One Tree Community Services Inc v United Voice - [2019] FCA 1309

FEDERAL COURT OF AUSTRALIA
One Tree Community Services Inc v United Voice [2019] FCA 1309

File number: WAD 389 of 2019

Judge: MCKERRACHER J

Date of judgment: 19 August 2019

Catchwords:
INDUSTRIAL LAW – where dispute about payment of redundancy and recognition of service of transferred employees was referred to Fair Work Commission for arbitration – employer challenged Commission’s jurisdiction – Commission satisfied as to jurisdiction

INDUSTRIAL LAW – where the employer commenced proceedings in this Court challenging the Commission’s jurisdiction to arbitrate – whether the new employer ‘consented’ to arbitration – scope of agreement to arbitrate – parties to agreement to arbitrate

CONSTITUTIONAL LAW – whether the Commission would be impermissibly exercising judicial power in arbitrating the dispute – private arbitration – whether the Commission would be infringing Ch III of the Constitution

PRACTICE AND PROCEDURE – application for interlocutory relief – whether a prima facie case established – whether balance of convenience favoured relief

Legislation:
Constitution s 71

Fair Work Act 2009 (Cth) ss 50, 52(1), 53(3)(a), 122(1), 182(1), 186, 186(6), 311, 311(2), 313, 313(1), 313(1)(a), 320, 562, 595(1), 595(3), 595(5), 738(b), 739, 739(4), 793

Judiciary Act 1903 (Cth) ss 39B(1), 39B(1A)(b), 39B(1A)(c), 78B, 78B(5)

Cases cited:
Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57

Balfour Beatty Power Construction Australia Pty Ltd v Kidston Goldmines Ltd [1989] 2 Qd R 105

Burwood Cinema Ltd v Australian Theatrical and Amusement Employees’ Association (1925) 35 CLR 528

City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426

Construction, Forestry, Mining and Energy Union v Australian Industrial Relation Commission (2001) 203 CLR 645

Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2016) 244 FCR 178

Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245

Energy Australia Yallourn Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union (2018) 363 ALR 60

Hi-Fert Pty Ltd v United Shipping Adriatic Inc (1998) 89 FCR 166

Regional Express Holdings Ltd v Australian Federation of Air Pilots (2017) 262 CLR 456

Rinehart v Hancock Prospecting Pty Ltd (2019) 93 ALJR 582

TCL Air Conditioner (Zhongshan) Co Ltd v Judges of Federal Court of Australia (2013) 251 CLR 533

United Voice v One Tree Community Services Inc [2019] FWC 4285

Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 1102

Date of hearing: 14 August 2019

Registry: Western Australia

Division: Fair Work Division

National Practice Area: Employment & Industrial Relations

Category: Catchwords

Number of paragraphs: 64

Counsel for the Applicant: Mr M Follett

Solicitor for the Applicant: DLA Piper Australia

Counsel for the First Respondent: Mr SS Bull

Solicitor for the First Respondent: United Voice

Counsel for the Second Respondent: The Second Respondent submits to any order of the Court, save as to the question of costs

Table of Corrections:

22 March 2021

The medium neutral citation has been amended to ‘One Tree Community Services…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] FCA 1309
Decision Date: 19 August 2019

CaseChat Overview and Summary

One Tree Community Services Inc brought proceedings against United Voice in the Federal Court, challenging the jurisdiction of the Fair Work Commission to arbitrate a dispute concerning the payment of redundancy and recognition of service for employees transferred from One Tree to United Voice. The dispute arose from the transfer of employees under an Enterprise Agreement (EA) between One Tree and the Australian Council of Trade Unions. United Voice, although not a party to the EA, initiated the dispute with the Commission. The central legal issues were whether the new employer had 'consented' to arbitration, the scope of the agreement to arbitrate, and whether the Commission would be exercising judicial power in arbitrating the dispute. Additionally, the Court considered whether the Commission's arbitration would infringe Chapter III of the Constitution.

