Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Limited t/a Qantas

[2017] FWC 805

[2017] FWC 805

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s238 - Application for a scope order

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU); Australian Workers' Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Qantas Airways Limited t/a Qantas
(B2016/1237)

DEPUTY PRESIDENT SAMS SYDNEY, 8 FEBRUARY 2017

Application for a party to be represented by a lawyer or paid agent – scope order application by three Unions – whether matter will be dealt with more efficiently taking into account the complexity of the matter – scope order application likely to raise technical engineering and operational issues – cross-examination of witnesses – balancing fairness between the parties – principles considered – exercise of discretion – application granted – application for directions under Rule 12 that a party not be represented by a lawyer for the purposes of preparing a submission or communicating with the Commission – no previous authority or decision of the Commission – application of same principles under s596(2) of the Act to Rule 12 – other practical considerations – directions refused.

[1] This is an edited version of the ex tempore decision I issued in transcript on 6 February 2017.

[2] This interlocutory decision will determine two cross applications in respect to a substantive application lodged by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (‘AMWU’), the Australian Workers' Union (‘AWU’) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (‘CEPU’) (‘the Alliance Unions’) on 24 November 2016. The substantive application seeks a scope order, pursuant to s238 of the Fair Work Act 2009 (the ‘Act’).  The scope order application arises in the context of bargaining for a new agreement between the Alliance Unions and Qantas in respect to its engineering operations, primarily in Sydney and Brisbane. Shortly put, the Alliance Unions seek one enterprise agreement, whereas Qantas seeks to retain the existing arrangements in which one agreement applies in Brisbane and another applies in Sydney and elsewhere.

[3] The substantive application is listed for hearing on 22 and 23 February 2017 and directions in preparation for the hearing were issued by the Commission on 22 December 2016.  The Alliance Unions have complied with the directions and Qantas was due to file its evidence and submissions by 4 pm Friday, 3 February 2017. On 31 January 2017, after learning the day before of Qantas's application to be represented by lawyers (Herbert Smith Freehills) at the hearing, the Alliance Unions sought directions, pursuant to Rule 12 of the Commission's Rules that Qantas not be permitted to be represented by lawyers or paid agents for the purposes of:
(a) preparing written submissions or other documents;
(b) lodging with the Commission a written submission or other documents; or
(c) corresponding with the Commission.
Concurrently, and unsurprisingly, the Alliance Unions also oppose Qantas being represented by lawyers at the hearing later this month. Given the direction that Qantas file its evidence last Friday, the Alliance Unions sought an urgent hearing to deal with these two applications.  The matter was listed at 3pm last Friday, 3 February 2017, with Mr M Nguyen appearing for the AMWU, Ms J Gherjestani appearing for the AWU and Mr G Noble appearing for the CEPU.

[4] I note that all three Union representatives are legally trained but, of course, are not required to seek permission to appear, pursuant to section 596(4) of the Act. Mr C Follett of Counsel appeared, with permission for present purposes, for Qantas. Given the pressing timetable of directions, this decision is issued without the benefit of transcript.  However, I have considered all of the submissions, led primarily by Mr Nguyen for the Alliance Unions and Mr Follett for Qantas, in determining these applications.

[5] I propose to deal firstly with Qantas's application to be represented by lawyers in the substantive application.

SUBMISSONS

For Qantas

[6] Mr Follett contended that:

(a) the scope applications will involve the cross-examination of four witnesses;

(b) scope order applications, by their very nature, involve legal principles applied to the evidence. Legal representation will focus the parties on relevant issues and shorten the proceedings by cross-examining witnesses according to proper legal processes;

(c) most scope order applications have involved one or more of the parties being legally represented;

(d) scope order proceedings are very different to proceedings involving individual, unrepresented litigants, such as in unfair dismissal cases;

(e) Qantas, as the respondent to the Alliance Unions' scope order application, is entitled to defend its position with the most effective representation available to it;

