[2018] FWC 2441
The attached document replaces the document previously issued with the above code on 23
May 2018.
A typographical error in paragraph [19] has been corrected.
Ingrid Stear
Associate to Vice President Hatcher
Dated 26 February 2019
1
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Metropolitan Fire and Emergency Services Board
(AG2018/1278)
VICE PRESIDENT HATCHER SYDNEY, 23 MAY 2018
Application for referral to a Full Bench - Fair Work Act 2009 (Cth) – s 615A.
Introduction
[1] On 3 April 2018 the Metropolitan Fire and Emergency Services Board (MFESB) made
an application pursuant to s 185 of the Fair Work Act 2009 (FW Act) for the approval of the
Metropolitan Fire and Emergency Services Board & United Firefighters Union Operational
Staff Agreement 2016 (Agreement).
[2] In correspondence addressed to the President dated 11 April 2018, an application was
made by the Honourable Craig Laundy MP, Minister for Small and Family Business, the
Workplace and Deregulation (Minister), for the MFESB’s application for approval of the
Agreement to be referred to a Full Bench for hearing and determination by way of a direction
under s 615A. Omitting formal parts, the Minister’s correspondence stated:
“I refer to the application to approve the Metropolitan Fire and Emergency Services
Board & United Firefighters Union of Australia Operational Staff Agreement 2016
(Agreement).
I write to apply under section 615A(2)(b) of the Fair Work Act 2009 (Fair Work Act)
for you to direct a Full Bench to deal with the application to approve the Agreement. I
consider there to be strong public interest considerations in having this matter
considered by a Full Bench.
The Agreement is large and complex, consisting of 321 pages and a number of highly
prescriptive clauses. There has been significant public controversy in relation to the
terms and conditions of the Agreement.
There may be significant questions as to whether the Agreement includes unlawful
terms, specifically, discriminatory terms and objectionable terms, as well as terms that
may be inconsistent with the Fair Work Act or other legislation.
I also understand that the Victorian Equal Opportunity and Human Rights
Commission (VEOHRC) has drafted a report arising from its Independent Review into
Equity and Diversity issues within Metropolitan Fire Brigade and Country Fire
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DECISION
E AUSTRALIA FairWork Commission
[2018] FWC 2441
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Authority. Commissioner Kristen Hilton has publicly stated that the “equity and
diversity problems within the [Victorian] fire services are well documented over the
past few years and the case for change is clear”. While the Report has not yet been
published, the views of the VEOHC demonstrate that the Agreement should be
carefully scrutinised by a Full Bench to ensure that its terms are lawful and promote
cooperative, productive and inclusive workplace relations within the Metropolitan Fire
Brigade.”
[3] Section 615A, pursuant to which the Minister’s application was made, provides as
follows:
615A When the President must direct a Full Bench to perform function etc.
(1) The President must direct a Full Bench to perform a function or exercise a power
in relation to a matter if:
(a) an application is made under subsection (2); and
(b) the President is satisfied that it is in the public interest to do so.
Note: The President gives directions under section 582.
(2) The following persons may apply to the FWC to have a Full Bench perform a
function or exercise a power in relation to a matter:
(a) a person who has made, or will make, submissions for consideration in the
matter;
(b) the Minister.
[4] On 27 March 2018, the President delegated to me all his powers and functions under
the FW Act, except under s 581A(1)(b) and ss 620 and 625, for the period from midday on 27
March 2018 through to 25 April 2018. This general delegation encompassed the Minister’s
referral application. After the general delegation expired, on 3 May 2018 the President
delegated his functions and powers under ss 582, 615 and 615A of the FW Act specifically in
respect of the Minister’s referral application to me pursuant to ss 582 and 584 of the FW Act.
Accordingly it is necessary for me to determine the Minister’s referral application pursuant to
these delegations.
