1
Fair Work Act 2009
s.604 - Appeal of decisions
Aged Care Services Australia Group Pty Ltd
v
Health Services Union & Australian Nursing and Midwifery Federation
(C2017/1539)
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT CLANCY
COMMISSIONER JOHNS
MELBOURNE, 23 MAY 2017
Appeal against decision [[2017] FWCA 1201] of Deputy President Wells at Hobart on 2
March 2017 in matter number AG2017/165 – Permission to appeal – Finding of ambiguity or
uncertainty – Exercise of discretion – Retrospective amendment – Fair Work Act 2009, ss. 53,
54, 217 and 604.
Introduction
[1] This Decision concerns an application for permission to appeal by Aged Care Services
Australia Group Pty Ltd (“ACSAG”) against a Decision of Deputy President Wells handed
down on 2 March 2017.1 The Decision of the Deputy President under section 217 of the Fair
Work Act 2009 (Cth) (“the Act”) was to make a variation to remove an ambiguity and/or
uncertainty in the Aged Care Services Australia Group Pty Ltd – Nurses and Aged Care
Employees Enterprise Agreement 2014 (“the 2014 Agreement”). The 2014 Agreement was
approved on 28 October 2014. It commenced operation 7 days later on 4 November 2014.
The application to vary the 2014 Agreement was made by ACSAG on 20 January 2017.
[2] At the hearing of the appeal on 17 May 2017, Mr R. Dalton, of Counsel, appeared on
behalf of ACSAG with permission pursuant to section 596(2)(a) of the Act. We were
satisfied that the matter was invested with sufficient complexity such that we would be
assisted in the efficient conduct of the matter if we granted ACSAG permission to be
represented. Mr J. Eddington appeared on behalf of the Health Services Union (“HSU”).
Background
[3] The 2014 Agreement contains a coverage clause which states that:
“5 Coverage
This Agreement shall cover:
1 [2017] FWCA 1201.
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DECISION
E AUSTRALIA FairWork Commission
[2017] FWCFB 2806
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(a) Aged Care Services Australia Group Pty Ltd; and
(b) Nurses and Aged Care employees employed by Aged Care Services Australia
Group Pty Ltd as classified in Schedule 3 of this Agreement; and
(c) subject to the requirements of the Fair Work Act 2009, the Australian Nursing and
Midwifery Federation Tasmanian Branch (‘ANMF’), and the Health Service[s] Union,
Tasmania No. 1 (‘HACSU’).”
[4] In its application to vary the 2014 Agreement, ACSAG alleged clause 5 was
ambiguous. Before the Deputy President and before us, ACSAG contended that the wording
of clause 5 is ambiguous and that the clause should be varied to clearly define the employees
covered as being employees of ACSAG “employed in Tasmania”.
Decision
[5] In her Decision, the Deputy President:
a) Had regard to the authorities relevant to the exercise of the discretion under section
217 of the Act and predecessor provisions;2
b) Determined that:
“[23] Having applied the principles espoused in these authorities I am
satisfied that, on an objective assessment, and considering the context of clause
5 and the combination of Schedule 3, and clauses 27 and 38, the employees to
be covered by the Agreement is susceptible to more than one meaning and is
therefore ambiguous.”
c) Observed that:
“[24] It is clear from the documentation provided by ACSAG with its
submissions that the voting and approval process undertaken with the
Agreement in 2014 involved only ACSAG’s Tasmanian employees, and that
neither the ANMF nor the HSU raised any concerns involving the coverage of
the Agreement, or the voting process for its approval.
[25] ASCAG have established, on an objective assessment, an arguable case
for the contention that coverage of the Agreement can be read to include only
those of its employees classified under Schedule 3 of the Agreement and
employed within Tasmania.
[26] I am also satisfied that on reading clause 5, in isolation of the other
provisions of the Agreement, that a conclusion could be drawn that the
Agreement covers ACSAG employees classified under Schedule 3 of the
Agreement, regardless of where they work.
2 [2017] FWCA 1201, [18]-[20].
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[27] As I have determined that ambiguity and/or uncertainty exists as to clause
5(b) of the Agreement, I am of the view it is appropriate for the Commission to
exercise its discretion under s.217 to remove that ambiguity or uncertainty, to
provide clarity to all parties covered by the Agreement.”
d) Concluded that:
“[28] In conclusion, I am satisfied that the intention of the parties was that the
Agreement would cover employees of ACSAG as described in Schedule 3 of
the Agreement and that are employed in Tasmania. It is appropriate to vary the
Agreement by inserting the words “employed in Tasmania” at the end of sub
clause (b) of clause 5.
[29] Accordingly, the application is granted and the variation, as sought, will
operate from today.”
e) Varied the 2014 Agreement by inserting the words “employed in Tasmania” at the
end of sub clause (b) of clause 5 (“Variation Order”).
