Keller Foundations Pty Ltd

[2016] FWC 9199

[2016] FWC 9199

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees

Keller Foundations Pty Ltd
(AG2016/7628)

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 22 DECEMBER 2016

Application for order relating to instruments covering new employer and transferring employees.

[1] This is an application pursuant to s.318 of the Fair Work Act 2009 (Act) by Keller Foundations Pty Ltd (Keller) seeking an order from the Fair Work Commission (Commission) with respect to three transferrable instruments, being:

• the Vibro-Pile (Aust) Pty Ltd and CFMEU Union Collective Agreement 2015 – 2019;



• the Piling Contractors Pty Ltd - Northern Region Enterprise Agreement 2011 – 2015; and



• the Frankipile Queensland Field Employees Agreement 2013-2016



• Transferable Instruments).

[2] Keller seek an order pursuant to s.318(1)(a) of the Act that the Transferable Instruments not apply to Keller or to 43 employees who have been transferred from Vibro-Pile (Aust) Pty Ltd, Piling Contractors Pty Ltd and Frankipile Australia Pty Ltd to Keller. The 43 employees are hereinafter referred to as the Transferring Employees.

[3] Furthermore, Keller seek an order pursuant to s.318(1)(b) of the Act that the Keller Foundations Pty Ltd and CFMEU Union Collective Agreement 2015-2019 (Keller Agreement) covers, or will cover Transferring Employees in Queensland and the Northern Territory.

[4] To-date, the three Transferable Instruments have continued to apply to the Transferring Employees. It is Keller’s desire for the Transferable Instruments to no longer apply, to ensure that all employees are covered by the Keller Agreement.

[5] The Construction, Forestry, Mining and Energy Union (CFMEU) are a party to the matter by virtue of being covered by two of the three Transferable Instruments and the Keller Agreement. The CFMEU advised in correspondence dated 2 December 2016, that it does not object to the application and stated that they believe that the transferring employees will not be disadvantaged in relation to their terms and conditions of employment should the orders sought be granted.

Disclosure of personal relationship

[6] On allocation of the application to me, I instructed my Associate to write to the CFMEU to disclose a family relationship with the HR Manager of Keller. The email, sent on 13 December 2016 was as follows:

‘…The Commissioner wishes to disclose that she is related by marriage to the National HR Manager of Keller, Ms Rutherford. In light of that disclosure, the Commissioner requests that the CFMEU advise whether they oppose the Commissioner determining the application. I note that on 2 December 2016 the CFMEU advised that it will not object to the orders sought by the Applicant pursuant to s.318 of the Fair Work Act 2009.’

[7] The CFMEU provided a response on 14 December 2016 as follows:

‘…We thank the Commissioner for bringing the matter to our attention and for disclosing the relationship.

Please be advised that whilst the CFMEU sees no risk of any real bias in relation to the matter, in order to avoid any possibility of an apprehension of bias (irrespective of our view), we respectfully submit that it may be in the Commissioner's - and the Commission's - best interests to recuse herself of the matter.

I stress that in no way do we imply any potential for real bias on the part of the Commissioner.’

[8] The CFMEU further clarified that it wishes to press an objection to me dealing with the application on the basis of apprehension of bias and that if I chose to determine the application, it would seek reasons for my decision. The CFMEU further stated:

‘Respectfully, the CFMEU does not consider it necessary to prepare submissions on the matter as there are no facts that are in dispute. Further, the principles of apprehension of bias are well known, and it is a matter for the Commissioner to determine if she wishes to proceed on that basis or otherwise.’

