Australian Workers' Union v Job Connect Recruitment Pty Ltd t/a Job Connect
[2019] FWCFB 5132
•2 AUGUST 2019
| [2019] FWCFB 5132 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Australian Workers' Union
v
Job Connect Recruitment Pty Ltd t/a Job Connect
(C2019/3540)
| VICE PRESIDENT HATCHER | SYDNEY, 2 AUGUST 2019 |
Appeal against decision [[2019] FWCA 3446] of Deputy President Lake at Brisbane on 17 May 2019 in matter number AG2018/6141.
Introduction and background
[1] The Australian Workers’ Union (AWU) has lodged an appeal, for which permission to appeal is required, against a decision of Deputy President Lake issued on 17 May 2019 1 (Decision) to approve the Job Connect Recruitment Pty Ltd Major Projects Division Enterprise Agreement 2018 (2018 Agreement). The AWU contends that it was denied procedural fairness in connection with the process by which the Deputy President approved the Agreement, and that the Deputy President erred in concluding that the requirement in s 186(3) of the Fair Work Act 2009 (FW Act) was satisfied such as to permit the approval of the Agreement. The AWU seeks that permission to appeal be granted, the appeal be upheld, the Decision be quashed, and the application for the approval of the Agreement be dismissed.
[2] In respect of the AWU’s contention that it was denied procedural fairness, the following facts are not in dispute:
(1) The employer covered by the 2018 Agreement, Job Connect Recruitment Pty Ltd (Job Connect), lodged the application for approval of the 2018 Agreement on 5 November 2018.
(2) On 7 March 2019 the AWU wrote to the Commission requesting copies of the application (form F16) and the accompanying statutory declaration (form F17) and stating that, as the principal union in the civil construction sector, it wished to be heard in relation to the application for approval of the 2018 Agreement.
(3) On 13 March 2019, a staff member of the Commission sent to the AWU by email the forms F16 and F17, together with the Notice of Employee Representational Rights, and requested that the AWU advise whether it was a bargaining representative in relation to the 2018 Agreement.
(4) On 19 March 2019 the AWU responded by email, stating that it did not appear to have been a default bargaining representative for the 2018 Agreement but nonetheless maintained its application “to intervene in the approval proceedings and requests the opportunity to make submissions in support of our application to intervene”. It further requested that its correspondence be brought to the attention of the relevant Commission member.
(5) On 4 April 2019 the application for approval of the 2018 Agreement was assigned to the Deputy President.
(6) On 17 May 2019 the Deputy President issued the Decision approving the 2018 Agreement. The Deputy President had not to this point afforded the AWU the opportunity to make submissions as requested in its email of 19 March 2019.
(7) On 5 June 2019 the AWU, having become aware of the Decision, sent an email to the chambers of the Deputy President attaching its earlier correspondence with the Commission and requesting confirmation that this had been provided to the Deputy President.
(8) The Deputy President’s chambers responded the same day, stating that the hard copy file provided to the Deputy President did not contain the AWU’s correspondence, the electronic file did contain the correspondence but the Deputy President had not been aware of it, and that the Deputy President now invited the AWU to make a submission.
(9) On 7 June 2019 the AWU responded by noting that s 603(3)(b) of the FW Act prevented the Commission from changing a decision to approve an enterprise agreement other than on appeal, and foreshadowed the possibility of an appeal.
[3] It is clear therefore that the AWU was denied what it requested in its email of 19 March 2019, namely an opportunity to make submissions in support of its request that it be heard in relation to the application for approval of the 2018 Agreement. Further, no decision was ever made in relation to that request because the Deputy President was not aware prior to the Decision being issued that such a request had been made.
[4] In relation to the second ground of error for which the AWU contends, s 186 of the FW Act relevantly provides:
186 When the FWC must approve an enterprise agreement--general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).
. . .
Requirement that the group of employees covered by the agreement is fairly chosen
(3) The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.
(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
. . .
[5] It is not in dispute that, apart from the requirement in s 186(3), the 2018 Agreement satisfied the other requirements set out in s 186 and s 187. If s 186(3) was also satisfied, it is clear that the Deputy President was required under s 186(1) to approve the 2018 Agreement.
