Health Services Union v Mecwa trading as Mecwacare
[2021] FedCFamC2G 179
•22 October 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Health Services Union v Mecwa trading as Mecwacare [2021] FedCFamC2G 179
File number(s): MLG 2654 of 2020 Judgment of: JUDGE BLAKE Date of judgment: 22 October 2021 Catchwords: INDUSTRIAL LAW – applicant asserted failure to consult in accordance with consultation term contained in an enterprise agreement – decision of the Fair Work Commission approving the enterprise agreement noted that pursuant to section 205 of the Fair Work Act 2009, the model consultation term was taken to be a term of the enterprise agreement – consideration of the interpretation and effect of section 205 of the Fair Work Act 2009 – term of the enterprise agreement relied on by the Applicant did not satisfy the requirements of section 205 of the Fair Work Act 2009 – effect of section 205 is that model consultation term in the Regulations displaced the consultation term contained in the enterprise agreement – applicant only pleaded breach of consultation term in the enterprise agreement – application dismissed Legislation: Fair Work (Registered Organisations) Act 2009 (Cth)
Fair Work Regulations 2009 (Cth), sch 2.3
Fair Work Act 2009 (Cth), ss 50, 205, div 5 pt 2-4
Cases cited: Teekay Shipping (Australia) Pty Ltd v Auld [2020] FCAFC 206 Division: Division 2 General Federal Law Number of paragraphs: 40 Date of hearing: 30 August 2021 and 12 October 2021 Counsel for the Applicant: Mr Bakri Solicitor for the Applicant: Holding Redlich Counsel for the Respondent: Mr D’Abaco Solicitor for the Respondent: Zeitz Workplace Lawyers ORDERS
MLG 2654 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: HEALTH SERVICES UNION
Applicant
AND: MECWA TRADING AS MECWACARE
Respondent
ORDER MADE BY:
JUDGE BLAKE
DATE OF ORDER:
22 OCTOBER
THE COURT ORDERS THAT:
1.The Application filed on 23 July 2020 be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE BLAKE:
This is an application brought by the Health Services Union (‘Applicant’). The Applicant seeks, inter alia, a declaration that Mecwa (trading as Mecwacare) (‘Respondent’) has contravened section 50 of the Fair Work Act 2009 (‘Act’) by failing to consult with its employees as required by clause 63 of Mecwa (trading as Mecwacare), ANMF and HSU Enterprise Agreement 2018 (‘Agreement’). The Respondent denies contravening section 50 of the Act and clause 63 of the Agreement.
For the reasons that follow, I have decided to dismiss the application.
BACKGROUND
The Applicant is an organisation registered pursuant to the Fair Work (Registered Organisations) Act 2009. As an employee organisation within the meaning of the Act, it is entitled to represent various classes of employees employed by the Respondent and has standing to commence this proceeding.
The Respondent operates not for profit aged care facilities in the State of Victoria. It employs approximately 2000 employees and also engages 500 volunteers.
The Agreement was approved by the Fair Work Commission (‘Commission’) on 22 March 2019. It has a nominal expiry date of 30 June 2022. It applies to and covers the Respondent, its employees who fall within the scope of the Agreement and the Applicant. The Respondent is required to comply with the terms of the Agreement.
In the period up to 12 July 2020, many employees of the Respondent also performed work for other employers in the aged care services sector. The Respondent did not, prior to that date, seek to impede or restrict its employees from being employed by other employers in the aged care sector, or from performing work for other employers at aged care facilities operated by those other employers.
It is a matter of public record that in early 2020, the COVID 19 global pandemic reached Australia. In the period March to April 2020, the Respondent introduced progressively, additional safety measures to protect clients and employees as the public health situation deteriorated because of COVID 19.
Subsequently on 13 July 2020, the Respondent sent an email to its employees (‘July Email’). In the July Email, the Respondent informed employees who worked for the Respondent and another aged care provider that, among other things, they were required to decide which aged care organisation they wished to work for.
In general terms, clause 63 of the Agreement requires the Respondent to, among other things, consult with employees about a change that may have a significant effect on their employment. Such clauses are commonly referred to as ‘consultation clauses’ or ‘consultation terms’. The Applicant formed the view that by sending the July Email, the Respondent had contravened clause 63 of the Agreement. Consequently, it commenced the present proceedings.