Approach to determining apprehended bias

[9] The principles for determining apprehended bias were succinctly set out by Asbury DP in Woolston v Uniting Church in Australia Property Trust (Q) T/A Blue Care Bli Bli Aged Care Facility (Woolston) 1. In Woolston the Deputy President dealt with applications for both apprehension and actual bias, and said as follows:2

‘As the High Court of Australia put it in Ebner v the Offical Trustee 3 “…bias whether actual or apparent, connotes the absence of impartiality.”4 A claim of actual bias requires proof that the decision maker approached the issues with a closed mind or had prejudged the matter and for reasons of either partiality in favour of a party or some form of prejudice affecting the decision, could not be swayed by the evidence in the case at hand.5 The test for apprehended bias is whether “a fair minded lay observer might reasonably apprehend that the [decision maker] may not bring an impartial mind to the question the [decision maker] is required to decide”.6

Actual bias is assessed by reference to conclusions that might reasonably be drawn from evidence about the actual views and behaviour of the decision maker and requires clear and direct evidence that the decision maker was in fact biased. It has been pointed out that in the absence of an admission of guilt or a clear and public statement of bias from the decision maker, actual bias will be difficult to establish. 7 Apprehended bias is assessed objectively by reference to conclusions that may reasonably be drawn about what an observer might conclude about the possible views and behaviour of the decision maker. In relation to apprehended bias, a Court may only need to be satisfied that a fair minded and informed observer might conclude that there was a real possibility that the decision maker was not impartial.8

The Decision of Justice Moynihan in Keating v Morris; Leck v Morris 9is instructive in terms of the authorities considered and the conclusions reached. In that case, his Honour was considering an application that a Commission of Inquiry was tainted by the apprehension of bias and made findings about the conduct of the Commissioner conducting the Inquiry. Those findings included that the Commissioner questioned witnesses rather than allowing Counsel Assisting to do so in accordance with the practice direction; the Commissioner’s questions were aggressive, sarcastic and belittling; and that the Commissioner’s harsh treatment of some witnesses was in stark contrast with his treatment of other witnesses.10 His Honour observed in relation to the questions asked by the Commissioner of certain witnesses that they were not: “fairly described as an exploratory or tentative statement of issues with a view to testing their correctness or to give the witnesses an opportunity to respond to a provisional view.”11 It was also found that the Commissioner interfered in the cross-examination in a hostile way and made accusations about the motives of those instructing counsel.12

On the basis of those matters, Justice Moynihan concluded in that case that:

“The circumstances established by the accumulated weight of evidence would rise, in the mind of a fair minded and informed member of the community, to a reasonable apprehension of lack of impartiality on the Commissioner’s part in dealing with the issues relating to each of the applicants.” 13

His Honour also noted that while many decisions involve allegations of bias against courts, the rules also apply to investigative bodies, but that the application of the rules to such bodies differs from their application to litigation. In this regard, Justice Moynihan noted that a judge makes a decision on the basis of the evidence which the parties to the litigation have thought to be in their best interests to adduce and has no right to travel outside that evidence in an independent search for the truth. 14 His Honour observed that the test for bias “…takes into account the personality and disposition of the investigator, some may be more robust than others.”15 His Honour also observed that the difference between an inquiry and a court does not “dilute or diminish the expectation that a fair and unprejudiced mind will be applied to the resolution of any question.”16

The Commission is not a court and neither is it an investigative body. However, the Commission is not bound to follow the rules of evidence and can inform itself in any way that it sees fit. The Commission also has broad powers to control its proceedings. The Commission is bound to deal with matters before it in accordance with equity, good conscience and the substantial merits of the case. The Objects of Part 3-2 of the Act state that the procedures and remedies relating to unfair dismissal are intended to ensure that a “fair go all round” is accorded to both the employer and the employee concerned. The Commission is also bound to afford parties natural justice.

The rule against bias has been called one of the twin pillars of natural justice.  17 The other pillar – the hearing rule – requires that: “a decision maker, at least one exercising a public power, must ordinarily afford a person whose interests may be adversely affected by a decision an opportunity to present material information and submissions relevant to such a decision before it is made”.18 However, as Justice Kirby observed in Allesch v Maunz:19

“…it is worth emphasising that the principle just described does not require that the decision maker actually hear (or receive the submissions of) the party potentially liable to be adversely affected. Sometimes through stubbornness, confusion, misunderstanding, fear or other emotions, a party may not take advantage of the opportunity to be heard, although such opportunity is provided. Affording the opportunity is all that the law and principle require.” 20

The Commission is increasingly required to deal with unrepresented parties – both employers and employees – who are very often extremely aggrieved and have a passionate belief in the righteousness of their position, notwithstanding the parameters of the legislative framework in which they seek to articulate their cases. The observation made by Justice Kirby set out above is apposite in the present case.’

