Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v e2o Pty Ltd
[2019] FWCFB 4023
•12 JULY 2019
| [2019] FWCFB 4023 |
| 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
e2o Pty Ltd
(C2019/2518)
VICE PRESIDENT CATANZARITI | SYDNEY, 12 JULY 2019 |
Appeal against decision [2019] FWCA 1992 of Deputy President Anderson at Adelaide on 27 March 2019 in AG2018/6230.
[1] On 27 March 2019 Deputy President Anderson issued a Decision 1 approving an application for approval of the e2o Pty Ltd Enterprise Agreement 2018-2022 (the Agreement).
[2] On 17 April 2019 the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) lodged a notice of appeal against the Decision under s 604 of the Fair Work Act 2009 (Cth) (the Act).
[3] Written submissions were filed and on 31 May 2019 the Full Bench heard the parties on permission to appeal and the substantive appeal. Mr A Slevin, Counsel, appeared on behalf of the CEPU and Mr M Follett, Counsel, appeared on behalf of the e2o Pty Ltd. Permission to appear was granted pursuant to s 596(2)(a) as, taking into account the complexity of the matter, the appeal would be dealt with more efficiently with legal representation.
Decision under appeal
[4] On 7 November 2018 a single enterprise agreement was made between e2o Pty Ltd and its employees, with an application under s 185 of the Act for its approval being filed with the Commission on 8 November 2018. No union was a bargaining agent for employees during its negotiation and no union is covered by the Agreement.
[5] On 30 November 2018, the CEPU wrote to the Commission seeking copies of the application and accompanying documents and later sought to be heard with respect to the approval of the Agreement pursuant to s 590 of the Act.
[6] On 15 January 2019 the CEPU put submissions on an opportunity to be heard, as well as the ‘better off overall’ (BOOT) test, and alleged that there was a failure to genuinely agree and understand the effects of the terms of the Agreement. More specifically, the CEPU alleged a failure with respect to genuine agreement for reasons including the difference between the work performed by the employees and the work covered by the underpinning instruments, the employees were not capable of genuinely agreeing to the Agreement, the Agreement lacking moral authority, and other matters such as the lack of sufficient material on how the Agreement was explained to employees, the interest of the employees in the agreement such as their classifications, and other matters.
[7] On 13 February 2019 the CEPU put further written submissions seeking an opportunity to be heard. In its written submissions the CEPU again addressed the BOOT Test 2 and issue of the alleged failure of the Agreement to meet the ‘genuinely agreed’ requirements of the Act.3 The genuine agreement submissions dealt with the requirements of the Act as illustrated by the decision of the Full Federal Court in the One Key Workforce Pty Ltd v. CFMEU decision,4 the smallness of the voting group and the number of classifications across six modern awards displaced, the position of casual and seasonal employees, and other matters, concluding that the Commission cannot be satisfied that the genuine agreement requirements are met.
[8] On 20 February 2019, Deputy President Anderson conducted a hearing by telephone on the request by the CEPU to be heard. The Deputy President handed down a decision stating that it was not persuaded to exercise discretion in favour of the CEPU being heard beyond that which had already been afforded by way of written and oral submissions (Interim Decision). 5
[9] On 28 February 2019, Directions were issued by Deputy President Anderson with the matter being set down for a pre-hearing conference and hearing. The Directions raised issues of genuine agreement having regard to One Key Workforce Pty Ltd v. CFMEU 6 and other issues.
[10] A pre-hearing conference was conducted on 20 March 2019. E2o Pty Ltd provided the Commission with written submissions on 22 March 2019 and a revised written undertaking dated 26 March 2019. A statutory declaration was received from Ms Emily Robertson on 27 March 2019.
[11] On 27 March 2019, Deputy President Anderson conducted a hearing on the application. No employee bargaining representatives made an appearance despite notice having been provided. E2o Pty Ltd outlined the terms of and effect of the Agreement and written undertaking of 26 March 2019 with the Deputy President also hearing oral evidence from an officer of the Applicant, Ms Emily Robertson.
[12] At paragraph [12], the Deputy President said:
“[12] I have considered the evidence and submissions before me including the matters raised in my Directions of 28 February 2019 and responses thereto. On the basis of the material contained in the application, the statutory declarations of Emily Robertson dated 8 November 2018 and 27 March 2019, the oral evidence of Emily Robertson, the submissions provided by e2o Pty Ltd and the undertaking attached as Annexure A, I am satisfied that each of the requirements of sections 186, 187, 188 and 190 of the FW Act as are relevant to this application for approval have been met.” 7
[13] The Agreement was approved in accordance with s 54 of the Act and would operate 7 days from the date of approval with the nominal expiry date four years from the date of the approval.
Relevant legislative provisions
[14] The provisions of the Act relating to genuine agreement are contained in a number of provisions. Section 180 of the Act provides that the employees must be given a copy of the agreement and it must be explained to them:
180 Employees must be given a copy of a proposed enterprise agreement etc.
Pre-approval requirements
(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.
