OS MCAP Pty Ltd ACN 626 224 655 v Construction, Forestry, Maritime, Mining and Energy Union

[2023] HCATrans 170

[2023] HCATrans 170

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B24 of 2023

B e t w e e n -

OS MCAP PTY LTD ACN 626 224 655

Applicant

and

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

Respondent

Application for special leave to appeal

GORDON J
BEECH‑JONES J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON TUESDAY, 21 NOVEMBER 2023, AT 11.27 AM

Copyright in the High Court of Australia

GORDON J:   In accordance with the protocol for remote hearings, I will announce the appearances for the parties.

MR J.C. SHEAHAN, KC appears with MR I.M. NEIL, SC and MS V. BULUT for the applicant.  (instructed by Herbert Smith Freehills)

MR I. TAYLOR, SC appears with MR P.A. BONCARDO for the respondent.  (instructed by Construction, Forestry, Maritime, Mining and Energy Union)

GORDON J:   Mr Sheahan.

MR SHEAHAN:   Your Honours, we propose first, briefly, to say why the decision below matters and then deal with the second special leave ground first, because it is a short point and because if it were to succeed on the appeal, it would dispose of the whole matter.  There would be nothing to remit.  Then we will deal with the first special leave ground, which is whether the expression request in section 114 can encompass a requirement.

Now, why does this decision matter?  There are five reasons.  The first is obvious.  The National Employment Standards are apex employment laws, laying down universal standards which cannot be displaced.  Secondly, the particular exception in section 114(2) and (3) is vital for industries that are vital, and it is vital terms in the most competitive environment.  Thirdly, the decision creates a penal provision which, in our respectful submission, should not exist, and one of uncertain operation.  Fourthly, the decision invites unnecessary and unproductive industrial disputation hinging on whether particular conduct in a particular time and place is properly characterised as a “request” or a “requirement”.  Fifthly, the effects of this interpretation will be compounded, to the detriment of employees, if its reasoning is extended – as the Full Court seems to think it should be – to employee rights under sections 65, 66F and 76 of the National Employment Standards.

If I can go, then, to the second special leave ground.  Section 44 of the Act provides that an employer must not contravene a provision of the National Employment Standards.  It is a civil . . . . . so it attracts penalties.  Section 114 is one of those provisions – and if I can ask your Honours to go to it, it is in several places in the appeal record, but I am looking at page 146 in the application book.

GORDON J:   May I ask, is ground 2 the application of, in effect, principles to facts?  Is that the way it is put?

MR SHEAHAN:   Ground 2 is not a question of the application of principles to facts, it is a pure question of statutory construction, that is to say, whether non‑compliance with the conditions for being relieved of – an employer being relieved of the burden of section 114 is a contravention of the Act, as opposed to just not satisfying the condition that would get you a benefit.  So, it is a pure question of statutory interpretation.

BEECH‑JONES J:   Mr Sheahan, it is accepted, is it, that 114 is a National Employment Standard?

MR SHEAHAN:   Yes.  That is plainly so.

BEECH‑JONES J:   So, the effect of what was decided below is that to deny the entitlement in (1) is the contravention?

MR SHEAHAN:   Your Honour it is – the effect of the decision below is not as you have described.  I hesitate to put positively what is the effect of  the decision, but let me do my best.  Your Honours will see that subsection (1) gives an employee an entitlement.  Subsections (2) and (3) qualify that entitlement:

an employer may request an employee to work on a public holiday if –

it is a “reasonable” request, and if the employer does request:

the employee may refuse if –

. . .

(b)the refusal is reasonable.

Subsection (1) gives the employee an entitlement, subsections (2) and (3), taken together, qualify that entitlement.  What the Full Court has decided is that if the employer says something that goes beyond a request for the purposes of subsection (2) – they are too insistent in their language – they have contravened section 114.  Now, in our respectful submission, that has the section doing something that does not, on its face, do.

GORDON J:   Does subsection (4) infect or influence the way in which that is considered?

MR SHEAHAN:   In our submission, no.  The Full Court thought that there was something in it, but in truth subsection (4) simply identifies circumstances that would be taken into account in deciding whether a request was reasonable or not or a refusal was reasonable or not.  It does not bear upon the question whether saying words that are too insistent to amount to a mere request, contravene.

BEECH‑JONES J:   Mr Sheahan, on your argument, how would an employer contravene this National Employment Standard?

