[2011] FWAFB 6761 |
FAIR WORK AUSTRALIA |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
SENIOR DEPUTY PRESIDENT HARRISON |
|
Appeal against decisions [[2011] FWA 3490 and [2011] FWA 2670] of Senior Deputy President O’Callaghan at Adelaide on 2 June 2011 and 17 May 2011 in matter number AG2010/20176.
[1] The Construction, Forestry, Mining and Energy Union (CFMEU) has appealed the decision of Senior Deputy President O’Callaghan refusing to approve the Moyle Bendale Timber Pty Ltd Enterprise Bargaining Agreement 2010-2013 (the Agreement). This decision addresses the CFMEU grounds of appeal but should be read with our decision in respect of an appeal against the approval of the ADJ Contracting Pty Ltd Enterprise Agreement 2010-2014. 1 The appeal in that matter and this appeal were heard at the same time.
[2] Before us, Mr Irving appeared for the CFMEU. Moyle Bendale Timber Pty Ltd (the Employer) did not appear and made no submissions. Leave to intervene was sought by the Australian Industry Group (AIG) represented by Mr Wood, the Australian Mines and Metals Association Inc (AMMA) for whom Mr Follett appeared and the Australian Council of Trade Unions (ACTU) represented by Mr Fetter. In each case where counsel sought permission to appear it was granted. In each case where permission was sought to intervene to make submissions it was granted. We note that the Fair Work Act 2009 (FW Act) does not refer to an intervener however it was not in issue that an application to make submissions may be made by a person who is able to establish a relevant interest in the matters raised by the appeal grounds. 2
[3] The appeal is made under s.604 of the FW Act. The relevant parts of that section are:
“604 Appeal of decisions
(1) A person who is aggrieved by a decision:
(a) made by FWA (other than a decision of a Full Bench or the Minimum Wage Panel); or
(b) …
may appeal the decision, with the permission of FWA.
(2) Without limiting when FWA may grant permission, FWA must grant permission if FWA is satisfied that it is in the public interest to do so.
Note: …
(3) A person may appeal the decision by applying to FWA.”
[4] The Agreement was made between the Employer and its employees in Adelaide who are covered by the Timber Industry Award 2010. 3 The CFMEU was a bargaining representative during negotiations for the Agreement. It filed a notice under s.183 of the FW Act indicating that it wanted the Agreement to cover it. It appeared before His Honour and made submissions in support of approval of the Agreement. We should here note that the Employer appointed a bargaining representative to assist it during negotiations for the Agreement, a Mr Hayes who also appeared for the Employer before His Honour. He indicated to His Honour that the Employer supported the CFMEU submissions and little more was said. We accept that the CFMEU is a person aggrieved by His Honour’s decision to refuse to approve the Agreement.
[5] Two grounds of appeal are raised by the CFMEU. The first is that His Honour erred in law when he found that clause 7.12 of the Agreement was an unlawful term. There appears to be two subgrounds imbedded within this ground. The first is that His Honour erred when he “concluded that the Act prohibited any term of an agreement establishing a right of entry regime independent of that established by Part 3-4 of the Act”. The second subground was that His Honour was in error when he concluded at [43] that there “is no capacity to establish a right of entry regime which permits the avoidance of the obligation set out in s.196 by simply asserting that the purpose of the right of entry is separate from that specified in Part 3-4”.
[6] The second ground of appeal is that His Honour erred in law in his construction of clause 7.12 of the Agreement and the final paragraph of that clause in particular because, as the Appellant claimed, “[p]roperly construed, clause 7.12 does not provide an entitlement to enter premises for a purpose referred to in sections 481 and 484 of the Act. Accordingly it is not an unlawful term under s.194(f) of the FW Act”. There is some overlap between the grounds of appeal, a matter to which we will return below in our decision.
[7] Clause 7.12 of the Agreement reads as follows:
“7.12 Access to the Workplace
An official of the CFMEU-FFPD may have access to the Employer’s premises, at any time, for the following purposes connected to this Agreement:
to represent employees under any term of this agreement which creates a right to representation;
to deal with disputes and represent employees under the dispute resolution procedure set out in this agreement;
to represent employees and meet with the Employer about the negotiation of a replacement agreement;
to attend induction meetings for new employees of the company;
for any other purpose connected to the relationship between the Union and the employer.