Submissions
[5] On 24 April 2018 the Minister, pursuant to the Commission’s directions, filed written
submissions in support of his application. In those submissions, the Minister submitted that
the referral of the application to approve the Agreement to a Full Bench would be in the
public interest having regard to the following matters:
The law is not settled as to whether the FW Act, in the context of discriminatory
and objectionable terms under s 194, prohibits terms of industrial instruments that
indirectly discriminate against certain employees. In particular, conflicting
authority exists between Klein v Metropolitan Fire and Emergency Services Board
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[2012] FCA 1402 (Klein) and Shop, Distributive and Allied Employees
Association v National Retail Association & Anor (No 2) [2012] FCA 480 (SDA).
If the FW Act protects against indirect discrimination, a number of the terms of the
Agreement are of concern, such as: restrictions on the availability of part-time
work that indirectly discriminate against MFESB employees who are women, have
family or carer’s responsibilities or are disabled; and terms that require or permit
adverse action against MFESB employees who are non-union members by
requiring the approval of the United Firefighters’ Union (UFU) for their operation,
by providing for a member of a dispute panel to be nominated by the UFU, and
providing only for UFU membership on certain committees.
Potential problems with the Agreement have been acknowledged in the Form F17,
suggesting that the MFESB’s attention has been drawn to questions concerning the
lawfulness of some Agreement terms, but has not satisfied itself as to whether
these terms are lawful or not.
An important question arises as to whether a provision such as clause 3.1.11 of the
Agreement (which states, “in implementing the Agreement the parties will act
consistently with equal opportunity and anti-discrimination legislation”) has any
and, if so, what effect, where a provision is discriminatory or objectionable.
The issues raised by the application have significant wider implications beyond
this matter. It is in the public interest that decisions about the operation of the FW
Act regarding novel or unsettled questions of potential concern to Australian
workplaces are legally sound and ensure certainty of rights and obligations for
employers and employees.
This matter has attracted public controversy, and has been the subject of inquiry
and report by the VEOHRC. Public confidence in the workplace relations
arrangements underpinning this essential service is likely to be promoted by
referral to a Full Bench.
While applications under s 615A of the FW Act have not previously been granted
where it was considered that there was no divided authority on the question of the
proper construction of the FW Act, the objects of the FW Act include “enabling
fairness and representation at work and the prevention of discrimination”.
The public interest would be served by consideration of the FW Act’s
interpretation by a Full Bench of the Commission.
[6] The Minister’s application for referral to a Full Bench is opposed by the MFESB and
the UFU.
[7] In response to the submissions filed by the Minister, the MFESB submitted that there
were insufficient public interest considerations to warrant referral of the application to a Full
Bench for the following reasons:
Klein and SDA were not conflicting authorities, as Klein was concerned with the
meaning of the expression “discriminates between” in s 342 in the context of an
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application under Pt 3-1 of the FW Act, whereas SDA was concerned with an
application under s 153, a provision which was relevantly identical to s 195, and
made clear that the meaning did not extend to indirect discrimination;
the proposition that there were terms of the Agreement that required or permitted
adverse action was inconsistent with the Federal Court Full Court decision in
United Firefighters Union of Australia v Country Fire Authority1 as well as Klein;
to the extent that there was any conflict between Klein and SDA, that would need
to be resolved at the Federal Court Full Court level;
the application for approval of the Agreement did not raise any novel issues
concerning indirect discrimination or objectionable terms;
the Minister had available to him the review mechanism in s 605 to address any
first instance decision which the Minister considered to be contrary to the public
interest;
to the extent that the Minister contended that there were any indirectly
discriminatory terms, it would be necessary for the Minister to adduce evidence to
establish that the terms would disproportionately disadvantage each of the
identified groups, and any evidentiary contest would best be dealt with by a single
member;
the Form F17 merely reflected that it was for the Commission to be satisfied under
s 186(4) that the Agreement contained no unlawful terms; and
the fact that the Agreement application might have attracted public controversy did
not mean that there were public interest considerations.
[8] The UFU likewise submitted that there no public interest grounds supporting the
referral because there was no conflict between the decisions in Klein (which relevantly dealt
with the expression “discriminates between”) and SDA (which dealt with the expression
“discriminates against”).
