Monash College Proprietary Limited v Independent Education Union of Australia

[2016] FWC 4065

[2016] FWC 4065

The attached document replaces the document previously issued with the above code on 23 June 2016.

Footnote 1 has been changed to [2016] FWC 3538.

Timothy Grellman

Associate to Vice President Catanzariti AM

Dated 30 June 2016

[2016] FWC 4065

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Monash College Proprietary Limited
v
Independent Education Union of Australia
(C2016/4132)

VICE PRESIDENT CATANZARITI SYDNEY, 23 JUNE 2016

Appeal against decision [[2016] FWC 3538] of Commissioner Bissett at Melbourne on 6 June 2016 in matter number C2016/2447 – stay granted.

[1] On 6 June 2016, Commissioner Bissett issued a decision 1 (Decision) pursuant to s.739 of the Fair Work Act 2009 (FW Act) which found that had Monash College Pty Ltd (Monash College) acted in accordance with the provisions of the Monash College Proprietary College Ltd (Monash University Foundation Year Teaching Staff) Agreement 2012 (the Agreement), it would have appointed some 35 of its Monash University Foundation Year (MUFY) teachers on an on-going basis with Monash College. The Commissioner found that the parties should consult to give effect to this decision.2

[2] On 15 June 2016, Monash College applied for a stay of the Decision on the basis that the Commissioner erred in construing clause 9.6 of the Agreement, and subsequently erred in finding that 35 MUFY teachers would have been appointed on an on-going basis in the event that Monash College had acted in accordance with the provisions of the Agreement. I heard the parties on 21 June 2016 in relation to the stay application, and made a decision to grant the stay. At the conclusion of the hearing I informed the parties of my decision and that the reasons for my decision would be published in due course. These are the reasons for my decision.

Applicable Principles and General Approach

[3] There was no dispute between the parties as to the principles applicable to the determination of the stay application. They are as stated in Kellow-Falkiner Motors Pty Ltd v Edghill, 3in which the Full Bench approved the following statement of principle:

“[5] In determining whether to grant a stay application the Commission must be satisfied that there is an arguable case, with some reasonable prospect 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.

[6] The Commission approaches applications for stay orders on the basis that, unless otherwise established, the order subject to appeal was regularly made.”

Submissions

[4] Monash College submitted that pivotal to the operation of clause 9.6 of the Agreement is whether the reference to “reasons” in the clause contemplates a subjective or objective test. Monash College posited that the Commissioner found that the required test was objective and not subjective, and that this conclusion undermined the Commissioner’s subsequent analysis of the clause. Monash College submitted that this error was exposed when the Commissioner was required to consider the operation of clause 9.6(c) of the Agreement, that is, whether the employment on a fixed term contract was “to meet peak student enrolments”.

[5] Monash College submitted that based on an objective test, an employer can never know with certainty whether student enrolments are or are not at peak. Monash College further submitted that compounding this error, the Commissioner also impermissibly determined that clause 9.6 of the Agreement necessitated that various consultation obligations be met when in fact, Monash College posited, no such consultation obligations are required by the language of the Agreement.

[6] Monash College further posited that clause 9.6 of the Agreement focuses on the reasons the relevant teacher is employed on a fixed term contract and that it was not disputed that each of the 35 fixed term teachers were employed to teach a specific subject area or areas. Monash College contended that the Commissioner erroneously determined that Monash College claimed that “specific activities” were the various activities set out in a teacher’s position description. Monash College submitted that this was never its case, and that the Commissioner has erred in failing to answer the case as advanced by Monash College.

[7] Monash College further submitted that based on the Commissioner’s construction of clause 9.6 of the Agreement, it will only be permissible to engage a person in a fixed term contract where it is known, at the commencement of the contract, that the teacher will not be required beyond that period. Monash College submitted that the effect of this approach is to depart from the language in clause 9.6 of the Agreement, which is directed to ascertaining whether there is no reasonable certainty of continuing employment, to a requirement that Monash College must know at the time of the fixed term appointment that the teacher is not required beyond the length of that fixed term contract. Monash College contended that such a construction involves a clear rewriting of clause 9.6(b) of the Agreement.

[8] Monash College further submitted that the Commissioner erred in determining that she had the power pursuant to s.739 of the FW Act to in effect convert 35 fixed term contracts into contracts for on-going employment. Monash College submitted that such a remedy would need to be clearly provided for in the FW Act or contemplated in the Agreement itself. Monash College posited that to the extent that the Commissioner relied upon Commissioner Roe’s decision in NTEU v University of Melbourne 4such decision was wrongly decided. In the submissions of Monash College, whether such a decision that purports to convert the nature of common law contracts from fixed term to on-going contracts is within power also creates a powerful basis for the grant of permission to appeal.

