Mermaid Marine Vessel Operations Pty Ltd v The Maritime Union of Australia
[2014] FWCFB 1317
•7 MARCH 2014
[2014] FWCFB 1317
The attached document replaces the document previously issued with the above code on 7 March 2014.
The MNC reference in the summary on page 1 is corrected and a typographical error in paragraph [45] and [60] is corrected.
Abbygayle Lang
Associate to Deputy President Gostencnik
Dated 20 February 2015
| [2014] FWCFB 1317 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
Maritime Union of Australia, The
(C2014/2788)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 7 MARCH 2014 |
Appeal against decision [[2014] FWC 8] of Commissioner Williams at Perth on 3 January 2014 in matter number B2013/1582.
Introduction
[1] The Maritime Union of Australia (Respondent) in its capacity as a bargaining representative of employees who will be covered by a proposed enterprise agreement, applied to the Fair Work Commission (Commission) on 18 December 2013 for an order under s.437 of the Fair Work Act 2009 (Act) requiring a protected action ballot to be conducted to determine whether employees of Mermaid Marine Vessel Operations Pty Ltd (Appellant) wish to engage in particular protected industrial action for the agreement1(PABO Application). Commissioner Williams heard the PABO Application on 23 December 20132. The Commissioner granted the PABO Application and delivered his reasons for decision on 3 January 2014 (Decision) 3. An order giving effect to the Decision was also issued on 3 January 2014 (Order)4.
[2] On 24 January 2014 the Appellant lodged a notice of appeal against the Decision and Order. At the hearing of the appeal, pursuant to s. 590 of the Act we granted permission to the Australian Mines and Metals Association (AMMA) to appear and to make submissions.
[3] We have decided to grant permission to appeal. We have also decided to uphold the appeal in part and to dismiss the remainder of the appeal. In consequence we will quash the Order. We have decided to remit the PABO Application to Commissioner Cloghan to determine the question of whether the Respondent has been, and is genuinely trying to reach agreement with the Appellant and to determine what order, if any, should be made. These are our reasons for so doing.
Factual context
[4] An important aspect of the factual context that arises in this appeal concerns the overlapping coverage of some of the Appellant’s employees by two enterprise agreements. The Mermaid Marine Vessel Operations Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 (General Agreement) is expressed to cover employees of the Appellant engaged in the offshore oil and gas industry, whose employment classification is contained in the agreement and who is a member of, or eligible to be a member of, the Respondent 5. The Mermaid Marine Vessel Operations Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers Gorgon Enterprise Agreement 2011 (Gorgon Agreement) is expressed to cover employees of the Appellant whose employment classification is contained within the General Agreement and who is employed on board a vessel performing offshore work under the Gorgon Contract as determined by the Appellant6.
[5] The Gorgon Agreement incorporates all of the terms of the General Agreement, except the nominal expiry date and clause 31 7. Clause 31 is not relevant to any question raised in the appeal8 .
[6] The nominal expiry date of the General Agreement of 31 July 2013 has passed 9, while the nominal expiry date of the Gorgon Agreement of 15 January 2016 has not10.
[7] On 16 November 2012, the Respondent sought to commence bargaining with the Appellant for a new Offshore Oil and Gas Enterprise Agreement 11. The Respondent agreed to bargain for a new Offshore Oil and Gas Enterprise Agreement to replace the General Agreement in around early December 201212.
[8] Having agreed to bargain, on 24 December 2012 the Respondent issued a notice of employee representational rights (NERR), pursuant to s.173 of the Act to 213 of its employees engaged by it in the offshore oil and gas industry who, at that time, worked in the classifications covered by the General Agreement 13. The NERR described the proposed agreement as the “Mermaid Marine Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2013”14. That proposed agreement was expressed to cover employees whose employment classifications are contained in the General Agreement15. For convenience, we refer to that proposed agreement as the “proposed Offshore Oil and Gas Enterprise Agreement”. The employees to whom a NERR was issued included employees who, at that time, were covered by both the General Agreement and the Gorgon Agreement and (by reason of work or assignment allocation) to whom either the General Agreement or the Gorgon Agreement applied at any given point in time16. The scope of the proposed Offshore Oil and Gas Enterprise Agreement set out in the NERR clearly would cover both of these classes of employees.
[9] The Respondent was, and is, the bargaining representative for those employees who will be covered by the proposed Offshore Oil and Gas Enterprise Agreement, who are members of the Respondent and who have not appointed another bargaining representative for the agreement, or revoked the Respondent’s status as a bargaining representative.
[10] Bargaining for the proposed Offshore Oil and Gas Enterprise Agreement proceeded for over a year on the basis that it would cover all employees engaged to work in the offshore oil and gas industry in the classifications referred to in the General Agreement 17.
[11] During the course of bargaining, the Respondent had on 21 November 2013, applied to the Commission for a protected action ballot order in relation to the proposed Offshore Oil and Gas Enterprise Agreement 18. At a hearing of that application held on 22 November 2013, the Respondent withdrew the application following an objection by the Appellant founded on s.438 of the Act,19 arguing that as the Gorgon Agreement covered some of the employees who will be covered by the proposed Offshore Oil and Gas Enterprise Agreement, the application could not be made.
[12] On or about 25 November 2013, the Respondent foreshadowed to the Appellant that it would be proposing a scope clause that would exclude employees to whom the Gorgon Agreement applies 20. On 13 December 2013 the Respondent advised the Appellant that it was seeking such a narrower scope clause21.
[13] The resolution of this appeal depends in part on the construction of certain provisions of the Act, particularly s. 438(1), applied to the facts of this case. It is therefore necessary to set out in some detail, the relevant statutory provisions and examine these provisions in context. We propose to deal with the proper construction of the relevant provisions at issue in the appeal before turning specifically to the grounds of appeal advanced by the Appellant, as some of the grounds of appeal travel beyond the construction of s.438(1).
[14] Before doing so, it is necessary to deal with the Appellant’s application to adduce further evidence on appeal and then to make a few brief observations about the proper approach to statutory construction, at least so far as is relevant for the disposition of this appeal.
Application to admit fresh evidence
[15] The Appellant has asked the Commission to exercise its discretion to admit further evidence in the appeal. That evidence is in the form of an affidavit of Mr Benjamin O’Brien, affirmed on 7 February 2014, together with three annexures (O’Brien affidavit). The annexures are:
● correspondence from Will Tracey of the Respondent to Simon White of the Australian Mines and Metals Association dated 16 January 2014;
● email correspondence between Doug Heath of the Respondent and Ben O’Brien of Appellant dated 30 January 2014; and
● correspondence to Paddy Crumlin of the Respondent on behalf of the managers and executives of a number of Vessel Operators dated 6 February 2014.
[16] Section 607(2) of the Act provides that:
The FWC may:
(a) admit further evidence; and
(b) take into account any other information or evidence.
[17] Relevant material that comes to light subsequent to the time of an initial hearing may be admitted if it bears on an issue to be determined in the appeal 22. It was common ground that the exercise of the discretion to admit further evidence is governed by the principles set out in Akins v National Australia Bank23.In Akins, the Court held at that:
Although it is not possible to formulate a test which should be applied in every case to determine whether or not special grounds exist there are well understood general principles upon which a determination is made. These principles require that, in general, three conditions need be met before fresh evidence can be admitted. These are: (1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible. 24
[18] In considering whether to exercise the discretion in s. 607(2), it is permissible in an appropriate case to depart from the principles set out in Akins and the principles need not be strictly applied 25. However, we do not think this is an appropriate case.
[19] The Appellant seeks to adduce the evidence in aid of both its position on the identification of the “proposed enterprise agreement” for the purpose s. 438(1) and on the question of “genuinely trying to reach agreement” for the purpose of s. 443(1)(b) of the Act.
[20] It is self evidently the case that the evidence set out in the O’Brien affidavit could not have been obtained with reasonable diligence for use at the hearing before the Commissioner as the correspondence annexed to the affidavit, post dates the Decision. We are also prepared to assume, without deciding, that the evidence is credible. However for reasons that will become apparent later in this decision, we are not persuaded that there is a high degree of probability that the evidence would result in a different conclusion on the identification of the “proposed enterprise agreement” for the purpose s.438(1). To the extent that the evidence is sought to be admitted for the purpose of putting in issue the question whether the Respondent has been, and is genuinely trying to reach agreement on the proposed agreement with the Appellant, we have found it unnecessary to admit and consider that evidence in order to determine the appeal and as we have decided to remit that question to Commissioner Cloghan the Appellant will have the opportunity to lead that evidence and, appropriately, the Respondent will have the opportunity to rebut, clarify or contextualise that evidence. Consequently we refuse the Appellant’s application to admit the O’Brien affidavit.
