Mr Steven Harold Gangell v Lobethal Abattoirs Pty Ltd T/A Thomas Foods International
[2018] FWCFB 4344
•31 JULY 2018
| [2018] FWCFB 4344 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Mr Steven Harold Gangell
v
Lobethal Abattoirs Pty Ltd T/A Thomas Foods International
(C2018/3248)
JUSTICE ROSS, PRESIDENT | SYDNEY, 31 JULY 2018 |
Appeal against decision [2018] FWC 3136 of Deputy President Anderson at Adelaide on 31 May 2018 in matter number AG2018/1546 - Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument – Deputy President declined to issue directions for the hearing and determination of the application in order to allow bargaining to occur – arguable case of appealable error – inconsistency with Re Aurizon Operations Ltd (2015) 249 IR 55 – permission to appeal granted – lack of utility in upholding the appeal – matter back before the Deputy President on 3 August 2018 – appeal dismissed.
[1] Mr Gangell (the Appellant) has applied for permission to appeal and appeals a decision 1 made by Deputy President Anderson on 31 May 2018 (the Decision) to delay the arbitration of his application to terminate a collective agreement-based transitional instrument, called the Food Process Worker Lobethal Abattoir Employee Collective Agreement 2008 (the 2008 Agreement), by at least two months.2
[2] An appeal under s.604 of the Fair Work Act (the Act) is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker. 3 There is no right to appeal and an appeal may only be made with the permission of the Commission. The matter was listed for hearing in respect of both permission to appeal and the merits of the appeal. The background may be shortly stated.
[3] On 24 April 2018 Mr Gangell made an application terminate the 2008 Agreement and sought to have the matter listed for arbitration. The application was made pursuant to Item 16(1) of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 which provides:
‘Subdivision C of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements by employers and employees) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.’
[4] As a consequence of the above provision, ss. 225 and 226 of the Act are applicable, and they provide:
s.225 Application for termination of an enterprise agreement after its nominal expiry date
If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:
“• one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
s.226 When the FWC must terminate an enterprise agreement
If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:
(a) the FWC is satisfied that it is not contrary to the public interest to do so; and
(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:
(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and
(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.
[5] The Respondent opposed the listing of the application for arbitration on the basis that a period of enterprise bargaining for a new agreement was about to take place.
[6] On 31 May 2018 Deputy President Anderson issued an interlocutory decision and directions in relation to the Appellant’s application to terminate the2008 Agreement.The Deputy President directed, among other things, that the application be listed for conciliation on or around 30 June and 31 July 2018, and that the application not be listed for arbitration until the Commission reviews the status of the conciliation process and any workplace bargaining for a new collective agreement.
[7] In the Decision, the Deputy President states:
‘[10]The Applicant requests that the application be set down for hearing and determination …
[11]The employer opposes the application. It says that it intends to shortly recommence bargaining for a new agreement and has taken steps over the past week to speak to bargaining representatives about that course. It says that the application should be adjourned for at least six months to allow bargaining to occur …
[12]The procedural issue that needs to be decided at the outset of dealing with this matter is important because the application has material significance to the employer and hundreds of employees. Its effect would be that, if the Agreement is terminated and no replacement agreement made, wages and conditions of employees would revert back to the relevant modern award (the Meat Industry Award 2010). The procedural issue is presented by the parties as either a pathway being cleared for Commission arbitration of that question or a pathway that permits further workplace bargaining.
[13]Though I have yet to receive evidence on the matter, it is clearly apparent from the submissions made by both parties that collective wages and conditions of employment for approximately 600 employees under the Agreement are in issue; and in a business which has experienced substantial and unexpected dislocation in recent months, and in an industrial relations environment where bargaining has occurred at the workplace level but been contested.
[14]I take into account of the following:
1. The right of an applicant to invoke the Commission’s jurisdiction and, having done so, have their claim dealt with efficiently, fairly and expeditiously;
2. The employer’s desire and intent to resume bargaining;
3. The statutory scheme, and the historic practice of the Commission, to seek resolution of matters (especially collective industrial matters) by conciliation in preference to and in advance of arbitration;
4. The statutory objects of Part 2-4 of the FW Act and in particular section 171 concerning the facilitation of good faith bargaining and the making of agreements;
5. The terms of section 226 of the FW Act and in particular the likelihood that any arbitration will require factual matters to be established including the views and circumstances of employees, the employer and employee organisations. The issue of “appropriateness” and the public interest also arise. These may not be simply or swiftly dealt with if the matter continues to be contested. For example, in considering the views of employees the Commission may need to be satisfied that views formed were based on a sufficiently well informed and accurate body of knowledge;
6. That there has been a recent history of bargaining at the Lobethal site whereby (in 2016) a negotiated replacement agreement was voted up by a majority of the workforce but not approved by the Commission on the ground that it did not meet the BOOT test and, further (in 2018) whereby a proposed agreement was voted down by a majority of the workforce.
