Liquor Hospitality and Miscellaneous Union v Compass Group (Australia) Pty Ltd

[2011] FWA 1603

[2011] FWA 1603

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Liquor Hospitality and Miscellaneous Union
v
Compass Group (Australia) Pty Ltd
(C2010/3486)

DEPUTY PRESIDENT LEARY HOBART, 15 MARCH 2011

Alleged dispute about any matters arising under the modern award and the NES; [s146] .

[1] In an application pursuant to s.739 of the Fair Work Act, 2009 (the Act) the Liquor Hospitality and Miscellaneous Union (the Union) alleged that a dispute existed with the Compass Group (Australia) PtyLtd (the company) about matters arising under the modern award and the National Employment Standards (NES).

[2] The Union claims “that transferring employees of the respondent employed at Aldersgate Kings Meadow in Tasmania are covered by the Cleaning Services Award 2010” and sought orders pursuant to s.319(1) of the Act that “the non-transferring employees of Compass employed at Aldersgate Kings Meadow in Tasmania are covered by the Cleaning Services Award 2010.”

[3] The union had been advised that the company was employing the employees under the terms of the Hospitality Industry (General) Award 2010.

[4] The written submission from the union said that “The employees receive up to $200.00 a fortnight less under the Hospitality Award as compared to the Cleaning Award.”

[5] Discussions between the parties failed to resolve the issue hence the union filed its application which was the subject of two conciliation conferences before Fair Work Australia (FWA).

[6] The company National Workplace Relations Manager appeared at the conciliation conferences by telephone from Perth, Western Australia; there was no local company representative at either conference in Hobart (the establishment in question is in Launceston, Tasmania); the union representative was present in Hobart.

[7] There is no formal record of the conciliation conferences, other than perhaps personal notes taken by the parties.

[8] At the conciliation conferences the company raised the issue of jurisdiction and argued that FWA did not have the power to hear and determine the union application.

[9] The jurisdictional issues raised were complex inasmuch as there were several sections of the Act relied upon and a disagreement about appropriate award coverage. The company referred to a number of authorities but no documentation was provided for the purpose of the conciliation conferences.

[10] Every attempt was made to resolve the matter by conciliation but this was unsuccessful and the union sought that the application be listed for formal hearing.

[11] In an endeavour to limit costs considering the geographical distance between the parties and the fact that the issues were complex, FWA issued Directions for the parties to exchange written submissions and indicated that the jurisdictional issue would be determined ‘on the papers’.

[12] Both parties complied with the Directions.

[13] The union advised, having received from the company comprehensive and detailed written submissions in response to its submission that it wished to discontinue the application.

[14] Following that advice the company filed an application for costs against the union arguing that the:

“application was commenced without reasonable cause;

and it should have been reasonably apparent to the applicant that the application had no reasonable prospect of success.”

[15] The company submitted in respect to its costs application that it “relies on the written submissions previously filed in this matter re jurisdiction and power to establish its case for an order for costs to be made against the applicant.”

[16] I deal only with the application for costs in this decision.

The costs application:

[17] Section 611 Costs prescribes:

“(1) A person must bear the person’s own costs in relation to a matter before FWA.

(2) However, FWA may order a person (the first person) to bear some or all of the costs of another person in relation to an application to FWA if:

(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) FWA 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.”

The Company:

[18] As previously noted the company relied on its written submissions provided in respect to the application by the union in which the union argued that the employees, the subject of the dispute, are covered by the Cleaning Services Award 2010 (the Cleaning Award).

[19] In that matter the company challenged the union’s capacity to commence the application on the following grounds:

• the Act requires that for orders to be made pursuant to s.318 and 319 there must first be a transfer of business as defined by s.311 o the Act;



• the company denied that there had been a transfer of business therefore no jurisdiction exists for FWA to make the orders as sought;



• even had there been a transfer of business (which is denied) the power under s318 and 319 is limited to making orders related to ‘transferable instruments’ as defined by s.312 of the Act, or enterprise awards or agreements, none of which are applicable in this matter;



• the Cleaning Award is not applicable therefore the application made pursuant to the dispute settling provision of the award cannot be dealt with by FWA.