Approach to construction of the relevant statutory provisions
[21] In considering the relevant statutory provisions at issue in this appeal the starting point is to construe the words of the statute according to their ordinary meaning having regard to the context and legislative purpose. 26 The words of the statute being construed should be read by reference to the language of the statute as a whole27. As Lawler VP and Bissett C observed in JJ Richards and Sons Pty Ltd v Transport Workers’ Union of Australia28, after reciting relevant authorities concerning statutory construction:
Drawing these principles together, the task of statutory interpretation is concerned with ascertaining the intention of the legislature as manifested by the text of the legislation. Context (using that word in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means, one may discern the statute was intended to remedy) and the purpose or object underlying the legislation must always be considered. These must be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise. The text of a provision, read in context and having regard to the object and purpose of the provision, is always the surest guide. 29
[22] His Honour Justice Flick in J.J. Richards & Sons Pty Ltd and Another v Fair Work Australia and Another 30 discussed three long established and fundamental principles to statutory construction. In so doing His Honour said:
First, the so-called “golden rule” of the common law as to statutory construction is that “the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no farther”: Grey v Pearson[1857] EngR 335; (1857) 6 HLC 61 at 106 per Lord Wensleydale. See also: Australian Boot Trade Employés’ Federation v Whybrow & Co[1910] HCA 53; (1910) 11 CLR 311 at 341 to 342 per Higgins J. The “golden rule” is not confined to circumstances where a “mistake” has been made in the wording of an Act; the rule is also applied to avoid construing legislation so as to produce patently unintended or absurd results: Footscray City College v Ruzicka[2007] VSCA 136 at [16], 16 VR 498 at 505 per Chernov JA (Warren CJ and Maxwell P agreeing).
Second, the common law also recognised that “[i]t is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do”: Thompson v Goold & Co[1910] AC 409 at 420 per Lord Mersey. See also: Dallikavak v Minister for Immigration and Ethnic Affairs (1985) 9 FCR 98 at 103 per Northrop and Pincus JJ; Minister for Immigration and Citizenship v Hart [2009] FCAFC 112 at [6] per Spender J.
Third, a construction of a statutory provision is to be preferred “that would best achieve the purpose or object of the Act”: Acts Interpretation Act1901 (Cth) s 15AA. The requirement to look to the purpose or object of an Act is more than an instruction to adopt the traditional mischief or purpose rule in preference to the literal rule of construction; s 15AA requires no ambiguity or inconsistency in a statutory provision before a court is not only permitted, but required to have regard to purpose: Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214 at 235. Dawson J there went on to observe that the provision there in question, being a provision comparable to s 15AA, “... requires a court to construe an Act, not to rewrite it, in the light of its purposes”. Similarly, in Trevisan v Commissioner of Taxation(1991) 29 FCR 157 at 162, Burchett J observed that s 15AA “... is not a warrant for redrafting legislation nearer to an assumed desire of the legislature. It is not for the courts to legislate ...”. See also: R v L(1994) 49 FCR 534 at 538 per Burchett, Miles and Ryan JJ; Skea v Minister for Immigration, Local Government and Ethnic Affairs(1994) 51 FCR 82 at 85 per Moore J; Minister for Immigration and Multicultural Affairs v Lim[2001] FCA 512 at [7], [2001] FCA 512; 112 FCR 589 at 592 to 593 per Sundberg J. “In the end the task of the court is to ascertain and to enforce the actual commands of the legislature”: Re Application of The News Corp Ltd(1987) 15 FCR 227 at 236 per Bowen CJ.
[23] We respectfully agree and apply these principles to construing the provisions at issue in this appeal.
Relevant statutory provisions and context
[24] The Appellant submitted before us and at first instance that the PABO Application could not and should have been made by reason of s.438(1) of the Act which provides:
Restriction on when application may be made
(1) If one or more enterprise agreements cover the employees who will be covered by the proposed enterprise agreement, an application for a protected action ballot order must not be made earlier than 30 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be).
[25] In aid of this submission the Appellant says that “the proposed enterprise agreement” in s 438(1) means, in the current context, the agreement that has been the subject of bargaining between the Appellant and the Respondent since at least December 2012 and identified earlier in these reasons as the proposed Offshore Oil and Gas Enterprise Agreement. As some of the employees who will be covered by the proposed Offshore Oil and Gas Enterprise Agreement are currently covered by the Gorgon Agreement which has a nominal expiry date of 15 January 2016, the PABO Application must not have been made and should therefore have been dismissed. Furthermore, the Appellant says that the Respondent’s change of position on scope, which occurred between 15 November and 13 December 2013, was no more than a change in position about a claim made during bargaining for the proposed Offshore Oil and Gas Enterprise Agreement. It did not result in a “proposed enterprise agreement” which was different to that being bargained for and so cannot be relied upon to avoid the consequence of s. 438(1).
[26] The Respondent submits that the construction of s.438(1) advanced by the Appellant is erroneous. It says the “proposed enterprise agreement” referred to in s.438 (1) of the Act means, in this case, no more than the agreement that is being proposed by the Respondent as bargaining representative of employees who will be covered by that agreement. Relevantly it is the agreement proposed by the Respondent and identified in the PABO Application. That agreement will not cover employees who are also covered by the Gorgon Agreement. Therefore s.438(1) is not engaged. Moreover the “proposed enterprise agreement” need not be an agreement with a scope that was bargained about, and/or agreed, earlier in the bargaining process. Thus the enterprise agreement proposed by the Respondent containing a narrower scope than that which had been the subject of bargaining was the “proposed enterprise agreement” in relation to which inquiry must be made as to whether any of the employees that will be covered by that proposed enterprise agreement are also covered by the Gorgon Agreement. We will, for convenience refer to this narrower scope agreement as the “Respondent’s proposed enterprise agreement”.
[27] In our view s.438(1) will operate to prevent an application for a protected action ballot being made in a given case if:
● the proposed enterprise agreement by its terms will cover any employee;
● who is covered by an enterprise agreement that has not passed its nominal expiry date; and
● the application has been made more than 30 days before the nominal expiry date of that enterprise agreement.
[28] It is necessary therefore to determine the meaning of “proposed enterprise agreement” in s.438(1). In order to do so it seems to us proper to examine the role of the phrase “proposed enterprise agreement” and of protected industrial action in the scheme of bargaining, enterprise agreements and industrial action established by the Act.
[29] We turn then first to s.3 of the Act. It sets out the object of the Act which relevantly includes:
The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:
...
(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; ....
[30] The means by which those matters identified in paragraph (f) above are to be achieved by the Act are set out principally in discrete parts of Chapters 2 and 3 of the Act. The regulation of enterprise-level collective bargaining, agreement-making and good faith bargaining are set out in Part 2-4 of Chapter 2, while Part 3-3 of Chapter 3 contains rules governing industrial action.
[31] Part 2-4 of the Act, which deals with enterprise agreements and bargaining begins with the objects of Part:
171 Objects of this Part
The objects of this Part are:
(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and
(b) to enable FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:
(i) making bargaining orders; and
(ii) dealing with disputes where the bargaining representatives request assistance; and
(iii) ensuring that applications to FWC for approval of enterprise agreements are dealt with without delay.
[32] Part 3-3 the Act, which deals with industrial action, does not contain provisions setting out the objects of the Part. However Division 8 of Part 3-3, which concerns protected action ballots and in which is to be found s.438, contains a provision dealing with the object of that Division. Section 436 provides as follows:
436 Object of this Division
The object of this Division is to establish a fair, simple and democratic process to allow a bargaining representative to determine whether employees wish to engage in particular protected industrial action for a proposed enterprise agreement.
Note: Under Division 2, industrial action by employees for a proposed enterprise agreement (other than employee response action) is not protected industrial action unless it has been authorised in advance by a protected action ballot.
[33] Although bargaining for a proposed agreement is an important feature of the scheme established by the Act, the capacity of a bargaining representative to apply for a protected action ballot order, for such an order to be made and for employees who will be covered by the proposed agreement to engage in protected industrial action is not confined to the period after bargaining for the proposed agreement between an employer and employees has begun 31. Excepting the prohibition of making an application in s.438(1), the Commission must make a protected action ballot order in relation to employee who will be covered by a proposed agreement in the circumstances set out in s.443. Section 443 relevantly provides:
443 When FWC must make a protected action ballot order
(1) FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:
(a) an application has been made under section 437; and
(b) FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.
(2) FWC must not make a protected action• ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).
[34] The word “agreement” referred to in s.443 (1)(b) is a reference to the “proposed enterprise agreement” referred to in the opening words of s.443. 32
[35] A bargaining representative for a proposed enterprise agreement may take steps under the Act both before and after bargaining between an employer and employees has begun 33.
