Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
[2017] FCA 1245
•23 October 2017
FEDERAL COURT OF AUSTRALIA
Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245
File number: VID 201 of 2017 Judge: BROMBERG J Date of judgment: 23 October 2017 Catchwords: INDUSTRIAL LAW – interlocutory application contesting the jurisdiction of the Court to make a declaration as to the meaning of a clause of an Enterprise Agreement (“the EA”) – where a dispute as to the interpretation of the clause was arbitrated by the Fair Work Commission (“FWC”) – whether the justiciable controversy between the parties has been extinguished by the arbitration and, as a result, the Court lacks jurisdiction – where an arbitration by the FWC pursuant to the EA and the Fair Work Act 2009 (Cth) is a private arbitration – whether by the terms of the EA the FWC had jurisdiction to conduct the arbitration – whether by the terms of the EA a union party was authorised to initiate and participate in the arbitration in its own capacity as party principal – whether the union initiated the arbitration on behalf of relevantly aggrieved employees – whether the applicant is estopped from asserting that the FWC had no jurisdiction – whether the applicant’s Originating Application is an abuse of process – Originating Application stayed.
PRACTICE AND PROCEDURE – interlocutory application under r 13.01 of the Federal Court Rules 2011 (Cth) to have the applicant’s Originating Application set aside – whether compliance with r 13.01(3) should be dispensed with – whether the applicant’s Originating Application is an abuse of process as an attempt to re‑litigate the dispute resolved by private arbitration.
ESTOPPEL – by conduct – where the applicant by its conduct represented that the factual conditions giving jurisdiction to the FWC were satisfied – whether the applicant is estopped from asserting facts inconsistent with the representation made.
Legislation: Fair Work Act 2009 (Cth) ss 3, 50, 186, 539, 562, 564, 737, 738, 739
Federal Court of Australia Act 1976 (Cth) ss 19, 20, 21, 22, 23
Workplace Relations Act 1996 (Cth) s 849
Fair Work Regulations 2009 (Cth) sch 6.1
Federal Court Rules 2011 (Cth) rr 1.34, 13.01Cases cited: Alexander v Australian Community Pharmacy Authority (No 3) [2010] FCA 506
Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241
Amon v Raphael Tuck & Sons Ltd [1956] 1 QB 357
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Armada (Singapore) Pte Ltd v Gujarat NRE Coke Limited [2014] FCA 636
Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1
Australasian Meat Industry Employees Union v Fair Work Australia (No 2) (2012) 203 FCR 430
Australian Financial Services and Leasing Pty Limited v Hills Industries Limited (2014) 253 CLR 560
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (2015) 235 FCR 305
Bray v F Hoffman-La Roche Ltd (2002) 118 FCR 1
Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317
Burwood Cinema Ltd v Australian Theatrical and Amusement Employees’ Association (1925) 35 CLR 528
City of Wanneroo v Australian Municipal, Administrative, Clerical And Services Union [2006] FCA 813
Dobbs v National Bank of Australasia Limited (1935) 53 CLR 643
D’Orta-Eenaike v Victoria Legal Aid (2005) 223 CLR 1
Duggan v Metropolitan Fire and Emergency Services Board [2017] FCAFC 112
Federated Engine-Drivers and Firemen’s Association of Australasia v Broken Hill Pty Co Limited (1911) 12 CLR 398
Grapsas v Federal Commissioner of Taxation [2011] FCA 1465
Grundt v The Great Boulder Proprietary Gold Mines Limited (1937) 59 CLR 641
Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404
Hebei Import & Export Corp v Polytek Engineering Co Ltd [1999] HKCFA 40
IMC Aviation Solutions Pty Ltd v Altain Khuder LLC (2011) 38 VR 303
Kermani v Westpac Banking Corporation (2012) 36 VR 130
Khatri v Price (1999) 95 FCR 287
Kimberley Diamonds Ltd v Arnautovic [2017] FCAFC 91
Kucks v CSR Limited [1996] IRCA 141
Mann v Medical Practitioners Board of Victoria (2004) VSCA 148
Metropolitan Health Service Board v Australian Nursing Federation (2000) 99 FCR 95
Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427
NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd [2009] FCA 1147
Palmer v Ayres [2017] HCA 5
Papua and New Guinea v Daera Guba (1973) 130 CLR 353
R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141
R v Dunlop Rubber Australia Ltd; Ex parte Federated Miscellaneous Workers’ Union of Australia (1957) 97 CLR 71
Re McJannet; Ex parte Australian Workers’ Union of Employees, Queensland (No 2) (1997) 189 CLR 654
Reichel v Magrath (1889) 14 App Cas 665
Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198
Rogers v The Queen (1994) 181 CLR 251
Sea Calm Shipping Co SA v Chantiers Navals de L’Esterel SA (The “Uhenbels”) [1986] 2 Lloyd’s Rep 294
State Bank of New South Wales Limited v Stenhouse Ltd (1997) Aust Torts Reports 81-423
Tay v Migration Review Tribunal (2009) 178 FCR 1
TCLAir Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia (2014) 251 CLR 533
Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union [2015] FCA 1033
Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507
Tomvald v Toll Transport Pty Ltd [2017] FCA 1208
Transport Workers Union v Lee (1998) 84 FCR 60
Walton v Gardiner (1993) 177 CLR 378
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Williams v Spautz (1992) 174 CLR 509
Westminster Chemicals & Produce Ltd v Eichholz & Loeser [1954] 1 Lloyd’s Rep 99
Woolworths Ltd v Shop Distributive and Allied Employees Association (Queensland Branch) Union of Employees (2010) 183 FCR 214
Zhang v Zemin (2010) 79 NSWLR 513
Date of hearing: 4 and 5 September 2017 Registry: Victoria Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 180 Counsel for the Applicant: Mr C O’Grady QC with Mr B Avallone Solicitor for the Applicant: Lander & Rogers Counsel for the Respondents: Mr H Borenstein QC with Mr C Tran Solicitor for the Respondents: Australian Manufacturing Workers’ Union ORDERS
VID 201 of 2017 BETWEEN: ENERGY AUSTRALIA YALLOURN PTY LTD (99 086 014 968)
Applicant
AND: AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS' UNION (AMWU)
First Respondent
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (CFMEU)
Second Respondent
COMMUNICATION, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA (CEPU)
Third Respondent
(and others named in the Schedule)
JUDGE:
BROMBERG J
DATE OF ORDER:
23 OCTOBER 2017
THE COURT ORDERS THAT:
1.The applicant’s Originating Application dated 6 March 2017 is set aside.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BROMBERG J:
By its Originating Application, the applicant (“Energy Australia”) seeks a declaration that, on its proper construction, cl 5.3 of the EnergyAustralia Yallourn Enterprise Agreement 2013 (“the EA”) has the effect that a casual employee who works overtime “is to be paid per hour two thirty-sixths of the weekly rate prescribed for the classification of work performed (double time) exclusive of any casual loading”.
By an interlocutory application dated 11 April 2017, the respondents (“the Unions”) seek that the Originating Application be set aside under r 13.01 of the Federal Court Rules 2011 (Cth) (“Rules”). An order is also sought that compliance with r 13.01(3) of the Rules be dispensed with for the first respondent under r 1.34. The dispensation sought by the first respondent, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (“AMWU”), seeks to address the filing by the AMWU of an unconditional appearance and the consequent implied submission of the AMWU to the jurisdiction of the Court in circumstances where, by its interlocutory application, the AMWU now challenges the jurisdiction of the Court to entertain the Originating Application. At the hearing of the interlocutory application I dispensed with the requirement under r 13.01(3) for the AMWU for the reasons I will later give.
The proceeding arises in the original jurisdiction of the Court under s 19 of the Federal Court of Australia Act 1976 (Cth) (“FCA Act”). On 7 April 2017, the Chief Justice determined the proceeding to be of sufficient importance to direct that it be heard by a Full Court of this Court under s 20(1A) of the FCA Act. On 17 May 2017, I convened a case management conference during which I canvassed the position of parties in relation to the composition of the Court for the hearing and determination of the interlocutory application. That issue devolved into something of a proxy for the related question of whether the interlocutory application should be heard separately from the substantive application. I will address that question in more detail below in dealing with Energy Australia’s contention that the question of the Court’s jurisdiction should be dealt with at trial. However, it suffices to say that the parties were not in agreement about the composition of the Court on the interlocutory application. The Unions supported its hearing and determination by a single judge of the Court, whereas Energy Australia opposed that course. On 18 May 2017 the Chief Justice determined that I should hear and determine the interlocutory application, sitting alone.
The two questions raised by the Unions’ interlocutory application are:
(1)whether or not this Court has jurisdiction to hear and determine the Originating Application; and
(2)whether or not the proceeding is an abuse of the Court’s processes.
The competing contentions of the parties may be broadly expressed by way of introduction. Both parties accept that for the Court to have jurisdiction there must be a “matter” (s 562) arising under the Fair Work Act 2009 (Cth) (“FW Act”), and that the existence of a “matter” depends, in this case, on the existence of a justiciable controversy between the parties about the meaning and application of cl 5.3 of the EA. They also accept that an arbitration validly conducted under cl 28 of the EBA is properly to be characterised as a private arbitration and that the arbitrator’s determination has the effect of extinguishing the dispute or controversy the subject of the determination, at least insofar as the controversy relates to the parties to the arbitration.
The Unions contended that there is no justiciable controversy in relation to the meaning and application of cl 5.3 of the EA because, although such a dispute existed, it was resolved by an arbitration conducted under cl 28 of the EA by the Full Bench of the Fair Work Commission (“FWC”), the outcome of which binds each of the parties to this proceeding. In the absence of a justiciable controversy, the Unions say there is no “matter” and thus this Court lacks jurisdiction. Conversely, Energy Australia denies that the controversy was extinguished by the determination of the Full Bench of the FWC because it contends that the FWC itself lacked jurisdiction to determine the dispute that its determination purported to resolve. That contention relies principally on a submission that, properly construed, cl 28 of the EA only permits an arbitration between Energy Australia and one or more of its employees and not, as Energy Australia contends happened here, between Energy Australia and one or more of the Unions. In response, the Unions deny that cl 28 is restricted to the arbitration of disputes between employees and Energy Australia and that the arbitral process provided by cl 28 was validly engaged by the AMWU. Alternatively, if so restricted, the Unions say there was here a dispute between Energy Australia and its employees the existence of which Energy Australia is estopped from denying.
As a secondary contention, Energy Australia contended that, if the FWC had jurisdiction in relation to the arbitration it conducted, only the controversy between it and the AMWU has been extinguished as, of the Unions, only the AMWU was a party to the private arbitration. To that, the Unions say that by its terms, cl 28 operates to bind each of the Unions whether they participated in the arbitration or not and accordingly any controversy as to the meaning of cl 5.2 between Energy Australia and the Unions has been extinguished.