Consideration
[9] The general principles relevant to the determination of an application under s 615A of
the FW Act were set out in Collinsville Coal Operations Pty Limited as follows (footnote
omitted):2
“[5] The issue for determination is whether I am satisfied that it is in the public interest
to refer the agreement approval application to a Full Bench. The expression ‘in the
public interest’, when used in a statute, imports a discretionary value judgment to be
made by reference to undefined factual matters and confined only by the subject
1 (2015) 228 FCR 497
2 [2014] FWC 3129, (2014) 246 IR 21
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matter, scope and purpose of the relevant statute. [O'Sullivan v Farrer [1989] HCA
61; (1989) 168 CLR 210 at 216 per Mason CJ, Brennan, Dawson and Gaudron JJ]
[6] Sections 577 and 578 of the FW Act are relevant to the exercise of the President’s
powers under s 615A.
[7] Section 577 provides as follows:
The FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that the FWC performs its
functions and exercises its powers efficiently etc. (see section 581).
[8] Section 578 directs the Commission to take into account, among other things, the
objects of the FW Act and ‘equity, good conscience and the merits of the matter’.
[9] Section 581 is also apposite. It provides, relevantly, that the President is
responsible for ensuring that the Commission performs its functions and exercises its
powers in an efficient manner.”
[10] In subsequent decisions made under s 615A, it has been determined that:
the number of employees affected by the substantive application does not, of itself,
enliven the public interest,3 but may do so where the number of employees is so
large as to be of public significance because of the potential economic and
commercial effects;4
the duration and nature of the substantive proceedings will be relevant, and where
a detailed evidentiary case involving a significant number of witnesses and hearing
days is required, that will usually mean that the matter is more appropriately dealt
with by a single member unless there are other countervailing considerations;5
the mere fact that the matter involves issues of public controversy does not enliven
the public interest;6
the mere fact that there may otherwise be no contradictor does not enliven the
public interest;7 and
3 Murdoch University v National Tertiary Education Union [2017] FWC 1553 at [17]
4 Penelope Vickers [2017] FWC 2609 at [14]
5 Murdoch University v National Tertiary Education Union [2017] FWC 1553 at [18]; Collinsville Coal Operations Pty Ltd
[2014] FWC 3129 at [11]; Lend Lease Building Pty Ltd and Ors [2014] FWC 5026 at [13]; Metropolitan Fire & Emergency
Services Board [2014] FWC 2498 at [17] – [18]; and Saeid Khayam v Navitas English Pty Ltd t/a Navitas English [2016]
FWC 8759 at [11]; Penelope Vickers [2017] FWC 2609 at [15]
6 Penelope Vickers [2017] FWC 2609 at [6] and [12]
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the public interest will not be attracted in relation to a question of the proper
construction of the FW Act where there is established and consistent authority on
the question.8
[11] The starting point for the consideration of the Minister’s application is that he intends
to oppose the approval of the Agreement, and the only basis disclosed for that opposition
appears to be that the Commission could not be satisfied, as required by s 186(4) of the FW
Act, that the agreement does not include any “unlawful terms”. Section 194 defines an
“unlawful term” to include, relevantly, a “discriminatory term” and an “objectionable term”.
“Discriminatory term” is defined in s 195(1) to mean:
(1) A term of an enterprise agreement is a discriminatory term to the extent that it
discriminates against an employee covered by the agreement because of, or for reasons
including, the employee's race, colour, sex, sexual orientation, age, physical or mental
disability, marital status, family or carer's responsibilities, pregnancy, religion,
political opinion, national extraction or social origin.
[12] The definition operates subject to certain exceptions set out in s 195(2) and (3). One of
the exceptions, in s 195(2)(a), is that a term does not discriminate against an employee if “the
reason for the discrimination is the inherent requirements of the particular position
concerned”.
[13] “Objectionable term” is defined in s 12 as follows:
"objectionable term" means a term that:
(a) requires, has the effect of requiring, or purports to require or have the
effect of requiring; or
(b) permits, has the effect of permitting, or purports to permit or have the
effect of permitting;
either of the following:
(c) a contravention of Part 3-1 (which deals with general protections);
(d) the payment of a bargaining services fee.
