Penelope Vickers

[2017] FWC 2609

[2017] FWC 2609

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Penelope Vickers
(AG2016/3797)

VICE PRESIDENT HATCHER SYDNEY, 12 MAY 2017

Referral to a Full Bench - Fair Work Act 2009 (Cth) – ss. 582, 615 and 615A.

Introduction

[1] Ms Penelope Vickers, who is an employee of Coles Supermarkets Australia Pty Ltd (Coles), made an application on 5 July 2016 pursuant to s.225 of the Fair Work Act 2009 (FW Act) for the termination of the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011 (2011 Agreement). One important aspect of the application (termination application) is that Ms Vickers seeks that the termination of the 2011 Agreement take effect retrospectively, from 31 May 2014. The termination application is opposed by Coles, and by two unions covered by the 2011 Agreement, the Shop, Distributive and Allied Employees Association (SDA) and the Australian Workers’ Union (AWU).

[2] Ms Vickers’ termination application is currently before Commissioner Spencer, who to this point has dealt with a number of complex interlocutory issues raised by the parties.

[3] On 31 March 2017 Ms Vickers applied for the termination application to be referred to a Full Bench of the Commission for determination pursuant to ss.582, 615 and 615A of the FW Act. This application (referral application) is opposed by Coles, the SDA and the AWU.

[4] Sections 582, 615 and 615A of the FW Act provide:

582 Directions by the President

The President may give directions

(1)  The President may give directions under subsection (2) as to the manner in which the FWC is to perform its functions, exercise its powers or deal with matters.

(2)  The President may give a direction that is of a general nature, or that relates to a particular matter, to one or more of the following persons:


(a)  an FWC Member;

(b)  a Full Bench;

(c)  an Expert Panel;

(d)  the General Manager.

(3)  The direction must not relate to a decision by the FWC.

(4)  Without limiting subsection (2), the direction may be a direction of the following kind:

(a)  a direction about the conduct of 4 yearly reviews of modern awards under Division 4 of Part 2-3;

(aa)  a direction about the conduct of 4 yearly reviews of default fund terms of modern awards under Division 4A of Part 2-3;

(b)  a direction about the conduct of annual wage reviews;

(c)  a direction that 2 or more matters be dealt with jointly by one or more single FWC Members or one or more Full Benches;

(d)  a direction about the transfer between FWC Members (including a transfer between Full Benches) of one or more matters being dealt with by the FWC.

Persons must comply with the President's directions

(5)  A person to whom a direction is given must comply with the direction.

Note:          For directions to the General Manager, see section 658.
Direction is not a legislative instrument

(6)  If a direction is in writing, the direction is not a legislative instrument.

615 The President may direct a Full Bench to perform function etc.

(1) A function or power of the FWC may be performed or exercised by a Full Bench if the President so directs.

Note: The President gives directions under section 582.

(2)  The President may direct that the function or power be exercised by a Full Bench generally, or in relation to a particular matter or class of matters. 

(3)  To avoid doubt, a reference in this section to a Full Bench includes a reference to more than one Full Bench.

615A When the President must direct a Full Bench to perform function etc.

(1) The President must direct a Full Bench to perform a function or exercise a power in relation to a matter if:

(a) an application is made under subsection (2); and 

(b) the President is satisfied that it is in the public interest to do so.

 
Note: The President gives directions under section 582.

(2) The following persons may apply to the FWC to have a Full Bench perform a function or exercise a power in relation to a matter:

(a) a person who has made, or will make, submissions for consideration in the matter; 

(b) the Minister.

[5] On 5 April 2017 the President of the Commission, Ross J, delegated his functions and powers under ss.582, 615 and 615A of the FW Act in respect of the referral application to me pursuant to s.584 of the FW Act.

Submissions

[6] Ms Vickers contends that the referral of the termination application would be in the public interest having regard to the following matters:

(1) The Commission’s initial approval of the Coles Store Team Enterprise Agreement 2014-2017 (2014 Agreement), and the subsequent quashing of that approval on appeal 1, as well as its approval of other enterprise agreements in the retail industry, has been the subject of substantial public discussion, concern, media attention and Parliamentary debates.

(2) Coles is engaged in considerable “ongoing underpayment of wages”, and more generally “[r]eports suggest that approximately 250,000 retail and fast food sector workers governed by EBAs are paid less than the Award”. The relevant award is the General Retail Industry Award 2010 (Award).

(3) There had been calls for a Senate Inquiry into the Commission’s approvals of enterprise agreements due to their effect on competing small business.

(4) The 2011 Agreement, which covered some 74,000 employees, is the largest enterprise agreement for which termination orders have been sought, and the first of numerous enterprise agreements liable to be terminated against the wishes of the employer and main union.

(5) The termination application, insofar as it sought a retrospective date of termination, would be a practical and cost-effective way to compensate underpaid employees. This was a novel feature of the termination application.

(6) The termination application also raised the novel issue as to whether the costs incurred by employees associated with the loss of choice concerning superannuation imposed by the 2011 Agreement should be taken into account when comparing benefits under the 2011 Agreement to those provided by the Award.

(7) The “deliberate breaches” of the FW Act committed by Coles “warrants sanctioning from the highest level of the Commission so as to indicate the seriousness with which it is viewed and to deter similar behaviour”.

[7] Ms Vickers submitted that the matters referred to above justified the termination application being dealt with at the most authoritative level of the Commission. She also said that because she did not have legal representation, but was opposed by parties with high-level legal representation, the referral was justified because the Full Bench was inherently better equipped to deal with this imbalance.