[36] Part 2-4 makes provision in several places for applications to be made to the Commission for determinations or orders that can facilitate bargaining. Many of the provisions enable such applications to be made before bargaining has begun. These include for example, applications under:
● s.236 - 237 - a majority support determination (if an employer refuses to bargain)
● s.238 - a scope order (to determine a disputed scope of a proposed enterprise agreement);
● s.242 - 243 -a low-paid authorisation (to enable access to special bargaining provisions applicable only in relation to low-paid employees);
● ss.248 - 250 - a single- interest authorisation (if employees with sufficiently similar interests seek to bargain together).
[37] Other remedial provisions in Part 2-4 are only available to a bargaining representative once bargaining has begun. These include:
● s.229 - 230 - good faith bargaining orders (where a bargaining representative is not observing the good faith bargaining requirements); and
● s.234 - a serious breach declaration (where there are serious and persistent breaches of a good faith bargaining order).
[38] Protected industrial action is defined in s.408 and relevantly includes: “(a) employee claim action for the agreement (see section 409)”. Section 409 relevantly provides:
409 Employee claim action
Employee claim action
(1) Employee claim action for a proposed enterprise agreement is industrial action that:
(a) is organised or engaged in for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters; and
(b) is organised or engaged in, against an employer that will be covered by the agreement, by:
(i) a bargaining representative of an employee who will be covered by the agreement; or
(ii) an employee who is included in a group or groups of employees specified in a protected action ballot order for the industrial action; and
(c) meets the common requirements set out in Subdivision B; and
(d) meets the additional requirements set out in this section.
Protected action ballot is necessary
(2) The industrial action must be authorised by a protected action ballot (see Division 8 of this Part).
Unlawful terms
(3) The industrial action must not be in support of, or to advance, claims to include unlawful terms in the agreement.
Industrial action must not be part of pattern bargaining
(4) A bargaining representative of an employee who will be covered by the agreement must not be engaging in pattern bargaining in relation to the agreement.
Industrial action must not relate to a demarcation dispute etc.
(5) The industrial action must not, if it is being organised or engaged in by a bargaining representative, relate to a significant extent to a demarcation dispute or contravene an FWA order that relates to a significant extent to a demarcation dispute
. . .
[39] Section 413 sets out the “common requirements” for protected industrial action:
413 Common requirements that apply for industrial action to be protected industrial action
Common requirements
(1) This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.
. . .
Genuinely trying to reach an agreement
(3) The following persons must be genuinely trying to reach an agreement:
(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement--the bargaining representative;
(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement--the bargaining representative of the employee.
. . .
No industrial action before an enterprise agreement etc. passes its nominal expiry date
(6) The person organising or engaging in the industrial action must not contravene section 417 (which deals with industrial action before the nominal expiry date of an enterprise agreement etc.) by organising or engaging in the industrial action.
[40] Section 417 prohibits, inter alia, the taking of industrial action, including protected industrial action, by persons and organisations covered by an enterprise agreement that has not passed its nominal expiry date. That section provides:
No industrial action
(1) A person referred to in subsection (2) must not organise or engage in industrial action from the day on which:
(a) an enterprise agreement is approved by the FWC until its nominal expiry date has passed;
or
(b) a workplace determination comes into operation until its nominal expiry date has passed;
whether or not the industrial action relates to a matter dealt with in the agreement or determination.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2) The persons are:
(a) an employer, employee, or employee organisation, who is covered by the agreement or determination; or
(b) an officer of an employee organisation that is covered by the agreement or determination, acting in that capacity.
[41] Section 437 enables a bargaining representative to apply for a protected action ballot order. Section 437(1) provides:
A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to FWA for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.
[42] It is to be observed from the above, that the Act variously makes reference to a “proposed agreement”, or the ”proposed enterprise agreement” and “proposed single-enterprise agreement” to describe in a particular context the same concept, that is, the agreement that is being proposed by a party wishing to bargain or by one that is actually bargaining. That this is so seems to be confirmed by the Explanatory Memorandum to Fair Work Bill 2008 and its description of the use of the phrase “proposed enterprise agreement” in Parts 2-4 and 3-3 as “a generic term” 34, and its reference to the decision in Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Union (No 2)35in which French J referred to the use of the words “proposed agreement” in s. 170MI of the Workplace Relations Act 1996 as a “generic term [that] allows for a variety of possibilities”36. The content of a proposed agreement need not be settled nor need the scope of a proposed agreement be agreed between the bargaining parties for that which is proposed by one party to bear the character of a proposed agreement or proposed enterprise agreement for the purposes of the Act.
[43] In MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union 37, a Full Bench of Fair Work Australia observed that :
The Fair Work Act 2009 (FW Act) uses the expression “proposed enterprise agreement”, “proposed single-enterprise agreement” and “proposed agreement” in a number of places. An agreement may be “proposed” by an employer or it may be “proposed” by a bargaining representative of employees or there may be different and competing agreements “proposed” by both. Where a person makes an application under the FW Act in their capacity as a bargaining representative for a “proposed enterprise agreement” or “proposed single enterprise agreement”, the bargaining representative is entitled to rely on the agreement it has proposed or it may choose to make the application in relation to an agreement proposed by another bargaining representative. In this case, it was the LHMU that first “proposed” an agreement and it was the agreement proposed by the LHMU that was the “proposed single” for purposes of the LHMU’s application for a protected action ballot order under s.437.
[44] We respectfully agree and adopt those observations in resolving the meaning of “a proposed agreement” in s.438(1).
Meaning of and indentify the “proposed enterprise agreement” in s.438
[45] The prohibition of making an application for a protected action ballot order under s.438(1) is, in our view, concerned with identifying whether an employee who is covered by an enterprise agreement that has not passed its nominal expiry date will also be covered by the proposed enterprise agreement. The relevant enquiry is therefore directed to assessing whether any of the employees who will fall within the scope of the proposed enterprise agreement that is the subject of the application are also covered by an enterprise agreement that has not passed its nominal expiry date.
[46] When read in context, “a proposed enterprise agreement” in s.438(1) seems to us to mean no more than the agreement the bargaining representative applying for an order under s. 447 is proposing at the time the application for a protected action ballot order is made. It is that agreement to which the ballot will relate and it is employees represented by the bargaining representative who fall within the scope of that agreement (or a group of such employees) who will vote on questions of particular industrial action. That the Appellant does not agree with the scope of the proposed agreement or would prefer a broader scope or that the bargaining parties have bargained for a broader scope previously is, for the purpose of identifying the proposed enterprise agreement to which s.438(1) might relate, irrelevant in considering whether s.438(1) prohibits an application being made.
[47] In our view, this construction adheres to the ordinary meaning of “a proposed enterprise agreement” and does not lead to any absurdity or repugnance. It is consistent with the objects and purpose of the scheme of bargaining, agreement-making and industrial action established by the Act.
[48] In this case the Respondent proposes an agreement with a scope that excludes employees to whom the Gorgon Agreement applies. For present purposes we do not think that anything material turns on the fact that the application is expressed to exclude employees to whom the Gorgon Agreement “applies” rather than excluding employees “covered” by the Gorgon Agreement. The PABO Application is limited to only those employees that will be covered by the Respondent’s proposed enterprise agreement. Those employees are not covered by another enterprise agreement that has not passed its nominal expiry date. It follows that the Respondent is not prevented by reason of s.438(1) from making the PABO Application.
[49] We also observe that s.438(1) reflects the intent underpinning the Act that industrial action not be engaged in or organised by persons covered by an enterprise agreement which is yet to pass its nominal expiry date. Section 417 of the Act to which we earlier referred also reflects that intent.
[50] The construction of s.438(1) that we favour is consistent with and does undermine that intent. The employees who are balloted on the question of whether particular industrial action should be authorised are not covered by an enterprise agreement that has not passed its normal expiry date. Only those employees covered by the General Agreement who are not also covered by the Gorgon Agreement are the persons to be balloted. Further, no employee covered Gorgon Agreement will be covered by the Respondent’s proposed enterprise agreement. Neither s. 438(1) nor s.417 operate so as to prevent the taking of protected industrial action by employees who are not covered by an in term enterprise agreement in furtherance of claims for a proposed enterprise agreement, which by its scope will be limited to covering only those employees.
[51] We now turn to consider the specific grounds of appeal advanced by the Appellant.
