FEDERAL COURT OF AUSTRALIA
One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77
Appeal from: Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266 File number: NSD 2073 of 2017 Judges: BROMBERG, KATZMANN AND O'CALLAGHAN JJ Date of judgment: 25 May 2018 Catchwords: INDUSTRIAL LAW — enterprise agreements — where labour hire company hired three employees and the three employees voted to approve an enterprise agreement applying to employees and prospective employees covered by 11 modern awards — where employer declared it had explained to the employees the terms of the agreement and their effect but there was no evidence of the content of the explanation — where Fair Work Commission approved agreement and primary judge declared approval to be void and of no effect, whether primary judge erred in holding that there was no agreement susceptible of approval — whether compliance with s 180(5) of the Fair Work Act 2009 (Cth) is a jurisdictional fact — whether primary judge erred in holding in the alternative that the Commission’s satisfaction was affected by jurisdictional error — purpose of s 180(5) — scope of s 188(c) — whether Commission’s decision also affected by jurisdictional error because it failed to take into account certain considerations in achieving satisfaction that agreement passed the “better off overall test” under s 193 or because there was no reasonable basis upon which it could have been satisfied Legislation: Constitution, s 75(v)
Acts Interpretation Act 1901 (Cth) s 15AA
Fair Work Act 2009 (Cth) ss 3, 53(1), 54(1), 57, 171, 172, 173, 176(1), 180, 181, 182, 185, 186, 187, 188, 189(2), 190, 193, 578(a)
Workplace Relations Act 1996 (Cth) ss 3, 170L, 170LT
Explanatory Memorandum, Fair Work Bill 2008 (Cth)
Right to Organise and Collective Bargaining Convention (No 98), opened for signature 1 July 1949, 96 UNTS 257 (entered into force 18 July 1951)
Cases cited: Aerocare Flight Support Pty Ltd v Transport Workers’ Union of Australia [2018] FCAFC 74
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27
ALDI Foods Pty Ltd v Shop, Distributive and Allied Employees Association [2017] HCA 53; (2017) 350 ALR 381; 92 ALJR 33; 270 IR 459
Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241
Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd [1998] FCA 166; (1998) 80 IR 208
Australian Commercial Catering Pty Ltd v Fair Work Commission (2015) 235 FCR 441
Australian Industry Group v Fair Work Australia (2012) 205 FCR 339
Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; (2006) 153 IR 426
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Details
- Case
- [2018] FCAFC 77
- Decision Date
CaseChat Overview and Summary
One Key Workforce Pty Ltd sought to have an enterprise agreement approved by the Fair Work Commission. The Construction, Forestry, Mining and Energy Union (CFMEU) applied to the Federal Court for a declaration that the Commission's approval of the agreement was void and of no effect, in the alternative seeking a writ of certiorari to quash the approval and a writ of mandamus requiring the Commission to hear and determine the application to approve the Agreement. The primary judge declared the Commission's approval to be void and of no effect. The CFMEU and One Key Workforce both appealed to the Full Court. The central issue before the Court was whether the primary judge erred in holding that there was no agreement susceptible of approval. A secondary issue was whether the primary judge erred in holding in the alternative that the Commission’s satisfaction was affected by jurisdictional error. The Full Court held that the primary judge was correct in declaring the approval of the agreement to be void and of no effect. The Court held that the primary judge was correct to find that the Commission was not satisfied that the employer had taken all reasonable steps to explain the terms of the agreement and their effect to the employees, as required by s 180(5) of the Fair Work Act 2009 (Cth). The Court found that the primary judge was correct in holding that the Commission’s satisfaction was affected by jurisdictional error because it failed to take into account certain considerations in achieving satisfaction that the agreement passed the “better off overall test” under s 193 or because there was no reasonable basis upon which it could have been satisfied. The Court held that the approval of the agreement was void and of no effect.
Orders
Orders of the court
1. Within 28 days the parties file submissions (not exceeding five pages) on the question of what orders should be made in the light of these reasons.
