Australian Municipal, Administrative, Clerical and Services Union v Moreland City Council

[2017] FWC 3283

[2017] FWC 3283

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Australian Municipal, Administrative, Clerical and Services Union
v
Moreland City Council
(C2017/1235)

COMMISSIONER BISSETT MELBOURNE, 16 JUNE 2017

Orders to produce certain documents.

[1] On 25 May 2017 the Fair Work Commission (Commission) issued orders to produce certain documents directed to Moreland City Council (the Order). The Order was issued on application by the Australian Municipal, Administrative, Clerical and Services Union (ASU). The application for the order was made on 24 May 2017. The date for production of the documents was 7 June 2017.

[2] On 24 May 2017 the Commission received an email from lawyers for Moreland City Council (MCC) indicating that the lawyer responsible for the matter was leaving for overseas the following day and would not be able to deal with the matter until his return on 5 June 2017. That email indicated that MCC would be opposing the production of some of the documents sought. The objection was set down for hearing on 9 June 2017.

[3] The substantive application was, at that time, due to be heard on 16 June 2017.

[4] On 30 May 2017 the lawyers for MCC queried if the documents sought to be produced were for the Commissioner’s consideration only and would not be provided to the ASU. The lawyers for MCC were advised that they should indicate, at the time of production, which documents were subject to objection and if there was any objection to inspection by the ASU of those documents not subject to objection.

[5] MCC produced the documents as required on 7 June 2017 and indicated those documents subject to objection. It indicated it had no objection to “producing/discovery to the Applicant” of the remaining documents. On this basis the documents to which there was no obvious objection were provided for inspection by the ASU.

[6] On 9 June 2017 a hearing was held to deal with the objection by MCC to the production/inspection of some specified documents. MCC indicated in the hearing that it also objected to the inspection of all documents in the Order on the grounds of relevance. During the hearing however it was made clear that the documents not specifically objected to had been provided for inspection by the ASU on the basis of the covering letter from lawyers for MCC.
[7] The documents to which objection to production/inspection is taken are documents 4, 10A and 10B (arising from document 10), 11, 12 and 13B (one of the documents arising from document 13) in the Schedule of the Order although some of those documents (one arising from document 10 and documents 11 and 12) are the same document.

[8] The grounds of objection are, broadly, that the documents identified above are commercial-in-confidence and are not relevant to the substantive matter before the Commission. This decision is in relation to those specifically identified documents.

[9] Clause 6.2 of the Moreland City Council Enterprise Agreement 2015 1 (the Agreement) grounds the dispute.

[10] In brief, the substantive matter relates to whether MCC is required to facilitate the making of an in-house bid for garbage collection 2 in the Southern District of MCC and seeks a halt to the current process of awarding a contract for that work presumably pending such a bid. The determination of the matter requires a consideration of the proper construction of clause 6.2 of the Agreement and whether the conduct proposed by MCC to award a contract contravenes that clause.

[11] The orders sought by the ASU are, in effect, to stop the awarding of a contract for kerbside collection in the Southern District, for the ASU; employees and MCC to confer for the purpose of determining how to give effect to clause 6.2 of the Agreement; and for MCC to facilitate the making of an in-house bid.

[12] The Northern District garbage collection is performed in-house by MCC. The Southern District collection, for historical reasons, has been outsourced since 2001.

Submissions – Moreland City Council

[13] On the relevance of the documents, MCC submits that it is telling that the ASU could make its case without access to the documents, it appears that there is no gap in the ASU’s case to which evidence in the documents is directed and that the ASU considered it had an arguable case before seeking the documents.

[14] MCC submits that, in circumstances where the relief sought by the ASU is that MCC not proceed to outsource its waste collection services and that the question to be answered (and hence orders sought) go to whether MCC would fail to comply with the requirements of clause 6.2 of the Agreement if, in all of the relevant circumstances, it was to contract with an external contractor for the Southern District; and where clause 6.2 is known and confined, the documents sought by the ASU are of no relevance or, at best, of marginal relevance. In such circumstances it submits that the Commission should exercise its discretion to not permit inspection of the documents.

[15] MCC further submits that, where the dispute is about what clause 6.2 of the Agreement obliges MCC to do, the documents are of little or no relevance to that obligation.

[16] As to the commercial-in-confidence nature of the documents MCC submits that whether to grant access to these by the ASU requires a balance of the utility of production (although this is not decisive 3) and the effect of production/inspection on MCC. On the latter point MCC says that the degree of confidentiality is extreme and once seen the documents cannot be “unseen” by those who may engage in an in-house bid such that they would gain some commercial advantage. Further it says that production provides a danger that information of a tendering party may be released without that party’s knowledge and it may taint any future tender processes.

