Australian Federation of Air Pilots v Regional Express Holdings Ltd
[2021] FCAFC 226
•16 December 2021
FEDERAL COURT OF AUSTRALIA
Australian Federation of Air Pilots v Regional Express Holdings Limited [2021] FCAFC 226
Appeal from: Australian Federation of Air Pilots v Regional Express Holdings (No 2) [2020] FCCA 219 File number(s): VID 146 of 2020 Judgment of: BROMBERG, KERR AND WHEELAHAN JJ Date of judgment: 16 December 2021 Catchwords: INDUSTRIAL LAW – appeal from orders of the Federal Circuit Court of Australia – where the primary judge dismissed the appellant’s application below for declarations, pecuniary penalties and injunctive relief based upon allegations of contraventions of ss 340, 343 and 345 of the Fair Work Act 2009 (Cth) – where the contraventions were alleged to arise from the contents of a letter sent by the respondent to cadets undertaking a training program.
INDUSTRIAL LAW – adverse action – whether the primary judge erred in finding that the letter did not contain threats to take adverse action against the cadets by a threat that the respondent would not employ the cadets if they exercised a workplace right, and that they would be subject to disadvantageous terms of employment if they exercised a workplace right, in contravention of s 340 Fair Work Act – whether the presumption in s 361 of the Fair Work Act was engaged, and whether the respondent accordingly discharged its onus of proof – discussion of principles relevant to determining whether a threat was made – s 361 presumption engaged in relation to threats following Full Court’s decision in ABCC v Molina – properly construed, the letter conveyed the threats alleged and the primary judge erred in finding otherwise – remitted to the Federal Circuit and Family Court of Australia (Division 2) for re-hearing.
INDUSTRIAL LAW – action with intent to coerce – whether the primary judge erred in finding that, by the letter, the respondent did not threaten to take action against the cadets with an intent to coerce in contravention of s 343 of the Fair Work Act – properly construed, the letter conveyed the threats alleged and the primary judge erred in finding otherwise – whether presumption is s 361 was engaged, and whether the respondent accordingly discharged its onus of proof with respect to the required intention to negate choice – discussion of principles relevant to determining whether there was an intent to coerce – remitted to the Federal Circuit and Family Court of Australia (Division 2) for re-hearing.
INDUSTRIAL LAW – false or misleading representations – whether the primary judge erred in finding that the letter did not contain false or misleading representations – whether the letter contained representations “about” a workplace right – representations do not have to identify a workplace right in order to be “about” a workplace right – the relevant representations were not about a workplace right and accordingly were not false or misleading in contravention of s 345 of the Fair Work Act – primary judge’s decision in this respect affirmed.
INDUSTRIAL LAW – whether the appellant had standing to bring the proceeding because of its entitlement to represent the industrial interests of cadets under s 560(4) of the Fair Work Act – whether, in the absence of a member of the appellant who was affected by the alleged contraventions, the appellant had standing to bring the proceeding – no dispute that the cadets were not members of the appellant, but were entitled to become members – entitlement of the appellant to represent cadets for standing under s 560(4) is distinct from the entitlement of the cadets, under the appellant’s rules, to representation by the appellant – appellant not required to “bring with it” a “person affected” by the alleged contraventions – entitlement to represent the cadets was sufficient, and accordingly the appellant had standing.
PRACTICE AND PROCEDURE – whether the primary judge erred in permitting the appellant to present a case at trial which departed from that articulated in its “Form 4” and reply prior to trial – where the appellant’s “Form 4” and reply were in the style of pleadings – where the content of the appellant’s claims were relevant to whether and to what extent any statutory presumptions were engaged – in a proceeding not subject to pleadings, and where no order for pleadings has been made, the relevant question is whether the respondent was denied procedural fairness – in light of other findings, it was not necessary to decide the question with respect to the allegation of false or misleading representations – in the circumstances, there was otherwise no error in permitting the appellant to rely at trial on the terms of its opening.
PRACTICE AND PROCEDURE – circumstances in which an appellate court must or should remit a proceeding for re-hearing to the court below – discussion of relevant principles, including where relevant viva voce evidence was given by a witness at trial – benefit enjoyed by primary judge not available to appellate court - whether the court on appeal was in as good a position as the primary judge to make relevant findings – in the circumstances, it was not appropriate for the court on appeal to make the relevant findings.
Legislation: Fair Work Act 2009 (Cth) ss 183, 336(1) 340, 340(1), 341, 341(3), 342(1), 342(2), 343, 343(1), 345, 345(1), 348, 360, 361, 539(2), 540(6), 551, 566, 567
Fair Work (Registered Organisations) Act 2009 (Cth) ss 141(1)(a), 166(1), 320, 320(1), 321, 321(1)
Federal Circuit Court of Australia Act 1999 (Cth)
Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021 (Cth)
Federal Court of Australia Act 1976 (Cth) ss 20(1), 20(1A)
Workplace Relations Act 1996 (Cth) ss 170LT, 298K
Federal Circuit Court Rules 2001 (Cth) rr 1.05(3)(b), 2.04, 4.01, 4.02, 45.03, 45.06, 45.08
Cases cited: Abalos v Australian Postal Commission (1990) 171 CLR 167
Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 [2021] FCAFC 121; 153 ACSR 522
Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191; 267 FCR 268
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCA 1398
Australian Building and Construction Commissioner v Hall [2018] FCAFC 83; 261 FCR 347
Australian Building and Construction Commissioner v Molina [2020] FCAFC 97; 277 FCR 223
Australian Federation of Air Pilots v Regional Express Holdings [2016] FCCA 316
Australian Securities and Investment Commission v Westpac Securities Administration Ltd [2019] FCAFC 187; 272 FCR 170
Banditt v The Queen [2005] HCA 80; 224 CLR 262
Betfair Pty Ltd v Racing New South Wales [2010] FCAFC 133; 189 FCR 356
Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500
Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2009] FCAFC 8; 174 FCR 175
Community and Public Sector Union v Telstra Corporation [2000] FCA 844; 99 IR 238
Community and Public Sector Union v Telstra Corporation Ltd (No 2) [2000] FCA 872; 101 FCR 45
Community and Public Sector Union v Telstra Corporation [2001] FCA 267; 107 FCR 93
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126; 265 FCR 208
Construction, Forestry, Mining and Energy Union v Bengalla Mining Company Pty Ltd (No 2) [2013] FCA 362
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; 253 CLR 243
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2015] FCAFC 25; 230 FCR 298
Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Ltd (No 2) [2017] FCA 1046
Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446; 232 IR 290
Dakhyl v Labouchere [1908] 2 KB 325
Doyle v Ranse (1991) 103 FLR 419
Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135
Esso Australia Pty Ltd v Australian Workers’ Union [2017] HCA 54; 263 CLR 551
Fair Work Ombudsman v Australian Workers’ Union [2017] FCA 528; 271 IR 139
Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (In Liq) (No 4) [2021] FCA 1242
Forrest v Australian Securities and Investments Commission [2012] HCA 39; 247 CLR 486
Fox v Percy [2003] HCA 22; 214 CLR 118.
General Motors-Holden’s Pty Ltd v Bowling (1976) 51 ALJR 235
Gietzelt v Craig-Williams Pty Ltd (No 1) (1959) 1 FLR 456
Gietzelt v Craig-Williams Pty Ltd (No 2) (1959) 1 FLR 465
Jadwan Pty Ltd v Rae & Partners (a firm) [2020] FCAFC 62; 278 FCR 1
Lee v Lee [2019] HCA 28; 266 CLR 129
Leotta v Public Transport Commission (NSW) (1976) 9 ALR 437
Newton v Australian Postal Corporation (No 2) [2019] FCA 2192; 292 IR 396
Orr v Holmes (1948) 76 CLR 632
Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39
Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177; 384 ALR 75
R v Alexander [2007] VSCA 178; 174 A Crim R 297
R v Dunlop Rubber Australia Ltd; Ex parte Federated Miscellaneous Workers Union (1957) 97 CLR 71
R v Leece (1995) 123 FLR 324
R v Leece (1995) 125 ACTR 1
R v RJR [2005] VSCA 315
ReMinister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 [2003] HCA 30; 198 ALR 59
Regional Express Holdings Limited v Australian Federation of Air Pilots [2017] HCA 55; 262 CLR 456
Regional Express Holdings Ltd v Australian Federation of Air Pilots [2016] FCAFC 147; 244 FCR 344
Retail and Fast Food Workers Union Inc v Tantex Holdings Pty Ltd [2020] FCA 1258; 299 IR 56
Sterling Commerce (Australia) Pty Ltd v Iliff [2008] FCA 702; 173 IR 378
Victoria v Construction, Forestry, Mining and Energy Union [2013] FCAFC 160; 218 FCR 172
Water Board v Moustakas [1988] HCA 12; 180 CLR 491
Waterways Authority v Fitzgibbon [2005] HCA 57; 221 ALR 402
Wood v Bowron (1866) LR 2 QB 21
Division: Fair Work Division Registry: Victoria National Practice Area: Employment and Industrial Relations Number of paragraphs: 197 Date of hearing: 24 November 2020 Counsel for the Appellant: Ms J Firkin QC, Ms E Levine, and Mr M Hosking Solicitors for the Appellant: Mr A Molnar and Mr J Lauchland of the Australian Federation of Air Pilots Counsel for the Respondent: Mr B Walker SC and Mr L Howard Solicitor for the Respondent: Clayton Utz
ORDERS
VID 146 of 2020 BETWEEN: AUSTRALIAN FEDERATION OF AIR PILOTS
Appellant
AND: REGIONAL EXPRESS HOLDINGS LIMITED
Respondent
ORDER MADE BY:
BROMBERG, KERR AND WHEELAHAN JJ
DATE OF ORDER:
16 DECEMBER 2021
THE COURT ORDERS THAT:
1.The respondent’s interlocutory application filed 17 November 2020 be dismissed.
2.The appeal be allowed in part.
3.The orders of the Federal Circuit Court of Australia made 6 February 2020 be set aside and in lieu it be ordered that the applicant’s claim that the respondent contravened s 345 of the Fair Work Act 2009 (Cth) be dismissed.
4.Otherwise, the application is remitted to the Federal Circuit and Family Court of Australia (Division 2) for rehearing in accordance with these reasons of the appellant’s claims that the respondent contravened s 340 and s 343 of the Fair Work Act.
5.There be no order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
Introduction
The appellant, the Australian Federation of Air Pilots (the Federation), appeals the order of a judge of the Federal Circuit Court of Australia (as it was then known) which dismissed its application for declarations, pecuniary penalties, and injunctive relief based upon allegations of contraventions by the respondent of ss 340, 343, and 345 of the Fair Work Act 2009 (Cth) (FW Act). The respondent, Regional Express Holdings Ltd (REX), has filed a notice of contention and, in addition, has applied to this Court for a declaration under the Fair Work (Registered Organisations) Act 2009 (Cth) (RO Act), s 321(1), to which we will refer later in these reasons.
Background
The Federation is an association of employees registered under the RO Act, and is entitled to represent the industrial interests of persons who are eligible for membership of the association in accordance with its eligibility rules. Because it is an association of employees registered under the RO Act, it is also an industrial association for the purposes of the FW Act.
