Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Hitachi Rail Sts Australia Pty Ltd (Formerly Known as Ansaldo Sts Australia Pty Ltd)
[2024] FWC 2335
•2 SEPTEMBER 2024
| [2024] FWC 2335 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.217—Enterprise agreement
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Hitachi Rail Sts Australia Pty Ltd (Formerly Known As Ansaldo Sts Australia Pty Ltd)
(AG2024/2957)
| COMMISSIONER SIMPSON | BRISBANE, 2 SEPTEMBER 2024 |
Application for variation of the Ansaldo STS Australia Pty Ltd Enterprise Agreement 2019 - Application for a stay or adjournment of proceedings – application for adjournment granted
Hitachi Rail STS Australia Pty Ltd (Hitachi) has applied for a stay or adjournment of proceedings under section 589 of the Fair Work Act 2009 (Cth) (the Act) in connection to an application made to the Fair Work Commission (the Commission) by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) on 5 August 2024 to vary two enterprise agreements pursuant to section 217 of the Act. The two enterprise agreements are currently the subject of proceedings filed by Hitachi STS in the Federal Court of Australia on 20 May 2024 (FCA Proceedings).
The relevant enterprise agreements are Ansaldo STS Australia Pty Ltd Enterprise Agreement 2019 (2019 Agreement) and the Hitachi Rail STS Australia Pty Ltd Enterprise Agreement 2022 (2022 Agreement) (collectively, the Agreements).
The FCA Proceedings seek declaratory relief to the effect that, relevantly, for the purpose of calculating the entitlements to overtime and penalties under clauses 4.10(a), 4.11.2(c), 4.11.2(d) and 5.11(a) in the Agreements, only the hourly rate in Schedule B of the Agreements is to be used and that the amount of any allowances payable under clause 5.1 are not included. The CEPU’s application in the Commission seeks a finding that there is an ambiguity or uncertainty within the meaning of section 217 of the Act in clauses 4.10, 4.11.2(c)-(d) and 5.11(a) of the Agreements, and consequent orders removing the ambiguity or uncertainty, by varying the Agreements on terms that require the allowances under clause 5.1 to be taken into account in the calculation of entitlements to overtime and penalties.
The FCA Proceedings are also currently subject to a stay application brought by the CEPU and that application is listed for hearing on 23 October 2024. Hitachi now seeks a stay or adjournment of proceedings before the Commission pending the outcome of the stay application brought by the CEPU in the FCA Proceedings.
I heard Hitachi’s stay application on 26 August 2024. Permission was granted under section 596(2)(a) of the Act for Mr Ian Neil SC and Mr Sam Pack of counsel to represent Hitachi, and Mr Phillip Boncardo and Mr Lewis Hamilton of counsel to represent the CEPU.
Hitachi relied on the evidence of Mr Ronan Boothman, and the CEPU relied on the evidence of Ms Yolla Abousleiman. Neither witness was required to give evidence and the statements from Mr Boothman[1] and Ms Abousleiman[2] were admitted in evidence.
Evidence
Mr Ronan Boothman, a Senior Associate with Corrs Chambers Westgarth, and Ms Yolla Abousleiman, a solicitor employed as National Employment and Industrial Lawyer by the CEPU gave evidence they had day to day carriage of the FCA Proceedings and these proceeding for Hitachi and the CEPU respectively.
Ms Abousleiman said that since about March 2022, there has been dispute between Hitachi and one or more of its employees about the provisions of the Agreements.
Ms Abousleiman said there were proceedings filed in the Commission by a former employee of Hitachi (Mr Neville Schoof) to deal with these disputes in or around August 2023. Hitachi challenged the Commission’s jurisdiction and the Commission dismissed the dispute finding that it did not have jurisdiction to deal with the matter.
Ms Abousleiman said after these Commission proceedings, Hitachi back paid employees penalty and overtime rates such that they were inclusive of all-purpose allowances from the date the 2022 Agreement commenced. No back payment was made under the 2019 Agreement. After this, Hitachi have paid penalty and overtime rates in accordance with the contentions advanced by Mr Schoof in his dispute.
Ms Abousleiman confirmed that on 17 May 2024 this year Hitachi started the FCA Proceedings and sought declarations about certain allowances not being incorporated into penalty and overtime rates under the 2019 Agreement and the 2022 Agreement.
Mr Boothman said the first case management hearing in the FCA Proceedings was on 2 July 2024.