Lastly, the Unions contend that even if the Court has jurisdiction, the proceeding is an attempt by Energy Australia to re-litigate the meaning of cl 5.2 of the EA and is an abuse of process and for that reason should be permanently stayed.
To address those questions, it is necessary to set out the background facts.
BACKGROUND
Energy Australia operates the Yallourn Power Station and an adjacent open cut coal mine. It employs some 195 persons on an ongoing basis. Approximately 75 of those employees are power station operators and another 40 are maintenance employees. The remaining employees are predominantly engineers and administrative staff. There are also employees employed by contractors who perform work at the Yallourn Power Station.
Historically, casual employees performing maintenance roles at the Yallourn Power Station were provided by a contractor Ventia Utility Services Pty Ltd (“Ventia”). However, in January 2016, Energy Australia decided to commence directly employing casual employees to work in maintenance roles at the Yallourn Power Station. That decision was motivated, at least in part, by the fact that Ventia was then in the process of negotiating an enterprise agreement. Energy Australia wanted to avoid the risk that its operations would be affected by any industrial action taken by employees of Ventia in furtherance of the making of such an agreement.
In February 2016, Energy Australia commenced to recruit casual employees then employed by Ventia. Initial discussions occurred with eight employees of Ventia. In those discussions some of the differences between the enterprise agreement applicable to employees of Ventia and those that would be applicable in relation to casual employment under the EA were raised by Energy Australia. One of the issues explained to the prospective employees was that a 25% casual loading would only be paid for work performed during ordinary hours (ie and not in relation to the performance of overtime). That was contrasted with the enterprise agreement applicable at Ventia, which included the casual loading as part of an “all-purpose allowance” paid in relation to all hours of work including overtime work. Of the eight employees with whom initial discussions were held, Energy Australia employed seven as casual employees. Thereafter, approximately 201 further casual employees were engaged (“casual employees”).
Clause 5.3 of the EA provides for casual employees. The clause is in the following terms (with emphasis given to the most relevant text):
The Company may employ persons on a casual basis for the purpose of meeting particular and/or short term needs.
A casual employee is one engaged by the hour and paid as such. Such employees will be entitled to a salary loading in accordance with this Clause 5.3 Casual employment.
Casual employees shall be provided with a minimum period of 8 hours/full shift employment on each engagement or will be paid for a minimum of eight hours/7 hours 12 mins/full shift at the appropriate casual rate.
A casual employee for working ordinary time shall be paid per hour one thirty-sixth of the weekly rate prescribed in this Agreement for the classification of work performed plus a loading of 25% of that weekly rate. A casual employee is entitled to penalty rates applicable to rostered shifts worked by the employee based on the ordinary rate of pay.
The casual loading is in lieu of all paid leave, paid personal/carer's leave, compassionate leave, public holidays not worked, notice of termination and the other attributes of full time and part time employment. Nor are casual employees entitled to parental leave, except in circumstances prescribed by the FW Act.
Casual employees shall be paid overtime for all hours worked in excess of ordinary hours on any day (i.e. 8 hours/7 hours 12 minutes per day/shift length). Except as provided by Clause 13 - Public Holidays of this agreement, all time worked which is in excess of ordinary daily hours shall be paid at double time.
Notwithstanding anything to the contrary appearing elsewhere in this Agreement, the services of a casual employee may be terminated by one day's/shift's notice on either side or by the payment or forfeiture of one day's/shift's salary as the case may be.
Casual employees are not entitled to redundancy pay.
Relevantly, the clause provides that casual employees shall be paid at “double time” for all time worked in excess of ordinary daily hours. The clause also provides for a 25% loading on the applicable weekly rate and states that “[a] casual employee is entitled to penalty rates applicable to rostered shifts worked by the employee based on the ordinary rate of pay”.
Energy Australia’s position is that “double time” in cl 5.3 refers to double the ordinary time rate of pay for the relevant classification, exclusive of loadings and penalties such as the 25% casual loading. All casual employees engaged by Energy Australia (including the former employees of Ventia) have been paid on that basis for overtime worked.
The casual employees employed by Energy Australia in maintenance perform various occupational roles including, rigger, scaffolder, boilermaker, fitter, pressure welder, boiler inspector, trades assistant, electrician/electrical worker, and instrument and controls tradesperson. Although the eligibility rule of each Union was not in evidence, it is uncontroversial that each of the Unions is an organisation registered under the Fair Work (Registered) Organisations Act 2009 (Cth) with rules which entitle each to enrol as members some or all of the casual employees.
The fact that Energy Australia had or was about to employ casual employees in maintenance roles directly came to the attention of each of the Unions. Stephen Dodd (“Dodd”) is an organiser with the AMWU. Dodd deposed that the AMWU represents members who are employed by Energy Australia as maintenance employees, mostly fitters and turners and boiler makers. Dodd has responsibility for recruiting, organising and representing AMWU members at Energy Australia’s Yallourn site. In or around March and April 2016 a number of AMWU members raised with him whether Energy Australia was correctly calculating the overtime payments paid to casual employees.
Toby Thornton (“Thornton”) is employed as an organiser by the Construction, Forestry, Mining and Energy Union (“CFMEU”). In that role, Thornton represents employees of Energy Australia who work at Yallourn Power Station and its adjacent mine who are primarily engaged as riggers, scaffolders and crane drivers. In or about early April 2016 Thornton received many telephone calls from CFMEU members working at the Yallourn Power Station. In those conversations, members expressed their concerns about the casual loading not being paid on overtime hours.
Peter Mooney (“Mooney”) is an organiser with the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“CEPU”). He is responsible for servicing the members of the Electrical Division of the CEPU (commonly referred to as the “ETU”) who are employed by Energy Australia at the Yallourn Power Station and adjacent mine. Those members are engaged in the electrical and instrumentation trades as permanent or casual employees. In or around February or March 2016, Mooney had a conversation with James Korab (“Korab”), a permanent employee of Energy Australia and a delegate of the ETU. Korab asked Mooney to raise a dispute with Energy Australia to see if Energy Australia’s refusal to pay the 25% casual loading on overtime could be resolved. Mooney agreed to do so.
After Mooney spoke with Korab he spoke to Dodd and Thornton about the matter raised by Korab. It was agreed between them that a joint meeting with Energy Australia should be organised.
Peter Chapple (“Chapple”) was, at all relevant times, employed by Energy Australia in the position of Employee Relations Advisor based at the Yallourn Power Station. By an email dated 27 April 2016 addressed to Chapple and copied to Dodd and Mooney, Thornton requested that a meeting be convened “to discuss casual employment … RE terms and conditions that pertain to the Energy Australia agreement”. He proposed that the meeting be held on 5 May 2016. A meeting was held on that date attended by Thornton, Dodd, Chapple and Paul Koopmans (“Koopmans”), Energy Australia’s “Maintenance Leader” based at the Yallourn Power Station.
Before that meeting and sometime in April 2016, Dodd attended the ETU office to speak with Mooney. He deposed that Chapple was there and that he had a short conversation with him. Although Chapple did not deny the conversation, he deposed that he could not recall it, that he did not (as he would have expected) have any record of a meeting with Mooney in or about the period in question and that it was unlikely that such a meeting occurred given Chapple’s commitments in Melbourne, away from Yallourn, during that period. Chapple did say that he ran into Dodd occasionally at the ETU office. Dodd’s recollection that the conversation occurred was not directly challenged in cross-examination. In circumstances where Chapple did not deny the conversation, I accept that the conversation occurred although, in the context of the totality of the evidence, its significance is not critical. I accept that Dodd said to Chapple words to the effect that, “We have some problems regarding the terms and conditions that casuals are paid working under the Energy Australia EBA”. I also accept he said that when the EBA was negotiated Chapple had told him that Energy Australia had no plans to employ casuals and that the casual clause would only be used when permanents went on leave and Energy Australia needed to backfill. In response, Chapple said words to the effect of, “We’ll do what we do”. Dodd responded by saying words to the effect that, “We’re not accepting your interpretation of the EBA – it needs to be fixed, we’re in dispute. We need to have further meetings about this”.
There was some conflict in the evidence as to the content of the meeting of 5 May 2016. It is uncontroversial that a number of issues relating to the engagement of casuals under the EA were discussed including how the overtime rate should be calculated. The prominence given to the overtime issue in the meeting was disputed, but I need not resolve that dispute. It suffices that the overtime issue was raised and that the proper calculation of overtime payments paid to casuals under the EA was in dispute. I accept that the union organisers put the view that casual employees employed under the EA were entitled to receive the 25% casual loading as part of their penalty payment when working overtime hours and that Chapple disputed that view. Chapple advised that Energy Australia did not intend to change the manner in which casuals were being paid for working overtime.
I accept that both Dodd and Thornton told Chapple and Koopmans that their members had raised with them their concerns about the non-inclusion of the casual loading in the overtime payments made to casual employees. I refer to that evidence in greater detail below. I also accept that no particular employee who was aggrieved was identified and that no such identification was sought by Energy Australia. There is some disagreement in the evidence as to whether, at the 5 May meeting, an express indication was given by Dodd and Thornton that an application would be made to the FWC under the EA’s dispute resolution clause or, alternatively, that a more general statement was made such as “we are in dispute”. Again, it is unnecessary for that disagreement to be resolved.
On 16 May 2016, the AMWU filed with the FWC and served upon Energy Australia, an application requesting the FWC to deal with a dispute in accordance with the dispute settlement procedure in the EA. The AMWU’s application stated that the dispute related to cl 5.3 on the EA. Relevantly, the application described the dispute as follows:
1.A dispute has arisen as to the correct rate to be paid to casual employees under the Agreement.
2.The AMWU contends that the correct method for calculating the ordinary time rate for casual employees is set via paragraph 4 of sub-clause 5.3 which requires that relevant weekly rate for the classification in question (se Appendix 1) be divided by 36 then augmented with a casual loading of 25%. This then becomes the base figure used for calculating double time when overtime is performed per paragraph 6 of sub-clause 5.3.
3.The AMWU contends that this method of calculation is well recognized across the industry with casual loading generally considered to form part of an employees “all purpose rate”
(See for example clause 14.l of the Manufacturing and Associated Industries and Occupations Award 2010).
The application made by the AMWU did not by its terms expressly allege that any employees were in dispute with Energy Australia nor disclose the detail of any employee claims. In response to a question asked on the FWC’s standard form application as to the steps taken to resolve the dispute, the AMWU said this:
1.The AMWU, CFMEU and ETU met with Senior Energy Australia Management on the 5th May 2016 to discuss relevant issues.