Employees must be given copy of the agreement etc.
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.
(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used.
(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).
Terms of the agreement must be explained to employees etc.
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:
(a) employees from culturally and linguistically diverse backgrounds;
(b) young employees
(c) employees who did not have a bargaining representative for the agreement.
[15] Section 186 of the Act provides that the Commission must be satisfied that there is genuine consent:
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).
Requirements relating to the safety net etc.
(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
(b) if the agreement is a multi-enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(b) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(c) the agreement passes the better off overall test.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
Note 2: The FWC may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).
[16] Section 188 of the Act provides that an enterprise agreement has been genuinely agreed to if the Commission is satisfied of a number of matters including compliance with pre-approval steps, an employee is not requested to approve an agreement until a 21 day period after the last notice of employee representative rights is given, and other matters:
188 When employees have genuinely agreed to an enterprise agreement
(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
[17] It should be noted that the power to rectify minor procedural or technical errors in s 188(2) does not apply to all matters in ss 180, 186 and 188. Section 188(2) has no application in circumstances where the Commission is not satisfied that an agreement was genuinely agreed to in a general sense, as might arise in considering s 188(1)(c). 8 The test is different in nature to other requirements in the Act, which provide for a discretion, or a means of rectifying any defects. Section 201 for example requires an agreement to contain a consultation and flexibility clause, and provides that if it does not or is not in the appropriate form then a model clause applies, and the defect does not prevent approval. Section 188(2) provides a limited discretion to deal with some ‘minor procedural or technical errors’ relating to the procedural requirements for agreements, and s 190 provides the limited circumstances in which undertakings may satisfy the Commission that particular concerns are met, namely where the undertaking is not likely to cause financial detriment to any employee covered by the agreement or result in substantial changes to the agreement. A more general discretion is contained in some provisions of the Act, such as s 387, or the public interest test in s 604.
[18] The legislative history is a relevant consideration. Genuine agreement provisions and requirements to explain the terms of the agreement were introduced with the Industrial Relations Act 1993 (eg. s 170NC), and continued in the Workplace Relations Act 1996 (eg. S 170LJ, 170LK). Provision for the approval of agreements had existed in industrial legislation before that, in for example s 28 of the Conciliation and Arbitration Act 1904, and ss 115-117 of the Industrial Relations Act 1988. Madwick J in Kucks v. CSR Ltd 9 reminds us that those drafting awards were ‘likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon.’ These words are equally applicable to those seeking to negotiate agreements and seeking their approval, although all the requirements of the Act must nevertheless be applied.
[19] The legislative provisions relevant to the approval of enterprise agreements set out strict requirements that must be satisfied prior to approval. These provisions, coupled with the relevant legal principles such as that set out below, may have the effect of making the approval process complex and difficult to navigate, particularly in circumstances where expert advice is not available to employers.
Relevant Legal Principles
[20] In One Key Workforce Pty Ltd v. CFMEU 10 the Full Court of the Federal Court considered an application for approval of an enterprise agreement. The Commission at first instance approved an agreement made with the three employees employed when the agreement was made. The agreement covered both coal and building award areas. The Court said that ‘it was common ground’ that the Commission was ‘never told what was said to the relevant employees’, rather the statutory declaration simply stated that ‘they had been given an explanation of the term of the Agreement and the effect of those terms’:
“[112] It is common ground that the Commission was never told what was said to the relevant employees. It was simply told that they had been given an explanation of the terms of the Agreement and the effect of those terms. In effect, this amounted to little more than a self-serving statement that the employer had complied with its obligation under the Act. OKW contended that the fact that it made such a statement in a statutory declaration was significant. It is not. As the CFMEU argued, whether all reasonable steps were taken to ensure that the effect of the terms of the Agreement was explained in an appropriate manner is a question of substance, not form. The recital of a conclusion on the very question the Commission was required (through an evaluative process) to determine is not, without more, a sufficient basis for the satisfaction of the statutory test. In other words, a bare statement by an employer that an explanation has been given is an inadequate foundation upon which to reach a state of satisfaction. OKW submitted that if the Commission had erred in this respect, it was an error in fact finding or an error in process, which would be an error within its jurisdiction. We reject this submission. In order to reach the requisite state of satisfaction that s 180(5) had been complied with, the Commission was required to consider the content of the explanation and the terms in which it was conveyed, having regard to all the circumstances and needs of the employees and the nature of the changes made by the Agreement. It is true that the Act does not expressly say that. But the question of whether an administrative decision-maker is required to consider a matter is not determined only by the express words of the Act; it may also be determined by implication from the subject-matter, scope and purpose of the Act: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39–44 (Mason J).
[113] A consideration of the subject-matter, scope and purpose of the relevant provisions of the Fair Work Act indicates that the content of the explanation and the terms in which it was conveyed were relevant considerations to which the Commission was bound to have regard. The absence of that information meant that the Commission was not in a position to form the requisite state of satisfaction. Put differently, without knowing the content of the explanation, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure that the terms and their effect had been explained to the employees who voted on the Agreement or that they had genuinely agreed to the Agreement.
