Australian Federation of Air Pilots v Regional Express Holdings
[2016] FCCA 316
•17 February 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AUSTRALIAN FEDERATION OF AIR PILOTS v REGIONAL EXPRESS HOLDINGS | [2016] FCCA 316 |
| Catchwords: INDUSTRIAL LAW – Compliance and enforcement – Civil remedies – pecuniary penalty orders – proceedings for penalties – parties – authority of Industrial Associations to bring action – no evidence of members being affected – affected employees eligible for membership. |
| Legislation: Fair Work Act 2009, s.540 |
| Cases cited: Tomlinson v Ramsey Food Processing Proprietary Limited [2015] HCA 28 Other references: |
| Applicant: | AUSTRALIAN FEDERATION OF AIR PILOTS |
| Respondent: | REGIONAL EXPRESS HOLDINGS |
| File Number: | MLG 788 of 2015 |
| Judgment of: | Judge Riethmuller |
| Hearing date: | 12 November 2015 |
| Date of Last Submission: | 12 November 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 17 February 2016 |
REPRESENTATION
| Counsel for the Applicant: | Ms Swanwick |
| Solicitors for the Applicant: | Australian Federation of Air Pilots |
| Counsel for the Respondent: | Mr Trindade |
| Solicitors for the Respondent: | Clayton Utz |
ORDERS
That the Respondent’s Application in a Case be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 788 of 2015
| AUSTRALIAN FEDERATION OF AIR PILOTS |
Applicant
And
| REGIONAL EXPRESS HOLDINGS |
Respondent
REASONS FOR JUDGMENT
The respondent applies to have the applicant’s claim dismissed or struck out on the basis that the claim fails to identify any particular person against whom the conduct alleged therein is said to have been taken, and further, that the applicant lacks standing to bring proceedings at all.
Background
In September 2014, the respondent provided applicants who had been short listed for its cadet program with a letter dated 5 September 2014. The letter advised the candidates that they were being considered for a position with the respondent’s cadet pilot program, which the respondent considered to be, “a very special honour”.
The letter goes on to state that for the respondent:
Pure technical skills alone are not enough. We are looking for cadets who will acknowledge the privilege of this life – changing opportunity and commit to paying back to the company by being fiercely loyal and company minded, and by going way above and beyond the call of duty, especially in times of need for the company.
Relevantly, the letter goes on to say:
We have encountered many cadets in the past who promised us the earth in order to be selected for the RECP program, but once selected they very quickly showed their true colours. Even simple requests like volunteering to stay at the AAPA accommodation are refused when overnighting for simulator checks. Senior management and directors regularly stay at the AAPA accommodation when on official visits, and yet some cadets find that this is not good enough for them (when they were perfectly fine with it for nine months of their cadet training), and instead choose to stay at the local motel, costing the company more than $100 per night extra.
You should be aware that the Rex Group considers such cadets to be totally lacking in integrity in breaking their solemn undertakings given earlier. The Rex Group will not allow any pilot lacking in integrity to hold a command and will not consider him/her to be suitable for entry into the Picus Program, which is a prerequisite to holding a command.
The applicant alleges that the terms of this letter required the recipients of the letter to provide a written undertaking not to rely on a particular workplace right, namely the right to accommodation of a particular standard as provided for in the award, and threaten them with adverse action in the event that they did rely upon their workplace right.
It is also alleged that the letter was intended to coerce recipients not to exercise relevant workplace rights and made false or misleading representations about that workplace right.
In the statement of claim, the applicant does not identify individual persons who are said to be affected by this conduct alleged to have been undertaken on behalf of the respondent. The applicant identifies two distinct classes of affected persons, namely:
a)persons who, at the date of the letter, were employee pilots and former cadets of the respondent; and,
b)persons who, as at the date of the letter, were short listed applicants for the respondent’s cadet program, and were subsequently accepted into that program.
The applicant pursues the claim under ss.340, 342(2)(a), and 343 and 345 of the Fair Work Act 2009.
The applicant in the proceedings is an industrial association within the meaning of that term as it is used in s.540(6) of the Fair Work Act, which provides
540. [Limitations on who may apply for orders etc.].