On 30 August 2021, the matter came on for trial before me. I heard evidence and submissions from the parties concerning, among other things, whether the Respondent’s actions in sending the July Email constituted a contravention of clause 63 of the Agreement. At the conclusion of the hearing I reserved judgment.
On reviewing the matter and the contents of the Court Book on return to Chambers, I read the decision of the Commission approving the Agreement. Paragraph [4] of the decision of the Commission provided as follows:
‘Pursuant to s.205(2) of the Act, the model consultation term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement’.
I observe that the reference to ‘model consultation term’ in the decision above is a reference to a consultation term contemplated by section 205 of the Act.
During the trial, neither party had raised with me paragraph [4] of the decision of the Commission. Neither party had raised with me that the model consultation term might apply to the present proceedings. Significantly, neither party had addressed me on what effect, if any, the operation of the model consultation provision had on clause 63 of the Agreement.
In light of the above matters, I wrote to the parties raising these issues and inviting their comment. Ultimately, the matter was called on for further submissions on 12 October 2021. Each party filed a further outline of submissions prior to the hearing on 12 October 2021. Further, an affidavit of the Respondent’s solicitor was accepted into evidence at the hearing on 12 October 2021.
ISSUES BEFORE THE COURT
In the Amended Statement of Claim, the Applicant alleges, inter-alia, that clause 63 of the Agreement applies to the parties and that the Respondent contravened the terms of clause 63 of the Agreement. No alternative cause of action is pleaded. The Applicant’s claim therefore rests on clause 63 being found to apply to the parties.
The Respondent contends that clause 63 does not apply to the parties. It contends that clause 63 has been displaced by the terms of the model consultation term pursuant to section 205 of the Act.
Accordingly, the first issue the Court has to resolve is whether clause 63 of the Agreement continues to operate and apply to the parties in the circumstances of the case. Only if this issue is resolved favourably for the Applicant is the Court required to consider whether the Respondent has contravened clause 63 of the Agreement. If the Court is of the view that clause 63 of the Agreement has been displaced by the model consultation term, then the application before the Court must fail given the way the matter has been pleaded by the Applicant.
THE PROVISIONS OF THE ACT, THE REGULATIONS AND THE AGREEMENT
Enterprise agreements are made under Part 2-4 of the Act. Division 5 of Part 2-4 deals with the mandatory terms of enterprise agreements. Section 205 of the Act is found within Division 5. It provides as follows:
205 Enterprise agreements to include a consultation term etc.
Consultation term must be included in an enterprise agreement
(1)An enterprise agreement must include a term (a consultation term) that:
(a) requires the employer or employers to which the agreement applies to consult the employees to whom the agreement applies about:
(i)a major workplace change that is likely to have a significant effect on the employees; or
(ii)a change to their regular roster or ordinary hours of work; and
(b)allows for the representation of those employees for the purposes of that consultation.
(1A) For a change to the employees’ regular roster or ordinary hours of work, the term must require the employer:
(a) to provide information to the employees about the change; and
(b)to invite the employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities); and
(c) to consider any views given by the employees about the impact of the change.
Model consultation term
(2)If an enterprise agreement does not include a consultation term, or if the consultation term is an objectionable emergency management term, the model consultation term is taken to be a term of the agreement.
(3)The regulations must prescribe the model consultation term for enterprise agreements.
The following observations may be made, relevantly, about section 205 of the Act. First, subsection (1) describes the content of a term to be included in an enterprise agreement. By doing so, it defines what is meant by the term ‘consultation term’ for the purposes of subsection (2). Second, and relevantly, subsection (2) makes clear that if an enterprise agreement that does not include a ‘consultation term’, the model term is taken to be a term of the enterprise agreement.
The model consultation term (‘model term’) is contained within the Fair Work Regulations 2009. It relevantly provides as follows:
Model consultation term
(1) This term applies if the employer:
(a)has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees; or
(b) proposes to introduce a change to the regular roster or ordinary hours of work of employees.
Major change
(2) For a major change referred to in paragraph (1)(a):
(a)the employer must notify the relevant employees of the decision to introduce the major change; and
(b) subclauses (3) to (9) apply.
(3)The relevant employees may appoint a representative for the purposes of the procedures in this term.
(4) If:
(a)a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and
(b)the employee or employees advise the employer of the identity of the representative;
the employer must recognise the representative.
