Application by the Minister for Jobs and Industrial Relations; Minister for Women

[2019] FWC 1922

[2019] FWC 1922

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.608 - President may refer questions of law to the Federal Court

Application by the Minister for Jobs and Industrial Relations; Minister for Women
(ADM2019/4)

VICE PRESIDENT HATCHER SYDNEY, 27 MARCH 2019

Application by The Hon. Kelly O'Dwyer MP, Minister for Jobs and Industrial Relations; Minister for Women for referral of a question of law to the Federal Court.

Introduction and background

[1] On 5 February 2019 the Minister for Jobs and Industrial Relations and Minister for Women, the Hon. Kelly O'Dwyer MP, lodged an application pursuant to s 605 of the Fair Work Act 2009 (FW Act) for a review of a decision issued by Deputy President Gostencnik on 15 January 2019 1 (first decision). The first decision concerned an application for approval of the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2016 (2016 Agreement). The Deputy President determined that the 2016 Agreement did not include any discriminatory or objectionable terms, passed the better off overall approval test, and with one exception satisfied the requirements for approval of enterprise agreements in ss 186 and 187 of the FW Act. The exception was that he was not satisfied that particular identified terms of the 2016 Agreement did not contravene s 55 of the FW Act, and accordingly he did not consider that the approval requirement in s 186(2)(c) had been met. The Deputy President made directions at the conclusion of the first decision concerning any undertakings which the Metropolitan Fire and Emergency Services Board (MFB), the employer to which the 2016 Agreement was to apply, might propose to address the Deputy President’s concern that certain terms of the 2016 Agreement contravened s 55.

[2] The Minister’s review application (first review application) challenged in its grounds the conclusion that the Agreement did not contain any terms that were discriminatory within the meaning of s 195(1) of the FW Act. The Minister had earlier intervened in the proceedings before the Deputy President and contended that provisions in the 2016 Agreement which operated to restrict the capacity of employees to work on a part-time basis were discriminatory terms within the meaning of s 195(1) because they indirectly discriminated against women and employees with parental and carer’s responsibilities, and were therefore unlawful terms under s 194(a). This contention was founded on the proposition that s 195(1) was to be construed as concerning enterprise agreement terms which were indirectly as well as directly discriminatory. This proposition was rejected by the Deputy President in the first decision, who determined that he should follow the decision of a single member of the Federal Court (Tracey J) in SDAEA v National Retail Association (No 2) 2 (SDAEA). In that decision, the Court determined that s 153(1) of the FW Act, which in terms relevantly the same as s 195(1) provides that a modern award must not include discriminatory terms, encompassed only direct discrimination. On that basis, the Deputy President concluded that the 2016 Agreement did not contain any discriminatory terms. However the Deputy President went on to say that, were he free to determine the proper construction of s 195(1) for himself, he would conclude that the provision included indirect discrimination, and he set out detailed reasoning as to why he would reach that conclusion. The Minister contends in the first review application that the Deputy President’s conclusion was in error, and that it was in the public interest to review the first decision.

[3] On 5 February 2019 - the same day as the first review application was lodged - the Minister, by correspondence addressed to the President of the Commission, Justice Ross, applied for the referral of a question of law to the Federal Court pursuant to s 608 of the FW Act (referral application). The question sought to be referred (proposed question) was as follows:

“On its proper construction, does the term ‘discriminates’ in s 195 of the FW Act include indirect discrimination?”

[4] The Minister’s correspondence included the following contentions:

● the Minister’s contention concerning the proper construction of s 195 was based on decision of the Federal Court (Gordon J) in Klein v Metropolitan Fire and Emergency Services Board 3(Klein), to the effect that discriminatory adverse action described in s 342(1) of the FW Act includes adverse action of an indirectly discriminatory nature;

● the 2016 Agreement contains various terms which indirectly discriminate against women and people with family or carer’s responsibilities;

● the ground of review in the first review application raised the proposed question, which was one of statutory construction and was properly characterised as a question of law;

● the proposed question arose in the first review application, which was a matter before the Commission;

● there were competing authorities of single justices of the Federal Court concerning the meaning of the term “discriminates” within different provisions of the FW Act, namely SDAEA and Klein,and the Federal Court Full Court was the only forum in which an authoritative determination could be made as to the inconsistent constructions of the term “discriminates”;

● the question raised a matter of significant importance to the role of the Commission in preventing discrimination and of general application to all existing and future enterprise agreements approved by the Commission; and

● the opinion of the Federal Court on the question would assist the Full Bench to determine the first review application.

[5] On 6 February 2019 the President, acting pursuant to ss 584 and 582 of the FW Act, delegated to me his functions and powers under s 608(1) of the FW Act in relation to the Minister’s referral application and transferred to me the hearing and determination of that application. This decision determines the Minister’s referral application.

