Linfox Australia Pty Ltd v Australian Federated Union of Locomotive Employees
[2019] FWCFB 7020
•10 OCTOBER 2019
| [2019] FWCFB 7020 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Linfox Australia Pty Ltd
v
Australian Federated Union of Locomotive Employees; Australian Rail, Tram and Bus Industry Union
(C2019/4377)
VICE PRESIDENT HATCHER | SYDNEY, 10 OCTOBER 2019 |
Application for costs
[1] The Australian Federated Union of Locomotive Employees (AFULE) and the Australian Rail, Tram and Bus Industry Union (RTBU) have each made an application for costs against Linfox Australia Pty Ltd (Linfox) in relation to an appeal instituted by Linfox from a decision of Commissioner Spencer.
[2] The costs applications are made pursuant to s 611(2) of the Fair Work Act 2009 (FW Act), which provides:
(2) However, the FWC may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause;
or
(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.
[3] The unions seek their costs in the appeal under both sections 611(2)(a) and (b). They contend that Linfox brought the appeal without reasonable cause, and submit that it should have been apparent to Linfox, at least by 16 August 2019, that the application had no reasonable prospect of success.
[4] The background to these matters may be summarised as follows. On 24 May 2019, Linfox lodged an application under to s 426 of the FW Act seeking a two month suspension of protected industrial action being taken by employees of Aurizon Operations Limited (Aurizon) who were members of the AFULE and the RTBU, on the basis that their action threatened to cause Linfox significant harm as a third party. Employees of Aurizon were at that time engaged in an overtime ban which had commenced on 15 May 2019 and was to end on 28 May 2019. A 48-hour stoppage of work had also been notified to occur from 28 to 30 May 2019. Linfox contended that this action would result in a significant reduction in the number of train services it could provide to transport its customers’ freight, to its commercial detriment.
[5] Commissioner Spencer heard the application on 27 May 2019, and advised the parties in writing shortly after the hearing that she did not intend to grant the application and would issue her reasons as soon as possible. The Commissioner’s written decision of 28 June 2019 stated that she had dismissed the application because she was not satisfied that the requisite significant harm to Linfox was threatened. The Commissioner made extensive reference to, and applied, the Full Bench decision in CFMEU v Woodside Burrup Pty Ltd 1which addressed among other things the meaning of “significant harm” in s 426(3).
[6] On 18 July 2019, Linfox lodged an appeal against the Commissioner’s decision. Linfox contended that the test in Woodside Burrup for “significant harm” was incorrect and that the Commissioner had erred by applying that test. It also contended that the Commissioner had erred in finding that the harm being suffered by Linfox was not significant, and that the protected industrial action was not threatening to cause it significant harm.
[7] Linfox’s application for permission to appeal and its appeal were listed for hearing before us on 23 August 2019. We asked the parties to address us first on the question of whether permission to appeal should be granted, which they did. After a short adjournment, we issued a decision refusing permission to appeal. 2 We concluded that the appeal had no practical utility because there was no protected industrial action currently being undertaken. Therefore, even if the appeal had succeeded, Linfox’s application would still have had to be dismissed because the jurisdictional precondition in s 426(1) that there be protected industrial action “that is being engaged in” could not have been satisfied.
[8] In support of their applications for costs the AFULE and the RTBU each filed written submissions which may be summarised as follows:
• Linfox brought the appeal without reasonable cause. It knew when the appeal was lodged that the protected industrial action was scheduled to cease by late May 2019 and that there would be no protected industrial action occurring at the time of any rehearing, with the consequence that the application under s 426 could not be granted in such circumstances.
• It should have been reasonably apparent to Linfox that its application had no reasonable prospect of success because, on the facts known to Linfox at the time it lodged its appeal, the request for permission to appeal was bound to fail due to a lack of any utility in the appeal.
• No element of utility could be established by reference to the possibility of future protected industrial action by Aurizon employees because, even if such further action had been taken, it was impossible to say what form that industrial action might take, what harm it would cause to Linfox, or whether the application of Woodside Burrup would be decisive as to the disposition of the application at that future time. The appeal lodged by Linfox was therefore directed at speculative or hypothetical circumstances rather than any protected action that was being engaged in or was planned.
• At least from 16 August 2019, it should have been reasonably apparent to Linfox that its application had no reasonable prospect of success because on this date the RTBU and the AFULE both confirmed to Linfox that no protected industrial action was currently taking place or notified. It was therefore clear that the jurisdictional precondition in s 426(1) that there be protected industrial action “that is being engaged in” could not be satisfied.
• The letters of 16 August 2019 put Linfox on notice that if its appeal was not discontinued by 19 August 2019, costs would be sought in the event permission to appeal was refused. Linfox did not discontinue the appeal and instead sought undertakings from the unions that they and their members would not take protected industrial action at any time in the future in connection with the current enterprise agreement negotiations. This was an unreasonable “collateral purpose” or “lever” seeking what the s 426 application could not achieve, namely an indefinite cessation of protected action, and should be taken into account by the Commission in the exercise of the discretion to award costs.
• The Full Bench considered the lack of merit in the application for permission to appeal to be sufficiently obvious that it refused permission to appeal on the morning of the hearing.
Consideration
[9] There is overlap between the two jurisdictional bases for awarding costs under s 611(2). An application brought “without reasonable cause” could often also be described as one which, objectively considered, had “no reasonable prospect of success”. Nevertheless each basis is to be considered separately.