[8] Coles submitted that:

● the termination application did not involve any contest about the interpretation of the relevant statutory provisions, but merely concerned their application to a particular factual scenario;

● the termination application was factually complex and would involve expert evidence, a substantial number of lay witnesses and a protracted hearing, and for that reason it would be inefficient to deal with it at the Full Bench level;

● media interest or public curiosity was not to be conflated with the public interest;

● the fact that a significant number of employees will be affected did not enliven the public interest; and

● the Commissioner had in the process of dealing with the application acquired a good deal of knowledge about the termination application, which would be thrown away if the referral application was granted.

[9] The SDA submitted that:

● the likely duration and evidentiary nature of the proceedings were such that the termination application was more suited to be determined by a single member;

● the fact that the matter was of public interest did not mean that referral would be in the public interest;

● there was nothing novel about the termination application, and the legal issues it raised had been dealt with in earlier decision of the Commission;

● there was no controversy or doubt about the power of the Commission to backdate an order for termination under s.227 of the FW Act;

● a single member of the Commission was as well-equipped to deal with the asserted imbalance in representation as a Full Bench, and the Commissioner had satisfactorily dealt with this issues to date;

● Ms Vickers’ assertions about the extent to which employees of Coles were allegedly being paid less than the Award were factually in contest, and it was premature to rely on these matters in support of the termination application; and

● Ms Vickers had earlier in the proceedings resisted an invitation from the Commissioner to indicate support for a referral of the termination application, and nothing had changed such as to justify Ms Vickers’ change of position.

[10] The AWU made submissions to similar effect to those of the SDA.

Consideration

[11] The principles relevant to the determination of an application under s.615A were set out in Collinsville Coal Operations Pty Limited as follows (footnote omitted) 2: 

“[5] The issue for determination is whether I am satisfied that it is in the public interest to refer the agreement approval application to a Full Bench. The expression 'in the public interest', when used in a statute, imports a discretionary value judgment to be made by reference to undefined factual matters and confined only by the subject matter, scope and purpose of the relevant statute. [O'Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210 at 216 per Mason CJ, Brennan, Dawson and Gaudron JJ]

[6] Sections 577 and 578 of the FW Act are relevant to the exercise of the President’s powers under s 615A.

[7] Section 577 provides as follows:

The FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581).

[8] Section 578 directs the Commission to take into account, among other things, the objects of the FW Act and ‘equity, good conscience and the merits of the matter’.

[9] Section 581 is also apposite. It provides, relevantly, that the President is responsible for ensuring that the Commission performs its functions and exercises its powers in an efficient manner.”

[12] In relation to the matters raised by Ms Vickers as set out above, I do not consider that matters 1, 2, 3 and 7 raise any issue that would justify the grant of the referral application in the public interest or on general discretionary grounds. The proposition that Coles is, while the 2011 Agreement remains in force, paying any of its workforce an amount of remuneration which is less than that which would be payable if the Award applied is at this stage merely asserted, and is contested by Coles. The submissions of Ms Vickers proceed substantially on the basis that these assertions are self-evidently correct and for that reason attract the public interest. I accept the submissions of the SDA that it would be premature to grant the referral application on the basis of these assertions, which will need to be proven at the hearing by Ms Vickers. The mere fact that there is some degree of public controversy arising from these assertions does not weigh in favour of the grant of the application, and the further untested allegations about other enterprise agreements in the retail sector and effects on small business seem to me to be of marginal relevance to the proper consideration of the referral application.

[13] That Ms Vickers is not legally represented, unlike Coles, the SDA and the AWU, does not weigh in favour of the grant of the referral application. Members of the Commission are well versed in dealing with the circumstances of self-represented litigants, and there is no reason to consider that the determination of the matter by a Full Bench would place Ms Vickers in any more favourable position.

[14] However I consider that, in respect of two of the matters raised by Ms Vickers, the grant of the referral application would be in the public interest. First, I consider that the number of employees to which the 2011 Agreement applies is so large as to make the question of the termination of the 2011 Agreement a matter of public significance because of its potentially broad economic and commercial effects. Second, although there appears to be no dispute that the Commission has the power under s.227 to terminate an enterprise agreement with a retrospective date of operation, nonetheless applications under the FW Act to terminate enterprise agreements with retrospective effect have been rare, and have only been granted where the backdating has been for a short period only and the agreement has limited application. 3 There has not been any authoritative pronouncement or consideration of the principles to be taken into account in deciding such a significant matter. The effect of a backdated termination of an enterprise agreement and the concomitant retrospective reversion to the application of the relevant modern award raises complex legal and practical issues, particularly in relation to any employees who have been paid above-award rates and other benefits. The circumstances of this matter are likely to give these issues particular emphasis.

[15] It may be accepted that, in a case involving contested issues of fact and a large number of witnesses, is it usually more appropriate for the hearing to be conducted by a single member. However, cases of particular significance are from time to time heard by Full Benches even where they involve the receipt of extensive evidence, and there is no reason why the allocation of such a matter to a Full Bench should result in delay in the conduct of the hearing.

[16] Accordingly I direct that the termination application (AG2016/3797) be referred to a Full Bench for hearing and determination.

VICE PRESIDENT

Appearances:

Ms P. Vickers on her own behalf with Dr A Truslove.

Mr A. Harding of Counsel for the Shop, Distributive and Allied Employees Association.

Mr J. Harding for the Australian Workers Union.

Mr C. Buckley for Australian Meat Industry Employees Union.

Mr S Woods QC with Mr N. Burmeister of Counsel for Coles Supermarkets Australia Pty Ltd.

Hearing details:

2017.

Melbourne:

11 May.

 1   [2016] FWCFB 2887

 2   [2014] FWC 3129

 3   See Catalina Country Club Ltd [2013] FWCA 2005

Printed by authority of the Commonwealth Government Printer

<Price code C, PR592856>