REX employed pilots in the conduct of its commercial aviation business. As a means of recruiting pilots, REX sponsored cadet pilots to undertake a training program known as the REX Pilot Training Program conducted by the Australian Airline Pilots Academy (Academy). The Academy was operated by a company associated with REX and was based at Wagga Wagga, New South Wales. Its facilities included a flight simulator, accommodation for the cadets, and dining and recreation facilities. While undertaking the course the cadets resided at the Academy. The cadets undertook a 34 week intensive training program, which if successfully completed, resulted in the cadet obtaining an Australian commercial pilot’s licence with multi-engine instrument rating. The Academy had regular intakes of cadet pilots who were chosen by REX to undertake training with a view to then employing the pilots upon successful completion of the course. The flight simulator at the Academy was also used by REX’s employed pilots in the course of undertaking ongoing training and assessment.
The form of REX’s sponsorship of the cadets was two loans to cover most of the cost of the course. If a cadet was subsequently employed by REX or one of its subsidiaries, one of the loans was repayable by regular instalments over the course of the subsequent employment. If a pilot who graduated from the course subsequently completed seven years of service with REX, the other loan was forgiven. The cadets entered into formal loan agreements to give effect to these arrangements. After commencing employment with REX, the pilots had further opportunities to achieve qualifications, including: (1) entry into the “Pilots in Command Under Supervision”, or “PICUS”, program; (2) potential entry into a “Command upgrade” course; and (3) potential appointment to the role of Captain. Higher qualifications were associated with opportunities for higher remuneration.
The enterprise agreement
The Regional Express Pilots’ Enterprise Agreement 2011 (2011 Agreement) was made and approved under Pt 2‑4 of the FW Act and commenced operation on 27 September 2012. The 2011 Agreement succeeded an earlier agreement, being the Regional Express Pilots Certified Agreement 2005 (2005 Agreement), which was certified under s 170LT of the Workplace Relations Act 1996 (Cth), as then in force.
The 2011 Agreement was expressed to be binding on the Federation (after it gave notice in accordance with s 183 of the FW Act), REX, and all pilots employed by REX, whether they were members of the Federation or not. The 2011 Agreement had a nominal expiry date of 30 June 2014, and continued to operate until 18 August 2016.
Clause 58 of the 2011 Agreement contained provisions relating to the accommodation of pilots while absent on layovers from their base. The 2005 Agreement contained relevantly similar terms. A layover was defined in the 2011 Agreement as –
any occasion a Pilot is away from his or her Home Base or base of temporary transfer between sign-off time and sign-on time for a continuous period exceeding nine hours.
A layover might typically occur if a pilot stayed overnight at a regional destination prior to a morning return flight. A layover might also occur if a pilot attended Wagga Wagga for the purpose of training or evaluation on REX’s simulator. Clause 58.1 provided that when absent on a layover, a pilot would be provided by REX with “appropriate accommodation”. Clause 3.4 defined “appropriate accommodation” as follows –
“Appropriate accommodation” means accommodation which is, as a minimum, clean, quiet and free from factors which may reduce adequate rest and must provide a separate room incorporating ensuite bathroom facilities for each Pilot, with air conditioning and or heating as appropriate to the area. Such accommodation will be assessed as per the most recent Dawson’s Hotel Guide Book or other guide as agreed by the REX PC at not less than a 3 star standard for non-capital cities and 4 star for capital cities. An initial assessment period shall apply as agreed.
The REX PC referred to in the above definition is a reference to the REX Pilots’ Committee, which liaised with REX’s management in relation to such issues. Both the 2005 and the 2011 Agreements contained provisions for working out a list of approved places of accommodation through consultation between REX and the REX PC, and for a settlement procedure in relation to any disputes about proposed changes to the accommodation arrangements.
The dispute about accommodation
In 2010, there was a disagreement between REX and the REX PC as to whether the residential facilities at the Academy at Wagga Wagga were appropriate accommodation for the purposes of discharging REX’s obligations under the 2005 Agreement. REX notified the REX PC that it proposed to change the existing approved accommodation in Wagga Wagga to include the accommodation facilities at the Academy. This proposal was resisted by the REX PC, and proceedings in Fair Work Australia under the disputes settlement procedure followed, but did not resolve the issue. By a decision dated 17 December 2010, a Commissioner of Fair Work Australia identified concerns with the size of the rooms and beds that made the accommodation unacceptable for pilots, save for a fly in/fly out stay of one night, in respect of which the Commissioner determined that there should be a four month trial for pilots, which then took place. Following that trial, the Federation informed REX that it did not support the use of the Academy as an alternative to hotel accommodation in Wagga Wagga. The primary judge found that accommodation at the Academy remained accommodation that was not “appropriate accommodation” for the purposes of the 2005 Agreement.
In April 2014, REX informed the REX PC that it wished to use the accommodation at the Academy for pilots undertaking checks using the flight simulator at Wagga Wagga. This led to a review of the accommodation at the Academy on behalf of the REX PC.
On 9 June 2014, and following an inspection of the facilities at the Academy, the Federation wrote to REX and stated that the accommodation at the Academy was not considered to be “appropriate accommodation” for the purposes of the 2011 Agreement, and set out reasons for that conclusion, and suggestions for improvement to address the concerns. From that point, the matter was not taken any further by REX. The primary judge found that at the time of the events the subject of the proceeding, the accommodation at the Academy remained as not “appropriate accommodation” for the purposes of the 2011 Agreement.
On 11 June 2014, the Crew Resources Manager of REX sent a memorandum to all pilots asking them to complete a preference form for accommodation when staying in Wagga Wagga for simulator duties. Two options were put to the pilots: (1) accommodation at the Academy; or (2) accommodation at the Mercure Hotel in Wagga Wagga, which was accepted as “appropriate accommodation” for the purposes of the 2011 Agreement.
On 1 July 2014, Mr Neville Howell commenced in the position of Chief Operating Officer of REX.
On 4 July 2014, the Crew Resources Manager of REX sent a further memorandum to all pilots. That memorandum stated that many pilots had not returned their preference form for accommodation at Wagga Wagga following the earlier request, and stated that pilots who did not complete the form by Wednesday 9 July 2014 would be accommodated at the Academy.
On 8 July 2014, the Federation wrote to Mr Howell of REX expressing concern about the 4 July 2014 memorandum and another written statement by REX that invited pilots to volunteer to stay at the Academy when using the flight simulator at Wagga Wagga. The other statement was contained in an internal newsletter of REX which referred to the new simulator at Wagga Wagga and stated –
REX management also hopes that all pilots using the simulator would volunteer to use the accommodation at [the Academy] instead of wasting money at the local hotel.
The Federation’s letter of 8 July 2014 emphasised that the accommodation at the Academy was not approved accommodation, requested that the memorandum of 4 July 2014 be withdrawn, and requested confirmation that no pilot would be pressured by REX to agree to stay at the Academy in unapproved accommodation. On 15 July 2014, the Federation wrote to Mr Howell again, and pursued a response to its earlier letter of 8 July 2014.
By email to the Federation dated 20 July 2014, Mr Howell stated that the memorandum of 4 July 2014 had been withdrawn, and that no pilot had been pressured by REX to stay at the Academy, and invited the provision of examples where this had occurred.
The 5 September 2014 letter
On 5 September 2014, Mr Howell wrote to three individuals who were shortlisted applicants for places in its pilots’ course. The terms of the letter (Letter) are central to the claims that were made by the Federation, and the material parts are set out below with the addition of paragraph numbers –
1.You are being considered for a position in the Regional Express Cadet Pilot (RECP) programme. We consider this a very special honour as it means you have been assessed to have among the best technical/academic aptitudes amid the thousands of applications we have on record.
2.However, for us at Regional Express (REX), 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 needs for the Company. This will provide the best chance for the Company to remain resilient and strong in this very tough industry and enable the Company to raise the next generation of Cadets and aspiring airline pilots.
3.We expect you to honour all your commitments for at least the first 7 years of your career with the REX Group.
4.We have encountered many Cadets in the past who promised us the Earth in order to be selected for the RECP programme, but once selected they very quickly show their true colours. Even simple requests like volunteering to stay at the [Academy] accommodation are refused when overnighting for simulator checks. Senior management and directors regularly stay at the [Academy] 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 9 months of their Cadet training) and instead choose to stay at the local motel, costing the Company more than $100 per night extra.
5.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 programme which is a pre-requisite to holding a command.
6.For us to gauge if you would fit the profile of the type of Cadets we are looking for, we would like you to prepare a hand-written motivation letter telling us what this life-changing opportunity means to you and giving us your solemn promise to give back to the Company by volunteering to undertake various activities and actions.
7.You should give specific examples of these activities and actions, like the one we have cited above, on the different concrete ways that you are willing to give back to the Company for this extraordinary opportunity and privilege afforded to you. Your final selection will be largely determined by how far you are motivated to go above and beyond the call of duty for the Company as detailed in the list of examples you will provide.
8.If you are selected, we expect you to honour not only the contractual obligations as spelt out in your letter of employment and the Enterprise Bargaining Agreement, but also the solemn promises/commitments that you have articulated in your motivation letter. We therefore urge you to think carefully before you promise or commit to anything; your word is your bond and we reserve the right to respond accordingly if you break your word. So do not pursue this application for the RECP programme if you have the slightest doubts about your ability to honour your commitments over the next 7 years.
At trial, the scope of the Federation’s claims was the subject of dispute. Without entering upon the field of that dispute at this point, the Federation’s claims were made in a “Form 4” titled “Further Amended Claim under the Fair Work Act 2009 alleging contravention of a general protection…”. We will refer to this document as the further amended claim. The Federation claimed that the contents of the Letter related to two classes of persons. The first class, which was referred to as “affected class one” comprised persons who, as at 5 September 2014, were employee pilots and former cadets of REX. The second class, which was referred to as “affected class two”, comprised shortlisted applicants for the cadet program who ultimately accepted a place in the cadet program and were either undertaking, or had undertaken cadetships. The evidence was that there were three such cadets to whom the Letter was sent, and that each of them was subsequently accepted into the course, completed the course and was then employed as a commercial pilot by REX. For the purposes of this appeal, the Federation maintained its claims only in relation to “affected class two” to whom we will refer as the cadets.
The claims made by the Federation were premised on the existence of workplace rights, which by its further amended claim were alleged as –
(a)the right to stay at appropriate accommodation whilst on layovers;
(b)the right to refuse to agree to a proposed change to approved existing accommodation; and
(c)the right to continue to stay at approved existing accommodation unless and until any dispute concerning a change to existing accommodation was resolved in accordance with the dispute settlement procedure in the 2011 Agreement.
Relevantly, the Federation claimed that by sending the Letter, REX contravened the FW Act in the following respects –
(a)in contravention of s 340(1) of the FW Act, REX threatened to take adverse action against the three cadets if they did not forego a workplace right to stay at approved accommodation in Wagga Wagga;
(b)in contravention of s 343 of the FW Act, REX threatened to take action with the intent of coercing the three cadets not to exercise their workplace right to benefit from the 2011 Agreement, and in particular the provisions concerning approved accommodation; and
(c)in contravention of s 345 of the FW Act, REX knowingly or recklessly made representations to the three cadets (that were referred to in the Federation’s further amended claim as “false representations”), that –
(i)those persons were not entitled to the benefit of the workplace rights;
(ii)if those persons insisted on the benefit of the workplace rights, then REX would be entitled to, and would either –
(A)refuse to employ those persons; or
(B)if already employed, ensure that those persons’ career progression was effectively stalled.