2.The dispute remains unresolved and is now referred to the FWC in accordance with Step 4 of the dispute resolution process contained in the Agreement.
The application sought mediation, conciliation or arbitration if necessary.
It is not in issue that in making the application, the AMWU relied on the dispute resolution process set out by cl 28 of the EA. The proper construction of cl 28 is critical to the issues I need to determine and it is necessary to set out its text in full:
28 Dispute Resolution Process
The DRP process is to be used to assist in resolving any matter or dispute pertaining to the employment relationship.
For matters that are in dispute, that go to the application or interpretation of this Agreement or with matters arising under the National Employment Standards (NES), this clause facilitates access to the Fair Work Commission for conciliation and, if necessary, arbitration ('category 1 matters').
For all other matters pertaining to the employment relationship that do not go to the application or interpretation of the Agreement or are not matters arising under the NES ('category 2 matters'), the steps set out below shall apply, except that the Fair Work Commission shall only be empowered to exercise conciliation powers.
28.1 Initial Process
(a) In the event of any dispute arising the following procedure will apply.
STEP 1The matter will, in the first instance, be discussed between the employee(s), and the Team Leader involved.
If the matter remains unresolved it shall be elevated to STEP 2 as soon as practicable;
STEP 2The matter may be referred in writing, by the employee(s) to the relevant Line Manager. The Line Manager will provide a written response to the issue within three working days.
If the matter remains unresolved;
STEP 3It will be referred for discussion between the appropriate Union Official or other employee representative and the Executive Manager Yallourn, or their nominated delegate. The Executive Manager Yallourn will provide a response to the issue as soon as practicable.
If the matter remains unresolved;
STEP 4It may be referred to the Fair Work Commission (FWC) for conciliation or arbitration (for 'category 1 matters') or conciliation only (for 'category 2 matters').
Employees may bring a support person or the appropriate union representative to any meeting held under this clause with the Parties being able to elect to bring representatives of their own choosing to any matter referred to conciliation or arbitration.
(b)The dispute may be referred to FWC at any stage by agreement of the parties in the interest of speedy resolution of the dispute.
(c)For 'category 1 matters', during the entire period, from the time when the dispute first arises until the time of its resolution (whether by discussion or negotiation, or by proceedings before the FWC), the status quo or 'normal work' shall continue, unless the maintenance of status quo or performance of normal work would place at risk the health or safety of the employee(s) concerned. No party to the dispute shall suffer any prejudice as to the resolution of the matter by reason only that normal work continues as required by this paragraph.
(d)In respect to category 2 matters, either party may notify the FWC of a dispute and seek to have the matter dealt with on an expedited basis, provided that the notifier has satisfied steps 1 and 2 of the initial process. The status-quo shall apply to category 2 matters in the same way as category 1 matters unless one party argues successfully before FWC that the status-quo should be altered or removed. Any such application shall not occur until at least 14 days has elapsed since the first conciliation hearing of the notified matter. The dispute and status-quo provision ends when the FWC determines that the conciliation process is concluded.
(e)'Normal work' means the work normally performed by an employee and "status quo" means the circumstances existing immediately prior to the change or circumstance leading to the proposed change which resulted in the dispute arising.
28.2STEP 4 PROCESS
(a)Upon referral of the matter, the FWC shall conciliate. If the dispute remains unresolved after conciliation, the FWC may resolve category 1 matters by arbitration. Either party may be legally represented during arbitration.
(b)In exercising its role under this clause, the FWC shall exercise any of its powers under the Act.
(c)It is a term of this Agreement that the parties to the dispute will be required under this dispute settlement procedure to:
i. Attend conciliation conferences and hearings;
ii.Produce relevant documents and other material (subject to appropriate safeguards for commercial-in-confidence documents); and
iii.Make available any witness that the FWC believes is reasonably necessary.
(d)Without limiting the generality of the foregoing, the FWC may exercise any powers reasonably incidental to the exercise of conciliation and/or arbitration functions under this clause, having regard to the category of the matter.
(e)Where the FWC has issued a decision, determination or direction under this clause, it shall be final and binding on the Parties, subject to the appeal process in accordance with sub-clause 28.3.
28.3 APPEAL PROCESS
(a)A party may seek an appeal of the FWC's decision within fourteen days of receipt of decision or the provision of reasons for decision which ever comes later.
(b) An application for an appeal of the FWC's decision will be provided to the Parties and the FWC in writing detailing the grounds for appeal.
(c)Unless agreed otherwise by the parties to the dispute, the appeal will be conducted according to the principles applying to an appeal under the Act, including where a stay is sought.
(d) The parties to the dispute and the appeal panel of the FWC will use their best endeavours to ensure that the appeal process is expedited.
(e) The decision of the appeal panel of the FWC is final, subject to any other legal right of appeal that might exist.
28.4 COSTS & EXPENSES
Where a matter has been notified pursuant to this clause, the Company shall provide leave without loss of pay for any employee directly involved in the preparation of the case or required as a witness. In the event that the parties fail to agree on the identity or number of persons who qualify under this clause, the question shall be determined by the FWC as part of the dispute.
Each party to the dispute will meet their own costs.
On 30 May 2016, and in furtherance of the application made by the AMWU, a conciliation conference was convened before Commissioner Gregory of the FWC. The conciliation conference was attended by Dodd, Thornton and Mooney as well as Chapple and Koopmans. Each of Dodd, Mooney and Thornton participated in the discussions held with the representatives of Energy Australia. Dodd, Thornton or Mooney did not identify any particular casual employee said to be the subject of the dispute. They were not asked to do so. In relation to participation in the conciliation, Thornton deposed that members had made a request to him that the CFMEU be involved in the dispute.
On 10 June 2016, Dodd requested an arbitration of the dispute in an email forwarded to the chambers of Commissioner Gregory. The communication relevantly said that the AMWU elected to have the matter arbitrated and stated that “the CFMEU and ETU may also be in contact as I understand they may wish to be involved in the Arbitration in regards to this dispute”. That communication was copied to Energy Australia and also to Mooney and Thornton.
On 14 June 2016, the chambers of Commissioner Gregory notified the AMWU and Energy Australia that the dispute would be listed for hearing on 1 August 2016 and set out directions for the exchange of submissions. Written submissions were filed by the AMWU on 28 June 2016 and by Energy Australia on 12 July 2016 followed by the reply submissions of the AMWU filed on 19 July 2016.
On 1 August 2016, when the arbitration commenced, an industrial officer of the AMWU, David Vroland (“Vroland”) announced to Commissioner Gregory that he would be making submissions on behalf of both the AMWU and the CFMEU. I infer from the evidence, including Vroland’s evidence of holding a conversation with the CFMEU’s in-house lawyer prior to the hearing, that Vroland was authorised by the CFMEU to do so. Additionally, Thornton attended and observed the arbitration held on 1 August 2016.
Neither Mooney nor any representative of the CEPU was in attendance or otherwise participated.
The fourth respondent, Australian Municipal, Administrative, Clerical and Services Union (“ASU”) did not participate. A representative of that Union deposed that it was not a party to the proceedings in the FWC and did not itself use the dispute resolution process in cl 28 of the EA. The solicitor for the fifth respondent, the Australian Workers’ Union (“AWU”), deposed that though the AWU was not a party to the proceedings before the FWC, it became aware of the proceeding after it had commenced. The AWU determined to let the proceeding run its course and to allow the other Unions involved to take the lead role in progressing the dispute to resolution.
In the proceeding before the FWC, Energy Australia did not contend that the FWC lacked a capacity to deal with the dispute because the application made to the FWC failed to identify any casual employee said to be in dispute with Energy Australia in relation to the payment of wages for overtime work. Nor, did it contend that one of the Unions could not invoke the arbitration in its own right. Nor, on the evidence before me, was any such suggestion ever communicated to any of the Unions. To the contrary, in its written submissions to Commissioner Gregory, Energy Australia accepted that the FWC had jurisdiction to arbitrate the dispute. Relevantly the submissions said this (citations omitted emphasis added):
2.2Under clause 28 of the Agreement, if the dispute remains unresolved following the completion of steps 1 to 3, it may be referred to Commission. In the case of Category 2 Matters, the powers conferred on the Commission are confined to conciliation. However, in the case of Category 1 Matters, the powers conferred on the Commission extend to arbitration.
2.3EA agrees that the current dispute involves a Category 1 Matter. Therefore, subject to the normal limitations on the Commission's arbitral powers, e.g. the requirement in s 739(5) of the FW Act not to make a decision that is inconsistent with a fair work instrument that applies to the parties, EA accepts that the Commission has jurisdiction to arbitrate the dispute.
On 13 October 2016, Commissioner Gregory published his decision.
In that decision, Commissioner Gregory identified the matter before him as concerning the entitlements of casual employees of Energy Australia when performing overtime work. The Commissioner identified and set out cl 5.3 of the EA and stated (citations omitted):
[5]The dispute arises in circumstances where casual employees are required to perform overtime, being work that extends beyond the 36 ordinary time hours each week provided for in clause 10 of the Agreement. The AMWU submits the casual loading of 25% provided for in sub clause 5.3 "must first be accounted for to establish the employee's ordinary time rate of pay before double time can be calculated."
[6]EnergyAustralia disagrees. It submits it is only obliged to pay a casual employee twice the rate of pay applicable for the employee's classification level as set out in Appendix 1 of the Agreement. In its submission it is not required to include the casual loading in calculating those payments when overtime is worked.
[7]The Commission is accordingly required to determine the correct interpretation of the relevant wording in sub clause 5.3.
Commissioner Gregory found in favour of Energy Australia. He was “not satisfied that it can be concluded that subclause 5.3 intends that the casual loading is to be included in the calculation of overtime” (at [40]).
On 3 November 2016, the AMWU filed a Notice of Appeal from the decision of Commissioner Gregory. After the making of directions and the exchange of written submissions, a hearing was conducted before the Full Bench of the FWC on 13 December 2016. There is no evidence of any participation in the appeal by any of the Unions other than the AMWU.
On 24 January 2017, the Full Bench published its decision. The Full Bench identified the decision under appeal as arising from an application made by the AMWU to resolve a dispute over the rate to be paid by casual employees working overtime under the EA. The Full Bench’s decision recorded that a ground of the appeal was that Commissioner Gregory had erred in his interpretation of cl 5.3 of the EA. After setting out the submissions of the parties and its considerations, the Full Bench concluded by finding “that the casual loading should be included in the calculation of overtime for casual employees”. The Full Bench allowed the appeal and quashed the decision of Commissioner Gregory.
