Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Ausgrid Management Pty Ltd t/a Ausgrid
[2021] FWCFB 4563
•30 JULY 2021
| [2021] FWCFB 4563 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Ausgrid Management Pty Ltd t/a Ausgrid
(C2021/3514)
VICE PRESIDENT HATCHER | SYDNEY, 30 JULY 2021 |
Appeal against decision [2021] FWC 3023 of Commissioner Cambridge at Sydney on 4 June 2021 in matter number B2021/357.
Introduction and background
[1] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) has filed an appeal, for which permission is required, against a decision 1 and order2 of Commissioner Cambridge made on 4 June 2021. The decision concerned an application made by the CEPU for an order for the conduct of a protected action ballot of employees who would be covered by the proposed enterprise agreement to replace the Ausgrid Enterprise Agreement 20183 and who are members of and entitled to have their industrial interests represented by the CEPU and for whom the CEPU is a bargaining representative. The Commissioner granted the order sought but, in respect of 20 of the 27 types of proposed industrial action which were to be the subject of questions on the ballot, extended the period of written notice to 7 working days pursuant to s 443(5) of the Fair Work Act 2009 (FW Act). The CEPU appeals this last aspect of the Commissioner’s decision and order.
[2] Part 3-3 of the FW Act establishes a regime under which “protected” industrial action (that is, industrial action that is subject to qualified legal immunity as provided for in s 415) may be taken. In relation to protected industrial action to be taken by employees, the action must first be authorised in a secret ballot of the relevant employees pursuant to the provisions of Division 8 of Part 3-3. An additional requirement for the taking of such action by employees, once authorised, is that written notice of the action must be given by the bargaining representative of the employees: s 413(4), s 414(1). Section 414(2) provides that the period of notice must be at least 3 working days or, if a protected action ballot order specifies a longer period of notice, that period of notice.
[3] Pursuant to s 437, a bargaining representative of employees in relation to a proposed agreement may apply to the Commission for a protected action ballot order. Such an order, if made, authorises and directs the conduct of the requisite ballot for the taking of industrial action by employees. Section 441(1) provides that the Commission must, as far as practicable, determine an application for a protected action ballot order within 2 working days after the application is made. Section 443 prescribes the circumstances in which the Commission must, and must not, make a protected action ballot order pursuant to an application made under s 437 and also prescribes certain requirements as to the content of any order to be made. Relevantly in this respect, s 443(5) provides:
(5) If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.
[4] In the decision in National Tertiary Education Industry Union v Charles Darwin University, 4 a Full Bench described the decision-making process required in determining whether there should be an extension of the required notice period pursuant to s 443(5) as follows:
“[23] The determination of whether the circumstances in a particular case are ‘exceptional’ involves an evaluative judgement. A proper approach to the exercise of the Commission’s discretion under s.443(5) requires first that a member identify or make findings about the particular facts or circumstances in relation to the proposed industrial action which are said inform the evaluative judgement that such factors or circumstances are exceptional circumstances. The phrase “exceptional circumstances” carries its ordinary meaning.
[24] Secondly, there must be a consideration whether the identified exceptional circumstances are circumstances “justifying” a longer notice period. This also involves an evaluative judgement made on the basis of probative material. The use of the verb “justifying” in s.443(5) signifies that the identified exceptional circumstances must show or prove that it is reasonable or necessary or the circumstances warrant or provide good reason to require a longer period of written notice.
[25] Thirdly, if the member is satisfied there are exceptional circumstances justifying a longer period of notice, there must be a consideration of whether to exercise the discretion and, if so, the additional period of notice that should be given in the circumstances (noting the maximum period).”
[5] In the present case, the CEPU and others are bargaining with Ausgrid Management Pty Ltd (Ausgrid) for a new enterprise agreement. Ausgrid is an electricity distribution company which owns, maintains and operates the electricity network covering the majority of metropolitan Sydney, the Central Coast, Newcastle and the Hunter Valley in New South Wales. It is responsible for the safe and reliable supply of electricity to more than 1.8 million customers, which include hospitals, nursing homes, and water and communications infrastructure. There are frequently unplanned electricity outages in the network to which Ausgrid must respond, at least initially, on an emergency basis. Responding to such emergencies often involves critical safety issues to be addressed.