(5) As soon as practicable after making its decision, the employer must:
(a) discuss with the relevant employees:
(i) the introduction of the change; and
(ii) the effect the change is likely to have on the employees; and
(iii)measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and
(b)for the purposes of the discussion—provide, in writing, to the relevant employees:
(i)all relevant information about the change including the nature of the change proposed; and
(ii)information about the expected effects of the change on the employees; and
(iii)any other matters likely to affect the employees.
(6)However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.
(7)The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.
(8)If a term in this agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in paragraph (2)(a) and subclauses (3) and (5) are taken not to apply.
(9)In this term, a major change is likely to have a significant effect on employees if it results in:
(a) the termination of the employment of employees; or
(b)major change to the composition, operation or size of the employer’s workforce or to the skills required of employees; or
(c)the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or
(d)the alteration of hours of work; or
(e)the need to retrain employees; or
(f)the need to relocate employees to another workplace; or
(g)the restructuring of jobs.
Change to regular roster or ordinary hours of work
(10) For a change referred to in paragraph (1)(b):
(a)the employer must notify the relevant employees of the proposed change; and
(b)subclauses (11) to (15) apply.
(11)The relevant employees may appoint a representative for the purposes of the procedures in this term.
(12)If:
(a)a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and
(b)the employee or employees advise the employer of the identity of the representative;
the employer must recognise the representative.
(13)As soon as practicable after proposing to introduce the change, the employer must:
(a)discuss with the relevant employees the introduction of the change; and
(b) for the purposes of the discussion—provide to the relevant employees:
(i)all relevant information about the change, including the nature of the change; and
(ii)information about what the employer reasonably believes will be the effects of the change on the employees; and
(iii)information about any other matters that the employer reasonably believes are likely to affect the employees; and
(c)invite the relevant employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities).
(14)However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.
(15)The employer must give prompt and genuine consideration to matters raised about the change by the relevant employees.
(16) In this term:
relevant employees means the employees who may be affected by a change referred to in subclause (1).
There is then clause 63 of the Agreement. That clause provides as follows:
CONSULTATION
Where the Employer proposes a change that may result in the termination of the employment of an Employee or any other significant effect on an Employee, the Employer will notify the Employee/s concerned in writing regarding the details of proposed change, the reasons for the change and the possible effect on employment. The Employer will meet with the Employee/s to discuss the proposed change and any proposals that may mitigate the effects of the proposed change. The Employer will invite the employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities). The Employee/s may bring a representative including a union representative to any meeting. The Employee/s will be advised of this in writing by the Employer prior to the meeting. For the purposes of this clause, a 'significant effect' includes but is not limited to:
•A change to their regular roster or ordinary hours of work (while this is a requirement of the Fair Work Act);
•A reduction in hours and/or remuneration;
•Changes to an Employee's classification, position description or duties;
•Relocation I redeployment to another site; and
•Removal of an existing amenity.
THE INTERACTION BETWEEN THE ACT, THE AGREEMENT AND THE MODEL TERM
In Teekay Shipping (Australia) Pty Ltd v Auld [2020] FCAFC 206 (‘Teekay’), a Full Court of the Federal Court of Australia (Rares, Logan and Wigney JJ) considered, inter alia, the effect of section 205 of the Act on an enterprise agreement that purportedly contained a consultation term that did not meet the requirements of section 205 of the Act. The Full Court examined whether a Full Bench of the Fair Work Commission had made a jurisdictional error in interpreting the enterprise agreement, the relevant award and section 205 of the Act. The underlying dispute had arisen as a result of a decision by Teekay to dismiss certain employees, and the bringing of unfair dismissal applications by employees which alleged, inter alia, that Teekay had failed to comply with its obligations to consult under clause 9 of the Teekay Shipping (Australia) Pty Ltd Seagoing Ratings Dry Cargo Enterprise Agreement 2015 (‘Teekay Agreement’).
Clause 9 of the Teekay Agreement was concerned with ‘Notification and Consultation about Change’. Clause 9.1 of the Teekay Agreement relevantly provided as follows:
9.1 Company Duty to Notify
Where the Company is likely to introduce changes in production, program, organisation, structure or technology that are likely to have significant effects on Employees, the Company undertakes to notify the Employees who may be affected by the proposed changes and the National Secretary and relevant Branch Secretary of the Union.
