DECISION

Fair Work Act 2009
s.156 - 4 yearly review of modern awards

4 yearly review of modern awards—Family & Domestic Violence Leave Clause
(AM2015/1)

4 yearly review of modern awards – Family & Domestic Violence Leave Clause – reconstitution of Full Bench.

[1] Matter AM2015/1 concerns a claim by the Australian Council of Trade Unions (ACTU) for a paid family and domestic violence leave clause to be inserted into every modern award. The background to the immediate issue in this matter, which for convenience I will refer to as the ‘constitution issue’, was set out in my Statement of 28 April 2017 1 (Statement). As related in the Statement:

‘On 27 February 2017 Vice President Watson published his decision in this matter. The Vice President’s resignation from the Fair Work Commission took effect on 28 February 2017. At the time of Vice President Watson’s resignation, the other two members of the relevant Full Bench (Deputy President Gooley and Commissioner Spencer) had not published their decisions and they sought my advice as to whether they may proceed to finalise and publish a decision in the matter, having regard to s.622 of the Fair Work Act 2009 (Cth) (FW Act).’ 2

[2] Written and/or oral submissions in relation to the constitution issue have been made by the ACTU, Australian Chamber of Commerce and Industry (ACCI), Australian Industry Group (Ai Group), Australian Meat Industry Council (AMIC), Master Plumbers Association of NSW and The Pharmacy Guild of Australia. These submissions were outlined in the Statement as follows:

‘In relation to the present matter, AM2015/1, it seems that the parties that appeared at the hearing on 4 April 2017 share a view that if Deputy President Gooley and Commissioner Spencer are in a position to hand down their decision(s) in the matter in accordance with the FW Act, then their decision(s) together with the earlier decision of former Vice President Watson could comprise the decision in this matter. However, the parties differ as to what, if anything, must be done to enable them properly to hand down their decision(s) and, if it is necessary to reconstitute the Full Bench for that to occur, whether a new Member of the Bench would be required also to issue a decision in the matter.

It seems that the ACTU and Ai Group (supported by AMIC and Master Plumbers Association of NSW) are of the view that the FW Act permits Deputy President Gooley and Commissioner Spencer now to hand down their decision(s) so as to complete the decision-making of the original Full Bench. In contrast, it seems that ACCI (supported by The Pharmacy Guild of Australia) is of the view that I must reconstitute the original Full Bench before Deputy President Gooley and Commissioner Spencer can properly hand down their decision(s). While ACCI is of the view that a new Member appointed to the Full Bench might exercise discretion not to issue his or her own decision (so that the decision of the reconstituted Full Bench comprises the decisions of the members of the original Full Bench), Ai Group considers that a new Member may be required to issue their own decision.

The parties also differ as to the operation of FW Act s.624 in the present circumstances. It seems that ACCI and Ai Group are of the view that if Deputy President Gooley and Commissioner Spencer were now to hand down their decision(s) then, even if there is a deficiency in the constitution of the Full Bench, s.624 would ensure their decision(s) are not invalid. However, the ACTU suggests that reading s.624 harmoniously with the other provisions Division 4 of Part 5-1 of the FW Act and s.618 in particular, has the result that s.624 would not operate to validate a decision made by a Bench with less than three Members. The ACTU also suggests that if there is at present no Full Bench for the purposes of making a decision in matter AM2015/1 then that is a Bench that ‘has emerged’ rather than one that was ‘constituted’ for the purposes of s.624.’  3 [endnotes omitted]

[3] I related in the Statement that:

‘… my concern is to find a process or outcome that will give certainty to the parties to this proceeding and to persons affected by any variations to modern awards that might arise from it. The ACTU’s claim in AM2015/1 is for a new paid leave entitlement to be inserted into every modern award. I am particularly concerned, if this proceeding was to result in variations to modern awards, about the potential at some time in the future for enforcement of an award obligation to be subject to collateral attack on the basis that there was no Full Bench decision or the Full Bench was not properly constituted.’ 4 [endnotes omitted]

[4] In the Statement I expressed a provisional view that I should seek certainty in the final disposition of matter AM2015/1 by referring questions of law to the Federal Court pursuant to s.608(1) of the FW Act. I also noted that such a referral is to be in the form of a ‘special case’, which must state the facts briefly but specifically and attach all documents necessary to enable the Court to decide the questions raised by the special case.

