Regional Express Holdings Limited v Australian Federation of Air Pilots

[2017] HCATrans 105

[2017] HCATrans 105

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M155 of 2016

B e t w e e n -

REGIONAL EXPRESS HOLDINGS LIMITED (ACN 099 547 270)

Applicant

and

AUSTRALIAN FEDERATION OF AIR PILOTS

Respondent

Application for special leave to appeal

KIEFEL CJ
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 12 MAY 2017, AT 10.26 AM

Copyright in the High Court of Australia

MR M.J. FOLLETT:   If the Court pleases, I appear with my learned friend, MR L.R. HOWARD, for the applicant.  (instructed by Clayton Utz Lawyers)

MS J.M. FIRKIN:   If the Court pleases, I appear with my learned friend, MS J.F. SWANWICK, for the respondent.  (instructed by Australian Federation of Air Pilots)  

KIEFEL CJ:   Yes, Mr Follett.

MR FOLLETT:   If the Court pleases.  The special question in this case is this.  For the purpose of conferring standing on an industrial association to commence civil penalty proceedings under the Fair Work Act when is that industrial association entitled to represent the industrial interests of a person affected by the contravention?  In particular and insofar as the person affected is an individual, does such an entitlement derive from membership of the association, as we contend, or does such an entitlement derive from the mere fact that the person is eligible to be a member of that industrial association if they so choose to be, as the Full Court found. 

As we identify in the written submissions, Justice Jessup below, whose judgment is effectively the judgment of the Full Court, has, with respect, in our submission, done much of the heavy lifting for us in terms of demonstrating the appropriateness of a grant of special leave in this case.

GORDON J:   Is that because he says it is doubtful and involves a legal fiction?

MR FOLLETT:   It is a combination of the identification of the importance of the question as well as the expression that the conclusion was doubtful that it involved an unconventional approach to statutory construction.  It involved the legal fiction and it involved the adornment on the phrase in question with a special meaning. 

KIEFEL CJ:   Certainly, the legislative provision does not offer a great deal of guidance.

MR FOLLETT:   That is so, your Honour.  That is so, your Honour, and I will come back to that point.  But, the principal complaint we make is that the well‑established principles of statutory construction require a focus on the primacy of the statutory language used and, importantly, those principles require attention to be paid to the language and its ordinary meaning first – not after an analysis of legislative history or extrinsic material.

GORDON J:   The problem is, as I read Justice Jessup’s judgment, there is nothing expressly in the statute which says there is an entitlement or not an entitlement.  So you have – as he puts it and it seems that Justice White picks up this point – there is nothing there expressly or that says either one way or the other.  There is nothing in the general law which deals with it and these points are the points that you rely upon.  The question is whether or not the answer is the right answer, given the fact that it is not addressed.

MR FOLLETT:   I think his Honour does suggest, certainly by way of implication – this is at paragraph 49 of the judgment of ‑ ‑ ‑

GORDON J:   Well, that is the one that I thought seemed to suggest that it was not expressly addressed - paragraph 49 on page 61.

MR FOLLETT:   That is correct – where his Honour says at about line 18 – this is the provisions of the Registered Organisations Act and they were provisions that we put some weight on below in establishing that it was membership which was the start and endpoint of the entitlement.  His Honours says at about line 18:

These provisions imply that an organisation is not only entitled, but obliged, to represent its members ‑ ‑ ‑

GORDON J:   But it is the next bit:

but there is nothing, either here or elsewhere in the RO Act, which suggests that an organisation is entitled to represent persons who are not its members.

MR FOLLETT:   That is right.  So the way we read that sentence is that his Honour is saying that these provisions suggest that membership provides the entitlement, or even an obligation, but there is nothing with respect to non‑membership.

GORDON J:   I read it at two levels.  One was entitlement to represent and then it is the next bit:

there is nothing . . . which suggests that an organisation is entitled to represent the industrial interests –

which is the more important question.

MR FOLLETT:   That is so, your Honour.  That is so, and there is certainly nothing in the Act – the Fair Work (Registered Organisations)Act, the general law or the rules of the association which provide any such entitlement either to represent non‑members per se or to represent their industrial interests.  The case did not need to decide – and it did not decide – whether there is any distinction in principle between those two concepts of representing and representing the industrial interests.  The notion of industrial interest itself is – to borrow his Honour’s phrase – the proverbial elephant as well.  It does not have a meaning. 