First ground of appeal - s. 438 and proposed enterprise agreement
[52] The first ground of appeal alleges error on the part of the Commissioner in his conclusion that the “proposed enterprise agreement” for the purposes of s. 438 of the Act was the narrower scope agreement proposed by the Respondent in its PABO Application and not the proposed Offshore Oil and Gas Enterprise Agreement that had been the subject of bargaining for over 12 months before the PABO Application was made.
[53] For the reasons we have identified at [24] to [50] we think the Commissioner was correct in his conclusion that the Respondent was entitled to make the PABO Application relying on the Respondent’s proposed enterprise agreement, being the agreement with a narrower scope that excluded employees covered by the Gorgon Agreement, and consequently that “section 438 of the Act is not applicable in this instance” 38. We therefore do not discern any appellable error in this regard.
[54] Further, to the extent that the Appellant argues under this ground that the Commissioner erred in not making a finding whether the Respondent had ceased to bargain for the proposed Offshore Oil and Gas Enterprise Agreement, we disagree. Such a finding was neither necessary nor relevant to the identification of the proposed enterprise agreement or the operation of s.438 of the Act. It may be relevant to determining the issue of genuinely trying to reach agreement for the purposes of s.443(1)(b), but that submission was not put to us nor to the Commissioner at first instance. We also reject the Appellant’s submission that the Respondent cannot unilaterally change the scope of the agreement that is being bargained for. The very essence of a “proposed enterprise agreement” involves a degree of unilateral action by a bargaining representative. Whether other parties accept the unilaterally altered scope, or agree to bargain on that proposed enterprise agreement is a question that is perhaps relevant to different issues, but not one that is relevant to determining whether s.438 applies.
Second ground of appeal - misapplication of the decision in MSS Security
[55] The second ground of appeal concerns the proper application of the decision in MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union 39 and in particular [18] of that decision.
[56] The Commissioner dealt with the decision in MSS Security as follows:
[35] Applying this approach then the MUA has made an application in their capacity as a bargaining representative for a proposed enterprise agreement and as such they are entitled to rely on the agreement they have proposed which in this case means a proposed enterprise agreement with the MUA’s preferred scope, which excludes from its coverage employees covered by the 2011 Gorgon Agreement. The MUA have previously notified Mermaid and AMMA of the MUA’s preferred scope and this is indeed recorded in the most recent version of the AMMA draft agreement 5.
[36] The fact that throughout the process of bargaining from late 2012 until November 2013 the MUA had agreed with the respondent as to the scope of the proposed enterprise agreement does not alter their right to now make a ballot order application for a proposed enterprise agreement with the MUA’s preferred scope.
[37] The respondent and the applicant both accept that the scope of a proposed agreement is a matter that can itself be the subject of bargaining. The authorities are clear on this point. As the Full Bench in the MSS Security case observed:
“[14] In Stuartholme School v The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane (Stuartholme) a Full Bench of Fair Work Australia held that the scope of a proposed agreement is a matter than can itself be the subject of bargaining for the agreement. We respectfully endorse the reasoning and conclusion of the Full Bench in that regard.” (References omitted)
[38] The Full Bench in the MSS Security case also considered the situation of the parties where they were in dispute over the scope of the proposed agreement and observed that:
“[18] ...Where there is a continuing disagreement between the bargaining parties as to the scope of the proposed enterprise agreement, the remedy for the party who wants a narrower scope is to seek a scope order pursuant to s.238. In the absence of such an order, bargaining will proceed on the basis of the Respondents preferred scope, save that the parties are entitled to continue bargaining over the scope itself until such time as the scope of the proposed agreement is settled through bargaining or by the making of a scope order.” (Underlining added)
[39] Obviously pursuing a section 238 scope order is one option open to a bargaining party as a means of resolving a dispute about a proposed agreements scope. In my view though the first sentence of this statement from the Full Bench is not to be taken as authority for the proposition that the bargaining party who wants the narrower scope, where this is disputed, is obliged to seek a scope order under section 238 of the Act. This is in effect what the respondent has submitted is the correct approach for the MUA in this case.
[40] Rather the Full Bench was merely pointing to the fact that applying for a section 238 scope order is a remedy available. The benefit to such a party of a section 238 scope order application is that potentially one party’s view of the preferred scope for a proposed enterprise agreement will be imposed on the other bargaining party by virtue of a Commission order. However the Full Bench went on to note that in the absence of a scope order the parties are entitled to continue bargaining over the scope until that is settled through bargaining or by the making of a scope order.
[41] The employee bargaining representative in this matter as part of seeking to resolve the dispute over the scope of the proposed agreement and other disputed matters has opted to apply for a ballot order to test whether the employees they wish to be covered by the proposed agreement support potentially taking industrial action to influence Mermaid to accept their claims. Within the scheme of the Act such a ballot order application is part of that process of bargaining. 40
[57] The Appellant criticises this part of the Decision on two bases. It submits firstly that the Commissioner stated wrongly that: “bargaining will proceed on the basis of the Respondents scope”, rather than: “bargaining will proceed on the basis of the broader scope” The Appellant submits that the decision in MSS Security makes clear that until scope is resolved by agreement or order, bargaining must proceed on the basis of the broader scope, regardless of what scope is proposed by which party. Secondly the Appellant says that contrary to the Commissioner’s application of the MSS Security decision at [39] and [40] of the Decision, at [18] of the MSS Security decision the Full Bench held that:
(a) in circumstances where the scope of a proposed enterprise agreement is in dispute, the remedy for the party who seeks a narrower scope is to apply for a scope order pursuant to section 238 of the Act (emphasis added); and
(b) in the absence of such an order, bargaining will proceed on the basis of the broader scope.
[58] It was therefore submitted that as the Commissioner found that an application for a scope order pursuant to s.238 was “only one” remedy available in such circumstances he was in error.
[59] We do not accept that the misquote relied upon by the Appellant amounts to a misconstruction of the Act, nor did it alter the effect of the decision in MSS Security or result in a misapplication by the Commissioner of the decision. First, the reference to “broader scope” in the decision in MSS Security 41 when considered in the context of the decision as a whole is clearly a reference to the Respondent’s proposed scope in that case. Secondly, for the reasons which follow, the misquoted paragraph did not lead to an improper application by the Commissioner of the decision in MSS Security.
[60] As to the second issue, we think the Appellant’s submission proposes a far wider proposition than that which is advanced in MSS Security. At [18] of MSS Secuirity, the Full Bench was considering the question of disputed scope in the context of whether an obligation to issue a NERR arose and if so whether it should be issued to employees within the broader or narrower scope. It was not making a statement of broader application. This seems clear when [18] is read with the paragraphs that immediately proceed and follow it, which for convenience we reproduce below:
[17] However, once an employer has agreed to bargain in relation to a group of employees within the scope of an agreement as proposed by a union or other employee bargaining representative, the employer is obliged to:
- issue a notice of representational rights to the employees within the scope of the agreement proposed by the union or other employee bargaining representative; and
- bargain in good faith in accordance with s.228.
[18] As the Full Bench in Stuartholme noted, “[t]he terms of [s.237] unambiguously suggest that bargaining may have commenced under the Fair Work Act even though the parties to the bargaining process are in disagreement about the scope of the proposed agreement.” Where there is a continuing disagreement between the bargaining parties as to the scope of the proposed enterprise agreement, the remedy for the party who wants a narrower scope is to seek a scope order pursuant to s.238. In the absence of such an order, bargaining will proceed on the basis of the broader scope, save that the parties are entitled to continue bargaining over the scope itself until such time as the scope of the proposed agreement is settled through bargaining or by the making of a scope order.
[19] It follows from the scheme of the FW Act that the obligation under s.173 is to issue a notice of representational rights to the broader class of employees even though the employer does not wish to have an agreement that extends that far. If it were otherwise, it would mean that an employer could always prevent an agreement having a broader scope than it desired by simply refusing or failing to issue notices of representational rights outside its desired scope. Such an outcome is inconsistent with the scheme of the FW Act.
[61] When read in context we think that the paragraph in issue in MSS Security should properly be interpreted as saying no more than a disagreement over scope may ultimately be settled either through bargaining, which may include protected industrial action, or by the making of a scope order. It must also be remembered that there is limited availability to scope orders. An application for a scope order is not an available remedy to resolve any disputes about scope per se. Before an application for a scope order may be made, a bargaining representative must have concerns that bargaining is not proceeding efficiently or fairly because that bargaining representative considers that the proposed agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover. 42 Viewed in its proper context, a scope order is not a universal remedy for a dispute about scope, rather it is a remedy for bargaining that is not proceeding efficiently or fairly because of a bargaining representative’s view about employee coverage of a proposed agreement. Not every dispute about scope will have the effect of impeding bargaining in this way.
