Minister for Jobs and Industrial Relations; Minister for Women – Application for review of a decision

[2019] FWC 1228

[2019] FWC 1228

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.605 - Minister may apply for review of a decision

Minister for Jobs and Industrial Relations; Minister for Women – Application for review of a decision
(C2019/1128)

VICE PRESIDENT HATCHER SYDNEY, 26 FEBRUARY 2019

Application for a review of decision approving the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement [2019] FWCA 1023 – stay application

[1] An application has been made pursuant to s 605 of the Fair Work Act 2009 (FW Act) by the Hon. Kelly O'Dwyer MP, Minister for Jobs and Industrial Relations and Minister for Women (Minister), for a review by a Full Bench of the Commission of a decision issued by Deputy President Gostencnik on 18 February 2019 (Decision). 1 In the Decision, the Deputy President approved the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2016 (2016 Agreement) and, pursuant to the Decision and s 54 of the FW Act, the 2016 Agreement took effect yesterday (25 February 2019). The Minister contends that the approval of the 2016 Agreement was in error, and seeks an order that the Decision be set aside and the application for approval of the 2016 Agreement be dismissed. The Minister also seeks a stay of the Decision pending the hearing and determination of her review application. This decision deals with the application for a stay of the Decision.

[2] The principles applying to the determination of stay applications in respect of appeals are well established. The practice of the Commission is to adopt the two-part test enunciated in a decision of the Australian Industrial Relations Commission in Edghill v Kellow-Falkiner Motors Pty Ltd. 2 This decision has been followed in a number of cases decided under theFW Act. Paragraph [5] of that decision states:

“[5] In determining whether to grant a stay application the Commission must be satisfied that there is an arguable case with some reasonable prospects of success, in respect of both the question of leave to appeal and the substantive merits of the appeal. In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed. Each of the two elements referred to must be established before a stay order will be granted.”

[3] In assessing whether a stay application in an appeal has the requisite prospects of success, the Commission necessarily engages in an assessment of the appeal’s merits of a preliminary nature only, since the Commission will not have had the benefit of hearing the appellant’s full argument and usually will not have had the opportunity to properly peruse the case materials. 3

[4] I consider these principles apply equally to a stay application made in respect of a review application by the Minister pursuant to s 605.

[5] The grounds of the review are confined. For the purpose of her stay application, the Minister only relied upon one ground in substance, namely that the Deputy President misconstrued the phrase “discriminatory term” in s 195 of the FW Act as encompassing only direct and not indirect discrimination, and as a result erroneously approved the 2016 Agreement in circumstances where it contained indirectly discriminatory and hence unlawful terms.

[6] The background to the matter requires some explanation. Prior to the approval of the 2016 Agreement, the industrial instrument applicable to operational firefighters employed by the Metropolitan Fire and Emergency Services Board (MFB) was the Metropolitan Fire And Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2010 (2010 Agreement). Clause 6, Application of Agreement and Parties Bound, provided that the 2010 Agreement covered, applied and was binding upon the MFB, the United Firefighters Union of Australia (UFU) and employees of the MFB in what might broadly be described as operational firefighting classifications. Clause 37.2 of the 2010 Agreement provided that no employee could hold a position on a part-time basis “unless by agreement between the parties”, which I take to include the UFU.

[7] At the time the 2010 Agreement was made, the modern award which covered firefighters, the Fire Fighting Industry Award 2010 (Award), did not permit part-time employment for firefighters employed in the public sector. That position changed when the Award was varied 4 to permit such part-time employment as a result of a Full Bench decision made as part of the 4 yearly review of modern awards.5

[8] The 2016 Agreement covers operational firefighters together with employees holding the rank of Commander and AFCO, but does not cover the MFB’s employees engaged in administrative, clerical, engineering, technical or mechanical functions. The 2016 Agreement was “made” for the purpose of s 182 of the FW Act on 16 March 2018 when the process for employees to vote to approve the agreement was completed. Of the 1,999 employees of the MFB who would be covered by the 2016 Agreement, 1,768 cast a valid vote and 1,759 voted to approve it. Subsequent to this, the MFB made an application to the Commission on 3 April 2018 for approval of the 2016 Agreement. This application was supported by the UFU, but the Minister and the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) intervened to oppose its approval.