[5] The Attachment to the Statement set out on a provisional basis the statement of facts, questions of law and other materials proposed to be provided to the Federal Court. The parties and any other interested persons were requested to provide submissions on my provisional view that I should make a referral and also on the contents of the Attachment. In relation to the Attachment, the parties were asked, in particular, either to confirm that they concur with the proposed statement of facts and that in the context of those facts the Court’s answers to the questions will dispose of the constitution issue, or to propose alterations or additions to the statement of facts or the questions.

[6] The ACTU, Ai Group, ACCI, and AMIC lodged written submissions in response to the Statement. Having considered these submissions I have decided for the reasons below to refer to the Federal Court the questions that were set out in the Attachment to the Statement, with one deletion from the statement of facts.

[7] The terms of s.608(1) of the FW Act impose two conditions on the exercise of my discretion to refer a question for the opinion of the Federal Court: first, the question must be one ‘of law’, and second, the question must be one ‘arising in a matter before’ the Fair Work Commission (Commission). In respect of the second condition, the present circumstances are unusual in that I have initiated the proposal to make a referral rather than this being requested by a party to AM2015/1, and as the proposed questions bear upon how a decision can be obtained in the proceedings.

[8] The ACTU agrees that I should exercise my discretion to refer a question of law to the Federal Court under s.608(1), in order to ensure certainty in the final outcome of AM2015/1. The ACTU concurs with the proposed questions of law, statement of facts and other materials to be provided to the Court as set out in the Attachment to the Statement, and agrees that the Court’s answers to the proposed questions would dispose of the constitution issue. 5

[9] Ai Group reiterates its views on the constitution issue, but acknowledges that there are conflicting submissions before me and that the relevant issues are novel and have a potentially significant practical impact. 6 ACCI submits that there is ‘a real controversy’ before the Commission and, insofar as ‘referral to the Federal Court can provide an efficient and practical resolution’ it does not object to that course.7 AMIC submits that ‘certainty of outcome is of primary importance’, but reiterates its views on the constitution issue (and expresses some additional views on the issue).8

[10] Ai Group does not suggest any amendments to the proposed questions of law in the Attachment to the Statement. 9 ACCI submits that answers to the proposed questions of law will dispose of the relevant issues, but suggests three questions as an alternative to those proposed.10 AMIC also suggests a simplified approach to the questions of law.11 I am not satisfied that the answers to the questions suggested by ACCI and AMIC would necessarily dispose of the constitution issue and I do not adopt those suggestions.

[11] I am satisfied that the proposed questions of law in the Attachment to the Statement ‘arise in’ matter AM2015/1 for the purposes of s.608(1) of the FW Act, as pertaining to ‘an issue that actually exists’ 12. The constitution issue must be addressed in order to obtain a decision on the ACTU’s claim in matter AM2015/1 and, as I have previously observed, the decision in the matter could depend upon what position is taken on the issue13. I am also satisfied that answers to the proposed questions of law would dispose of the constitution issue.

[12] The discretion conferred by s.608(1) is to be exercised having regard to the purpose and objects of the FW Act. Section 577 is relevant in this regard. It provides that the Commission must perform its functions and exercise its powers in a manner that, amongst other considerations, ‘is fair and just’ and ‘is quick, informal and avoids unnecessary technicalities’. The discretion conferred by s.608 should, where possible and appropriate, be exercised in such a way as to avoid undue delay in the determination of matters before the Commission. Such an approach is consistent with that taken by a number of Full Benches of the Australian Industrial Relations Commission in relation to the legislative antecedents to s.608. 14

[13] Also relevant in this regard is the object of the FW Act in s.3(b) of ‘ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions’ and my responsibility as President under s.581 to ensure that the Commission performs its functions and exercises its powers in a manner that is efficient and adequately serves the needs of employers and employees.

[14] The following factors favour referral of the proposed questions of law to the Federal Court:

• The questions involve real issues of substance relating to the operation of ss.618 and 622 of the FW Act which the Commission cannot conclusively determine and on which there appears no relevant authority. There is also uncertainty as to the operation of s.624 (and as to what would constitute a decision for the purposes of s.624) in the circumstances. 15



• Absent answers to these questions, if the ACTU’s claim in matter AM2015/1 was not rejected in the proceedings then there may be uncertainty as to the validity of any resulting award variations. All such variations could be open to future collateral challenge. Potentially, the result could be that the validity of a leave entitlement in many or all modern awards was uncertain.