On 16 February 2017, Mooney wrote to Chapple and copied both the CFMEU and the AMWU. He told Chapple that the three unions would like to know whether or not Energy Australia intended to abide by the Full Bench decision and asked Chapple to advise whether Energy Australia would now include the casual loading in the calculation of overtime and make retrospective payments to union members. In response, on 20 February 2017, Chapple advised that Energy Australia was of the view that the decision of the Full Bench was “not binding and, in any event, was wrongly decided”. The communication then set out the basis for Energy Australia’s position as follows:
•Clause 28 'Dispute Resolution Process' of the EnergyAustralia Yallourn Enterprise Agreement 2013 (Agreement) sets out a process for the resolution of disputes between EnergyAustralia and its employees. While a union may represent employees in such disputes, clause 28 does not allow the FWC to arbitrate disputes between EnergyAustralia and a union party in its own right.
ŸThe AMWU brought the application in its own name and failed to identify the employees who were said to be in dispute with EnergyAustralia.
ŸNeither the ETU nor the CFMEU were parties to the dispute. On no view could the Decision have application to those organisations or their members.
ŸThe Decision purports to have been made pursuant to the FWC's power to deal with and arbitrate a dispute pursuant to section 739 of the FW Act. However, s 739 confers jurisdiction on the FWC to deal with and arbitrate a dispute only to the extent it is allowed or required to do so by a dispute resolution term of an enterprise agreement. Further, the FWC must not make a decision that is inconsistent with a Fair Work instrument that applies to the parties.
ŸAccordingly, the Decision has no binding effect.
ŸFurther, and in any event, the Full Bench was wrong to find that sub-clause 5.3 'Casual Employment' requires the casual loading to be taken into account when calculating overtime. It was also wrong to find that the subclause was not, at least, ambiguous.
Chapple further stated that Energy Australia intended to make an application to the Federal Court seeking declaratory relief in respect of the construction of cl 5.3 and advised that the Unions would be named as respondents. On 6 March 2017 the application foreshadowed by Chapple was filed in this Court.
There is one other clause of the EA which needs to be set out in order that the issues that I need to determine can be properly explained. Clause 2 of the EA provides that Energy Australia and the Unions are collectively described in the EA as “the Parties”. That description is used in various clauses including, relevantly, cl 28. Whether the phrase “the Parties” when used in cl 28 has its defined meaning is of significance to the competing contentions I need to address. The terms of cl 2 follow, with emphasis given to those parts of cl 2 of most relevance:
2 APPLICATION OF AGREEMENT
This Agreement shall cover:
(a)EnergyAustralia Yallourn Pty Ltd ACN 065 325 224 and/or any successor(s) (Company); and
(b) Subject to Fair Work Commission approval in accordance with s201(2) of the FW Act 2009 the following unions (collectively the Unions):
i. Construction, Forestry, Mining and Energy Union (CFMEU);
ii.Automotive Food, Metals, Engineering, Printing and Kindred Industries Union, also known as Australian Manufacturing Workers Union (AMWU);
iii.Communication, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU);
iv.Australian Municipal, Administrative, Clerical and Services Union (ASU); and
v. Australian Workers' Union (AWU).
Hereinafter the Company and the Unions will collectively be described as "the Parties".
This Agreement applies to all EnergyAustralia Yallourn Pty Ltd employees who are members of, or who are eligible to be members of, any of the organisations of employees party to this agreement and who are employed to work in the classifications in Appendix I (hereinafter referred to as the 'employees').
This Agreement operates to the exclusion of all other industrial instruments, which would otherwise apply to the employees including terminating the TRUenergy Yallourn Pty Ltd Workplace Agreement 2008. It supplements the National Employment Standards ('NES') and contains terms that are ancillary and/or incidental to the NES. The Company will only employ persons covered by this Agreement in accordance with its terms and conditions.
This Agreement settles all the claims of the Parties and the employees in respect of terms and conditions of employment for the duration of this Agreement. The Parties will endeavour to commence negotiations on a replacement agreement at least three months before the nominal expiry date of this Agreement.
DISPENSATION WITH RULE 13.01(3) OF THE RULES
As indicated above, at the hearing I dispensed with the requirement made by r 13.01(3) which had the effect of requiring that the AMWU file the interlocutory application for an order under r 13.01(1) at the same time that it filed its Notice for Address of Service. In the case of the AMWU, a Notice of Address for Service was filed some four weeks prior to the making of the interlocutory application pursuant to r 13.01(1). In seeking dispensation from the operation of r 13.01(3), the AMWU relied on Vroland’s evidence that he had, on behalf of the AMWU, filed the Notice of Address for Service thinking at the time that it was a mere administrative step. Vroland had not appreciated that any challenge to the jurisdiction or competence of the Court, or the appropriateness of the proceedings commenced by Energy Australia, was to be effected by an application under r 13.01 at the same time as the filing of a Notice of Address for Service. Vroland further deposed that it had always been his intention to seek advice on, and challenge, the validity or appropriateness of the Originating Application filed by Energy Australia on the basis that the matter raised by that application had already been dealt with by the FWC.
The Court has power to dispense with rules of court: r 1.34 of the Rules. As Gordon J said in Grapsas v Federal Commissioner of Taxation [2011] FCA 1465 at [16], the discretion of the Court to dispense with the rules is broad and “may be exercised where there is no apparent injustice and the alleged error can be one of procedure”. In that case, in the absence of evident injustice, Gordon J did dispense with compliance with r 13.01(3) of the Rules.
Although Energy Australia resisted the dispensation sought by the AMWU, it could point to no injustice and none is apparent. I accept that the AMWU’s conduct was based on a mere misunderstanding of the Rules and consider that insufficient of itself to deny the AMWU the benefit of the procedure it now seeks to take. For those reasons, I granted the AMWU the dispensation it sought.
DOES THE COURT HAVE JURISDICTION – PRELIMINARY MATTERS AND GENERAL PRINCIPLES
Should the jurisdictional challenge be dealt with first?
The Unions seek that their contention that the Court lacks jurisdiction should be determined first and on this interlocutory application. That was resisted by Energy Australia on a number of grounds.
In a submission not expanded upon orally, Energy Australia contended that r 13.01 does not extend to cases where the originating process has been served within the jurisdiction and a respondent claims that the applicant has no prima facie case on the merits. Relatedly, Energy Australia submitted that r 13.01 is concerned with matters which “on the face of the initiating process” fall outside the jurisdiction of the Court.
Neither of those contentions is supported by authority. As Besanko J said of a predecessor to r 13.01 in Tay v Migration Review Tribunal (2009) 178 FCR 1 at [21]:
The authorities establish that O 9 r 7(1) is not confined to cases where there has been service outside the jurisdiction. While O 9 r 7(1)(b), (c) and (d) refer to service of an originating process, (a) does not, and under that subparagraph an originating process may be set aside where the Court does not have jurisdiction to entertain the claim made in it, or where the originating process constitutes an abuse of process: F Sharkey & Co Pty Ltd v Fisher (1980) 50 FLR 130; 33 ALR 173; Cell Tech Communications (at 370).
Furthermore, Energy Australia contended that the Court is not obliged to determine the jurisdictional issue raised by the Unions as a preliminary matter and, in the exercise of its discretion, may decide not to do so and leave the issue to be resolved at trial.
In an often cited passage, Griffith CJ said over a century ago that “the first duty of every judicial officer is to satisfy himself that he has jurisdiction, if only to avoid putting the parties to unnecessary risk and expense”: Federated Engine-Drivers and Firemen’s Association of Australasia v Broken Hill Pty Co Limited (1911) 12 CLR 398 at 415.
However, whether a court is duty bound to consider its jurisdiction once it has been disputed, seems to be a contestable proposition. In Bray v F Hoffman-La Roche Ltd (2002) 118 FCR 1 at [185]–[187], Merkel J following Katz J in Khatri v Price (1999) 95 FCR 287 at [14], concluded that whilst in the usual course a court must satisfy itself that it has jurisdiction in the proceeding as a preliminary issue, the Court is not under an unqualified duty to do so. On the other hand, on the appeal (Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317), Finkelstein J (in obiter) at [239] concluded that if a query about jurisdiction is raised, or if it is identified by the court, the court must satisfy itself that it has jurisdiction before it proceeds any further with the matter.
Whether I am obliged to determine the jurisdictional issue raised by the Unions or instead have a discretion not to do so, I consider that I should do so. It is clear that, in the usual case, the issue of jurisdiction should be determined as a preliminary matter: Zhang v Zemin (2010) 79 NSWLR 513 at [33] (Spigelman CJ, with whom Allsop P and McClellan CJ at CL agreed). There is no reason for the view that this is other than a usual case. As I have said, Energy Australia did contend that the jurisdictional issue depends upon the Court’s satisfaction that there has been an accord and satisfaction in relation to the determination of the FWC and that that factual inquiry is better entertained at trial. However, all of the evidence sought to be adduced by the parties on that issue has been adduced on this interlocutory application and, where sought, cross-examination of deponents has occurred. Energy Australia could point to no disadvantage or prejudice in the Court determining the jurisdictional issue on this interlocutory application. Indeed, dealing with jurisdiction as a preliminary question has the possible advantage of avoiding the time and expense involved in determining the merits of the substantive case pursued by Energy Australia.
The better course is to deal with the jurisdictional issue as a preliminary matter consistently with what seems to me to be the purpose of the procedure provided by r 13.01 of the Rules.
The Court’s power to declare the meaning of an enterprise agreement
The declaration sought by Energy Australia is sought pursuant to ss 19 and 21 of the FCA Act and ss 562 and 564 of the FW Act. Section 562 of the FW Act confers jurisdiction on this Court “in relation to any matter (whether civil or criminal) arising under” that Act.
Prior to the enactment of the FW Act, the Workplace Relations Act 1996 (Cth) (“WR Act”) expressly conferred upon this Court the jurisdiction to interpret an industrial agreement made under that Act. Section 849 of the WR Act was in the following terms:
849 Interpretation of certified agreements
(1)The Court or the Federal Magistrates Court may give an interpretation of a collective agreement on application by:
(a) the Minister; or
(b) an organisation or person bound by the agreement; or
(c) an employee whose employment is subject to the agreement.
(2)The decision of the Court or the Federal Magistrates Court is final and conclusive and is binding on:
(a) the organisations and persons bound by the agreement; and
(b) the employees whose employment is subject to the agreement;
who have been given an opportunity of being heard by the Court or the Federal Magistrates Court.
As I said in Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union [2015] FCA 1033, before exercising that power, the Court needed to be satisfied that there was a genuine dispute between the parties the resolution of which was necessary to quell an actual controversy: NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd [2009] FCA 1147 at [14] (Perram J). As Gray J said in Woolworths Ltd v Shop Distributive and Allied Employees Association (Queensland Branch) Union of Employees (2010) 183 FCR 214 at [19], the FW Act has no specific counterpart to s 849 of the WR Act, “but s 562 of Fair Work Act confers on the Court jurisdiction in relation to any matter (whether civil or criminal) arising under the Fair Work Act”. Insofar as Gray J was thereby suggesting (albeit in passing and in obiter) that s 562 of the FW Act was broad enough to encompass the type of power which had previously been specifically conferred in s 849 of the WR Act, that observation seems to me to be correct.