[6] Clause 3of the 2018 Agreement sets out the coverage of the agreement. It provides:
3. APPLICATION
This Agreement covers and applies to:
(a) Job Connect Recruitment Pty Ltd (ABN 40 145 040 964) (the Company); and
(b) all employees of the Company:
(i) who are engaged in the Major Projects Division; and
(ii) whose employment would otherwise be covered by the Building and Construction General On-site Award 2010, the Clerks-Private Sector Award 2010, the Electrical, Electronic and Communications Contracting Award 2010, the General Retail Industry Award 2010, the Manufacturing and Associated Industries and Occupations Award 2010, the Road Transport and Distribution Award 2010 or the Waste Management Award 2010; and
(iii) who are supplied as labour on an on-hire basis to the Company's clients in Australia (the Employees).
[7] The expression “Major Projects Division” is not defined or otherwise explicated in the 2018 Agreement. It is not in dispute that the 2018 Agreement does not cover all of the employees of Jobconnect and that accordingly s 186(3A) was necessarily applicable to the consideration of whether the requirement in s 186(3) was satisfied.
[8] The coverage of the 2018 Agreement is narrower than that of the Job Connect Recruitment Pty Ltd Enterprise Agreement 2014 (2014 Agreement). Clause 4 of the 2014 Agreement provides:
4. APPLICATION
This Agreement binds:
4.1 Job Connect Recruitment Pty Ltd (ABN 40 145 040 964) ("the Company");
4.2 All casual, fixed-term or permanent (full-time or part time) employees employed by the Company and who are supplied as labour on an on-hire basis to the Company's clients in Australia ("Employee").
Submissions
[9] The AWU submitted that:
● it had standing to bring the appeal as a person aggrieved by the Decision pursuant to s 604(1) of the FW Act, being an organisation with the capacity to enrol as members persons covered by the 2018 Agreement and the 2014 Agreement and thus having an interest beyond that of an ordinary member of the public;
● permission to appeal should be granted because the AWU had been denied procedural fairness and had been precluded the opportunity to demonstrate to the Deputy President that the 2018 Agreement could not be approved because the requirement in s 186(3) was not satisfied, because the appeal raised an issue of general importance concerning the fairly chosen test, and because the Decision was attended with sufficient doubt to warrant its reconsideration;
● notwithstanding that the Deputy President’s failure to determine the AWU’s intervention request was inadvertent, it amounted to a constructive failure to exercise jurisdiction;
● the coverage of the 2018 Agreement was not fairly chosen because it was neither geographically nor operationally distinct, nor did the mere assertion in the form F17 that the Major Projects Division was a separate and distinct group because it provided hired labour to Job Connect’s major projects clients demonstrate organisational distinctiveness;
● the lack of any clear definition or objective meaning of “Major Projects Division” meant that it may be no more than a term “purely of administrative convenience”;
● the scope of the 2018 Agreement is opaque and the rationale for its coverage is unclear;
● in the circumstances, there was no proper basis upon which the Deputy President could have determined that the coverage of the 2018 Agreement was fairly chosen as required by s 186(3), and the Decision does not disclose that the Deputy President took into account whether the group of employees covered by the 2018 Agreement was geographically, operationally or organisationally distinct, as required by s 186(3A); and
● if the employer could move employees into the coverage of the 2018 Agreement and likewise remove them from coverage based upon its characterisation of clients as being “major project clients”, that would undermine collective bargaining and be indicative of an unfairly chosen coverage.