The Court found that the Commission had jurisdiction to arbitrate the dispute. It held that One Tree's contention about the Commission's jurisdiction was arguable and that the balance of convenience favoured resolving the issue in the Federal Court rather than the Commission. The Court reasoned that the dispute had wide implications for industrial relations and that resolving it in the Federal Court would prevent potential conflicts and penal consequences if One Tree's contention were incorrect. The Court also noted that the balance of convenience and the interests of justice favoured an early resolution of the jurisdictional issue. Consequently, the Court granted an interlocutory injunction restraining the Commission from hearing or determining the dispute until the Court's final decision.

The Court’s decision emphasised the legislative character of enterprise agreements and the role of unions in initiating disputes under such agreements. It also considered the constitutional implications of the Commission's arbitration powers. The Court concluded that the case was arguable and that the balance of convenience and the interests of justice supported an early resolution by the Court.

The Court made orders restraining the Commission from proceeding with the arbitration of the dispute until the Court's decision, with the orders being stayed for 48 hours to allow the Commission to consider whether to adjourn the arbitration. Costs were reserved.

Orders

Orders of the court

1. Until the hearing and determination of the originating application or further order (the Court’s Decision), the Second Respondent be restrained from hearing or determining by way of arbitration the dispute the subject of Fair Work Commission proceeding number C2019/1489 (the Dispute).

2. These orders be stayed for 48 hours and thereafter discharged if the Second Respondent determines to adjourn the hearing of the Dispute and stay any interlocutory orders, until the Court’s Decision.

3. Costs reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Insofar as the balance of convenience is concerned, it clearly favours resolving this dispute in this Court as it is an issue which is capable of affecting numerous other circumstances and is obviously capable of being of wide import in industrial disputation. More specifically, in relation to the balance of convenience concerning these parties, I appreciate that the argument would expose United Voice to a more expensive dispute, but if it is correct on the view it takes about the Dispute which it has raised, it will be compensated to some extent by a costs order of the Court. It is equally true and of significance that if One Tree’s contention concerning the Commission’s jurisdiction is correct, but no interlocutory relief were to be ordered by this Court, it would be required to defend the Commission proceeding, which is generally a no cost jurisdiction, such that it would be unable to recover the costs in that jurisdiction. Further, and more importantly I think, if the Commission proceeding is determined adversely to One Tree, it will be faced with the choice of either complying with the determination (rendering these proceedings nugatory) or consciously refusing to comply, exposing it to penal consequences pursuant to s 50 of the FW Act. Apart from the question of costs, which United Voice may incur, there is no other readily identifiable prejudice to it or to those members it represents other than modest delay in conferral upon them of rights, if they are entitled to the rights they claim in the Dispute before the Commission. CONCLUSION I consider the contention One Tree seeks to press is arguable and I have no doubt that the balance of convenience and the interests of justice favour resolving the point raised sooner rather than later by this Court so that the parties may, if necessary, proceed in the Commission if One Tree fails. The strength of the arguable case and the balance of convenience (together with the interests of justice) should always be measured collectively. Having regard to my clear views about the balance of convenience and interests of justice and my view that the case is arguable, I consider that the granting of relief would be appropriate. By conveying this view in written reasons in this proceeding to which the Commission is a party, I consider it appropriate not to make any order for 48 hours (or such further period as the Commission may reasonably deem necessary) to permit the Commission the opportunity of considering whether or not it would stay its present procedural orders and adjourn the arbitration of the Dispute pending resolution of this issue in this Court.