Ms Abousleiman said after Hitachi filed its statement of claim in the FCA Proceedings on 16 July 2024 the CEPU sought advice from counsel. Mr Boothman confirmed a second case management hearing was conducted on 24 July 2024 and orders were made as set out above. Both witnesses confirmed that at the second case management hearing on 24 July 2024, the CEPU informed the Court that it intended to make a section 217 application to deal with the issues raised by Hitachi in the FCA Proceedings. Mr Boothman said at the second case management hearing that the Court declined to make any order for timetabling of a stay application by the CEPU.
On 5 August 2024 the CEPU filed this application.
Both witnesses confirmed that on 9 August 2024, the CEPU filed an interlocutory application seeking a temporary stay of the FCA Proceedings pending determination of the section 217 application in this proceeding.
Both witnesses confirmed on 14 August 2024, Colvin J made orders vacating certain orders he had made on 24 July 2024 (including a requirement for the CEPU to file a defence).
Colvin J’s issued orders with respect to the programming of the stay application included a requirement for the CEPU to file an outline of submissions by 21 August 2024, and a requirement that Hitachi file an outline of submissions by 4 September 2024. The stay application was programmed for hearing on 23 October 2024. The CEPU filed its submissions on 21 August 2024, and the Mr Boothman said Hitachi intends to file its submissions by 4 September 2024.
On 19 August 2024, Hitachi applied for these proceedings to be stayed pending determination by Colvin J of the CEPU’s interlocutory application in the FCA Proceedings.
Mr Boothman said Hitachi has taken steps to notify the affected individuals in compliance with Colvin J’s orders of 24 July 2024.
Ms Abousleiman said a significant aspect of the CEPU’s case on ambiguity and uncertainty, as well as on the exercise of the discretion under section 217, is that extraneous materials (including negotiations and materials provided to employees prior to them voting on the Agreements) indicates that the objectively discerned mutual intention of the parties was that the allowances Hitachi says were not incorporated into penalty and overtime rates were intended to be so included.
Ms Abousleiman said the CEPU intends to call this evidence in these proceedings, however this evidence is irrelevant or at best of limited significance to the issues of construction in the FCA Proceedings.
Ms Abousleiman said in the event that the CEPU succeeds in varying the Agreements in the manner sought in these proceedings, the FCA Proceedings have no utility. Alternatively, should Hitachi seek alternate orders varying the Agreements to reflect its preferred position in these proceedings, the FCA Proceedings will also have no utility.
Ms Abousleiman said the CEPU intends to prosecute these proceedings regardless of whether the FCA Proceedings are stayed and if they are not stayed and the Federal Court ultimately upholds the construction asserted by Hitachi.
Ms Abousleiman said the CEPU is currently in the process of commencing to gather its evidence in support of this application and will be in a position to file its evidence and submissions by mid to late September. The CEPU seeks that these proceedings be progressed as expeditiously as possible so the dispute between the parties can be resolved. The CEPU is of the view that these proceedings could, subject to the Commission’s availability, be readied for hearing by November or December 2024. The FCA Proceedings are unlikely to be ready for hearing and heard until sometime in 2025.
Ms Abousleiman said the CEPU opposes these proceedings being temporarily stayed and is of the view that these proceedings are the most effective forum for the issues raised in the Federal Court proceedings to be determined. Further, the parties have not participated in conciliation or mediation about the dispute and the CEPU would have no opposition to attending a conciliation or mediation conducted by the Commission as soon as practicable. The CEPU is concerned that any stay will mean that the Commission cannot convene a conciliation of the dispute.
Submissions
Hitachi submitted that there are two extant pending proceedings concerning the Agreements being:
a.Matter WAD118/2024 in the FCA, commenced on 20 May 2024 by Hitachi; and
b.Matter AG2024/2957 in the Commission, commenced on 5 August 2024 by the CEPU.
Hitachi submitted that while there is not complete overlap, each of the FCA Proceedings and the Commission proceedings essentially concern the proper interpretation of the same clauses under the 2019 and 2022 Agreements.
Hitachi submitted that subsequent to the commencement of the Commission proceedings, the CEPU filed a stay application in the FCA Proceedings, and the ultimate ground on which the stay of the FCA Proceedings is sought is the existence and pendency of the Commission proceedings.
FCA Proceedings
Hitachi seeks a stay or alternatively an adjournment of the Commission Proceedings pending Colvin J’s decision in respect of the stay in the FCA Proceedings.