A genuine dispute as to the meaning and effect of a term of an enterprise agreement that confers rights or imposes obligations is a matter which may properly be said to arise under the FW Act. That is because the right or duty in question “owes its existence to [the FW Act] or depends upon [the FW Act] for its enforcement”: R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154 (Latham CJ); see also in an industrial context Re McJannet; Ex parte Australian Workers’ Union of Employees, Queensland (No 2) (1997) 189 CLR 654 at 656, (Brennan CJ, McHugh and Gummow JJ); Transport Workers Union v Lee (1998) 84 FCR 60 at 64–67 (Black CJ, Ryan and Goldberg JJ). That conclusion is fortified by the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) which states at [2213], “The Federal Court will, for example, be able to make declarations relating to the meaning of industrial instruments made under the Bill”. That observation made about s 564 (which provides that nothing in the FW Act limits the Federal Court’s powers under ss 21, 22 and 23 of the FCA Act), is properly understood as an observation that the combination of ss 562 and 564 provides to the Federal Court the jurisdiction to make declarations as to the meaning of industrial instruments made under the FW Act.
A significant difference between the way in which s 849 of the WR Act operated and a declaration as to the meaning of an industrial instrument that may now be made pursuant to the Court’s general powers to make declarations is that there is no equivalent of s 849(2). The binding effect of any such declaration will be limited to those persons who are parties to the proceeding rather than all of the persons bound by the instrument whose meaning has been declared who were notified of the proceeding. The difference, which may well be the product of legislative oversight, is significant and serves to substantially undermine the practical utility of a declaration declaring the meaning of an industrial instrument made under the FW Act.
Initially, Energy Australia contended that the declaration sought would be of general application, that is that it would be binding on persons to whom the EA applies, whether or not they are parties to this proceeding. However, in its oral submissions, Energy Australia did not press that contention. As a result, Energy Australia’s reliance on the proposition that the Court would retain jurisdiction to declare the proper construction of cl 5.3 to resolve the rights and obligations of employees to whom the EA applies fell away and provides no support to several of Energy Australia’s responses which had sought to rely upon it.
The Court’s jurisdiction – General Principles
As the prior discussion alluded to, there are two conditions that must be satisfied for the Court to have jurisdiction pursuant to s 562 of the FW Act. First, there must be a “matter”. Second, that matter must “arise under the FW Act”. I have addressed the second condition. It is with the first condition, the existence of a “matter”, that the Unions take issue.
It is uncontroversial that the identification of a “matter” for the purposes of s 562 is to proceed by reference to High Court authority about the identification of a “matter” for the purposes of engaging federal jurisdiction under the Constitution: Australasian Meat Industry Employees Union v Fair Work Australia (No 2) (2012) 203 FCR 430 at [28] (Flick J). That approach was endorsed by a Full Court recently in Duggan v Metropolitan Fire and Emergency Services Board [2017] FCAFC 112 at [45] (Tracey, Wigney and O’Callaghan JJ).
In Palmer v Ayres [2017] HCA 5 at [26]–[27], Kiefel, Keane, Nettle and Gordon JJ repeated the relevant principles in the following passage (citations omitted):
[26]A “matter”, as a justiciable controversy, is not co-extensive with a legal proceeding, but rather means the subject matter for determination in a legal proceeding – “controversies which might come before a Court of Justice” (emphasis added). It is identifiable independently of proceedings brought for its determination and encompasses all claims made within the scope of the controversy. What comprises a “single justiciable controversy” must be capable of identification, but it is not capable of exhaustive definition. “What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships”.
[27]The requirement that, for there to be a “matter”, there must be an “immediate right, duty or liability to be established by the determination of the Court” reinforces that the controversy that the court is being asked to determine is genuine, and not an advisory opinion divorced from a controversy, and, further, that only a claim is necessary. A matter can exist even though a right, duty or liability has not been, and may never be, established.
Private arbitration under the FW Act – General Principles
Since its inception, one of the primary aims of federal industrial legislation has been to facilitate the settlement of industrial disputes. In keeping with that aim, an objective of the FW Act is to provide “accessible and effective procedures to resolve grievances and disputes”: s 3(e). A number of mechanisms are deployed by the Act to achieve that objective including that of requiring an enterprise agreement made under the FW Act provide “a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the Agreement, to settle disputes … (i) about any matters arising under the Agreement; and (ii) in relation to the National Employment Standards”: s 186(6)(a). Such a procedure must allow “for the representation of employees covered by the Agreement for the purposes of that procedure”: s 186(6)(b). A model clause which may be included in an enterprise agreement is provided for (s 737 and Schedule 6.1 Fair Work Regulations 2009 (Cth)) and the FWC is empowered to deal with disputes, including by arbitration, when a dispute resolution process in an enterprise agreement so provides: s 739.
As submitted by the Unions, the legal consequences of a determination by the FWC pursuant to a dispute resolution clause and s 739 of the FW Act are clear and have been settled by the Full Court of this Court and by the High Court. In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (2015) 235 FCR 305, Dowsett, Tracey and Katzmann J at [35] said this:
Thus it is well settled that “arbitration” by FWC pursuant to a term in an enterprise agreement is a private arbitration, based upon the consent of the parties, and not upon the coercive authority of the Australian state.
At [34], their Honours cited TCLAir Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia (2014) 251 CLR 533, including [77]–[79] where the legal consequences of a private arbitration were explained by Hayne, Crennan, Kiefel and Bell JJ as follows (citations omitted):
[77]However, if parties do go to arbitration and the arbitrator makes an award, the making of the award has legal significance in respect of the parties' dispute and their rights and liabilities. As the plurality in Dobbs said: “if, before the institution of an action, an award was made, it [the award] governed the rights of the parties and precluded them from asserting in the Courts the claims which the award determined” (emphasis added). In such a case, the arbitrator's award governs the rights of the parties because “[b]y submitting the claims to arbitration, the parties confer upon the arbitrator an authority conclusively to determine them”.
[78]This gives rise to the general rule that an award made by an arbitrator pursuant to such authority is final and conclusive. Further, the arbitrator's making of an award in exercise of such authority both extinguishes the original cause of action and imposes new obligations on the parties in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. The former rights of the parties are discharged by an accord and satisfaction. The accord is the agreement to submit disputes to arbitration; the satisfaction is the making of an award in fulfilment of the agreement to arbitrate .
[79] It follows that when an arbitral award is enforced by curial process, the obligations sought to be enforced are those which are created by the award in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. A party may sue on an award as a cause of action or, in some cases, as in this case, seek enforcement of the award pursuant to the IA Act.
In that passage, their Honours approved the following statement by Rich, Dixon, Evatt and McTiernan JJ in Dobbs v National Bank of Australasia Limited (1935) 53 CLR 643 at 653 (citations omitted):
But if, before the institution of an action, an award was made, it governed the rights of the parties and precluded them from asserting in the Courts the claims which the award determined. By submitting the claims to arbitration, the parties confer upon the arbitrator an authority conclusively to determine them. That authority enables him to extinguish an original cause of action. His award will do so if it negatives the existence of liability. It will do so if it operates, not merely to ascertain the existence and measure of the original liability, but to impose a new obligation as a substitute, whether the obligation results from the tenor of the award or from an antecedent undertaking of the parties to give effect to the determination it embodies. The award given under authority of the parties operates as a satisfaction pursuant to their prior accord of the causes of action awarded upon.
The proposition to be derived from the above passages is that once an arbitration has been seen through to completion and a determination is rendered, that determination extinguishes the original dispute and replaces it with the determination. It is the arbitral determination that then determines the rights and obligations of the parties bound by it.
DOES THE COURT HAVE JURISDICTION – DISCUSSION
Relying on the determination made by the Full Bench of the FWC in the arbitration conducted pursuant to cl 28 of the EA, the Unions contended that there is no subsisting controversy in relation to the meaning of cl 5.3 of the EA insofar as it relates to the rate to be paid to a casual employee performing overtime work. That controversy, so the Unions contended, was extinguished as between each of the persons bound by the Full Bench’s determination, including each of the parties to this proceeding, such that there is no longer any “matter” arising under the FW Act for the purposes of s 562 and the Court’s jurisdiction is not engaged.
In its written submission, Energy Australia contended that whether an accord and satisfaction exists as between it and the Unions as a consequence of the arbitral determination of the Full Bench, is a question that goes to the merits of the Originating Application. That proposition was not expanded upon orally. Insofar as the contention is pressed, I regard it as misconceived. The existence or not of an accord and satisfaction is at the heart of whether or not a justiciable controversy remains and may be determined without reference to the substantive question in the application—the interpretation of cl 5.3. I accept however, consistently with Energy Australia’s submission, that the Unions bear the onus of establishing that there has been an accord and satisfaction such that any relevant justiciable controversy has been extinguished.
Was the FWC’s arbitration invalid and not binding?
Turning then to the substance of the competing contentions, Energy Australia contended that there is no accord and satisfaction as between it and the Unions because the determination of the Full Bench was beyond power and of no binding effect.
That contention is premised on the proposition that the FWC only had jurisdiction to arbitrate a dispute under cl 28 of the EBA in relation to the meaning of cl 5.3 as between Energy Australia and one or more of its existing employees or, more particularly, an existing casual employee aggrieved by Energy Australia’s application of cl 5.3. Energy Australia contended that the dispute which the FWC resolved was a dispute between Energy Australia and the AMWU. Relatedly, Energy Australia contended that the FWC was not empowered to determine a dispute notified by the AMWU in its own right. Energy Australia characterised the arbitration conducted by the FWC as “ad hoc”, being beyond the terms of cl 28 and beyond the authority conferred upon the FWC by the FW Act. In that respect, Energy Australia primarily relied upon s 739(3) which provides that “[i]n dealing with a dispute, the FWC must not exercise any powers limited by” the terms in an enterprise agreement providing for a dispute resolution process.
In the alternative, if there was a valid arbitration, Energy Australia contended that any determination made by the FWC could only have bound the parties to the arbitration. In that respect, Energy Australia accepted that the AMWU was a party but contended that no other Union was.