Officials will not unduly hinder the productivity of the workplace. The union can, by agreement, hold paid meetings of union members for the purposes associated with this agreement identified above. Management will not unreasonably withhold agreement to paid meetings of union members.
However, nothing in this clause provides an official of the Union with a right to enter premises for a purpose which is within Part 3-4 of the Fair Work Act 2009.”
[8] Section 186 of the FW Act provides that if an application for the approval of an enterprise agreement is made under s.185, Fair Work Australia (FWA) must approve the agreement if the requirements set out in ss186 and 187 are met. The requirement in s.186(4) is relevant to this appeal. It reads as follows:
“Requirement that there be no unlawful terms
(4) FWA must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).”
[9] The meaning of unlawful term is in s.194 of the FW Act. The part relevant to this appeal reads as follows:
“194 Meaning of unlawful term
A term of an enterprise agreement is an unlawful term if it is:
[...]
(f) a term that provides for an entitlement:
(i) to enter premises for a purpose referred to in section 481 (which deals with investigation of suspected contraventions); or
(ii) to enter premises to hold discussions of a kind referred to in section 484;
other than in accordance with Part 3-4 (which deals with right of entry); [...]”
[10] The issues raised by the grounds of appeal were narrowed as a result of agreement between counsel for the CFMEU and AIG 4 about the construction that we should place upon s.194(f). In this respect we reproduce an extract from the CFMEU’s written submissions:
“21. The preferred construction of section 194 (f), and the Act’s scheme concerning terms in enterprise agreements about right of entry is as follows:
(a) Part 3-4 of the Act does not create an exclusive code governing the rights of officers to enter the employer’s premises.
(b) Enterprise agreements may include terms granting additional entitlements to officers to enter the employer’s premises, so long as the terms granting those additional right of entry entitlements is not an unlawful term under section 194 (f).
(c) A term is only an unlawful term under section 194 (f) if it grants an entitlement to enter premises for the purposes referred to in sections 481 or 484 of the Act other than in accordance with Part 3-4.
(d) It follows from points (a), (b) and (c) that a term is not an unlawful term under section 194 (f) if it grants a right of entry for a purpose not specified in sections 481 or 484 of the Act.”
[11] We accept the above construction of the relevant provisions of the FW Act. It is also a construction which is consistent with the Full Bench decision in Australian Industry Group and Pacific Brands Limited t/a Dunlop Foams 5 (Dunlop Foams) a decision which we will refer to later.
[12] We turn to the first aspect of the first ground of appeal. The CFMEU submits that His Honour concluded that s.194(f) of the FW Act prohibited any term of an agreement establishing a right of entry regime independent of that established by Part 3-4 of the FW Act. In this respect it refers to comments made by His Honour in paragraphs [28], [32], [35], [38] and [43] of his reasons. It submits that this construction of the FW Act is wrong and constitutes an error of law.
[13] Had His Honour made the finding CFMEU asserts we would have agreed it was in error. Although we accept that comments made in the various paragraphs referred to by the CFMEU, read in isolation, do suggest His Honour reached this conclusion, we think a fairer reading of the whole of his decision does not. His Honour made no express finding that Part 3-4 of the FW Act establishes an exclusive code governing right of entry. Nor did he expressly comment upon the proposition put to him by the CFMEU that an agreement might establish right of entry entitlements which were differentiated from those in ss481 and 484 of the Act, and which did not need to be exercised in accordance with Part 3-4 of the FW Act. There is, however, implicit endorsement of this proposition when His Honour made reference to qualifying provisions of other agreements, presumably with which he was familiar, which conferred purposes for right of entry that were not for purposes set out in s.481 or s.484 of the FW Act. 6 Further, had His Honour reached the conclusion asserted by the CFMEU he would not have needed to consider, as he did, the drafting of clause 7.12 and the decision in Dunlop Foams.