Without limiting the generality thereof, significant effects includes termination of employment, changes in the composition, operation or size of the workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alteration of hours of work, the need for retraining or relocation or transfer of Employees to other work or locations, the restructuring of jobs
Clause 9.2 of the Teekay Agreement relevantly required Teekay to discuss changes. Clause 9.3 of the Teekay Agreement dealt with how disputes about proposed changes were to be resolved, and provided a mechanism for such disputes to be referred to the Commission. Clause 9.4 of the Teekay Agreement dealt with implementation of agreed changes. (I observe that an issue that arose in Teekay, but that does not arise in the present proceedings, was the ongoing effect, if any, of the consultation provision in the underpinning award).
The Full Court found that clause 9 of the Teekay Agreement did not comply with the requirements of section 205 of the Act because, inter alia, it did not permit the employees to be represented by a representative of their choice. Furthermore, clause 9 of the Teekay Agreement did not comply with section 205 of the Act because it did not deal with roster changes: paragraphs [62] and [63] of the judgment of Rares and Logan JJ. Accordingly, Rares and Logan JJ held that it was correct for a Deputy President of the Commission to note that the model term was a term of the enterprise agreement by force of section 205(2) of the Act when the Deputy President approved the Teekay Agreement.
In light of those findings, Rares and Logan JJ then turned their attention to how clause 9 of the Teekay Agreement and the model term worked together. In their joint judgment, Rares and Logan JJ stated as follows:
67The Act requires, by force of s 205, an enterprise agreement to contain a consultation term and, in default of compliance with that requirement, deems a prescribed term to be a term of the enterprise agreement. That requirement and prescription evince the intention of the Parliament that the MCT [model consultation term] should not only be part of an enterprise agreement that does not otherwise include a consultation term, but should also operate within the agreement in such a way that any clauses inconsistent with it must yield to it and be taken to be ineffective. There would be no point in the Parliament providing that a consultation term must be part of an enterprise agreement and using the mechanism in s 205(2) to deem a prescribed term to fill that role, if another clause of the same agreement could operate to sideline or palliate against that prescribed term operating according to its tenor
…
69Where an enterprise agreement does not contain a consultation term as defined in s 205(1) and (1A), the MCT must be the only operative term of the agreement dealing with the consultation process. After all, s 205(2) does not qualify the operation of the MCT as being to fill any deficiencies or gaps in whatever the terms of the enterprise agreement might be that went some way towards, but fell short of dealing with what the definition in s 205(1) and (1A) required a consultation term to provide. However, the Parliament intended that, if the terms of an enterprise agreement did not contain a consultation term, s 205(2) would provide certainty in the form of the prescribed MCT about the consultation process that the employer, the employees and their representatives, if any, must all follow in all circumstances to which s 205(1) and (1A) apply, including for the purposes of s 389.
70EA cl 9.1 applies to all of the categories of change to which MCT cl 1 applies, being changes that “are likely to have a significant effect on employees”. But because EA cl 9 is not a consultation term within the meaning of s 205(1) and (1A), it cannot mandate that Teekay follow a process of consultation inconsistent with the MCT.
71Importantly, s 205(1) and (1A) do not use the expressions “made a definite decision to introduce a major change” (MCT cl 1(a)) or “is likely to introduce changes” (EA cl 9.1). The language of s 205(1) requires the employer to “consult the employees” about a major workplace change, but does not specify the stage of the employer’s decision making at which consultation must occur. Thus an enterprise agreement could include a provision couched in the language of EA cl 9.1, taken by itself, so long as it also included terms that comply with the balance of s 205(1) and (1A). The problem here is that EA cl 9.1 commences a process that does not comply with s 205 and, if it is followed, would not allow the MCT to have any effect before EA cll 9.3 and 9.4 operate, at a stage and on the basis that any consultation under EA cl 9 had been exhausted. The Union’s right under EA cl 9.3 to refer its disagreement immediately after Teekay’s decision if operative, would cut across any possible process of consultation under MCT cl 5 that can only commence after Teekay had made such a definite decision, and thus render the statutorily deemed consultation term nugatory.
72The MCT was a term that the Act required to be part of the EA. Therefore the MCT is not susceptible to a process of construction with the rest of the EA such as that which EA cl 5.3 required when it adjusted the internal hierarchy of the terms of the EA and the Award that EA cl 5.3(a) incorporated into the EA. Rather, once the MCT is deemed by force of s 205(2) to be part of an enterprise agreement, any inconsistent or competing provisions of that agreement cannot be permitted to interfere in the operation of the MCT. Such inconsistent or competing provisions are inoperative because they do not provide for a consultation term that s 205(2) imports in their stead.
