Australian Manufacturing Workers' Union

[2015] FWC 3261

[2015] FWC 3261

FAIR WORK COMMISSION

DECISION

Fair Work (Registered Organisations) Act 2009
s.158(1) RO Act - Application for alteration of eligibility rules

s.137A RO Act - Orders about representation rights of organisations of employees

Australian Manufacturing Workers' Union
(D2014/70)

ResMed Limited
v
Australian Manufacturing Workers' Union
(C2015/1008)

VICE PRESIDENT HATCHER SYDNEY, 13 MAY 2015

Recusal application.

Introduction

[1] Two applications have been lodged in the Commission in relation to the industrial representation of employees of ResMed Limited (ResMed). On 7 November 2014, the Australian Manufacturing Workers’ Union (AMWU) 1 filed an application for the Commission’s consent under s.158 of the Fair Work (Registered Organisations) Act 2009 (RO Act) to an alteration to its eligibility rules to include a provision giving it coverage of all employees of ResMed, including persons supplied by labour hire providers to ResMed and apprentices and trainees engaged by group training services which are hosted by ResMed (AMWU rules application). ResMed filed an objection to this rules alteration on 17 December 2014.

[2] On 5 January 2015 ResMed lodged an application seeking an order under s.137A(1)(b) of the RO Act that the AMWU is not to have the right to represent under the RO Act or the Fair Work Act 2009 (FW Act) the industrial interests of the employees of ResMed (ResMed representation application).

[3] Subsequent to the lodgement of the AMWU rules application and the ResMed representation application, ResMed applied for both applications to be referred to a single Full Bench of the Commission for determination. In a decision issued on 9 February 2015 2, the President of the Commission (Ross J) directed, pursuant to s.615A of the FW Act, that the functions and powers of the Commission be performed and exercised by a Full Bench in respect of the AMWU rules application3, and further directed that a Full Bench be constituted to hear the ResMed representation application and, pursuant to s.582(2) of the FW Act, that this be the same Full Bench as would hear the AMWU rules application.4 On the same day the President directed that the Full Bench to hear both applications would be comprised of myself, Deputy President Lawrence and Commissioner Johns.

[4] The applications were listed for directions before the Full Bench on 20 February 2015. Shortly prior to that directions hearing, on 18 February 2015, the legal representatives of ResMed sent to my chambers a letter in which an application was made that I recuse myself from the Full Bench hearing the applications on the basis of apprehended bias. The procedural course to be taken in respect of this application, as well as other matters (to which I shall return) were discussed at the directions hearing on 20 February 2015. On the same day, I issued a direction that ResMed file and serve full written submissions and supporting material concerning its recusal application by 24 February 2015, and that the AMWU file and serve any submissions it wished to make by 26 February 2015. Submissions were subsequently filed and served by ResMed and the AMWU in accordance with this direction.

[5] This decision concerns ResMed’s recusal application.

Related proceedings and applications

[6] In order to properly understand the basis of ResMed’s recusal application and my determination in relation to it, it is necessary to set out the history of a number of related proceedings and applications instituted by ResMed and the AMWU.

[7] On 25 March 2013 the AMWU applied pursuant to s.236(1) of the FW Act for a majority support determination to be made in respect of five specified categories of employees at ResMed’s operating plant at Bella Vista in Sydney who would be covered by an enterprise agreement proposed by the AMWU. In respect of that application, ResMed contended that the Commission had no jurisdiction to grant the majority support determination sought by the AMWU. This contention was based on the proposition that an application under s.236(1) could only validly be made by a registered employee organisation such as the AMWU if it had the capacity to enrol as members under its eligibility rules and therefore represent all those employees specified in the application who would be covered by the proposed agreement. ResMed submitted that none of the employees were eligible to be members of the AMWU and therefore the AMWU had no standing to make the application. The AMWU resisted this jurisdictional objection on two bases: first, that s.236(1) only required that an applicant organisation have coverage of, and be the bargaining representative for, one employee who would be covered by a proposed enterprise agreement; and second that in any event the AMWU had coverage of all the five categories of employees identified in its application.

[8] ResMed’s jurisdictional objection was rejected in a decision issued by Commissioner Bull on 19 December 2013. 5 The Commissioner determined that s.236(1), properly construed, did not require that an applicant employee organisation have constitutional coverage of all employees who would be covered by the proposed enterprise agreement. He found that the AMWU had coverage in respect of one of the five categories of employees identified in its application (and did not have coverage of the other four categories) and had at least one member in that category, and determined that this was sufficient to confer standing on the AMWU to make the application.