The Appeal
[6] In the appeal, no attack was made on the central finding of the Deputy President that
clause 5 was ambiguous and that it should be amended by the Variation Order.
[7] The appeal focused solely on the Deputy President’s decision to amend the 2014
Agreement with prospective effect from the date of the Decision (2 March 2017), rather than
retrospectively from the date that the 2014 Agreement commenced operation (4 November
2014).
Nature of the Appeal
[8] An appeal lies with the permission of the Commission. The Commission must grant
permission if it considers that it is in the public interest to do so. Other grounds for granting
permission may also be available. The Decision to approve the variation involves the
application of a number of statutory tests, many of which involve the exercise of discretion as
described by the High Court in Coal and Allied v AIRC.3 In that case, Gleeson CJ, Gaudron
and Hayne JJ said:4
“‘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.” (references omitted)
3 Coal and Allied v AIRC [2000] HCA 47; 203 CLR 194; 74 ALJR 1348; 99 IR 309; 174 ALR 585 (31 August 2000).
4 Coal and Allied v AIRC [2000] HCA 47; 203 CLR 194; 74 ALJR 1348; 99 IR 309; 174 ALR 585 (31 August 2000) at [19].
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[9] Discretionary decisions are subject to review on the grounds expressed by the High
Court in House v The King:5
“The manner in which an appeal against an exercise of discretion should 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.”
[10] Insofar as any aspect of the Decision is not properly considered a discretionary
decision, we are required to determine whether the Decision is correct.6
[11] The Decision involves a number of conclusions and a principal finding that the 2014
Agreement contained an ambiguity that was to be remedied by making an amendment to
clause 5 with prospective operation. The grounds of appeal seek to challenge only that aspect
of the Decision that relates to the prospective nature of the amendment.
The Grounds of Appeal
[12] The grounds of appeal advanced by ACSAG are that:
The Deputy President erred in failing to consider ACSAG’s application for the
section 217 Variation Order to operate from 4 November 2014, the
commencement date of the 2014 Agreement;
The Deputy President erred in not providing any reason for giving the Variation
Order a prospective operation, and not a retrospective operation as sought by
ACSAG;
In giving the Variation Order a prospective operation and not a retrospective
operation as sought by ACSAG, the Deputy President failed to take into account a
material consideration, being the fact (as found by the Deputy President at [28] of
the Decision) that the common intention of the parties was that the geographical
scope of the 2014 Agreement was limited to the State of Tasmania.
5 House v The King (1936) 55 CLR 499 at [504]-[505] per Dixon, Evatt and McTiernan JJ.
6 Pawel v Australian Industrial Relations Commission (1999) 94 FCR 231.
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Permission to Appeal
[13] ACSAG submits that it is in the public interest for the Commission to grant permission
to appeal for reasons, including that:
It is in the public interest to grant permission to ACSAG to appeal on the first
appeal ground, given that the appeal ground identifies an injustice, being the
failure of the primary decision-maker to consider the part of the ACSAG’s section
217 application seeking retrospectivity; and
More generally, permission to appeal should be granted on conventional grounds.
The Decision is attended with sufficient doubt and ACSAG would suffer
substantial prejudice if permission were refused, as it could be exposed to potential
unwarranted underpayment claim in respect of its employees outside Tasmania
who worked in the retrospective period.
ACSAG’s Submissions
[14] ACSAG submitted that:
Appeal ground 1
The Deputy President was required to give the claim for retrospectivity proper and
genuine consideration;7 and
As a ready inference drawn from the absence of the reasons on the retrospectivity
point, the Deputy President erred in failing to consider the case for retrospectivity.
This is a jurisdictional error, being a failure to have regard to a submission
centrally relevant to the Decision being made.8
Appeal ground 2
It sought a variation order that would operate retrospectively from 4 November
2014;
It filed written submissions addressing the claim for a retrospective operation of
the Variation Order, which was central to its case;
The only part of the Decision that deals with the operative date of the Order is at
paragraph [29] (where the Deputy President determined that the Variation Order
would operate from 2 March 2017);
Having found (correctly) that the parties’ common intention was to limit the
geographical scope of the 2014 Agreement to Tasmania, the Deputy President was
required to connect those findings to her ultimate conclusion, not only to the
7 Islam v Cash [2015] FCA 815 at [14]; Tickner v Chapman (1995) 57 FCR 451 at 462; Minister for Immigration and
Citzenship v Khadgi (2010) 190 FCR 248 at [57]-[58], [63].