[114] The following considerations point inexorably to that conclusion.
[115] The Commission was required to be satisfied that OKW had taken “all reasonable steps to ensure” that both the terms and the effect of the terms had been explained to the relevant employees as an element in the inquiry as to whether “genuine” agreement had been obtained from them. The agreed purpose of the obligation imposed on employers by s 180(5) is to enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement.
[116] In order for the employer to comply with the obligation it must take into account the particular circumstances and needs of those employees, including their cultural and linguistic backgrounds, their youth, and the absence of a bargaining representative. That is made explicit in s 180(6). How could the Commission decide whether the steps the employer had taken were “all reasonable steps” unless it knew what the employees had been told before they cast their votes? Without knowing the terms in which the explanation had been conveyed how could the Commission form an opinion on the sufficiency of the explanation, particularly having regard to the considerations mentioned in s 180(6)? Ultimately, how could the Commission decide that a genuine agreement had been reached without having evidence upon which it could answer both these questions?
[117] As there was no evidence of these matters before the Commission, it necessarily follows that the Commission purported to be satisfied that OKW’s obligations under s 180(5) had been discharged without taking those matters into account. That was a jurisdictional error because the Commission did not have authority to make the decision unless its satisfaction had been informed by them. As is often the case, there are several ways of describing the error. It could be characterised as a misconception as to what the exercise of the statutory power entails or an error “as to an important attribute of the decision to be made”: Graham at [68]. Equally it could be seen as a misunderstanding on the part of the Commission of the nature of the opinion it was required to form: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at [31] (Gleeson CJ, Gaudron and Hayne JJ). Had the Commissioner applied his mind to the question of what the putative explanation entailed, he would inevitably have inquired into its content and terms.
[118] Alternatively, as the CFMEU submitted, the Commissioner’s error might be regarded as an error of the kind referred to by the High Court in R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd [1953] HCA 22; (1953) 88 CLR 100 at 120. In that case, where an order was made for prohibition under s 75(v) of the Constitution, the Court observed that the inadequacy of the material before the tribunal was not itself a ground for prohibition but “a circumstance which may support the inference” that the tribunal applied the wrong test, was not really satisfied of the requisite matters, or misconceived the purpose of the function committed to it. In circumstances such as these, the Court said, “it is but a short step to the conclusion that in truth the power has not arisen because the conditions for its exercise do not exist in law and in fact.” 11
[21] Further, at paragraphs [141]-[142] the Court said:
“[141] Turning then to the language utilised in ss 186(2)(a) and 188(c), the word “genuinely” in the phrase “genuinely agreed”, indicates that mere agreement will not suffice and that consent of a higher quality is required. We reject OKW’s contention that the phrase is only directed at requiring an absence of fraud, coercion or duress in the process of employees providing their agreement. The word “agreed” on its own, suffices to achieve those ends. The word “genuinely” must be given some additional work to do. A court construing a statutory provision must strive to give meaning to every word of it: Project Blue Sky at [71]. The limits OKW seeks to put on para 188(c) are too narrow. The requirement for genuine agreement in the Fair Work Act prescribes some, but not all, factors that must be taken into account. In this respect, in contrast to its predecessor, s 170LT(6) of the Workplace Relations Act, paras 188(a) and (b) direct the Commission’s attention to a number of discrete matters. Paragraph 188(c), however, it is not at all prescriptive.
[142] Paragraph 188(c) is cast in very broad terms. It is intended to pick up anything not caught by paras (a) and (b). Thus, any circumstance which could logically bear on the question of whether the agreement of the relevant employees was genuine would be relevant. One obvious example is the provision of misleading information or an absence of full disclosure (see, for example, Re Toys “R” Us (Australia) Pty Limited Enterprise Flexibility Agreement 1994 (1995) 37 AILR 3-068 (Print L9066) (C No 23663 of 1994)). Another is the likelihood that the relevant employees understood the operation of the various awards that would be affected by the agreement and the extent to which the wages and working conditions for employees under each of those awards would change, for better or worse, under the terms of the agreement. Thus, if we be wrong to conclude that the Commission is bound by s 180(5) to consider the content of the employer’s explanation of the terms of the Agreement and their effect, in order to be satisfied that the Agreement was “genuinely agreed to” having regard to s 188(a)(i), then for similar reasons we would hold that this was a matter which was not only relevant to the question raised by para 188(c), but was a mandatory consideration.” 12
[22] At paragraphs [155]-[157] the Court discusses the classification coverage of employees voting:
“[155] Where employees working in few occupational classifications consent to an agreement which covers numerous other occupations or other occupations in many industries beyond their own, an explanation of the terms of the agreement and their effect may fall short of providing an adequate basis for the formation of genuine consent. The employees who voted may be indifferent to the impact of an agreement on other employees or prospective employees in occupational classifications outside their own training or experience. As Buchanan J observed in John Holland (Besanko and Barker JJ agreeing), in those circumstances the employees will presumably act out of self-interest (at [33]) with the possible result that “it may not be fair for an enterprise agreement made with three existing employees to cover a wide range of other classifications and jobs in which they may have no conceivable interest” (at [83]).