73 The Full Bench erred in reasoning that, because there was no express provision in the Act that rendered of no effect any existing term of an enterprise agreement dealing with consultation, such a term would operate side by side with the MCT (the first reasons [68]–[74]). With respect, that reasoning failed to recognise that while the Parliament allowed parties to the process of formation of an enterprise agreement to agree on its terms, s 205 required them to include a term that complied with its requirements. In default of a term complying with s 205, the Act makes the MCT a term of the enterprise agreement when the Commission approves it so as to ensure that a consultation term, as prescribed by law, will apply regardless of the other terms of that agreement that may have dealt inadequately or inconsistently (as here) with the same subject matter.
…
75In our opinion, the Full Bench’s reasoning overlooked the significance of the Parliament mandating that, if an enterprise agreement did not contain a term (or more than one when read together) that complied with the definition of a consultation term in s 205(1) and (1A), the MCT became a part of the agreement so as to achieve what the Parliament intended. If the full effect of the MCT could be reduced by a process of contractual or industrial instrument construction so as to render it harmonious with the non-compliant or inconsistent term in an enterprise agreement, the certainty that the Parliament intended to achieve through its use of the MCT in respect of the rights and obligations to consult provided in s 205 would be undermined.
…
77It follows that the MCT’s provisions must take precedence over the provisions of not only EA cll 9.3 and 9.4, but also the entirety of EA cl 9, that do not give effect to the requirements of s 205 and the object of the Act in s 3. The Parliament did not intend that, at a stage anterior to the consultation process that the Act required, the Commission could become involved, under a term of an enterprise agreement that itself did not comply with s 205, in conciliation or arbitration about a change on which s 205 operated. Once it is found that an enterprise agreement has not complied with s 205(1) and (1A), there is no room to construe the MCT together with the other terms of the enterprise agreement so as to alter or detract from the process that the MCT mandates.
78The terms of the MCT as a statutorily imposed term cannot be read down in the process of construing it as part of an enterprise agreement. The MCT became a term of that EA because it did not contain a consultation term. To give effect to EA cl 9.3, and the antecedent process in EA cl 9.1 and 9.2, would negate both the express terms of the MCT and the achievement of the object of the Act (in s 3) to provide a balanced framework for “cooperative and productive workplace relations”, the provision of “accessible and effective procedures to resolve grievances and disputes” (such as the MCT provides if a consultation term were not otherwise already part of an enterprise agreement) and the achievement of productivity and fairness through “clear rules governing industrial action”. Moreover, the parties would not know with any clarity what consultation had to occur for the purposes of s 389, if the MCT alone did not provide that certainty by the use of the process that it prescribed.
79 The evident legislative intent in s 205(2) is that, if enterprise agreement fails to include a consultation term in accordance with the definition in s 205(1) and (1A), the persons bound by that agreement must consult in accordance with the MCT and not follow the insufficient process, if any, that the agreement contained apart from the MCT. The Parliament understood that an enterprise agreement might contain a term or terms that provided for some forms of consultation about a major workplace change or a roster change. But it also recognised, in s 205(2), that where an enterprise agreement fell short in complying with its requirements for what a consultation term must include, then a provision for consultation had to be imposed into it pursuant to s 205(2) in the form of the MCT.
80 Hence, by force of law, if an enterprise agreement fails to contain a consultation term that complies in all respects with s 205(1) and (1A), s 205(2) deems the MCT to be a part of the agreement so that consultation must occur only in accordance with the statutorily prescribed mechanism. The purpose of prescribing the MCT was to provide “accessible and effective procedures to resolve grievances and disputes”, “effective compliance mechanisms”, and “clear rules governing industrial action” (see s 3 of the Act). Compliance with that mechanism cannot yield to, or be affected by, other terms of the enterprise agreement that fall short, and hence caused the MCT to become the consultation term.