MR SHEAHAN:   There are three elements to this.  The first is that if, on the Full Court’s approach, they speak too insistently, what they say has no effect on the employee’s rights; it is rendered ineffective.  Secondly, section 116, which appears on the same page, 146, issues a command to the employer.  The employer, if the employee is absent, “must pay”, so that if the employer were to think, I wanted you to work on that day and you did not work, I am not going to pay you, by virtue of section 116 they will contravene.  There would be a plain contravention of section 44 by virtue of section 116.

In addition, if they sought to take any adverse action against the employee for exercising his or her workplace right not to attend on the public holiday, that would be proscribed by section 340, which prohibits any adverse action on those grounds.  So, there are positive commands, prescriptions and proscriptions in the statute designed to deal with an employer who tries to take seriously conduct which goes beyond a mere request.

GORDON J:   Can I then take you, consistent with what you have just put to us, to application book 96, where their Honours deal with section 116 at paragraph 33, and then go on to identify what might be described in classic statutory construction questions as text, context and then the mischief.  What is wrong with that analysis which, as I say, follows on from looking at 116 at 34 through to, possibly, 39?

MR SHEAHAN:   All of that analysis is directed not to the topic I am addressing at the moment.  It is important to appreciate that.  That is all directed to the question, is the expression “request” apt to encompass a “requirement”?

GORDON J:   The reason why I raise it, Mr Sheahan, is it seems to infect, at least to some extent, this analysis of whether or not 44 – the interaction between 44 and 114.

MR SHEAHAN:   I think I understand your Honour’s point.  In our submission, that analysis does not infect the question that we have identified as ground 2, and that is because this analysis is assumed by ground 2.  That is to say, ground 2 assumes the correctness of the proposition that to insist, to require, is to go too far and therefore not to engage section 114(2).  So, the 114(2) process stops at that point for the purposes of this.  So, ground 2 is predicated on the correctness of all that analysis.

BEECH-JONES J:   Mr Sheahan, so in your argument, 44 would only be engaged in this context:  once the holiday had passed and someone like the employer tried to take some action about it, like not pay them or sack them or something like that ‑ ‑ ‑

MR SHEAHAN:   Yes.

BEECH‑JONES J:   ‑ ‑ ‑ would that not undermine the purpose of creating the standards, if you were to put the parties in that kind of position?

MR SHEAHAN:   In our respectful submission, no.  It is important to keep this in mind:  one of the National Employment Standards is that the employees have to be informed about all of these things.  That is in sections 124 and 125.  The Ombudsman creates a list of all the workplace rights of the employees:  124.  And in 125, the employer must give it to the employees.  The employees are informed about these things.  It is not the case that the Full Court seemed to think that there was some power imbalance, or knowledge asymmetry.  In fact, there is not.

What is created, on our construction, is a perfectly coherent system.  Under section 114(1), the employees are given a right, but it is a conditional right, and things happen – do happen – under subsections (2) and (3), and the right is qualified.  If they do not happen, the right continues to exist, and in that case, the employer is bound by the other provisions of the Act not to do certain things and to do other things.  Those other that it must do or must not do provide a coherent legislative scheme in relation to it.

BEECH‑JONES J:   Mr Sheahan, I am sorry to ask this:  did the Full Court actually, specifically address this argument?

MR SHEAHAN:   They did.  Only very briefly at page ‑ ‑ ‑ 

GORDON J:   At the end, page 101.

MR SHEAHAN:   And your Honours will see, when you look at paragraph 50, the Full Court, as we see it, attempting to deal with an awkwardness resulting from their Honours’ construction of the section.  The awkwardness is this.  On their approach, the employer contravenes the Act by being too insistent even if the employee is perfectly conscious of their rights not to work in those circumstances and do not – and the employee does not work.

Or, alternatively, if the employee is perfectly conscious of their right not to work, but they choose to work – for example, to get the benefit of loadings.  But, in either case, taking the Full Court’s interpretation logically, the employer is in contravention both times.  They seem to attempt to deal with this in paragraph 50, but in what is, with the greatest respect to their Honours, an incoherent way.  They say that:

the breach is of s 114, not of s 114(2).

Can we just pause there to say that that highlights the conceptual difficulty in the Court’s approach, because the Court was ultimately unable even to identity a legislative command in the form of a section or a subsection of this provision that is contravened.  Next, they say:

This is so because the breach occurs when an employee is required to work on the public holiday, does in fact work on that day –

Now, that limitation on whether there is a contravention – a limitation that depends upon a subsequent act of a third party, the employee – is totally unmoored from the language of the provision.  Totally unmoored – it finds no foothold at all.  The Court seemed to think it was important to put some such limitation on the operation of the provision to make it coherent, for the reasons that we have adverted to.