The Unions put forward a number of answers to Energy Australia’s contention that the arbitration before the FWC was invalid. First, they contended that cl 28 permits each of them to initiate and participate in an arbitration in their own right. Second, they contended that even if the dispute resolution process was only open to Energy Australia and one or more of its existing employees, the Unions that participated in the arbitration were acting on behalf of those employees. Thirdly, the Unions say that Energy Australia is estopped from contending that the arbitration before the Commission was invalidly commenced or conducted. As to Energy Australia’s alternative contention, the Unions say that the determination made by the FWC is not simply binding upon the parties to the arbitration but, by reason of cl 28.2(e) of the EBA, the arbitral determination binds each of the Unions as each is a party to the EBA.
The resolution of these questions calls for the interpretation of the EA and in particular cl 28. It was accepted that the EA should be construed by reference to the well-known observations of Madgwick J in Kucks v CSR Limited [1996] IRCA 141 at 4, which were cited with approval in Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 by Kirby J at [96] and Callinan J at [129]. In Kucks, Madwick J said (emphasis added):
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) 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. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand
In agreeing with those observations, Kirby J in Amcor at [96] said this:
The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement.
To similar effect, in City of Wanneroo v Australian Municipal, Administrative, Clerical And Services Union [2006] FCA 813, French J said at [57], in relation to the construction of an award (citations omitted):
It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities.
See also Tomvald v Toll Transport Pty Ltd [2017] FCA 1208 at [38] (Flick J).
Was the AMWU entitled to engage the arbitral process in its own right?
Although Energy Australia accepted the applicability of the principle of interpretation laid out in Kucks, it nevertheless contended that cl 28 should be construed narrowly, so as to not extend its operation beyond what was plainly intended. That contention was premised on the proposition that dispute resolution clauses that allow for private arbitration to resolve disputes about the meaning of an enterprise agreement are effectively an abrogation of the rights of those to whom the agreement applies to have such matters determined by a court.
It is important to bear in mind the ultimate purpose of dispute resolution clauses found in enterprise agreements. From the perspective of the FW Act, that purpose reflects the object set out in s 3(e) of “providing accessible and effective procedures to resolve grievances and disputes”. The intent of the framers of cl 28 should be construed in that context and with an appreciation that industrial harmony is of value to industrial parties and that dispute resolution processes provide a means of restoring and maintaining industrial harmony by resolving disputation. The framers of cl 28 would have also appreciated that, like all disputes, industrial disputes are more effectively resolved when all persons concerned in the outcome are included in the resolution process. To my mind, cl 28 should be construed in keeping with those understandings and, consistently with what Kirby J said in Amcor, the objective of achieving “a sensible industrial outcome” should be attributed to the framers of cl 28. It must also be appreciated, consistently with the observations in Kucks, that it should not be assumed that the framers of cl 28 were skilled in legal drafting.
Those contextual considerations, including the legislative context under which cl 28 operates, are important. However, the starting point for interpretation must be the text of cl 28 itself.
There are no express terms in cl 28 which spell out who may invoke its processes. What is specified is the subject matter of a dispute that the process “is to be used to assist in resolving”. That subject is “any matter or dispute pertaining to the employment relationship”. The phrase “matter pertaining to the employment relationship” has a long pedigree in industrial jurisprudence and understanding. It is a phrase of broad application which undoubtedly encompasses a dispute as to the rate of pay to which employees are entitled. When such a dispute involves competing interpretations of the EA, as in this case, the dispute clearly falls within what cl 28 describes as “category 1 matters”. That conclusion was not in contest.
It is only “category 1 matters”, relevantly “matters … that go to the application or interpretation of this Agreement or with matters arising under the National Employment Standards”, that under cl 28 may be resolved through arbitration by the FWC. All other disputes (referred to as “category 2 matters”) are restricted to the exercise by the FWC of its conciliation powers.
The rationale for that dichotomy is not clear. It may well be historical. At the least, it seems that cl 28 regards the resolution of “category 1 matters” as likely to be of higher order importance relative to “category 2 matters”, which in the main may be expected to be individual (as distinct from collective) disputes between one or perhaps a few employees and Energy Australia. Conversely, disputes about the application or interpretation of the EA may be expected to be collective in nature involving the interests of many employees and likely to raise the attention of those persons—Energy Australia and the Unions—that the EA speaks of as its “Parties”.
Clause 28.1 provides for a four step process through which if the dispute remains unresolved following a step it is progressed to the next step in the hierarchy. Step 1 commences with a shop floor discussion between employees and their “Team Leader”. Step 4 ends with a referral to the FWC. Energy Australia submitted that “read literally” the four steps are preconditions “that can only be satisfied between [Energy Australia] and a particular employee or employees”. It is that feature of cl 28, that the process commences with direct discussion between Energy Australia and its employee or employees, together with the fact that a dispute must “pertain to the employment relationship”, that Energy Australia relied upon to support its construction that only a dispute between it and an identified existing employee or employees may engage the processes made available by cl 28. The construction contended for addressed access to the clause and not merely access to arbitration under the clause. If correct, it would necessarily apply to all of the processes contemplated by cl 28, including the discussions and the conciliation before the FWC which the clause otherwise provides for. Energy Australia’s construction must be tested by reference to its broad application.
To my mind, that construction misconceives the purpose of the text which describes steps 1 and 2 in cl 28.1(a). I accept that, because of the subject matter restriction that the dispute pertain to the employment relationship, a dispute capable of being addressed by the cl 28 processes must raise or involve an interest of an employee or employees of Energy Australia which arises out of employment with Energy Australia. However, reading the clause as a whole, bearing in mind its imputed purpose of facilitating the restoration and maintenance of industrial harmony, I do not read the description of steps 1 and 2 in cl 28.1(a) as intending to lay down mandatory limitations on access to the processes of discussions, conciliation or arbitration that cl 28 facilitates.
Why, in the face of the broad facilitative purpose of cl 28, such limitations might have been intended is not apparent. I appreciate that, as a practical matter in some circumstances, the ascertainment of the nature of a dispute may require the identification of an aggrieved employee. But that practical consideration, which is likely to have no application in an enterprise-wide dispute as to the application or interpretation of the EA (as this case demonstrates), does not support the much wider proposition that it was intended that, as a jurisdictional precondition of general application, an employee must be involved and identified as a disputant party. That is particularly so given that there are practical considerations which tend in the opposite direction. It may be expected, particularly in disputes involving many employees, that a single employee will be reluctant to be singled out and identified as the lead disputant. The anonymity which employees may desire and which may be provided by their representation through a union ought not be regarded as inimical to the objectives of cl 28. To the contrary, anonymity tends to facilitate the airing of employee grievances and thus enhances the opportunity of those grievances being resolved in line with the purpose of cl 28.
Steps 1 and 2 of the cl 28.1 process are directed at disputes that arise at the workplace of the kind that a “Team Leader” would have the authority to resolve. Those steps would have no utility in relation to an enterprise-wide dispute about the application and interpretation of the EA the resolution of which would require the approval of senior management of Energy Australia. Steps 1 and 2 have a limited purpose of providing for a particular procedure. In my view, they are not intended to spell out general limitations upon access to the clause and make no significant contribution to an understanding of what, if any, limitations were intended.
That construction is consistent with the approach actually taken by Energy Australia to the dispute about the interpretation of cl 5.3. The dispute was first raised in the circumstances contemplated by step 3 of cl 28.1. When raised with senior management, it was raised by a union and not by an individual employee. That all occurred without objection and without any suggestion that the validity of the process embarked upon depended on the dispute being raised by an employee in accordance with step 1. Indeed, Energy Australia did not here contend that cl 28 was not validly engaged because steps 1 and 2 were not followed. That may be because it is only in relation to “category 2 matters” and not “category 1 matters” that cl 28 expressly requires (at 28.1(d)) steps 1 and 2 to be followed before the dispute may be taken to the FWC.
The actual approach taken to the engagement of cl 28 in relation to the dispute over the meaning of cl 5.3 by Energy Australia, the AMWU, CEPU and CFMEU was understandable. To have commenced the process at step 1 would have been an illogical waste of time. To my mind, what here occurred reflects what the framers of cl 28 must have intended.
For those reasons, I do not draw from the text which describes steps 1 and 2 of the dispute resolution process a general limitation that only Energy Australia and its employees may validly engage the processes provided for by cl 28. Furthermore, I consider that there are positive indicators in the text of cl 28, supported by contextual considerations, which support a conclusion that cl 28 contemplates that one or more of the Unions may be what cl 28 calls a “party” and may validly engage the conciliation and arbitral processes provided by the clause. If that is so, the challenge made to the validly of the arbitration conducted by the FWC must be rejected.
I am satisfied, contrary to the submissions made by Energy Australia to which I will return, that the expression “the Parties”, when used in cl 28, has its defined meaning given by cl 2 of “the Company [Energy Australia] and the Unions [CFMEU, AMWU, CEPU, ASU and AWU]”. I am also satisfied that where cl 28 uses the expression “the parties” it means the parties to the dispute resolution process provided by the clause. The phrase “parties to the dispute” used elsewhere in cl 28 has the same meaning.
Step 4 (set out at cl 28.1(a)) provides that the dispute may be referred to the FWC for conciliation and, in relation to “category 1 matters”, for arbitration. The person or persons who may make such a referral are not there specified. Clause 28.1(b) provides that “[t]he dispute may be referred to FWC at any stage by agreement of the parties”. Where there is no such agreement, cl 28.1(d) dealing with category 2 matters provides that “either party may notify the FWC of a dispute and seek to have the matter dealt with”. Clause 28 does not contain a similar express statement in relation to who, absent an agreement between “the parties”, may refer to the FWC a “category 1 matter” for conciliation and, if necessary, arbitration. However it seems inescapable that, just as for “category 2 matters”, cl 28 must intend that a “party” has the capacity to refer “category 1 matters” for conciliation and arbitration by the FWC. No other sensible construction is open and the necessary implication is irresistible. It follows, in my view, that where a person that cl 28 regards as a “party” engages the arbitral process provided for by cl 28, the jurisdiction of the FWC has been properly invoked by a person capable of doing so. To restate that proposition by reference to the current facts, if the AMWU was a person regarded by cl 28 as a “party” in relation to the dispute raised as to the interpretation of cl 5.3, the invocation by the AMWU of the arbitral process was valid and the challenge made by Energy Australia to the validity of the arbitration must be rejected.
The capitalised expression “the Parties” appears in cl 28 in three places. First, at the foot of cl 28.1(a) in the following passage:
Employees may bring a support person or the appropriate union representative to any meeting held under this clause with the Parties being able to elect to bring representatives of their own choosing to any matter referred to conciliation or arbitration.
Second, in cl 28.2 (which provides for arbitration by the FWC of “category 1 matters”), in paragraph (e):
Where the FWC has issued a decision, determination or direction under this clause, it shall be final and binding on the Parties, subject to the appeal process in accordance with subclause 28.3.