[9] ResMed applied for permission to appeal and appealed the Commissioner’s decision rejecting its jurisdictional objection under s.604 of the FW Act. ResMed’s appeal did not challenge the Commissioner’s conclusion that the AMWU had constitutional coverage of one of the five categories of employees identified in its application for a majority support determination, but involved the proposition that it was necessary for the AMWU to have constitutional coverage of all five categories in order for it to have standing to make the application, which it did not. The AMWU subsequently also applied for permission to appeal and appealed the Commissioner’s decision that it did not have constitutional coverage of four of the five categories of ResMed employees.

[10] Both appeals were heard and determined by a Full Bench consisting of myself, Senior Deputy President Drake and Commissioner Cargill. The appeals were determined in two separate decisions. ResMed’s appeal was dealt with in a decision issued on 11 April 2014 6 (first appeal decision). In that decision the Full Bench granted ResMed permission to appeal, but then went on to affirm the Commissioner’s decision that AMWU had standing to make its application for a majority support determination and to dismiss ResMed’s appeal. In relation to the AMWU’s appeal, the Full Bench issued its decision on 17 July 20147 (second appeal decision). The Full Bench granted permission to appeal and upheld the appeal to the extent that it found that the AMWU had constitutional coverage in two of the four categories in respect of which the Commissioner had found that there was no coverage, that the AMWU had coverage of part of a third category, and remitted to a single member of the Commission for further hearing the question of coverage of the fourth category.

[11] ResMed subsequently filed an application in the Federal Court of Australia for prerogative relief in relation to the first appeal decision and the Commissioner’s decision concerning the AMWU’s standing to apply for a majority support determination. In a decision issued on 20 April 2015 8, a single member of the Court (Perry J) dismissed that application. ResMed has since advised that on 4 May 2015 it filed an appeal against this decision, that the appeal is listed for a callover before Allsop CJ on 29 July 2015, and that the Court Registry has advised that, in the ordinary course, the appeal will be listed in the scheduled Full Court and Appellate sitting period between 2 and 27 November 2015.

[12] On 15 September 2014 ResMed also made an application to the Federal Court (ResMed court application) in which it sought:

(1) a declaration that the AMWU “is not entitled to represent the industrial interests of the production operators, line leaders and line coordinators employed by ... ResMed to perform work in the Liquid Silicone Rubber, Mask Assembly, Spares and Accessories, Machines, Ventilator and Warehouse work groups at the Bella Vista site of ResMed” (that is, employees in the four categories which the Commissioner had determined were not constitutionally covered by the AMWU); and

(2) prerogative relief in relation to the second appeal decision.

[13] Apparently in response to this application by ResMed, the AMWU also made an application to the Federal Court seeking a declaration that it was entitled to represent the industrial interests of the four categories of employees which ResMed contended that it was not entitled to represent (AMWU court application). Both the ResMed court application and the AMWU court application were allocated to Perry J.

[14] In relation to the ResMed court application, the AMWU on 8 October 2014 filed an interlocutory application seeking to dismiss that part of it which sought prerogative relief against the second appeal decision on the basis that it had no reasonable prospects of success. Before the interlocutory application was determined, the AMWU rules application and the ResMed representation application were the subject of the directions hearing before the Full Bench on 20 February 2015 to which I have already referred. At that directions hearing, ResMed applied for both applications to be stayed pending the hearing and determination of the ResMed court application and the AMWU court application by the Federal Court (stay application), and indicated that it wished to be heard on that application on a subsequent date. The AMWU indicated that it opposed the stay application insofar as the AMWU rules application was concerned, but would consent to it in relation to the ResMed representation application.

[15] In a decision issued on 22 April 2015, Perry J dealt with the AMWU’s interlocutory application in respect of the ResMed court application by dismissing those parts of the application in which prerogative relief was sought. 9 The gravamen of her Honour’s reasoning in respect of that determination was that the second appeal decision did not have any operative legal effect but constituted only an expression of opinion, with the result that the orders in the nature of certiorari and mandamus sought by ResMed were not available.10

[16] I have been advised by the parties that the remaining aspect of the ResMed court application (for declaratory relief) and the AMWU court application were the subject of a directions hearing on 5 May 2015 before Perry J. At that hearing the AMWU advised that it sought that the applications be stood over until ResMed’s application for the Full Bench of this Commission to stay the AMWU rules application and the ResMed representation application had been determined. That interlocutory application will be heard on 14 May 2015, and an indication has been given that a decision can be expected shortly thereafter, and that the programming of the matters may then be dealt with.

Consideration

[17] The submissions made by ResMed in support of its recusal application which were filed on 24 February 2015 disclose two bases for the application:

(1) A lay observer might reasonably apprehend that, on the issue of the AMWU’s coverage, I might not be inclined to depart from the views expressed in the second appeal decision when considering that issue in relation to the AMWU rules application and the ResMed representation application.

(2) The second appeal decision is subject to judicial review by the Federal Court, including on grounds asserting a denial of procedural fairness, which might lead a fair minded lay observer to entertain a reasonable apprehension of bias on my part in the determination of similar issues in relation to the AMWU rules application and the ResMed representation application.