GORDON J:   Do you wish to address ground 1, Mr Sheahan?

MR SHEAHAN:   Yes, that is what I was going to go to now.  The first ground relates to what has been assumed up to this point, that the conduct that can be characterised as a requirement is not a request.  In our submission, every consideration of context, purpose and legislative history suggests that there is no such substantive distinction.  Many of the problems appear from paragraph 5 of the judgment of the Full Court.  If I can just take your Honours to it.  What the court summarises section 114 as providing for a “request” in the form of a question, leaving a choice, which invites discussion, which may result in a requirement.

First, a request is not necessarily a question:  please work on Boxing Day is a petition, not a question.  Secondly, the question is not necessarily a request:  are you prepared to work on Boxing Day may be just an inquiry.  Thirdly, while a “request” always implies a choice, the choice here is not nearly entailed in the request.  It is explicitly conferred by subsections (2) and (3), and it is conferred in qualified terms by subsection (3).  This is important.  It means that the section operates perfectly well if “request” does encompass or can encompass a requirement.

To put it another way, the legislative structure is that a demand to work has no greater or lesser effect than a polite request.  The statute leaves no need to distinguish between a demand and a polite request.

GORDON J:   It is sort of a difficult submission to maintain, though, given the language of section 114.

MR SHEAHAN:   Can I skip ahead to an aspect of the legislative history which we deal with in our written submissions?  In particular, at application book 111, paragraph 25.  We there set out three examples given in the explanatory memorandum to the Act which introduced what was the direct predecessor of this section.  Its language was slightly different, but its substance not materially different.  The three examples – each is unequivocally an insistence on someone working on a public holiday.  That reflects the simple fact that there is not a bright line between requests and requirements, they exist on a spectrum from begging, through to expressions of hope or expectation, to insistence.

The very same words may be one or the other depending on tone of voice or inflection.  Penal consequences should not depend on distinctions of this kind, especially in the day‑to‑day management of a workplace, managers should not have to watch their words in the way that the Full Court decision requires them to, and this distinction has an obvious tendency to promote unnecessary and unproductive industrial disputation around the parsing and construction in context of things said by the employer.

I should say one more thing.  The Court relied on some other provisions which used the word “request”.  They include three provisions which provide for the employee to request benefits, flexible working arrangements, conversion from casual to permanent, and so on.  It is inconceivable that the rights intended to be created by those provisions might be lost to the employee merely because the employee was too insistent – that is to say, they said, you must extend my parental leave, instead of saying, please – polite request – would you extend my parental leave?  On the Full Court’s approach, the first set of words would mean that the employee would not be enlivening the rights provided for although these important provisions.

Finally, your Honours, the Full Court approached the question of construction by asking the wrong question.  They asked:  is a “request” a synonym for a “requirement”?  This might be thought to be just a mere slip, but their Honours did it three times:  paragraphs 34, 37 and 39.  That was plainly not the question.  The question was whether, in its context, the legislation draws a substantive distinction between conduct able to be characterised as a “requirement” and conduct able to be characterised as a “request”.  For the reasons we have given, it does not.

GORDON J:   Thank you, Mr Sheahan.  Mr Taylor.  I think you are on mute, Mr Taylor, we cannot hear you at the moment.

MR TAYLOR:   If it please your Honours.  As to ground 1, in our submission, there is insufficient reason to doubt the correctness of the Full Court’s decision, and secondly, the practical significance for other employers of the outcome of this decision is frankly very low.  As to proposed ground 2, this was not a matter that was pleaded or argued below.  In any event, it is wrong, and if it were to be entertained, it would have significance for a number of other NES rights – namely, a series of other leave entitlements – which also commence with entitlement.

Can I deal with practical significance of the first question?  Ultimately, this case is about no more than whether an employer who wants an employee to work on a public holiday has to start with a request or whether they can move directly to requiring an employee to work.  The Act uses the word “request” – that is, will you, rather than, you will.  It is not as if it is a particularly onerous obligation, contrary to the applicant’s contentions, nor is it one that ought affect in any way how easy it is to roster or have employees work on a public holiday.

On their case, the same factors arise as to reasonableness.  The purpose, though – the distinction is important, as the Full Court identified.  The purpose of using, deliberately, the word “request” is to signify the very choice that Mr Sheahan accepted exists in the balance of the section.  In an employment context, this is particularly important.  In an employment context, employees understand that if they fail to comply with an obligation or requirement – or as the Full Court described it, as an “unilateral command” – they can be subject to disciplinary matters.  So, it is important that it is conveyed as a request.