[10] Job Connect did not dispute the AWU’s standing to bring the appeal, but submitted that:
● the Decision, insofar as it contained a statement to the effect that the Deputy President was satisfied that the requirements of ss 186, 187 and 188 as relevant had been met, demonstrated that the Deputy President had considered the matters he was bound to consider under those provisions including s 186(3A);
● the form F17 described the employees in Job Connect’s Major Projects Division as a “separate and distinct group of employees who provide labour hire services to the company’s Major Projects’ clients”, and this constituted material upon which the Deputy President could be satisfied that the group of employees was organisationally distinct;
● the consideration required by s 186(3) involved the formation of a value judgment and a degree of subjectivity, and the AWU merely disagreed with the conclusion reached;
● an employer is free to organise and structure its business in order to conduct its operations, and the Commission has recognised that most businesses have organisational structures which allow for organisationally distinct groups to be identified;
● it was open on the material before him for the Deputy President to have been satisfied concerning the approval requirement in s 186(3), and no appealable error had been identified by the AWU;
● the AWU had no right to be heard before the Deputy President, only an entitlement to be given a proper opportunity to develop its argument on the question of whether it should be heard;
● the AWU had the opportunity in the appeal to advance any argument as to why it should be heard in relation to the approval of the 2018 Agreement, but no such argument had been advanced; and
● the AWU had no rights which would be affected by the approval of the 2018 Agreement, and in the circumstances there was no denial of procedural fairness.
[11] Specifically in relation to the “Major Projects Division”, Job Connect stated in its written outline of submissions (footnotes omitted):
“48. … The Respondent has “major clients”, those being clients where the Respondent will invoice the client an amount equal to or in excess of $5 million per year. To ensure effective service for such clients, the Respondent has a designated division (i.e. the “Major Projects Division”) within its operations dedicated to servicing those major clients and the revenue they provide. In the Respondent’s submissions, this group of employees is distinct from other employees within its operations… Furthermore, the structure of the Respondent’s operations, with an organisational structure of a clearly defined Major Projects Division allows this organisationally distinct group of employees to be identified.
49. The Respondent has at all times in making the Agreement, proceeded on the basis that the group of employees covered by the Agreement are those within its Major Projects Division. Such a term is well known within the Respondent’s operations and the Respondent employees are well aware whether or not they are part of the Major Projects Division. There has been no arbitrary or discriminatory basis in which the Respondent has selected the group of employees to be covered by the Agreement.”
[12] In oral submissions, and partly in response to questions from the bench, the representative for Job Connect explained that:
● Job Connect hoped for growth in its Major Projects Division;
● employees might be assigned to a major project client and thus fall within the Major Projects Division and be covered by the 2018 Agreement, or might be recruited directly into the Major Projects Division to work for a major project client;
● employees might be assigned to a client which does not initially meet the invoice value criterion for a major project client, and thus they would not initially be covered by the 2018 Agreement, but once that criterion was satisfied, they would become part of the Major Projects Division and be covered by the 2018 Agreement; and
● the opposite might occur – that is, a client might cease to meet the invoice value criterion, and the employees assigned to that client would cease to be part of the Major Projects Division and cease to be covered by the 2018 Agreement.
[13] At the hearing of the appeal, the representative for Job Connect was not in a position to identify the business rationale for the narrower coverage of the 2018 Agreement as compared to the 2014 Agreement.
Consideration
[14] It may be accepted that the AWU did not have a right to be heard in relation to the application for approval of the 2018 Agreement, since it was neither a bargaining representative in respect of bargaining for that agreement 2 nor a party covered by the 2014 Agreement such that any substantive right conferred upon it by that agreement would be affected by its partial displacement upon approval of the 2018 Agreement.3 A mere capacity to represent employees covered by an enterprise agreement is not a sufficient right or interest to found a right to be heard.4 Pursuant to its power under s 590(1) of the FW Act to inform itself in such manner as it considers appropriate, the Commission “may choose, in a particular case to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard”.5 Where an organisation seeks to be heard in that situation, it is entitled to be given “a proper opportunity to develop its argument on the question [of] whether it should be heard”.6 Arising from the factual circumstances which we have earlier set out, the AWU was inadvertently denied that opportunity and its request to be heard in relation to the approval of the 2018 Agreement was constructively refused. This amounted to a denial of procedural fairness.
[15] Not every denial of procedural fairness entitles the aggrieved party to a new hearing. It is necessary for the AWU here to demonstrate that the denial of procedural fairness deprived it of the possibility of a successful outcome. This possibility will be negated if it is concluded that a properly conducted hearing could not have produced a different result. 7 In this matter, this means that the AWU must demonstrate not only that it was denied the possibility of persuading the Deputy President that it should be heard on the “fairly chosen” question (since there is no indication that the AWU would have addressed him on any other aspect of the application for approval of the 2018 Agreement), but also that as aconsequence it was denied the possibility of persuading the Deputy President that the coverage of the 2018 Agreement was not fairly chosen.