(f) all legal practitioners have a duty to the courts and the profession to act according to the speedy and efficient administration of justice;

(g) the scope order application involves complex operational and engineering issues. The Commission will be assisted by effective legal representation in understanding these issues in the context of the evidence and the application of the legal principles to that evidence;

(h) Qantas has 10 in-house HR personnel who deal primarily with engineering/operational issues and 11 IR personnel, of whom only three have had operational experience; one of whom is unavailable for the proceedings, another, Mr Saunders, is one of the two Qantas witnesses, and Mr Smith has not appeared in a Commission hearing for some 18 months. In addition, the conduct of litigation is entirely different to IR and HR functions;

(i) this position is to be contrasted to the three legally-trained Alliance Union representatives who appear regularly in the Commission and are well familiar with the Commission's processes, decisions and principles derived therefrom; and

(j) the Alliance Unions have proffered no evidence to demonstrate why it would be unfair if Qantas is represented by a lawyer.

For the Alliance Unions

[7] Mr Nguyen submitted that:

(a) Qantas had provided no evidence to demonstrate why the proceedings will be dealt with more efficiently if it is represented by lawyers;

(b) applications for scope orders are not inherently complex, novel or unique;

(c) a number of Full Bench decisions have settled the relevant legal principles to be applied to scope order applications;

(d) the presumption of parties appearing in all Commission proceedings, without legal or agent representation, requires Qantas to satisfy the tests set out in s596(2) of the Act and in accordance with the lead authority of the Federal Court in Warrell v Walton [2013] FCA 291 (‘Warrell’);

(e) Qantas has large, well-resourced human resource/employment relations teams, including legally-trained persons, who are more than capable of effectively representing it in the proceedings;

(f) it would be unfair for the Alliance Unions to be unrepresented if Qantas was represented by an experienced industrial barrister.

CONSIDERATION

[8] Section 596(2) of the Act is the relevant section to be applied in matters of this kind. It is expressed in the following terms:

(2)  FWA may grant permission for a person to be represented by a lawyer or paid agent in a matter before FWA only if:

(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or

(b)  it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c)  it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

[9] At the outset, a number of observations may be made about the Commission's grant of permission for a party to be represented by a lawyer or paid agent.

[10] Firstly, while the decision is an interlocutory one, it ought not be regarded as a mere procedural decision; see: Warrell at 24. A grant of permission decision sits alongside of, and is complementary to, ensuring the Commission's powers in the performance of its functions under the Act are fair, just, quick, informal, open and transparent and avoid unnecessary technicalities (s577).

[11] Secondly, subsections (a), (b) and (c) of s596 are disjunctive. In other words, it is only necessary for the Commission to find one of the subsections to be satisfied for the Commission to move to the next stage of exercising a more general discretion to refuse or grant permission for a person to be represented by a lawyer or paid agent.

[12] Thirdly, even if the Commission is satisfied one or more of the subsections (a), (b) and (c) are established, the Commission, in the exercise of its discretion, as I have just indicated, may still refuse permission for a person to be represented by a lawyer or paid agent.

[13] Fourthly, there is no basis in the statutory provisions, or arising from any of the authorities, for considerations of who the party seeking to be represented by a lawyer chooses as its lawyer; whether a barrister, a solicitor or a particular law firm; see: New South Wales Bar Association v McAuliffe & Anor[2014] FWCFB 1663(‘McAuliffe’) at 24.

[14] Fifthly, whether a person (Qantas in this case) can be represented by in-house resources, including in-house lawyers, is not the relevant question.  As Gostencnik DP said in ASC Pty Ltd v The Australian Workers’ Union; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia Union[2014] FWC 544:

‘In any event the question, for the purposes of granting permission for the reasons set out in section 596 (2)(a) of the Act, is not whether ASC can be represented or even effectively represented by in-house resources, rather the relevant question is whether, taking into account the complexity of the matter, the grant of permission to ASC to be represented by a lawyer (in this case one experienced in advocacy and industrial law) would enable the matter to be dealt with more efficiently. The in-house capacity of ASC has a bearing on that assessment but I am satisfied that in this case the grant of permission to ASC for external legal representation will have that result.’