[156] Therein lies the concern. The legislative objective of achieving “fairness through an emphasis on enterprise-level collective bargaining” could be undermined if the employees who vote on the agreement have no basis for appreciating its nature and terms. What is required by s 186(2)(a) is genuine agreement. To construe that requirement as mandating an informed and genuine understanding of what is being approved is consistent with the text of the provision (as defined) and accords with its underlying purpose.
[157] Ordinarily, non-greenfields agreements are made with the participation of the employees who are representative of the range of employee classifications covered by the enterprise agreement. The capacity to provide consent based upon a true understanding of the consequences of the proposed agreement across the breadth of classifications covered is likely to be adequate, including because representatives of each classification or classificational grouping will be involved. While it is correct to say, as OKW submitted, that the group of employees who vote are not required by the Fair Work Act to be representatives for, or agents of, the wider group of employees who may ultimately be covered by the agreement, the fact that the group does not broadly reflect the occupational scope of the proposed agreement restricts the terms and conditions in the agreement for which the group can genuinely speak.” 13
[23] Finally, the Court concluded at paragraph [172]:
“[172] Nevertheless, the primary judge was correct to find that the Commissioner fell into jurisdictional error by failing to have regard to the content and terms of the explanation OKW purportedly provided the employees before they cast their votes. In addition the Commissioner’s decision was affected by jurisdictional error because he failed to appreciate that, in determining whether the relevant employees had genuinely agreed to the Agreement he needed to consider whether they were likely to have understood its terms and effect.” 14
Permission to appeal
[24] An appeal under s.604 of the Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.15 There is no right to appeal and an appeal may only be made with the permission of the Commission. Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is in the public interest to do so. Permission to appeal may otherwise be granted on discretionary grounds.
[25] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.16 The public interest is not satisfied simply by the identification of error, or a preference for a different result.17 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...”18
[26] Other than the special case in s.604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if leave is refused.19
[27] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.20 However, as earlier stated the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.
[28] We are of the view that permission to appeal should be granted in this matter. It is in the public interest to ensure that the requirements of which the Commission must be satisfied when approving enterprise agreements are properly considered, administered and applied in each matter. The CEPU’s appeal alleges error on behalf of the Deputy President in approving the Agreement, and we are satisfied that appellate intervention to examine the alleged errors is warranted. Accordingly, permission to appeal is granted.
Submissions
Appeal ground 1(a)
[29] The CEPU submitted that the Deputy President failed to apply the principles set down in One Key Workforce Pty Ltd v. CFMEU 21with respect of ss 180(5) of the Act. The Deputy President seems to have accepted ‘bald assertions’ in the application that the Agreement was adequately explained to employees, and failed to take into account the CEPU’s written and oral submissions by giving them ‘due weight’. Therefore there was an error within House v. King.22
[30] E2o Pty Ltd submitted that no departures, detrimental or otherwise, from the underpinning awards are identified which were not expressly explained to employees or omitted from the Form F17. In relation to the ‘bald assertions’ alleged to have been accepted by the Deputy President, e2o Pty Ltd submitted that the Deputy President expressly stated that he ‘considered the evidence and submissions before’ him. 23 E2o Pty Ltd identified the relevant material before the Deputy President, and noted that in certain circumstances the Deputy President specifically asked for some of it and says that he had regard to it. The suggestion that the Deputy President failed to satisfy himself of the criteria in s 180(5) of the Act is without any substance.
Appeal ground 1(b) and 2
[31] Section 188(c) of the Act required the Deputy President to be satisfied that in the circumstances that existed when the Agreement was voted on, there were no other reasonable grounds for believing the employees’ agreement was not genuine. The CEPU submitted that the Deputy President was required to consider whether the employees who voted ‘had a stake in its rates of pay and conditions’, consistent with authority 24, and did not in his Decision refer to the basis on which he was satisfied that there were no other reasonable grounds for believing agreement was not genuine.
[32] Further, The CEPU submitted that, as per paragraph [24] of the Interim Decision, the Deputy President determined not to ‘exercise discretion in favour of the CEPU being heard beyond that already provided by way of written and oral submissions’. This sentence appears to infer that the Deputy President would, in determining the application, taken into account the CEPU’s submissions that had been earlier been provided, which dealt extensively with ss 188(c) of the Act. By not giving consideration to the CEPU’s submissions in the Decision or in the transcript of proceedings on 27 March 2019, the CEPU submitted that the Deputy President erred by not reaching a state of satisfaction in respect of ss 188(c) of the Act.
[33] The CEPU also submitted that the Deputy President had acted upon a wrong principle of been guided by an irrelevant factor. These include his reliance on e2o Pty Ltd’s submissions dated 22 March 2019 and the oral evidence of Ms Emily Robertson on 27 March 2019 and his consideration of the residential addresses of employees in reaching a state of satisfaction in respect of ss 188(c) of the Act.