The relevant statutory provisions
The provisions of the FW Act that the Federation claimed that REX contravened are within Part 3‑1 of Chapter 3 of the Act. Section 336(1) provides that the objects of Part 3‑1 include the protection of workplace rights and protection from workplace discrimination. Section 340 provides that a person must not take adverse action against another person because of a workplace right –
340 Protection
(1)A person must not take adverse action against another person:
(a)because the other person:
(i)has a workplace right; or
(ii)has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b)to prevent the exercise of a workplace right by the other person.
Relevantly, a workplace right is defined by s 341 as including an entitlement to the benefit of a workplace law, workplace instrument, or order made by an industrial body, which includes the Fair Work Commission. Section 341(3) extends the concept of workplace rights to prospective employees.
The meaning of “adverse action” is addressed by a table in s 342(1). In addition, s 342(2) provides that adverse action includes threatening to take action that is covered by the table. Relevant to the Federation’s claims at trial in relation to the three cadets were items 2(a), and (b) of the table in s 342(1) which provide that adverse action is taken by a prospective employer against a prospective employee if the prospective employer –
(a)refuses to employ the prospective employee; or
(b)discriminates against the prospective employee in the terms or conditions on which the prospective employer offers to employ the prospective employee.
Section 343(1) of the FW Act provides that a person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person to exercise or not exercise, or propose to exercise or not exercise, a workplace right, or to do or not do so in a particular way.
Section 345(1) of the FW Act provides that a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person or the exercise, or effect of the exercise, of a workplace right by another person.
Section 360 of the FW Act provides that a person takes action for a particular reason if the reasons for the action include that reason.
Section 361 of the FW Act provides that if in an application in relation to a contravention of Part 3‑1 it is alleged that a person took, or is taking, action for a particular reason with a particular intent, then that is presumed to be so unless the person proves otherwise.
Item 11 of the table in s 539(2) of the FW Act, in the terms existing at the relevant time, gave standing to an industrial association to apply to the Federal Circuit Court (as it was then known) or the Federal Court for orders in relation to, relevantly, a contravention or proposed contravention of s 340(1), s 343(1) and s 345(1) of the Act. Section 539 is qualified by s 540(6), which provides –
Industrial associations
(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.
By its notice of contention, REX puts in issue the questions whether the appellant was entitled to represent the interests of any person affected by the contraventions alleged by the Federation, whether in accordance with its rules the appellant had authority to bring the proceeding, and whether the primary judge had erred in permitting the Federation to depart from the terms of its further amended claim. It will be necessary to say more about these contentions later.
The course of the proceeding prior to trial
The Federation commenced the proceeding by an application filed in the Fair Work Division of the Federal Circuit Court on 15 April 2015. The grounds of the application were set out in a document titled “Form 4 Claim under the Fair Work Act 2009 alleging contravention of a general protection”. Part G of the form, which was titled “Contravention(s) alleged” was completed by the insertion of 23 numbered paragraphs in the style of a pleading.
On 4 May 2015, REX filed a response to the claim which disputed the Federation’s standing to make the application, made a broad denial that it contravened the provisions of the FW Act, claimed that the Federation had not identified the adverse action, or the persons against whom adverse action was alleged to have been taken, and claimed that the Court lacked jurisdiction. REX did not address individually the 23 numbered paragraphs in the Federation’s claim.
On 22 May 2015, the Federation filed an amended claim which made several changes to the contraventions that were alleged, and which enlarged the claim to 33 numbered paragraphs. On 3 July 2015, REX filed an amended response which maintained the allegation that the appellant had failed to identify any particular person to whom the alleged contraventions were directed, repeated the claims that the appellant lacked standing and that the Court lacked jurisdiction, and under cover of those claims addressed the several allegations made by the Federation in its amended claim.
On 31 July 2015, REX filed an interlocutory application seeking summary dismissal of the proceeding on the grounds that the Federation had no reasonable prospect of successfully prosecuting the proceeding, or alternatively that the proceeding was an abuse of process. That application was argued on the ground that the claim failed to identify any particular person against whom the conduct alleged was said to have been taken, and on the further ground that the appellant lacked standing. On 17 February 2016, His Honour Judge Riethmuller of the Federal Circuit Court dismissed the application, holding for the purposes of the summary judgment application that the Federation had standing because it was entitled to represent the industrial interests of the persons to whom the alleged contraventions related, and that it was sufficient in relation to the claim alleging a threat of adverse action to identify a class of employees of REX: Australian Federation of Air Pilots v Regional Express Holdings [2016] FCCA 316.
REX appealed the decision dismissing its application for summary dismissal to the Full Court, after having obtained leave to do so. The Full Court (Jessup J, North J and White J agreeing) dismissed the appeal: Regional Express Holdings Ltd v Australian Federation of Air Pilots [2016] FCAFC 147; 244 FCR 344. At [14], Jessup J stated that on the appeal REX did not put in issue the correctness of the proposition that the persons who were alleged to have been affected by the contraventions were eligible for membership of the Federation, but that it claimed that eligibility for membership of the Federation was not sufficient to sustain the Federation’s standing. After a comprehensive review of the legislative history and context, Jessup J held that on the question of standing it was sufficient that the Federation was entitled to represent the industrial interests of the members of “affected class one” and “affected class two”, as defined by the Federation’s claim, without any requirement that those persons be members of the Federation, and that the Federation would be so entitled if the employees or prospective employees were eligible for membership under the Federation’s eligibility rules: see especially [59]-[62].
REX sought and obtained special leave to appeal the Full Court’s decision to the High Court of Australia. On 13 December 2017, the High Court dismissed REX’s appeal: Regional Express Holdings Ltd v Australian Federation of Air Pilots [2017] HCA 55; 262 CLR 456.
On 2 March 2018, the Federation filed in the Federal Circuit Court its further amended claim to which we referred earlier. By that document, the Federation’s statement of its claims was revised again, and was enlarged to 47 numbered paragraphs.
On 9 April 2018, REX filed a “further amended response (defence)” which addressed the paragraphs of the Federation’s claim individually. REX’s further amended response was substantially revised. Accepting that the Federation was entitled to represent the industrial interests of persons who were eligible to be members of the Federation pursuant to its rules, REX alleged by reference to the Federation’s rules that it was not entitled to represent the industrial interests of cadets.
On 23 April 2018, the Federation filed a reply. As to REX’s allegation that cadets were not eligible for membership of the Federation, the Federation alleged that the issue had been the subject of full argument before the Federal Circuit Court at what were the interlocutory hearings on 12 November 2015 and 31 March 2016, and that in the reasons of 17 February 2016 for dismissing REX’s application for summary judgment the Federal Circuit Court had found that cadets were eligible to be associate members of the Federation, and that the Federation was entitled to represent their industrial interests within the meaning of s 540(6) of the FW Act. The Federation also alleged that the High Court had found that the Federation was entitled to represent the industrial interests of persons eligible for membership pursuant to its rules, and that it was common ground that cadets were entitled to be members of the Federation pursuant to its eligibility rules, and did not confine the categories of membership to which its decision applied. The Federation alleged that in consequence, REX’s allegation that the Federation did not have standing in relation to cadets was an abuse of process, alternatively, that REX was estopped from raising those allegations in circumstances where the issue had already been argued and determined by the Federal Circuit Court.
The trial of the proceeding
The trial of the proceeding commenced on 17 July 2019. Shortly prior to the commencement of the trial, on 4 July 2019, the Federation and REX filed and exchanged written submissions. Those submissions were subsequently annotated by counsel for the parties and presented as closing submissions.
Threat to take adverse action – ss 340 and 342(2)
At trial, the Federation’s further amended claim alleged what were defined as the “second adverse action” and the “third adverse action” which were alleged to relate to “affected class two”, being the cadets. In relation to the “second adverse action” the allegations in the further amended claim were as follows –
SECOND ADVERSE ACTION
35.On about 5 September 2014, shortlisted applicants for the cadet program (prospective employees) were advised by the respondent in writing:
a.that their selection into that program was dependent on the provision and content of a hand-written ‘motivation’ letter;
b.that the motivation letter was to include “solemn promises” to undertake various activities and actions in the event of employment;
c.that the ‘solemn promises’ should include an undertaking to stay at the [Academy] whilst on overnight layovers, and not to insist on the provision of approved existing appropriate accommodation in accordance with the workplace rights.
36.Some of the prospective employees were ultimately offered, and accepted, a place in the cadet program and are currently undertaking, or have undertaken, cadetships (affected class two).
37.For the purposes of the second adverse action, affected class two is limited to those prospective employees who were ultimately accepted into, and are currently undertaking, or have undertaken, the cadet program.
38.The statements described at paragraph 35 constitute a threat to refuse to employ those members of affected class two who would not undertake to give up one or more of the workplace rights.
39.The adverse action described at paragraphs 35 and 38 was taken to prevent members of affected class two from exercising workplace rights once employed by the respondent.
40.Affected class two is, and will continue to be affected by the second adverse action by reason that any prospective or actual employment is or will be on terms which are disadvantageous as compared to other employee pilots.
41.The applicant is entitled to represent the industrial interests of affected class two.
In relation to the “third adverse action” the Federation’s allegations in its further amended claim were as follows –
THIRD ADVERSE ACTION
42.On about 5 September 2014 prospective employees, including members of affected class two, were advised by the respondent in writing that:
a.if ultimately employed by the respondent, they would be expected to honour the ‘solemn promises’ made in the motivation letter described above at paragraph 35, including the promise to stay at the [Academy] whilst on overnight layovers;
b.in the event that the undertakings provided for in the motivation letter were not honoured once employment commenced, the respondent “reserve[d] its right to respond accordingly.”
43.The statements described at paragraph 42 constitute a threat to discriminate in the terms or conditions on which employment is or was to be offered to members of affected class two, by:
a.Subjecting the class to a term of employment which prohibits members of the class from relying on the workplace rights in circumstances where other employee pilots are entitled to rely on the workplace rights (disadvantageous term); and
b.Threatening to stall the career progression of any member of affected class two who refuses to comply with the disadvantageous term, in circumstances where other employee pilots - with the exception of affected class one - are not subject to any such threat.
44.The adverse action described at paragraphs 42 and 43 was taken to prevent prospective employees from exercising the workplace right once employed by the respondent.
The Federation’s case was opened on the basis that the terms of the Letter contained two threats to the three cadets. The first threat, which was referred to as “the Employment Threat”, was that REX threatened to refuse to employ cadets who did not give an undertaking that they would refrain from exercising their workplace right to the benefits of the 2011 Agreement, and in particular those relating to approved accommodation. For this threat, the Federation relied on the terms of the Letter in the paragraphs numbered 1, 4, and 6 as set out at [19] above, in the context of the Letter as a whole and in light of the surrounding circumstances. The Federation claimed at [34] of its written opening that REX made the Employment Threat with the intention or motivation of preventing the cadets from exercising their workplace right to the benefit of the 2011 Agreement, and in particular to cl 58.2 of the 2011 Agreement. The Federation relied on the evidentiary presumption in ss 360 and 361 of the FW Act in relation to the reasons alleged.