• The answers to the questions will dispose of the constitution issue.



• The parties will not be prejudiced by any delay that results from a referral.



• As discussed further below, there are no outstanding evidentiary or factual matters to inhibit the efficient determination of the proposed questions of law.

[15] Referral of the proposed questions of law to the Federal Court would facilitate certainty in the final disposition of matter AM2015/1. On the other hand, the Commission is urged by parties to bring this matter expeditiously to a conclusion. Referral to the Court may delay the conclusion of this matter.

[16] On balance I consider the prospect of delay to be outweighed by the factors favouring referral of the proposed questions of law to the Federal Court.

[17] It remains to finalise the statement of facts and other materials proposed to be provided to the Court. As noted earlier, the ACTU concurs with the proposed statement of facts and other materials to be provided to the Court as set out in the Attachment to the Statement. Ai Group concurs with the proposed statement of facts other than paragraph 7 and with the description of ‘subsequent proceedings’ in the Attachment to the Statement (paragraphs 11-20). 16 Paragraph 7 is:

‘On 20 February 2017 Vice President Watson provided the other Members of the Full Bench with a draft of his decision in matter AM2015/1 which did not include his final conclusion.’

[18] In relation to paragraph 7, Ai Group submits:

‘Ai Group is not in a position to know whether paragraph 7, as drafted, is a fact. With no disrespect to Deputy President Gooley and Commissioner Spencer, we note that there have been prominent media reports quoting Mr Watson as disagreeing with some of the content of their memorandum of 23 March 2017 to the President. These media reports also quote Mr Watson as stating that he advised Deputy President Gooley and Commissioner Spencer of his intention to reject the ACTU’s claims in December last year.

In the circumstances, we propose that the words “which did not include his final conclusion” be deleted from paragraph 7.’ 17

[19] ACCI considers the proposed statement of facts and description of subsequent proceedings in the Attachment to the Statement to be correct, subject to the concern it raises in relation to paragraphs 7, 8 and 12, and in relation to the inclusion of ‘Attachment 2’ in the documents proposed to be provided to the Federal Court:

‘The Australian Chamber has no reason to doubt that paragraphs [7], [8] and [12] and Attachment 2 are correct and complete statements of fact, but is equally unable to confirm that they are correct and complete. They concern internal communications of the Commission to which the Australian Chamber was not privy. It is likely that the other parties to the proceeding may be similarly unable to positively endorse those parts of the SOF [statement of facts].’ 18

[20] Paragraph 8 in the proposed statement of facts is:

‘On 27 February 2017 Vice President Watson caused his decision and reasons in matter AM2015/1 to be published and sent to the parties (Attachment 1). Deputy President Gooley and Commissioner Spencer were not able to issue their decision or decisions at that time and to date they have not issued their decision or decisions in the matter.’

[21] Paragraph 12 in the description of subsequent proceedings is:

‘On 23 March 2017 Deputy President Gooley and Commissioner Spencer sent a memorandum to the President of the FWC seeking advice as to how a decision in matter AM2015/1 might now be finalised.’

[22] Attachment 2 in the documents proposed to be provided to the Federal Court is my Statement in this matter dated 27 March 2017 19, which attaches the memorandum of Deputy President Gooley and Commissioner Spencer referred to above.

[23] ACCI submits that the questions of law can be determined without reference to paragraph 7, the second sentence of paragraph 8, paragraph 12 and Attachment 2, and proposes that they be omitted from the information to be provided to the Federal Court. 20

[24] I accept that the parties are not in a position to confirm that paragraph 7, the first part of the second sentence in paragraph 8 (‘Deputy President Gooley and Commissioner Spencer were not able to issue their decision or decisions at that time’) and the content of the memorandum included in Attachment 2, are ‘correct and complete’. To provide a more complete record of relevant communications between then Vice President Watson, Deputy President Gooley and Commissioner Spencer, would involve publishing further internal Commission correspondence, which is not a course I propose to adopt. As it seems unlikely that the Federal Court will require information about these communications in order to answer the proposed questions, paragraph 7 will be omitted from the statement of facts. I am satisfied that the second sentence of paragraph 8 is correct and it will be retained in the statement of facts.

