TasTAFE v United Workers' Union - [2023] FWCFB 123

[2023] FWCFB 123

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.604—Appeal of decision

TasTAFE
v

United Workers’ Union

(C2023/1713)

TasTAFE
v

Australian Education Union

(C2023/1715)

JUSTICE HATCHER, PRESIDENT
DEPUTY PRESIDENT GOSTENCNIK
DEPUTY PRESIDENT O’NEILL

SYDNEY, 12 JULY 2023

Appeals against decision [2023] FWC 391 of Commissioner Lee at Melbourne on 24 March 2023 in matter numbers AG2022/1961 and AG2023/1809.

Introduction

TasTAFE is an instrumentality of the State of Tasmania with responsibility for vocational education and training. By virtue of s 4 of the TasTAFE (Skills and Training Business Act) 2021 (Tas) (TasTAFE Act), TasTAFE became an incorporated entity effective from 1 July 2022. One consequence of this change to its legal identity was that it became, for the purpose of the Fair Work Act 2009 (Cth) (FW Act), a ‘national system employer’ within the meaning of s 14 to which the provisions of the FW Act apply.[1] Under items 6 and 7(2) of Sch 3 to the TasTAFE Act, the employment of employees of TasTAFE in its previous incarnation was terminated on 1 July 2022, and they were taken to be employees of the incorporated TasTAFE effective from the same date.

The following industrial instruments in operation pursuant to the Industrial Relations Act 1984 (Tas) applied to TasTAFE immediately prior to 1 July 2022:

·TasTAFE Teaching Staff Award
·TasTAFE Teaching Staff Industrial Agreement 2021 (2021 Agreement)
·Tasmanian State Service Award
·Public Sector Union Wages Agreement 2019 (2019 Agreement)
·Facility Attendants (Tasmanian State Service) Award
·Education Facility Attendants Salaries and Conditions of Employment Agreement 2019 No 2
·Education Facility Attendant Job Security Industrial Agreement 2019

Part 6-3A of the FW Act comprises a regime of provisions applicable to a ‘transfer of business’ from a State public sector employer that is not a national system employer to a national system employer to which the FW Act applies. Section 768AD defines when a transfer of business for the purpose of Pt 6-3A occurs. There is no dispute that a transfer of business within the meaning of s 768AD occurred upon the incorporation of TasTAFE effective from 1 July 2022. Part 6-3A provides that, upon a transfer of business (as defined) occurring, certain terms and conditions of employment of ‘transferring employees’ will transfer with them. The mechanism by which this is achieved is the creation of a new instrument enforceable under the FW Act, the ‘copied state instrument’, upon the occurrence of the transfer of business which incorporates the terms of State awards and employment agreements which previously applied to the transferring employees. There are two types of copied State instruments: a ‘copied State award’ which incorporates the terms of a formerly-applicable State award, and a ‘copied State employment agreement’ which incorporates the terms of a formerly-applicable State employment agreement. In this case, copied State instruments (either copied State awards or copied State employment agreements) incorporating the terms of the instruments identified in paragraph [2] above came into existence on 1 July 2022 and applied to the transferring employees of TasTAFE and to TasTAFE in respect of their employment. Under s 768AO, copied State awards generally operate for a period of five years, while copied State agreements operate until terminated by the Commission pursuant to s 768AY.

While a copied State award applies to a transferring employee, a modern award does not cover the employee,[2] and while a copied State collective employment agreement applies, it prevails over an applicable modern award to the extent of any inconsistency.[3] However, if an enterprise agreement made and approved under the FW Act starts to cover a transferring employee after the time the employee becomes employed by the national system employer in relation to the transferring work, a copied State instrument ceases to cover the employee and employer and can never cover them again.[4] Thus, if TasTAFE were to make an enterprise agreement covering its transferring employees, the copied State instruments would cease to operate.