[34] In response to the CEPU’s submission in respect of ss 188(c) of the Act, e2o Pty Ltd relied on the reasons provided in response to appeal ground 1(a). Further, e2o Pty Ltd submitted that where the evaluative assessment in ss 188(c) of the Act is unconfined, the relevant considerations to that assessment are equally unconfined, with any prohibition or limitation necessarily implied only by reasons of the scope or purpose of the Act. 25 The Deputy President was conscious of the question of ‘genuine agreement’ and the impact and relevance of One Key Workforce Pty Ltd v. CFMEU26, making the suggestion that he did not turn his mind to such matters unacceptable.
Appeal ground 3
[35] The CEPU submitted that, for same reasoning outlined in paragraph [32] above, the Deputy President failed to take into account a relevant consideration, by not evaluating or giving due consideration to the matters raised in the CEPU’s submissions in respect of whether compliance with ss 186(2) of Act had been satisfied.
[36] In response, e2o Pty Ltd relied on the reasons provided in response to appeal ground 1(a). Further, the Deputy President was not obliged to have regard to submissions made by a non-party with no right to be heard and who was not heard on the application for approval. The Deputy President had regard to and applied what was required, being the statutory approval criteria.
Consideration
[37] We note the following evidence, going to the question of genuine consent, that was before the Deputy President:
• the application for approval of the Agreement was made by the employer on 8 November 2018. The employer in answer to questions 2.4 - 2.7 of the application’s accompanying F17 provided an outline of the steps taken to explain the agreement to employees, the dates of voting, methods of taking into account the particular circumstances and needs of the relevant employees 27;
• A copy of a document entitled ‘Frequently Asked Questions’ was provided to the Commission, 28 and a document entitled ‘Meaning and Effect’,29 the notice of employee representational rights,30 written submissions of the employer relating to genuine consent31; and
• further information was provided by the employer during the formal hearing, including relating to the geographic spread of the workforce, the classifications, and the experience of employees which was submitted meant that the application was ‘remarkably different from the One Key Workforce litigation, sir’ in the view of the e2o Pty Ltd. 32
[38] At the appeal hearing, the CEPU noted that it advanced only the ground at point 6 of its Notice of Appeal 33, namely that the Deputy President erred by failing to apply the principles set down in One Key Workforce Pty Ltd v. CFMEU in respect of whether the Agreement was genuinely agreed to by employees.34 The CEPU submitted that in relation to ss 180(5), ss 186(2)(a) and ss 188(c) there was not sufficient material but there was a ‘gap’ in the information in relation to genuine consent. The ‘material simply wasn’t there’.35 The CEPU also submitted that the circumstances in One Key Workforce Pty Ltd v. CFMEU 36 were the same as at present in that there was insufficient material before the Commission to approve the agreement, and there was an inadequacy of decision making.37
[39] In addressing the CEPU’s appeal, we turn first to consider the nature of the Agreement and departures from the underpinning awards. The departures from the awards are set out in questions 3.4-3.5 of the application’s accompanying F17. 38 These were explained to employees in a simple and clear form in a document entitled ‘Meaning and Effect’.39 A further explanation was provided to employees in a document entitled ‘Frequently Asked Questions’.40 These documents were provided to all the 32 employees voting.41 The Deputy President did not accept a bald assertion or assertions as submitted by the CEPU, but rather accepted substantial and persuasive material of relevance to the issues before him. There will always be a limit to the material provided to employees and to the Commission, and it is easy to simply claim that more should have been provided. In our view, there was sufficient material to satisfy the requirements of the Act relating to explanations and genuine agreement in ss 180-188 of the Act.
[40] Secondly, we consider the alleged issues by the CEPU in respect of the composition of those employees voting. The composition of those voting was explained in the application and employer submission. The Deputy President was told about the residential and work locations of the 32 employees, and their occupations, and the industry they worked in, and the work experience of these employees based on data extracted from their resumes. 42 Ms Emily Robertson gave evidence which supported these submissions.43 Her evidence concerned the resumes and therefore experience of the employees that participated in the Agreement making process, the residential addresses and fly in fly out nature of work, the geographical spread of e2o Pty Ltd work it is pursuing, the disciplines or trades or role of those participating in the making of the agreement, the industries they worked in, and the range of industries the employees had exposure to during their engagement with e2o Pty Ltd.44
[41] Based on these submissions and evidence the Deputy President was correct to conclude that the requirements of the Act were met notwithstanding the various observations in One Key Workforce Pty Ltd v. CFMEU 45 relating to an inability to comprehend the Agreement given experience and other matters.46 We discuss the adequacy of the Decision later. There was no reason to conclude that the employees did not or could not genuinely consent based on factors such as their inexperience, their background or lack of knowledge. Nor were they indifferent to the impact of the Agreement given their occupational scope, on the material before the Deputy President
[42] The matter is therefore distinguishable from One Key Workforce Pty Ltd v. CFMEU. 47The evidence before the Deputy President48 demonstrated that there were 32 long-serving employees, with a geographic spread across the country, and with a range of classifications and industry knowledge. It can be distinguished just as the facts were distinguished in Thiess v. CFMEU.49In that case a Full Bench decided that while in each case only three employees approved the Agreement, (unlike in the present matter), in that matter there were substantial differences relating to the work and classifications, and the relevant experience of employees.50
[43] Thirdly, we consider the material before the Deputy President with respect to the breakdown of employees by reference to the relevant underpinning award for that employee. It is true that the Deputy President had no such reference before him. The CEPU did not submit that there was a requirement that for a vote to be successful it must include people that are covered by any potential modern award that would otherwise but for the Agreement apply, but specifically disagreed with that proposition. 51 Nor do the observations in One Key Workforce Pty Ltd v. CFMEU 52 require this. The requirement in the Act is that of genuine consent, and it does not extend to requirements of that kind which do not raise issues of genuine consent. Given the nature of the changes to the award and the composition of the workforce there is no basis to conclude that there was not genuine consent.