[62] In our view the misquoted paragraph from MSS Security did not lead to any error of fact or law nor did the Commissioner misapply the decision in MSS Security. The Commissioner’s conclusion that a scope order application was “only one” remedy in resolving scope issues was in our view correct.
Third ground of appeal - identifying employees who will be covered by the proposed agreement who should be balloted
[63] The third ground of appeal concerns the potential difficultly said to arise from the possibility that at different times, employees who will be covered by the Respondent’s proposed enterprise agreement, are covered by the Gorgon Agreement some of the time and by the General Agreement at other times depending on the work being performed or assigned. The Appellant submits that arriving at the Decision, the Commissioner failed to give any, or any proper, weight to the evidence that there are employees who should be within the group to be balloted who:
(a) will, from time to time, perform work in classifications to which the Gorgon Agreement applies and who will, from time to time, perform work to which the General Agreement applies; and
(b) as a consequence, at all times, are therefore covered by the General Agreement.
[64] It was submitted that Commissioner’s failure to give any, or any proper, weight to the fact that there are employees who will perform work to which the Gorgon Agreement and the General Agreement will at different times apply, depending on what work they are doing at any given point in time, results in the undesirable and unintended consequence that some of those employees may not have a democratic say in the process which is intended to produce an enterprise-level collective agreement. This consequence will arise if employees are, at the time of the protected action ballot for the Respondent’s proposed enterprise agreement (which on the Respondent’s contention will only replace the General Agreement), performing work to which the Gorgon Agreement applies.
[65] It was submitted that such an outcome is arbitrary and contrary to the legislative intent that such persons should have a democratic say in the negotiation of any enterprise-level collective agreement which ultimately covers, and may be applied to them.
[66] In our view, these are matters of practicality in determining which employees are entitled to vote for the proposed industrial action and which employees are entitled to participate in protected industrial action once notice of the action is given. They do not bear upon the question whether s.438 operates as a bar to the PABO Application or on whether the matters in s.443(1) are satisfied. The PABO Application makes clear that employees to whom the Gorgon Agreement applies are not within the group of employees to be balloted 43. It is not unusual, particularly amongst a large group of employees of an employer, for the constituency of a group of employees to change during the ballot and by the time that notice of protected industrial action is given, and even between the giving of notice and the taking of action. Moreover it is not unusual for an employee to transfer between classifications or type of work, the result of which might be that another agreement covers that employee whilst working in the new classification or undertaking that type of work. These practical difficulties to not provide a basis for refusing to make a protected action ballot order. To the extent that this ground also raises the issue of which employees “will be covered” we deal with that issue under ground 5 of the appeal below. We are unable to identify any appellable error based on this ground.
Fourth ground of appeal
[67] As to the fourth ground of appeal, the Appellant says that having regard to each of grounds 1, 2 and 3 of the appeal, there was no ability for the Respondent to make the PABO Application and no jurisdiction for the Commissioner to make the Order, by reason of s.438 of the Act. As we have concluded that there is no appellable error identified by any of grounds 1, 2 or 3 of the appeal, it follows that this ground also fails.
Fifth ground of appeal - “will be covered”
[68] In its fifth ground of appeal the Appellant says that the Commissioner erred in finding that the Respondent’s 13 December 2013 proposal on scope would not cover employees who are covered by the Gorgon Agreement. The Appellant submitted that the exception contained in the Respondent’s scope proposal, which deals with coverage, is expressed to operate in respect of employees to whom the Gorgon Agreement applies. It goes on to state, that for the avoidance of doubt, should the Gorgon Agreement be terminated, the enterprise agreement proposed by the Respondent would apply. It is submitted that the way in which the exception is expressed makes it clear that the Respondent’s 13 December 2013 scope proposal covers the employees to whom the Gorgon Agreement applies.
[69] Thus it was submitted that when considering coverage of the Respondent’s 13 December 2013 scope proposal, it is simply not to the point that at any particular time employees to whom the Gorgon Agreement applies may be excluded. The position is not different to the current position in relation to the interaction between the General Agreement and the Gorgon Agreement. If the Gorgon Agreement applies, the General Agreement does not apply, but that does not alter the coverage of the General Agreement. That is, the Respondent’s 13 December 2013 scope proposal, even with the exception propounded by the Respondent, must include within its coverage employees covered by the Gorgon Agreement.
[70] It was submitted that s.438 is invoked if more than one enterprise agreement covers employees who will be covered by the proposed enterprise agreement. Section 438 applies where the proposed enterprise agreement will cover employees who are covered by an enterprise agreement which is not within 30 days of its nominal expiry date, regardless of whether the proposed enterprise agreement is expressed to not apply to those employees. Accordingly, the Respondent could not make the application and the Commissioner, as a consequence, was not empowered to hear and determine the Application.
[71] The first part of the Appellant’s argument turns on the proper construction of the phrase “will be covered” in s.438 of the Act.
[72] In Construction, Forestry, Mining and Energy Union v Hamberger and Another 44Katzmann J considered the meaning of the phrase “will be covered” in the context of s.172 of the Act. Her Honour said:
The first question, then, is what is meant by the expression “who will be covered by the agreement”, more particularly what “will” means in this context.
The starting point is to construe the words according to their ordinary meaning having regard to their context and legislative purpose. Context includes the existing state of the law and the mischief it was intended to remedy. See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue(Northern Territory) (2009) 239 CLR 27 at [14]; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. The words should be read by reference to the language of the statute as a whole: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355at [69].
The majority interpreted “will” in the expression to mean “future likelihood” (which the majority apparently took to be synonymous with an expression of present intention). The CFMEU submitted that the more appropriate meaning of “will be covered” in context is that coverage of the employees employed at the time the agreement is made is a necessary result of the agreement being made, intimating that such an interpretation provided the required degree of certainty. In any event, the CFMEU submitted that, even if the majority were correct, in this case it could not be said that it was intended that the employees who are employed at the time will be covered by the agreement if there is a clear indication in the agreement itself that they may not be. Thus, it was said, the employees who are employed at the time and participate in the vote for the agreement might be covered by it; it cannot be said they necessarily will be covered.
The majority’s interpretation reflected one of the meanings given to the auxiliary verb in the Macquarie Dictionary:
indicating future likelihood: I will take a taxi; she will meet us there; do you think it will rain?; you will be surprised.
The CFMEU’s contention reflects one of the meanings given in the Oxford English Dictionary:
expressing a determinate or necessary consequence (without the notion of futurity).
In my view, the construction which the CFMEU espouses is the preferable one. It more accurately reflects the sense in which the expression is used in the statute. But I do not think that this is determinative of the question of validity.
In ascertaining the meaning of the statutory words an examination of the existing state of the law has proved unhelpful. Section 327 of the Workplace Relations Act (now repealed) provided:
An employer may make an agreement (an employee collective agreement ) in writing with persons employed at the time in a single business (or part of a single business) of the employer whose employment will, or would but for the operation of an ITEA that has passed its nominal expiry date, be subject to the agreement.
I have been unable to find any authority that considered the meaning of the expression “will ... be subject to the agreement” in that section. Certainly, my attention was drawn to none.
Notwithstanding what the majority appear to have thought, the Explanatory Memorandum is also unhelpful on this question. They referred to paragraph 683, which states:
The use of the phrase ‘employees who will be covered by the agreement’ in clause 172 is intended to make clear that the employees covered by the agreement are not limited to those employees who were employed at the time the agreement was made. An agreement covers all employees whom it is expressed to cover (clause 53). This includes persons employed at the time the agreement was made and persons employed at a later time provided that they fall within a class or group of employees who are expressed to be covered by the agreement.
The majority said of this passage:
This makes clear that the phrase “employees who will be covered by the agreement” refers to the class or group of employees who are expressed to be covered by the agreement. It does not restrict how the agreement specifies that class or group. As with any other term of an agreement it is a matter for the parties to decide what they agree about (subject to meeting the specific requirements contained in ss. 186 and 187).
[Emphasis in original.]
In essence, all the majority picked up from paragraph 683 was the reference to clause 53 (now s 53 of the Act). In my view, whatever the intention of the draftsperson may have been, the use of the expression“employees who will be covered by the agreement” in s 172 does not make it clear “that the employees covered by the agreement are not limited to those employees who were employed at the time the agreement was made”, but may also include employees employed at a later time as long as they fall within the specified class. On the contrary, s 172 is concerned with the making of an enterprise agreement and the employer can hardly make an enterprise agreement with employees not yet employed, even if some time in the future they may be covered by the agreement. Objectively, the intention of the legislature in using the expression was to ensure that the employer could only make an agreement with those employees who were named or described in the agreement and whom the agreement purported to cover. 45
[73] We think Her Honour is correct and we see no reason to ascribe a different meaning to that phrase as it appears in s.438. To similar effect, a Full Bench of Fair Work Australia in CBI Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union 46said:
[16] These grounds of appeal turn on the proper construction of the expression “a majority of employees … who will be covered by the agreement” in s 237(2)(a). CBI contends that the word “will” is concerned with future likelihood and the expression requires an assessment of which employees, if any, “will” be covered by the proposed agreement and then ascertaining that a majority of those employees want to bargain. It was argued that, on the evidence before him, the Deputy President could not be satisfied that any employees would be covered by an agreement made through bargaining that occurred as a consequence of the majority support determination sought by the CFMEU.