I think I have already moved into it, but turning to why the Full Court’s reasons do not show any doubt as to the first question, I think we can largely rely on the reasoning of the Full Court.  Can I just emphasise that, as contained in our legislative materials behind the response – which should be tab 10 of your Honours’ application book – one will find, firstly, section 73(2) at application book 140.  This is part of the parental leave provisions of the NES.  Here, you see that the legislature has used the word “require”:

The employer may require the employee to take a period of unpaid parental leave –

If one turns back four pages to section 62, the employer is enjoined not to:

request or require an employee to work more than the following number of hours in a week unless the additional hours are reasonable –

It would appear the legislature has indeed turned their mind to when to use the word “request” and when to use the word “require”.  The word “request” – a court can, of course, depart from the ordinary meaning of a text if that meaning does not conform to the evident purpose or policy of the provision – but here the evident purpose is that employees cannot be compelled to work on a public holiday absent a process and absent reasonableness.  There is no reason to read the provision in a way that would say that the express entitlement in section 114 can be obviated by a requirement.  Can I turn to ‑ ‑ ‑

GORDON J:   Before you leave that, Mr Taylor, can I ask you to go to application book 111 and the three examples from the supplementary explanatory memorandum that Mr Sheahan took us to.

MR TAYLOR:   What was the page number?

GORDON J:   Page 111, paragraph 25.

MR TAYLOR:   Yes.  I think we address this in our submissions in response – and Mr Boncardo might give me the reference – but this is an explanatory memorandum to an earlier Act, not to the Fair Work Act.  We have referred in our submissions to the explanatory memorandum to the Fair Work Act which in fact introduced this particular section, where one finds that the explanatory memorandum refers to “ask” rather than “require” on more than one occasion – “ask” being, as the first ground correctly identifies, a synonym for a “request” and certainly not a synonym for a “requirement”.

This argument rests on an explanatory memorandum which does not underpin the legislation in question.  The reference to our submission is our response at paragraphs 37 to 40, and it is found at application book pages 128 to 129.  The second question comes by way of a new and different argument that was not argued below.  What was pleaded below at first instance was that the applicant had required the employees, but the requirement was reasonable, and it was contended that it was only if the requirement was unreasonable would the employer have contravened.  So much is found from the primary judgment at paragraphs 2 and 10.

This can also be found at the primary judgment, paragraph 97, where the judge commences with the words, “Although OS did not take the point”, that is, the point that there can be no contravention because there is no actual obligation on the employer, nevertheless considered whether there can be a contravention and found there could.  In the course of that judgment at paragraph 93, at application book 28, the judge made a statement in the final paragraph, at paragraph 93, namely considered whether:

a requirement, as opposed to a request –

if it were so considered:

would not fall within s 114(2) at all, so that an employer could, without restriction, require an employee to work on a public holiday.  Such a construction would be untenable.

It was that proposition which was picked up by the notice of contention below, that is, effectively, a cute point that if a request does not include requirement, then there is actually nothing stopping an employer requiring people unreasonably.  It was never contended, as it is contended now, that in fact, whether the requirement was reasonable or unreasonable, no contravention arises because there is no actual obligation on an employer.  Such a contention clearly has a fundamental effect of disentitling the actual entitlement.  It removes the entitlement to be absent from employment.  Section 114 commences with the words:

An employee is entitled to be absent –

Now, noting that – I misread how much time I had left, and I skipped ahead, can I just identify some further matters going to why we say it was not argued below.  The notice of contention that was put on below is found at application book page 58, and it is at first glance very similar to the point that Mr Sheahan describes as ground 2, but properly understood, and reading it in the context of the submissions the applicant put before the Full Court, the contention was no more than picking up Justice Rangiah’s paragraph 93; that is, the sections, if they do not – if “request” does not involve “requirement”, then you cannot contravene 114(1) or (2) by a requirement, because the word “request” does not include requirement.  As I said, a rather cute point.

It was not contended below that, in fact, 114 does not impose any obligation on an employer such that there could be a contravention of section 44.  The written submissions below on this point confirm our contentions.  If the Court goes to application book 62, you see the applicant’s written submissions below at paragraph 9, at application book 62, you see the way in which the notice of contention, to the extent to which it was referred to at all, was addressed.  Namely, the proposition that if the CFMEU is correct that 114(2) does not apply to requirement, then the preferrable consequence of such a construction is that identified in the reasons at paragraph 93.