GORDON J:   Could you explain one thing to me which I did not quite understand?  In Judge Riethmuller’s reasons, he talks about the practical consequences of the decision reached.  Is that something that you rely on? 

MR FOLLETT:   The practical consequences of the decision reached would have been that if we were successful the applicant’s case would have failed. 

GORDON J:   No, no, I am sorry, I need to be more specific.  He talks about the impact upon it in relation to other actions and other people.

MR FOLLETT:   That is not something we place any particular reliance on.

GORDON J:   I see.

KIEFEL CJ:   What are the practical consequences, though, of either approach to construction?  What are the wider ramifications of the differences of approach?

MR FOLLETT:   So the consequence of the Full Court decision is – we will just take a union, for example – a union who has no members in an employer and who may have no pre‑existing industrial relationship with that employer – say, it is a clerks’ union, for instance, and there is one clerk there and wide action is taken by the employer against a wide group of people including the clerk – that union would be entitled to come in and prosecute proceedings with respect to the clerk ‑ ‑ ‑

KIEFEL CJ:   Even if the clerk did not ask for it.

MR FOLLETT:   ‑ ‑ ‑ even if the clerk did not ask, even if the clerk did not even know they were entitled to be a member of a union, even if the clerk had no existing relationship with that union whatsoever and even if the union had no existing relationship with the employer whatsoever.  They would be able to walk in and say I am entitled to enrol that clerk.  That clerk is affected by your actions, whatever it might be – it might be an underpayment, it might be an adverse action case such as this – and I will bring proceedings on behalf of that person including in circumstances where that clerk might say, I do not want you to do that, I do not want to be involved, I do not have any truck with my employer, I am not interested.

KIEFEL CJ:   What benefit would the unions argue for as against that?

MR FOLLETT:   This sort of takes us back to the old industrial dispute cases – that there may be factual scenarios whereby the action against non‑members is the type of action that, for example, a union might not want to see replicated in future, perhaps against persons who are their members.  At the most broad level, your Honours, they could say that we have an interest in ensuring that the law is complied with and certainly since the early days of the Conciliation and Arbitration Act, the unions did form, essentially, a regulatory function as much as anything else. 

Now, those days have been largely overtaken by specific regulators, including the Fair Work Ombudsman.  An inspector, of course, has standing.  The other thing, of course, we note, your Honours, is that once an industrial association has brought a proceeding of that type the individual themselves – no form of estoppel operates.

GORDON J:   That was Judge Riethmuller’s point that he was addressing.

MR FOLLETT:   Yes.  We certainly rely on that factor.

GORDON J:   That is what I meant by third party implications.

MR FOLLETT:   I am sorry, your Honour, I misunderstood.  Like in Tomlinson in this Court where the Fair Work Ombudsman is proceeding, did not operate as an estoppel because they were not privies in interest, if the union is bringing a proceeding with respect to non‑members they could not be said to be a privy in interest and we would have dual proceedings on exactly the same conduct.

GORDON J:   The way in which – what Judge Riethmuller describes as sort of the practical solutions are they real?  He describes about giving notices and making sure that everyone is on notice and therefore there is no downside by adopting this sort of construction.  Is that a complete answer? 

MR FOLLETT:   No, your Honour, because it would very much depend – those sorts of factors might be used against an applicant – the second applicant – as some form of abuse of process argument or something like that ‑ ‑ ‑

GORDON J:   Or case management?

MR FOLLETT:   Yes, but, ultimately, they have six years to bring a proceeding.

GORDON J:   I see.

MR FOLLETT:   Once they do so they cannot be formally estopped unless abuse of process would extend and said, well, you were aware, you were involved – perhaps, you were probably a subpoenaed witness, why did you not bring your own proceedings?  There may be any number of answers to that question.  So, in our submission, your Honours ‑ ‑ ‑

KIEFEL CJ:   I think at this point we might hear from the other side, Ms Firkin.

MR FOLLETT:   If your Honours please.

KIEFEL CJ:   Why is this not a matter of general importance, Ms Firkin, given that the statute offers little guidance and there seem to be some potentially wide ramifications?