Wigney J delivered separate reasons, agreeing with the orders and reasons of Rares and Logan JJ, but offering further reasons by way of elaboration. Wigney J agreed that clause 9 of the Teekay Agreement did not satisfy all three requirements for a consultation term in subsections 205(1) and (1A) of the Act: at [113]. Wigney J then considered whether the model term applied in substitution of, or in conjunction with, clause 9 of the Teekay Agreement. At paragraphs [130] – [137], Wigney J examined the text and purpose of section 205 of the Act, and stated that:
130 There are textual indications in s 205 of the Act which suggest that, where the model consultation term is taken to be a term of an enterprise agreement by operation of s 205(2) of the Act, it is to be the term in the agreement dealing with that subject-matter. Those textual indications are that the section uses language which indicates that there is to be only one term which deals with consultation. First, s 205(1) provides that an enterprise agreement must contain “a” term that satisfies the requirements set out in paragraphs (a) and (b). Second, s 205(1A) provides that “the” term must require the employer to do the things referred to in paragraphs (a), (b) and (c). Third, s 205(2) also provides for what is to occur if the enterprise agreement does not contain “a” consultation term. Of course, the requirement that there be “a” term that meets the requirements of ss 205(1) and (1A) of the Act does not mean that “the” term cannot be constituted or comprised of a number of separate provisions in an enterprise agreement that, read together and as a whole, satisfy those requirements.
131 The other textual feature of s 205 of the Act which is important to note in this context is that s 205(1) effectively defines the expression “consultation term” as meaning a term which satisfies the requirements of s 205(1) and, in the case of changes to the employees’ regular roster or ordinary hours of work, the requirements in s 205(1A). It follows that a term which does not meet those requirements, such as cl 9 of the Enterprise Agreement, is not a “consultation term” for the purposes of the Act.
132 These textual features suggest that where the model consultation term is taken to be a term of an enterprise agreement, it is taken to be the consultation term and to supplant or displace any existing term that purports to deal with that subject-matter. The existing term, which must be deficient or defective if s 205(2) operates to make the model consultation term a term of the enterprise agreement, is not a “consultation term” as defined in s 205.
133 Some contextual considerations also support the above construction of s 205 of the Act.
134 The issue concerning the construction of s 205 that arises in this proceeding obviously does not arise where the relevant enterprise agreement does not contain any term that deals with consultation with employees. It only arises in cases, like this case, where the enterprise agreement contains a term that provides for consultation, but not in a way that meets the minimum requirements in ss 205(1) and (1A) of the Act; in other words, a deficient or defective consultation term. The incorporation of the model consultation term is plainly intended to overcome the deficiency or defect in the existing term of the enterprise agreement that purports to provide for consultation. It is difficult to conceive why the legislature would intend, in those circumstances, for the deficient or defective term to continue to operate in parallel with the model consultation term.
135 It is useful, in this context, to return to the wording of s 205(2), which provides that “[i]f an enterprise agreement does not include a consultation term … the model consultation term is taken to be a term of the agreement”. As adverted to, a “consultation term” is a term that satisfies the requirements detailed in ss 205(1) and (1A). Read together, if an enterprise agreement does not contain a term (or, as mentioned, even multiple terms) that constitutes a consultation term for the purposes of s 205, the model consultation term is, in effect, automatically included in the agreement. That model consultation term must therefore do the work, or satisfy the requirements of, ss 205(1) and (1A) – otherwise, there would be no reason for inserting that model term. As such, it would be an odd – or, perhaps, illogical – result if that inserted model consultation term was to now ensure compliance with ss 205(1) and (1A) alongside some otherwise deficient or defective term or terms.
136 A construction of s 205 of the Act which effectively allows for the continued operation of a deficient or defective term which provides for consultation, despite the incorporation of the model consultation term, would give rise to considerable uncertainty. It would also potentially permit a situation to arise whereby there is a conflict between the operation of the existing term and the incorporated model consultation term. As will be discussed shortly, this is a case where such an inconsistency would arise.
137 The important point to note, in this context, is that there is no provision in the Act, including s 205, which expressly provides for what would occur in the event of such a conflict between the existing, but deficient or defective, consultation term, and the incorporated model consultation term. There is, for example, no provision in the Act that provides that in such a case the model consultation term prevails to the extent of any inconsistency. If it was intended that any existing, though deficient or defective, term providing for consultation would continue to operate, despite the incorporation of the model consultation term, it might reasonably be expected that the Act would include such a provision, either in s 205 or elsewhere.
Further, at paragraphs [141] – [145], Wigney J stated:
141The Full Bench did not grapple with how the model consultation term could possibly operate in conjunction with cl 9 of the Enterprise Agreement. Nor did it grapple with the resolution of the conflict between those provisions. The better view is that s 205 of the Act should be construed in a way that there is no scope for any confusion or conflict between the existing, but deficient or defective, consultation term, and the model consultation term.
