Shop, Distributive and Allied Employees Association v Aldi Foods Pty Limited as General Partner of Aldi Stores (A Limited Partnership)

[2018] FWC 806

[2018] FWC 806

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.608—Referral of a question of law to the Federal Court

Shop, Distributive and Allied Employees Association
v
ALDI Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership)
(C2016/1264)

JUSTICE ROSS, PRESIDENT SYDNEY, 8 FEBRUARY 2018

Referral of a question of law to the Federal Court – s.608 Fair Work Act 2009 (Cth) – application refused.

[1] The matter before me is an application by ALDI Food Pty Limited as General Partner of ALDI Stores (A Limited Partnership) (ALDI) for the referral of a question of law to the Federal Court of Australia pursuant to s.608 of the Fair Work Act 2009 (Cth) (the FW Act). The Shop, Distributive and Allied Employees Association (SDA) opposes the referral application. The relevant background may be shortly stated.

[2] The referral application relates to appeal proceedings concerning the approval of the ALDI Jandakot Agreement 2015 (the Jandakot Agreement). Deputy President Bull approved 1 the Jandakot Agreement and the SDA appealed that decision (matter C2016/1264). The hearing of the appeal has been delayed by related proceedings in the Federal Court and the High Court.

[3] The application for the approval of the Jandakot Agreement included a document titled ‘Schedule 2.1 Notice of employee representative rights’ (the Jandakot Notice) which had been issued to employees. The Jandakot Notice substituted the word ‘leader’ for ‘employer’ in the last paragraph of the notice under the heading Questions? In other respects the Jandakot Notice appears to be compliant with Regulation 2.05 and Schedule 2.1. An issue in the appeal is whether the Jandakot Notice complied with the relevant provisions of the FW Act.

[4] Section 173 of the FW Act provides, relevantly, that an employer that will be covered by a proposed enterprise agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative (the Notice) to each employee who will be covered by the agreement. The content and form of the Notice is dealt with in s.174. Section 174(1A) provides that the Notice must contain the content, and be in the form, prescribed by the regulations. Regulation 2.05 of the Fair Work Regulations 2009 says: ‘For subsection 174(6) of the Act, the notice of employee representational rights in Schedule 2.1 is prescribed.

[5] As to the reference in Regulation 2.05 to s.174(6), I note that s.174(6) was repealed by the Fair Work Amendment Act 2012 (the 2012 Amendment Act) (see Schedule 4, item 9 of that Act). However, item 8(2) of Schedule 3 to the 2012 Amendment Act provides as follows:

‘Regulations that:

(a) were made for the purposes of subsection 174(6) before the commencement of Part 5 of Schedule 4 to the amending Act; and

(b) were in force immediately before that commencement;

Continue in force (and may be dealt with) after that commencement as if they had been made for the purposes of subsection 174(1A) (as inserted by Part 5 of Schedule 4 to the amending Act).’

[6] One of the matters that the Commission must be satisfied of before approving an enterprise agreement is that the agreement has been ‘genuinely agreed’ to by the employees covered by the agreement (s.186(2)(a)). Section 188 provides that an agreement has been genuinely agreed to by the employees covered by the agreement if, among other things, the Commission is satisfied that the employer has complied with s.181(2) (see s.188(a)(ii)). A failure to comply with s.174(1A) means that there would be no reference point for the operation of s.181(2) – which requires that the employer’s request to employees to approve a proposed agreement not be made until at least 21 days after the s.173 notice. Consequently, the Commission could not be satisfied of the matter specified in s.188(a)(ii), with the result that it could not be satisfied that the agreement was genuinely agreed to by the employees concerned for the purposes of s.186(2)(a). Hence whether a Notice complies with the form and content requirements specified in s.174 is important.

[7] In Peabody Moorvale Pty Ltd v CFMEU 2 a Full Bench considered the proper construction of s.174(1A) and whether non-compliance goes to invalidity and concluded as follows:

‘In our view s.174(1A) is clear and unambiguous. There is simply no capacity to depart from the form and content of the notice template provided in the Regulations. A failure to comply with these provisions goes to invalidity. We agree with the Minister’s submissions on this point, that is:

“A mandatory template is provided in the Regulations. The provisions make it clear that there is not scope to modify either the content or the form of the Notice other than as set out in the template.”

‘Taking into account the considerations identified in Project Blue Sky we have concluded that the legislative purpose of s.174(1A) is to invalidate any Notice which modifies either the content or form of the Notice template provided in Schedule 2.1 of the Regulations.’ 3 (footnotes omitted)

[8] The referral application is brought pursuant to s.608 of the FW Act, which is in the following terms:

‘608 Referring questions of law to the Federal Court

(1)  The President may refer a question of law arising in a matter before the FWC for the opinion of the Federal Court.

