1
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Mining and Energy Union
v
MGI Piling (NSW) Pty Ltd; Bauer Foundations Australia Pty Ltd; Avo
Piling Management (NSW) Pty Ltd; Piling Contractors Pty Ltd T/A Piling
Contractors Pty Ltd
(C2015/7880)
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT SAMS
COMMISSIONER SAUNDERS
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.
1 [2015] FWC 7345
2 Decision at [25]
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DECISION
E AUSTRALIA FairWork Commission
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2
[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
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]
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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 K12 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;
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
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(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 out13, 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.
13 Decision at [12]-[22]
14 [2014] FWCFB 7940
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[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:
An enterprise agreement may confer or deal with the rights and obligations of an
employee organisation vis-à-vis the employees and a new agreement might displace
or alter those rights and obligations. Account should be taken of such matters in
deciding 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;17 and
The right, interest or legitimate expectation that is said to be affected by an
application to approve an enterprise agreement must be identified and understood
against the framework of enterprise bargaining and agreement making established by
the Act.18
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]
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[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 agreements20 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
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
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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 EA28 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
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.
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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
29 See Collinsville at [16]
[2016] FWCFB 2654
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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.
30 Re Ludeke; Ex parte The Customs Officers’ Association of Australia (1985) 155 CLR 513 at 520
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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.
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