The Union:

[20] The matter in dispute with the company was award coverage. The application to FWA was made pursuant to s.739 of the Act seeking FWA to deal with a dispute in accordance with a Dispute Settlement Procedure. The application sought the following relief:

“An order under s.318(1) that transferring employees of Compass employed at Aldersgate Kings Meadows in Tasmania are covered by the Cleaning Services Award 2010;

and

An order under s.319(1) that the non-transferring employees of Compass employed at Aldersgate Kings Meadows in Tasmania are covered by the Cleaning Services Award 2010.”

[21] The union argued that ss318 and 319 are new provisions found in the Act and had at that time not been the subject of any decisions by FWA. It submitted that jurisdiction existed under s.311(3) as there was “a transfer of assets from the previous employer (Corporate Cleaning Services) to Compass, being the employees and that therefore the requisite ‘connection’ was established thus providing the basis for FWA to make an order.”

[22] Further it submitted that “FWA would have to determine whether it has the power to make orders under either section 318 or 319 of the Act. In so doing it has to determine whether there has been a transfer of business in accordance with section 311 of the Act.”

Findings:

[23] The union advised that it wished to discontinue its application having received the company’s written submissions and although I note the company complains that no reason was given for the discontinuance it would not be unreasonable to consider that the union, having received the company’s submission properly presented, may well have accepted the submission that jurisdiction did not exist for FWA to hear and determine the application.

[24] Nonetheless the union made the decision not to proceed any further, without providing any reason for so doing, and sought that the application be discontinued.

[25] The issues in dispute were complex, and despite the best attempts by the parties to resolve them during the telephone conciliation conferences there is little doubt that dealing with complex issues by telephone is difficult. The issues went to a number of sections of the Act and no documentation could be exchanged and references to authorities were discussed without the benefit of copies being available to one of the parties or to FWA.

[26] The union was acting on advice from its members and, as is not unusual, the members view of the events taking place at the establishment were, it seems, at odds with what the company was submitting.

[27] The union did concede that during the conferences “a number of matters (facts) were clarified, including that Aldersgate were not going to contract out the existing staff functions related to the preparation and serving of meals despite the claim by Compass that this was to occur in mid 2010.”

[28] There were many areas of contention that needed to be addressed and until such time as the parties exchanged their comprehensive and detailed submissions, which included references to sections of the Act and relevant authorities, it was unlikely that any settlement could be achieved. There was much assertion and commentary by both parties during conciliation.

[29] Each party maintained its respective position during conciliation, subject to the clarification of some facts, however just because the company strongly held the view that the application could not proceed due to a lack of jurisdiction was not sufficient reason for FWA to dismiss the application.

[30] The union strongly maintained its position, based on the information available to it, that jurisdiction existed for the claim to be determined. I am of the view that in such circumstances a party has the right to have its application tested. That is not a remarkable event in this jurisdiction. There are many positions parties can take in conciliation which may, or may not, change when a case is presented formally and comprehensively.

[31] The company referred to a decision of a Full Bench of the Australian Industrial Relations Commission (AIRC) in Hi-Security Fencing Pty Ltd v Forsyth [2007] AIRCFB 846 which considered the question of whether a costs order ought to be made pursuant to s.658(1) of the Workplace Relations Act 1996 and the Bench adopted the test pronounced in Deane v Paper Australia Pty Ltd [Print PR32454] and said:

“The approach to the statutory term ‘where it should have been reasonably apparent to the party that he or she had no reasonable prospect of success’ within s.658(1) of the Act is for the Commission to determine whether:

“upon the facts apparent to the applicant at the time of instituting the appeal, the proceeding in question was manifestly untenable or groundless, the relevant requirements in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available.” [PR97907 Para 20]

[32] The decision in Hi-Security Fencing Pty Ltd v Forsyth was an application for costs in respect to both the institution of the appeal and the substantive application.