[17] MCC says that the documents contain detailed financial analysis of bids and financial information going back 10 years. Knowledge of the information would provide a competitive advantage to the party with that knowledge.

[18] MCC further submits that the documents sought are the type routinely protected from production during Council meetings and were tabled and discussed in camera in a Council meeting pursuant to s.77(2) and s.89(2) of the Local Government Act 1989 (Vic) (LG Act).

[19] MCC says that the documents which are, by their nature, “productive of serious and unjustified trouble and harassment” is a significant discretionary factor against their production.

Submissions – ASU

[20] The ASU says that “apparent relevance” is a broad term. 4 It submits that, based on the outline of evidence provided, the documents sought have an apparent relevance to the matter before the Commission. It submits that the dispute is about the application of clause 6.2 of the Agreement and how it applies in the current circumstances. The documents sought form part of the circumstances within which the question is to be decided.

[21] Further, it says that, if the Commission finds in favour of the ASU, the question of what is to be done arises – that is what are the orders sought and do the documents have any relevance to that matter.

[22] The ASU submits that the documents sought have some apparent relevance to one or both of these matters – that is the determination of clause 6.2 and the relief it seeks.

[23] It relies on the evidence of Robert Thorne, Director of Infrastructure, (in particular annexure RLG1) and paragraph 16 of the submissions of MCC in the substantive matter to ground its submissions that there is an apparent relevance between the documents sought and the substantive matter before the Commission.

[24] Further, the ASU submits that MCC, in its submissions at paragraphs 9 and 18, raises the issues of the Best Value Review. It submits that the documents it seeks have relevance to this issue.

[25] Specifically, with respect to Document 4, the ASU submits that the “Waste Services Review” “appears to have been foundational in the assessment of the [community] need” across MCC. It says the Review apparently informed the decision-making process of Council and it was one of the steps in the best value principles review.
[26] Further, it says that document 4 has apparent relevance to the relief sought.

[27] With respect to Documents 10A, 10B, 11 and 12 the ASU submits that, on its face, this document contains an evaluation of how MCC’s identified needs can be met and are apparently the “flip side” to the Waste Services Review (Document 4). The ASU says that it may be inferred that that this had regard to the in-house provision as that was reported on to MCC. Further, it says that public provision of services is a consideration in applying the best value principles in theLG Act. The ASU suggests that, at the very least, the Document “may be expected to contain circumstantial material that informs the striving required of the parties by clause 6.2” of the Agreement.

[28] With respect to Document 14 the ASU says that it was relied on in the report to the Council meeting that recommended the on-going provision of waste collection services in the southern district external to MCC.

Consideration

[29] The Commission is being asked to determine if, in the circumstances of deciding to award a contract to an external provider, MCC is in breach of the requirements of clause 6.2 of the Agreement.

[30] To decide this matter the Commission is being called on to determine the application of clause 6.2 in the Agreement to the current circumstances. The relief sought is as outlined earlier in this decision.

[31] Clause 6.2 of the Agreement states:

6.2 Job Security

The parties acknowledge the current skills mix and staffing levels at the Moreland City Council, and will strive to maintain and expand, if required, to meet the needs of the community.

6.2.1 If any factors result in changes to services or staffing that may impact on job security, genuine and detailed consultation with employees and unions will take place in accordance with Clause 6.1 introduction of Change.

6.2.2 In the event of changes that threaten job security, the Council and unions will endeavor to reach agreement on any compulsory redundancies. Such agreement will not be unreasonably withheld.

6.2.3 Priority will be given to redeployment over redundancies in accordance with Clause 6.3 Redeployment and Redundancy.

6.2.4 Council recognises the benefits of maintaining in-house services rather than contracting out services to third parties where such services are efficient and competitive.

During the life of this agreement Council may undertake Best Value Reviews in line with the Best Value Principles of the Local Government Act 1989. If the outcome of the review does not favour the retention of an in-house service, the parties agree to investigate and introduce measures to improve the performance of the service.

Where it is deemed that market testing of a service is necessary, Council will resource the staff to submit an in-house bid.

[32] The relevant circumstances are set out in an agreed statement of facts filed by the parties.

Commercial-in-confidence

[33] The question of confidentiality of documents sought by order was considered by Vice President Lawler in The Association of Professional Engineers, Scientists and Managers, Australia v Airly Coal Pty Ltd. 5 It is apparent, from that consideration, that confidentiality or commercial sensitivity is not grounds alone on which to deny an order for production of documents; rather it may well be grounds for placing some restriction on inspection the documents.6

[34] For this reason I will first determine relevance. If I find the documents have apparent relevance I will determine what, if any, limitations should be placed on the production/inspection of them. I am not otherwise convinced the documents should not be subject to inspection purely on the grounds of their commercial-in-confidence status or commercial sensitivity.

