Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [2016] FWC 2481 of Vice President Watson at Melbourne on 17 May 2016 in matter number B2015/1766.

Introduction

[1] On 7 June 2016 MMA Offshore Vessel Operations Pty Ltd (MMA) lodged an appeal, for which permission to appeal was required, against a decision of Vice President Watson issued on 17 May 2016 1 (Decision) to grant a protected action ballot order2 on the application of the Maritime Union of Australia (MUA). There were two grounds of appeal, as follows:

“1. The Vice President erred by failing to have regard to relevant considerations, namely:

(a) whether the MUA had been and was pursuing substantive claims about non-permitted matters;

(b) the subject of those claims;

(c) the timing of the advancement of those claims and the basis upon which they were advanced;

(d) the significance of those claims to the negotiations;

(e) whether the MUA had any genuine belief as to the permissibility of those claims; and

(f) the fact that the MMAOVO 3 had placed in controversy the permitted status of those claims.

2. The Vice President erred by failing to give any, or any adequate, reasons for finding (at [22]-[24]) that the MUA had been and was genuinely trying to reach an agreement with MMAOVO.”

[2] Despite the fact that MMA lodged its appeal 21 days after the Decision, it sought an expedited hearing of the appeal on the basis that s.606(3) of the Fair Work Act 2009 (FW Act) did not permit the grant of a stay in relation to a protected action ballot order and MMA did not want to be exposed to the risk of damaging industrial action that might follow from the conduct of the ballot while its appeal was on foot. An expedited hearing was able to be arranged as requested by MMA, and the appeal was heard on 17 June 2016.

[3] At the conclusion of the hearing on 17 June 2016, we delivered our decision in relation to the appeal. We determined that permission to appeal would be refused, and indicated that we would issue our reasons for this decision at a later date. We now give those reasons.

The Decision

[4] The Decision was issued in response to an application for a protected action ballot order lodged by the MUA on 30 December 2015. Section 443(1) required the order sought to be granted if two specified conditions were satisfied as follows:

(1) The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a) an application has been made under section 437; and

(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

[5] The Decision identifies that MMA raised two arguments concerning whether the MUA’s application had validly been made under s.437. Those arguments were rejected, and a finding was made that the requirement in s.443(1)(a) was satisfied. The appeal did not challenge that finding. The Decision then dealt with the question of whether, for the purposes of the requirement in s.443(1)(b), the MUA had been genuinely trying and was continuing genuinely to try to reach an agreement with MMA. MMA’s submissions as to why the Commission could not be satisfied as to this matter were summarised in paragraph [18] of the Decision, and the contrary submissions of the MUA were summarised in paragraph [19]. The Decision then quoted from the Federal Court Full Court decision in JJ Richards & Sons v Fair Work Australia 4. Vice President Watson then set out a number of findings of fact in paragraph [21], and on the basis of the findings concluded as follows:

“[22] There is no doubt that the negotiations between the parties have been long and tortuous. Various proceedings in the Commission and the Court have fashioned the conduct of the parties to an extent. The history has included previous litigation about the genuineness of the MUA in trying to reach an agreement and allegations of taking positions for extraneous purposes. The parties remain apart on a large number of matters including the scope of any agreement. The positions of other unions and other employers in the industry are part of the context of the negotiations. The content of the negotiations is confused and confusing.

[23] The MUA campaigned against a positive vote for the agreement proposed by MMA Offshore in October 2015. It subsequently proposed its own agreement and has revised its position in certain respects. It has attempted to navigate around the outcomes of various proceedings and pending cases. Negotiations have been fraught and difficult. Agreements or understandings that have been made during the process may well have been modified. There may well be grounds for the parties to criticise each other over their respective positions. Certain claims by the MUA may not be about permitted matters under s.172(1) of the Act.

[24] In all of the circumstances I am satisfied that the MUA has been genuinely trying to reach an agreement with MMA Offshore and continues to do so. The efforts that it has made in relation to the negotiations appear to me to be exclusively directed to that objective. That is not to say that elements of its conduct cannot be subject to legitimate criticism. I am satisfied that the MUA has established the prerequisite for a protected action ballot order in s.443(1)(b).”

[6] The Decision finally dealt with the terms of the protected action ballot order to be issued.

Permission to Appeal

[7] As stated at the outset, there is no right to appeal under s.604 of the FW Act, and an appeal may only be made with the permission of the Commission. Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is “in the public interest to do so”, and permission to appeal may otherwise be granted on discretionary grounds.