And thirdly in cl 28.3 (dealing with appeals of an arbitration of a “category 1 matter”), at paragraph (b):
An application for an appeal of the FWC's decision will be provided to the Parties and the FWC in writing detailing the grounds for appeal.
The Unions also contended that, if contrary to their submission the Court determines that it has jurisdiction, the proceeding should be permanently stayed as an abuse of process. Six grounds in support of that submission were relied upon. First, that the issue raised in this proceeding was squarely, and solely, the issue in the FWC. Second, a full opportunity to litigate that issue at first instance and on appeal was had by the parties to this proceeding. Third, by the terms of cl 28, the determination of the FWC is final and binding on all of the persons that the EA regards as its parties, those persons being the parties to this proceeding. Fourth, Energy Australia was a party to the FWC proceeding. Fifth, a redetermination of the issue dealt with by the FWC in this Court would be in plain disregard of the proceeding that took place before the FWC and would undermine the administration of justice and the policy of the FW Act as reflected in ss 186(6), 738 and 739 to facilitate arbitration of disputes outside of the courts. Lastly, the Unions contended that there is a general interest in the finality of litigation which courts are astute to protect, noting that the importance of finality in this area is reinforced by the absence of any legislated appeal mechanism from a Full Bench of the FWC exercising an arbitral function.
It was uncontroversial that the Unions bear a heavy onus in establishing an abuse of process: Williams v Spautz (1992) 174 CLR 509 at [42] (Mason CJ, Dawson, Toohey and McHugh JJ); Kimberley Diamonds Ltd v Arnautovic [2017] FCAFC 91 at [33] (Foster, Wigney and Markovic JJ); Alexander v Australian Community Pharmacy Authority (No 3) [2010] FCA 506 at [46] (Bromberg J).
In a passage approved and adopted by the High Court (Gummow ACJ, Hayne, Heydon, Crennan and Bell JJ) in Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427 at [89], McHugh J in Rogers v The Queen (1994) 181 CLR 251 at 286 summarised the categories of abuse as follows (citations omitted):
Inherent in every court of justice is the power to prevent its procedures being abused. Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute. Many, perhaps the majority of, cases of abuse of procedure arise from the institution of proceedings. But any procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of the court's process.
The parties accepted that the guiding principles applicable to establishing an abuse of process are those identified by Robson AJA (with whom Neave and Harper JJA agreed) in Kermani v Westpac Banking Corporation (2012) 36 VR 130 at [97] as follows (citations omitted):
(1)The court possesses an inherent jurisdiction to stay its proceedings as an abuse of process if the proceedings are unjustifiably oppressive and vexatious or manifestly unfair or otherwise bring the administration of justice into disrepute among right-thinking people.
(2)The jurisdiction should only be exercised in exceptional cases or sparingly with the utmost caution.
(3)The jurisdiction to stay for abuse of process is not limited to cases where the proceedings have been brought for an improper purpose or where there is no possibility of the court affording the affected party a fair hearing.
(4)The circumstances in which abuse of process may arise are extremely varied and the courts have refrained from limiting the circumstances to fixed categories.
(5)In considering whether to grant a stay as an abuse of process, the court should undertake a weighing process involving a subjective balancing of a variety factors and considerations.
(6)Among those factors and considerations are the requirements of fairness to the accused, the legitimate public interest in the disposition of charges of serious offences and in the conviction of those guilty of crime, and the need to maintain public confidence in the administration of justice.
(7) These principles apply to civil penalty proceedings.
(8)The rationale underlying the principle against double jeopardy, in that an individual should not be vexed twice for the same cause, is a factor properly to be taken into account in the weighing exercise.
(9)It is prima facie vexatious to bring two extant civil actions where one will lie.
(10)This prima facie rule applies whether or not the two proceedings are in separate courts or one.
(11)The prima facie rule applies where the issues overlap or significantly overlap or there is a similarity of subject matters of the proceedings.
(12)The fact that the parties may not be identical, or the relief different, does not necessarily disentitle relief under this principle.
(13)In considering whether the rule should apply, the court should consider whether there was no reasonable justification for the second proceeding based on legitimate considerations of convenience, cost or the like.
(14)The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice. Regard may be had to:
(a)the importance of the issue in and to the earlier proceeding, including whether it is an evidentiary or ultimate issue;
(b) the opportunity available and taken to fully litigate the issue;
(c) the terms and finality of the finding as to the issue;
(d) the identity between the relevant issues in the two proceedings;
(e)any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceeding;
(f)the extent of the oppression and unfairness to the other party if the issue was relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and
(g)an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.
The Unions relied in particular on the guiding considerations recorded by Robson AJA in principle 14.
The assertion of the Unions of an abuse of process was substantially founded on this proceeding being an attempt by Energy Australia to re-litigate a matter which had already been authoratively determined. In that respect, the Unions also relied on the observations of French CJ in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [33] that “[a]buse of process principles may be invoked to prevent attempts to litigate that which should have been litigated in earlier proceedings as well as attempts to re‑litigate that which has already been determined”. It is a matter of significance, so the Unions contended, that a proceeding may be taken to be vexatious, oppressive or otherwise improper, precisely because it is an instance of re‑litigation. In this regard they point to Walton v Gardiner (1993) 177 CLR 378 at 393 where Mason CJ, Deane and Dawson JJ said this (citations omitted):
[P]roceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, there continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate a new a case which has already been disposed of by earlier proceedings. The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v. Chief Constable of the West Midlands Police as "the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people".
If the arbitration before the FWC was valid, in that it was validly conducted in accordance with cl 28, it is not in contest that the arbitration bound Energy Australia and the AMWU and that there is no justiciable controversy between those two parties and that therefore the Court lacks jurisdiction insofar as this proceeding relates to the AMWU. In those circumstances, there is no need for, and arguably no basis for, any stay or dismissal of that part of the proceeding relating to the AMWU as an abuse of process. If it had been necessary for the AMWU to rely upon abuse of process, I would have held that aspect of the proceeding to be an abuse for essentially the same reasons which support my conclusion of an abuse in relation to the other Unions. I now turn to consider that matter.
If I am right that the arbitration was validly invoked but wrong that the Unions other than the AMWU were bound, whether the proceeding is an abuse insofar as it relates to those other Unions is a live issue. If so, I would accept the Unions’ submission that abuse of process by re-litigation provides a reason why Energy Australia should not be permitted to re-litigate the case it lost before the FWC.
At the apex of the authorities relied upon by the Unions is Reichel v Magrath (1889) 14 App Cas 665. In an earlier proceeding against different parties Reichel had brought and lost a claim that his resignation as a vicar of a parish near Oxford was void and that as a consequence an injunction should issue restraining the Bishop of Oxford and other defendants from presenting any person for institution into the benefice. However despite having lost, Reichel refused to give up possession of the vicarage. In Reichel, the person appointed as vicar to succeed Reichel sought a declaration that he was the vicar and an injunction to restrain Reichel from continuing in possession of the vicarage. In defence of that claim, Reichel raised the same issues he had lost in the first proceeding. Reichel’s defence was struck out as an abuse of process. Lord Halsbury LC at 668 said this:
[I]t would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again . . . [T]here must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure ...
Reichel was referred to by Gummow ACJ, Hayne, Crennan and Bell JJ in Michael Wilson at [109], but distinguished on the basis that the proceeding said to be an abuse of process had not set up “the same case as was to be heard and determined in the arbitration” (original emphasis).
Whilst the principle in Reichel is clearly good law, it has its limitations. As Hunt CJ at CL in Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 stated in the following passage at 414:
There are obviously limitations to striking out pleadings or causes of action as an abuse of process upon the basis stated in Reichel v Magrath … The issue determined in the earlier case which is sought to be litigated in the later case must be one which the party propounding it in the latter lost in the former … It must be an issue which was necessarily determined in the earlier case, and one of importance to the final result. It must have been properly argued — by which I mean that … the tribunal which decided it was an appropriate one to do so, that the parties were appropriate contradictors and that the issue was regarded by them as one of importance … In normal circumstances, the decision disposing of the issue must have been a final one … There may also be circumstances in which, notwithstanding the absence of an appeal, it is clear that the earlier decision has overlooked some binding authority, or that it has caused the unsuccessful party a manifest injustice … [A]ll the circumstances of the determination in the earlier case may be considered … .
Those observations were quoted with approval by Handley JA (with whom Mason P and Heydon JA agreed) in Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198 at [31].
In Rippon, the purchasers of a business sued the vendor claiming that a warranty given as to the accuracy of various financial statements for 1991 involved representations which were misleading and deceptive. The purchasers were unsuccessful on that claim because they were unable to establish reliance on the erroneous figures. The purchasers then brought an action against the accountants who had prepared the financial statements claiming damages for negligent misrepresentation in the 1991 statements and additional misrepresentations in the statements for the preceding three years. The claim against the accountants was dismissed as an abuse of process. At [28], Handley JA said:
The present proceedings are an attempt to litigate or re-litigate issues which were either decided in or are barred by the earlier proceedings. In substance, ignoring the camouflage, the purchasers are attempting to re-litigate the issue of reliance on the 1991 figures which they lost. If they cannot succeed against anyone in respect of the 1991 figures because they did not rely on them, they could hardly succeed in establishing reliance on the earlier figures.
His Honour at [30] continued:
The substance of the matter therefore is clear. The purchasers, disappointed with their bargain, sued their vendor in contract and in misrepresentation. They lost their case in misrepresentation and were disappointed with their modest recovery in contract. A few weeks before the expiration of the limitation period they sued the accountants for what is in substance the same misrepresentations. In the first proceedings they had to prove that they relied upon those misrepresentations. This turned on the evidence of Mr Hoefl, the contemporary documents, and the surrounding circumstances. The purchasers lost that issue and seek to re-litigate it against the accountants on substantially the same evidence in the hope that this time Mr Hoefl will be believed.
At [36], Handley JA observed that there was no question of oppression and unfairness because the accountants were not parties to the earlier action but concluded that the proceeding threatened the integrity of the administration of justice and raised the prospect of conflicting judgments and for that reason was an abuse of process. After referring to the limitations of the principle in Reichel set out in Haines, Handley JA referred to State Bank of New South Wales Limited v Stenhouse Ltd (1997) Aust Torts Reports 81-423 (64,077) and the observations of Giles CJ Comm D at (64,089). Those observations are the source of principle 14 earlier set out from the judgment of Robson AJA in Kermani.
To my mind, and on the assumption that the arbitration was valid, each of the guiding considerations set out in principle 14 favours the characterisation of the proceeding as against the Unions as an abuse of process. As to (a), the issue as to the meaning of cl 5.3 was clearly important and apt to be characterised as the ultimate issue in the arbitration. As to (b), Energy Australia had a full opportunity to ventilate that issue in the arbitration. As to (c), the arbitration was both final and binding upon Energy Australia in the context of Energy Australia, as the employer party to the EA, having agreed that an arbitration under cl 28 should be both binding and final. As to (d), the issue in the arbitration and in this proceeding as to the meaning of cl 5.3 is identical. As to (e), fresh evidence is not a relevant consideration.