[15] Sixthly, the principles to be applied by the Commission were first judicially considered in Warrell and subsequently adopted by a Full Bench of this Commission in McAuliffe.  In Warrell, Flick J said, at 24:

‘A decision to grant or refuse "permission" for a party to be represented by "a lawyer" pursuant to section 596 cannot be properly characterised as a mere procedural decision. It is a decision which may fundamentally change the dynamics and manner in which a hearing is conducted. It is apparent from the very terms of section 596 that a party "in a matter before FWA" must normally appear on his own behalf. That normal position may only be departed from where an application for permission has been made and resolved in accordance with law, namely where only one or other of the requirements imposed by section 596(2) have been taken into account and considered. The constraints imposed by section 596(2) upon the discretionary power to grant permission reinforce the legislative intent that the granting of permission is far from a mere "formal" act to be acceded to upon the mere making of a request. Even if a request for representation is made, permission may be granted "only if" one or other of the requirements in section 596(2) is satisfied. Even if one or other of those requirements is satisfied, the satisfaction of any requirement is but the condition precedent to the subsequence exercise of the discretion conferred by section 596(2): i.e., "FWA may grant permission...". The satisfaction of any of the requirements set forth in section 596(2)(a) to (c) thus need not of itself dictate that the discretion is automatically to be exercised in favour of granting "permission".’

(See also Asciano Services Pty Ltd vHadfield[2015] FWCFB 2618.)

[16] In respect to these authorities, I refer to what I said in Bertrand v Navitas[2015] FWC 3147 at 14 to 22:

‘[14] While I respectfully accept the findings in both Warrell and NSW Bar Association v McAuliffe and am bound by those decisions, I reiterate what I said in Applicant v Respondent[2014] FWC 2860, where one party is unrepresented, more usually, but not always the applicant:

[17] In passing, I note that Flick J also said in Warrell:

"The appearance of lawyers to represent the interests of parties to a hearing runs the very real risk that what was intended by the legislature to be an informal procedure will be burdened by unnecessary formality."

[18] For my part, and with respect, this observation has not been my experience.  Invariably, I have found the skills and expertise of an experienced industrial legal practitioner will be more of a help than a hindrance, particularly bearing in mind a legal practitioner's professional obligations to the Commission and the Courts.  In this respect, I refer to the comments of Mason CJ in Giannarelli v Wraith (1988) 165 CLR 543; [1988] HCA 52:

"[A] barrister's duty to the court epitomises the fact that the course of litigation depends on the exercise by counsel of an independent discretion or judgment in the conduct and management of a case in which he has an eye, not only to his client's success, but also to the speedy and efficient administration of justice.  In selecting and limiting the number of witnesses to be called, in deciding what questions will be asked in cross-examination, what topics will be covered in address and what points of law will be raised, counsel exercises an independent judgment so that the time of the court is not taken up unnecessarily, notwithstanding that the client may wish to chase every rabbit down its burrow.  The administration of justice in our adversarial system depends in very large measure on the faithful exercise by barristers of this independent judgment in the conduct and management of the case."

[19] More recently, a Full Bench of the Commission in E. Allen and Ors v Fluor Construction Services Pty Ltd[2014] FWCFB 174 said at para [48]:

"A lawyer's duty to the Commission is paramount and supersedes a lawyer's duties to their client. A grant of permission to appear pursuant to section 596(1) of the Act is based upon a presumption that the representative to whom leave is granted will conduct themselves with probity, candour and honesty. The duty of advocates in that regard has been long recognised by the Commission [footnotes omitted]."