[44] Finally, we note that the CEPU was not able to specify or did not see as relevant the question of whether or not employees were subjected to any injustice as opposed to theoretical difficulties. 53 In our view of the material, no injustice was caused and if there was this might conceivably raise issues of genuine consent, although this is not necessary to our decision.
[45] In concluding its oral submissions, the CEPU led the Full Bench to Soliman v University of Technology, 54 as a relevant authority addressing the need for adequate reasons for a decision.55
[46] In Soliman v University of Technology 56 the Full Court of the Federal Court considered a dispute under an agreement (s 709 of the Act), and adequacy of reasons for decision. The Court said:
“[53] But where findings of fact and reasons have been provided, and where those reasons fail to address a submission which has been advanced, it may found a conclusion that that submission has not been considered or addressed.
[54] Such a conclusion may be available where there is a statutory requirement to provide findings and reasons. Thus, for example, in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30, 206 CLR 323 a submission was advanced that a decision of the Refugee Review Tribunal should be set aside because the Tribunal had failed to provide adequate reasons. Section 430(1) of the Migration Act1958 (Cth) required the Tribunal to prepare a written statement setting out “the reasons for the decision” and “the findings on any material questions of fact”. Although it was concluded that s 430 did not require the Tribunal to make findings on every question of fact which it may be considered were material ([2001] HCA 30 at [8]-[10], 206 CLR 323 at 331-332 per Gleeson CJ), McHugh, Gummow and Hayne JJ observed:
[69] It is not necessary to read s 430 as implying an obligation to make findings in order for it to have sensible work to do. Understanding s 430 as obliging the Tribunal to set out what were its findings on the questions of fact it considered material gives the section important work to do in connection with judicial review of decisions of the Tribunal. It ensures that a person who is dissatisfied with the result at which the Tribunal has arrived can identify with certainty what reasons the Tribunal had for reaching its conclusion and what facts it considered material to that conclusion. Similarly, a court which is asked to review the decision is able to identify the Tribunal's reasons and the findings it made in reaching that conclusion. The provision entitles a court to infer that any matter not mentioned in the s 430 statement was not considered by the Tribunal to be material … This may reveal some basis for judicial review by the Federal Court under Pt 8 of the Act, or by this Court in proceedings brought under s 75(v) of the Constitution. For example, it may reveal that the Tribunal made some error of law of the kind mentioned in s 476(1)(e) of the Act, such as incorrectly applying the law to the facts found by the Tribunal. It may reveal jurisdictional error … The Tribunal's identification of what it considered to be the material questions of fact may demonstrate that it took into account some irrelevant consideration or did not take into account some relevant consideration …
What is of present relevance is the proposition that a failure to mention a particular matter may support a conclusion that that matter was not in fact considered. A failure to include a matter in a statement of reasons provided pursuant to s 13 of the Administrative Decisions (Judicial Review) Act1977 (Cth) may similarly justify an inference being drawn that that matter was not taken into account: Sullivan v Department of Transport (1978) 20 ALR 323 at 349 per Deane J, 352-353 per Fisher J; Alexander v Australian Community Pharmacy Authority [2010] FCA 189 at [56], 265 ALR 424 at 435 per Bromberg J. See also: Electronic Industries Ltd v The Mayor, Councillors and Citizens of the City of Oakleigh [1973] VR 177 at 188-189 per Gowans J. But the “mere fact that not every issue was addressed in the statement of reasons or in the departmental advice contained in departmental briefs does not prove that the material was not considered by the Minister”: Blue Wedges Inc v Minister for Environment, Heritage and the Arts [2008] FCA 399 at [123], 167 FCR 463 at 492 per North J. See also: Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts [2011] FCA 113 at [96] per Cowdroy J.