[9] The opposition of the Minister and the VEOHRC was based on the contention that provisions in the 2016 Agreement which operated to restrict the capacity of employees to work on a part-time basis were unlawful because they were indirectly discriminatory against women and employees with parental and carer’s responsibilities, and accordingly prevented the agreement’s approval (at least in the form in which it was made). The provisions of the 2016 Agreement in this respect relevant to the Minister’s stay application were in five categories:

(1) Clause 9.1.6 provides that where the MFB agrees to an employee’s request to work other than full-time, the employee will be rostered pursuant to clause 124. Clause 44.1.1 is to the same effect. Clause 124 provides for a “Special Administrative Duties Roster” which is distinct from the 10/14 roster provided for in clause 123 which is usually applicable to operational firefighting duties.

(2) Clause 9.1.7 provides that, except in exceptional circumstances where there is no risk to service delivery, safety and welfare of employees, the MFB agrees that part-time employees will not work on the 10/14 roster or form part of minimum safety crewing for operational purposes. Clause 44.1.2 is to the same effect. Clause 43.6.1 provides that, except for operational dayworkers, full-time employees would be rostered on the 10/14 roster set out in clause 123 or the conditions for Fire Service Communications Controllers (FSCCs) in clause 153.

(3) Clauses 9.1.4 and 9.1.5 relevantly acknowledge the obligations of the MFB to make reasonable accommodations for employees with parental or carer responsibilities and to deal with requests for changes in working arrangements made under s 65 of the FW Act in accordance with that provision, but provide that the MFB has determined and the parties agree that the MFB’s operational requirements generally mean that on-shift employees should be employed on a full-time basis, and that accommodation of the employee might require the employee to be transferred off-station or from their current work location to another position. Clause 44.1 was to the same effect as clause 9.1.5.

(4) Clauses 43.6.1, 43.6.2, 152.1 and 152.2 read together make no provision for a part-time employee to work as a FSCC.

(5) Clauses 43.3, 43.6.3, 138.4 and 138.4.1 require the agreement of the UFU as to the engagement of any employee on a part-time basis and as to the pattern of rostered hours for any part-time employee.

[10] Section 186(4) of the FW Act requires, in order for an enterprise agreement to be approved, that the Commission be satisfied that the agreement does not contain any unlawful terms. Section 194(a) defines “unlawful term” to include a “discriminatory term”. Section 195(1) defines “discriminatory term” (subject to certain exceptions in s 195(2) which are not presently relevant) in the following way:

(1)  A term of an enterprise agreement is a discriminatory term to the extent that it discriminates against an employee covered by the agreement because of, or for reasons including, the employee's race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

[11] Section 253(1)(b) provides that a term of an enterprise agreement has no effect to the extent that it is an unlawful term.

[12] The critical issue before the Deputy President was whether s 195(1) was concerned only with directly discriminatory terms (that is, terms which on their face discriminate on a proscribed basis) or also applies to indirectly discriminatory terms (that is, terms which are “facially” neutral but discriminate in a proscribed fashion in their operation). In an interlocutory decision issued on 15 January 2019 6, the Deputy President determined7 that in relation to this issue he should follow the decision of a single member of the Federal Court (Tracey J) in SDAEA v National Retail Association (No 2)8. In that decision, the Court determined that s 153(1) of the FW Act, which in terms relevantly the same as s 195(1) provides that a modern award must not include discriminatory terms, encompassed only direct discrimination. On that basis, the Deputy President concluded that the 2016 Agreement did not contain any discriminatory terms.

[13] However the Deputy President went on to say that, were he free to determine the proper construction of s 195(1) for himself, he would conclude that the provision included indirect discrimination, and he set out detailed reasoning as to why he would reach that conclusion. 9 The Deputy President then expressed the view, although he acknowledged that it was unnecessary to do so, that the provisions of the 2016 Agreement in the five categories set out above were indirectly discriminatory.10 In respect of the first three categories, the Deputy President’s conclusion was wholly or substantially based on a finding that the special administrative duties roster did not extend to operational firefighting, with the result that part-time employees could not work on the 10/14 roster and perform operational firefighting duties except in the prescribed exceptional circumstances.

[14] Notwithstanding this, the Deputy President determined in the interlocutory decision that the 2016 Agreement was not capable of approval in the terms that it was made because the part-time employment provisions earlier referred to contravened s 55 of the FW Act because they excluded s 65 by interfering with the capacity of the MFB to deal with a request for flexible working arrangements in the form of part-time employment in accordance with the section. 11 Section 186(2)(c) requires as a condition of approval of an enterprise agreement that the Commission be satisfied that the agreement does not contravene s 55. Section 55(1) relevantly provides that an enterprise agreement not exclude the National Employment Standards (which include s 65).