It is that proposition that the Full Court rejected in the paragraphs my friend took the Court to, at paragraphs 48 to 50, and it is not an argument that is now being pursued.  Can I also identify there is, in the application book, the transcript of the oral submissions put by the applicant below, at tab 6.  If one goes to application book 72, Mr Follett is putting submissions before the Full Court.

GORDON J:   Mr Taylor, really, your submission is that this is a new argument and we have not got the benefit of reasons below from the court below.

MR TAYLOR:   Indeed, and it was not even pleaded before the primary judge, so this is new in every respect.  It bears some broad similarity to the notice of contention, but once one understands what was put in the notice of contention, it was really just that cute point.  It was not the contention that now appears to be put, that there is nothing in 114 which can in fact be contravened by an employer because the logical corollary of that is an employer can impose an unreasonable request or an unreasonable requirement, and there is no contravention until such time as an employee nevertheless refuses to work, is disciplined, or, alternatively, is not paid, and the employee in each case, presumably, then has an onus to take steps to remedy that situation.

That is an interpretation not argued below, and has implications for a series of other NES entitlements, that is, other leave entitlements – annual leave, parental leave, personal leave, long service leave – all of which start by creating an entitlement, none of which contain words to the effect the employer must provide this entitlement, but clearly, if an employer were to refuse to provide someone with annual leave when they are entitled to it, one would expect there is a breach of the NES.  Similarly here, if an employer requires someone to work on a public holiday, in circumstances where they must make a request, and that request must be reasonable, they have breached the NES.

GORDON J:   Have you finished addressing both grounds now, Mr Taylor, or is there something else you wish to raise in relation to those grounds?

MR TAYLOR:   I have finished on both of those grounds, I was going to address the special leave considerations as my final matter.

GORDON J:   Certainly.

MR TAYLOR:   The first of which is that this is one of the NES, and the NES applies to all employers and national system employees across Australia.  We accept that that is a special leave consideration, but we say that something more than that would need to be required for the Court to

grant special leave, lest the Full Federal Court becomes nothing but a speed hump in any case where the interpretation of the NES arises.

As to the ground which says that this is of fundamental importance to ensure essential workers can be rostered, as we have identified, it matters not whether it is “request” or “requirement”; employees have the same rights and so it ought not affect in any way the capacity to roster.  We have not, and do not identify any practical difficulties.  They are asserted, but there is no evidence to suggest that any practical difficulties would in fact arise, and indeed, whilst this is not material before you, on the facts of this particular case, this mine, the following year, moved to seeking volunteers rather than requiring.  It is not that hard, it really is not that hard to make requests of workers so that they can work.  We do not identify that there are any proper special leave grounds that would lead this Court to grant special leave.

They are our submissions.

GORDON J:   Thank you, Mr Taylor.  Mr Sheahan, anything in reply?  I think you are on mute, Mr Sheahan, I cannot quite hear you.

MR SHEAHAN:   Your Honours, we were taken to the notice of contention.  This is in relation to the question whether our ground 2 was raised below.  That notice of contention, in its terms, is plainly apt to . . . . . we have developed in our written submissions and in our oral submissions.

The same applies to paragraph 9 on application book 62 of the written submissions in the court below.  What our learned friend did not do was read the balance of the paragraph after the first couple of lines, where it goes on to make the point that the provision in section 114 would have no application to, and would not be capable of being contravened by, a requirement, as a matter of linguistic construction, et cetera, this is the inevitable consequence of a requirement not being capable of falling within section 114(2).  Tellingly, the CFMEU has still not articulated what particular provision (or “command expressed in a rule of law”) OS is said to have contravened by imposing a requirement, nor how.

That remains the position both in terms of our learned friends’ submissions on this point and in terms of . . . . . point.  And the fact that we are left in a state of affairs where penalisation is provided for, of a doubtful kind, because it hinges on a factual distinction between insistence, expectation, request, aspiration, begging, in the circumstances of a particular case, is entirely unsatisfactory, in our respectful submission, and an unsatisfactory charter for workplace management.

Those are our submissions in response, your Honours.

GORDON J:   Thank you, Mr Sheahan.  We see insufficient reason to doubt the correctness of the decision of the Full Court of the Federal Court of Australia to warrant the grant of special leave to appeal in this case.  Special leave to appeal is refused, with costs.

The Court will now adjourn until 12.30 pm.

AT 12.05 PM THE MATTER WAS CONCLUDED