[6] The employees of Ausgrid for whom the CEPU is bargaining representative include:
• employees working in the network Control Rooms, which have “24/7” responsibility for the overall control and monitoring of the electricity network;
• Despatch employees, who diagnose reported events and determine the appropriate response action; and
• Field Operations and Network Delivery Services employees, who are responsible for the physical delivery of field-based activities including maintenance of the network, construction and reconstruction works, physical switching of the network, response to unplanned and emergency events such as vehicle impacts, asset failures and storms, and disconnection and reconnection of customers.
[7] The CEPU filed its application for a protected action ballot order on 24 May 2021. The draft order accompanying the application specified 29 different types of industrial action to be the subject of separate ballot questions. In relation to 11 types of industrial action (including all the types constituted by a stoppage of work and a number of types of bans), the qualifier “except in emergencies” was added. On 26 May 2021, Ausgrid advised that, although it respected the right of its employees to decide whether they supported the taking of protected industrial action, it opposed the making of an order in the form sought by the CEPU. It described its concerns about the form of the draft order as follows:
“These concerns relate primarily to ensuring that the safety and security of Ausgrid’s electricity network, its employees/contractors and the public are able to be protected at all times and to the clarity of some aspects of the questions set out in the draft order. Ausgrid is willing, and has offered, to confer with the Applicant about how these concerns can be satisfactorily resolved.”
[8] Later the same day, and inferentially in response to Ausgrid’s stated position, the CEPU filed an amended draft order to change the emergency exception in each case to read “except in emergency situations where there exists an immediate threat to life or property”. On 27 May 2021, Ausgrid filed submissions in which it sought that the written notice period be extended to 7 working days pursuant to s 443(5). It also proposed that the following definition of “emergency” be applied to the emergency exemptions:
“An emergency is defined as an abnormal, dangerous or potentially dangerous situation, which requires urgent action to control, correct and return to a safe condition, which affects Ausgrid assets, systems, its workers, contractors, and/or the public.”
[9] The matter was initially set down for hearing on 28 May 2021; however, the matter was by consent adjourned that day until 4 June 2021 on the basis that the CEPU would file a further amended application that day and Ausgrid would file evidence by 1 June 2021. The CEPU filed its further amended application on 28 May 2021. The further amended draft order contained in this deleted in every instance the previously appearing emergency exemption.
[10] The hearing proceeded on 4 June 2021. The Commissioner issued his decision and order later the same day.
The decision
[11] In his decision, the Commissioner identified that the significant issue to be determined was whether the written notice period should be extended from 3 to 7 working days pursuant to s 443(5). He made reference to the submissions and evidence presented by Ausgrid in support of this extension, and the submissions and evidence of the CEPU in opposition to the extension, and said:
“[9] Having regard for the evidence provided, and the respective, competing submissions of the Parties, the Commission has been persuaded that exceptional circumstances exist in satisfaction of the requirements of subsection 443 (5) of the Act, justifying the extension to the notice period for taking industrial action. In particular, in this instance, the Commission has been cognisant of the potential health and safety implications that may be created for customers of the employer and the general public who rely upon the ongoing provision of electrical supply within the employer’s supply area. The employer unambiguously provides an essential public service in the form of electrical supply to a significant customer area encompassing a large part of Sydney including the Sydney CBD, Newcastle, and the NSW Central Coast.
[10] However, exceptional circumstances in satisfaction of subsection 443 (5) of the Act, has only been established in respect to the forms of industrial action specified in questions 1 to 20 inclusive of the PABO, and it has not been established in respect to the forms of industrial action specified in questions 21 to 27 inclusive of the PABO. Consequently, the period of written notice for the taking of industrial action will be extended to 7 working days for any form of industrial action taken pursuant to questions 1 to 20 inclusive, and the written notice for the taking of any industrial action that is confined to that specified in questions 21 to 27 inclusive shall be 3 working days.”
[12] The order was made in terms consistent with the decision. Clause 15 of the order provided that it came into effect from 4 June 2021 and “shall remain in force for a period of two weeks, unless revoked or varied by further Order of the Commission”.
CEPU’s appeal grounds and submissions
[13] The CEPU’s notice of appeal contained six grounds of appeal. The first three grounds contend that the Commissioner erred in failing to apply the three-stage decision-making process identified in NTEU v Charles Darwin University. The CEPU submitted that the Commissioner in paragraph [9] of his decision premised his conclusion that an extension to the maximum notice period should be granted solely on the basis of the potential health and safety implications for Ausgrid’s customers over a large area, and that he did not:
• detail how these matters justified an extension;
• explain how an extended notification period would permit Ausgrid to take appropriate defensive action;
• undertake the required evaluative exercise premised on probative material in order to determine whether there was a justification for an extension of the notification period; and
• gave no separate and distinct consideration to whether to exercise the discretion set out in s 443(5) and, if so, what additional period of notice should be provided in the circumstances.