In its written opening at trial the Federation referred to a second threat, which was defined as “the Sanction Threat”, which relied on the terms of the paragraph of the Letter that we have numbered 8. The Federation claimed that by the statements in that paragraph, REX had threatened that persons accepting employment with REX would be offered terms and conditions less favourable than those afforded to existing employees of REX, in that they: (a) would be bound not to exercise their workplace right to the benefit of the 2011 Agreement (or parts thereof); and/or (b) would be subject to sanction if they elected to exercise their workplace right to the benefit of those parts of the 2011 Agreement that they had undertaken to forego. At [40] of its written opening, the Federation claimed that REX made the Sanction Threat with the motivation or intention of preventing the cadets from exercising their workplace right to the benefit of cl 58 of the 2011 Agreement and/or the 2011 Agreement, and again relied on ss 360 and 361 of the FW Act.
Threat to take action with intent to coerce – s 343
In relation to the Federation’s claim that by the Letter REX had threatened action against the cadets with intent to coerce in contravention of s 343 of the FW Act, the Federation’s further amended claim alleged as follows, in which the references to “affected class two” are to the cadets –
COERCION
45.By reason of the matters set out at paragraphs 28-44, and in breach of section 343 of the Fair Work Act, the respondent:
a.…
b.threatened to organise and take action against prospective employees in affected class two, including threatening not to employ those persons;
c.threatened to organise and take action against prospective employees in affected class two, once employed, including threatening to effectively stall their career progression
in order to coerce those persons not to exercise the workplace rights.
In its written opening at trial, the Federation claimed that the threats against the cadets were: (a) to refuse to employ them; (b) to employ them on terms and conditions less favourable than those afforded to existing REX pilots; and/or (c) to sanction them if, having accepted employment, they exercised workplace rights that they had undertaken not to exercise. The Federation relied on the evidentiary presumption in s 361 of the FW Act, and submitted that it was for REX to demonstrate that it had not sent the Letter with intent to coerce, that is, to negate choice.
As for the alleged action that was threatened, the Federation claimed at [54] of its written opening that the threat to take action against the cadets was unconscionable or illegitimate. We set out the allegations below, but we interpret the references in them to “Class One” as being references to “Class Two”, and therefore referring to the cadets –
54.The threat to take action against Class Two was unconscionable or illegitimate because –
a.members of Class One [sic] were:
i.competing in a highly competitive application process;
ii.were applicants for a unique position with high barriers to entry and a limited number of places; and
iii.had already been assessed as possessing the technical skills necessary for appointment to the position;
iv.significantly invested in the application process;
v.had few accessible remedies to challenge a decision by Rex not to employ them if the [sic] failed to give the required undertakings;
b.the RECP is unique in Australia and the alternative career pathways were of a substantially different kind;
c.applicants for the RECP did not have equal bargaining power with Rex; and
d.members of Class One [sic] were, by reason of the matters in (a)-(c) above, vulnerable to an abuse of power by Rex.
The submissions then claimed at [55] –
55.It follows that, unless Rex discharges its onus on the intention to negate choice element of coercion, this contravention will be made out.
False or misleading representations – s 345
By its further amended claim, the Federation made the following allegations in relation to its claim that REX had contravened s 345 of the FW Act –
Misrepresentation
46.By reason of the statements made by the respondent (described at paragraphs 28, 35 and 42 [all being allegations about the Letter]), and in breach of section 345 of the Fair Work Act, the respondent knowingly and/or recklessly represented to members of affected classes one and two that:
a.those persons were not entitled to the benefit of the workplace rights;
b.if those persons insisted on the benefit of the workplace rights, the respondent would be entitled to, and would either:
i.refuse to employ those persons; or
ii.if already employed, ensure that the those persons’ career progression was effectively stalled
(false representations).
47.The false representations were about the workplace rights, and/or the effect of the exercise of the workplace rights.
By its written opening filed before trial, the Federation alleged the representations somewhat differently, and claimed that in the context of surrounding circumstances the Letter contained the following implied representations –
59.In the context of those surrounding circumstances, and the Letter read as a whole, the Letter contained implied representations that:
(a)REX could lawfully determine whether or not to offer employment to persons by reference to whether those persons were prepared to undertake not to exercise workplace rights;
(b)REX could lawfully refuse to offer employment to a person if they failed to give an undertaking not to exercise certain workplace rights;
(c)REX could lawfully refuse to accept a person into the PICUS course or refuse to offer a person a command if that person exercised their workplace right to the benefit of the 2011 Agreement; and/or
(d)REX could lawfully sanction a person who undertook not to exercise a workplace right and later elected to exercise that workplace right.
The Federation then alleged at [62] of its written opening at trial that the representations were false or misleading, which enlarged the allegation in its further amended claim which alleged only falsity –
62.In the present case, the representations, having regard to the Letter read as a whole and the surrounding circumstances, were false and/or misleading because it was, by operation of the FW Act, unlawful to:
(a)determine whether or not to offer employment by reference to whether a prospective employee was prepared to undertake not to exercise workplace rights;
(b)refuse to offer a person employment unless they agreed not to exercise their workplace rights;
(c)refuse to offer an employee entry into a select training course, or a promotion, on the basis that the employee had exercised, or would exercise or proposed to exercise, workplace rights; and
(d)sanction [an] employee who chose to exercise workplace rights, having earlier undertaken not to do so.
As to the question whether REX made the false or misleading representations that were alleged “knowingly or recklessly”, which is a necessary element of s 345, the Federation acknowledged at [63] of its written opening that it carried the burden in relation to this element.
REX’s threshold objections to the Federation’s claims
We mentioned at [39] above that REX filed a “further amended response (defence)” which alleged that the Federation was not entitled to represent the industrial interests of cadets. The relevance of this allegation is to the standing provision in s 540(6) of the FW Act, which we set out at [30] above, and which provides that an industrial association may apply for an order in relation to a contravention of a civil remedy provision only if, in the case of a contravention in relation to a person, the person is affected by, or will be affected by the contravention, and the industrial association is entitled to represent the industrial interests of the person. These are necessary conditions of standing in this case.
By its submissions to the primary judge, REX pursued the question of standing. REX submitted that in relation to the cadets, the Federation had not brought forward anyone who could be said to be affected by the contravention, and pursued its claim that the Federation was not entitled to represent the industrial interests of the relevant cadets. It was further submitted on behalf of REX that none of the three cadets who received the Letter had made application for associate membership of the Federation, and there was no ratification by the Federation’s Finance Committee of any decision to commence and fund the proceeding. We will address the terms of the Federation’s rules in more detail when addressing the issues raised by the notice of contention.
Otherwise, by its further amended response, while admitting the Letter, REX denied the Federation’s allegations of contravention of the FW Act, and by way of positive plea alleged at [44] that –
… the letter and the matters referred to in the letter, … were to assist [REX] to ascertain the character and integrity of the short-listed applicants solely for the purpose of determining whether they should be granted the life-changing opportunity and access to the training program and have access to the unsecured loan of $105,000.
In its opening written submissions to the Federal Circuit Court at trial, REX submitted that the scope of the trial was to be determined by the pleadings, and only the pleadings, citing Australian Building and Construction Commissioner v Hall [2018] FCAFC 83; 261 FCR 347 (ABCC v Hall) at [49]-[50]; Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39 at [239], [383]; and Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126; 265 FCR 208 at [131]‑[132] (Bromwich J, dissenting, but not in point of principle - see Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177; 384 ALR 75 at [151], [162], [169]). In response, in opening address before the primary judge, counsel for the Federation submitted that the parties were “not operating on the basis of pleadings”, and that the claim and response that were filed were not the same as a statement of claim and a defence. The primary judge addressed these competing submissions in the course of His Honour’s reasons for judgment, but did not rule upon the point during the course of the trial. We will address the course that the primary judge took later in these reasons.
The notice to produce
It appears from the transcript of the trial and from REX’s submissions below and to this court that REX served a notice to produce on the Federation. At the commencement of the trial, counsel for the Federation foreshadowed a challenge to the notice to produce. After some discussion about the availability of Mr Howell as a witness, and the expected duration of the hearing, counsel for the Federation returned to the notice to produce, and an exchange took place, the substance of which was that notwithstanding the Federation’s objections to the notice, and its submissions that it should be set aside, counsel for the Federation stated that there were no documents to produce in response in any event. It does not appear that the notice to produce that was the subject of the exchanges, or the surrounding correspondence that was referred to at the hearing, were tendered.
Witnesses
The Federation called two witnesses: (1) Mr Eric Djonlagic, who was a pilot formerly employed by REX and who had undertaken the cadet program but who had chosen to leave REX after five years and take up employment as a pilot in New Zealand; and (2) Mr Robin Darroch, who was a Captain employed by REX and who had been the Chair of the REX PC since about 2010. Both witnesses gave evidence-in-chief by adopting affidavits following rulings on objections. Mr Djonlagic was cross-examined briefly by counsel for REX, and Mr Darroch was not cross-examined.
Counsel for REX called its Chief Operating Officer, Mr Howell, who was the author of the Letter. Mr Howell suffered the onset of a medical condition on the first day of the trial, and was unable to give evidence that day. The hearing of the proceeding was adjourned before lunch on the first day and resumed three months later on 16 October 2019. Mr Howell gave his evidence-in-chief by an affidavit that was tendered following rulings on objections. By his affidavit, Mr Howell gave evidence about (inter alia) REX’s operations, the employment of pilots, and the recruitment of cadets for the course undertaken at the Academy. In relation to the Letter, Mr Howell explained his reasons for its composition. He stated that he was not requiring shortlisted candidates to commit in their motivation letter to volunteer to stay at the accommodation at the Academy for overnight simulator checks, and that the instance of cadets volunteering to stay at the Academy and then refusing to do so was just an example of the type of commitment that a cadet could make, but then later not comply with. He stated that what he wanted from the Letter was for the shortlisted candidates to give examples and commitments about how they would go above and beyond the call of duty, and that it was not a requirement or even an expectation that they would commit to staying at the Academy. Mr Howell specifically denied that he sent the Letter in order to threaten or coerce the cadets, or because the cadets had or proposed to exercise any workplace rights, or to prevent the cadets from exercising workplace rights, including the right to stay at the hotel accommodation at Wagga Wagga. Mr Howell also denied that he had misrepresented the nature of workplace rights. Mr Howell was cross-examined for some time by counsel for the Federation.
Counsel for REX also tendered an affidavit of Mr Stephen Manna, who was a pilot who commenced employment with REX on 19 August 2015 after completing the REX cadet programme, and who had received the Letter. Mr Manna was not cross-examined.
The primary judge’s reasons
In the primary judge’s reasons (J), his Honour addressed the submissions advanced on behalf of REX about the state of the Federation’s documents setting out the claims that were advanced. The primary judge addressed the extent to which the Federation’s case at trial conformed with the claims made in its “Form 4” further amended claim. His Honour stated at J [23], [27], and [28] that the Federation advanced a case that differed from what was set out in its further amended claim, and identified the alleged contravention of s 345 of the FW Act relating to misrepresentations as the clearest example of a departure from the Federation’s further amended claim. His Honour did not specify other respects in which the case that was opened on behalf of the Federation deviated from the further amended claim. However his Honour held that REX was not denied procedural fairness because it had notice of the Federation’s claims by the written submissions filed prior to trial, and also the oral opening. His Honour’s reasoning on these issues was as follows –
22.The Applicant commenced this application under rule 45.08 of the Federal Circuit Court Rules 2001 (‘Rules’). That rule permits an applicant to file a claim of this type in accordance with the approved form (‘Form 4’) and that the form be accompanied by a claim. The Applicant’s claim was contained within the Form 4.