[25] Paragraph 12 and Attachment 2 are not necessary for determination of the questions of law. The paragraphs under ‘subsequent proceedings’ and the documents in the table under ‘attached documents’ in the Attachment to the Statement (including paragraph 12 and Attachment 2), are intended only to provide the Federal Court with the context of my referral of the questions of law and the benefit of the submissions of the parties. They will be updated to include this Decision.

[26] Finally in relation to the proposed statement of facts, AMIC queries whether it should include the point that the characterisation of an award variation claim as a ‘common issue’, as with the ACTU’s claim in AM2015/1, does not involve any assumption that, if the claim is granted, the variation will apply consistently across all or most modern awards. 21 While this point bears upon the possible outcomes of AM2015/1, I do not consider it necessary to enable the Federal Court to decide the questions of law.

[27] The Attachment to this Decision sets out the statement of facts, questions of law and other material proposed to be provided to the Federal Court. The special case will be settled in accordance with Part 38 of the Federal Court Rules 2011 and the requirements of the Court.

PRESIDENT

Attachment

Statement of Facts

1. The questions for the consideration of the Court relate to proceedings of the Fair Work Commission (FWC) as part of the 4 yearly review of modern awards conducted under s.156 of the Fair Work Act 2009 (Cth) (FW Act).

2. As part of the 4 yearly review of modern awards, in or around February 2015 the Australian Council of Trade Unions (ACTU) sought inclusion of a family and domestic violence paid leave clause in all modern awards (matter AM2015/1). Matter AM2015/1 must be heard and determined by a Full Bench of the FWC.

3. In or around October 2015 the President of the FWC constituted a Full Bench to hear and determine matter AM2015/1. The Full Bench comprised Vice President Watson, Deputy President Gooley and Commissioner Spencer.

4. At the time the Full Bench was constituted, Vice President Watson was a Deputy President of the FWC who retained the designation of Vice President by virtue of his former office as a Vice President of the Australian Industrial Relations Commission. Vice President Watson was the most senior Member of the Full Bench under s.619 of the FW Act.

5. Written submissions and other materials were filed in matter AM2015/1 between June and October 2016, evidence was heard on 14-18 November 2016 and final oral submissions were heard on 1-2 December 2016. The hearing of the matter by the Full Bench concluded on 2 December 2016 and the Full Bench reserved its decision.

6. On or around 20 January 2017, Vice President Watson wrote to the Governor-General tendering his resignation as a Member of the FWC, with effect from the close of business on 28 February 2017.

7. On 27 February 2017 Vice President Watson caused his decision and reasons in matter AM2015/1 to be published and sent to the parties (Attachment 1). Deputy President Gooley and Commissioner Spencer were not able to issue their decision or decisions at that time and to date they have not issued their decision or decisions in the matter.

8. At close of business on 28 February 2017 Vice President Watson ceased to be a Member of the FWC.

Questions for the Consideration of the Court

9. The questions for the consideration of the Court are:

1) Are Deputy President Gooley and Commissioner Spencer presently permitted by the FW Act to issue their decision or decisions in matter AM2015/1?

2) If the answer to question 1 is yes: for the purposes of the FW Act will their decision or decisions, taken together with the decision of former Vice President Watson, constitute a Full Bench decision in matter AM2015/1?

3) If the answer to question 1 is yes and the answer to question 2 is no: for the purposes of the FW Act will their decision or decisions without the decision of former Vice President Watson, constitute a Full Bench decision in matter AM2015/1?

4) If the answer to question 1 or questions 2 and 3 is no: does the FW Act require or permit the President of the FWC to direct another FWC Member to form part of a Full Bench with Deputy President Gooley and Commissioner Spencer in order to obtain a Full Bench decision in matter AM2015/1?

5) If the answer to question 4 is yes: will the FW Act require the new member of the Full Bench to issue a decision in the matter?

6) If the answer to question 4 is yes: whose decisions will constitute the Full Bench decision in the matter, and, in particular, will the decision of former Vice President Watson comprise part of the decision in the matter?

7) If the answer to question 1 or questions 2 and 3 is no, and the answer to question 4 is also no: does the FW Act require or permit the President of the FWC to constitute a new Full Bench in order to obtain a Full Bench decision in matter AM2015/1?