[6] After obtaining confirmation that the Minister did not wish to make further submissions in addition to the contents of her referral application, I made directions for the determination of the referral application as follows:

(1) The other parties to the proceedings before the Deputy President, namely the MFB, the United Firefighters Union of Australia (UFU) and the Victorian Equal Opportunity and Human Rights Commission, were to file any submissions by 25 February 2019.

(2) The Minister was to file any submissions in reply by 4 March 2019.

[7] The MFB, UFU and the Minister filed written submissions in accordance with these directions. After the Minister’s submissions in reply were received, the MFB sought and obtained leave to file further submissions in response, and its further submissions were filed on 8 March 2019.

[8] The relief sought by the Minister in the first review application was that the directions made by the Deputy President at the conclusion of the first decision be set aside and that the application for approval of the 2016 Agreement be dismissed. No stay of the directions was sought by the Minister however, and the proceedings concerning the application for approval of the 2016 Agreement before the Deputy President continued to completion prior to the submissions relating to the referral application being received. On 18 February the Deputy President issued a further decision 4 (second decision) in which he approved the 2016 Agreement on the basis of undertakings which addressed his concerns concerning terms in contravention of s 55.

[9] On 21 February 2019 the Minister lodged an application for review of the second decision (second review application). The second review application contained two grounds for the review. The first was that in the first decision the Deputy President had misconstrued the meaning of the term “discriminates”. This was the same as the ground identified in the first review application. The second ground was that the Deputy President had erred in being satisfied that the undertakings proposed by the MFB and accepted by him were not likely to result in substantial changes to the Agreement for the purpose of s 190(3)(b) of the FW Act. The relief sought in the second review application was that it be heard together with the first review application, that the second decision be set aside, and that the application for approval of the 2016 Agreement be dismissed. A stay of the second decision was also sought pending the hearing and determination of the review.

[10] The stay application was heard before me on 25 February 2019, and in a decision issued on 26 February 2019 5 (stay decision) I declined to grant a stay. I will return to aspects of the stay decision later.

Submissions

[11] I have earlier outlined the reasons given by the Minister in the referral application for the referral of the proposed question of law. The MFB and the UFU opposed the referral application. Although they filed separate submissions, they made essentially the same points in their submissions, namely:

● the referral application was premature because the Commission had not yet decided whether it would conduct the review sought by the Minister, and accordingly it could not yet be said that there yet exists a “matter” before the Commission in which the relevant legal question can be said to arise;

● the decisions in SDAEA and Klein were not inconsistent or “competing” authorities, but dealt with the meaning of “discriminates” in relation to differing statutory contexts; consequently the Deputy President was correct to hold that the former decision was on point, not plainly wrong and had not been overruled, and the same approach would be taken by the Full Bench in the review; and

● the referral application would occasion substantial prejudice to the MFB and its employees, in that it would interpose a lengthy judicial process before any review would conclude and cast in doubt the status of the 2016 Agreement for a lengthy period.

[12] In reply, the Minister submitted that:

● the proposition that there was no matter before the Commission until permission for the review was granted was considered and rejected in CFMEU v Bulga Coal Management Pty Limited; 6

● SDAEA concerned the construction of a different provision of the FW Act and could not be regarded as strictly binding, and that decision could not be reconciled with Klein;

● a Full Bench was not in a position to resolve authoritatively this conflict, and this militated in favour of the referral;

● the fact that the second decision was not stayed means that there will be no substantive prejudice to employees arising from the grant of the referral application;

● a referral would be more efficient, since if the review were conducted and then judicial review followed, the same question of law would have to be determined by both the Full Bench of the Commission and then the Federal Court; and

● it was not disputed by the MFB or the UFU that the referral application concerned a question of significance and general application.

[13] The Minister’s reply submissions attached a draft of “Special case” concerning the proposed question which included a statement of facts and a schedule of relevant documents.

[14] In its further submissions, the MFB submitted that reliance on CFMEU v Bulga Coal Management was misplaced because it concerned whether a question of law arose before the appeal was determined, and not whether one arose before leave to appeal was granted. In respect of SDAEA, the MFB submitted that it was at the least highly persuasive, and even if the Full Bench had scope to depart from that position, it was the appropriate body to consider the extent of any such departure and the approach to the application of s 195 that would entail.

Consideration

[15] Section 608 of the FW Act provides:

608 Referring questions of law to the Federal Court

(1)  The President may refer a question of law arising in a matter before the FWC for the opinion of the Federal Court.

(2)  A question of law referred under subsection (1) must be determined by the Full Court of the Federal Court.