23.At the opening of the trial, the Applicant advanced a case that differed from what was set out in the Form 4.
24.In response to the above, the Respondent contended that the scope of the trial was to be determined by the pleadings and only the pleadings. The Respondent submitted that the Application, the Response and the Reply ought to be regarded as pleadings and the Applicant’s case ought to be confined to matters disclosed by the pleadings.
25.The submission that this case has been conducted on the pleadings is problematic for a number of reasons. Section 50 of the Federal Circuit Court of Australia Act 1999 expressly provides that proceedings can be instituted in this Court without pleadings. The Rules of this Court do not provide for pleadings. The Applicant commenced the proceedings under the Rules in a manner that is permitted by the Rules. Equally however, this is a matter in which the Applicant filed a Reply to the Response. In doing so, it appears to invoke the Federal Court Rules 2001 in relation to pleadings.
26.In Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286-287, Mason CJ and Gaudron J explained an essential function of pleadings is to ensure ‘a basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her’. The relevant question it seems to me in this case is not whether the initiating process filed by each party constitute pleadings or not, or whether the parties should be held to the Form 4 and Response, but rather, whether the Respondents have been denied procedural fairness because at trial, the Applicant advanced a case that differed from what was set out in the Form 4.
27.The Applicant did advance a case at trial that was to some extent different from the case disclosed by the Form 4. The clearest example of this is the case that the Applicant sought to advance in terms of the alleged contravention by the Respondent of section 345 of the Act (though there exists other departures when the Applicant’s written outline is compared to the Form 4).
28.While the Applicant did advance, to some extent, a different case at trial to what was disclosed in its Form 4, I find that the Respondent was not denied procedural fairness, and that the Applicant may pursue the case it outlined in its opening. I do so for the following reasons. This was a matter in which written outlines of argument were filed in advance of the trial. In this matter, the written outline was filed by the Applicant on 4 July 2019, some 8 business days before the date of commencement of the trial. Accordingly, the Respondent was on notice from this time as to the case it was required to meet. It could have taken any number of steps, including seeking an adjournment of the trial and a costs order against the Applicant, in order to deal with any prejudice. The Respondent did not do so.
29.That, however, is not the end of the matter. When the trial opened, it had to be adjourned on the first morning because a key witness was unavailable. That resulted in the trial being delayed for a further 3 months. The adjournment occurred after the Applicant had opened its case orally. Accordingly, the Respondent had a further period of three months in which to consider the Applicant’s case (disclosed both in the written outline, and in its oral opening at the trial) and decide how to meet it.
30.Given the circumstances above, I consider that the Respondent cannot now be heard to complain that it was denied procedural fairness, or suffered prejudice, because of the degree to which the case, as advanced at trial, departed from the Form 4. The Respondent suffered no material loss of opportunity to meet the case advanced by the Applicant. Accordingly, the Court will deal with the claims as advanced by the Applicant at trial.
31.The conclusions I have expressed above are very much applicable to the circumstances of this case. They ought not to be taken as an endorsement by this Court that parties are free to advance a case at trial that is different from that which is advanced in the initiating documents filed in this Court, whether those documents be pleadings, an Application and a Response, or any other variant. In the ordinary course, a party advancing a case different from that notified ought to be expected to be held to the claims or defence advanced in the initiating documents.
The primary judge also addressed questions of onus of proof. His Honour characterised the claims for contravention of s 340 and s 343 of the FW Act as involving threats of action, and held at J [20] that the evidentiary presumption in s 361 of the FW Act did not apply to threats, citing Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCA 1398 at [70] (Tracey J). His Honour noted that the Federation had accepted that proposition, although as we discuss later the Federation’s position was more nuanced. His Honour therefore considered the Federation’s claims on the basis that the Federation bore the onus of proof in relation to all elements. We pause to note at this point that after the judgment below, in Australian Building and Construction Commissioner v Molina [2020] FCAFC 97; 277 FCR 223 (ABCC v Molina) the Full Court (Bromberg, Colvin and Abraham JJ) held that s 361 of the FW Act applies to allegations of threats of action or organising action with intent to coerce that would contravene s 348, which concerns coercion with respect to industrial activity.
The primary judge then made detailed findings about the substance of the Federation’s claims. However, his Honour did not address the submissions that had been made on behalf of REX about the Federation’s standing to bring the claims, or whether it had been authorised to do so in accordance with its rules.
The primary judge found that the Letter was sent to candidates for entry into the respondent’s cadet program known as “REX 17”. His Honour did not make any specific findings about the identity of the persons to whom the Letter was sent. However, it appears to have been accepted that the Letter was sent to three cadets: Mr Manna, Mr Uscinski, and Ms Carr. His Honour found that REX sent the Letter as part of its recruitment process, and that it was not the first occasion upon which REX had sent such a Letter to candidates for its cadetships asking them to make “solemn promises” voluntarily to contribute to REX. His Honour referred to earlier iterations of the Letter that were before the Court, and at J [47] set out as an example a letter from September 2012. His Honour then considered in turn the Federation’s claims that: (1) REX had threatened to take adverse action against the alleged classes of persons in contravention of s 340 and s 342(2)(a) of the FW Act; (2) REX had threatened to take action against the alleged classes of persons with intent to coerce in contravention of s 343 of the FW Act; and (3) REX had knowingly or recklessly made false or misleading representations in contravention of s 345 of the FW Act.
Threat to take adverse action – s 340
As to the claim that there had been a threat to take adverse action against the cadets, the primary judge held that the terms of the Letter did not constitute a threat of unlawful adverse action, finding as follows –
57.The Letter does not state, as the Applicant asserts, that the Respondent will refuse to employ members of affected class two [the three cadets] who do not give an undertaking to stay at the accommodation at the Academy. Nor does the Letter say that members of affected class two would be bound not to exercise their workplace rights, or that they would be subject to sanction if they elected to exercise their workplace rights. The Letter says neither of these things (nor can these be reasonably inferred).
58.It is important, in my view, to look at the Letter as a whole and to ascertain the subject matter to which it is directed. The Letter is a letter to prospective cadets during a recruitment process. It is a document that is providing information and inviting a response. It explains that ‘technical skills alone are not enough’ and that the Respondent expects cadets to go ‘beyond the call of duty’. It then seeks from candidates ‘solemn promises’. Candidates are not required to respond to the Letter.
59.The Letter does not require candidates to give any particular promise – it expressly leaves that choice to the candidate. So much is evident from the terms of paragraph 6 which refers to a candidate undertaking ‘various activities and actions’, paragraph 7 which calls for the giving of ‘specific examples’ and paragraph 8 which refers to the ‘solemn promises/commitments that you have articulated in your motivation letter’ (emphasis added).
60.Two statements in the Letter attracted particular debate in the hearing. The first is that the Respondent ‘will not allow any pilot lacking in integrity to hold a command’. The second statement is that the Respondent ‘will not consider him/her suitable for entry into the PICUS Program’ (‘Statements’). These Statements are contained within a single sentence. An issue is to whom these Statements are directed.
61.I consider that the Statements set out above are directed at individuals who break ‘their solemn undertakings’. That the express text of the Letter supports such a conclusion is apparent from what follows:
(a)As stated above, the Letter is directed at ensuring that candidates honour all their commitments. This can be seen from paragraph 3 which begins with the words ‘We expect you to honour all your commitments…’;
(b)While paragraph 4 contains the example of persons refusing to stay at the Academy, its focus is on integrity – on persons who promised something – ‘promised us the earth’ and then do something else;
(c)The Statements are contained in the paragraph that is clearly addressed to those who break their solemn undertakings. So much may be seen from the first sentence of paragraph 5 of the Letter which provides as follows: ‘you should be aware that the REX Group considers such Cadets to be totally lacking in integrity in breaking their solemn undertakings given earlier’. Further, when the entire sentence containing the Statements is read, it can be seen from the words that precede the Statements that the Statements are directed to persons ‘lacking in integrity’;
(d)Paragraph 6 of the Letter seeks the provision of a motivation letter containing the ‘solemn promise to give back to the company by volunteering to undertake various activities and actions’.
(e)The final paragraph of the Letter emphasises the expectation on candidates to honour their ‘solemn promises/commitments’ and advises them not to pursue their application if they have the slightest doubt about their ‘ability to honour your commitments over the next seven years’.
62.The emphasis in the Letter placed on integrity and honouring commitments is unexceptional when one takes into account the circumstances. This is not to be an ordinary employment relationship. It is one where the parties are contemplating entering into a relationship of at least seven years, and one which will see the commencement not only of an employment relationship, but also a relationship of debtor/creditor in order to fund the training of the candidate. Further, the emphasis on integrity is unremarkable when consideration is given to the roles cadets will ultimately fill – pilots in command operating an aircraft with passengers safely.
63.There is then the evidence of Neville Howell. Mr Howell is the Chief Operating Officer of the Respondent and the author of the Letter. Mr Howell’s evidence was that the reference to ‘[the Academy] accommodation’ in the Letter was given as an example of persons who had not adhered to commitments. He did not have any particular person in mind. He sought from candidates specific examples of commitments they would give and follow through with. His evidence in chief was that he sent the Letter because the integrity and character of candidates was a very important consideration for entry into the RECP Programme. He also, in evidence in chief, expressly disavowed that he sent the Letter to threaten people in relation to the exercise of their workplace rights.
64.Mr Howell was cross examined at length about his reasons for sending the Letter. Under cross examination, Mr Howell made a number of statements that the Applicant asserted, effectively, amounted to admission or were dispositive of the case in the Applicant’s favour.
65.I have considered closely the evidence of Mr Howell in chief and in cross examination. His evidence in many ways largely reflected the content of the Letter. That is that Mr Howell regarded it as very important that individuals keep promises, and that there would be consequences for those who break their promises. Mr Howell was resolute in his views about the singular importance of integrity to the Respondent. Further, given the opportunity to clarify his answers on re-examination, Mr Howell returned to the central theme of his evidence in chief and emphasised that when he referred in the Letter to those lacking in integrity, he was referring to those who make a commitment and then renege on it.
66.I had the benefit of observing Mr Howell in the witness box. He was careful in giving evidence. He sought to explain his answers. He did not resile from the importance of integrity in the Respondent’s operations.
67.Having seen Mr Howell in the witness box, I find that when he wrote the Letter, it was his intention to extract from candidates commitments or ‘solemn promises’ and to inform candidates of the consequences for them if they broke those commitments. Mr Howell was concerned to ensure that candidates understood the importance of integrity as part of the recruitment process, and the view the Respondent took of persons who lack integrity (i.e. those who break their promises). Mr Howell did not intend to refuse to employ a person who did not stay at the Academy. Mr Howell did not, and did not intend to, threaten to sanction a person because they chose not to stay at the Academy. The Statements were directed at those who broke their promises.