142It should finally be noted that the contextual considerations which were relied on heavily by the Full Bench in construing s 205 of the Act are, upon close analysis, by no means compelling. It is true that neither s 205 nor any other provision in the Act expressly provides that any existing term of an enterprise agreement which deals with consultation has no effect once the model consultation term is taken to be part of the agreement. Nor, however, is there any provision in the Act which expressly provides that a deficient or defective term which deals with consultation continues to operate once the model consultation term is taken to be a term of the enterprise agreement.
143 It is equally true that the Act contains provisions, including ss 56 and 253, which provide that certain unlawful or impermissible terms in an enterprise agreement have no effect. It is not at all surprising that the Act specifically provides that certain sections that it defines as being unlawful or impermissible have no effect. Section 205 of the Act deals with an entirely different issue. It is not a section dealing with unlawful or impermissible terms. Quite to the contrary. It is a provision that an agreement must contain a term that deals with a particular issue (consultation), specifies the minimum requirements for that term and provides that if the agreement does not include a term that meets those requirements, the model consultation term is taken to be a term of the agreement. The fact that there is no similar provision to s 56 or s 253 in those circumstances is of little significance.
144 It may be accepted that the issue raised by this case in respect of the construction of s 205 of the Act is not entirely easy to resolve. The text of the provision does not squarely address the issue and there are contextual consideration that perhaps point both ways. The preferable construction, however, is the construction which avoids the uncertainty which would arise from the operation of parallel and potentially conflicting terms dealing with consultation.
145 It follows that the Full Bench erred in law in concluding (as quoted above at [0]-[0]) that s 205 of the Act operated in such a way as to permit the model consultation term, taken to be a term of the Enterprise Agreement, to operate in conjunction with cl 9 of the Enterprise Agreement and cl 8 of the Award, insofar as cl 8 operated. The Full Bench should have concluded that, once the model consultation term is taken to be part of the Enterprise Agreement, it effectively supplanted or displaced the otherwise deficient or defective clause or clauses that purported to provide for consultation. That error by the Full Bench was jurisdictional in nature. It involved an error in construing and applying s 205 in a way which materially affected the Full Bench’s exercise of its jurisdiction.
Having set out the relevant provisions and considered the decision in Teekay, it is necessary to apply those principles to the matter before me.
CONSIDERATION
The Applicant accepted that clause 63 of the Agreement did not satisfy all of the requirements of section 205(1) of the Act. In particular, the Applicant accepted that in respect of changes to regular rosters or ordinary work hours of employees (as contemplated by section 205(1)(a)(ii) and clause 1(b) of the model term), clause 63 of the Agreement was inoperative and the model term was imported into the Agreement in its place. The Applicant, however, contended, that in respect of changes that are within the scope of clause 63 of the Agreement but are outside the scope of the model term, the model term is not engaged and clause 63 is not inoperative but continues to operate and bind the parties to the Agreement.
The submission advanced by the Applicant was based on the following proposition. The type of change contemplated by section 205(1)(a)(i) is a ‘major workplace change that is likely to have a significant effect on the employees’. This is a type of change that is contemplated by clause 63 of the Agreement. Clause 63 of the Agreement, however, goes further and covers a broader category of change that may have a ‘significant effect on an employee’. In this way, clause 63 of the Agreement is not limited in the manner in which the model term is limited.
It was submitted by the Applicant that the change introduced by the July Email was within the scope of clause 63 of the Agreement, but outside the scope of the model term. As such, it was submitted that the model term was not engaged, and clause 63 of the Agreement continued to operate and apply to the parties.
In making its submissions, the Applicant emphasised two matters in respect of the decision in Teekay. First, it was submitted that the decision in Teekay needs to be read in context of the factual circumstances that were before the Full Court. Second, it was submitted that in Teekay, there was a complete overlap in scope between the model term and the scope of clause 9 of the Teekay Agreement.
It is convenient to start with the last point above first. It is not correct to say that in Teekay, the Full Court was considering a situation where there was a complete overlap between clause 9 of the Teekay Agreement and the model term. Clause 9.1 of the Teekay Agreement required, inter alia, Teekay to notify employees where the ‘Company is likely to introduce changes in production, program, organisation, structure or technology that are likely to have significant effects on employees’. It is not limited to ‘major change’. The model term however, is concerned with a situation in which an employer ‘has made a definite decision to introduce a major change to production, program, organisation, structure or technology… That is likely to have a significant effect on the employees’ (emphasis added). Further, there was a difference between the model term and the Teekay Agreement as to when the obligations are enlivened. The obligations contained in the model term are enlivened once ‘a definite decision’ has been made. The obligation in clause 9.1 of the Teekay Agreement would seem to be enlivened at an earlier point in time i.e. when Teekay ‘is likely to introduce changes’.