[17] We were not persuaded by those arguments. The Macquarie Dictionary, for example, demonstrates that the word “will” has a range of meanings. That word is not invariably concerned with “future likelihood”.
…
[22] The expression “employees who will be covered by [an] agreement” appears in numerous sections of the FW Act [footnote omitted].
[23] When consideration is given to the many contexts in which the expression “employees who will be covered by [an] agreement” is used, we are compelled to the conclusion that the legislature used that expression merely as a way of conveniently referring to the group or groups of employees who are proposed to be covered by an agreement (and who, therefore, will be covered when the agreement is made) rather than as a requirement that calls for a prediction as to which particular employees in the group will, when the agreement is made, be covered by the agreement. 47
[74] In the present context, s.438 is concerned with identifying employees who are covered by the Gorgon Agreement and ascertaining whether any such employee “will” also be covered by the proposed enterprise agreement. The answer is to be gleaned from the scope of the proposed enterprise agreement which excludes persons to whom the Gorgon Agreement applies and then asking: will the scope of the Respondent’s proposed enterprise agreement determine or as a necessary consequence would determine (without the notion of futurity) that employees covered by the Gorgon Agreement “will be covered” by the Respondent’s proposed enterprise agreement? The answer must be “no”.
[75] As to the second part of the Appellant’s argument, we do not think that the Appellant’s proposition by reference to the current interaction between the General Agreement and the Gorgon Agreement − that if the Gorgon Agreement applies, the General Agreement does not apply, but that does not alter the coverage of the General Agreement (our emphasis) − is analogous with the position that pertains vis-a-vis the Gorgon Agreement and the Respondent’s proposed enterprise agreement. Assuming both instruments were in operation, when the Respondent’s proposed enterprise agreement applies to an employee, the Gorgon Agreement would not apply and the Gorgon agreement would not cover that employee because necessarily that employee would not be performing work under the Gorgon Contract as determined by the Appellant 48. Conversely when the Gorgon Agreement is applied to an employee, the Respondent’s proposed enterprise agreement would neither apply nor cover that employee by reason of the exclusion of such an employee from the scope of the Respondent’s proposed enterprise agreement.
[76] It follows that we are unable to discern any appellable error based on this ground of appeal.
Sixth ground of appeal - “genuinely trying to reach agreement”
[77] Before the Commission is required to make a protected action ballot order in relation to a proposed enterprise agreement, it must be satisfied that the applicant for the order, in this case the Respondent, “has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted” 49. The Commissioner concluded that he was satisfied that the Respondent has been, and is, genuinely trying to reach agreement with the Appellant. The Commissioner’s reasons for reaching this conclusion are to be found at [44] of the Decision:
[44] I am satisfied that an application has been properly made under section 437 of the Act and the notice of application required by section 440 of the Act has been provided. The respondent does not dispute and the evidence does demonstrate to my satisfaction that the MUA has been, and is, generally (sic) trying to reach an agreement with Mermaid. I am satisfied that all the requirements of the Act have been met and as required by section 443 I must now make a protected action ballot order in relation to the proposed enterprise agreement. 50
[78] The Appellant submits that the Commissioner should not have been satisfied that the Respondent was genuinely trying to reach agreement within the meaning of s.443(1)(b) of the Act. It also submits that it is entitled to raise the matter on appeal where the decision below is tainted by the error even though it did not raise the issue before the Commissioner. It submits that before the Commissioner it made no concession on the question whether the Respondent has been, and is, genuinely trying to reach an agreement with the Appellant; rather it simply did not seek to be heard on the issue. The Commissioner nevertheless had to be satisfied, on the evidence, of the matters in s.443(1)(b). During the course of proceedings before the Commissioner, the following exchange took place:
MR POWER: Commissioner, may I just interrupt there and just indicate that we’re not going to be heard on the question of genuinely trying, so if that assists Ms Palmer, so be it.
MS PALMER: Thank you. I think we’re still obliged to make our case in any event.
THE COMMISSIONER: Yes, I think you are. But, yes. 51
[79] The exchange reproduced above is consistent with the Appellant’s submission before us.
[80] The Appellant says that the Commissioner should have but did not draw an inference from the available evidence that the Respondent was not genuinely trying to reach an agreement with the employer on the Respondent’s proposed agreement. Rather the Respondent’s change of position on scope in December 2013 was motivated by a desire to avoid the effect of s.438. The Appellant submitted that the inference was available on the basis of the following evidence:
● negotiations between the Appellant and the Respondent for the proposed Offshore Oil and Gas Enterprise Agreement for over 12 months during which the scope issue now raised by the Respondent was never raised;
● the Respondent raised the scope issue only after it had withdrawn its earlier protected action ballot application because of the effect on that application of s.438; and
● there was no evidence before the Commissioner which offered any other reason for the Respondent’s change in position on scope 52.
[81] Consequently the Respondent’s evidence that it was genuinely trying to reach an agreement with the Appellant on its proposed agreement should have been considered against the other available evidence and if that had been done it would not have been open to the Commissioner to conclude that the Respondent has been, and is, genuinely trying to reach agreement with the Appellant on the Respondents proposed enterprise agreement.
[82] The Respondent submits firstly that we should not entertain this ground because the Appellant did not make any submissions before the Commissioner on the question of whether the Respondent has been, and is, genuinely trying to reach an agreement with the Appellant. It was submitted that had the Appellant raised the issue at first instance the Respondent could have called evidence or made additional submissions to meet any objection by the Appellant. The Respondent says that Mr Tracey gave evidence that the Respondent had genuinely tried to reach an agreement with the Appellant and having done so the evidentiary onus on the issue shifted to the Appellant. As the Appellant chose not to take the point at first instance or take any step to discharge the onus that the Respondent was not genuinely trying to reach an agreement, it was too late on appeal to attempt to do so.
[83] Further, the Respondent submit that the Commissioner was correct in any event in concluding and that it has been, and is, genuinely trying to reach an agreement with the Appellant.
[84] It is true that the Appellant did not wish to be heard on the question whether the Respondent has been, and is, genuinely trying to reach an agreement with the Appellant 53. However it was also correctly accepted by the Respondent during the proceeding before the Commissioner that it nevertheless has to satisfy the Commissioner that it has been, and is, genuinely trying to reach an agreement with the Appellant54.
[85] On appeal the Appellant is effectively arguing that the Commissioner did not take into account evidence that was relevant to his assessment of whether the Respondent has been, and is, genuinely trying to reach an agreement with the Appellant. If that be correct, that is an appellable error and in our view the Appellant is entitled on appeal to point to that error as a ground for appeal even though the Appellant did not wish to be heard on the question below. The material which is said not to have been taken into account was relevant to establishing a necessary jurisdictional fact. Ultimately the Commissioner had to be satisfied on the existence of a particular state of affairs, and in considering whether he was so satisfied he was required to take into account all of the relevant evidence which bears upon that question. The Respondent made no concession on that question nor did it accept that the state of affairs existed. In the circumstances, we are satisfied the Appellant should be permitted to argue on appeal that the Commissioner did not take into account evidence, relevant to a jurisdictional fact, which was before him that suggests that the Respondent had some extraneous purpose for seeking the proposed enterprise agreement the subject of the PABO Application, and was therefore in error.
[86] Our decision to allow the Appellant to raise a matter on appeal on which it did not wish to be heard below, should not be read as giving a green light to parties that they need not run their full case at first instance. A party acting in this way will do so at their own peril. We do not condone the Appellant’s action. The Appellant could have, without taking a position on “genuinely trying to reach an agreement”, assisted the Commissioner by pointing to evidence, on which it now relies, which was suggestive of the Respondent not genuinely trying to reach agreement. It did not do so. Without that assistance the Commissioner was left in the invidious position of having before him unchallenged evidence and submissions from the Respondent that it was genuinely trying to reach an agreement and no submission on that question from the Appellant.