68.As I have noted, the Applicant, understandably, points to the timing of the inclusion of the [Academy] accommodation example in the Letter and that it followed renewed attempts by the Respondent to require pilots to stay at the Academy. It says, among other things, that that context and history ought to inform the Court’s view about the content of the Letter, and Mr Howell’s intentions in writing it. I accept that the context of surrounding events can be important in coming to a view about whether the Letter threatened adverse action. That does not mean, however, that I should look beyond the ordinary words used in the Letter.
69.To the above I would also add the following. To the extent that the history to the matter is of significance, all of it needs to be considered. One additional factor evident from the history and context is that the Letter was not the first of its type sent to prospective cadets. Versions of the Letter were sent from at least September 2012. A review of the earlier letters (one of which is set out earlier in these reasons) discloses that the Respondent has, well before the present proceedings, placed an emphasis on the importance of integrity and honouring commitments. Indeed, the Respondent has a history of asking prospective candidates to give solemn promises over and above their contractual commitments. Mr Howell was not the author of the earlier letters. Those letters however, demonstrate two things. They support Mr Howell’s evidence about the primary importance placed on integrity by the Respondent. They disclose the history of cadets being asked to give promises. They also show a history of the company explaining to cadets the consequences of them breaking their promises.
Threat with intent to coerce – s 343
The primary judge also held that REX had not engaged in conduct that contravened s 343 of the FW Act. His Honour’s reasons were as follows –
85.The threats against affected class one are said to be the threat that members of the class lacked integrity, would be denied entry into the PICUS course and would not be allowed to hold a command. The threats against affected class two are said to be a refusal to employ them, to employ them on terms and conditions less favourable than existing employees, or a threat to sanction them if, having accepted employment, they exercise their workplace rights.
86.The expression ‘intent to coerce’ in section 343 of the Act requires the Court to be satisfied about two discrete elements: Esso Australia Pty Ltd v Australian Workers Union [2016] FCAFC 72 (‘Esso’). First, that there was an intent to negate choice. Second, that there was the use of unlawful, illegitimate, or unconscionable means to do so. An intent to coerce refers to more than a mere inducement to comply: Esso. Coercion connotes something akin to the use of force, or at least the threat of harm to the interests of another: National Tertiary Education Union v Commonwealth of Australia [2002] FCA 441 (‘NTEU’) at [97]. What is required is an intent to negate choice, and not merely an intent to influence or to persuade or induce: NTEU at [103]. Coercion implies a high degree of compulsion, at least in a practical sense, not some lesser form of pressure by which a person is left with a realistic choice as to whether or not to comply: NTEU at [103].
87.I deal firstly with whether there was an intention to negate choice. The starting point is to consider the context in which the Letter was sent. I have dealt with this issue earlier and rely on my earlier findings. In summary, the Letter was sent to candidates for a cadetship as part of the Respondent’s recruitment process. The purpose of the Letter was to secure from candidates a handwritten motivation letter in which they made ‘solemn promises’ that they chose to give to the Respondent.
88.There is then the terms of the Letter itself. Again, I rely on my earlier findings. In summary, the Letter did not request any specific commitment from candidates. Rather, the Letter permitted candidates to choose which commitments they wished to give. The Letter emphasised the importance of integrity and of candidates honouring their commitments. The Statements applied in respect of a failure by a person to honour their commitments.
89.The terms of the Letter also went one step further. Candidates were informed not only of the expectation that they honour their commitments, but were informed not to pursue the application if they had the slightest doubts about their ability to honour their commitments. In other words, it was entirely up to the candidate as to what response they gave and indeed whether they chose to pursue the application for the cadetship.
90.The Applicant contends that the positions for cadetships were highly sought after. That may well be the case. Indeed, many employment opportunities are highly sought after and hotly contested. That fact alone however, does not mean that an applicant had no effective choice or that they were otherwise coerced. Here, the Letter makes plain that not only did the candidates have a choice as to what commitment they gave, but they also had a choice as to whether they wished to pursue their application.
91.For completeness, I note that the second element required to establish coercion is that the Respondent utilised means that were unlawful, illegitimate or unconscionable. There is not any unlawful conduct of the Respondent. The Applicant submits however, that unconscionable or illegitimate pressure was brought to bear on members of each affected class.
92.The Applicant submitted that members of the affected classes were bound (or would be bound) to the Respondent for a period of at least seven years, were unable to take alternative employment, and were subject to onerous loan agreements.
93.I accept that the arrangements relating to the loan agreements in evidence before me are not what one might regard as ordinary commercial or personal loans. Some of the terms are more onerous than those that might be imposed by a bank, including the imposition of financial penalties if cadets ultimately left employment with the Respondent to take up employment elsewhere. It is critical, however, to remember that the loans on offer are unsecured loans. Furthermore, they are loans that permit a cadet to focus on training, and not be distracted by having to gain other employment to immediately commence repaying the loan. The advantages enjoyed by a cadet under the RECP Programme, in terms of faster training, have been recorded earlier. The commercial arrangement on offer, it seems to me, balances these considerations. A candidate enjoys an expedited path through training and licensing and into command. With that comes the particular loan obligations. It is a choice they are ultimately free to make. That many of them choose it and enjoy the advantages that come with it means, in my view, that they cannot properly be heard to complain about the terms that are less favourable to them. At the end of the day, what is struck is a bargain, and every bargain has its positive and negative aspects.
94.To the above matters the following may be added. It is common in this day and age for students in a variety of disciplines to take out loans to further their education. Such loans may be through (admittedly) generous Government schemes, or may be obtained on private terms that are more commercial in nature. Students often incur significant debts and face the prospect of not being able to secure employment at the end of their studies in their chosen field. The ubiquity of such arrangements, in my view, detracts significantly from the proposition by the Applicant in this case that the loans or the loan terms, or a cadets ability to ultimately repay the loans, should be regarded as giving rise to circumstances that are unconscionable or illegitimate.
95.Finally, insofar as affected class two are concerned, many students in a variety of settings find themselves in highly competitive application processes, for limited numbers of positions and are significantly invested in the process. Those matters of themselves, or in combination with the loan terms, do not result in a conclusion that the Respondent has applied illegitimate or unconscionable pressure on members of affected class two.
False or misleading representations – s 345
Finally, the primary judge rejected the Federation’s claim that by sending the Letter REX had knowingly or recklessly made false or misleading representations to the three cadets in contravention of s 345 of the FW Act. His Honour’s reasons were as follows –
97.The final allegation made against the Respondent is that it has contravened section 345 of the Act. The Applicant submitted four implied representations emerged from the Letter that contravened section 345 of the Act. The asserted representations taken from the Applicant’s written submissions are:
‘(a)REX could lawfully determine whether or not to offer employment to persons by reference to whether those persons were prepared to undertake not to exercise workplace rights;
(b)REX could lawfully refuse to offer employment to a person if they failed to give an undertaking not to exercise certain workplace rights;
(c)REX could lawfully refuse to accept a person into the PICUS course or refuse to offer a person a command if that person exercised their workplace right to the benefit of the 2011 Agreement; and/or
(d)REX could lawfully sanction a person who undertook not to exercise a workplace right and later elected to exercise that workplace right.’
98.There are a number of elements that must be satisfied in order for a court to form the view that section 345 of the Act has been contravened. Among other things, the representation must be either false or misleading. It must also be ‘about’ one of the matters specified in subsection (1)(a) or (1)(b) of section 345 of the Act.
99.The principles relating to whether a representation is false or misleading in the context of section 345 of the Act were canvassed by a Full Court of the Federal Court of Australia in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298 (‘BHP Coal’) at [156] to [162]. I do not repeat here all of the observations of the Full Court, but rely on them.
100.I find that the Letter does not convey representations that are either false or misleading. My reasons for so finding are as follows.
101.Firstly, regard must be had to the terms of the Letter. The Letter does not refer to the relevant clauses in the 2011 Agreement. It does not refer to a workplace right. As the Letter says nothing about the clauses in the 2011 Agreement, it says nothing about the effect of those clauses.
102.Second, to the extent it might be said that the example given in the Letter is inconsistent with any workplace right, that of itself does not make the representation about a workplace right. In BHP Coal, the union published its own policy about overtime. The statement in the union policy was inconsistent with BHP’s workplace rights. The fact that there was an inconsistency between the union policy and BHP’s workplace rights did not produce the result that the union statement was ‘about’ workplace rights.
103.Third, words in documents must be read in context. In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199, in the context of misleading conduct under section 52 of the Trade Practices Act 1974, Gibbs CJ stated that it ‘is obvious that where conduct complained of consists of words it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words’.
104.I have already in these reasons given my views on the terms of the Letter. I rely on those findings in respect of the context referred to by Gibbs CJ here including that:
(a)The Letter seeks that candidates identify the commitments that they are prepared to give to the Respondent;
(b)A candidate is at liberty to select the commitments that he or she wishes to give;
(c)The Letter does not require candidates to give a commitment to not stay at the Academy;
(d)The Letter does not say that if a candidate fails to stay at the Academy, the candidate will not be admitted for entry into PICUS, or withheld from command;
(e)The Letter does stipulate that if a candidate does not honour the commitments that he or she has made, he or she will lack integrity, and persons who lack integrity will not be permitted to hold a command or be considered for entry into PICUS.
105.The above matters, in my view, provide context for, and inform the meaning of the words complained about. When the entire context is considered, its contents do not support a finding that the Respondent made statements that were false or misleading about a workplace right.
106.In addition to the above, I would also add the following reasons:
(a)it was submitted that two of the implied representations flowing from the Letter were as follows. First, that the Respondent could refuse to offer employment to a person who failed to give the undertaking not to exercise certain workplace rights. Second, that the Respondent could lawfully determine whether or not to offer employment to persons by reference to whether those persons were prepared to undertake not to exercise workplace rights. There is nothing in the Letter, either expressly or impliedly, that links a refusal to offer employment, or determining whether or not to offer employment, to the question of whether persons were prepared to give an undertaking not to exercise certain workplace rights. The language of the letter does not support such a conclusion.
(b)There is not an implied representation that the Respondent could refuse to accept a person into the PICUS course or refuse to offer that person a command if they exercise their workplace right. The language of the letter does not support such a conclusion. The refusal to accept a person into PICUS or give them a command is squarely linked to a person who lacks integrity because they have broken ‘solemn undertakings’ given earlier.
…
The grounds of appeal and the notice of contention
Senior counsel for the Federation submitted that Mr Howell had in cross-examination made an admission that the Letter was sent for a prohibited purpose. Counsel relied on a number of passages that were catalogued in the written submissions filed on behalf of the Federation and referred to in argument. In particular, counsel relied on an the following answers of Mr Howell in cross-examination as constituting an admission –
Q:All right. So, again, we’re talking about your intention when you wrote this letter. When you wrote this letter, you intended that cadets who read it would form the view that they should avoid engaging in conduct that would cause Rex to form the view they were totally lacking in integrity?
A:Yes.
Q:And one of the things that you wanted them to refrain from doing was refusing a request to volunteer to stay at [the Academy]?
A:Yes.
Q:Because that was a thing that would cause Rex to form the view they were totally lacking in integrity?
A:Yes.