Hitachi submitted that the FCA Proceedings arose out of a dispute between Hitachi and a former employee, Mr Neville Schoof, regarding his entitlements. The FCA proceedings were commenced by Hitachi on 20 May 2024 and named Mr Schoof as the first respondent and the CEPU as the second respondent.
At a case management hearing on 2 July 2024, Colvin J ordered Hitachi to file a statement of claim in the FCA Proceedings by 16 July 2024, and Hitachi did so. At the case management hearing on 24 July 2024, Colvin J made orders that:
(a)Required Hitachi to take steps to notify the individual current and former employees who are or were covered by the 2019 and 2022 Agreements of the FCA Proceedings and their opportunity to be joined as a respondent;
(b)Required the CEPU and Mr Schoof to file defences in the FCA Proceedings by 23 August 2024;
(c)Allowed Hitachi to file any reply in the FCA Proceedings by 6 September 2024; and
(d)Listed the FCA Proceedings for further case management hearing on 12 September 2024.
In the course of the case management hearing, counsel for the CEPU raised for the first time that it considered making an application under section 217 of the Act in respect of the 2019 and 2022 Agreements and seeking a stay of the FCA Proceedings.
On 9 August 2024 the CEPU filed a stay application in the Federal Court seeking a stay of the FCA Proceedings. The Federal Court indicated that the application would be set down for hearing in either September or October 2024, depending on parties’ availability.
On 13 August 2024 the parties to the FCA Proceedings signed a minute of consent orders which relevantly:
(a)Vacated the procedural orders with respect to further pleadings in the FCA Proceedings, such that the CEPU and Mr Schoof were not required to file a defence pending the resolution of the stay application;
(b)Did not disturb the order requiring Hitachi to notify current and former employees of the FCA Proceedings; and
(c)Programmed the filing of submissions and evidence in respect of the stay application in the FCA Proceedings.
The stay application in the Federal Court has been listed for hearing before Colvin J at 10:15am AWST on 23 October 2024.
Consistently with Colvin J’s order of 4 July 2024, Hitachi has contacted all relevant current and former employees and notified them of the proceedings.
Commission Proceedings
The Commission Proceedings were commenced on 5 August 2024. Hitachi seeks a stay or adjournment pending the resolution of the stay application made by the CEPU in the FCA Proceedings, including the vacation of the order requiring it to file a response to the Commission Proceedings.
Hitachi submitted that it would be highly undesirable for both the FCA Proceedings and the Commission Proceedings to proceed in parallel, while the Federal Court has before it an immediately pending question as to whether the FCA or the Commission Proceedings are the most appropriate forum in which to determine the issues common to both proceedings.
Hitachi submitted in circumstances where an application to stay the FCA Proceedings has been made, the parties have agreed programming orders for it to be heard in the Federal Court, hearing has been listed for before Colvin J on 23 October 2024, and the outcome of that hearing will be highly significant to the question of whether it is appropriate for the Commission Proceedings to proceed at this time or at all, it would not be efficient or consonant with section 577(1)(a) or (b) of the Act for any further steps to be taken in the Commission Proceedings.
The CEPU opposed the application for a temporary stay or adjournment on the grounds that there are no good reasons and no proper justification to interfere with the CEPU’s entitlement to have this proceeding heard and determined in the ordinary course of the business of the Commission. Further the question and focus of these proceedings are, contrary to the assertion of Hitachi, different. The CEPU submitted that these proceedings do not concern the interpretation of the Agreements in issue and referred to the decision in Bianco Walling Pty Ltd v CFMMEU (2020) 275 FCR 385 at [61], [65] – [72] and [86] – [88].
The CEPU submitted that section 589 of the Act provides that the Commission may decide “as to how, when and where a matter is to be dealt with.” It is accepted that section 589 of the Act confers power to grant what may be described ‘stay’ of proceedings pending finalisation of proceedings in another court or tribunal, or to otherwise adjourn proceedings pending resolution of proceedings (or step in proceedings) in another court or tribunal.
Exercise of the power requires consideration of the imperatives and dictates of sections 577-578 of the Act. These require the Commission to perform its functions, relevantly, in a manner that is fair and just; quick, informal and without undue technicality; and having regard to equity, good conscience and the merits of the matter. The ultimate question in deciding whether a ‘stay’ or adjournment should be granted is what does the justice of the case require?
The CEPU submitted that practical considerations based on common sense and fairness guide which action should proceed first, and whilst there is no checklist the CEPU referred to a decision of Gostencnik DP in Esso Australia Pty Ltd [2018] FWC 6244 at [19] where he said as follows:
“…entitled to press its application and to have [an] application determined as expeditiously as circumstances will allow. This weighs against an adjournment of its application. Unnecessary delay in a proceeding speaks against the proper administration of justice.”