[14] We agree with the submission of the Appellant that the FW Act does not preclude an agreement from incorporating entitlements to right of entry that are not entitlements of the kind or for the purposes for which provision is made in Part 3-4 of the FW Act. A term of an agreement is only an unlawful term under s.194(f) of the FW Act where it provides for a purpose for right of entry that is for a purpose of the kind set out in ss481 and 484 of the FW Act and that is not limited in operation by reference to the provisions of Part 3-4. We are not persuaded His Honour held a view to the contrary. This disposes of the first aspect of the first ground of appeal.
[15] We now turn to the second ground of appeal and, in doing so, we will also deal with the second aspect of the first ground of appeal. They raise related considerations and can be dealt with together. In light of the agreed points of construction we have earlier referred to the primary issue in this appeal turns on the terms of clause 7.12 and whether, properly construed, it provides for any entitlement to enter premises for a purpose referred to in ss481 and 484. The CFMEU submitted that we should find that the rights granted by Part 3-4 of the FW Act and clause 7.12 are mutually exclusive. It submits that His Honour’s finding to the contrary was in error.
[16] AIG submitted that the drafting of clause 7.12 and the final paragraph in particular, did not save the clause from being unlawful. That paragraph did not qualify or place limits on the exercise of the right of entry for which the clause provides. It accepted that a clause may be narrowly drafted to provide for a right of entry which does not encompass the purposes referred to in ss481 and 484. However, in its submission, clause 7.12 was not such a clause and His Honour was correct to find it was an unlawful term.
[17] In considering whether clause 7.12 of the Agreement was unlawful in terms of ss186(4) and 194(f) of the FW Act, His Honour applied the approach set out by the Full Bench in Dunlop Foams. For the purposes of this appeal the following extract from that decision is adequate.
“[7] The agreement for which Dunlop Foams sought approval in this case contained a provision dealing with right of entry. The provision reads:
‘44 Right of Entry
An authorised NUW representative is entitled to enter at all reasonable times upon premises and to interview any employee, but not so as to interfere unreasonably with the Employer’s business.’
...
[33] This summary of the legislative provisions indicates that the Fair Work Act regulates the exercise of entry rights by a permit holder in a comprehensive way. There cannot be any doubt that if cl.44 had been drafted so as to apply to a permit holder it would have been clearly inconsistent with the regime established by Part 3-4. It should be noted, however, that s.194(f) does not strike at agreement terms which deal with a permit holder as such, but at agreement terms which deal with an entitlement relating to particular types of entry to premises.
[34] In order to be an unlawful term within s.194(f) an agreement term must have three elements. The agreement term must provide for an entitlement, the entitlement must be to enter premises for a purpose referred to in s.481 or to hold discussions of a kind in s.484 and the term must purport to permit entry other than in accordance with Part 3-4.
[35] We have no doubt that cl.44 provides for an entitlement. Subject to compliance with the prescribed conditions an authorised NUW representative may enter the premises at any time. Provided the conditions are complied, with there is nothing that Dunlop Foams can do to prevent or restrict entry. It is also clear that the entitlement, being unrestricted by reference to purpose, includes entry for the purpose referred to in s.481, namely investigation of suspected contraventions. Equally the entitlement extends to the holding of discussions with employees, the matter dealt with in s.484. Finally it is clear that cl.44 is not limited in its operation by reference to the provisions of Part 3-4. As we have seen, those provisions establish a regime of regulation of entry to premises based on the requirement to obtain a permit and to observe a number of procedures and rules.”
[18] It is worth noting the breadth of the terms of the clause considered in Dunlop Foams and the Full Bench’s comment that it was unrestricted by reference to purpose. The Full Bench concluded that the clause enabled rights of entry to be exercised for purposes of ss481 and 484 of the FW Act that would not be exercised in accordance with procedures and rules set out Part 3-4. The term before it therefore contravened s.194(f) of the FW Act, and the agreement could not be approved because of the effect of s.186(4).
[19] His Honour faced very different circumstances than those which faced the Full Bench in Dunlop Foams. Indeed it might be said he faced the converse case to that before the Full Bench. Rather than dealing with a clause of undefined scope and breadth, His Honour was required to deal with a clause which consisted of a number of particularised purposes for right of entry and contained, as it did, an express provision precluding the clause from extending to any entry that was for a purpose referred to in Part 3-4.