However, these answers have to be evaluated with other evidence that Mr Howell gave. For instance, immediately following the above answers was the following exchange –
Q:And you wanted them to know that, if they refused that simple request, they would be lacking in integrity and there would be serious consequences; they wouldn’t be allowed into PICUS?
A:That was not my intention.
…
Q:You have just agreed with me that you wanted cadets reading this letter to refrain from refusing requests to stay at [the Academy] on the basis that that conduct would cause you to form the view they were lacking in integrity?
A:I agree that’s what it says. That was not the intent.
All these answers were given in the course of a lengthy and somewhat repetitive cross-examination of Mr Howell spanning more than 70 pages of transcript across two days. In addition, as recounted at [60] above, in his affidavit evidence Mr Howell addressed the reasons for which he sent the Letter, and made express denials that he sent the Letter or made any statements in the Letter to prevent the recipients from exercising their workplace rights. Further, Mr Howell gave evidence in re-examination of his intention in writing relevant paragraphs of the Letter.
We do not accept the submission on behalf of the Federation that this court is in as good a position as the primary judge to make findings about whether REX has discharged its onus of showing that a relevant prohibited purpose was not included as a substantial and operative reason for making the threats. It is apparent from [64]-[67] of the primary judge’s reasons that Mr Howell impressed his Honour as a witness. In Jadwan Pty Ltd v Rae & Partners (a firm) [2020] FCAFC 62; 278 FCR 1 at [403]-[415] the Full Court reviewed the main High Court authorities relating to appeals by way of re-hearing, and the demonstration of error in relation to a finding of fact that is the product of some advantage enjoyed by the primary judge. Advantages that may be enjoyed by a primary judge include the benefit of seeing witnesses give their evidence, and to form impressions about that evidence over the course of the trial, including by the “subtle influence of demeanour”: Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 (McHugh J, Mason CJ, Deane, Dawson and Gaudron JJ agreeing). In those circumstances, there is a restraint on appellate review in relation to whether error is demonstrated, including as to findings of secondary facts: Lee v Lee [2019] HCA 28; 266 CLR 129 at [55] (Bell, Gageler, Nettle and Edelman JJ, Kiefel CJ at [1] agreeing).
The question whether there was any error in the primary judge’s findings as to Mr Howell’s intent at J [64]-[67] depends in large part on what to make of the totality of Mr Howell’s evidence where the primary judge enjoyed an advantage in evaluating that evidence that is not available to this court. The primary judge stated as part of his reasons that he had the benefit of observing Mr Howell give evidence, and found at J [67] that Mr Howell “did not intend to refuse to employ a person who did not stay at the Academy”, and that he “did not, and did not intend to, threaten to sanction a person because they chose not to stay at the Academy”. These findings were supported by evidence that Mr Howell gave. The findings do not directly correspond to the inquiry required by s 361(1) of the FW Act, which his Honour did not consider. But they point to the fact that his Honour was not disposed to evaluate in isolation particular answers that Mr Howell gave in cross-examination, and on which the Federation relied as admissions. Making allowance, as we must, for the advantages which the primary judge enjoyed, we are not persuaded that there was any error in his Honour’s findings about Mr Howell’s intent in sending the letter to the extent that his Honour did not accept submissions on behalf of the Federation that Mr Howell had made admissions in the course of his evidence.
However, the question whether REX discharged the onus under s 361 of the FW Act, when read in conjunction with s 360, was not an issue that the primary judge addressed by reference to those provisions, or by reference to the principles discussed in Barclay. Further, to the extent that the primary judge addressed the intention or purpose of Mr Howell, that assessment was undertaken on the premise that the Letter did not convey any threats. Because the primary judge rejected the claim that the Letter threatened adverse action, his Honour did not address himself to the question whether, on the assumption that the Letter threatened adverse action, the threat was made for the purpose of preventing the cadets from exercising their workplace right to the benefit of the 2011 Agreement. While the primary judge found at J [67] that Mr Howell “did not intend to refuse to employ a person who did not stay at the Academy”, that finding did not squarely address the prohibited purpose that had been alleged.
By its submissions, the Federation invited this court to make a finding that REX had not discharged the evidentiary onus under s 361 in relation to the threat to take adverse action. For the same reasons that we are not persuaded that there was error in the primary judge’s rejection of the Federation’s submission that Mr Howell made admissions, we are not in a position to determine that question for ourselves. That is because any finding by this court as to Mr Howell’s intent or purpose in sending the letter would be founded only on part of the material that was available to the primary judge, being the transcript and the documentary evidence. The manner in which Mr Howell gave his evidence was clearly relevant to the primary judge’s evaluation of his testimony in circumstances where his evidence was mixed. This court therefore cannot substitute its own finding: see, Waterways Authority v Fitzgibbon [2005] HCA 57; 221 ALR 402 at [132]-[134] (Hayne J).
For the above reasons, the question whether REX made the threats for reasons that included a prohibited reason as a substantial and operative factor will have to be remitted to the Federal Circuit and Family Court of Australia (Division 2).
(4) Did the primary judge err in his Honour’s rejection of the Federation’s claim that REX had contravened s 343 of the FW Act by taking action, or threatening to take action with intent to coerce?
Section 343 of the FW Act proscribes the taking of action with intent to coerce a person to exercise, or not exercise, or propose to exercise or not exercise a workplace right (as defined), including in a particular way. It is settled that coercion itself requires the satisfaction of two elements: (1) negation of choice; and (2) the use of unlawful, or illegitimate, or unconscionable means to exert pressure to negate the choice: ABCC v Hall at [25]; Victoria v Construction, Forestry, Mining and Energy Union [2013] FCAFC 160; 218 FCR 172 at [91]-[92] (Buchanan and Griffiths JJ); cf, Esso v AWU at [61] (Kiefel CJ, Keane, Nettle and Edelman JJ). The intent aspect of the expression “intent to coerce” in s 343 applies to the negation of choice element referred to in the authorities, but not to the use of unlawful, or illegitimate, or unconscionable means, which is an objective element: ABCC v Hall at [25]-[26]; Newton v Australian Postal Corporation (No 2) [2019] FCA 2192; 292 IR 396 at [27], [29] (Bromberg J). The evidentiary presumption in s 361(1) of the FW Act applies to an allegation of an intent to negate choice for the purposes of an alleged contravention of s 343.
The primary judge’s findings in relation to the claim of contravention of s 343 were at J [85]-[95], which we have set out at [67] above. In relation to whether there was an intention to negate choice, the primary judge referred at J [87] and J [88] to his earlier findings. At J [87], the primary judge stated that the purpose of the Letter was to secure from candidates a handwritten motivation letter in which they made “solemn promises” that they chose to give to REX. This reflected the primary judge’s finding at J [67] in relation to Mr Howell’s intention when he wrote the letter. The primary judge then referred at J [88]-[89] to the terms of the Letter, which his Honour had earlier considered in rejecting the Federation’s claim that it contained threats of adverse action. The primary judge relied on the terms of the Letter in support of what is at least an implicit conclusion that there was no intention by REX to negate choice. As we have explained, we have concluded that the primary judge was in error in finding that the Letter did not convey threats of adverse action.
The primary judge’s reasons for rejecting the Federation’s claim that REX intended to negate choice relied on a mixture of findings in relation to Mr Howell’s intention in sending the Letter, and the terms of the Letter itself, which his Honour held did not convey the threats that were alleged, and did not amount to a denial of choice. The objective meaning of a communication may be relevant to the question whether in making the communication there was an intention to negate choice. That is particularly so if the communication was held not to convey the alleged threats, or to deny choice, because there would be some tension between a finding that objectively no threats were conveyed, and a finding that nonetheless there was a subjective intention to negate choice.
In our view, the findings as to objective meaning of the Letter which formed part of the primary judge’s reasoning at J [88]-[89] in relation to whether there was an intention to negate choice cannot be severed from his Honour’s other reasons concerning the purpose of the Letter, with the result that the components of the reasons cannot be disentangled. Because the primary judge’s finding that no threats were conveyed by the Letter has been shown to be in error, a material element of his Honour’s reasoning in rejecting the alleged intent for the purposes of the claimed contravention of s 343 of the FW Act must be reconsidered. For the reasons that we have given at [168] above relating to the benefit that the primary judge enjoyed in evaluating Mr Howell’s evidence, we are not able to reconsider that issue ourselves, and this cause of action will also have to be remitted.
(5) Did the primary judge err in his Honour’s rejection of the Federation’s claim that REX had contravened s 345 of the FW Act by knowingly or recklessly making false or misleading representations?
For the reasons given by the primary judge at J [101]-[102] there was no error by his Honour in rejecting the Federation’s claim that the Letter made representations about workplace rights, or their exercise. The Letter said nothing about workplace rights, and therefore the representations that the Federation alleged in its further amended claim which we set out at [50] above were not conveyed. As to the representations that the Federation alleged in its written opening which we set out at [51] above, they are allegations of implied representations that amount to no more than representing that what REX was proposing by the Letter was lawful. Recognising that whether a particular representation was conveyed is always a question of fact that is dependent upon the evidence, the reasoning of the Full Court in BHP Coal at [156] is applicable here, that is, “the fact that a representation may be inconsistent with a workplace right does not make it a representation about a workplace right”.
Upon finding that the Letter did not convey the representations alleged by the Federation, no occasion arises to consider whether they were made knowingly or recklessly.
(6) Did the Federation have standing to bring the proceeding?
The relevant standing provisions on which the Federation relied are in s 539(2) and s 540(6) of the FW Act, to which we referred at [30] above. The Federation did not claim that it was affected by the alleged contraventions, but claimed that it was an industrial association that was entitled to represent the industrial interests of persons who were affected by the alleged contraventions, thereby engaging s 540(6)(b) of the FW Act.
At trial, counsel for REX submitted to the primary judge that the proceeding could be dismissed upon consideration of four “threshold issues”, which were put in the alternative. The fourth of those issues raised the question of the Federation’s standing to bring the proceeding, and whether it was required to “bring with it” a cadet who was a “person affected” by the contraventions. A further element was whether the Federation had brought and maintained the proceeding in accordance with its rules. The primary judge did not consider these questions. Apart from the fact that the submissions were advanced in the alternative to other submissions that his Honour accepted, it was unnecessary for his Honour to consider the submissions, because upon rejecting the claims of contravention it followed that there was no person affected by any contravention for the purposes of s 540(6) of the FW Act. The issues are now raised on appeal as grounds 1 and 2 of the notice of contention.
We do not accept REX’s contention that the Federation was required to “bring with it” a cadet who was a “person affected” by the contraventions. The standing afforded to an industrial association by s 540(6)(b) of the FW Act to apply for an order is not derivative. In bringing an application the industrial association does not stand in the shoes of, or act as agent of a person affected by a contravention. Rather, an industrial association is given standing as a principal in an independent capacity to apply for an order in relation to a contravention if the condition in s 540(6)(b), that the industrial association is entitled to represent the industrial interests of the person affected by the contravention, is engaged. That condition equates with the Dunlop Rubber principle: R v Dunlop Rubber Australia Ltd; Ex parte Federated Miscellaneous Workers Union (1957) 97 CLR 71; Regional Express Holdings Limited v Australian Federation of Air Pilots [2017] HCA 55; 262 CLR 456 at [29] (Kiefel CJ, Keane, Nettle, Gordon and Edelman JJ).