[14] The CEPU submitted that the Commissioner’s failure to apply the structured decision-making process established in NTEU v Charles Darwin University entailed that he gave no active and genuine consideration to the second jurisdictional precondition of “justification” or to the separate and final issue of whether to exercise the discretion and for how long.
[15] By its fourth appeal ground, the CEPU contends that the Commissioner erred by failing to take a number of relevant matters into account, including the capacity of Ausgrid to take mitigative measures by engaging contractors (which its witness Mr Sam Sofi, Executive General Manager, Field Operations, conceded could be done in a period of 3-4 days) and the diminution of bargaining power which employees would experience in the event that an extension in the notification period was granted. It also contends that the Commissioner erred by failing to engage in any balancing or weighing of material matters in the assessment of whether exceptional circumstances justified an extension of the notification period and whether the discretion should be exercised to extend the period.
[16] By its fifth appeal ground, the CEPU contends that the Commissioner failed to consider a “clearly-articulated” argument which it advanced and thereby denied it procedural fairness and constructively failed to exercise jurisdiction. The CEPU submitted that an important part of its case before the Commissioner was that unplanned and emergency work could and generally was carried out by a small number of employees and that Ausgrid has historically been able to engage contractors at relatively short notice to come onto its network and cover such work within a period of 3-4 days. These circumstances were relied on by the CEPU below to submit that, to the extent there were exceptional circumstances, these did not justify an extension and if the discretion was to be exercised a further period of a day only should be granted. These matters, it was submitted, were not assessed or considered by the Commissioner.
[17] The CEPU’s sixth ground is that the Commissioner failed to give adequate reasons for his decision, in that he did not enter into the issues raised by the CEPU nor did he disclose the basis for his conclusion that exceptional circumstances justified an extension or why he had decided to exercise the discretion in the manner he ultimately did. This failure denied the CEPU procedural fairness and constituted jurisdictional error.
[18] The CEPU submitted that permission to appeal should be granted because the appeal raises issues concerning the proper application of NTEU v Charles Darwin University, the Commissioner acted contrary to binding authority in that decision by failing to apply the three-stage test and to properly apply the requirement of s 443(5), the decision manifests an injustice to the CEPU and its members by reason of the diminution in bargaining power resulting from the decision, and the decision is vitiated by jurisdictional error. It submitted that the appeal should be upheld and the Full Bench should vary the Commissioner’s order, if satisfied that there are exceptional circumstances justifying an extension of the notification period, by extending the notice period by a single working day.
Consideration
[19] For the reasons which follow, we do not consider that the grant of permission to appeal would be in the public interest, nor do we consider that there are discretionary grounds which justify the grant of permission to appeal.
[20] First, we consider that, having regard to the decision of the Federal Court Full Court in CFMMEU v DP World Sydney Ltd, 5it is clear that the first three appeal grounds, which proceed on the basis of an alleged failure by the Commissioner to undertake the three-step decision-making process articulated in NTEU v Charles Darwin University, are lacking in sufficient merit to justify the grant of permission. The Full Court in CFMMEU v DP World Sydney Ltd dealt with a very similar argument as is raised by the CEPU in its appeal here, namely that in granting an extension to the notice period under s 443(5), the Commission had erred by failing to apply the three-stage process in NTEU v Charles Darwin University. In dealing with that contention, the Full Court firstly characterised the decision-making task required under s 443(5) in the following terms:
“[14] As a general matter it is apparent that the formation of the discretionary judgment called for by s 443(5) is conditioned on the FWC forming a discretionary evaluative judgment about whether, having regard to all of the circumstances, there exists some characteristic of the foreshadowed proposed industrial action, in the whole of the context in which it is to occur, that justifies allowing a longer period of written notice. If the FWC so decided, then it must consider what, if any, additional days’ notice up to 7 should be required…”
[21] In relation to the three-stage process, the Full Court then said:
“[16] … The Full Bench in National Tertiary Education Industry Union v Charles Darwin University was not suggesting that in order to properly discharge the statutory function the reasons for a decision had to be structured into three separate and distinct parts. The Full Bench was providing guidance on the statutory provision which provides that if the FWC is satisfied that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a), being longer than 3 working days, the protected action ballot order may specify a longer period…”