In respect of the two particular matters referred to in the preceding paragraph, I pause to observe that the matter before me bears some resemblance to what was before the Full Court. Clause 63 of the Agreement (like clause 9 of the Teekay Agreement) is not limited to ‘major changes’, in the way the model term is. Further, clause 63 of the Agreement is enlivened at the point in time in which the employer ‘proposes’ a change (much like the Teekay Agreement), and is not enlivened once a definite decision has been made as contemplated by the model term.
I accept that the decision of the Full Court in Teekay arose from a set of factual circumstances in which Teekay terminated the employment of some employees on redundancy grounds, that those employees brought unfair dismissal applications that came before the Commission and as part of those applications, a question arose as to whether consultation with the employees had properly occurred. That background does not, however, persuade me to disregard the comments of the Full Court, or to give them less weight, or provide a sufficient basis to distinguish the reasoning in Teekay concerning the operation and effect of section 205 of the Act. A critical issue in dispute in Teekay was the effect of the model term on a consultation term within an existing enterprise agreement, in circumstances where the Commission had noted at the time the enterprise agreement was approved that the model term was to apply. That is the same issue that is before the Court now. In answering the question before it, the Full Court paid careful attention to not only the content of the consultation clauses before it, but also to the words of the Act and the legislative purpose behind section 205. All of those points are directly relevant to the matters presently before me. Indeed, the observations of the effect of section 205 of the Act are binding on the Court.
In advancing its contentions before me that clause 63 of the Agreement continues to operate alongside the model term in relation to matters not covered by the model term, the Applicant emphasised certain aspects of the text of the decision of Rares and Logan JJ. The Applicant emphasised the words at paragraph [72] of the reasons of Rares and Logan JJ where their Honours stated, inter alia, ‘any inconsistent or competing provisions of that agreement [the relevant Teekay Agreement] cannot be permitted to interfere in the operation of the MCT [model consultation term]’. The Applicant also emphasised the statements in paragraph [77] that the ‘MCT’s provisions must take precedence over…[The provisions of the Teekay Agreement]… That do not give effect to the requirements of s 205 and the object of the Act in s3’. In my view, in emphasising these and other similar passages, the Applicant adopted an unduly narrow view of the reasons of Rares and Logan JJ. When the reasons are read overall and in context, the position of Rares and Logan JJ is clear: the evident legislative intent in section 205 is that if an enterprise agreement fails to include a consultation term in accordance with the definition in section 205(1) and (1A), the persons bound by the agreement must consult in accordance with the model term and not follow the insufficient process if any contained in an enterprise agreement: at [77]-[80]. The Applicant’s submissions also do not pay any proper attention to the reasons given by Wigney J that I have recorded above.
In my view, the reasoning set out by all members of the Full Court is clear and persuasive. I adopt the Full Court’s reasons when it comes to my consideration of this matter, in particular, when it comes to considering the operation, effect and meaning of section 205 of the Act.
Finally, there is the practical industrial reality that attaches to the Applicant’s position. The contention advanced by the Applicant would give rise to considerable industrial uncertainty for the parties. It would not be clear to the parties which consultation term would apply in which particular set of circumstances. I regard this as an important consideration. The Full Court was alive to this issue when it came to giving its reasons in Teekay, having regard to, among other things, the objects and purpose of the Act: see Rares and Logan JJ at [78]; Wigney J at [144].
In view of all of the above matters, the submissions of the Applicant must be rejected. The reasoning of the Full Court in Teekay is clear and persuasive. I adopt the Full Courts reasons noted earlier when it comes to my consideration of the present matter. Of course, I am also bound by the reasons of the Full Court. In the circumstances of this case, clause 63 of the Agreement has been displaced by the model term. There is not any room for clause 63 of the Agreement to operate, whether in the manner suggested by the Applicant or otherwise. To the extent that any consultation was to have occurred, it needed to occur in accordance with the model term, which was the term that applied to the parties.
In the present matter, the Applicant has pleaded a case that relies upon clause 63 of the Agreement being in force. Clause 63 of the Agreement, for the reasons articulated above, is not in force and does not apply to the parties. As no other claim is pleaded by the Applicant, the application by the Applicant must be dismissed.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Blake. Associate:
Dated: 22 October 2021
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