[10] The Full Bench agreed with the approach taken by the Deputy President and in particular, noted that:  21

‘…In the Australian legal system, any application that a decision-maker, whether a judge of a court or a member of an arbitral or administrative tribunal or a person conducting an inquiry, should recuse himself or herself from hearing and deciding a matter on the ground of actual or apprehended bias is to be made and determined in the first instance by the decision-maker.’

Consideration on recusal application

[11] A fair minded lay observer would note that a member of the Commission is likely to have a large number of professional acquaintances from their earlier working life before appointment to the Commission. This should not immediately disqualify the member from hearing applications made to the Commission simply because of past acquaintances.

[12] Similarly, a relation by marriage would not, in my view, lead a fair minded lay observer to reasonably apprehend that I might not bring an impartial mind to the application. This is especially so when the correspondence sent by the CFMEU to the Commission dated 2 December 2016, not opposing the application made by Keller pre-dated the allocation of the matter to my Chambers.

[13] In a clearly uncontested matter, I do not agree to recuse myself from determining the application upon learning that my husband’s cousin is the HR Manager of Keller. On behalf of Keller, Ms Rutherford filed the applications and supporting material. The Form F40 was signed by Mr Mark Newton, General Manager, and it is his witness statement I have given consideration to in deciding to determine the application.

[14] In my view, the test for apprehended bias has not been made out and I have determined that it cannot be said that a fair minded lay observer might reasonably apprehend that I might not bring an impartial mind to the application.

[15] The CFMEU’s application that I recuse myself from determining the application is refused.

Relevant legislation

[16] Part 2-8 of the Act describes when a transfer of business occurs and provides for the transfer of enterprise agreements, certain modern awards and certain other instruments if there is a transfer of business from one employer to another employer.

[17] Section 311(1) contains the definition of transfer of business:

‘(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:

(a) the employment of an employee of the old employer has terminated;

(b) within 3 months after the termination, the employee becomes employed by the new employer;

(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).’

[18] Sections 317 and 318 of the Act provide:

“317 FWA may make orders in relation to a transfer of business

This Division provides for FWA to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.

318 Orders relating to instruments covering new employer and transferring employees

Orders that FWA may make

(1) FWA may make the following orders:

(a) an order that a transferable instrument that would, or would be likely to, cover the new employer and a transferring employee because of paragraph 313(1)(a) does not, or will not, cover the new employer and the transferring employee;

(b) an order that an enterprise agreement or a named employer award that covers the new employer covers, or will cover, the transferring employee.

Who may apply for an order

(2) FWA may make the order only on application by any of the following:

(a) the new employer or a person who is likely to be the new employer;

(b) a transferring employee, or an employee who is likely to be a transferring employee;

(c) …;

(d) ….

Matters that FWA must take into account

(3) In deciding whether to make the order, FWA must take into account the following:

(a) the views of:

(i) the new employer or a person who is likely to be the new employer; and

(ii) the employees who would be affected by the order;

(b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;

(c) if the order relates to an enterprise agreement—the nominal expiry date of the agreement;

(d) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace;

(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;

(f) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;

(g) the public interest.’

[19] Mr Newton’s statement makes it clear that Keller considers it would be better for the company and for employees if all relevant employees were covered by a single agreement. If the employees continued to be employed under the Transferable Instruments, Mr Newton stated there would be a considerable disruption to the business for the following reasons:

(a) The different terms and conditions means employees will be working alongside each other but being paid different rates and their conditions varying;

(b) Administering the different terms and conditions of employment creates administrative burden, particularly having to administer three separate payroll runs;

(c) The administrative burden places a burden on payroll, human resources and operational staff, which could otherwise be eliminated;

(d) Keller’s clients require one enterprise agreement be nominated to cover all contracted employees;

(e) The Transferable Instruments have differing nominal expiry dates which generates uncertainty;

(f) The nominal expiry dates for the Transferable Instruments are as late as 2019 in some cases, which means it will be an extensive length of time to be administering the different terms and conditions of employment amongst employees.

[20] Mr Newton stated that the Keller Agreement’s terms and conditions are no less favourable than those in the Transferable Instruments, and some areas are significantly higher.