Ratio Decidendi

Legal Principle Established

There was debate between the parties on the issue of the role of United Voice, which was not a direct party to the EA, but is a direct party to the proceedings in the Commission, having raised the Dispute. United Voice relies upon Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245, where Bromberg J held that a union was able to initiate a dispute under the agreement in the absence of a disputed employee being named and that all affected would be bound by the outcome. That approach was confirmed on appeal in Energy Australia Yallourn Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union (2018) 363 ALR 60, where Rares and Barker JJ described the enterprise agreement as a ‘statutory artefact’ made by persons specifically empowered by the FW Act to do so by having a ‘legislative character’. Their Honours said (at [60]):An enterprise agreement is a statutory artefact made by persons specifically empowered by the [FW Act] to do so: Marmara at [90]. It has a legislative character, because it is a fair work instrument, as defined in s 12 of the [FW Act]. The Act enables an enterprise agreement to be made between an employer and both its employees (by majority vote) and employee organisations, such as the five unions.CONSIDERATION Much of this case turns on whether the EA’s DRC is such that it encompasses authorising an arbitration between One Tree and United Voice in respect of the Dispute involving the Transferring Employees. Did One Tree consent? Can One Tree be deemed by statute, in effect, to have consented? Would a provision having the effect of deeming such consent be constitutional? Enterprise agreements represent bargains concluded by industrial parties – employers and employees and their nominated union representatives, or employers and employees – that are generally enterprise or business specific, though they may in certain circumstances cover multiple enterprises. Enterprise agreements are not, in and of themselves, ‘laws’, but are given the force of law by the federal industrial relations regime: cf City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 per French J (at [51] and the authorities therein cited). Enterprise agreements are given statutory force by a registration process prescribed by legislation. However, while contemplated by statute, enterprise agreements are related to contracts of employment as they presuppose the existence of a contract of employment and relationship of employment. Enterprise agreements may be categorised as analogous to contracts as they are arrangements entered into by private parties, albeit within a particular statutory framework. How, and if there is a distinction between a public and private instrument, may be an important question. (There is some discussion of this issue in a paper by Boncardo P, ‘Enterprise Agreements and Contracts: Convergent and Divergent Approaches to Interpretation’ (2011) 18 JCU Lw Rw 4.)

File number:	WAD 389 of 2019
Judge:	MCKERRACHER J
Date of judgment:	19 August 2019
Catchwords:	INDUSTRIAL LAW – where dispute about payment of redundancy and recognition of service of transferred employees was referred to Fair Work Commission for arbitration – employer challenged Commission’s jurisdiction – Commission satisfied as to jurisdiction INDUSTRIAL LAW – where the employer commenced proceedings in this Court challenging the Commission’s jurisdiction to arbitrate – whether the new employer ‘consented’ to arbitration – scope of agreement to arbitrate – parties to agreement to arbitrate CONSTITUTIONAL LAW – whether the Commission would be impermissibly exercising judicial power in arbitrating the dispute – private arbitration – whether the Commission would be infringing Ch III of the Constitution PRACTICE AND PROCEDURE – application for interlocutory relief – whether a prima facie case established – whether balance of convenience favoured relief
Legislation:	Constitution s 71 Fair Work Act 2009 (Cth) ss 50, 52(1), 53(3)(a), 122(1), 182(1), 186, 186(6), 311, 311(2), 313, 313(1), 313(1)(a), 320, 562, 595(1), 595(3), 595(5), 738(b), 739, 739(4), 793 Judiciary Act 1903 (Cth) ss 39B(1), 39B(1A)(b), 39B(1A)(c), 78B, 78B(5)
Cases cited:	Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 Balfour Beatty Power Construction Australia Pty Ltd v Kidston Goldmines Ltd [1989] 2 Qd R 105 Burwood Cinema Ltd v Australian Theatrical and Amusement Employees’ Association (1925) 35 CLR 528 City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 Construction, Forestry, Mining and Energy Union v Australian Industrial Relation Commission (2001) 203 CLR 645 Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2016) 244 FCR 178 Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245 Energy Australia Yallourn Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union (2018) 363 ALR 60 Hi-Fert Pty Ltd v United Shipping Adriatic Inc (1998) 89 FCR 166 Regional Express Holdings Ltd v Australian Federation of Air Pilots (2017) 262 CLR 456 Rinehart v Hancock Prospecting Pty Ltd (2019) 93 ALJR 582 TCL Air Conditioner (Zhongshan) Co Ltd v Judges of Federal Court of Australia (2013) 251 CLR 533 United Voice v One Tree Community Services Inc [2019] FWC 4285 Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 1102
Date of hearing:	14 August 2019
Registry:	Western Australia
Division:	Fair Work Division
National Practice Area:	Employment & Industrial Relations
Category:	Catchwords
Number of paragraphs:	64
Counsel for the Applicant:	Mr M Follett
Solicitor for the Applicant:	DLA Piper Australia
Counsel for the First Respondent:	Mr SS Bull
Solicitor for the First Respondent:	United Voice
Counsel for the Second Respondent:	The Second Respondent submits to any order of the Court, save as to the question of costs

Table of Corrections:
22 March 2021	The medium neutral citation has been amended to ‘One Tree Community Services…