MS FIRKIN:   There is no doubt that this standing of unions is a matter of public importance. However, that needs to be balanced against three things in this case. The first, in my submission, is that the decision of the Full Court of the Federal Court is not attended with sufficient doubt – and I can address further on that. The second is that, in this case, there was no dispute that regardless of the outcome of any appeal the proceeding must be remitted back to the Federal Circuit Court because there is at least one member of the AFAP. The third is that, on REX’s submission, regardless of the outcome of this appeal and if even successful, the AFAP should bear its own costs by reason of the operation of section 570 of the FairWork Act.

KIEFEL CJ:   How does that weigh in the equation?

MS FIRKIN:   In my submission, your Honour, the limited prospects of success, the fact that simply by reason of it being a matter of public importance, the AFAP bears the cost of defending the appeal, they are all matters which should be taken into account in the interests of justice.

KIEFEL CJ:   The point just before, though, in relation to there being one member of the AFAP in this case ‑ ‑ ‑

MS FIRKIN:   There is.

KIEFEL CJ:   ‑ ‑ ‑that is by way of you submitting, I take it, that this is not an appropriate vehicle for the resolution of the question.

MS FIRKIN:   Yes, your Honour.

KIEFEL CJ:   How often do these questions arise?

MS FIRKIN:   This is the first time this issue has arisen under this Act.  The Full Court dealt with this - so in terms of the potential consequences of the union standing, in my submission they have not led to any problems up until now.  Unions have acted as party principals representing industrial interests of affected employees since prior to the decision of Dunlop Rubber in 1957 which confirmed that role of unions in facilitating our workplace relations system.  The potential implications are hypothetical, in my submission, rather than real and they are the necessary consequence of unions having the capacity to facilitate our workplace relations system.

GORDON J:   So in relation to the submission that the consequence of it is that put by the applicant here, that is, the example that was given of a union coming along with one clerk and bringing proceedings – is that a reality?

MS FIRKIN:   It is a possibility.  I cannot put it any higher than that.  We have to question, realistically, how likely unions are to spend their funds prosecuting claims on behalf of non‑members.  But the flipside is that there may be cases – and it is my submission more likely that there will be cases with broad ramifications for both members and non‑members and the standing conferred on unions allows unions to confer to prosecute the entirety of those cases insofar as they affect relevant employees and, as my learned friend has said, create a precedent for its future members.

GORDON J:   But would you not have that by bringing the action for existing members?  Would that not bring about the same result – precedent – available to the court and available to those who were eligible members?

MS FIRKIN:   Potentially.  But my learned friend argues that the relief that can be sought should be confined to standing.  So, for example, if there is broad‑scale underpayment of people in a particular industry, the relief sought is confined only to those who are members of unions. 

GORDON J:   And, therefore, the penalties are adjusted down as a result?

MS FIRKIN:   Yes, your Honour.

GORDON J:   If the group is smaller – by reference to characteristics?

MS FIRKIN:   On my learned friend’s submission - that is a separate argument. 

GORDON J:   In relation to your first contention that it is not attended by sufficient doubt, it is an interesting submission given at least three or four matters are identified by Justice Jessup.  He says it is unconventional, he says it is doubtful, he says it involves a legal fiction and he says it involves a substantive change in the law which went unremarked in extrinsic materials – I do not think I have ever seen a case which has more questions raised by the judge who is writing it as to whether or not this is the only answer.

MS FIRKIN:   In relation to the comment about doubt, it is not in relation to his answer.  It is in relation to the words of the provision and the Act and there is no doubt that the words of the provision do not make clear, one way or another, what they mean.  I want to just stop there for a moment because the premise of my learned friend’s case is that the Full Court erred by failing to adopt the literal meaning of those words.  But the literal meaning of the words “entitled to represent the industrial interests of a person” is not to have a member who is affected.  Where the legislation requires membership it says so.  It says so in the preceding subsection of the same section.  Where it confers standing on employer organisations there is a deliberate confining of that standing to those members who are affected.

The other thing I want to raise in relation to my learned friend’s construction which, in my submission, confuses this issue is that it finds no support elsewhere throughout the Act.  There are multiple instances where it does not work, where membership is not required and these were canvassed at length in the court below.  My learned friend made concessions that there were anomalies with REX’s construction and the Full Court found this to be so.