[21] Keller provided a comparison table of the three Transferable Instruments and the Keller Agreement for consideration. The Vibro-Pile (Aust) Pty Ltd and CFMEU Union Collective Agreement 2015 – 2010 provides for similar rates and conditions when compared with the Keller Agreement.

[22] The Piling Contractors Pty Ltd - Northern Region Enterprise Agreement 2011 – 2015 and the Frankipile Queensland Field Employees Agreement 2013-2016 have rates and conditions considerably lower than the Keller Agreement. If the order is made as sought by Keller, the Transferring Employees who were subject to the Piling Contractors and Frankipile agreements will receive substantial increases to their terms and conditions from the date of the Order.

[23] Mr Newton wrote to relevant employees on 22 August 2016, detailing Keller’s intention to make application to the Commission, and specified the reasons why. Transferring Employees were asked to sign to say that they understood and supported Keller’s application to the Commission. It is Keller’s contention that the majority of employees confirmed their support for the application in writing, with the balance of employees confirming their support other than in writing. 22

Consideration – substantive application

[24] I have taken into consideration all of the requirements that I must consider in s.318(3). I will not address below all of the criteria that must be satisfied, however I have taken ss.318 (a)–(g) into consideration.

[25] I have considered the views of Keller and the CFMEU, noting the support by the CFMEU of the application on behalf of its members.

[26] I am satisfied that Transferring Employees will not be disadvantaged if an order is made that the Transferrable Instruments no longer apply to their employment, and they then become covered by the Keller Agreement. In fact, some Transferring Employees will receive substantial increases to rates and conditions on an order being made.

[27] I consider that it would be beneficial for Keller to have consistency across the workforce, with one industrial instrument covering relevant employees, and I am satisfied that if the Transferrable Instruments continued in place, it would have a negative impact on the productivity of Keller’s workplace for the reasons stated in [19].

[28] With respect to the public interest consideration, there is nothing before the Commission which demonstrates that the orders sought would be contrary to the public interest.

Conclusion

[29] For the reasons set out above, an order [PR588958] will issue that the agreements set out in [1] cease to cover Keller or any Transferring Employees, and the Keller Agreement will apply in its place.

COMMISSIONER

 1   [2015] FWC 5853.

 2   Ibid at [12]-[19].

 3 (2000) 205 CLR 337.

 4   Ibid at 348.

 5   Re Medicaments and Related Classes of Goods (No 2) [2000] EWCA Civ 350; [2001] 1 WLR 700 at [37] – [39].

 6   Ebner v Official Trustee in Bankruptcy (2001) 205 CLR 337 at 344.

 7   Groves M, The Rule Against Bias [2009] Monash University Law Research Series UMonashLRS 10, p. 4-5 citing Sun v Minister for Immigration and Ethic Affairs [1997] FCA 1488; (1997) 151 ALR 505 at 551-552.

 8   Ibid at p. 4-5.

 9 [2005] QSC 243.

 10   Ibid at [69] and [107].

 11 Ibid at [92].

 12 Ibid at [88].

 13 Ibid at [159].

 14   Ibid at [34] quoting Mahon v Air New Zealand [1984] 1 AC 808.

 15   Ibid at [44] citing Council of the Municipality of Burwood v Harvey (1995) LGERA 389, 395.

 16   Ibid at [46] citing Carruthers v Connolly [1998] 1 Qd R 339,371.

 17   Groves M, The Rule Against Bias, op cit at 1.

 18   Allesch v Maunz (2000) 203 CLR 172 at 184,per Kirby J.

 19   Ibid

 20   Ibid at 185,citing Vestry of St James and St John, Clerkenwell v Feary (1890) 24 QBD 703 at 709 per Lord Coleridge CJ; Sydney Corporation v Harris (1912) 14 CLR 1 at 15.

 21   Loretta Woolston v The Uniting Church in Australia Property Trust (Q.) t/a Blue Care Bli Bli Aged Care Facility[2016] FWCFB 278 at [10].

 22   Form F40 application at [2.3(5)].

Printed by authority of the Commonwealth Government Printer

<Price code C, AE405634  PR588913 >