[10] Authority in relation to the first jurisdictional basis indicates that an application could be regarded as brought “without reasonable cause” if the claim was misconceived. On the other hand it could not be so described simply because a person’s arguments had been rejected. 3 In Kanan v Australian Postal & Telecommunications the Federal Court observed that one way of ascertaining whether a proceeding had been brought “without reasonable cause” was to ask whether, on the applicant’s own version of the facts, it was clear that the proceeding must fail. If so, it could properly be said that the proceeding had no reasonable cause. But if the success of the claim depended upon the resolution in the applicant’s favour of arguable points of law, it would be “inappropriate to stigmatise the proceeding as being ‘without reasonable cause’”.4
[11] As to the second jurisdictional basis for awarding costs under s 611(2), a Full Bench of the Commission in Baker v Salva Resources Pty Ltd concluded that the words “should have been reasonably apparent” are directed to a belief formed on an objective basis, not a subjective one, and that a conclusion that an application had no reasonable prospect of success should only be reached with great caution, in circumstances where the application is “manifestly untenable or groundless or so lacking in merit or substance to be not reasonably arguable.” 5
[12] In our opinion, Linfox cannot be said to have lodged its appeal without reasonable cause. The appeal was not misconceived. It sought to challenge Full Bench authority concerning s 426, and therefore its success depended on the resolution in its favour of a point of law. As we did not grant permission to appeal, we have not heard and considered the parties’ contentions in relation to whether the decision in Woodside Burrup should be reconsidered, and we do not propose to comment on the grounds of appeal and submissions that concern this question other than to note that, for the purpose of applying s 611(2) to the circumstances surrounding the unions’ applications for costs, the contentions of Linfox are not unworthy of consideration.
[13] Although there was in fact ultimately no utility in the appeal, we do not consider that it was obvious at the time the appeal was lodged that this would necessarily be the case. It was not beyond reasonable contemplation that further protected industrial action would be engaged in at the time of the hearing and that, like the earlier action that had occurred, might cause an impact on Linfox that it would regard and seek to characterise as “significant harm” for the purpose of s 426.
[14] We do not agree with the contention that it should have been apparent to Linfox from 16 August 2019 that the appeal had no reasonable prospect of success. The unions had each confirmed on that date that no protected industrial action was being taken or had been notified. They did not say that no further protected industrial action was planned or would be taken prior to the hearing of the appeal. It was not unreasonable for Linfox to apprehend a possibility, which in our view was not remote or far-fetched, that protected industrial action might yet be taken. Had notices of protected industrial action been served on Aurizon later on Friday 16 August 2019, or even on the next working day 6, which was Monday 19 August 2019, protected industrial action could have occurred on Friday 23 August 2019, the day on which the application for permission to appeal was heard.
[15] In this connection, we note that a letter from the RTBU to Linfox’s solicitors of 19 August 2019 advised that the union intended to take whatever steps were lawfully available to it to secure an enterprise agreement for its members employed by Aurizon, which steps would clearly include the taking of further protected industrial action. We also note that protected industrial action affecting Linfox had in fact recurred after the completion of the action at the end of May 2019: a two week overtime ban commenced on 28 June 2019, and a further overtime ban was notified to commence on 10 August 2019 but was withdrawn on 9 August 2019. Both at the time the appeal was lodged, and on 16 August 2019, the possibility of further protected industrial action remained real.
[16] Moreover, Linfox’s contention that permission to appeal should be granted even in the absence of protected industrial action occurring at the time of the appeal hearing was not one that had no reasonable prospect of success. At the time the appeal was lodged there was a possibility that a pattern might emerge of protected industrial action causing third party harm which would support a conclusion that there was practical utility in the appeal such as to justify the grant of permission to appeal, even if there was no action occurring at the specific time the appeal was heard. We concluded at [12] of our decision that there was, ultimately, no such pattern, but that does not mean that there had been no possibility of such a pattern emerging before the appeal hearing.
[17] We do not discern any “collateral purpose” from Linfox’s request for undertakings from the unions, even though it was sought in broad terms and was perhaps unlikely to be agreed. The proposed undertakings went to the question of whether there would be further protected industrial action in the future and hence the utility of the appeal. If the unions had given the undertakings sought by Linfox, and the appeal had been pressed, the application of s 611(2) to the circumstances might have been different.
[18] In any event, we do not consider that there was no reasonable prospect of success for the contention that, despite the absence of utility, permission should be granted in the public interest in order to revisit a Full Bench authority. We were not persuaded that this was an appropriate basis to grant permission in this case, but that does not mean that there was no reasonable prospect of Linfox so persuading us.
[19] We are not satisfied that Linfox instituted the appeal without reasonable cause or that it should have been reasonably apparent to Linfox that the appeal would have no reasonable prospect of success. Therefore, the jurisdictional prerequisites for the making of a costs order under s 611(2) have not been satisfied. The unions’ costs applications must therefore be dismissed.
VICE PRESIDENT
Final written submissions:
Australian Federated Union of Locomotive Employees – 27 August 2019
Australian Rail, Tram and Bus Industry Union – 26 August 2019
Linfox Australia Pty Ltd – 3 September 2019
Printed by authority of the Commonwealth Government Printer
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1 [2010] FWAFB 6021, 198 IR 360
2 Linfox Australia Pty Ltd v Australian Federated Union of Locomotive Employees; Australian Rail, Tram and Bus Industry Union[2019] FWCFB 5861
3 See Dowling v Fairfax Media Publications Pty Ltd [2009] FCA 339, 182 IR 28 per Moore J in relation to s 824(1) of the Workplace Relations Act 1996 at [53]
4 Kanan v Australian Postal & Telecommunications [1992] FCA 539, 43 IR 257 at 264-265
5 [2011] FWAFB 4014, 211 IR 374 at [10], followed in Qantas Airways Limited v Carter[2013] FWCFB 1811 at [19] and Clothier v Ngaanyatjarra Media[2012] FWAFB 6323, 226 IR 397 at [15]
6 See s 414(2)(a) and the definition of “working day” in s 12.
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