[8] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 5 The public interest is not satisfied simply by the identification of error, or a preference for a different result.6 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...” 7

[9] Other than the special case in s.604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if leave is refused. 8 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.9 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.10

[10] Having regard to these principles, we determined to refuse permission to appeal for the following three reasons.

[11] First, we do not consider MMA’s grounds of appeal to be sufficiently arguable to support the conclusion that the Decision was attended with sufficient doubt to warrant its reconsideration or manifested any injustice. In relation to the first ground of appeal, the list of relevant considerations which the MMA identified as not having been taken into account was evidently drawn from paragraph [59] of the Full Bench decision in Esso Australia Pty Ltd v AMWU. 11 That decision was substantially concerned with the question of whether an applicant for a protected action ballot order who had, in the course of bargaining for an enterprise agreement, advanced a claim for a matter not permitted by s.172(1) of the FW Act to be included in the agreement could be found to be genuinely trying to reach an agreement under s.443(1)(b). The Full Bench said (emphasis added):

“[59] There is no legislative warrant for the adoption of a decision rule such that if an applicant is, or has been, pursuing a substantive claim which is not about a permitted matter it is not genuinely trying to reach an agreement within the meaning of s.443(1)(b). The fact that an applicant is, or has been, pursuing a claim about a non-permitted matter is relevant to whether the test posited by s.443(1)(b) has been met, but it is not determinative of the issue. A range of factual considerations may potentially be relevant in that context, including but not limited to the subject matter of the claim, the timing of the advancement of the claim, the basis upon which the claim is advanced, the significance of the claim in the course of the negotiations, the claimant’s belief as to whether the claim is about a non-permitted matter or not, where there is legal clarity about the permitted status of the claim, whether the other party has placed in contest whether the claim is about a permitted matter, and whether such a claim has been withdrawn and, if so, when and in what circumstances. The diversity of the factual circumstances and nuances which will be found in different cases means that it is not possible to say that any particular factor or consideration will always be determinative of the result.”

[12] The submission that whether the MUA had been and was pursuing substantive claims about non-permitted matters (appeal ground 1(a)) was not taken into account in the Decision is clearly incorrect. Paragraph [18] of the Decision expressly acknowledges the case advanced by MMA that the MUA had advanced substantive claims for non-permitted matters. That aspect of MMA’s case was specifically dealt with in Vice President Watson’s overall consideration of the matter in paragraphs [23]-[24] of the Decision. We consider that, on a fair reading of those paragraphs, MMA’s case was disposed of on the basis that, even if the MUA had advanced claims that were not about permitted matters, the proper conclusion having regard to all the circumstances was nonetheless that all the steps which the MUA had taken in relation to the negotiations were for the sole purpose of securing a new enterprise agreement with MMA. That was an approach which, as submitted by the MUA, effectively took MMA’s case at its highest for the purpose of the analysis and thus made it unnecessary to determine whether it was actually the case that the MUA had made claims about non-permitted matters. That approach was consistent with the Full Bench analysis in Esso quoted above, and with the further statement made in Esso that “[t]he adoption of a construction of s.443(1)(b) which would require the Commission to scrutinise each of the claims advanced by the applicant to determine whether they are about permitted matters is inconsistent with the object of Division 8 of Part 3-3 and the scheme of the FW Act” 12. It therefore does not follow that simply because Vice President Watson did not make findings about whether particular claims were about permitted matters or not, he did not have regard to that issue.

[13] In relation to the other matters identified in paragraphs (b)-(f) of MMA’s first ground of appeal which, it is contended, were not taken into account in the Decision, scant if any attention was paid to those matters in MMA’s submissions at first instance. To the extent that MMA dealt with these matters at all in its case, it was only in reply to submissions made by the MUA. Paragraph [59] of the Full Bench decision in Esso is not authority for the proposition that the factual considerations there referred to must all necessarily be given consideration in any decision made under s.442(1) of the FW Act; they are simply identified as examples of matters which may be of potential relevance. In circumstances where these considerations were not raised in any material way in MMA’s case at first instance, MMA being represented by experienced counsel, we do not consider it is reasonably arguable that Vice President Watson erred by not specifically adverting to these considerations in the Decision. 13

[14] The merit of MMA’s second ground of appeal, which alleged a lack of adequate or any reasons, falls to be assessed against the following principles concerning the provision of reasons stated by the Full Bench in Barach v University of New South Wales 14 (footnote omitted):

“[16] The duty to give adequate reasons for decision has been considered on many occasions. Important public policy considerations underlie this duty. In particular, the reasons for decision must be sufficient to allow the parties to exercise such rights of appeal as may be available and to enable an appeal bench to determine whether or not error has occurred in relation to a decision. Consequently the reasons given must articulate the essential grounds for reaching the decision and must address material questions of fact and law in a manner which discloses the steps which lead to a particular result. However the reasons for decision of a tribunal member need not be lengthy or elaborate and need not spell out every detail in the reasoning process or deal with every matter of fact or law which was raised in the proceedings.”