[16] It is not possible for us to conclude that, if the AWU had been afforded the opportunity requested in its email of 19 March 2019 to make submissions in support of its “application to intervene” in relation to the application for approval of the 2018 Agreement, it could not have persuaded the Deputy President to grant this application. Section 590(1) of the FW Act confers on members of the Commission a procedural discretion of the broadest scope, and in numerous cases members have allowed employee organisations to make submissions in relation to applications for approval of enterprise agreements pursuant to s 590(1) in circumstances where they do not have a right to be heard. 8 This is often for the reason that it is considered desirable to have a contradictor in relation to any particular difficult or contentious issues which may arise. There is no reason to consider that a similar course might not have been taken by the Deputy President in this case. Indeed, after the AWU’s earlier correspondence with the Commission was brought to the Deputy President’s attention, he invited the union to make a submission.
[17] It is likewise not possible to exclude the possibility that the AWU, if heard in relation to the application for approval of the 2018 Agreement, might not have persuaded the Deputy President that the coverage of the 2018 Agreement was not fairly chosen and therefore that the 2019 Agreement should not be approved. The principles applicable to the application of s 186(3) and (3A) were summarised in Aerocare Flight Support Pty Ltd v TWU. 9 Those principles included, relevantly, that the consideration required by s 186(3) involves a degree of subjectivity and the exercise of a very broad value judgment akin to a discretion; that where the matters in s 186(3A) are required to be taken into account, they must be evaluated and given due weight having regard to all other relevant considerations but are not determinative; and that the relevant considerations will vary from case to case but the word “fairly” suggests that the selection of the group covered must not be arbitrary or discriminatory. These principles make it clear that the decision-maker has a considerable degree of latitude in the conclusion to be reached in respect of s 186(3). All that was before the Deputy President in relation to the “fairly chosen” question was the following:
● the coverage provision of the 2018 Agreement, which limited its coverage to employees in the undefined “Major Projects Division”;
● the disclosure in the form F17 statutory declaration that the 2018 Agreement did not cover all of the employees of Job Connect; and
● the assertion in the form F17 that the group of employees covered by the 2018 Agreement were operationally and organisationally distinct by virtue of being in Job Connect’s “Major Projects Division”, described as a “separate and distinct group of employees who provide labour hire services to the company’s Major Projects’ clients”.
[18] As was made clear in the Aerocare decision, a finding under s 186(3A) that the group of employees covered by an agreement is geographically, operationally or organisationally distinct is not determinative of the group being fairly chosen. However Job Connect did not provide an explanation in the form F17 as to why the coverage of the 2018 Agreement was fairly chosen beyond the statement that it was operationally and organisationally distinct. Nor did Job Connect identify an objective criterion at first instance for a client being designated as a “Major Project client”. In the context of an uncontested application for approval of an enterprise agreement, little might turn on such considerations. But in this matter, they are relevant to the consideration of whether the AWU was deprived of the possibility of persuading the Deputy President that the relevant group was not fairly chosen. In our view, there is at least a possibility that, had it been heard on the question at first instance, the AWU might have persuaded the Deputy President that the coverage of the 2018 Agreement was not fairly chosen. We emphasise that this does not mean that it was not reasonably open for the Deputy President to reach the conclusion that he did, namely that the approval requirement in s 186(3) was satisfied, but only that the degree of latitude in the decision to be made with respect to s 186(3) and the limited material bearing on that decision that was available to the Deputy President means that it was reasonably possible for an alternative conclusion to have been reached.
[19] For these reasons we conclude that the denial of procedural fairness to the AWU did deny it the possibility of a successful outcome. Accordingly we will grant permission to appeal, uphold the appeal and quash the Decision.