…
(6) An industrial association may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision, only if:
(a) the industrial association is affected by the contravention, or will be affected by the proposed contravention; or
(b) if the contravention is in relation to a person:
(i) the person is affected by the contravention, or will be affected by the proposed contravention; and
(ii) the industrial association is entitled to represent the industrial interests of the person.
In this case, it is not suggested that the industrial action will affect the industrial association (the applicant). Rather, that the contravention is in relation to a person, in the sense of each of the people within the two classes identified.
It is clear that the first class of the two classes of persons said to be affected is comprised of domestic employee pilots, who are entitled to be members of the applicant pursuant to rule 1.2(a) of the applicant’s rules. Affected class 2 comprises cadets who are also entitled to become associate members of the applicant, pursuant to rule 2.2(c)(ii).
The respondent argues that the inability, or unwillingness, of the applicant to identify any named person leaves them outside the ambit of s.540(6)(b). The respondent contends that the entitlement to represent persons in s.540(6) only covers those persons who are current members of the applicant organisation. Whereas the applicant argues that the section extends to all affected persons who are eligible to become members of the applicant association.
The respondent argues that if the applicant is able to bring proceedings as a result of standing based upon s.540(6) of the Act, it will be entitled to represent the industrial interests of persons regardless of whether they are members of the applicant and whether they wish for the applicant to represent them or not.
The respondent goes on to argue that this would also be contrary to the right to freedom of association, in s.336 of the Act, which sets out as one of its objects the protection of freedom of association by ensuring that persons are free to become or not become members of industrial associations, and free to be represented or not represented by industrial associations.
Whether or not the applicant may prosecute a claim against the employer for contravention of the Act pursuant to the adverse actions provisions, without identifying a particular union member for whom they are acting is a key question.
An important starting point is to recognise that under the Fair Work Act the monitoring and enforcement of compliance with the minimum standards established by the statutory scheme is a critical objective of the provisions.
As summarised by Landau, I, et al, Trade Unions and the Enforcement of Minimum Employment Standards in Australia (Research Report, January 2014, Centre for Employment and Labour Relations Law, Melbourne University):
In Australia, trade unions have historically performed a significant, if not pre-eminent, role in monitoring an enforcement of minimum labour standards. The Fair Work Act 2009 (Cth) (“FW Act”) continues to recognise this regulatory function of unions through, among other things, providing unions with rights to enter workplaces for compliance purposes and standing to apply to a court for an order in relation to a contravention of provisions of the Act, a modern award or a workplace agreement on behalf of an employee.
The authors explore the suggestion that “monitoring and enforcement functions of unions has declined significantly” in recent decades (at page 4).
At page 8, the authors recognise that this “important aspect of unions regulatory function” has historically been supported by the Industrial Law frameworks in operation in Australia for much of the 20th century.
However they note:
Of significant importance for the enforcement functions of unions, since the 1990s Australia’s labour relations framework has been increasingly individualised. An important aspect of this individualisation has been the increase in statutory regulation of individual employment rights, with ‘legal rights being granted to individual’s within a company capacity to enforce those rights through legal action.’ (On page 12)
It is in this context that the provisions must be interpreted.
Section 540 appears in Chapter 4, Part 4-1, Division 2. Part 4-1 is the civil remedies part of the compliance enforcement chapter in the Fair Work Act. Division 2 of this part defines the persons or organisations who may apply for orders with respect to the civil penalties provisions, and the penalties that may be imposed with respect to the various provisions (see the table set out in s.539).
It is clear that the structure of allowing not only government inspectorates, but employees and industrial organisations, to bring enforcement proceedings under the relevant part continues in the current version of the Act.
Importantly, the provisions are not framed in terms that require industrial organisations to represent an employee in the sense that a solicitor may represent a client. Rather, the provisions create a scheme whereby one may identify if a particular industrial organisation has sufficient interest in the subject matter of the dispute (in this part the alleged contravention of a civil remedy provision) to justify that organisation having standing to prosecute a contravention claim under the provisions of the Act.