[15] The question required to be addressed in that part of the Decision the subject of the appeal was whether the MUA had been and was genuinely trying to reach an agreement with MMA. Because s.443(1)(b) refers to the Commission being “satisfied” as to this matter as a necessary precursor to a requirement to make a protected action ballot order, the making of a discretionary decision is involved. 15 In the Decision, a finding was made that the MUA had and was continuing to genuinely try to reach an agreement with MMA. The reason for that conclusion was clearly stated in paragraph [24] of the Decision as being that the efforts which the MUA had made in relation to the negotiations were exclusively directed to that objective. That reason was given against a background in which findings had been made that negotiations had been proceeding since December 2012, that the parties had exchanged correspondence containing their respective proposals for the enterprise agreement including a draft agreement produced by the MUA on 14 January 2016, that the MUA had attended meetings with MMA on 6, 7 and 28 October and 18 November 2015,16 that the negotiations had been long and tortuous17, that the MUA proposed its own agreement and revised its position in certain respects, and that the MUA had attempted to navigate its way through the outcomes of various proceedings and pending cases.18 It was not submitted by MMA that any of these findings were factually incorrect. They were matters which went to the efforts undertaken by the MUA to obtain an agreement and the motivation for its conduct, and properly founded the ultimate conclusion, and the reason for it, stated in paragraph [24] of the Decision.

[16] It was also significant that in his consideration under s.443(1)(b), Vice President Watson quoted 19 from the judgment of Flick J in JJ Richards & Sons v Fair Work Australia20 concerning the proper construction of s.443(1)(b). The passage quoted included the following:

“[58] It is ultimately concluded that s 443(1)(b) is to be construed such that Fair Work Australia cannot reach a state of satisfaction that an “applicant ... is ... genuinely trying to reach an agreement with the employer” unless:

● an applicant has approached the employer and informed the employer of the general ambit of that for which agreement is sought; and

● the employer has foreshadowed – even in the most general of terms – its attitude as to the proposed agreement.

More may be required. Much may well depend upon the factual scenario in which the terms of s 443(1)(b) are to be applied. But such a minimum statement of that which is required is sufficient to dispose of the present Application...

[59] So much, it is concluded, follows from the natural and ordinary meaning of the phrase “trying to reach an agreement ...”. It is difficult to conclude that any person can try to reach an agreement with another in the absence of a disclosure of that for which consensus is sought. One person may wish to reach an agreement with another. But, until the general content of the proposed agreement is disclosed, it cannot be said that he has even attempted to reach an agreement. Until disclosed, it is not known whether the other person will readily embrace the proposed agreement or shun it or (perhaps) embrace the concept of an agreement but wish to vary one or other of its terms. Until disclosed, the person seeking agreement has not even tried to solicit the response of the other. Unless the disclosure is genuinely with a view to reaching agreement, it could well be said that the attempt to reach an agreement falls short of a person even trying to reach agreement. The addition of the word “genuine” – on one approach to construction – perhaps adds little. But the addition of that term serves to emphasise the importance of a person actually trying to solicit agreement. Until a proposed agreement has been disclosed to the prospective parties, and a response solicited, an applicant has not even tried to reach agreement – let alone genuinely tried to reach agreement.”

[17] It is evident that the subsequent reasoning in the Decision was framed by what was stated in the above passage, particularly the identified minimum requirements for an applicant to have informed the employer of the general terms of what was claimed in an agreement and to have received a response thereto. The Decision directly addressed those minimum requirements by way of the findings and conclusions to which we have referred.