(3)  The FWC may make a decision in relation to the matter even if the Federal Court is determining the question of law, except if the question is whether the FWC may exercise powers in relation to the matter.

(4)  Once the Federal Court has determined the question, the FWC may only make a decision in relation to the matter that is not inconsistent with the opinion of the Federal Court (if the FWC has not already done so).

(5)  However, if the FWC has made a decision in relation to the matter that is inconsistent with the opinion of the Federal Court, the FWC must vary the decision in such a way as to make it consistent with the opinion of the Federal Court.

[16] The following principles are relevant to the determination of applications pursuant to s 608(1):

● section 608 confers discretion on the President as to whether a question of law should be referred for the opinion of the Federal Court, subject to two preconditions being satisfied: first, the question must be one of “law” and, second, the question must be one “arising in a matter before the Commission”; 7

● a question does not “arise” unless it pertains to an issue which actually exists, and a remote or merely possible relation of the question of law to the facts is not enough to make the question arise in the legal sense; 8

● the discretion conferred by s 608(1) should be exercised having regard to the purpose and objects of the FW Act and, having regard to s 577, it should be exercised where possible and appropriate in such a way as to avoid undue delay in the determination of matters before the Commission; 9 and

● if there are outstanding evidentiary or factual issues which would inhibit the efficient determination of the question of law, that will be a discretionary matter likely to weigh against a referral pursuant to s 608(1). 10

[17] There is no dispute, and I am satisfied, that the Minister’s proposed question for referral is one of law. And, notwithstanding the submissions of the MFB and the UFU, I am satisfied that the proposed question arises from a matter before the Commission. An application for a review by the Minister pursuant to s 605 is a “matter” requiring determination by a Full Bench of the Commission under s 614(a), whether or not the review is ultimately conducted, and the merits and importance of the proposed question are clearly raised by the review applications. Accordingly whether the referral application should be granted is a discretionary question.

[18] For reasons similar to those given in the Stay Decision in respect of the prospects of success of the second review application, 11 I consider that the Minister’s proposed question raises an issue of importance and general application. If answered in the manner contended for by the Minister, this would have a profound effect upon the approval process for enterprise agreements, in that it would raise a significant new hurdle on the path to approval, and it would also cast doubt on the validity of the approval of many enterprise agreements currently in effect. I also consider that the proposed question would address what I consider to be a real issue concerning the applicability of the decision of Tracey J in SDAEA to s 195(1) and the consistency of that decision with that of Gordon J in Klein.Two matters must be noted in this connection (as they were in the stay decision). First, although SDAEA only dealt directly with the construction of s 153(1), it is difficult for the reasons stated by the Deputy President in the first decision to identify a basis to assign differing interpretations to s 153(1) and s 195(1). Second, in Klein, Gordon J went so far as to say that even if SDAEA was binding as to the proper interpretation of “discriminates” in s 342(1) of the FW Act, she would decline to follow it because she disagreed with its analysis.12 The grant of the referral application would permit the Federal Court Full Court to authoritatively resolve these difficulties.

[19] These are matters which weigh in favour of the grant of the referral application. However there are two other matters concerning the extent to which the proposed question is necessarily determinative of the review applications which I consider weigh against the grant of the referral application.

[20] Firstly, as explained in the stay decision, events moved on after the first decision was issued. The Minister’s case before the Deputy President focused on the extent to which restrictions on access to part-time employment in the 2016 Agreement were said to indirectly discriminate against women and employees with parental and carer’s responsibilities. As explained in the stay decision, the provisions of the 2016 Agreement relied upon by the Minister in that connection were as follows:

(1) Clause 9.1.6 provides that where the MFB agrees to an employee’s request to work other than full-time, the employee will be rostered pursuant to clause 124. Clause 44.1.1 is to the same effect. Clause 124 provides for a “Special Administrative Duties Roster” which is distinct from the 10/14 roster provided for in clause 123 which is usually applicable to operational firefighting duties.

(2) Clause 9.1.7 provides that, except in exceptional circumstances where there is no risk to service delivery, safety and welfare of employees, the MFB agrees that part-time employees will not work on the 10/14 roster or form part of minimum safety crewing for operational purposes. Clause 44.1.2 is to the same effect. Clause 43.6.1 provides that, except for operational dayworkers, full-time employees would be rostered on the 10/14 roster set out in clause 123 or the conditions for Fire Service Communications Controllers (FSCCs) in clause 153.

(3) Clauses 9.1.4 and 9.1.5 relevantly acknowledge the obligations of the MFB to make reasonable accommodations for employees with parental or carer responsibilities and to deal with requests for changes in working arrangements made under s 65 of the FW Act in accordance with that provision, but provide that the MFB has determined and the parties agree that the MFB’s operational requirements generally mean that on-shift employees should be employed on a full-time basis, and that accommodation of the employee might require the employee to be transferred off-station or from their current work location to another position. Clause 44.1 was to the same effect as clause 9.1.5.