[18] The second ground is somewhat obscure, but in any event has been overtaken by events in that, as earlier stated, the ResMed court application, insofar as it sought judicial review of the second appeal decision, has been dismissed. Only the first ground therefore requires consideration.

[19] It may be accepted, at least in relation to the AMWU rules application if not the ResMed representation application, that the question of the AMWU’s current coverage of ResMed employees may need to be determined. Section 158(4) of the RO Act provides:

(4)  The FWC must not consent to an alteration of the eligibility rules of an organisation if, in relation to persons who would be eligible for membership because of the alteration, there is, in the opinion of the FWC, another organisation

(a)  to which those persons could more conveniently belong; and
(b)  that would more effectively represent those members.

[20] As was made clear by the Federal Court Full Court in relation to the equivalent provision in the Workplace Relations Act 1996 in Re Australian Workers' Union, Ex parte Construction, Forestry, Mining and Energy Union 11, it is necessary to identify the class of “persons who would be eligible for membership because of the alteration” in order that the specified statutory tests for approval may be applied to that class. Identification of that class requires a comparison of the existing coverage of the organisation compared to the coverage it would have if the rules alteration is approved.12 However, s.158(5) qualifies the operation of s.158(4) as follows:

(5)  However, subsection (4) does not apply if the FWC accepts an undertaking from the organisation seeking the alteration that the FWC considers appropriate to avoid demarcation disputes that might otherwise arise from an overlap between the  eligibility rules of that organisation and the eligibility rules of the other organisation.

[21] Thus a finding on existing coverage for the purposes of s.158(4) may not be necessary if an undertaking is proffered and accepted under s.158(5). In that circumstance, whether the issue of the identification of the AMWU’s existing coverage then arises in the exercise of the Commission’s general discretion to consent to the rules change may depend upon the grounds upon which any objections to the rules change are made.

[22] In relation to the ResMed representation application, it is less clear that the issue of existing coverage will arise. It is noted that the grounds advanced for the primary order sought in that application include that the AMWU does not have the right to represent ResMed employees and has misled employees about the extent of its current coverage. Conceivably that may require the extent of that coverage to be determined.

[23] It is obviously the case that in the second appeal decision the Full Bench of which I was a part expressed, in the course of exercising its statutory functions, an opinion about the extent of the AMWU’s existing coverage of ResMed employees. However whether this opinion is of any relevance to the determination of the AMWU rules application or the ResMed representation application may depend upon whether ResMed’s application to stay the hearing of the applications until the Federal Court has determined the residue of the ResMed court application and the AMWU court application is granted. If the stay application is granted, and the Federal Court proceeds to issue declaratory orders concerning the AMWU’s current coverage prior to the Full Bench hearing the two applications before it, then the opinion expressed in the second appeal decision will become irrelevant. The question of current coverage will have been judicially determined and thus will not be open for further debate before or reconsideration by the Commission. In that scenario, the basis for ResMed’s recusal application would simply fall away. There could be no reasonable apprehension of bias in circumstances where the duty of the Full Bench, including myself, would simply be to proceed on the basis of a binding decision of the Federal Court.

[24] Therefore, because ResMed’s recusal application will only properly arise for consideration if the stay application is not granted, I consider it to be premature to determine the recusal application prior to the Full Bench determining the ResMed stay application. There is nothing in ResMed’s submissions which suggests any reason why the Full Bench as currently constituted should not hear and determine that stay application. No opinion expressed in the second appeal decision could have relevance to the determination of the stay application, and thus no issue of apprehension of bias could arise.

Conclusion

[25] Further consideration of ResMed’s recusal application is deferred until after the Full Bench has heard and determined the stay application. The parties can expect to receive a listing for the hearing of the stay application shortly.

VICE PRESIDENT

Appearances:

L. Saunders for the Australian Manufacturing Workers’ Union.

A. Moses SC with Y. Shariff of counsel with S. Nettleton and T. Sebbens solicitors for ResMed Limited.

Hearing details:

2015.

Sydney:

20 February.

Final written submissions:

24 February 2015 - ResMed Limited

26 February 2015 - Australian Manufacturing Workers’ Union

 1   The full name of the AMWU is the “Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU). The name contains all the italicised words, letters and punctuation including the inverted commas.

 2   [2015] FWC 848

 3   Ibid at [23]

 4   Ibid at [24]

 5   [2013] FWC 9725

 6   [2014] FWCFB 2418

 7   [2014] FWCFB 3501

 8 [2015] FCA 360

 9 [2015] FCA 379

 10   Ibid at [47]-[57]

 11 (2002) 120 FCR 527

 12   Ibid at [44]-[52] per Gray and Moore JJ and [134]-[140] per Merkel J

Printed by authority of the Commonwealth Government Printer

<Price code C, PR567322 >