[20] Informality is one thing, but there is still a statutory foundation which must be observed in the exercise of all the Commission's powers and functions.  In my experience, the prospects of a case being run more efficiently and focused on the relevant issues to be determined is more likely where competent legal representation is involved. I agree with what was said by the Full Bench in Priestley:

"[13] In our view DPS has established that representation would assist DPS to bring the best case possible.  Representation by persons experienced in the relevant jurisdiction will be of undoubted assistance in this regard.  We are satisfied that the particular counsel has the capacity to assist the DPS and assist the Tribunal in performing its functions."

[21] In my view, balancing fairness between parties is as much a case of courtroom management as it is a case of legislative mandate.  With the greatly increased exposure of all courts and tribunals to self-represented litigants, with all of the well known difficulties this brings, the appearance of a focused, experienced and sympathetic legal practitioner is, more often than not, a welcome relief.

[22] On one interpretation, the Commission is positively required to undertake consideration and make appropriate findings in accordance with section 596(2) of the Act, even in circumstances where both parties are legally represented and neither party objects to the legal representation of the other party. To my mind, this is an unnecessary waste of the Commission's time and resources."’

[17] In my view, the substantive application would be dealt with more efficiently, taking into account the complexity of the matter, if legal representation was granted to Qantas in this case. I arrive at this conclusion for the following reasons:

(1) Scope orders are invariably hotly contested matters because sophisticated industrial parties will be deadlocked as to the scope of a proposed agreement. Such is the case in these proceedings. Evidence must be adduced to satisfy the conditions precedent for making a scope order under s238 of the Act. This case is no different. Legal representation will ensure the hearing is conducted efficiently and effectively.

(2) Both parties will provide detailed evidence likely to include technical engineering and operational issues.  Cross-examination is likely to be vigorously conducted.  The Commission will be assisted by experienced legal practitioners, who will steer the evidence as to relevance and with questions which assist the Commission to understand complex technical operational issues.  In my experience, competent industrial legal practitioners will invariably result in proceedings being properly focused and efficiently conducted. Experienced legal practitioners know when to make appropriate concessions, which shortens proceedings.

(3) Scope orders are not common in this Commission.  In 2015/16, only 28 scope order applications were made, most of which, as I apprehend, were contested.

(4) The Commission's own enquiries reveal the vast majority of scope order applications in recent years have involved legal representatives for one party or both, including, in many cases, by counsel.  This must reflect an obvious proposition that such applications involve some degree of complexity and the application of relevant legal principles.

(5) The fact there is existing, settled Full Bench authorities as to the principles to be applied in such applications is not indicative of matters being simple or straight forward.  The question would always arise as to how these principles are to be applied to particular contested facts and circumstances.  A competent, specialist legal practitioner will be useful in assisting in this exercise and ensuring such contested proceedings are conducted efficiently and constructively.

(6) While I do not need to consider subsections (b) and (c) of section 596 as to the fairness between parties, I find the Alliance Unions' submissions to be somewhat disingenuous given that all three Union advocates are legally trained and are very experienced practitioners in this Commission. They are employed by well-resourced, long-standing registered organisations in this Commission. I contrast this with the submission of Mr Follett as to the advocacy experience of Qantas HR and ER teams.

(7) While each case must be determined on its own facts and circumstances, I referred the parties during the proceedings to a decision of Booth C on 15 July last year in CEPU & Ors v Northern SEQ [2016] FWC 4736 in which the Commissioner dealt with a section 596 application in a scope order application which had some curious and surprising similarities to this case. For example, five Unions, including those in this case, appeared, two of the Union advocates had law degrees, the Unions had sought one agreement and the employer had sought three. The Commissioner concluded, at 13 - 14 as follows:

[13] In this matter the Commission is required to consider competing scope applications and whether bargaining orders should issue. There are 7 scope applications and 5 bargaining applications. The Unions seek one agreement; Unitywater and the AWU seek 3 separate agreements. In addition there will need to be evidence adduced and submissions concerning coverage between the agreements should the Unitywater and AWU’s preferred scope issue.