The CEPU submitted firstly, that section 217 proceedings are not proceedings concerned with the proper construction of enterprise agreements, and identification of the true legal meaning of a provision is distinct from the question of whether it is ambiguous or uncertain. Evidence of common intent is admissible and probative of ambiguity and uncertainty and relevant to the exercise of the discretion to vary an agreement. The focus of the inquiries in this proceeding and the FCA Proceedings are distinct and separate.
Second, if this proceeding is determined earlier, the relief sought in the FCA Proceedings may be rendered an academic outcome. Further, even if the CEPU stay application in the Federal Court fails and the Federal Court were to order declaratory relief, these proceedings would retain their utility and would need to be determined.
Third, section 217 of the Act provides the most appropriate mechanism to resolve the issues, and the CEPU referred to a decision of Snaden J in National Tertiary Education Union v Monash University [2022] FCA 1368 at [14] – [15] where the Federal Court granted a stay application pending the outcome of a section 217 application in the Commission.
Fourth, the Commission is a specialist tribunal and the appropriate place to hear the present application.
Fifth, there will be prejudice to the CEPU, its members and those otherwise covered by the Agreements were a stay or adjournment granted as the stay application in the Federal Court is not due to be heard until 23 October 2024.
Sixth, Hitachi is unlikely to suffer significant prejudice if this proceeding continues unhindered as neither proceeding is well advanced.
In reply submissions Hitachi submitted that the FCA Proceedings and the Commission Proceedings concern the same overlapping subject matter, and the available results in each has the potential to materially affect the other. If the Commission varies a provision in the 2022 Agreement to remove ambiguity or uncertainty, the claims being adjudicated in the FCA Proceedings would to that extent require amendment, and the basis on which those claims are sought may be substantially different. Conversely, if the Federal Court declares the one correct meaning of a provision in the 2022 Agreement, there will necessarily no longer be any ambiguity or uncertainty in that provision so as to enliven the Commission’s jurisdiction to vary the provision in the Commission Proceedings.
Hitachi submitted it follows that a decision has to be made about which proceeding should be determined first, or whether it is appropriate for them to proceed in parallel. The Federal Court has made preparations to make that decision imminently. A hearing date has been set, programming orders have been made, and the exchange of evidence and submissions is under way.
Hitachi submitted by this application, it asks only that the Commission await the Federal Court’s decision on the interlocutory question of which proceedings should be determined first, before proceeding any further with the Commission Proceedings.
Hitachi submitted that the Federal Court will exercise its powers by determining which of the competing jurisdictions is most appropriate, or, in other words, which aligns most with the interests of justice.
Hitachi submitted that the factors which will be considered by the Federal Court in making that determination, and which are also to be applied by the Commission in deciding the present application, include the following, taken from Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia)Pty Ltd (1992) 34 FCR 287:
(a)Which proceeding was commenced first.
(b)Whether the termination of one proceeding is likely to have a material effect on the other.
(c)The public interest.
(d)Whether work done on, for example, pleadings and preparation might be wasted.
(e)The undesirability of substantial waste of time and effort if it becomes a common
(f)practice to bring actions in two courts involving substantially the same issues.
(g)How far advanced the proceedings are in each forum.
(h)The law should strive against permitting multiplicity of proceedings in relation to similar issues.
(i)Generally balancing the advantages and disadvantages to each party.
Hitachi submitted that in the context of overlapping applications in both the Federal Court and the Commission, further relevant considerations have included:
(a)The Federal Court’s specialist function is the final determination of the legal rights of the parties under the Act (and, it might be said, any enterprise agreement made under the Act).
(b)The Commission is an inferior tribunal and will be assisted by the reasons of the Federal Court.
(c)Whether complex legal issues are evident which deserve the attention of a superior court.
(d)If the substantive question continues to determination before the Commission and the Federal Court, there is the potential for the answers to be inconsistent. If the Federal Court first determines the issue, the potential for inconsistent results are minimised.
(e)The potential for delay.
Hitachi accepted that the tasks of the Commission and the Federal Court in the respective proceedings, and the matters to be considered for the purposes of discharging those tasks, have important material differences, however nonetheless have considerable overlap, and the conclusion in one may materially affect the other.
Hitachi submitted that countless authorities have deplored the unfairness and waste of resources that is the inevitable result of two fora dealing substantively with overlapping subject matters at the same time.