Whether a person is affected by a contravention is fact-dependent and will be subject to the type of contravention that is alleged. In relation to a claim of a threat to take adverse action against a person in contravention of s 340 and s 342 of the FW Act, the question whether the threat was made is to be determined objectively, as we explained at [147]-[157] above. It is not a necessary element of the contravention to show that the person who was threatened had a subjective fear of harm. It follows that in order to have standing, it would be sufficient for the Federation to show that it was entitled to represent the industrial interests of the persons to whom the threat was made, for such a person would relevantly be affected by the contravention. In this case, those persons were the three cadets to whom the Letter was sent. There was direct evidence that one of the cadets, Mr Manna, read the Letter because he stated so in his affidavit. There also is an inference that the other two cadets read the Letter, because they responded to it, and their responses were in evidence. The receipt and reading of the Letter by the cadets would be sufficient to establish that they were persons affected by any actionable threat or action taken with intent to coerce that was effected by the Letter.
That brings us to the question whether the Federation was entitled to represent the industrial interests of the cadets. There was no issue raised by the notice of contention that brought into question the entitlement of the Federation to represent the industrial interests of the cadets. We did not understand that there was any controversy about this issue on appeal, and senior counsel for REX confirmed at the hearing that there was no argument put that the three cadets who received the Letter were not eligible to be members of the Federation. In case we have not correctly apprehended REX’s position, for the reasons that follow we express our own conclusion that the Federation was entitled to represent the industrial interests of the cadets for the purposes of engaging s 540(6)(b)(ii) of the FW Act.
Section 141(1)(a) of the RO Act provides that the rules of an organisation registered under the RO Act must specify the purposes for which the organisation is formed, and the conditions of eligibility for membership. Correspondingly, s 166(1) of the RO Act provides for entitlement to membership if a person is eligible to become a member under the organisation’s eligibility rules.
The rules of the Federation are organised by topic. Rule 1 is titled “General”, and in section 3 provides for the following objects of the Federation (inter alia) –
3. Objects
The principal objects for which the Federation is established are:
(a)To protect and further the interests of the profession of Air Pilots (hereinafter called the profession), and to safeguard and improve the interests and rights of Members of the Federation.
(b)To secure the elevation of the Profession of Commercial Air Pilots, and to improve the terms and conditions of their employment.
(c)To take any lawful action deemed desirable for the benefit and advancement of Members subject to approval of the Executive Committee.
(d)To afford legal protection for its Members in industrial matters, or other matters specifically authorised by the Executive Committee.
…
…
(g)To take any lawful action deemed desirable to further the interests of Commercial Aviation.
…
Rule 2 is concerned with membership of the Federation, and provides in section 1 that any person who is usually employed either wholly or partly in the profession of pilot in civil aviation and who holds a commercial pilot’s licence, senior commercial pilot’s licence, airline transport pilot’s licence or equivalent is eligible for membership of the Federation. Section 2.1 of Rule 2 of the Federation provides for four distinct categories of membership: (a) financial member; (b) unfinancial member; (c) associate member; and (d) life member. In relation to associate member, section 2(c)(ii) of Rule 2 is in the following terms –
(c) Associate Member: –
…
(ii)A cadet pilot or aviation student undertaking a course of study through an accredited training provider or University, with the intention of pursuing a career as a commercial pilot, may be offered Cadet/Student membership free of charge for up to two years with ratification of the Executive Committee.
A Cadet/Student member shall be entitled to receive the Federation’s Journals and publications.
The member may receive initial verbal advice in relation to industrial and professional matters free of charge. The cost of other verbal advice, and continued representation as a member, will be borne by the Cadet/Student Member unless in exceptional circumstances as determined and approved by the Finance Committee.
A Cadet/Student Member shall have no voting rights or other privileges of membership.
…
Because s 540(6)(b)(ii) of the FW Act refers to whether the industrial association is entitled to represent the industrial interests of the person, for context it is also relevant to have regard to section 4 of Rule 2, which relates to pilots –
4. QUALIFYING PERIOD FOR INDUSTRIAL REPRESENTATION
A new member will not be automatically entitled to industrial representation for any events occurring before the date membership is effective. A member who becomes financial under Rule 2.1(b)(v) shall not be entitled to representation in relation to any incident occurring during the period the pilot was unfinancial.
We referred at [35] to [37] above to the course of REX’s unsuccessful application for summary judgment. In his reasons for dismissing the application, his Honour Judge Riethmuller stated that cadets were entitled to be associate members of the Federation, citing rule 2.2(c)(ii) of the Federation’s rules, which we set out above: Australian Federation of Air Pilots v Regional Express Holdings [2016] FCCA 316 at [11]. His Honour rejected a submission advanced on behalf of REX that s 540 of the FW Act required that the Federation have as a member a person affected by a contravention: [29].
As we stated at [36] above, the Full Court dismissed an appeal by REX from the decision of His Honour Judge Riethmuller: Regional Express Holdings Ltd v Australian Federation of Air Pilots [2016] FCAFC 147; 244 FCR 344. At [14], Jessup J (with whom North J and White J agreed) framed the issues before the Full Court as follows –
14The appellant [REX] accepts that the respondent [the Federation] is entitled to represent the industrial interests of its members from time to time, but there was no allegation by the respondent that the persons affected by the alleged contraventions were its members. The respondent’s position, upheld by the primary Judge, is that it was and is entitled to represent the industrial interests of persons who were eligible for membership under its rules. On the present appeal, the appellant does not place in issue the correctness of the proposition that the persons who were alleged to have been affected by the contraventions were so eligible. But it contends that a person’s eligibility for membership of the respondent does not sustain the proposition that the respondent is entitled to represent the industrial interests of the person within the meaning of s 540(6)(b)(ii).
Jessup J undertook a comprehensive review of the legislative history of provisions that referred to the entitlement of registered organisations to represent the industrial interests of persons eligible for membership of the organisation. His Honour concluded that for the purpose of s 540(6)(b)(ii) of the FW Act, a registered organisation’s entitlement to represent the industrial interests of a person was not limited to a situation in which the person is a member of the organisation, and that the most obvious qualifying circumstance was coverage of the person under its eligibility rules. His Honour further concluded that this reasoning applied to the Federation for the purposes of s 540(6), which relates to industrial associations on the ground that the Federation was an industrial association because it was a registered organisation.
An appeal from the decision of the Full Court was dismissed by the High Court, which held that in the case of an industrial association which is a registered organisation, it was sufficient that the person was eligible for membership of the industrial association in accordance with its eligibility rules, to make the industrial association “entitled to represent the industrial interests of” that person within the meaning of s 540(6)(b)(ii) of the FW Act: Regional Express Holdings Ltd v Australian Federation of Air Pilots [2017] HCA 55; 262 CLR 456 at [1]. In a joint judgment, Kiefel CJ, Keane, Nettle, Gordon and Edelman JJ stated at [13] –
13It is not in issue that, if the sending of the letters contravened s 340(1), s 343(1) or s 345(1), the contraventions were in relation to the persons to whom REX sent the letters. The question is whether the Federation is entitled to represent the industrial interests of those persons. It has not been alleged that any of those persons is a member of the Federation. It is common ground that they are entitled to be members of the Federation pursuant to its eligibility rules.
The Court affirmed the analysis of Jessup J, holding that for the purposes of s 540(6) an industrial association such as the Federation will be entitled to represent the industrial interests of a person affected by a contravention of a civil remedy provision of the FW Act who, though not a member, is eligible for membership: see [46]-[47] of the Court’s reasons.
In our judgment, the Federation under its rules is entitled to represent the industrial interests of cadets. The Federation’s rules contemplate this occurring, because section 2(c)(ii) of Rule 2 provides for industrial representation of a cadet, albeit at the cost of the cadet unless in exceptional circumstances the Finance Committee of the Federation determines otherwise. It is important not to confuse the issue raised by s 540(6)(b)(ii) of the FW Act, which is the Federation’s entitlement to represent the interests of a person, with the different question whether a member of the Federation is entitled to industrial representation.
(7) Was the proceeding brought by the Federation in accordance with its rules, and if not, what are the consequences?
Applying the decision of the High Court on appeal in the interlocutory application in this proceeding in Regional Express Holdings Ltd v Australian Federation of Air Pilots, the entitlement of the Federation to provide industrial representation to the cadets is a sufficient condition to engage s 540(6)(b)(ii), whether or not the cadets were members. There is no allegation or evidence in this proceeding that the three cadets who received the Letter were members of the Federation, which reflects the position that the Federation did not purport, nor was it required, to bring the proceeding on behalf of such members. It follows that the issues argued in support of the second ground of the notice of contention do not arise. The Federation’s entitlement under s 540(6) of the FW Act to bring the proceeding below was as a principal, and there was no requirement that the Federation stand in the shoes of any cadet who was an associate member. Therefore, contrary to the submissions advanced by counsel for REX, no question arises as to whether the cadets were admitted to associate membership, and no question arises as to whether the bringing of the proceeding required the approval or ratification of the Finance Committee of the Federation under the section 2(c) of Rule 2 upon which REX relied. Ground 2 of the notice of contention therefore fails.
(8) Does this court have jurisdiction to entertain REX’s interlocutory application for orders under s 321(1) of the RO Act?
It follows from the resolution of the foregoing issues that REX’s claim that the Federation commenced and maintained the proceeding without complying with section 2(c) of Rule 2 falls away, and that the Federation’s reliance on s 320(1) of the RO Act does not arise for consideration. There is therefore no controversy that invites consideration of REX’s application for a declaration under s 321(1) of the RO Act to which we referred at [104] above. Without deciding whether the Full Court would have had jurisdiction to hear the interlocutory application, the application will be dismissed.
Conclusions
The appeal will be allowed in part.
The primary judge’s orders to the extent that the Federation’s claim of contravention of s 345 of the FW Act was dismissed should stand to that extent.
Otherwise, the Federation’s claims that REX contravened s 340 and s 343 of the FW Act must be remitted to the Federal Circuit and Family Court (Division 2) for rehearing in accordance with these reasons. In arriving at this decision we are mindful that a new trial “is a most deplorable result, not to be entertained upon any but the most solid grounds, as the only means of redressing a clear miscarriage”: Dakhyl v Labouchere [1908] 2 KB 325 at 327 (Lord Loreburn LC). See also: Orr v Holmes (1948) 76 CLR 632 at 640-41 (Dixon J); and Waterways Authority v Fitzgibbon [2005] HCA 57; 221 ALR 402 at [135] (Hayne J). However, for the reasons that we have given, that is the unavoidable outcome of this appeal.
Whether the primary judge should rehear the remitted issues is a matter for the Chief Judge of the Federal Circuit and Family Court of Australia (Division 2) to consider. We can see that there are likely to be efficiencies if the matter on remitter is allocated to the primary judge, but we can also see that the parties may wish to be heard, should it be allocated to his Honour: see generally, Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2009] FCAFC 8; 174 FCR 175.
There will be no order as to costs: FW Act, s 570.
I certify that the preceding one hundred and ninety-seven (197) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Bromberg, Kerr and Wheelahan. Associate:
Dated: 16 December 2021
12
23
7