[9] With regards to the balance of convenience, Monash College submitted that in the absence of a stay, the College will be required to continue to pay four teachers whose fixed term contracts expired on Friday, 17 June 2016. Monash College has declined to undertake to repay such moneys in the event the decision of Commissioner Bissett is overturned on appeal, and undertakes to pay any moneys due to the teachers if it is unsuccessful in securing permission to appeal or is otherwise unsuccessful on appeal. On this basis, Monash College contended that the balance of convenience weighs heavily in favour of the grant of a stay.

[10] In opposing the stay application, the Independent Education Union of Australia (IEU) submitted that there must be a reasonable prospect of success on the grounds of appeal for a stay to be granted. The IEU contended that Monash College’s line of appeal which complains that the Commissioner erred in that she failed to find that the teachers the subject of the dispute notification had been employed for specific activities and/or to meet peak student enrolment, sets out no basis on which the finding of fact or the failure to find a fact is impugned. The IEU posited that this means that Monash College has no reasonable prospect of success in respect of this line of appeal.

[11] With regards to the contention of Monash College that the “reasons” for which the College may employ teachers for a fixed term period of time connotes a subjective test, the IEU submitted that no complaint is made that the Commissioner misunderstood the principles applicable to the interpretation of agreements. The IEU posited that in reaching her decision, the Commissioner considered the Agreement as a whole and the operation of clause 9 of the Agreement in the context of the Agreement as a whole. The IEU further contended that the Commissioner correctly noted that the “reasons” given in clause 9.6 are factual. The IEU submitted that they are factual in the same way that any circumstance which gives rise to entitlements is factual. The IEU further submitted that it is entirely conventional that the existence of objective criteria is provided for as condition precedents for the basis for an entitlement or obligation or the exercise of a discretion. On this basis, the IEU posited that Monash College has no reasonable prospect of success in respect of this line of appeal.

[12] With regards to the contention of Monash College that the Commissioner erred in failing to determine whether, applying an objective test, the 35 fixed term teachers were employed “to meet peak student enrolments”, the IEU submitted that the Commissioner determined that the teachers were not employed “to meet peak student enrolments”, and that this is a finding of fact. The IEU posited that Monash College failed to identify any basis for a challenge to findings of fact in the decision of the Commissioner. The IEU further posited that the introduction of concepts of reasonableness in the fact-finding exercise in the Commissioner’s decision imports objective elements that are not inconsistent with the submissions of Monash College.

[13] The IEU posited that Monash College contended that the Commissioner erred in her construction of the meaning of “no reasonable certainty that there will be work for the Teacher on an on-going basis” in clause 9.6(b) of the Agreement and that the College had contended that to satisfy this clause there needed to be reasonable certainty that the Teacher’s employment would be on-going into the future with no end point. The IEU posited that the Commissioner dealt with this matter in paragraphs [73] – [81] of the Decision and observed that different provisions of the Agreement dealt with circumstances where, at some point in the future, there was insufficient work for employees of the College. The IEU further submitted that at paragraph [78] of the Decision, the Commissioner observed that the interpretation pressed by Monash College would not be consistent with clause 9.3 of the Agreement and that as a result, the Commissioner’s finding at paragraph [79] of the Decision is incorrectly described by Monash College. On this basis, the IEU submitted that there are no reasonable prospects of success on this line of appeal.

[14] The IEU further contended that the conclusion reached by the Commissioner at paragraph [93] of the Decision followed on from earlier findings as to the meaning of the clause and the circumstances in which teachers had been employed. The IEU submitted that the Commissioner’s rejection of the contention of Monash College as to the meaning of “specific activities” and the interpretation of whether there was no reasonable certainty of on-going work necessarily led to the findings that the Commissioner made. On the basis that reasons are not to be read in an overly strict way, the IEU posited that there is no reasonable prospect of success on this line of appeal.

[15] With regards to the contention of Monash College that the Commissioner also impermissibly determined that clause 9.6 of the Agreement necessitated that various consultation obligations be met, the IEU submitted that clause 8 of the Agreement deals with consultation and provides that a consultative committee will be established to consult on a number of matters. These matters included general matters of concern of the MUFY teachers, proposals for significant or substantial change, and, the monitoring and reviewing of the implementation of the Agreement. The IEU submitted that further to this and in any event, if there was an error, which the IEU denies there was, it played no part in the substantive reasoning of the Commissioner as to the interpretation of the Agreement or her determination of the dispute. On this basis the IEU contended that there is no reasonable prospect for Monash College to succeed on this line of appeal.