[87] In J.J. Richards & Sons Pty Ltd v Transport Workers’ Union of Australia Lawler VP and Bissett C gave consideration to evidentiary issues relevant to the question of genuinely trying to reach agreement within the meaning of s.443(1)(b). Lawler VP and Bissett C said:
[62] In the ordinary course of events where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act, what may be described as an evidentiary onus shifts to the party or parties opposing the application to demonstrate why that evidence ought not be accepted sufficient to shift the evidentiary onus back to the applicant
[63] In circumstances where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act a finding that the applicant was not “genuinely trying to reach an [enterprise] agreement” within the meaning of s. 443(1)(b) will necessarily involve accepting evidence establishing that the applicant had some other, extraneous purpose in seeking the ballot. Indeed, when there is evidence from an applicant for a protected action ballot order that they have been and are “genuinely trying to reach an [enterprise] agreement” under the FW Act, it is difficult to conceive of circumstances where it could properly be found they were not, unless there is cross-examination or other evidence establishing that the applicant in truth has some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act. For example, the evidence may demonstrate that the applicant is pursuing an agreement that it knows or ought reasonably knows would not be an enterprise agreement within the meaning of the FW Act because it contains non-permitted matters contrary to s.172(1) or that the true motivation is to apply pressure in pursuit of political or environmental goals or simply to punish the employer for some perceived wrong doing. 55
[88] The observations of the majority in J.J. Richards reproduced above should not be taken as meaning any more than in the usual course of events when an applicant leads relevant evidence on the question whether it is generally trying to reach an agreement, prima facie, that will be sufficient to establish that fact. However the Commissioner had before him not only evidence of Mr Tracey in which he asserted that the Respondent was genuinely trying to reach an agreement, but also evidence noted in [76] above which raised serious questions about the Respondent’s purpose in now seeking the proposed enterprise agreement the subject of the PABO Application and whether the Respondent has been, and is, genuinely trying to reach an agreement with the Appellant about the Respondent’s proposed enterprise agreement. 56
[89] The majority in J.J. Richards also said:
[58] The expression “genuinely trying” in s.443(1)(b) is, clearly enough, concerned with the genuineness of the “trying”, the efforts, to reach the stated goal, namely an enterprise agreement that meets the requirements of the FW Act. It is directed at the authenticity of the applicant’s efforts to reach that goal. The genuineness or authenticity of an applicant’s efforts to reach that goal will turn on its motivation - the intention, object or purpose. 57
[90] In our view the Commissioner had before him evidence directed to the authenticity of the Respondent’s efforts to reach agreement with the Appellant on the Respondent’s proposed enterprise agreement the subject at the PABO Application. Some of that evidence was not favourable to the Respondent. The Commissioner’s reasoning on the question of genuinely trying to reach an agreement reproduced at [77] above does not indicate that he took that evidence into account. Certainly there is no discussion in the Decision, which would indicate that he took it into account. We note that there was some discussion between the Commissioner and Ms Palmer about the Respondent’s motivation and genuinely trying to reach agreement disclosed in the transcript 58. However it is not evident on the face of the Decision that the evidence was taken into account. It is not evident on the face of the Decision how that evidence was dealt with by the Commissioner in arriving at his ultimate conclusion . Apart from [44] of the Decision, which discloses the Commissioner’s conclusion, the bulk of the reasoning concerns the application of s.438. Although the Commissioner notes that the “respondent [Appellant] does not dispute”59 the Respondent has been, and is, genuinely trying to reach an agreement with the Appellant, this does not relieve the Commissioner of the obligation to take into account all relevant evidence which has a bearing on that question. The Commissioner’s statement that “the evidence does demonstrate to my satisfaction that the MUA has been, and is, genuinely trying to reach an agreement with Mermaid”60 does not, with respect, demonstrate that he took into account relevant and important evidence tending to show an extraneous purpose on the Respondent’s part.
[91] It seems to us that the Commissioner was, not unreasonably, influenced in his conclusion, by the Appellant’s decision not to be heard on the question. This seems clear both in the recital of facts in the “Background” of the Decision:
[11] Consequently on 25 November 2013 the MUA wrote to Mermaid’s representatives advising that it was their claim that the work covered by the 2011 Gorgon Agreement should be excluded from the scope of the agreement being negotiated.
[12] The response from AMMA on behalf of the vessel operators including Mermaid was that the change in the scope of the agreement claimed by the MUA was in their view not consistent with good faith bargaining and indicative that the MUA was not genuinely trying to reach agreement.
[13] In response the MUA further explained that the MUA’s changed position on scope of any agreement simply reflected the legal position identified in the previous ballot order application and the change was proposed as a logical solution consistent with the relationship between the 2010 Agreement and the 2011 Gorgon Agreement.
[14] I note that in the proceedings of this matter Mermaid does not argue that the MUA has not been or is not now genuinely trying to reach agreement. (Footnotes omitted)
[92] Further at [44] “The respondent does not dispute and the evidence does demonstrate to my satisfaction that the MUA has been, and is, generally trying to reach an agreement with Mermaid.” However, whatever may be said about the Appellant’s position on the question, the Commissioner had to turn his mind to all of the evidence relevant to that question. The decision does not disclose that he did this.
[93] The evidence of the Respondent’s change in its position on scope and of the circumstances in which the change was brought about was suggestive of purpose or motive that was all about avoiding the consequence of s. 438(1) and had very little to do with trying to reach agreement with the Appellant on the Respondent’s proposed enterprise agreement that was the subject of the PABO Application. The failure to take into account that evidence is an appellable error 61.
Submissions of AMMA
[94] In its submission before us, AMMA raised three substantive arguments, the second and third of which dealt with the proper construction of the phrases “proposed enterprise agreement” and “will be covered” and the operation of s.438. 62 For the reasons given earlier in this decision we do not accept those submissions as a basis of upholding the appeal.
[95] Much of the first argument is also directed to those matters. However, AMMA also submits as part of its first argument that the Respondent does not have standing to make the PABO Application because it is not a bargaining representative for the agreement proposed by it. The Respondent objected to the receipt of the submission because it was not raised below and did not arise from any of the Appellant’s ground of appeal 63. We determined to hear Counsel for AMMA on the question and to decide later what should be done with the submission64. As the submission goes to the validity of the PABO Application made by the Respondent and is an important question, we have decided to deal with that issue as part of the appeal even though the Appellant has not raised it.
[96] AMMA’s submission is best encapsulated in the following exchange recorded in transcript:
The relevant facts as he identified were that bargaining notices were provided in late December 2012 to the 213 employees. As he identified, that was because Mermaid had agreed, or initiated, it doesn’t matter, for bargaining for the agreement. We wish to additionally make the point that the process by which the MUA became the default bargaining representative for the proposed enterprise agreement was by operation of the Act. That is by section 176(1)(b). That is the scope of the proposed enterprise agreement described in the notices allowed employees to appoint a bargaining representative, that is each of the 213, or alternatively the Act operates so that relevantly, in this case, the MUA was appointed as their bargaining representative for the proposed agreement, not on some other basis.
If one looks at the notice given to each of the employees and one looks at the Act, section 174 subsection (2), there is no other evidence available below to allow one to draw a conclusion that the MUA was appointed on a default basis as a bargaining representative for those of the 213 employees who are members of the MUA for the proposed enterprise agreement which is described in the notices that each of them received. Now, the deputy president presiding asked my learned friend, “Well, you don’t take issue with the certain points of principle, it’s just a question of facts.” We agree with that. It’s just a question of fact as to what the proposed enterprise agreement was. As at the end of December 2012, two facts had been established.
DEPUTY PRESIDENT GOSTENCNIK: 2012?
MR WOOD: 2012.
DEPUTY PRESIDENT GOSTENCNIK: Just making sure.
MR WOOD: That’s when the notices of representational rights were provided. If I take the tribunal to appeal book 189, you can see the notice. This is the one referred to at paragraph 23 of Mr O’Brien’s statement. He says, “On 24 December 2012, Mermaid Marine issued the notice of employee representational rights to the 213 employees.” It says, “Mermaid Marine gives notices that it is bargaining in relation to an enterprise agreement,” describes the agreement, “which is proposed to cover employees whose employment classifications are contained within what we call the general agreement.” That is that’s how the 213 employees were identified.
Each of them were then told in the third paragraph of that notice, “You have a right to appoint a bargaining representative to represent you in bargaining for the agreement or in a matter before Fair Work Australia about bargaining for the agreement.” Then thirdly, third paragraph under that heading, “If you’re a member of the union that’s entitled to represent your industrial interests,” relevantly the MUA here, “in relation to the work to be performed under the agreement, your union will be your bargaining representative for the agreement unless you appoint another person as your representative or you revoke the union’s status as your representative.” There was no evidence below that the MUA was appointed by any of the 213 employees.