8 Linfox Australia Pty Ltd v Fair Work Commission(2013) 240 IR 178 at [47].
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merits of the Variation Order, but also the merits of ACSAG’s claim for a
retrospective operation of that Variation Order;
In deciding the variation would have a prospective operation only, the Deputy
President drew no such connection. There was no mention in any part of the
Decision to the request for a variation to operate retrospectively, let alone any
evaluation of the reasons advanced as to why retrospective operation was
appropriate; and
The Deputy President failed to give reasons why she made the Variation Order
operate prospectively, as opposed to retrospectively. This was an error of law.9
Appeal ground 3
The findings made by the Deputy President at paragraphs [24] and [28] of the
Decision were matters relevant not just the merits of whether the Variation Order
should be made, but also relevant to the question of whether the Variation Order
should operate retrospectively. There is nothing in the Decision that indicates the
Deputy President took these matters into account in deciding upon the operative
date of the Variation Order; and
This was a House v King error because the Deputy President failed to take into
account a relevant consideration.
The Unions’ Submissions
[15] On 9 May 2017, the Australian Nursing and Midwifery Federation wrote to the
Commission and indicated that it would not be filing submissions in respect of the appeal and
would not appear at the appeal hearing.
[16] Nonetheless, on 9 May 2017, the HSU filed an outline of submissions. However,
before us, the HSU indicated that it withdrew its objection to the granting of permission to
appeal and no longer relied upon its submissions filed in the matter.
Consideration – Appeal ground 1
[17] We consider the ACSAG’s first ground of appeal determinative of the appeal.
[18] In the present matter:
ACSAG made an application for a variation to the 2014 Agreement and for that
variation to be made retrospectively;
In its submissions, ACSAG sought Orders including that the Variation Order apply
retrospectively;
The Decision does not address the issue of retrospectivity;
9 Soliman v University of Technology Sydney (2012) 207 FCR 277 at [50].
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The Order made was prospectively;
The Deputy President did not put ACSAG on notice that she was going to order
that the Variation Order apply prospectively rather than retrospectively; and
consequently
ACSAG was denied procedural fairness in relation to the date of operation of the
Variation Order.
[19] Thus, ACSAG was not given an opportunity to make submissions about the
prospective operation of the Variation Order. We are satisfied this was a denial of procedural
fairness and an appealable error. We are satisfied that it is in the public interest to grant leave
to appeal. On the basis of that finding, we have decided to quash the Decision and Order of
Deputy President Wells.
Rehearing
Ambiguity
[20] As stated above, in the appeal before us, there was no attack made on the central
finding of the Deputy President that clause 5 was ambiguous and that it should be amended by
the Variation Order.
[21] For the reasons stated by the Deputy President, we too are satisfied that:
On reading clause 5, in isolation of the other provisions of the Agreement, that a
conclusion could be drawn that the 2014 Agreement covers ACSAG employees
classified under Schedule 3 of the Agreement, regardless of where they work;
That potential reading of clause 5 gives rise to an ambiguity;
Having determined ambiguity exists as to clause 5(b) of the Agreement, it is
appropriate to exercise our discretion under section 217 to remove that ambiguity
and to provide clarity to all parties covered by the 2014 Agreement;
It was the objective intention of the parties that the 2014 Agreement would, from
its commencement, cover employees of ACSAG as described in Schedule 3 of the
Agreement and that are employed in Tasmania; and
It is appropriate to vary the 2014 Agreement by inserting the words “employed in
Tasmania” at the end of sub clause (b) of clause 5.
Retrospectivity
[22] The Commission has the power to vary an existing enterprise agreement with
retrospective effect in circumstances where a decision to vary matters giving rise to an
ambiguity or uncertainty is made.10
10 Qantas Airways Limited [PR550766] and MSS Security Pty Ltd [2016] FWCA 2774.
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[23] In the present matter, having determined that it was the objective intention of the
parties that the 2014 Agreement would, from its commencement, cover employees of ACSAG
as described in Schedule 3 of the Agreement and that are employed in Tasmania, it
necessarily follows that the Variation Order that we make apply from the commencement of
the 2014 Agreement; that is to say, the Variation Order that we make should apply
retrospectively.
Conclusion
[24] For the above reasons we grant permission to appeal and uphold the appeal. Further,
on the rehearing of the matter we are satisfied that:
The 2014 Agreement contains ambiguity and that, consequently;
It should be varied by inserting the words “employed in Tasmania” at the end of
sub clause (b) of clause 5; and
The variation should apply from the date that the 2014 Agreement commenced
operation on 4 November 2014.
Orders
[25] We order that:
1. Permission to appeal is granted;
2. The appeal is upheld;
3. The Decision of Deputy President Wells is quashed;
4. The 2014 Agreement is varied by inserting the words “employed in Tasmania” at
the end of sub clause (b) of clause 5 (Our Variation Order); and
5. Our Variation Order will commence from 4 November 2014.
VICE PRESIDENT
Appearances:
R Dalton, of Counsel, for the Aged Care Services Australia Group Pty Ltd.
J Eddington for the Health Services Union.
OMMISSION CO THE SEAA THE FAIR WORK
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Hearing details:
2017
Melbourne:
17 May.
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