[55] Even in the absence of a statutory requirement to provide findings or reasons, a failure to address a submission centrally relevant to the decision being made may similarly found a basis for concluding that that submission has not been taken into account. Such a failure may be exposed in reasons voluntarily provided. And a failure to take into account such a submission may constitute jurisdictional error: cf. WAFP v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 319. Lee, Carr and Tamberlin JJ there concluded:
[21] However, in our view, the failure by the RRT to refer to the interview of 10 September 1997 and to take it into account in considering whether the appellant departed illegally did amount to an error of law, because it constituted a failure to have regard to relevant material, which is so fundamental that it goes to jurisdiction: see Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 per McHugh, Gummow and Hayne JJ at [82].
[56] In the present proceeding it is concluded that the failure to refer to the submissions relating to mitigating circumstances and the reasonableness of the decision of the Acting Vice-Chancellor is properly to be characterised as a failure on the part of the Vice President to resolve, in accordance with law, the application that had been made.
[57] Just as reasons for an administrative decision should not be read with an eye keenly attuned to discerning error (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272 per Brennan CJ, Toohey, McHugh and Gummow JJ), eyes should not be so blinkered as to avoid discerning an absence of reasons or reasons devoid of any consideration of a submission central to a party’s case. Two factors, in particular, dictate the conclusion that the reasons of the Vice President fail to give any real consideration to the submissions advanced on behalf of Dr Soliman as to mitigating circumstances, namely:
the fact that the findings and reasons provided were written by an experienced, senior member of Fair Work Australia with legal qualifications and a person who had the considerable benefit of written submissions filed by experienced legal practitioners: Endeavour Coal Pty Limited v Association of Professional Engineers, Scientists and Managers, Australia [2012] FCA 764 at [36], 290 ALR 326 at 337; Yum! Restaurants Australia Pty Ltd v Full Bench of Fair Work Australia [2012] FCAFC 114 at [37] per Lander, Flick and Jagot JJ;
and, irrespective of any consideration being given to the qualifications and experience of the person who prepared those findings and reasons:
the fact that any reading of the findings and reasons of the Vice President disclose no real attempt to engage with the submissions being advanced on behalf of Dr Soliman.
The submissions advanced on behalf of Dr Soliman as to mitigating circumstances were not considered by the Vice President. The decision of the Full Bench gives no greater consideration to those submissions. Both the decision of the Vice President and the decision of the Full Bench, it is concluded, should be quashed.” 57
[47] In the decision under appeal the Deputy President said in relation to issues of genuine consent that:
“[12] I have considered the evidence and submissions before me including the matters raised in my Directions of 28 February 2019 and responses thereto. On the basis of the material contained in the application, the statutory declarations of Emily Robertson dated 8 November 2018 and 27 March 2019, the oral evidence of Emily Robertson, the submissions provided by e2o Pty Ltd and the undertaking attached as Annexure A, I am satisfied that each of the requirements of sections 186, 187, 188 and 190 of the FW Act as are relevant to this application for approval have been met.” 58
[48] The reasons for decision encompass therefore the matters raised in the Directions issued on 28 February 2019, and the other matters referred to in that paragraph, and responses to those Directions, which include e2o Pty Ltd written responses dated 22 March 2019, which dealt with:
• Whether the agreement meets the BOOT test; and
• whether the agreement was genuinely agreed by employees.
[49] The Directions issued on 28 February 2019 raise three issues regarding genuine agreement at paragraph 2.2. The Directions relate to issues of whether the Agreement ‘was genuinely agreed’, including whether and which casual employees were employed on the day of the vote and other matters, whether employees resided in States where the Agreement was stated to operate, and how given the scope of the Agreement a vote of 32 employees was capable of constituting ‘genuine consent with the meaning of the decision in One Key …’. 59 The Deputy President was therefore cognisant of the issues raised by One Key Workforce Pty Ltd v. CFMEU 60, and stated this in his Decision when he took account of the ‘matters raised in my Directions’, and ‘the responses thereto’.61
[50] He also specifically referred to and took account of the evidence of Ms Emily Robertson. The statutory declaration of Ms Emily Robertson dated 8 November 2018 in support of the application for approval of the Agreement addresses the requirements for approval and the statutory declaration dated 27 March 2019 confirms the Directions of 28 February 2019 being emailed to employees covered by the proposed Agreement. The oral evidence of Ms Emily Robertson related to the resumes and therefore experience of the employees that participated in the agreement making process, the residential addresses and fly in fly out nature of work, the geographical spread of e2o Pty Ltd work it is pursuing, the disciplines or trades or role of those participating in the making of the agreement, the industries they worked in, the range of industries the employees had exposure to during their engagement with e2o Pty Ltd. 62 The express reference to this evidence in the reasons for decision shows that the Deputy President turned his mind to the fundamental issues of the ability of the employees to consent given the nature of those employees. The submissions provided by e2o Pty Ltd pursuant to the Directions were also specifically referred to, and dealt with the work that e2o Pty Ltd was seeking, the residential and work locations of the 32 employees, and their occupations, and the industry they worked in, and the work experience of these employees based on data extracted from their resumes.63
[51] The express reference to these submissions shows that the Deputy President had regard to all these issues in determining that the requirements in the Act relating to genuine agreement had been met, and accepted the submissions of the employer in relation to them. He was right to do so. As previously noted, this was not the acceptance of a bald assertion or assertions as submitted by the CEPU, but rather the acceptance of substantial and persuasive material of relevance to the issues before the Commission, which encompassed the CEPU’s submissions in relation to One Key Workforce Pty Ltd v. CFMEU 64 and genuine consent made on 15 January 2019 and 13 February 2019. The substance of the CEPU’s submissions was addressed in the Decision of 27 March 2019.65
[52] In addition, the importance and nature of the CEPU submissions were expressly noted in the earlier decision dated 27 February 2019, 66 in which the Deputy President had regard to those submissions when it said:
“[22] The issues raised by the CEPU in its written submissions are not however marginal matters. They concern issues that must be considered by the Commission. They are however not matters incapable of being raised or considered by the Commission in its own right. Irrespective of whether there is a contradictor the Commission will need to consider both the BOOT and whether genuine agreement (within the meaning of the FW Act) was present. Whether there is substance to the objections remains to be seen.” 67
[53] In our view, the Deputy President had regard to and resolved the issues relating to genuine consent and other matters, and expressed that decision appropriately in his reasons for decision. We accept that a lengthier exploration of each of the issues considered by the Deputy President may have assisted the parties, however, in our view there was no error in the reasons for decision.