Further, we have a situation where there is no support in the legislative history for my learned friend’s construction.  It is submitted to this Court that since 1904, unions have never been conferred standing for anyone who is not a member.  This is plainly wrong.  The AFAP has identified various standing provisions in past legislation which do exactly that – to which my learned friend has not answered. 

If we eliminate the alternative construction, we face the task of the Federal Court.  In my submission, the way in which the Federal Court approached that task was consistent with the modern approach to statutory construction.  It looked at the contentious phrase “in context” and it is accepted that “context” includes legislative history.  

The decision of Justice Jessup involved a careful consideration of that legislative history and we can see from it the inception of the phrase back in the case of Dunlop Rubber 1957.  In that case, a unanimous High Court held that a union’s eligibility rules provide the criterion for ascertaining or defining the group or class in the place of which it stands for industrial purposes or which it represents.  REX submits to this Court that it

has never held that a union represents people that are not its members, but this is precisely what Dunlop Rubber did.

The High Court accepted that an organisation does not claim on behalf of definite or ascertainable people.  An organisation claims on behalf of an ever‑changing class of present and future members.  This concept of unions acting for present and future members is not controversial and as soon as we recognise the representational role of a union extending beyond present members it is evident that the class on whose behalf it stands includes some employees who are not existing members. 

This principle has been invoked time and time again in our industrial legislation. REX seeks to distinguish it on the basis that it originally arose in the context of industrial disputes relying on different constitutional powers. But it has since been used in all contexts, including for prosecuting contraventions, relying on all or various powers in the Constitution.

This was dealt with at length by Justice Jessup in the judgment and it has been addressed in the AFAP submission and REX can provide no answer to this.  Whilst the comments of Justice Jessup were colourful in describing the leap that he necessarily had to take in the absence of an express definition of the phrase, he did so through a conventional means.  He adopted an established meaning of the phrase which has been uncontested since 1957.  It has been invoked in previous legislation and it has been invoked expressly.  The Industrial Tribunal has accepted what it means and that phrase remains in our legislation today.  For those reasons, we submit that the decision of the Full Court is not attended with sufficient doubt in this case to justify granting leave to appeal. 

KIEFEL CJ:   Thank you, Ms Firkin.  Mr Follett, could you address, in particular, the question of whether this is an appropriate vehicle for the determination of the question, given that there is a member of the AFAP here?

MR FOLLETT:   The proceedings – these particular proceedings involve at least four identifiable people, one of whom is a member.  If we are right, the proceedings will not extend to the other three people.  This is an adverse action proceeding which involves the reverse onus of proof.  So it is incumbent upon my client to come to court and explain why it took the action it did in relation to each of the persons and without doing so, it cannot succeed. 

The extent of compensation, if any, will be affected by the decision.  The extent of penalty, if any, may be affected by the decision, subject to principles of civil double jeopardy and totality and we will be vexed with

proceedings, in the particular facts of this case, with respect to persons who we say we ought not be. 

More widely, the type of examples referred to by my learned friend are the most likely examples and they are far from uncommon – they are very common large scale actions taken by employers or other persons against large groups of persons and within that large group of persons will be members and non‑members.  There are very legitimate questions in those cases about how far the court’s relief can go based upon the answer to this question – in relation of which of those persons can remedies be sought and in relation of which of those persons can remedies be given.

In circumstances where the evidence is not the same, although similar but not the same with respect to the circumstances of different persons within different groups, you essentially have two different cases running, one of which, on our construction, ought not be before the court – at least at the instigation of the industrial association. 

So, for those reasons, the mere fact that one of the potential claimants in this case is a member is not a reason why the point is not worthy of a decision of this Court.  It is not a reason why we should defend proceedings with respect to at least three persons who we say we should not. 

KIEFEL CJ:   Yes, thank you, Mr Follett.  There will be a grant of special leave in this matter.  What is your time estimate?  How long will it take?

MR FOLLETT:   No more than a day, your Honour.

KIEFEL CJ:   Do you agree with that, Ms Firkin?

MS FIRKIN:   I do, your Honour.

KIEFEL CJ:   Would you please ensure that your instructing solicitors obtain a copy of the directions necessary in this matter.

MR FOLLETT:   We will do so.

KIEFEL CJ:   Thank you.

AT 10.51 AM THE MATTER WAS CONCLUDED