[20] We consider that the most efficient course is for us to re-determine the application for approval of the 2018 Agreement rather than remit it to the Deputy President. This is because the only issue in contest is whether s 186(3) is satisfied and we have already been in receipt of information and submissions about this issue which were not before the Deputy President. The hearing of the appeal has meant that the AWU has already made submissions before us in relation to this issue and, as we consider it would therefore be of assistance, we grant leave to the union to be heard on this issue in the redetermination of the application for approval of the agreement.
[21] In its distillation of principles derived from earlier decisions, the Aerocare decision indicated that, in relation to the consideration of organisational distinctiveness under s 186(3A), the term “organisation” refers to the manner in which the employer has organised its business in order to conduct its business, that most businesses have organisational structures which allow organisationally distinct groups to be identified, and that the performance by a group of employees of duties which are qualitatively distinct may be a marker that the group is organisationally distinct. Organisational distinctiveness will weigh in favour of, but not be conclusive as to, whether the group of employees covered by an agreement is fairly chosen. 10 Where the group to be covered by the agreement is selected on some objective basis, as opposed to an arbitrary or subjective basis, this is likely to favour a conclusion that the group was fairly chosen.11 Additionally, as was made clear in the Federal Court Full Court decision in CFMEU v John Holland Pty Ltd,12 it is necessary to take into account the business rationale for the selection of coverage.
[22] We have earlier set out the position conveyed to us on behalf of Job Connect at the hearing of the appeal. That has left a number of matters somewhat unclear, including the extent to which the Major Projects Division pre-dated the making of the 2018 Agreement, whether there is an organisation chart or something of that nature which illustrates the existence of the division as a separate organisational unit, the extent to which employees may move in and out of the division (and hence coverage under the 2018 Agreement) during their employment, the areas of employment which are not covered by the 2018 Agreement, and the rationale for the narrowing of coverage in the 2018 Agreement as compared to the 2014 Agreement. We are not satisfied that Job Connect has yet had a fair opportunity to properly address these issues. Accordingly we will allow a period of 14 days for Job Connect to file an affidavit, and any further accompanying submission, addressing these issues and anything else bearing upon the approval requirement in s 186(3) and (3A). The AWU will be provided with seven days to respond. We will then determine the application for approval of the 2018 Agreement.
Orders and directions
[23] We order and direct as follows:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) The Decision ([2019] FWCA 3446) is quashed.
(4) Job Connect shall file and serve within 14 days an affidavit, and any accompanying submissions, addressing the agreement approval requirement in s 186(3) and (3A) of the FW Act including the issues identified in paragraph [22] of this decision. The AWU may file any response to this within a further seven days.
VICE PRESIDENT
Appearances:
A Sage for the Australian Workers’ Union
M Swan with S Rinkevich, AiGroup, on behalf of Job Connect Recruitment Pty Ltd
Hearing details:
2019.
Melbourne:
23 July.
Printed by authority of the Commonwealth Government Printer
<PR710631>
1 [2019] FWCA 3446
2 CFMEU v Collinsville Coal Operations Pty Ltd [2014] FWCFB 7940, 246 IR 21 at [16]
3 CFMMEU v Mechanical Maintenance Solutions Pty Ltd [2019] FWCFB 3585 at [33]
4 CFMEU v Collinsville Coal Operations Pty Ltd [2014] FWCFB 7940, 246 IR 21 at [49]-[73]
5 Ibid at [75]
6 Ibid at [76]
7 Stead v State Government Insurance Commission [1986] HCA 54, 161 CLR 141 at 145, 147
8 See e.g. Collinsville Coal Operations Pty Limited [2014] FWC 5628 (affirmed on appeal in [2014] FWCFB 7940, 246 IR 21); Inco Ships Pty Ltd [2016] FWC 1637 (permission to appeal refused in [2016] FWCFB 3370); One Key Coal QLD Pty Ltd [2018] FWC 256
9 [2017] FWCFB 5826, 270 IR 385 (affirmed on judicial review in Aerocare Flight Support Pty Ltd v TWU [2018] FCAFC 74, 261 FCR 175, 278 IR 211) at [26]-[27]
10 Ibid at [26]-[27]
11 Ibid at [26]
12 [2015] FCAFC 16, 228 FCR 297 at [33] per Buchanan J, with whom Besanko and Barker JJ relevantly agreed.
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