[14] The Minister’s submissions do not with precision identify the grounds of his intended
opposition to the approval of the Agreement, but appear to involve the contention that the
restrictions on the availability of part-time employment in the Agreement would be indirectly
discriminatory against women, people with family or carer’s responsibilities or persons with a
disability, and thus would constitute a discriminatory term, and that provisions in which UFU
approval of certain arrangements is required, the UFU only has the right to nominate a
member of the Disputes Panel, and certain committees only provide for UFU membership (on
7 CEPU v Metcher [2016] FWC 8731 at [26] and [41]
8 Mondelez Australia Pty Ltd [2018] FWC 2140
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the employee side) are terms that require or permit adverse action, and are thus (presumably)
objectionable terms as well as perhaps discriminatory terms.
[15] It was a fundamental element of the Minister’s submissions in support of a Full Bench
referral that there was a conflict between the single-member Federal Court decisions in Klein
v Metropolitan Fire and Emergency Services Board9 and Shop, Distributive and Allied
Employees Association v National Retail Association & Anor (No 2)10 as to whether the FW
Act protected against indirect, as distinct from direct, discrimination. In this respect it must be
accepted, contrary to the submission of the MFESB and the UFU, that there is a significant
degree of inconsistency between these two identified decisions. In SDA it was determined by
Tracey J that the requirement in s 153(1) that a modern award not contain terms that
“discriminate against an employee” for specified reasons did not encompass “indirect
discrimination”. Tracey J said:
“[52] The Act does not define the word “discriminate” or the words “discriminate
against”. The ordinary and natural meaning of the word ‘discriminate’ connotes the
making of distinctions: cf HBF Health Funds Inc v Minister for Health and
Ageing [2006] FCAFC 34; (2006) 149 FCR 291 at 295. In the context of s 153(1) this
involves the making of distinctions between employees whose employment is
regulated by the Award.
[53] It is next to be noted that not all discrimination is proscribed. What is proscribed
is discrimination against an employee. That means the making of
an adverse distinction between employees: cf Helal v McConnell Dowell Constructors
(Aust) Pty Ltd [2010] FCA 1462; (2010) 193 FCR 213 at [24] (per Ryan J). The
adverse distinction must be drawn for one of the reasons, including age, which appear
in the sub-section.
[54] As can be seen, the proscribed reasons for adverse discrimination are those which
are commonly dealt with in Federal and State anti-discrimination legislation.
Typically, such legislation defines discrimination so that it covers both direct and
indirect discrimination: see for example the Disability Discrimination Act
1992 (Cth) ss 4, 5 and 6; Sex Discrimination Act 1984 (Cth) ss 5, 6, 7 and 7B; Equal
Opportunity Act 2010 (Vic) ss 8 and 9. The reason that this was considered necessary
is, as Dawson and Toohey JJ pointed out in Waters v Public Transport
Corporation [1991] HCA 49; (1991) 173 CLR 349 at 392-3, because the proscription
of discrimination, without more, is not apt to pick up “facially neutral” discrimination
which is otherwise known as indirect discrimination. Indirect discrimination, as
defined in anti-discrimination legislation requires the imposition of a requirement or
condition which does not, in terms, distinguish between people on prohibited grounds
but which, in practice, adversely impacts on such people. It must be established that
the requirement or condition is one with which a substantially higher proportion of
persons who are not aggrieved by its operation are able to comply, that the
requirement or condition is not reasonable and that the aggrieved person is not able to
comply with it.
9 [2012] FCA 1402
10 [2012] FCA 480
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[55] No attempt has been made in the Act to provide an extended definition of the
term “discrimination”.
[56] It would be highly unlikely that the Parliament intended that s 153(1) could be
contravened by indirect discrimination. Awards typically contain many provisions that
discriminate between employees. Wage rates, for example, are usually fixed by
reference to criteria such as length of service and qualifications held. It is unlikely that
Parliament intended that such provisions could be impugned on the ground that they
indirectly discriminated on the grounds of age because younger employees as a group
would not have had the length of service, or the time to obtain the requisite
qualifications, in order to qualify for placement in the higher classifications which
attract higher wages.