[18] The Decision also addressed the two principal submissions of MMA concerning the MUA’s alleged advancement of claims about non-permitted matters and its alleged breach of good faith bargaining orders. We have already discussed the way in which the Decision dealt with the first of these. The second was essentially dealt with in the same way. In paragraph [24] it was stated that elements of the MUA’s conduct might be the subject of legitimate criticism. This, again, effectively amounted to taking MMA’s case at its highest and finding that it did not affect the conclusion that the MUA was genuinely trying to reach an agreement having regard to the statement of principle in JJ Richards earlier quoted. It not having been submitted that a past breach of a good faith bargaining order by itself necessarily disbarred a finding that the MUA was genuinely trying to reach an agreement, it was not necessary in those circumstances for whatever legitimate criticisms which might have been directed to the MUA to be specified.

[19] The MMA’s complaint in the appeal appears to us to be in substance that the Decision did not deal fully with all the matters raised in the extensive case it advanced at first instance. In Linfox Australia Pty Ltd v Fair Work Commission 21 the Federal Court Full Court said in relation to the obligation of the Commission to provide adequate reasons in response to the case advanced by a party:

“[47] ... there remains no unqualified and universally applicable legal requirement to refer to every submission advanced. Much depends upon the importance of the submission to the claims being made. A failure to address a submission which is “significant” and which touches upon the “core duty” being discharged (Fox v Australian Industrial Relations Commission [2007] FCAFC 150 at [39] per Marshall, Tracey and Buchanan JJ) or which is “centrally relevant” to the decision being made (WAFP v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 319 at [21] per Lee, Carr and Tamberlin JJ; Soliman v University of Technology, Sydney [2012] FCAFC 146 at [55] to [56]; 207 FCR 277 at 295) may in some circumstances found a conclusion that it has not been taken into account and may thereby expose jurisdictional error.”

[20] We consider that the Decision addressed those submissions advanced by MMA which went to the core issue of whether the MUA was genuinely trying to reach an agreement with MMA. Vice President Watson was not obliged to produce a decision of a length commensurate with the length of the hearing and the volume of the evidence. We further consider that his reasons articulated the essential grounds by which the decision to grant a protected action ballot order was reached, and were sufficient to enable the appellate function to be properly exercised. We do not consider therefore that the second ground of appeal was sufficiently arguable to justify the grant of permission to appeal.

[21] The second reason for our refusal of permission is that the appeal grounds did not contend that the Decision contained any error of fact, or that the discretionary decision made by Vice President Watson in relation to his satisfaction under s.443(1)(b) was, on the facts as found, “unreasonable or plainly unjust” such as to permit the inference that “there has been a failure properly to exercise the discretion”. 22 That is, it was not contended in the appeal grounds that the conclusion reached under s.443(1)(b) was beyond the boundaries marking the range of outcomes which a legitimate exercise of the discretion might produce. That is a further basis for concluding that the Decision was not attended by sufficient doubt such as to warrant appellate review and did not manifest any injustice.

[22] The third reason is that the appeal did not raise any question of general application concerning the interpretation or application of s.443(1) that would justify the grant of permission in the public interest or on discretionary grounds. Section 443(1) has been well traversed in the decisions in JJ Richards and Esso, and the matter was decided in conformity with the principles stated in those decisions.

VICE PRESIDENT

Appearances:

M. Follett of counsel for MMA Offshore Vessel Operations Pty Ltd.

M. Ritter SC for the Maritime Union of Australia.

Hearing details:

2016.

Melbourne:

17 June.

 1   [2016] FWC 2481

 2   PR580401

 3   The acronym used in the Notice of Appeal for MMA.

 4   [2012] FCAFC 53, (2012) 201 FCR 297

 5   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]

 6   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]

 7   (2010) 197 IR 266 at [27]

 8   Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481

 9   Wan v AIRC (2001) 116 FCR 481 at [30]

 10   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]

 11   [2015] FWCFB 210, (2015) 247 IR 5

 12   Ibid at [64]

 13   See Linfox Australia Pty Ltd v Fair Work Commission [2013] FCAFC 157, (2013) 240 IR 178 at [48]

 14   [2010] FWAFB 3307; (2010) 194 IR 259

 15   Esso Australia Pty Ltd v AMWU [2015] FWCFB 210, (2015) 247 IR 5 at [54]

 16   Decision at [21]

 17   Decision at [22]

 18   Decision at [23]

 19   Decision at [20]

 20   [2012] FCAFC 53, (2012) 201 FCR 297

 21   [2013] FCAFC 157, (2013) 240 IR 178

 22   See House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ

Printed by authority of the Commonwealth Government Printer

<Price code C, PR581771>