[14] In deciding whether to exercise the discretion to grant permission to be represented one of the conditions in s596(2)(a)-(c) must have been satisfied. The satisfaction of one of these conditions does not conclude the matter but enlivens a discretion about whether permission to be represented should be granted.

And at 24-31, the Commissioner said:

[24] The Unions also submit that Unitywater is able to represent itself effectively, particularly through Mr Dearling. Further, they provided details of employees of Unitywater obtained from the internet, arguing there are many lawyers who work for Unitywater. I note however they appear to be commercially focussed lawyers rather than advocates. Mr Dearling is not a lawyer but is an experienced employee relations practitioner although not an industrial advocate.

[25] It may be that Mr Dearling or other employees could run the case. However, the test is not whether a party can be effectively represented by an in-house advocate, but whether the matter would be dealt with more efficiently if permission to be represented by a lawyer or paid agent was granted, given the complexity of the matter.

[26] In ASC Pty Ltd v The Australian Workers’ Union  Deputy President Gostencnik observed that:-

“…In any event the question, for the purposes of granting permission for the reasons set out in section 596 (2) (a) of the Act, is not whether ASC can be represented or even effectively represented by in-house resources, rather the relevant question is whether, taking into account the complexity of the matter, the grant of permission to ASC to be represented by a lawyer (in this case one experienced in advocacy and industrial law) would enable the matter to be dealt with more efficiently. The in-house capacity of ASC has a bearing on that assessment but I am satisfied that in this case the grant of permission to ASC for external legal representation will have that result. …”

[27] The capacity of Mr Dearling or other employed lawyers is a factor in assessing whether representation “would enable the matter to be dealt with more efficiently”. The lawyers appear not to have expertise in this jurisdiction or as advocates. Mr Dearling has considerable employee relations experience but is not an experienced advocate.
[28] The legal representative acting in this matter to date has experience in advocacy and industrial law. Further, Mr Dearling’s status as a witness in the matter is a consideration. These are factors, when taking into account the complexity of the matter, mean that it would be more efficient if Unitywater was represented at the hearing.
[29] I am therefore satisfied that the matter is complex, and, taking into consideration the above, the matter will be dealt with more efficiently if Unitywater was legally represented.
[30] It is not necessary to decide if the condition in s596(2)(b) or (c) have been met.
[31] However, I must still instead decide whether I should exercise my discretion to grant permission.

(9) There is a real practical consideration in this case where the hearing is listed for 22-23 February 2017.  The parties are keen to commence bargaining for a new agreement or agreements.  The timetable for hearing the scope order application was designed to ensure that this issue is determined as soon as practicable.  If Qantas is denied legal representation, having already instructed its lawyers to prepare its evidence and submissions and that exercise has been completed, the Commission might understandably be moved to agree to an adjournment of the substantive application in order for Qantas's materials to be prepared or re-prepared in-house.  I do not consider this scenario to be in the interests of ensuring an efficient resolution of the substantive matter for bargaining to continue on a proper footing.

[18] For the above reasons, I find that s596(2)(a) has been satisfied and that these proceedings will be conducted more efficiently, taking into account the complexity of the matter, if Qantas is represented by a lawyer. It is therefore unnecessary to make any findings as to subsections (b) and (c) of s596. Having made this finding, I intend to exercise my further discretion to grant permission for Qantas to be represented by lawyers in the substantive application and I order accordingly.