The provisions similarly make rules with respect to the capacity of others to prosecute such claims. For example, an employee may prosecute if they are affected by the contravention (see s.540(1)).
The capacity of an employee organisation or association to apply for an order is limited by the tests in s.540(2)(a) and (b). It is further limited by s.540(3), which provides:
540.[Limitations on who may apply for orders etc].
Employees, employers, outworkers and outworker entities
(1) The following persons may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision, only if the person is affected by the contravention, or will be affected by the proposed contravention:
(a) an employee;
(b) an employer;
(c) an outworker;
(d) an outworker entity.
Employee organisations and registered employee associations
(2) An employee organisation or a registered employee association may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision in relation to an employee, only if:
(a) the employee is affected by the contravention, or will be affected by the proposed contravention; and
(b) the organisation or association is entitled to represent the industrial interests of the employee.
(3) However, subsection (2) does not apply in relation to:
(a) items 4, 7 and 14 in the table in subsection 539(2); or
(b) a contravention or proposed contravention of:
(i) an outworker term in a modern award; or
(ii) a term in an enterprise agreement that would be an outworker term if it were included in a modern award.
Items 47 and 14 of s.539(2) deal with claims under sections 50, (contravening an enterprise agreement), section 280, contravening a workplace determination, and s.417 (engaging in industrial action before the nominal expiry date of the enterprise agreement). Thus, the restrictions provided for in s.540(2) do not apply in these circumstances.
There is no question that the Fair Work Ombudsman would have been entitled to prosecute the respondents for the breaches alleged in these proceedings, should the ombudsman have seen fit.
Once one conceptualises the role of the industrial organisation as including the prosecution of alleged contraventions of the Act, it is difficult to see why s.540(2) should be read as requiring the organisation to have an affected person as a member of the organisation. In substance, the provision appears to enable the organisation to bring what is effectively an action against the employer for breaching the Act with respect to the whole of the class. The legislature can determine who may prosecute contraventions under the Act. The legislature has not provided for industrial organisations to have a right to prosecute any alleged contravention as the FWO can, but put in place limits upon the categories of cases industrial organisations can prosecute. That the limit is related to whether employees may be members of the industrial association limits industrial association’s to cases with the industries with which they are concerned. That an industrial association doesn’t have a member that has been directly affected does not show that they have no proper interest in enforcing the industrial laws with the relevant industry given their unique role in the operation of the legislative scheme. The difficulties that may arise procedurally, however, need to be considered.
I note that in Creighton and Stuart Labour Law (5th edition) (Federation Press, Sydney Australia) the authors come to the same conclusion stating (at para 16.15) that:
Section 540(2) makes clear that employee organisations can initiate proceedings only in relation to employees who are affected by contravention, and whose interests the union is entitled to represent. It is irrelevant whether the employee actually is a member, so long as they are eligible to be a member if they so choose.
In Australian Manufacturing Workers Union v Resmed Limited [2015] FCA 788 concerned an application for injunctive relief in relation to a group of employees. Not all of the employees were members of the industrial organisation, the AMWU. In that case, the AMWU contended that if transfers of employees were effected, it would be impossible to retrieve the position as the employees would lose the opportunity of being represented by the AMWU during the consultation process. The court concluded that it would not entertain a claim by the AMWU for injunctive relief on an interim basis with respect to employees who had not nominated the AMWU as their representative: (see para [51]). The case, however, was argued on the basis of the AMWU claiming to be affected in its own right: (see paragraph [4]).
In substance, it appears that the difficulty in AMWU v Resmed Limited was that the orders sought would directly affect an employee who was neither party to the proceedings, nor had nominated the AMWU as its representative. That situation can be distinguished from any claim in this case, where the contravention proceedings relate to a threat of adverse action with respect to a class of employees. The applicant is not seeking specific damages for any particular employee, but simply the imposition of penalties. It is not pursing the individual rights of a particular employee for damages. Rather, it is bringing the contravention proceedings which could be brought by the Fair Work Inspector towards the imposition of a penalty which would be payable to consolidated revenue or the applicant in a particular case depending upon the circumstances of that case (as determined by the court in the proceedings).