As to (f), as the CEPU, AWU and ASU took no part in the arbitration, it cannot be said that for that reason they would be subjected to oppression if the meaning of cl 5.3 was re-litigated. The CFMEU did participate but not extensively and mainly through the auspices of the AMWU. Whilst there may be some oppression to the CFMEU, I would not regard it as very significant.
The finality of litigation, which courts are astute to protect (D’Orta-Eenaike v Victoria Legal Aid (2005) 223 CLR 1 at [34]–[36]; Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1 at [35]), is a consideration which weighs against Energy Australia and significantly so given that it consented to the finality of the arbitral determination. The public interest in finality is, in this instance, bolstered by the absence of any appeal mechanism provided by the FW Act in relation to arbitral determinations made under a dispute resolution clause.
Public confidence in the administration of justice is a significant factor in favour of regarding this proceeding as an abuse of process. The re-litigation raises the anomalous prospect of conflicting determinations as to the meaning of cl 5.3 where the same party (Energy Australia) would be bound by two conflicting determinations simultaneously. The fact that each such conflicting determination may be enforced against Energy Australia by different parties does not fully mitigate but perhaps to some degree extenuates the anomaly the existence of which would tend to undermine confidence in the administration of justice.
Given Energy Australia’s communication to the CEPU, CFMEU and AMWU of 20 February 2017 described at [40] above, it is evident that this proceeding is, in essence, a collateral attack by Energy Australia against the merits of the determination made by the FWC. Assuming for current purposes that it is only the AMWU that has the benefit of the arbitral determination, whilst orders made in this proceeding would not overturn or set aside the arbitral determination, as a matter of industrial or practical reality, a conflicting determination made by this Court as to the meaning of cl 5.3 would deny to the AMWU the fruits of its victory in the arbitration. That would occur by reason of a proceeding which, on the current assumption, had been dismissed as against the AMWU for lack of jurisdiction and would otherwise have been stayed as an abuse of process as against the AMWU. The unfairness to the AMWU arising from a different outcome in this Court achieved collaterally in a proceeding of that character would also tend to diminish public confidence in the administration of justice.
Turning then to (g), which requires an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process, there were four matters upon which Energy Australia relied. First, Energy Australia contended that principle 14 was limited to “civil action” and that the arbitration before the FWC was not a civil action. Energy Australia noted that principle 9 stated in Kermani referred to “two extant civil actions”. It contended that there is a fundamental difference between the nature of proceedings in the FWC pursuant to a dispute resolution clause and proceedings in a court which concern the exercise of the judicial power of the Commonwealth. Whilst I accept that there is a fundamental difference between a private arbitration and a court determination, I reject the contention that the difference is of significance in this case.
In Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 453, Gibbs J said this (citations omitted):
The doctrine of estoppel extends to the decision of any tribunal which has jurisdiction to decide finally a question arising between parties, even if it is not called a court, and its jurisdiction is derived from statute or from the submission of parties, and it only has temporary authority to decide a matter ad hoc.
His Honour was there addressing estoppel by res judicata, a doctrine closely related to and overlapping with abuse of process: Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at [24]–[26]. Analogously with the approach taken by Gibbs J, I can see no reason why a decision of a tribunal whose jurisdiction is derived from the submission of the parties, but which is nevertheless final and has the effect in law of extinguishing a controversy which would otherwise have been justiciable, should not be regarded as an earlier relevant proceeding for the purposes of determining whether the re-litigation of an issue is an abuse of process.
Second, on the assumption that the only parties to the arbitration were Energy Australia and the AMWU, Energy Australia relied upon the lack of identicality between the parties to the arbitration and the parties to this proceeding.
As principle 9 recognises, and as is made clear on the facts of Reichell and Rippon, that parties are not identical in both proceedings is not necessarily a disentitling consideration. There may be cases where the lack of identicality should be regarded as a weighty consideration but this is not such a case. None of the Unions have a direct private interest to protect; their involvement in the arbitration and in this proceeding is protective of the interests of various groups of employees of Energy Australia who are their members or prospective members and who all have a common interest in the meaning and application of cl 5.3. Whether that common interest is or was pursued by one or other of the Unions as a party or parties to one or other of the two proceedings in question is not a matter which in the balancing exercise contemplated by (g) of principle 14 tends to have significance. Energy Australia did not identify a factor and I am unable to discern any factor arising from the disparity of parties which justifies or tends to support the proposition that a re‑litigation would not be an abuse of process.
Next, Energy Australia pointed to principle 13 which provides that in considering whether there was an abuse of process, the court should consider whether there was no reason or justification for the second proceeding based on legitimate considerations of convenience, cost or the like. The submission was based on the proposition (later abandoned) that a declaration made in this proceeding will be binding on all persons to whom the EA applies including all of the relevant employees. If that had been the case, I would have agreed that some justification for the second proceeding would have been established. It might nevertheless be said by Energy Australia that a declaration binding on each of the Unions would have greater utility than a declaration as to the meaning and effect of cl 5.3 binding only on the AMWU (on the current assumption that the other Unions are not bound by the arbitral determination). For reasons earlier indicated in relation to the resolution of disputes and the maintaining of harmony, there is, as a matter of industrial reality, utility in a declaration as to the meaning and application of the EA being binding upon the Unions and I would accept that binding all of the Unions is of greater utility than simply binding one. But whilst that may be theoretically true, the position of the Unions is that they are all already bound by the arbitral determination and, given that the determination favoured the position of employees, there is no reason for thinking that the industrial harmony which the arbitral resolution achieved would be disturbed by the Unions. The only actual inconvenience arising from any industrial discord as to the meaning of cl 5.3 is that being created by Energy Australia by this very proceeding. Convenience does not support the position of Energy Australia.
To conclude, the guiding considerations are oppression and unfairness and a concern for the integrity of the administration of justice. Having regard to the factors set out in principle 14, on the assumption that the arbitration was valid, the factors that weigh in support of an abuse of process sufficiently establish an abuse despite the heavy onus involved. Accordingly, on the current assumption, I would hold that insofar as the proceeding relates to the CEPU, CFMEU, AWU and ASU, it is an abuse of process. As indicated earlier, if it had been necessary to decide, I would come to the same view in relation to the proceeding so far as it relates to the AMWU.
Competing submissions were also raised by the parties on the question of whether, if the arbitration was invalid, this proceeding nevertheless constitutes an abuse of process. In this respect the Unions relied on the observation made in Tomlinson at [25] that “the doctrine of “abuse of process is inherently broader and more flexible than estoppel”, including res judicata, issue estoppel and Anshun estoppel. The Unions contended that the invalidity of the arbitration does not necessarily require the conclusion that the present proceeding is not an abuse of process. There were two circumstances why, so the Unions contended, an abuse of process would nevertheless arise. The first is the potential for inconsistent determinations in the absence of any order requested by Energy Australia in its Originating Application to set aside the decision of the Full Bench. Energy Australia’s answer to that contention was that the arbitral determination, if invalid, is no decision at all and given that the FWC is not a superior court the decision is void ab initio. Accordingly, so Energy Australia contended, there would be no obligation to comply with the FWC’s determination. That may be an answer to the Unions’ contention that the existence of inconsistent determinations would be oppressive but it does not necessarily answer the contention that the existence of two inconsistent determinations (where the determination of the FWC is not set aside) would tend to undermine public confidence in the administration of justice for the reasons identified above. A mitigating factor on the current assumption, however, is that this Court will have found that the arbitral process was invalid for lack of jurisdiction. Whilst that finding would not set aside the arbitral determination, the determination would be so compromised that, in terms of public confidence in the administration of justice, the tension created by the existence of inconsistent determinations would tend to fall away. Accordingly, the potential for inconsistent determinations would provide but scant support for establishing an abuse of process.
The Unions’ second contention is that if Energy Australia had sought relief against the arbitral determination, the fact that Energy Australia had positively submitted to the FWC that it had jurisdiction and proceeded actively to participate in the arbitration, would provide powerful reasons for a court to refuse to set aside the arbitral determination on discretionary grounds. The Unions referred to a court’s discretion on judicial review to refuse to grant relief in circumstances where by its conduct an applicant had acquiesced in the decision‑maker’s error: Mann v Medical Practitioners Board of Victoria (2004) VSCA 148 at [17] (Nettle JA). The Unions contended that if the Court was of the view that the conduct of Energy Australia in relation to the arbitral determination was such that would lead to a refusal to grant an order quashing that determination, then for Energy Australia to continue with its proceeding in this Court, may be regarded as an abuse of process.
In response, Energy Australia submitted that the Unions’ argument as to discretion does not go to an abuse of process. That was said because under r 13.01 of the Rules the Court is not concerned with whether, as a matter of discretion, it should grant the relief sought in the substantive application. That contention seems to be misconceived. The Unions’ reference to the Court’s discretion was directed to the Court’s discretion to refuse prerogative relief as a step to informing it whether an abuse of process exists. They were not suggesting that such discretion alone could be the basis for setting aside the Originating Application. Under r 13.01 the Court is clearly empowered to set aside a claim where the originating process constitutes an abuse of process: Tay at [21]. Rule 13.01 cannot of itself be a basis for saying that considerations relevant to the Court’s discretion in refusing prerogative relief cannot inform the Court’s consideration of whether an abuse of process exists.
What it seems to me to be the essence of the Unions’ contention is that it would be unfair and oppressive to permit Energy Australia to put itself in a better position through a collateral attack upon the arbitral determination than it would likely have been if it had challenged that determination directly. Whilst that may well give rise to some unfairness, given the heavy burden of establishing an abuse of process, I would not for that reason alone (or in combination with the Union’s first contention), find an abuse of process on the assumption here made that the arbitration was invalid.
CONCLUSION
I have concluded that there is no “matter” arising under the FW Act and that as a consequence this proceeding is incompetent. It follows that the Originating Application must be set aside.
I will reserve the question of costs. If any party seeks costs of the proceeding, in the absence of an agreement between the parties, short submissions should be filed and exchanged within 30 days on a timetable to be agreed between the parties. I will then determine the issue on the papers. If there is no application for costs or if there is agreement as to costs, the parties should inform the Court accordingly.
I certify that the preceding one hundred and eighty (180) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. Associate:
Dated: 23 October 2017
SCHEDULE OF PARTIES
VID 201 of 2017 Respondents
Fourth Respondent:
AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION (ASU)
Fifth Respondent:
AUSTRALIAN WORKERS' UNION (AWU)
30
37
5