DEPUTY PRESIDENT GOSTENCNIK: So this is a standing point. It didn’t have - it wasn’t a bargaining representative for its proposed agreement?
MR WOOD: For it’s enterprise agreement, if everything - if you don’t accept what Mr Power says, that there was only one proposed enterprise agreement, the converse must be made out. There was no standing to apply for under 237. 65
[97] We do not accept that the Respondent did not have standing to make the PABO Application. The position of the Respondent as bargaining representative is not determined by the NERR or after the NERR has been issued. 66 For the reasons earlier discussed a bargaining representative may make various applications under the Act before an NERR has been issued, as is the case before an employer has agreed to bargain. The Respondent will, relevantly, be a bargaining representative for a proposed enterprise agreement in the circumstances set out in s.176(1). We see no reason to ascribe a different meaning to “proposed enterprise agreement” in that section, to that which applies to the scheme under which the PABO Application was made. It follows that the Respondent is a bargaining representative for employees of the Appellant who “will be covered” by the Respondent’s proposed enterprise agreement who are members of the Respondent and who have not appointed another bargaining representative or revoked the status of the Respondent as that employee’s bargaining representative. It follows that the Respondent had standing to make the PABO application.
Permission to appeal
[98] Section 604 provides:
(1) A person who is aggrieved by a decision:
(a) made by the FWC (other than a decision of a Full Bench or an Expert Panel); or
(b) made by the General Manager (including a delegate of the General Manager) under the Registered Organisations Act;
may appeal the decision, with the permission of the FWC.
(2) Without limiting when the FWC may grant permission, the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.
Note: Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).
(3) A person may appeal the decision by applying to the FWC.
[99] The Explanatory Memorandum to what is now s.604 states:
2327. The concept of permission in the Bill is intended to replace the concept of leave currently in the WR Act, using more modern terminology. Other than in the special case of subclause 604(2), the grounds for granting permission to appeal are not specified. It is intended that this would call up all the existing jurisprudence about granting leave to appeal – see e.g., Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (1998) 89 FCR 200; and Wan v Australian Industrial Relations Commission (2001) 116 FCR 481.
2328. Subject to the appellant demonstrating an arguable case of appealable error, it is intended that FWA should have a broad discretion as to the circumstances in which it can grant permission to appeal. Some examples of considerations which have traditionally been adopted in granting leave and which would therefore usually be treated as justifying the grant of permission to appeal include:
● that the decision is attended with sufficient doubt to warrant its reconsideration; and
● that substantial injustice may result if leave is refused.
2329. However, subclause 604(2) requires FWA to grant permission to appeal the decision if FWA is satisfied that it is in the public interest to do so.
[100] In Wan the Full Federal Court made the following observation regarding the operation of s.45 of the then Workplace Relations Act 1996 (the WR Act), a statutory predecessor to s.604:
Section 45 does not specify grounds for granting leave to appeal other than in the special case referred to in s 45(2). As we have previously observed, grounds traditionally adopted in granting leave have included considerations such as whether the decision is attended with sufficient doubt to warrant its reconsideration and whether substantial injustice may result if leave is refused. These “grounds” should not be seen as fetters upon the broad discretion conferred by s 45(1), but as examples of circumstances which will usually be treated as justifying the grant of leave. It will rarely, if ever, be appropriate to grant leave unless an arguable case of appealable error is demonstrated. This is so simply because an appeal cannot succeed in the absence of appealable error. 67
[101] Given the similarities between s.45 of the WR Act and s.604 of the Act the observations in Wan remain apposite.
[102] The Appellant submits that it is in the public interest that permission to appeal be granted because the appeal raises important questions about the proper interpretation and application of s.443 and s.438 of the Act, and the operation of those provisions with other provisions of the Act establishing the regime for enterprise bargaining and protected industrial action. It says further that permission to appeal should be granted where, as here appellable error is demonstrated or an arguable case of appealable error existed. The Respondent took a contrary position.
[103] As is apparent from our reasons we have concluded that there was an appellable error at first instance. The error made was one that may well have affected the outcome of the PABO Application. It is an error going to the establishment of a jurisdiction fact necessary before an order under s.443 must be made. We are also satisfied that the appeal raised important questions about the proper interpretation and application of s.438. It is therefore appropriate to grant the Appellant permission to appeal.
Disposition of appeal
[104] We grant permission to appeal, dismiss the appeal in part (ground 1 to 5), uphold the appeal in part (ground 6) and we quash the order made by Commissioner Williams in PR546210.
[105] We remit the PABO Application to Commissioner Cloghan to determine whether the Respondent has been, and is, genuinely trying to reach an agreement with the Appellant about that proposed enterprise agreement within the meaning of s.443(1)(b) of the Act.
DEPUTY PRESIDENT
Appearances:
AJ. Power of Counsel for the Appellant
S.Wood S.C and T. Saunders of Counsel for AMMA
M. Ritter S.C and E. Palmer for the Respondent
Hearing details:
Perth.
2014
17 February.
1 ABl-5
2 See transcript at AB17-49
3 AB9-16; Maritime Union of Australia, The v Mermaid Marine Vessel Operations Pty Ltd [2014] FWC 8 (3 January 2014)
4 AB6-8; PR546210
5AB57-118; General Agreement, Clause 4 – Scope and Application
6 AB119-172; Gorgon Agreement, Clause 3.1 – Scope. Note that ‘Gorgon Contract’ is defined in Clause 2 – Definitions of the Gorgon Agreement
7 AB123.4; Gorgon Agreement, Clause 4.1
8 Clause 31 of the 2010 Agreement deals with a construction project allowance bonus; See AB78.3
9 AB57.7
10 AB121.3
11 AB52.9 and AB177
12AB53.1
13 AB53.5 and AB188-189
14 AB189
15 Ibid
16 AB53.5
17 AB10 at [7] and AB52.10-54.7
18 AB692-695
19AB732.10-733.5 and AB734.10-735.1
20 AB468.1, AB 512.2 and AB 573.1
21 AB55.8, AB319.3 and AB320.5
22 The Australian Workers' Union v Killarnee Civil & Concrete Contractors Pty Ltd, ITF The Thompson Family Trust; Construction, Forestry, Mining and Energy Union [2011] FWAFB 4349 at [22]
23 (1994) 34 NSWLR 155
24 Ibid at [160]
25 J.J. Richards & Sons Pty Ltd v Transport Workers' Union of Australia [2010] FWAFB 9963 at [95]
26 Construction, Forestry, Mining and Energy Union v Hamberger and Another (2011) 195 FCR 74 at [70]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at [14]; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408.
27 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69].
28 [2010] FWAFB 9963
29 Ibid at [29]
30 (2012) 201 FCR 297
31 Ibid at [30]-[31], [33], [58] and [71]
32 J.J. Richards & Sons Pty Ltd v Transport Workers’ Union of Australia [2010] FWAFB 9963 at [54]; Australian Postal Corporation v CEPU[2010] FWAFB 344 at [60]; see also Australian Postal Corporation vCEPU[2009] FWAFB 599 at [43] - [45]
33 See for example MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union[2010] FWAFB 6519; see also section 236 of the Act (majority support determinations)
34 Explanatory memorandum at [643]
35 Ibid; (2004) 138 IR 362
36 Ibid at [55]
37 [2010] FWAFB 6519
38 AB15 at [43]
39 [2010] FWAFB 6519
40 AB14-AB15
41 [2010] FWAFB 6519 at [18]
42 See s. 238(1)
43 AB3 at [3]
44 (2011) 195 FCR 74
45 Ibid at [69]-[79]
46 [2011] FWAFB 7642
47 Ibid [16]-[17] and [22]-[23]
48 See AB119-172; Gorgon Agreement, Clause 3.1 – Scope. Note that ‘Gorgon Contract’ is defined in Clause 2 – Definitions of the Gorgon Agreement
49 Section 443(1)(b)
50 [2014] FWC 8 at [44]
51 AB36; PN157-PN159
52 See summary of background at AB 10 at [7] - [14] which records certain evidentiary matters
53 Ibid
54 Ibid
55 [2010] FWAFB 9963 at [62]-[63]
56 See the evidence at AB732.10-733.5 and AB734.10-735.1
57 [2010] FWAFB 9963 at [58]
58 AB34-35; Transcript PN145 - PN151
59 AB16 at [44]
60 Ibid
61 See House v The King (1936) 55 CLR 499 at 504-505
62 See [24] - [26] and [27]-[30] of AMMA’s outline of submission
63 Transcript PN241-PN243
64 Transcript PN244
65 Transcript PN232-PN240
66 See MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union[2010] FWAFB 6519 at [9]-[13]
67 (2001) 116 FCR 481 at [30]
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