Relevance

[35] In Santos Ltd and Others v Pipelines Authority of SA 7 the Full Court of the Supreme Court of South Australia said:

87. The concept of relevance for the purposes of discovery or production of documents is, of course, wider than the concept of relevance for the purposes of admission.

[36] In Re Clerks’ (Alcoa of Australia – Mining and Refining) Consolidated Award 1985 (2) 8 Munro J said:

The documents sought must be of a nature capable of being relevant to an issue which might legitimately arise on the hearing of the matters in dispute.

[37] The ASU rely on the relevance of the documents to both the circumstances surrounding the application of clause 6.2 and to the orders sought by it to resolve the dispute. MCC make no specific submissions about each document sought but rely on a general objection of relevance.

Document 4 – Waste Services Review

[38] I am satisfied that this document has some apparent relevance to issues that might arise in the matter to be determined by the Commission. It grounds a number of decisions taken by MCC with respect to the decision to go to tender and not perform the work in-house.

[39] I am satisfied it should be made available for inspection by the ASU, subject to my comments below on restrictions on inspection.

Document 10A – MEG Brief DCI – Waste Tender Evaluation

Documents 10B, 11 and 12 – Waste Tender Evaluation Report

[40] I am not convinced that these documents have any apparent relevance to issues that might arise during a consideration of the matter to be determined or any orders that might be issued. These are documents generated by MCC at the conclusion of the tender evaluation process.

[41] It is not clear to me at this stage if the intention is that any in-house bid (should it be ordered that such a bid be made and considered) should be done as part of a competitive process – that is, in effect, a competing bid to those already received – or if it is intended that the in-house team be given an opportunity to put in a proposal that meets the best tender.

[42] In either case these documents do not become relevant until after the determination of the application and the finalisation of orders. That they may have some relevance to the next stages following the issue of orders by the Commission does not elevate them to the status of having some apparent relevance to the matters that might arise in hearing the dispute.

[43] I am not convinced that they will be relevant to a matter that may arise during the hearing of the dispute. I do not propose that these documents should be available for inspection by the ASU.

Document 13B – Northern District Bin Lift Costs

[44] The report to Council containing the recommendation for the award of the tender for the Southern District 9 said, in part, that:

…Although in conducting this tender the in-house team did not submit a tender for the Southern Collection District it is possible to apply the in-house bin lift costs incurred in the north to this contract as a comparison… In comparing costs if the average bin lift costs for the in-house team in 2015-2016 is applied to the Southern Collection District the cost would be approximately $780,000 per annum or $5.55m greater over the life of the contract.

[45] Clearly the comparison of bin lift costs has some apparent relevance to matters that may arise during the hearing of the application. The document will be provided for inspection subject to the restriction set out below.

Should some restriction be placed on inspection of Documents 4 and 13B?

[46] I am satisfied that some restriction should be placed on inspection of the documents due to their commercial nature.

[47] I shall therefore order 10 that the documents should be made available for inspection by the legal representatives of the ASU and the ASU Branch Secretary (Richard Duffy) only. They, or their contents, are not to be otherwise disclosed to any person without further order of the Commission. I shall further order that the documents may only be used for the purpose of the hearing of the application and the settlement of any orders arising and shall not be used for the purpose of giving effect to any such order.

[48] Either party is at liberty to apply for a variation to this order. Consent to such a variation should be sought in the first instance.

COMMISSIONER

Appearances:

M. Harding of counsel for the Applicant.

T. Donaghey of counsel for the Respondent.

Hearing details:

2017.

Melbourne:

June 9.

 1   AE416327.

 2   It is not necessary, for the purposes of this decision to break garbage collection down into its constituent parts of kerbside garbage, green waste and recycling.

 3   See Seven Network Limited v News Limited (No 5) [2005] FCA 510.

 4   See Hammerton v Knox Grammar School [2013] FWC 9024,[12(j)], Santos Ltd & Others v Pipelines Authority of SA [1996] SASC 5628, [87].

 5   PR962479.

 6   Mobil Oil Australia Ltd and Anor. v Guina Developments Pty Ltd and Anor. [1996] 2 VR 34, cited in Airly Coal.

 7 [1996] SASC 5628.

 8   Print H2892.

 9   See Agreed statement of facts filed by the parties on 12 May 2017.

 10   PR593792.

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