[15] The MFB subsequently proposed, pursuant to s 190, a number of undertakings to resolve the s 55 difficulty identified in the interlocutory decision. These undertakings were to the following effect:

•  clause 43 was to be modified to exclude from its operation an application for part-time employment made pursuant to s 65 (so that, inter alia, the requirement for UFU agreement did not apply);

•  a new provision (cl 43.7) was to be added to make it clear that FSCCs could access part-time rostering arrangements under the 2016 Agreement;

•  clause 44.1.1 was to be modified to provide that if a s 65 request was granted by MFB, the employee was to be rostered taking into account the employee’s preference, the existence of any reasonable business grounds, service delivery requirements, and the safety and welfare of employees, and that if the employee could not be rostered under the 10/14 roster because of these considerations, the employee would be rostered under clause 124;

•  the “exceptional circumstances” provision in clause 44.1.2 was to be deleted; and

•  clause 124 was to be modified to remove all references to “administrative” duties (with the apparent intention that the roster for which the clause provided could be applied to operational duties).

[16] In the Decision, the Deputy President found that the proposed undertakings met the s 55 concerns expressed in the interlocutory decision, and he accepted the undertakings pursuant to s 190(3). 12 On this basis, he approved the 2016 Agreement.13

[17] It is apparent from the above that the Deputy President’s satisfaction as to s 186(4) and hence his approval of the 2016 Agreement was contingent upon his application of the decision of Tracey J in SDAEA v National Retail Association (No 2) to conclude that the definition of discriminatory terms in s 195(1) did not include terms that were indirectly discriminatory. Insofar as the Minister’s review application seeks to challenge this conclusion, I consider that it is arguable with reasonable prospects of success. Section 605 does not confer a right of review upon the Minister, but merely a right for the Minister to apply for a review, with a requirement that such a review be conducted if the Commission is satisfied that it is in the public interest to do so. I consider that there are reasonable prospects that the application for the conduct of a review would be granted in the public interest or on discretionary grounds. The proposition advanced by the Minister concerning the proper construction of s 195(1) has not been dealt with by a Full Bench before and raises significant questions concerning the approval process for enterprise agreements. Indeed, it is reasonable to say that if the Minister’s contention that s 195(1) encompasses indirect discrimination is correct, it would likely effect a revolution in the way the Commission must address its statutory task of considering applications for the approval of enterprise agreements. I likewise consider that on the merits, the Minister’s primary contention to be advanced in the review is reasonably arguable for at least the following reasons:

(1) The decision of Tracey J in SDAEA v National Retail Association (No 2) was not directly on point since it did not deal with the proper construction of s 195(1) (although it must be acknowledged, for the reasons identified by the Deputy President in the interlocutory decision, that it would be difficult to identify a basis upon which to assign differing interpretations to s 153(1) and s 195(1)).

(2) The Deputy President himself preferred the position advanced by the Minister, and provided detailed reasoning for that preference.

(3) The Minister may cite in her favour a decision of another (then) single member of the Federal Court (Gordon J) in Klein v Metropolitan Fire and Emergency Services Board 14to the effect that discriminatory adverse action described in s 342(1) and prohibited by s 340 includes adverse action of an indirectly discriminatory nature. In that decision Gordon J declined to follow SDAEA v National Retail Association (No 2), and went so far as to say that if even it was binding, her Honour would decline to follow it because she disagreed with its analysis.

[18] However I am not persuaded that the balance of convenience favours the grant of the stay sought by the Minister. Firstly, it is not clear to me that the grant of a stay would necessarily serve any legal purpose in the sense that it would relevantly alter the rights at law of those bound by the 2016 Agreement which would otherwise apply if the agreement remained in force and effect until the hearing and determination of the appeal. As earlier stated, s 253(1)(b) provides that an unlawful term of an enterprise agreement has no effect. That means that if the Minister is correct that the part-time provisions of the 2016 Agreement, even as modified by the undertakings, are discriminatory terms and are therefore unlawful, then they have no effect notwithstanding the Deputy President’s conclusion to the contrary and his decision to approve the 2016 Agreement. The legal rights of any employee adversely affected by any unlawful term in the 2016 Agreement are maintained by s 253(1)(b) even without the grant of a stay.