Conclusion
[54] For the reasons set out above, we order as follows:
a) Permission to appeal is granted;
b) The appeal is dismissed.
VICE PRESIDENT
Appearances:
Mr A Slevin of Counsel on behalf of the CEPU.
Mr M Follett of Counsel on behalf of the e2o Pty Ltd.
Hearing details:
2019
Melbourne
31 May
Final written submissions:
CEPU’s final written submissions dated 6 May 2019.
E2o Pty Ltd’s final written submissions dated 24 May 2019.
Printed by authority of the Commonwealth Government Printer
<PR709205>
1 [2019] FWCA 1992.
2 CEPU Submissions 13 February 2019 at [5] - [8].
3 CEPU Submissions 13 February 2019 at [9] - [16].
4 [2018] FCFAC 77.
5 [2019] FWC 1145.
6 [2018] FCFAC 77.
7 [2019] FWCA 1992.
8 Huntsman Chemical Company Australia Pty Ltd T/A RMAX Rigid Cellular Plastics & Others[2019] FWCFB 318 [35] – [37].
9 (1996) 66 IR 182.
10 [2018] FCFAC 77.
11 Ibid at [112]-[118].
12 Ibid at [141]-[142].
13 Ibid at [155]-[157].
14 Ibid at [172].
15 Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
16 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46].
17 GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
18 [2010] FWAFB 5343, 197 IR 266 at [24] – [27].
19 Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481.
20 Wan v AIRC (2001) 116 FCR 481 at [30].
21 [2018] FCAFC 77.
22 (1936) 55 CLR 499.
23 [2019] FWCA 1992 at [12].
24 Appeal by KCL Industries [2016] FWCFB 3048 3048 at [36].
25 CFMEU v AGL Loy Yang Pty Ltd [2014] FWCFB 6332, citing Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40.
26 As he specifically issued directions about these matters on 28 February 2019 and explored them at the hearing on 27 March 2019.
27 Forms R7, R8.
28 Appeal Book Tab 13.
29 Ibid Tab 12.
30 Ibid Tab 11.
31 Ibid Tab 7, p.39-42.
32 Transcript, PN40-41; PN52-65; PN69-75.
33 Notice of Appeal by the CEPU dated 17 April 2019.
34 Transcript, PN6-PN9.
35 Ibid, PN24.
36 [2018] FCAFC 77.
37 Transcript, PN26-34.
38 Appeal Book, F17 pp. 94-96.
39 Appeal Book pp.71-72.
40 Appeal Book pp.73-75.
41 Form F17 Questions 2.4-2.6.
42 Appeal Book pp. 39-41.
43 Transcript, PN50-68.
44 Ibid, PN52-68.
45 [2018] FCAFC 77.
46 [2019] FWCA 1992 at [12].
47 Ibid.
48 See paragraph [37] of this decision.
49 [2018] FWCFB 2405
50 Ibid at [99].
51 Transcript, PN284-285.
52 [2018] FCAFC 77.
53 Ibid, PN286-290.
54 [2012] FCAFC 146.
55 Transcript PN34.
56 [2012] FCAFC 146.
57 Ibid [53]-[57].
58 [2019] FWCA 1992 at [12].
59 [2018] FCAFC 77.
60 Ibid.
61 [2019] FWCA 1992 at [12].
62 Transcript, PN52-68.
63 Appeal Book pp. 39-41.
64 [2018] FCAFC 77.
65 [2019] FWCA 1992.
66 [2019] FWC 1145.
67 Ibid at [22].
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