Hitachi submitted that it did not accept the correctness of the CEPU submission that even if the Federal Court concludes with judicial declarations as to the proper construction of the two agreements, it may still be open to the Commission to vary the agreements under section 217 so as to avoid the effect of the declarations. Hitachi submitted that it is at least arguable that course would not be open, or would not be an appropriate exercise of discretion.
Hitachi submitted that it is appropriate for the Federal Court to make the decision as to which proceeding should be resolved first for the following reasons:
(a)The process for the Federal Court to make the decision is advanced;
(b)If the Federal Court decides it is in the interests of justice for the FCA Proceedings to continue in preference to the Commission Proceedings the Commission would inevitably give considerable weight to that decision, and receive considerable guidance from the Court’s reasons, in determining whether it is appropriate for the Commission proceedings to continue at this time;
(c)If the Federal Court considers it necessary to do so, it can make orders staying the Commission proceedings. The Commission cannot make corresponding orders staying the FCA Proceedings.
(d)Resources expended in advancing the Commission Proceedings before the Federal Court makes it decision may well be wasted, depending on the Federal’s Courts decision.
(e)There is at least, a very real prospect that the Federal Court will refuse the CEPU’s stay application, with the result that the FCA Proceedings continue to a substantive hearing and decision.
(f)Were the Commission not to agree to await the Federal Court’s decision as to which proceeding should be determined first, it would be necessary to either:
(i)File a further application seeking a stay of the Commission Proceedings or
(ii)Seek ain interlocutory injunction in the FCA Proceedings staying the Commission Proceedings pending the Federal Court’s determination of the CEPU’s stay application.
Hitachi submitted that there is no evidence of any particular prejudice to the CEPU or its members if the Commission Proceedings are delayed pending the Federal Court determination of the CEPU stay application.
Hitachi submits the CEPU did not make its application under section 217 of the Act until well after the FCA Proceedings had commenced from which it must be inferred that the CEPU saw no urgency in the resolution of the dispute. This being a money case dating back several years, there is no obvious urgency. Hitachi has paid and is paying employees under the 2022 Agreement penalty rates and overtime on the basis the all-purpose allowance is included in the calculation, contrary to the declarations it seeks in the FCA Proceedings but in accordance with the variations the CEPU seeks in the Commission Proceedings.
Further Hitachi submits that the Commission cannot proceed to deal with the section 217 application in respect of the 2019 Agreement.
Conclusion
I have weighed the evidence and submissions, and each of the arguments presented by the CEPU as to why I should refuse Hitachi’s stay application. I have concluded it is appropriate to adjourn these Commission Proceedings pending the determination of the CEPU stay application in the Federal Court by Colvin J.
The FCA Proceedings are somewhat more advanced than these proceedings. The Federal Court matter does overlap with the matter before me, and a delay until 23 October 2024 will not cause a substantial level of prejudice to the CEPU in all of the circumstances. The CEPU will have the opportunity to put before the Federal Court the same arguments presented to the Commission as to why the Federal Court should not proceed with the matter for it and allow the section 217 application to be heard first.
The Commission will be assisted by the reasons of the Federal Court in determining the CEPU stay application. It would also appear possible, if not probable that should this stay application be refused, it may trigger further litigation between now and the Federal Court hearing on 23 October 2024 which is undesirable.
On a separate matter, the CEPU proposed that in the event I was against the CEPU’s substantive position on the Hitachi stay application, the Commission should proceed to issue directions for the CEPU, as the Applicant in the section 217 application, to file its evidence and submissions so that in the event Colvin J grants the CEPU’s stay application in the FCA Proceedings, the Commission Proceedings will be that much more advanced. The CEPU submitted it was prepared to bear the time and cost of preparing its case material, and doing so would not prejudice Hitachi in any way. Counsel for Hitachi advised that it took no position either for or against this proposal.
In the circumstances I see no harm in adopting the CEPU proposal. On that basis I will issue separate directions with dates for filing for CEPU to file its evidence and submissions in the matter before me and the matter will otherwise be adjourned pending the outcome of the CEPU stay application in the Federal Court.
COMMISSIONER
Appearances:
I. Neil SC and S. Pack of counsel for Hitachi STS
P. Boncardo and L. Hamilton of counsel for the CEPU
Hearing details:
2024
Brisbane (by Microsoft Teams)
26 August.
[1] Exhibit 1
[2] Exhibit 2
Printed by authority of the Commonwealth Government Printer
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