[22] In relation to the Commission decision the subject of the proceedings before it, the Full Court accepted that the decision did not “reflect a clear separation” of the matters referred to in NTEU v Charles Darwin University, but regarded the complaint about thisas “in truth … one of form rather than substance” 6 and found that the substance of each of the matters had been addressed. The Full Court emphasised that a fair reading of the decision as a whole was necessary and said: “In circumstances where the decision had to be made and reduced to writing within 2 working days there cannot be any proper basis to conclude that the decision is affected by jurisdictional error on the basis of this first contention”.7
[23] In the case before us, it may likewise be accepted that the Commissioner’s decision does not reflect in paragraphs [9] and [10] a clear separation of the three matters identified in NTEU v Charles Darwin University. However, it is apparent that the Commissioner in substance dealt with those matters. A fair reading of paragraph [9] discloses that the Commissioner set out the matters which he regarded as constituting exceptional circumstances and as justifying the grant of an extension. It may be accepted that the basis upon which the Commissioner chose to exercise the discretion in favour of an extension of the notification period to 7 working days in the case of questions 1-20 is not set out in terms, but a reading of the decision as a whole makes it tolerably clear that the Commissioner proceeded upon an acceptance of Ausgrid’s case as to the extension, including the extent of the extension.
[24] It is also necessary to take into account (as the Full Court did in CFMMEU v DP World Sydney Ltd) that the Commissioner made his decision in the context of the qualified statutory time constraint imposed by s 441(1). Although the 2 working days timeframe was not achieved (noting that the file was not allocated to the Commissioner until 26 May 2021, making it practically impossible for him to achieve the statutory timeframe), the initial hearing was listed within 2 days of allocation, the hearing was adjourned for 5 working days by consent, and the decision was issued on the same day that the hearing completed. This represents, we consider, an appropriate sense of urgency consistent with the statutory intention. Perfection in the content, expression and structuring of reasons cannot always be expected in that context.
[25] Second, we likewise do not consider that the remaining appeal grounds have sufficient merit to justify the grant of permission to appeal. In relation to the fourth and fifth appeal grounds, we would note generally that the fact that a matter is not expressly referred to in a decision does not necessarily mean that it was not considered. The Commissioner said in the first sentence of paragraph [9] of the decision that he had had regard to the evidence and the parties’ competing submissions, and there is no reason in the circumstances to call this into question. In relation to the contention that the Commissioner failed to take into account the diminution in bargaining power that would be caused by the extension, reference may again be made to the Full Court’s decision in CFMMEU v DP World Sydney Ltd in which a similar contention was rejected. The Full Bench said:
“[18] …the CFMMEU contended that the Deputy President failed to deal with its central argument that an extended notice period would diminish the employees’ bargaining power. This contention cannot be accepted. It again elevates form over substance. As the CFMMEU’s submissions to this Court disclose, the diminution in bargaining power was a central issue in the proceedings. The battle lines were clearly drawn. The CFMMEU wanted the standard 3 day period because, as must have been and was obvious, this would maximise its bargaining power. DP World wanted a longer period because, as must have been and was obvious, that would enable it to take more effective steps to mitigate the impact of the protected industrial action, a necessary corollary of which would be a diminution of the employees’ bargaining power. The idea that in this context the Deputy President overlooked the CFMMEU’s central argument about the impact on its bargaining position is unrealistic.”
[26] There is no doubt that the issue of the reduction in the efficacy of employee industrial action and any consequent diminution in employee bargaining power will usually be an important consideration to be taken into account under s 443(5) and, ideally, the way in which it is taken into account and what weight it has been assigned should be explained in any decision. However, in this case, the decision makes it sufficiently clear that the Commissioner regarded the potential consequences for third parties which would arise if industrial action resulted in interruptions to the electricity supply as the dominant consideration overriding all others. This was, on any view, an assessment of the position which it was reasonably open for him to make.