[16] With regards to the contention of Monash College that the Commissioner erred in determining that she had the power to treat the contracts of the 35 fixed term teachers as if they were contracts for on-going employment and, in the alternative, erred in determining that she had power to create and impose a different form of contract for the 35 fixed term teachers, the IEU submitted that the submissions of Monash College misrepresent the Commissioner’s findings. The IEU posited that at paragraph [116] of the Decision, the Commissioner says no more than that it is a proper exercise of the Commission’s functions to require the parties to act conformably with the Agreement. The IEU contended that thereafter, the Commissioner determined what she found would have been the position had Monash College complied with the Agreement, and that Monash College point to no part of the determination by which the Commissioner imposed a “different form of contract”. On this basis, the IEU posited that there are no reasonable prospects of success on this line of appeal.

[17] With regards to the contention of Monash College that the Commissioner erred in her finding at paragraph [111] about what the College would have done had it applied the Agreement in the way determined by the Commission, the IEU submitted that the Commissioner set out the basis for her finding in paragraph [111] of the Decision, and identified four relevant reasons. The IEU contended that these reasons did not need to be expansive and, that these reasons adequately set out the Commissioner’s train of thought utilised in the decision making process. The IEU therefore posited that there are no reasonable prospects of success on this line of appeal.

[18] The IEU further submitted that having regard to the decision of a Full Bench of the Commission in Victoria University v NTEU 5, it is unclear as to what basis Monash College contends that the Commissioner erred in failing to issue orders. The IEU contended that as a result there are no reasonable prospects of the appeal succeeding.

[19] The IEU contended that Monash College posited two reasons as to why it is in the public interest to grant leave to appeal; firstly, that the decision is wrong, and secondly, that the effect of the decision changes the state of common law contracts of employment. The IEU submitted that the contention that the Decision is wrong is an assumed position in all applications for leave to appeal and does not go further to enliven the public interest. The IEU further submitted that Monash College identifies no part of the Decision by which common law contracts of employment are varied by the determination of the Commissioner. The IEU posited that furthermore, Monash College ignores paragraph [112] of the Decision in which the Commissioner says that she did not seek to do anything about the terms of the contracts. The IEU therefore posited that Monash College identified no proper basis on which leave to appeal would be granted.

[20] With regards to the balance of convenience, the IEU submitted that the contention of Monash College that an immediate difficulty is created because of the determination in respect of four teachers whose fixed term contracts ended on 17 June 2016 is addressed by the fact that there is no on-going issue, the IEU submits, that could not be dealt with by the application of the other provisions of the Agreement. The IEU submitted that further and in any event, the four teachers are entitled to be paid for a period of the “non-attendance” period of approximately three weeks. On this basis, the IEU submitted that Monash College has not set out the basis by which it would give effect to the determination, and as such has not established a circumstance against which the balance of convenience might be measured. As a result, the IEU submitted that Monash College has not established that the balance of convenience favours a stay of the Decision.

Consideration

[21] I accept Monash College’s contention that the Decision, and the effect that the Decision has on the contractual relationship between the College and the relevant teachers, raises important issues with regards to the nature of fixed term and on-going contracts under the Agreement. I accept that Monash College has an arguable case with some reasonable prospect of success in respect of the question of leave to appeal.

[22] With regards to the proper construction of clause 9.6 of the Agreement I accept the submissions of Monash College that there is an arguable case with reasonable prospect of success in relation to the merits of the matter. The grounds of appeal outlined by Monash College reveal a number of issues that, if successfully made out, could provide a basis for allowing an appeal against the Commissioner’s decision. I certainly could not conclude at this point in time that these grounds of appeal are unarguable.

[23] In light of the above, I find that Monash College has an arguable case with some reasonable prospect of success in respect of the question of leave to appeal and on the substantial merits of the appeal.

[24] Further, I accept the submissions of Monash College that the balance of convenience favours the granting of a stay against the Commissioner’s decision on the basis that the College will be required to continue to pay certain teachers whose fixed term contracts have already expired. I accept that the balance of convenience favours the granting of a stay particularly given the undertaking of Monash College to pay any moneys due to the teachers if it is unsuccessful in securing permission to appeal or is otherwise unsuccessful on appeal.

[25] Having considered the submissions of both parties and the authorities relating to the Commission’s discretion to grant a stay, I find in all the circumstances that a stay order is appropriate.

[26] This matter will be set down for both permission to appeal and the appeal on 14 July 2016.

Conclusion

[27] The Commissioner’s decision is stayed pending the hearing and determination of Monash College’s appeal.

VICE PRESIDENT

Appearances:

Mr J Bourke of Queens Counsel for Monash College

Mr E White of Counsel for the IEU

Hearing details:

Sydney and Melbourne by Video Link

21 June 2016

 1   [2016] FWC 3538.

 2   Ibid, 118.

 3   [2000] AIRC 1207.

 4   [2012] FWA 1202.

 5   [2015] FWCFB 2892.

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