[19] I turn now to the Alliance Unions' application for directions under Rule 12 and the Commission's Practice Note 2/2013.  Rule 12 is as follows:

12  Representation by a lawyer or paid agent

(1) For subsection 596(1) of the Act, a person may be represented in a matter before the Commission by a lawyer or paid agent for the following purposes:

(a) preparing a written application or written submission for the person in relation to the matter;

(b) lodging with the Commission a written application, written submission or other document, on behalf of the person in relation to the matter;

(c) corresponding with the Commission on behalf of the person in relation to the matter;

(d) participating in a conciliation or mediation process conducted by a member of the staff of the Commission, whether or not under delegation, in relation to an application for an order to stop bullying made under section 789FC of the Act.

Note 1: Section 596 of the Act sets out other circumstances in which a person may be represented in a matter before the Commission by a lawyer or paid representative.

Note 2: Subrule 12(3) deals with representation of parties in a conference or hearing before a Commission Member.

(2)  However, subrule (1) is subject to a direction by the Commission to the contrary in relation to the matter.

(3)  To remove doubt, nothing in this rule is to be taken as permitting a lawyer or paid agent to represent a party in a conference or hearing before a Commission Member.

Note: Section 596 of the Act sets out when the Commission may grant permission for a person to be represented by a paid agent or lawyer, including at a conference or hearing.

[20] Mr Nguyen submitted that, firstly, given the opening words ‘For subsection 596(1) of the Act’ and subclause (2) of Rule 12, the principles applying to section 596(2) generally have application to Rule 12 and secondly, the onus is on the Alliance Unions to satisfy the Commission that it should issue a direction to not permit Qantas to prepare submissions or correspond with the Commission. I agree with Mr Nguyen's characterisation of how Rule 12 is to be considered by the Commission.  A number of other observations, however, may also be made about this Rule.

[21] There is no example, or authority of this Commission, as to the principles to be applied in applications for directions under Rule 12 in any matter which has been before a Member of this Commission; let alone at Full Bench level.

[22] It is at least arguable, as Mr Follett suggested, that the Rule itself may be inconsistent with the statutory provisions of s596 and therefore invalid. However, in light of my conclusions as to legal representation at the hearing and because the question of invalidity was not fully developed before me, I do not intend to take this matter any further. Nevertheless, in my view, it would be a bizarre result indeed if the Commission was to grant permission for a party to be legally represented and then take the opposite approach and issue a direction under Rule 12 that a legal representative not prepare a submission or correspond with the Commission. That this is so is not only because of the direct applicability of the same principles under Rule 12 and s596, but also because of the following practicalities.

[23] A notice of representative commencing to act (Form 53) is required to be filed by a party's legal representative.  This is obviously corresponding with the Commission.  Indeed, the purpose of the notice is for the Commission to correspond and communicate with the parties to a proceeding, such as issuing directions, advising of listings, et cetera, through its nominated representative.  What a nonsense outcome would it be if a Form 53 was filed by a lawyer, but the lawyer could not subsequently continue to correspond with the Commission on behalf of its client.

[24] Mr Nguyen could not answer my question as to how the Commission could ever know whether a legal representative had prepared, or even advised, as to the contents of a submission or whether the party has simply signed the submission as its own creation.  It would be impossible for the Commission to know whether a well-argued, legally sound submission was prepared by a lawyer or just prepared by a learned in-house employee.

[25] Conflicting issues surrounding legal professional privilege might also be a practical consideration in these circumstances.

[26] In any event, I am not convinced that the Alliance Unions have discharged the onus they bear in satisfying the Commission that the directions they seek should be made.  For the same reasons I have granted permission for Qantas to be represented by a lawyer, I refuse to make the directions sought.  It would be an absurdity to do otherwise.

[27] I make orders accordingly.  I lift the stay on my directions last Friday and replace direction 2, issued on 22 December 2016, such as requiring Qantas to now file and serve its materials by 4 pm Monday, 6 February 2017.

DEPUTY PRESIDENT

Appearances:

Mr M Nguyen appearing for the AMWU,

Ms J Gherjestani appearing for the AWU

Mr G Noble appearing for the CEPU.

Mr C Follett of Counsel for Qantas

Hearing details:

Friday 3 January 2017

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