[33] The company also referred to the decision of Whelan C in Darcy v Megan Fitzgerald and Associates Pty Ltd (2009) FWA 1547 in which she reviewed the case law in relation to the phrase without reasonable cause as it was found in the Workplace Relations Act 1996. Whelan C noted that s.611(2) of the Fair Work Act also refers to a claim being brought without reasonable cause.

Whelan C said:

“[24] In considering the meaning of the term in Kanan v Australian Postal and Telecommunications Union (1992) [43 IR 157] Wilcox CJ said:

‘It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceedings as being ‘without reasonable cause’. But where on the applicant’s own version of the facts, it is clear that the proceedings must fail, it may properly be said that the proceeding lacks a reasonable cause.’

[25] His Honour’s approach was adopted by a Full Bench of the Industrial Relations Commission in Henderson v Mainpoint Enterprises Australia Pty Ltd with respect to an application for costs under section 170CJ of the Workplace Relations Act 1996. It was further considered by a Full Bench in Stagnato v Frews Wholesale Meats which placed emphasis on the test being one of not what should have been apparent to the applicant but what was the applicant’s own view of the facts at the relevant time.

[26] Section 611(2)(b) deals with what should have been reasonably apparent to the person, the test being, should it have been reasonably apparent that the application had no reasonable prospect of success?”

[34] Further, Whelan C noted that “We are dealing in this case with new legislation the parameters of which have not been tested by the Courts.” She said “In my view great care should be exercised in coming to a conclusion that a party either instituted proceedings without reasonable cause or in circumstances where it should have been reasonably apparent that the application had no reasonable prospect of success where the facts of the case and the applicable law have not been tested in a hearing.”

[35] She also noted that “In this case the only proceedings which occurred were constituted by a private conference…….”

[36] There a number of similarities in that decision with the circumstances of this application.

[37] As far as I am aware, the union had no prior knowledge that the company was going to challenge the jurisdiction of FWA to hear and determine the matter until it was raised at the first conciliation conference.

[38] It was not until such time as the union had considered the company’s argument, which was concisely presented in its detailed and comprehensive written submission, that the union made the decision to discontinue its application. Up until that time various issues had been raised and discussed during the telephone conferences but nothing had been provided in writing for the union to consider.

[39] I agree with Whelan C that ‘great care should be exercised in coming to a conclusion that a party either instituted proceedings ‘without reasonable cause’ or in circumstances where it should have been reasonably apparent that the application had ‘no reasonable prospect of success’ where the facts of the case and the applicable law have not been tested in a hearing’.

[40] In this matter some facts had been clarified during the conferences but there was still disagreement about the applicable law.

[41] I do not think it remarkable, nor is it the first time, nor possibly will it be the last, that an application is discontinued once an applicant has seen or heard a respondent’s case properly put in a comprehensive submission along with the presentation of relevant authorities, references or any other documentation for consideration. In this matter it seems to me that until fulsome submissions were provided by the company, thereby enabling the union to consider its claim that it was not in a position to concede the company’s position.

[42] I reject the submission by the company that the “applicant has taken a cavalier approach to the matter and should be punished for causing the respondent to unnecessarily incur costs.” I am disturbed that the company consider an application for costs as an exercise in ‘punishment’.

[43] In fact in my view the circumstances in this matter are not unusual at all, it is not uncommon that two parties vehemently oppose the other’s position, one seeks to have the matter determined by FWA whilst the other seeks it to be dismissed without a hearing to consider the merits, or otherwise, of the application.

[44] The award of costs is an exercise of discretion. In this matter I am of the view that the application by the company is misconceived and, at best, premature.

[45] Accordingly I reject the application by the company.

DEPUTY PRESIDENT

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