[27] Insofar as the CEPU’s fourth and fifth appeal grounds are founded on the proposition that the evidence demonstrated that Ausgrid could obtain the services of contractors to replace employees taking industrial action within 3 or 4 days, and that the Commissioner failed to take this into account or consider the CEPU’s submission that an extension to 7 working days was therefore not justified, we consider that the evidence demonstrated no such thing. The CEPU relied upon the following answer given by Mr Sofi in cross-examination:
With the distributors who were able to access Ausgrid's network, that occurred in a matter of days, didn't it?---We ramped up distributors. I cannot recall how quickly they came onto the network, but it would have been around the three to four-day mark. 8
[28] However, this question and answer referred to an event, outside the context of industrial action, in which Ausgrid obtained the services of “distributors from interstate work” to respond to a “large scale event”. 9 However, Mr Sofi’s evidence concerning the capacity of Ausgrid to have contractors access the network to perform work in the context of industrial action was clearly that 3 days would be insufficient:
But, let's say, hypothetically, you were notified that industrial action is to occur three days hence, three working days hence, Ausgrid would be able to direct or arrange for a contractor to be granted - with the relevant expertise and the relevant systems and equipment - would be able to arrange for that contractor to be issued access to the network?---If those relevant systems and all the other things that you mentioned existed, which they don't, then we could. So, I think it's a little bit - I suppose the question, at the moment, the answer would be, no, we cannot.
. . .
Can I suggest to you again, sir, that if Ausgrid wanted to, it could provide access to contractors to perform work on the network without much difficulty at all?---It depends on which labour was there. If we - if the operators were available to issue to contractors, other distributors, yes, that's fine.
Those operators, if they are available, let's say three days employees ceasing work, would be able to - well, not being available to perform work, would be able to issue those accesses; correct?---Three days, no. (underlining added) 10
[29] The above evidence was consistent with Mr Sofi’s evidence, given in his primary witness statement and elaborated upon at some length, that: “If the industrial action referred to in the application for a PABO is taken, Ausgrid's ability to respond to an emergency and make safe will be severely compromised.”
[30] In relation to the sixth ground, it is sufficient to say that the Commissioner’s reasons for his decision were adequate having regard to what we have earlier said in relation to the first three appeal grounds.
[31] Third, insofar as the CEPU contends that the decision manifests an injustice to the CEPU and its members by reason of the diminution in bargaining power resulting from the decision, we think that is to a significant degree a situation which it brought upon itself. As earlier explained, the initial version of the protected action bargaining order proposed by the CEPU entirely excluded emergencies from the most serious types of industrial action. Ausgrid proposed a definition of what constituted an emergency for that purpose which, we consider, was reasonable in the circumstances. However, the CEPU responded by entirely removing the emergencies exemption for reasons which are not entirely clear.
[32] Ausgrid’s case concerning the need for an extension of the notification period was largely based upon the additional time it needed to organise alternative capacity to deal with emergencies. Mr Sofi’s witness statement, to which we have earlier referred, discussed at length the extent to which the industrial action proposed in the CEPU’s further amended proposed order would severely compromise Ausgrid’s capacity to respond to emergencies. Mr Sofi conceded in cross-examination that this was the foundation for its case for an extension:
Ausgrid, as I understand it, has no issues with its employees exercising their workplace right to take protected industrial action?---Correct.
Ausgrid's application is based upon what you have described as unplanned events. That is, that it needs - you say that Ausgrid needs additional time to prepare for and deal with unplanned events that may or may not occur?---That's correct. 11
[33] In short, it is unlikely that Ausgrid’s case for an extension could have succeeded if the CEPU had maintained its exemption for emergencies.
[34] There is one other additional matter we should note. As earlier set out, clause 15 of the Commissioner’s order provides that it would only remain in effect until 18 June 2021. The parties implicitly assumed in their respective submissions that the extension to the notification period (in clause 14 of the order) continued to have effect after that date. We have proceeded on the basis of this assumption, although it cannot be said to be self-evidently correct. If the assumption is wrong, that would of course be another good reason for the refusal of permission to appeal.
Conclusion
[35] Permission to appeal is refused.
VICE PRESIDENT
Appearances:
P Boncardo of counsel for the appellant.
H Dixon SC with S Meehan of counsel for the respondent.
Hearing details:
2021.
Sydney and Brisbane (by video-link).
22 July.
Printed by authority of the Commonwealth Government Printer
<PR732235>
1 [2021] FWC 3023
2 PR730181
3 AE428494
4 [2018] FWCFB 4011
5 [2019] FCAFC 99
6 Ibid at [17]
7 Ibid at [16]-[17], [23]
8 Transcript, 4 June 2021, PN 477
9 Ibid, PNs 470-473
10 Ibid, PNs 469, 474-475
11 Ibid, PNs 286-287
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