[15]I consider it appropriate for a reasonable time to be provided for both the re- commencement of bargaining at the workplace level and also for Commission conciliation of the application in advance of arbitration.
[16]I do not consider that putting in place arrangements for arbitration of the application in advance of both workplace bargaining and Commission conciliation to be desirable. However, I also do not consider the employer’s proposal that the application simply be adjourned for at least six months to allow bargaining to occur to be reasonable. I consider that a process of workplace bargaining and Commission facilitated conciliation can and should operate in parallel, at least for the time being.
[17]I will provide a period of at least two months for that parallel process. Subject to any other development, I will review the status of both bargaining and conciliation at or around 31 July 2018 and invite the parties to express views at that time as to whether the application should be listed for arbitration, and (if so) on what basis, or whether further time for bargaining or conciliation is desirable.’
[8] The Appellant advances two grounds of appeal.
[9] The first ground contends that the Deputy President either failed to take into account relevant matters or failed to accord those matters adequate weight in the relevant sense, including:
1. Evidence before the Commission – by way of statutory declarations from the Appellant and Graham Smith 4 – that workers are receiving pay which is less than that prescribed in the Meat Industry Award 2010;
2. A submission by the Respondent that the Appellant “at times earns less than he would under the Award”; 5
3. The effect of the decision on the Appellant and, in particular, the length of time the Appellant would continue to receive less than Award pay;
4. The effect of the decision on the Respondent and, in particular, the length of time the Respondent could continue to pay its workers at less than Award rates; and
5. Part 2-3 of the Fair Work Act 2009 concerning the role of Modern Awards providing a fair and relevant minimum safety net of terms and conditions and Section 3 of the Fair Work Act 2009 concerning workplace relations laws that are fair to working Australians.
[10] The second ground of appeal contends that the Deputy President acted on a wrong principle, in that he departed from the principles in Re Aurizon Operations Ltd 6 (Aurizon) at paragraphs [16], [20] and [21] of the Decision (set out above).
[11] As mentioned earlier, there is no right to appeal and an appeal may only be made with the permission of the Commission. Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is ‘in the public interest to do so.’
[12] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 7 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
‘... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.’ 8
[13] Other than a special case in s.604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been 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 refused. 9
[14] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 10 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.11
[15] Section 226 requires that an instrument be terminated if the Commission is satisfied that it is not contrary to the public interest and that it is appropriate to do so, after taking account of all the circumstances, including the views of the employees, each employer and each employee organisation (if any) covered by the instrument; and the circumstances of those employees, employers and organisations, including the likely effect that the termination will have on each of them.
[16] Section 226 requires the exercise of a type of discretion. As the High Court observed in Coal and Allied Operations v Australian Industrial Relations Commission (footnotes omitted): 12
‘“Discretion” is a notion that “signifies a number of different legal concepts”. In general terms, it refers to a decision-making process in which “no one [consideration] and no combination of [considerations] is necessarily determinative of the result.” Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject-matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment.’ 13
[17] As discussed in CFMEU v Peabody Energy Australia PCI Mine Management Pty Ltd 14 and CFMEU v AGL Loy Yang Pty Ltd,15 s.226 involves the exercise of a ‘narrow’ discretion of the type described in the last sentence of the above passage, though it remains the case that the evaluative assessments required by s.226(a) and (b) allow a degree of latitude on the part of the decision-maker as to the conclusions to be reached.