(4) Clauses 43.6.1, 43.6.2, 152.1 and 152.2 read together make no provision for a part-time employee to work as a FSCC.

(5) Clauses 43.3, 43.6.3, 138.4 and 138.4.1 require the agreement of the UFU as to the engagement of any employee on a part-time basis and as to the pattern of rostered hours for any part-time employee.

[21] The Deputy President expressed the view in the first decision that these provisions were indirectly discriminatory. However the provisions were extensively modified in their effect as a result of the undertakings accepted by the Deputy President in the second decision. These were summarised in the stay decision as follows:

● clause 43 was to be modified to exclude from its operation an application for part-time employment made pursuant to s 65 (so that, inter alia, the requirement for UFU agreement did not apply);

● a new provision (cl 43.7) was to be added to make it clear that FSCCs could access part-time rostering arrangements under the 2016 Agreement;

● clause 44.1.1 was to be modified to provide that if a s 65 request was granted by MFB, the employee was to be rostered taking into account the employee’s preference, the existence of any reasonable business grounds, service delivery requirements, and the safety and welfare of employees, and that if the employee could not be rostered under the 10/14 roster because of these considerations, the employee would be rostered under clause 124;

● the “exceptional circumstances” provision in clause 44.1.2 was to be deleted; and

● clause 124 was to be modified to remove all references to “administrative” duties (with the apparent intention that the roster for which the clause provided could be applied to operational duties).

[22] As a result, the position appears now to be that:

● where part-time employment is sought pursuant to s 65, the agreement of the UFU is not required;

● any s 65 request must be determined in accordance with the section and unhindered by the part-time provisions of the 2016 Agreement;

● the “exceptional circumstances” requirement for part-time employment on the 10/14 roster has been removed;

● part-time employees can now perform operational firefighting duties on the special duties roster; and

● it has been made clear that FSCCs may be engaged on a part-time basis.

[23] Where that leaves the Minister’s case concerning indirect discrimination is unclear. While in the stay decision I noted that “there may theoretically be some room left by the undertakings” for the part-time provisions to operate in an indirectly discriminatory manner, it is plain that the Minister’s proposed question must now be assessed against a radically different framework than that which was applicable at the time of the first decision. Although the Deputy President considered in the first decision that the part-time provisions of the 2016 Agreement identified above were indirectly discriminatory, that assessment even if correct may no longer have validity with respect to the 2016 Agreement in the form approved in the second decision. Therefore the answer to the Minister’s proposed question may not be determinative of the review if one is granted. An assessment would first need to be made as to whether the 2016 Agreement as modified by the undertakings contains indirectly discriminatory terms, and no such assessment has yet been made.

[24] Secondly, the Minister’s second review application contains a second ground, namely that the Deputy President erred in accepting the undertakings proposed by the MFB pursuant to s 190(3). It is apparent that but for those undertakings the Deputy President would have dismissed the application for approval of the 2016 Agreement. Therefore if a review is granted and the Minister is successful on this second ground, the Minister will obtain the relief she seeks (namely dismissal of the application for approval of the 2016 Agreement) without the need for any consideration to be given to the proposed question, which relates only to the first ground of review.

[25] For these reasons, I do not consider that the grant of the referral application would be an efficient procedural course. There would be an extensive delay involved in having a Full Court of the Federal Court consider and determine the proposed question in circumstances where the answer to the question may turn out not to be determinative of the Minister’s review applications.

[26] The Minister’s referral application is therefore dismissed. The review applications will now be listed for hearing before a Full Bench of the Commission.

VICE PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR706147>

 1   [2019] FWC 106

 2 [2012] FCA 480, 219 IR 382

 3 [2012] FCA 1402, 208 FCR 178, 228 IR 399

 4   [2019] FWCA 1023

 5   [2019] FWC 1228

 6   [2002] AIRC 1356

 7   Application by Grabovsky [2015] FWC 5161 at [52]

 8   Hamzy v Tricon International Restaurants [2001] FCA 1589, 115 FCR 78, 11 at [21]; Application by Restaurant and Catering Association of Victoria [2013] FWC 6705, 232 IR 433 at [11]

 9   Health Services Union v Liviende Inc[2013] FWC 4435 at [9]-[10]

 10   Country Fire Authority v United Firefighters' Union of Australia[2012] FWA 8803 at [9]-[14]

 11   [2019] FWC 1228 at [17]

 12 [2012] FCA 1402, 208 FCR 178, 228 IR 399 at [95]