Subsequent Proceedings

10. The following paragraphs outline proceedings in Matter AM2015/1 subsequent to paragraph 8 above.

11. On 23 March 2017 Deputy President Gooley and Commissioner Spencer sent a memorandum to the President of the FWC seeking advice as to how a decision in matter AM2015/1 might now be finalised.

12. On 27 March 2017 the President of the FWC issued a Statement attaching Deputy President Gooley’s and Commissioner Spencer’s memorandum and notifying a hearing on 4 April 2017 in relation to issues it raises (Attachment 2).

13. On 3 and 4 April 2017, the ACTU, Australian Chamber of Commerce and Industry (ACCI) and the Australian Industry Group (Ai Group) filed written submissions in response to the Statement of 27 March 2017 (Attachments 3-5).

14. At the hearing on 4 April 2017, the ACTU, ACCI, Ai Group, Australian Meat Industry Council (AMIC), Master Plumbers Association of NSW and The Pharmacy Guild of Australia made oral submissions (transcript at Attachment 6).

15. During the hearing on 4 April 2017, the President of the FWC invited the parties to file further written submissions commenting on the decision in Morton v The Transport Appeal Board & Anor No. 1 [2007] NSWSC 1454 (Attachment 7).

16. At the conclusion of the hearing on 4 April 2017 the President informed the parties that he was contemplating referring to the Federal Court of Australia questions of law as to how a decision in matter AM2015/1 can now be concluded.

17. On 12 and 13 April 2017, the ACTU, Ai Group and AMIC filed further written submissions (Attachments 8-10).

18. On 18 April 2017 the President of the FWC issued a Statement setting out the other matters that were before Full Benches in which Vice President Watson was a presiding Member and which had not been completed prior to his resignation (Attachment 11).

19. On 28 April 2017, the President of the FWC issued a Statement expressing a provisional view that he should refer questions of law to the Federal Court pursuant to s.608 of the FW Act and setting out on a provisional basis the statement of facts, questions of law and other material proposed to be provided to the Court for that purpose. This Statement also sought submissions on the provisional view and on the proposed statement of facts and questions of law (Attachment 12).

20. On 9-11 May 2017, the ACTU, Ai Group, ACCI and AMIC filed written submissions in response to the Statement of 28 April 2017.

21. On 18 May 2017, the President of the FWC issued a Decision to refer questions of law to the Federal Court pursuant to s.608 of the FW Act and attaching the statement of facts, questions of law and other material proposed to be provided to the Court for that purpose (Attachment 13).

Attached Documents

22. The attachments to this document are set out in the following table.

 1   [2017] FWC 2347.

 2   Ibid at [1].

 3   Ibid at [18]-[20].

 4   Ibid at [22].

 5   Written submissions of ACTU dated 10 May 2017.

 6   Written submissions of Ai Group dated 10 May 2017.

 7   Written submissions of ACCI dated 11 May 2017, paragraphs 2.2-2.3.

 8   Written submissions of AMIC dated 9 May 2017, paragraphs 12-16 and 20-21.

 9   Written submissions of Ai Group dated 10 May 2017.

 10   Written submissions of ACCI dated 11 May 2017, paragraph 4.2.

 11   Written submissions of AMIC dated 9 May 2017, paragraph 19.

 12   Hamzy v Tricon International Restaurants and Anor (2001) 115 FCR 78 at [21].

 13   [2017] FWC 2347 at [21].

 14   The Hoyts Corporation Pty Ltd and Australian Theatrical and Amusement Employees Association, Print K4341; Re Finemores Pty Ltd, Print M5301; Bulga Coal Management Pty Ltd v CFMEU, Print PR924444 8 November 2002 per Marsh SDP, Cartwright SDP and Hoffman C.

 15   [2017] FWC 2347 at [20]-[21].

 16   Written submissions of Ai Group dated 10 May 2017.

 17   Ibid.

 18   Written submissions of ACCI dated 11 May 2017 at paragraphs 3.2-3.9.

 19   [2017] FWC 1733.

 20   Written submissions of ACCI dated 11 May 2017 at paragraph 3.8.

 21   Written submissions of AMIC dated 9 May 2017 at paragraph 18, citing [2014] FWC 8583 (Statement of the President dated 1 December 2014 in AM2014/196 and others) at paragraph [15].

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