[18] It is evident that the Deputy President was alert to the competing considerations potentially arising from s.226 of the Act and some of the practical elements of the case. This included the status of the bargaining, the fact that the Appellant was contending that he was, under the 2008 Agreement, being paid less than the Award, and that the workforce concerned had recently changed significantly as a result of the transfer of a large number of employees from another worksite due to that worksite being destroyed by fire. The program of further bargaining and report back conferences was apparently designed to reflect these matters. However, even in light of those circumstances, the adoption of a course of declining to issue directions for the hearing and determination of the s.225 application in order to ‘allow bargaining to occur’ was somewhat unusual. This had the effect of significantly delaying, without a clear end date, an informed assessment about how these, and other, considerations might impact upon the application and the circumstances of the parties. In doing so he also appears to have given determinative weight to the object in s.171 concerning the facilitation of good faith bargaining; rather than the Commission’s obligation to perform its functions and exercise its powers in a manner that ‘is quick, informal and avoids unnecessary technicalities’ (s.577(b)). In adopting this course it is at least arguable that the Deputy President departed from the principles set out in Aurizon. At [151] of that decision the Full Bench said:
‘Section 226 of the Act is part of the simple, flexible and fair framework, established by Pt 2-4 to which the objects in s 171 relate. There is nothing inherently inconsistent with the termination of an enterprise agreement that has passed its nominal expiry date and collective bargaining in good faith. There is nothing incompatible with the termination of such an agreement and the continuation of collective bargaining that has commenced in good faith at an enterprise level for an enterprise agreement that delivers productivity benefits. The framework that is established by Pt 2-4 provides for applications and orders to be made for the termination of an enterprise agreement that has passed it nominal expiry date. It is not too difficult to suppose that such an agreement in particular circumstances might no longer deliver productivity benefits, or that such an agreement has never done so. It is not too difficult to suppose that the termination of such an agreement might better support good faith bargaining for an agreement that delivers productivity benefits at the enterprise level.’ (emphasis added).
[19] The Deputy President’s decision appears to be premised on the proposition that there is a tension, or incompatibility, between the continuation of good faith bargaining and the termination of the 2008 Agreement. To the extent that this is the case, the Decision is inconsistent with Aurizon. The appropriate course would have been to issue directions for the hearing and determination of the s.225 application and, if thought desirable, the scheduling of concurrent conciliation conferences directed at reaching agreement on the terms of a new enterprise agreement. This would also have allowed the Commission, cognisant of the full facts and circumstances, to make an informed decision about how all of the various considerations provided by s.226 of the Act should be applied to the application.
[20] We are satisfied that the Appellant has established an arguable case of appealable error. In our view the Decision is attended with sufficient doubt as to warrant its reconsideration on appeal. Accordingly, we have decided to grant permission to appeal.
[21] Despite the grant of permission to appeal we are not persuaded to uphold the appeal and make the orders sought by the Appellant. We consider that there is a lack of utility in upholding the appeal in circumstances where the matter is listed for a conference before the Deputy President on 3 August 2018 and where the programming of the application is due to be further considered by the Deputy President at that time. We agree with the Respondent’s submission that ‘[e]ven if the Deputy President had erred by allowing the parties two months to negotiate … that time has now passed. It is difficult to see what order could be made that could reverse the effect of that decision.’
[22] Further, we apprehend that the Deputy President intends to consider the status of the matter at the 3 August 2018 conference. In that regard, we observe that while s.589 of the Act confers a broad discretion on the Commission to make decisions as to how, when and where a matter is to be dealt with, this must be read with s.577, which requires the Commission to perform its functions and exercise its powers in a manner that is quick and informal.
[23] We would also observe that the need to deal with an application expeditiously is particularly important in cases where, as here, there are assertions that employees to whom the agreement applies are at times earning less than under the relevant modern award.
[24] Section 578 requires that in performing functions or exercising powers the Commission must take into account the object of the Act, which is to provide a balanced framework for cooperative and productive workplace relations that promotes economic prosperity and social inclusion for all Australians by (among other things):
‘(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders…’ 16
[25] Subject to the application of all of the relevant considerations, it would be prima facie contrary to the object of the Act to permit an agreement that has passed its nominal expiry date to continue to operate in circumstances where its provisions as a whole are less beneficial than those provided by the relevant modern award.
[26] For the reasons given we grant permission to appeal and dismiss the appeal.
PRESIDENT
Appearances:
K Rogers for the Appellant.
A Manos for the Respondent.
Hearing details:
2018.
Sydney.
25 July 2018.
1 [2018] FWC 3136.
2 Notice of Appeal.
3 This is so because on appeal FWC has power to receive further evidence, pursuant to s.607(2); see Coal and Allied v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
4 The Australasian Meat Industry Employees Union’s Federal Secretary.
5 Outline of Submissions of Lobethal Abattoirs Pty Ltd, 25 May 2018, at paragraph [21].
6 Re Aurizon Operations Ltd (2015) 249 IR 55.
7 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others(2011) 192 FCR 78 at [44] -[46] .
8 [2010] FWAFB 5343, 197 IR 266 at [24] – [27].
9 Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481.
10 Wan v AIRC [2001] FCA 1803 at [30].
11 GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler; [2011] FCAFC 54; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
12 Coal and Allied Operations v Australian Industrial Relations Commission (2000) 203 CLR 194.
13 Ibid at [19].
14 [2016] FWCFB 3591 at [16].
15 [2017] FWCFB 1019 at [29].
16 Fair Work Act 2009 (Cth) s 3(b).
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