DECISION

Fair Work Act 2009
s.604—Appeal of decision

Sodexo Remote Sites Australia Pty Ltd
v
Construction, Forestry, Maritime, Mining and Energy Union; Australian Workers’ Union
(C2018/6845)

Appeal against decision in transcript of Commissioner McKenna at Sydney on 23 November 2018 and Order PR702622 in matter number AG2018/3064 – refusal to extend time for late lodgement of application for approval of enterprise agreement – denial of natural justice.

Introduction and background

[1] Sodexo Remote Sites Australia Pty Ltd (Sodexo) has lodged an appeal against a decision and order of Commissioner McKenna made on 23 November 2018 1 dismissing an application made by Sodexo (Application) under s 185 of the Fair Work Act 2009 (Act) for the approval of the Sodexo Remote Sites (Offshore Operations) Enterprise Agreement 2018 (Enterprise Agreement).

[2] The Enterprise Agreement was made on 19 June 2018. The Application was lodged in the Fair Work Commission (Commission) on 6 July 2018. The Application was therefore lodged three days late. 2 Sodexo sought an extension of time under s 185(3)(b) of the Act. In support of its application for an extension of time, Sodexo provided the following information in its statutory declaration (Form F17):

•  “The Employer did not receive a signed copy of the Enterprise Agreement from the bargaining representatives until 28 June 2018, some 10 days after the voting process by which the employees approved the agreement.

•  The complexities of arranging the signing of the Enterprise Agreement by the bargaining representative was further compounded by the bargaining representatives even time roster arrangements, R & R period, hours of work when at the workplace, the offshore work location, and the substantial distance between the corporate offices and offshore work locations.

•  The filing of the Agreement was further delayed with two (2) no working days (Saturday & Sunday) and after receiving the signed Enterprise Agreement from the Bargaining Representative.

•  There is no prejudice to the employees in the late filing of the Enterprise Agreement.”

[3] At a mention/directions hearing on 23 November 2018, the Commissioner heard and determined the extension of time application. The Commissioner concluded that she was “not satisfied in this matter that it is fair in all the circumstances to extend time. On that basis the application for the approval of the [Enterprise Agreement] is now dismissed.” 3 The Commissioner made the Order dismissing the Application.

[4] The background against which the Decision and Order were made was as follows. After progressing through the Commission’s enterprise agreement assessment process, the Application was allocated to the Commissioner on 17 October 2018. The Commissioner first listed the Application for mention and/or hearing, by telephone, on 22 October 2018. During the course of the 22 October 2018 mention, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and The Australian Workers’ Union (AWU) raised a number of issues in opposition to the approval of the Enterprise Agreement, including in relation to the notice of employee representational rights (NERR). The outcome of the 22 October 2018 mention was that the CFMMEU and AWU were granted leave to intervene in the proceedings and were given an opportunity to make written submissions concerning their respective issues with the Enterprise Agreement. At the conclusion of the 22 October 2018 mention, the Commissioner indicated that “the matter will be listed for a mention and/or hearing. I anticipate it will be very short. It will just be to look at the next step I would anticipate, at 4:15 on Friday, 2 November.” 4

[5] On 30 October 2018, the CFMMEU and AWU filed and served on Sodexo their respective submissions. On 1 November 2018, the CFMMEU notified the Commissioner’s chambers that it was considering whether to raise a further ground of opposition to the approval of the Enterprise Agreement relating to the inclusion of an unlawful term of the kind described in s 194(ba) of the Act.

[6] The Application was listed for mention and/or hearing, by telephone, before the Commissioner at 4:15pm on 2 November 2018. At that time the Commissioner indicated that a decision of a Full Bench in a potentially relevant matter would be issued within a fortnight. Rather than asking each union to put on supplementary submissions in relation to a question which had arisen concerning the identity of the relevant award for the purposes of the better off overall test, and based on the Commissioner’s belief that the potentially relevant Full Bench decision would be issued within a fortnight, the Commissioner informed the parties that the Application would be listed again on Monday, 19 November 2018. The Commissioner indicated that “it will only be very brief … we’ll put the matter into mention at 5 pm on Monday the 19^th …” 5

