opportunities presented to
employees (or those covered by the agreement for that matter) to express a genuine view, free
from any form of coercion. Given the factual matrix in this case, we see nothing which would
lead us to disturb the Commissioner’s approach where he accepted that he was seized with the
views of employees permitting him to exercise jurisdiction. We add for completeness that the
Commissioner’s decision to prefer a secret postal vote was a discretionary decision which, in
the circumstances of this case, was not unreasonable.
16 Ibid PN294/295.
[2013] FWCFB 8726
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[24] We now turn to the financial impact on AWX. We agree with AWX that it did provide
evidence in that Mr Dart described that fact that he had fixed term contracts at fixed rates. He
further opined that if the Agreement was terminated it would have a material impact on the
business. However, it is also true that no material was put was which would have permitted an
objective analysis of economic impact on AWX in the event that the Agreement was
terminated. The substance of what the Commissioner found remains true; namely there is no
material upon which he could consider the detail of the financial impact on the Company.
This is particularly relevant against the background of the extent of the practical application
of the Agreement and the duration of contracts.
[25] Before turning to the public interest requirements, we touch on the submission that the
Commissioner erroneously found that the terms and conditions of employees are becoming
increasingly inconsistent which can at least, in part, be attributed to the continued existence of
the Agreement.17 We don’t think this is significant enough to identify it as an appealable
error. Even on the submission of AWX some 50% of employees do not draw their terms and
conditions of employment from the Agreement and given the contracts are said to be written
with the Agreement rates in mind, the Commissioner’s observations are not unreasonable.
[26] Finally, we turn to the public interest test in s.226(b) contained in the grounds of
appeal. AWX argued that the public interest was attracted by preserving the opportunities
which the company could provide under the Agreement for asylum seekers, released from
detention centres, with little or no English and workforce skills, to be assisted into the
workforce in country/provincial areas. In particular, it was argued by AWX that this
identifiable group of employees were benefiting from its approach as they received
meaningful training, employment and accommodation and did not end up in the black
economy. It was argued that the Commissioner was in error in reaching a conclusion about
migrants generally18 rather than the class of vulnerable persons being considered.
[27] We agree that the case was not put on the basis of migrant employees generally;
however we are not sure if this is a distinction without a difference. The role of AWX in
providing opportunities for this group of employees is important, but a part of the argument
by AWX was that it prevented this group from being a part of the black economy.19 We do
not accept that because competitors may not comply with award conditions or taxation laws
that this provides a basis for arguing that it would be contrary to the public interest to
terminate the Agreement. Further, the meaningful training was relatively short although full
productive capacity was longer.20
[28] We note the important contribution made by AWX to the lives of these asylum seekers
and accept that it is a relevant consideration to be balanced against minimum entitlements
provided under modern awards for any employee in Australia. We are not satisfied that the
observation of the Commissioner about migrant workers generally created a circumstance
where he took into account erroneous material or proceeded on an incorrect path.
17 [2003] FWCA 4490 at paragraph 114.
18 Ibid at paragraph 101.
19 Appeal transcript PN269.
20 [2003] FWCA 4490, paragraphs 86—90.
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[29] Finally, we turn to whether or not permission to appeal should be granted. This is a
matter which seeks to distinguish between employees generally and those with asylum seeker
backgrounds. We see no reason to discriminate in this regard. Modern awards constitute a set
of terms and conditions of employment which apply as minimum standards to employees
within the Australian community. An employee’s background is not, by itself, a relevant
consideration. The matters which are used to distinguish this group of employees such as
training, the avoidance of improper employment arrangements and the contribution being
made by the employer in securing and providing labour in its business, on the facts of this
case, were not made out before the Commissioner and we see no error in his findings.
[30] It is important to reflect on the modern award objective when considering whether or
not the termination of the Agreement would be contrary to the public interest. Section 134 of
the TPCA provides:
“(1) The FWC must ensure that modern awards, together with the National
Employment Standards, provide a fair and relevant minimum safety net of
terms and conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce
participation; and
(d) the need to promote flexible modern work practices and the efficient
and productive performance of work; and
(e) the principle of equal remuneration for work of equal or comparable
value; and
(f) the likely impact of any exercise of modern award powers on business,
including on productivity, employment costs and the regulatory burden;
and
(g) the need to ensure a simple, easy to understand, stable and sustainable
modern award system for Australia that avoids unnecessary overlap of
modern awards; and
(h) the likely impact of any exercise of modern award powers on
employment growth, inflation and the sustainability, performance and
competitiveness of the national economy.”
[31] The Commissioner examined all of the relevant factors which fall for consideration
when deciding whether or not to terminate the Agreement and to have as a safety net the
terms of the modern award under which the employees would be paid subject to them
reaching another agreement.
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[32] One final matter before concluding; we sought to further understand the possible cost
consequences of dismissing the appeal and setting aside the stay order. AWX relied on the
material put to the Commissioner and no further material was advanced which may have
assisted us in a full consideration of this matter.
[33] We are not satisfied that the appellant has identified appealable error in the
Commissioner’s exercise of his discretion. Given that these are matters which will rely
heavily on particular circumstances and that no matters of principle require determination, we
do not consider that it is in the public interest or otherwise to grant permission to appeal. We
set aside the stay order and dismiss the appeal.
DEPUTY PRESIDENT
Appearances:
J. E. Murdoch QC with C. Mossman, solicitor for AWX Limited.
E. Dalgleish for the Australasian Meat Industry Employees Union.
Hearing details:
2013.
Brisbane:
October, 3.
Printed by authority of the Commonwealth Government Printer
Price code C, AC304195 PR544209
SEAL OF FAIR THE AUSTRALIA ORK COMMISSION