[57] It is also to be observed that the exceptions to the general rule contained in s
153(1), which are to be found in sub-sections (2) and (3), all cover terms which would
meet the description of direct discrimination. A modern award may, for example,
discriminate on the ground of age by expressly providing for minimum wages for
young employees of a certain age or on the ground of disability when fixing wage
rates for such employees: see s 153(3).”
[16] Section 153 is not, for relevant purposes, distinguishable from s 195(1).
[17] In Klein, Gordon J considered whether s 342(1), which defines (in item 1(d)) “adverse
action” of the type prohibited by s 340 to include where the employer “discriminates between
the employee and other employees of the employer”, encompasses indirect discrimination. In
relation to the decision in SDA, Gordon J said:
“[94] The MFESB submitted that I should follow the recent decision in National Retail
Association (No 2) at [52]-[58] that the word “discriminate” did not extend to
“indirect discrimination”. I reject that contention. National Retail Association (No
2) considered s 153(1) of the FW Act and the phrase “discriminate against”. One of
the issues was whether s 153(1) could be contravened by “indirect discrimination”.
The Court held that it could not. The decision dealt with a different provision in the
FW Act. To that extent, it does not bind me.
[95] Further, even if the decision did bind me, I would decline to follow it. In
considering the phrase “discriminate against” and whether it extends to “indirect
discrimination” the trial judge referred at [54] to the High Court decision in Waters.
With great respect, I do not agree with his Honour’s analysis. After noting
that typically Federal and State anti-discrimination legislation defines discrimination
so that it covers both direct and indirect discrimination, the trial judge said that the
reason that was considered necessary was that, as pointed out by Dawson and Toohey
JJ in Waters at 392-3 (see [93] above), “the proscription of discrimination, without
more, is not apt to pick up ‘facially neutral’ discrimination which is otherwise known
as indirect discrimination”. A number of points need to be made. First, the analysis of
Mason CJ and Gaudron J (with which Deane J agreed) (see [91]-[92] above) is to the
opposite effect. The trial judge did not refer to this analysis. Second, such a view is
contrary to the historical source of the concept of “indirect discrimination” and, third,
as the trial judge himself recognised, the question is ultimately one of statutory
construction. Dawson and Toohey JJ’s analysis of whether conduct which was
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“facially neutral” would fall within one section or another was ultimately resolved by
construction of the statute. With respect, I do not consider that the extracted passage is
authority for the proposition advanced by the trial judge that “the proscription of
discrimination, without more, is not apt to pick up ‘facially neutral’ discrimination
which is otherwise known as indirect discrimination”.”
[18] Gordon J went on to conclude:
“[102] The MFESB’s submission proceeds upon a fundamental misconception of what
may constitute indirect discrimination. It is now recognised that an employer’s
particular reason for choosing a “facially neutral” criterion may in fact be its adverse
impact on a protected group. In another words, although the employer chose a
seemingly innocent or innocuous criterion, the employer did so for a prohibited reason
or basis. There is nothing in the language of Pt 3-1 of the FW Act that would support
limiting “discrimination” for the purposes of Item 1(d) of the definition of “adverse
action” in s 342 so as to exclude “facially neutral” or indirect discrimination of that
kind. As Mason J said in General Motors Holden Pty Ltd v Bowling (1976) 12 ALR
605 at 617 in relation to the predecessor of s 361 of the FW Act:
... the plain purpose of the provision [is to throw] on to the defendant the onus
of proving that which lies peculiarly within his own knowledge.”
[19] Although it may be characterised as obiter, paragraph [95] of Klein cannot be
disregarded. Gordon J expressed the view that, on the basis of the judgment of Mason CJ and
Gaudron J (with which Deane J agreed) in the High Court decision in Waters v Public
Transport Corporation,11 the expression “discriminate against” used in s 153(1) encompassed
indirect discrimination. Neither SDA nor Klein dealt directly with s 195(1), so they could be
not regarded as strictly binding on the question of whether that provision encompassed
indirect discrimination. Nonetheless either decision could be called in aid of the competing
propositions in that respect. It is also important to note that in United Firefighters' Union of
Australia v Country Fire Authority12 the Federal Court Full Court did not foreclose a future
argument that a provision in an enterprise agreement might constitute an objectionable term
on the basis of indirect discrimination.13 SDA was concerned only with award terms alleged to
be discriminatory under s 153(1), and not with objectionable terms as defined in s 12.