[7] During the mention on 19 November 2018, Sodexo’s solicitor submitted that “we will need to understand what’s put against us before we can take the matter further”. 6 The Commissioner raised a concern about the description of the proposed agreement on the NERR. The Commissioner also indicated that she would provide the parties with the assessment conducted by a staff member of the Commission’s agreement assessment team because “for example, they pick up on some matters such as late lodgement of the application and some other matters …”7 There was also extensive discussion during the 19 November 2018 mention about the next steps that would need to be taken to deal with the Application.8 Those discussions included the fact that further submissions would need to be filed by Sodexo (and potentially the unions), together with any further evidence on which Sodexo intended to rely.9 Mr Edmonds, Legal Officer of the CFMMEU, submitted that the matter would likely “need to proceed by way of a full hearing”.10 The Commissioner agreed with that proposition11 and then commenced a discussion about the most appropriate location for the hearing.12

[8] The outcomes of the 19 November 2018 mention were as follows:

•  the Commissioner would arrange for the agreement assessment team’s analysis to be sent to the parties so that they might consider it in their submissions;

•  the Commissioner would “list the matter later in the week for a mention/directions proceeding or something of that nature”; 13 and

•  the Commissioner put to the parties that “it would be very helpful if the parties could actually agree on how best to progress the matter forward”. 14

[9] On 20 November 2018, a Notice of Listing was issued to the parties, notifying them that the matter had been listed for mention and/or hearing, by telephone, at midday on Friday, 23 November 2018. Although the Notice of Listing used the expression “mention and/or hearing”, in light of the context to which we have referred, we construe that expression to mean “mention/directions hearing”.

[10] On 22 November 2018, Sodexo’s solicitors sent an email to the Commissioner’s chambers setting out proposed consent directions which, if made, would have:

•  required the CFMMEU and AWU to file and serve any supplementary submissions and material on which they intended to rely at the hearing by 7 December 2018;

•  required Sodexo and an employee bargaining representative to file and serve any submissions and material on which they intended to rely by 21 December 2018;

•  listed the Application for hearing with an estimate of one day at the convenience of the Commission but not before 14 January 2019; and

•  resulted in the directions hearing listed for 23 November 2018 being vacated.

[11] On 23 November 2018, the Commissioner held a mention/directions hearing, by telephone, commencing at 11:59am. At the outset of the mention/directions hearing, the Commissioner informed the parties that she would not make directions in the terms proposed, “which would see matters going out to the New Year”. 15 The matter was then adjourned to allow the parties to have discussions about an alternative timetable. During that adjournment, Sodexo, the CFMMEU and the AWU agreed on expedited consent directions which, if made, would have resulted in submissions and material being filed in time for the Commission to be able to hear the Application prior to 21 December 2018.16

[12] The 23 November 2018 mention/directions hearing, by telephone, then resumed. However, the Commissioner did not permit the solicitor appearing for Sodexo to inform her of the proposed expedited directions which had been agreed between Sodexo and the unions. 17 The Commissioner expressed concern that the Commission had not been provided with the contact details for each of the employee bargaining representatives (other than Mr Harwood), with the result that they had not been notified about, and were not present during, the mention/directions hearing on 23 November 2018.18 The Commissioner stood “the matter down the list until, say, 4:15; then we can discuss a date that is suitable”19, so that the employee bargaining representatives could be notified of the mention/directions hearing and have input in relation to it.20

[13] At 4:15pm on 23 November 2018, the mention/directions hearing, by telephone, resumed. Sodexo, together with the CFMMEU and AWU appeared, but the employee bargaining representatives did not. Discussion took place about a range of issues associated with the Application. The solicitor for Sodexo again attempted to put before the Commission the proposed expedited directions which had been agreed between Sodexo and the unions. 21 The Commissioner stated that she would “come to that in a moment” and then proceeded to raise the fact that the Application had been filed out of time.22 The Commissioner stated:

“There is a raft of issues about this application, a raft of issues, and I’m minded not to extend time because I do not consider it would be fair to extend that period …

Well, in circumstances where the raft of issues arising in relation to this application suggest to me that it would not in the end be approved, and my concern for the employees not having had a pay rise, I’m not sure that it would be fair in all of the circumstances to extend the period, because it will just delay starting the process, which I consider will have to be started again.”  23