2. Unless otherwise ordered, the question be determined on the papers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
“Good faith bargaining” is defined by the considerations in s 228.THE FACTS OKW is one of a number of related companies which together operate as a business known as One Key Resources Group. The business of One Key Resources includes the provision of contract labour to other businesses (clients) in a range of industries. By August 2015 One Key Resources supplied more than 300 full-time employees to operators of coal mines in New South Wales and Queensland. That work was covered by the BCMIA. Between March 2015, when OKW was first registered, and August 2015, when the vote on the Agreement took place, OKW hired three employees: Kevan O’Brien, Reuben Raymond and Vernon Marfell. Notwithstanding the scope of the Agreement, these three men were the only employees of the company before the Commission approved the Agreement. Mr O’Brien began working for OKW in June 2015. He was employed on a permanent basis, working in the coal mining industry as a specialised machine operator/trainer assessor and placed with HSE Mining to work on the pre-stripping contract with BHP Billiton Mitsubishi Alliance at the Peak Downs black coal mine in Queensland. Mr Raymond began working for OKW in late May 2015. He was employed as a casual labourer. At first he was placed with BMD Constructions on a construction project in Darwin. Soon afterwards he was placed with BMD Urban to work on another construction project also in Darwin. Mr Marfell began working for OKW in late April 2015, also on a casual basis. He was employed as a site trainer/assessor and placed with Whitehaven Coal at Maules Creek in New South Wales. By 3 March 2017 Mr O’Brien was the only one of the three employees still employed by OKW. Mr Marfell’s employment ended on 29 February 2016, four months after the Commission approved the Agreement, and Mr Raymond’s on 16 September 2015, six weeks before the Commission approved the Agreement and almost two months before it came into force. At the hearing before the primary judge, without objection the CFMEU read parts of affidavits filed by OKW in this Court. Petrina Ind, an employee of One Key Resources (but not of OKW) was the deponent of one of those affidavits. The CFMEU also questioned Ms Ind. On 24 July 2015 Ms Ind sent an email to the three employees attaching a notice of employee representational rights in accordance with s 173 of the Fair Work Act. Ms Ind and OKW described this as the commencement of bargaining for the agreement. The notice stated that the agreement was to cover employees covered by the 11 awards and identified those awards. It also contained a brief explanation of an enterprise agreement, informed the employees of their right to appoint a bargaining representative, and told them what to do if they had any questions. On 7 August 2015 Ms Ind emailed the employees a copy of the proposed agreement. The email attached copies of the 11 modern awards. Ten days later, on 17 August 2015, Ms Ind advised the employees by email that voting on the agreement would occur between 9am and 5pm on 25 August 2015. Ms Ind then telephoned each of the employees to confirm that he had received the email. According to evidence adduced before the primary judge but not before the Commission, in the telephone calls she explained the voting process, went through the terms of the Agreement, reading out certain clauses but did not “go through” the awards or explain how the terms of the Agreement would interact with the awards. She told the Court that she had not undertaken a comparison of the 11 awards with the Agreement. She also told the Court that (at all relevant times) she was unaware that the BCMIA did not permit casual employment for engineering and production employees.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Three days later, on 30 October 2015, the Commissioner approved the Agreement with the undertakings, publishing reasons at the same time.THE COMMISSIONER’S DECISION Given the scope of the primary judge’s decision and the issues on the appeal, it is unnecessary to refer to the entire decision. Two matters are presently relevant. On whether he was satisfied that s 180(5) had been complied with, the Commissioner said:5The Applicant says that the terms of the Agreement were explained to the employees. There were no bargaining representatives and there was no negotiation. The employer drafted a proposed agreement and provided it to employees by email. Employees were provided with a link that directed them to the relevant Awards. …9Section 180(5) of the Act requires that all reasonable steps must be taken by the employer to explain the terms of the agreement and the effect of those terms. It is quite common for the Fair Work Commission to identify terms which it believes may disadvantage employees in circumstances where the employer has failed to identify these matter in the F17 Statutory Declaration and in the information provided to employees. In this case the employer failed to identify a number of matters which disadvantage employees. Where these matters are minor it does not necessarily mean that Section 180(5) has not been complied with. The requirement is about “reasonable steps”. Where the matters are more significant the Fair Work Commission might not be satisfied that Section 180(5) has been met and as a consequence the requirement for genuine agreement in Section 188 may not be met and this will prevent the Agreement being approved. In the circumstances of this case I am satisfied, on a fine balance, that reasonable steps were taken to explain the terms of the agreement and the effect of those terms. The Commissioner proceeded to identify some of the matters in the Agreement which put employees at a disadvantage compared to their position under the awards (or some of them). He did so, however, not to explain why he reached the conclusion that all reasonable steps had been taken to explain the terms and effect of the Agreement, but in the context of his discussion of whether the Agreement met the BOOT. On that question, the Commissioner was only satisfied in the light of OKW’s undertakings. The undertakings did not address the concern earlier expressed that the Agreement had not been genuinely agreed to by the employees covered by the Agreement and nothing in the Commissioner’s reasons specifically addressed that question. Nevertheless, he said that he was satisfied as to each of the requirements of ss 186, 187 and 188 of the Act as was relevant to the application.THE APPLICATION BEFORE THE PRIMARY JUDGE No application was made to the Full Bench for permission to appeal. Rather, the CFMEU applied to the Court under s 39B(1A)(c) of the Judiciary Act 1903 (Cth), ss 21, 22 and 23 of the Federal Court of Australia Act 1976 (Cth) and ss 562 and 563 of the Fair Work Act for a declaration that the approval of the RECS Agreement was “void and of no effect”. In the alternative it sought a writ of certiorari to quash the approval and an order that a writ of mandamus be issued to the Commission requiring it to hear and lawfully determine the application to approve the Agreement.
Ratio Decidendi
Legal Principle Established
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