[20] However notwithstanding this, I am not satisfied that it is in the public interest to
direct under s 615A that a Full Bench determine whether the Agreement should be approved,
for the following reasons.
[21] First, a Full Bench of the Commission is obviously not in a position to resolve
authoritatively any conflict in decisions of the Federal Court.
[22] Second, although the Minister has not stated any intention to do so, it is difficult to
imagine that a seriously arguable case that a provision of the Agreement is indirectly
discriminatory could be advanced without adducing evidence at least going to the potential
11 [1991] HCA 49; (1991) 173 CLR 349
12 [2015] FCAFC 1; (2015) 228 FCR 497
13 Ibid at [230]
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effect of the term upon the identified disadvantaged groups of employees (to the extent they
actually exist in the MFESB’s workforce) and also perhaps demonstrating a discriminatory
intent on the part of those who made the Agreement (noting that the assessment of whether a
provision of an enterprise agreement is discriminatory or objectionable does not involve any
reverse onus). Additionally it could be expected that, in response to any evidence adduced by
the Minister in this respect, the MFESB would seek to rely upon the “inherent requirements
of the particular position” exception in s 195(2)(a), which would undoubtedly require it to
adduce evidence concerning the nature of its operations and the duties of firefighters. As
earlier stated, it is generally more appropriate for an evidentiary case of any significant
duration to be heard by a single member because although there is no practical impediment to
a Full Bench hearing and determining an evidentiary case, it is likely to be conducive of
unnecessary delay.
[23] Third, to the extent that the Minister’s case concerns those provisions of the
Agreement which mandate a particular role for the UFU, it raises issues which have been
dealt with in Federal Court decisions before. In Klein the Court rejected a claim that
provisions of an earlier MFESB enterprise agreement concerning the UFU’s right to nominate
persons to comprise the Consultative Committee constituted objectionable terms,14 and in
UFU v CFA the Full Court also rejected claims that provisions in another firefighters’
enterprise agreement which gave the UFU the right to determine the membership of two
workplace committees authorised discrimination against non-union staff.15 No novelty
therefore attaches to this aspect of the Minister’s foreshadowed case.
[24] Fourth, to the extent that the Minister raised issues concerning public confidence in the
workplace relations arrangements underpinning the provision of an essential service and the
object of the FW Act concerning the enablement of fairness and representation at work and
the prevention of discrimination at work, there is no basis to consider that those matters
cannot satisfactorily be addressed by the determination of the application for approval of the
Agreement by a single member. If the Minister is dissatisfied with the decision of the single
member in relation to the application such that he believes it to be contrary to the public
interest, he has the right to apply under s 605(1) for a review of the decision by a Full Bench.
Section 605(2) requires such a review to be conducted if the Commission is satisfied that it is
in the public interest to do so, without limiting when the Commission may conduct such a
review. Therefore any public interest concerns may be addressed by the use of this
mechanism.
[25] Finally, if the Commission is concerned that it cannot be satisfied pursuant to s 186(4)
that the Agreement does not contain unlawful terms by reason of the matters raised by the
Minister, it would nonetheless be open to the Commission to approve the Agreement pursuant
to s 190 by accepting undertakings from the MFESB which address those concerns. That
operates to diminish the significance of the issues raised by the Minister. I also consider that
any issue about appropriate undertakings could more efficiently be deal with by a single
member than a Full Bench.
14 [2012] FCA 1402 at [215]-[225]
15 [2015] FCAFC 1 at [220]-[236]
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[26] For the above reasons, the application for a direction that a Full Bench hear and
determine the application for approval of the Agreement is rejected.
VICE PRESIDENT
Appearances:
J. O’Sullivan for the Minister for Small and Family Business, the Workplace and
Deregulation.
C. O’Grady QC for the Metropolitan Fire and Emergency Services Board.
T. Dixon of Counsel and T. Sakkas for the United Firefighters’ Union of Australia.
Printed by authority of the Commonwealth Government Printer
PR606734
OF THE FAIR WORK MISSION THE