[14] The Commissioner offered the solicitor for Sodexo a short adjournment, which he declined and instead sought that the extension of time question be dealt with at the same time as the other issues associated with the Application. 24 The solicitor for Sodexo made the following submissions:

“… I don’t suggest that it is impossible that the agreement could not be approved. What I suggest is that the matter has not been properly heard, and we would respectfully seek the opportunity to have the matter heard in an orthodox manner and with an exchange of written submissions in order to put you, Commissioner, in the best position to understand what are the respective positions and to inform you as to those matters, and to give you the opportunity to raise and deal with any of the concerns that may have come to your mind being properly informed of the matter…

In summary, we contend that you’re not in a position at this stage to make a decision on the basis on which you identified you may make a decision about not extending leave. That’s a matter that ought to be dealt with in the full consideration of the matter, and we ask that you make directions accordingly, albeit we’re very happy for those to be on expedited basis.” 25

[15] Following some further short submissions, the Commissioner announced her decision in relation to the extension of time question:

“In the exercise of my discretion I have considered the question of if in all the circumstances the Commission considers it is fair to extend that period that I may do so to the period that I allow. I am not satisfied in this matter that it is fair in all the circumstances to extend time. On that basis the application for the approval of the Sodexo Remote Sites (Australia) Pty Ltd Agreement is now dismissed…” 26

Natural Justice

[16] Sodexo relies on a number of grounds of appeal, but it is only necessary that we deal with the ground of appeal concerning natural justice.

[17] It is well established that Members of the Commission are obliged to observe procedural fairness in carrying out their functions under the Act. 27 Procedural fairness is a component of natural justice. It requires that the Commission ensure that each party is given a reasonable opportunity to present its case.28 In Abigroup, Justices Katzmann and Rangiah explained (at [125]) what is meant by a reasonable opportunity to present a case (references omitted):

“What will constitute a reasonable opportunity for a party to present his or her case in a given situation depends upon the whole of the circumstances, including the nature of the jurisdiction exercised and the statutory provisions governing its exercise. Procedural fairness requires that the statutory power be exercised fairly: that is, in accordance with procedures that are fair to each party in light of the statutory requirements, the interests of the parties and the interests and purposes, whether public or private, which the statute seeks to advance or permits to be taken into account as legitimate considerations.”

[18] A refusal to grant an adjournment can constitute procedural unfairness. In Abigroup, Justices Katzmann and Rangiah addressed this issue 29 and in doing so cited the following passage from the decision of the English Court of Appeal in R v Thames Magistrates’ Court, Ex parte Polemis30:

“But of the versions of breach of the rules of natural justice with which in this court we are dealing constantly, perhaps the most common today is the allegation that the defence were prejudiced because they were not given a fair and reasonable opportunity to present their case to the court, and of course the opportunity to present a case to the court is not confined to being given an opportunity to stand up and say what you want to say; it necessarily extends to a reasonable opportunity to prepare your case before you are called on to present it. A mere allocation of court time is of no value if the party in question is deprived of the opportunity of getting his tackle in order and being able to present his case in the fullest sense.”  31

[19] A Full Bench of the Commission in City of Stirling v Mr Kevin Emery 32 considered the consequences of a failure to afford procedural fairness (references omitted):

“[37] In Stead v State Government Insurance Commission the High Court stated that “not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial.” The Court noted that it is relevant to consider whether further information that might have come before the Court if natural justice had been afforded would have made any difference. The Court went on to state:

“Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference. …It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact.” 