(2)  A question of law referred under subsection (1) must be determined by the Full Court of the Federal Court.

(3)  The FWC may make a decision in relation to the matter even if the Federal Court is determining the question of law, except if the question is whether the FWC may exercise powers in relation to the matter.

(4)  Once the Federal Court has determined the question, the FWC may only make a decision in relation to the matter that is not inconsistent with the opinion of the Federal Court (if the FWC has not already done so).

(5)  However, if the FWC has made a decision in relation to the matter that is inconsistent with the opinion of the Federal Court, the FWC must vary the decision in such a way as to make it consistent with the opinion of the Federal Court.’

[9] The principles relating to an application for the referral of a question of law under s.608(1) are conveniently summarised in Grabovsky v United Protestant Association of NSW Ltd 4(Grabovsky) as follows:

‘[52] Section 608 confers discretion on the President as to whether a question of law arising in a matter before the Commission should be referred for the opinion of the Federal Court. Subsection 608(1) imposes two conditions on the power to refer a question for the opinion of the Court: first, the question must be one ‘of law’; and second, the question must be one ‘arising in a matter before the Commission’.

[53] As to the meaning of the expression ‘a question of law arising in a matter before the FWC’ in Hamzy v Tricon International Restaurants and another [[2001] FCA 1589, 115 FCR 78] the Full Federal Court held that a question does not ‘arise’, within the meaning of what is now s.608(1), ‘unless it pertains to an issue that actually exists’. The Court cited a statement by Isaacs J in Australian Commonwealth Shipping Board v Federated Seaman’s Union of Australia [(1925) 36 CLR 442]in support of this proposition:

“It is manifestly impossible for this Court or any other Court to ‘hear and determine’ a question so as to give it the character of a conclusive judgment, unless that question ‘arises’ so as necessarily to enter into the legal determination of the matter upon the facts stated. Remote or merely possible relation of the question of law to the facts is not enough to make the question ‘arise’ in a legal sense. To say that it may arise is not the same as saying it does arise, which is the meaning of ‘arising’.”

[54] The above statement was applied by the Full Court of the Federal Court in Re Alcoota Land Claim No 146 [(1998) 82 FCR 391].

[55] The discretion conferred by s.608(1) is to be exercised having regard to the purpose and objects of the Act. In this context I note that s.577 of the FW Act provides that the Commission 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.’ 5

[10] Further, the discretion conferred by s.608 should, where possible and appropriate, be exercised in such a way as to avoid undue delay in the determination of matters before the Commission. 6

[11] ALDI seeks to refer the following questions to the Full Court of the Federal Court:

1. Does the Jandakot Notice comply with the requirements of section 174 of the FW Act?

2. If not, to what extent is the Jandakot Notice non-compliant?

3. If the Jandakot Notice is non-compliant, is the degree of non-compliance sufficiently minor that the Commission is entitled to apply the de minimis principle?

[12] Section 608(1) imposes two conditions on the power to refer a question for the opinion of the Federal Court: first, the question must be one ‘of law’; and second, the question must be one ‘arising in a matter before the Commission’. If these two conditions are satisfied the President’s discretion to refer the question of law is enlivened.

[14] It is not in dispute that the preconditions for referral have been met. The discretion in s.608(1) is therefore enlivened, the issue is whether the discretion should be exercised to grant the referral application.

[13] ALDI submits 7 that the questions of law should be referred because, essentially, it will provide a means of resolving the conflict in the various judgments of the Full Federal Court in SDA v ALDI Foods Pty Ltd and another8(ALDI Foods).

[14] ALDI Foods was an application for judicial review in which the SDA sought to quash two decisions of the Commission, namely a decision by Bull DP to approve the ALDI Regency Park Agreement 2015 and the subsequent decision by a Full Bench to dismiss the SDA’s appeal against the decision of Bull DP. The issue which is the subject of the questions sought to be referred was one of the issues in the Federal Court proceedings, but, as the alleged non-compliance with s.174(1A) had not been raised before the Commission, the Court concluded that relief should be refused on discretionary grounds. 9

[15] In the various judgments in ALDI Foods the Court expressed differing views on the alleged non-compliance with s.174(1A).Jessup J (in dissent) observed: 10

‘At least within reasonable bounds, for the employer to have nominated the individual to whom it intends that questions should be addressed would not, in my view, amount to a departure from the prescribed form, even if strict compliance were necessary.’