[20] His Honour placed little weight on the final paragraph of clause 7.12. He said he had “concluded that there is no capacity to establish a right of entry regime which permits the avoidance of the obligation set out in s.196 by simply asserting that the purpose of the right of entry is separate from that specified in Part 3-4”. 7 He went on to find that the purposes for right of entry in clause 7.12 of the Agreement included the purposes that are contemplated under Part 3-4 of the FW Act. Because of this, His Honour concluded that “clause 7.12 must represent an unlawful term”.8
[21] With respect, we do not agree with His Honour’s conclusion. It ignores the final paragraph of clause 7.12 about which we comment below. Before we do so however we note the CFMEU submission that even absent that final paragraph all of the purposes for entry in the clause may be achieved without undertaking any of the activities regulated by Part 3-4. These include the right to attend an induction meeting or to meet with the Employer about a replacement agreement. The CFMEU gave another example in its written submissions. That is where a union official enters premises to consult with an employer in the event of foreshadowed redundancies. The final paragraph of the clause however removes the need for us to express any conclusion about this submission.
[22] In our opinion the final paragraph of clause 7.12 of the Agreement serves more than to “simply” assert that the clause will operate in an intended manner. It is a term of the Agreement and has effect as such. The effect of the final paragraph is that the purposes for which right of entry to premises under that clause can be exercised do not include the purposes in Part 3-4 of the FW Act.
[23] We agree with the CFMEU’s submissions as to why clause 7.12 should be interpreted in the manner for which it contends. We summarise those submissions. First, when interpreting the clause it must be read as a whole and one cannot discount the final paragraph. Next, where there are two alternative constructions of a clause, one which would make it lawful and another which would make it unlawful then the construction of the clause that would make it lawful should be preferred. Third, giving effect to the intention of the parties is paramount in the construction of industrial instruments. When construing the terms of an industrial instrument account must be taken of the context in which the instrument was made. That context includes the factual and legal context. 9 The way in which the clause is drafted strongly suggests it was done with s.194(f) in mind. Its clear purpose is to ensure rights to enter premises are granted by the Agreement in a manner consistent with that subsection. Such a construction will give effect to the intention of the parties.
[24] In interpreting clause 7.12 we do not accept it as appropriate to assume a union official, when exercising rights under the clause, would do so in a way inconsistent with the clause nor that the official will make inaccurate or false assertions about their purpose. Nothing would be achieved by doing so. If in truth the purpose is one within Part 3-4 then the clause grants no rights and that part of the FW Act needs to be complied with.
[25] In our opinion the final paragraph in clause 7.12 of Agreement serves to confine the operation of the clause to those purposes for entry to premises that are not of the kind which are set out in ss481 and 484 of the FW Act. It is not an unlawful term and in finding it was His Honour was in error.
[26] Before we conclude, we observe that this decision is not likely to resolve the issue of right of entry for the duration of the Agreement. There is a risk that the operation of clause 7.12 of the Agreement may be the subject of future disputation between the CFMEU and the Employer should there be a contest as to whether the purpose for which entry is sought is one that falls under Part 3-4 of the FW Act or one for which entry is sought under clause 7.12. The prospect of such a dispute at the workplace level is not a consideration to which s.186(4) of the FW Act is directed. As we have earlier observed, if FWA is satisfied ss186 and 187 are complied with it must approve the agreement.
[27] We grant permission to the CFMEU to appeal and uphold the appeal. We quash the decision of the Senior Deputy President and, in its place, indicate that the Agreement should be approved. We refer to Senior Deputy President Harrison the task of issuing an approval decision in accordance with the FW Act.
SENIOR DEPUTY PRESIDENT
Appearances:
H. Borenstein, Senior Counsel for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
S. Wood, Counsel with J. Tracey for The Australian Industry Group.
M. Irving, Counsel for the Construction, Forestry, Mining and Energy Union.
M. Follett, Counsel for the Australian Mines and Metals Association Inc.
J. Fetter for the Australian Council of Trade Unions.
Hearing details:
2011.
Melbourne:
July 28.
2 Sections 589 and 590
4 PN398, PN548
6 PN23
7 PN43
8 PN 27, 44, 46.
9 Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10 and SDA v Woolworths SA Pty Ltd [2011] FCAFC 67
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