[38] In our view, these observations are relevant to the approach of a Full Bench of the Commission in considering a contention on appeal that a party has been denied procedural fairness, this being a component of natural justice.” 33

[20] We do not have any difficulty with the Commissioner’s decision to decide the extension of time question as a threshold issue and prior to her determination of the other issues raised in relation to the Application. However, having identified to the parties that there were a “raft of issues” associated with the Application which, in the Commissioner’s view, “suggest[ed]… that it [the Enterprise Agreement] would not in the end be approved”, 34 procedural fairness required that Sodexo be given a reasonable opportunity to present its case in support of its application for an extension of time, including by addressing the “raft of issues”. Those issues went to the merits of the Application, which were plainly relevant to the exercise of discretion, and included alleged defects in the NERR, an alleged failure to provide certain employees with a NERR, identification of the correct underlying award, issues concerning whether employees had genuinely agreed to the Enterprise Agreement (s 188(1)(c) of the Act), and issues concerning the better off overall test. Procedural fairness required that Sodexo be given a reasonable opportunity to address those issues by way of submissions and (potentially) evidence in a hearing on the extension of time question. By proceeding to hear and determine the extension of time question at the mention/directions hearing on 23 November 2018, before Sodexo had an opportunity to get its “tackle in order”35 and file relevant material, we consider that Sodexo was denied a reasonable opportunity to present its case in support of its application for a three day extension of time under s 185(3)(b) of the Act. Sodexo was therefore denied natural justice.

[21] There is, in our view, at least some prospect that Sodexo may have been able to persuade the Commissioner to exercise her discretion to grant a three day extension of time under s 185(3)(b) of the Act, if it had been given the opportunity to file material addressing the “raft of issues” and otherwise in support of such an extension. Accordingly, we are not satisfied that the denial of natural justice could have made no difference to the outcome of the question of whether an extension should have been granted in respect of the late lodgement of the Application.

[22] A denial of natural justice is a jurisdictional error. 36 Given the nature of the error which has been established, we are satisfied that it is in the public interest to grant permission to appeal, uphold the appeal, and quash the Decision and Order.37

Conclusion

[23] For the reasons given, we:

(a) grant permission to appeal;

(b) uphold the appeal;

(c) quash the Decision and Order; and

(d) remit the Application, including the application under s 185(3)(b) of the Act for an extension of time, to Deputy President Boyce for determination. It will be a matter for Deputy President Boyce to make whatever directions he decides are appropriate for the future conduct of the matter.

DEPUTY PRESIDENT

Appearances:

B Avallone, of counsel, for Sodexo

Z Duncalfe for the AWU

L Edmonds for the CFMMEU

P Casey, employee bargaining representative

Hearing details:

2019.

Sydney and Perth (video hearing):

January 23.

Printed by authority of the Commonwealth Government Printer

<PR704589>

 1   Transcript, 23 November 2018, at PN236 (Decision); Order PR702622 (Order)

 2   14 days after 19 June 2018 (not including 19 June 2018) is 3 July 2018 (s 185(3) of the Act). 6 July 2018 is three days after 3 July 2018

 3   Transcript, 23 November 2018, at PN236

 4   Transcript, 22 October 2018, at PN201

 5   Transcript, 2 November 2018, at PN104 – PN106

 6   Transcript, 19 November 2018, at PN19

 7   Ibid at PN62

 8   Ibid at PN64-PN123

 9   Ibid at PN122

 10   Ibid at PN124

 11   Ibid at PN125

 12   Ibid at PN125-PN133

 13   Ibid at PN162

 14   Ibid at PN162

 15   Transcript, 23 November 2018, at PN21

 16   Appellant’s outline of submissions, 28 December 2018, at [1.17]

 17   Transcript, 23 November 2018, at PN31-PN70

 18   Ibid

 19   Ibid at PN72

 20   Ibid at PN70-PN72

 21   Ibid at PN208

 22   Ibid at PN209-PN211

 23   Ibid at PN217-PN219

 24   Ibid at PN221-PN222

 25   Ibid at PN224-PN225

 26   Ibid at PN236

 27   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Abigroup Contractors Pty Ltd [2013] FCAFC 148 (Abigroup) at [118]

 28   Ibid at [119]

 29   Ibid at [120]

 30   [1974] 2 All ER 1219

 31   Ibid at 1223

 32   [2018] FWCFB 2279

 33   Ibid at [37]

 34   Transcript, 23 November 2018, at PN217-PN219

 35   See paragraph [18] above

 36   E. Allen and Ors v Fluor Construction Services Pty Ltd [2014] FWCFB 174 at [56]

 37   Monash University v National Tertiary Education Industry Union [2017] FWCFB 2420 at [21]