[16] Katzmann J observed: 11

‘I respectfully decline to join in the parting observation made by Jessup J at [49]…

It may be accepted that ALDI substantially complied with the form. But in the case of s 174(1A), substantial compliance will not do…

It seems to me that if ALDI’s management wished to designate an appropriate person or persons to whom questions could be directed, it could have done so by other means, for example, in an accompanying document. But in my respectful opinion s 174(1A) requires that there be no alteration in form or content. The Act does not allow for exceptions for administrative efficiency or convenience…’

[17] White J did not form a concluded view on the issue, but made the following observation: 12

‘In my opinion, the SDA’s contention that the decision of the Full Bench is affected by jurisdictional error by reason of a defect in the NERR should be rejected. I respectfully agree with the reasons of Jessup J in [39]-[48] concerning this ground.

The reasons of Katzmann J on the question of whether a notice given pursuant to s 174 must conform strictly with the prescribed form do appear to have some force, but I would prefer not to express a concluded view on that issue until it is necessary to do so.’

[18] ALDI also submits 13 that in the event that the appeal in the substantive matter is successful, and the approval of the Jandakot Agreement is quashed, it will suffer significant prejudice.

[19] I have decided to refuse the application for referral, for three reasons.

[20] First, the determination of the proposed questions of law by the Court will not necessarily dispose of the substantive application and hence it cannot be confidently predicted that the referral will avoid unnecessary costs.

[21] The SDA has foreshadowed that, depending on the outcome of another ALDI matter before a differently constituted Full Bench, it will seek leave to amend its grounds of appeal in the Jandakot appeal (matter C2016/1264) to contend that the Jandakot Agreement did not comply with the BOOT (the better off overall test in s.193). In the event that such leave is sought (and obtained) the referral of the proposed questions of law will simply fragment the substantive proceeding and the determination of the referred question will not dispose of all of the issues in the appeal before the Commission.

[22] Second, during the course of oral argument counsel for ALDI submitted that if the referral application was granted then the evidence to be adduced to the Court would show that the employees concerned understood that the reference to ‘leader’ in the Jandakot Notice meant their employer. 14 I am not persuaded that it is appropriate to refer the questions of law in circumstances where there are factual issues which require determination. It is not apparent that there is any agreement in respect of the proposition that there was a common understanding of what is meant by the reference to ‘leader’ in the Jandakot Notice. It is appropriate that any contest about the relevant facts be resolved by the Appeal Bench, in the event that leave is granted to admit further evidence ( see s.607(2)(a)).

[23] Third, I find ALDI’s submission as to the prejudice they will suffer in the event the referral is not granted, unpersuasive. I accept that if the appeal is successful ALDI will be prejudiced, but I am not persuaded that is a determinative factor warranting the referral of the proposed questions. The same prejudice would follow in the event the questions were determined in a manner contrary to ALDI’s submissions. Further, if the Appeal Bench upholds the appeal on an incorrect understanding of the law that may lead to jurisdictional error which can be dealt with in subsequent judicial review proceedings. 15

[24] The application is refused.

PRESIDENT

Appearances:

Mr G Hatcher SC and Ms Perigo for ALDI.

Mr W Friend QC for the SDA.

Hearing details:

2018.

Melbourne.

6 February.

<PR600197>

 1   [2016] FWCA 2028.

 2   [2014] FWCFB 2042.

 3   Ibid at [46]-[47].

 4   [2015] FWC 5161.

 5   Ibid at [52]-[55].

 6   The Hoyts Corporation Pty Ltd and Australian Theatrical and Amusement Employees Association, Print K4341; Re Finnemores Pty Ltd, Print M5301; Bulga Coal Management Pty Ltd v CFMEU, Print PR924444 8 November 2002 per Marsh SDP, Cartwright SDP and Hoffman C.

 7   See Transcript of proceedings 6 February 2018 at [28]-[36].

 8 [2016] FCAFC 161.

 9   Ibid at [46]-[48], [71]-[72] and [175].

 10 Ibid at [49].

 11   Ibid at [56], [66] and [70].

 12   Ibid at [175]-[176].

 13   See correspondence from ALDI dated 15 January 2018.

 14   Transcript of proceedings 6 February 2018 at [96]-[99].

 15 [2016] FCAFC 161 at [45] per Jessup J, [71] per Katzmann and White J at [175]; Also see Wei v Minister for Immigration and Border Protection (2015) 257 CLR 22 at [33]-[35].

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