[19] Secondly, there is no basis in practical terms to conclude that the grant of a stay is necessary to protect the position of any actual employee of the MFB pending the hearing and determination of the appeal. As explained above, the part-time provisions of the 2016 Agreement which were challenged by the Minister, and considered to be indirectly discriminatory by the Deputy President were extensively modified by the undertakings. The position now appears to be:

•  where part-time employment is sought pursuant to s 65, the agreement of the UFU is not required;

•  any s 65 request must be determined in accordance with the section and unhindered by the part-time provisions of the 2016 Agreement;

•  the “exceptional circumstances” requirement for part-time employment on the 10/14 roster has been removed;

•  part-time employees can now perform operational firefighting duties on the special duties roster; and

•  it has been made clear that FSCCs may be engaged on a part-time basis.

[20] The Minister pointed to the fact that the undertakings may not be legally effective in achieving their intention, in that although modifications were made to provisions restricting part-time employment in clauses 43 and 44, such modifications had not been made to the provisions of clause 9 to the same effect. That submission is not without legal foundation. However the MFB through its counsel explained that the undertakings were intended to have the practical effects identified above, and for the purpose of the consideration of the stay application I will proceed on the presumption that if a stay is not granted the MFB will apply the undertakings in a manner consistent with its counsel’s submissions.

[21] There may theoretically be some room left by the undertakings for the part-time provisions to operate in the indirectly discriminatory manner identified by the Deputy President in his interlocutory decision. However there is nothing before me to suggest that there is any real possibility that any actual employee of the MFB will be detrimentally affected if a stay is refused, let alone affected in an irreparable way. There is no evidence that any employee is currently seeking part-time employment or is likely to in the near future. Importantly, the Deputy President found that there was no evidence that any employee was actually disadvantaged by the restrictive part-time employment provisions of the 2010 Agreement. 15

[22] The Minister couched her submissions on the balance of convenience in terms of the moral outrage associated with maintaining in effect an enterprise agreement containing terms that have been found by the Deputy President to be indirectly discriminatory, but I prefer to proceed on a more practical basis. In any event, there is a compelling countervailing consideration. Assuming that the grant of a stay would mean that ss 54(2)(b) and 58(2) of the FW Act are not relevantly engaged, the consequence of the stay being granted would be that the MFB would have to continue to apply the 2010 Agreement. The provisions of that agreement concerning part-time employment are significantly more restrictive than the 2016 Agreement, as modified by the undertakings, and therefore would presumably be indirectly discriminatory to a greater degree. Thus the grant of the Minister’s stay application would act to the detriment of employees whose interests the application is nominally intended to protect. This consideration supports a conclusion that the balance of convenience positively weighs against the grant of a stay.

[23] Finally I consider it significant that both the MFB as the employer and the UFU acting on behalf of the overwhelming majority of employees covered by the 2016 Agreement oppose the grant of a stay. There is no basis to conclude that any relevant employee opposes the 2016 Agreement remaining in effect pending the hearing and determination of the appeal. Therefore I cannot be satisfied that the Minister’s stay application is actually representative of the interests of any employee of the MFB covered by the 2016 Agreement.

[24] For the above reasons, the Minister’s stay application is dismissed.

VICE PRESIDENT

Appearances:

J. Firkin SC for the Hon. Kelly O'Dwyer MP, Minister for Jobs and Industrial Relations and Minister for Women

C. O’Grady QC and A. Pollock of Counsel for the Metropolitan Fire and Emergency Services Board

R. Kenzie QC for the United Firefighters Union of Australia

Hearing details:

2019.

Sydney:

25 February.

Printed by authority of the Commonwealth Government Printer

<PR705275>

 1   [2019] FWCA 1023

 2   [2000] AIRC 785, Print S2639

 3  Supreme Caravans Pty Ltd v Hung Pham [2013] FWC 4766 at [9]

 4   PR587553

 5   [2016] FWCFB 8025

 6   [2019] FWC 106

 7   Ibid at [118]-[123]

 8 [2012] FCA 480, 219 IR 382

 9   [2019] FWC 106 at [128]-[173]

 10   Ibid at [209]-[210], [226], [238]-[239]

 11   Ibid at [281]-[301]

 12   [2019] FWCA 1023 at [17]

 13   Ibid at [18]

 14 [2012] FCA 1402, 208 FCR 178

 15   [2019] FWC 106 at [191]