A similar difficulty arose in Transport Workers Union of New South Wales v Australian Industrial Relations Commission and Others [2008] FCAFC 26, where the Full Court noted that even if there are cases where interests of particular employees are represented adequately by an organisation, in that particular case different considerations arose because the order of the Commission attempted to bind various employees who were not members of the organisation (although would have been eligible to join the organisation if they had chosen to do so). In those circumstances, the organisation could not be taken to have represented their interests. Fundamentally, the difficulty related to the question of procedural fairness where orders are being sought against employees by bringing proceedings against the industrial organisation: (see generally paragraphs [45] and [46]).
Finally, reference was made to BHP Iron Ore Pty Ltd v The Australian Workers Union [2000] FCA 430, where the claim was that adverse action had taken place, not merely threatened. The relevant provision required that there be evidence of dismissal, injury, alteration of position, refusal to employ or discrimination, not merely a threat. In such a case, individual employees had to be identified in order to succeed in the claim. This is in contrast to the provisions under which this proceeding is brought, that do not require the threat to have actually been carried out against an employee: merely threatening is sufficient to potentially found a contravention.
Establishing an identifiable group for whom the conduct has the potential to affect, has been found to be sufficient to allow a matter to proceed to trial: see Community and Public Sector Union v Telstra Corporation Limited [2001] FCA 267 and Australian and International Pilots Association v Qantas Airways Limited [2006] FCA 1441.
There appears to be little difficulty in this case in identifying the members of the class, if need be orders can be made for discovery of the names of the members of the class as there is no prevention against self-incrimination for corporations.
In Tomlinson v Ramsey Food Processing Proprietary Limited [2015] HCA 28, the High Court found that when proceedings are brought the Fair Works Ombudsman, the ombudsman, was exercising a statutory power to enforce the Workplace Relations Act and awards made under that legislation. The High Court concluded that the source of that power was distinct from a right enjoyed by a particular employee under the legislation. The same reasoning appears to me to hold with respect to the industrial association here, which has a statutory right to bring proceeding to enforce the legislation in the particular circumstances of this case.
The problem of multiple persons, the Fair Work Ombudsman, employees, and industrial organisations, all having the right to enforce the provisions of the Act with respect to breaches, not necessarily with respect to specific damages claims, gives rise to the possibility of multiple prosecutions for enforcement proceedings arising out of the one incident.
Ordinarily, this will present no difficulty as all those with interest will be aware of the proceedings that are pending. Even if they are not aware, there can be little complaint that one of the legal entities with the right to enforce the Fair Work Act, has brought proceedings towards a penalty, which primarily is payable to the consolidated revenue (although may be directed to be paid to the applicant in particular cases).
Those proceedings do not foreclose actions for damages by others as a result of the contravention, which may be brought individually just as it was found in the High Court that the appellant, in that case, could bring the proceedings individually.
Potential procedural difficulties do arise if these proceedings proceed to a conclusion with respect to threatened adverse action against all of the employees in the class, without identifying if any particular employee has an individual claim for damages as a result of the relevant conduct. It would not be appropriate for there to be further proceedings by that employee, nor does it appear to me to be appropriate to allow the applicant to prosecute a claim, ultimately extinguishing the cause of action, without some notice to the individual employees to enable them to join the proceedings, should one of them wish to bring an individualised claim for damages and potentially argue they should receive a share of any penalty given that there are generally no costs orders in these claims.
Given the nature of the conduct in this particular case, it seems unlikely, but nonetheless remains a possibility that there may be individual claims. This procedural difficulty can relatively easily be dealt with by directions that all of the members of the classes be notified (as it must be possible to identify them), that they ought to bring application to join the proceedings, or have the industrial organisation represent them directly, should they wish to pursue an individual claim for contravention of the adverse action provisions of the type claimed by the applicant. The precise directions necessary to effect this can be subject of submission by the parties following delivery of these reasons.
I therefore order that the respondent’s application in a case to be dismissed.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Riethmuller
Date: 17 February 2016
2
5
2