Under s 768BG of the FW Act, the Commission is empowered to make an order which has the effect that a copied State instrument that applies to transferring employees of the relevant national system employer also operates in respect of ‘non-transferring employees’ of the same employer performing the same work. Section 768BG provides:

768BGConsolidation orders in relation to non‑transferring employees

Consolidation order
(1)The FWC may make an order (a consolidation order) that a copied State instrument for a transferring employee (employee A) also is, or will be, a copied State instrument for one or more non‑transferring employees who perform, or are likely to perform, the transferring work.

Non‑transferring employees

(2)A non‑transferring employee of a new employer is a national system employee of the new employer who is not a transferring employee.

Who may apply for order

(3)The FWC may make a consolidation order under subsection (1):

(a)on its own initiative; or

(b)on application by any of the following:

(i) a non‑transferring employee who performs, or is likely to perform, the transferring work;

(ii) the new employer or a person who is likely to be the new employer;

(iii) an employee organisation that is entitled to represent the industrial interests of an employee referred to in subparagraph (i);

(iv) if the application relates to an enterprise agreement—an employee organisation that is, or is likely to be, covered by the agreement.

Matters that the FWC must take into account

(4)In deciding whether to make a consolidation order under subsection (1), the FWC must take into account the following:

(a)the views of:

(i) the employees who would be affected by the order; and

(ii) the new employer or a person who is likely to be the new employer;

(b)whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;

(c)if the order relates to a copied State employment agreement or an enterprise agreement—the nominal expiry date of the agreement;

(d)whether the copied State instrument for employee A would have a negative impact on the productivity of the new employer’s workplace;

(e)whether the new employer would incur significant economic disadvantage if the order were not made;

(f)the degree of business synergy between the copied State instrument for employee A and any workplace instrument that already covers the new employer;

(g)the public interest.

Restriction on when order may come into operation

(5)A consolidation order under subsection (1) must not come into operation in relation to a particular non‑transferring employee before the later of the following:

(a)the time when the non‑transferring employee starts to perform the transferring work for the new employer;

(b)the day on which the order is made.

Under s 768BO of the FW Act, if a ‘consolidation order’ is made under s 768BG(1), then its effect is that the relevant copied State award applies in the same way to the relevant non-transferring employees as to the transferring employees.

On 9 June 2022, the Australian Education Union (AEU) applied under s 768BG(3)(b)(iii) of the FW Act for an order that copied State instruments incorporating the terms of the first four instruments listed in paragraph [2] above would apply to non-transferring employees of TasTAFE. On 15 June 2022, the United Workers’ Union (UWU) applied under s 768BG(3)(b)(iii) for an order that copied State instruments incorporating the terms of the last three instruments listed in paragraph [2] above would apply to non-transferring employees of TasTAFE. TasTAFE opposed these applications.

In a decision issued on 24 March 2023,[5] Commissioner Lee determined to grant the orders sought by the AEU and the UWU. The orders were published separately on the same day.[6]

TasTAFE has appealed the Commissioner’s decision and orders. Permission is required for the appeal. This decision determines Tas TAFE’s appeal. For the reasons which follow, we grant permission to appeal but dismiss the appeal.

The cases advanced before the Commissioner

The AEU’s application was concerned with the interests of non-transferring teaching staff and general staff — that is, new teaching and general staff employed by TasTAFE after 1 July 2022 — who were covered by the Educational Services (Post-Secondary Education) Award 2020 (PSE Award), although the case it advanced below was focused on teaching staff. The AEU contended that non-transferring staff would, without the making of the consolidation order it sought, be ‘worse off’ than transferring staff because:

·their hours of duty would be 38 per week under the PSE Award, as compared to 35 for transferring staff;

·teaching hours would be 25 hours per week with no annual cap, as compared to an average of 19 hours per and up to 23 hours per week;

·four weeks of annual leave and six weeks of non-attendance time compared to four weeks of annual leave and seven weeks of non-attendance time;

·change in the pay scales resulted in a lower hourly wage rate for non-transferring teaching staff; and

·some allowances would change or no longer be accessible for non-transferring teaching staff.

The AEU contended that there was little to no business synergy between the terms of the copied State instruments applicable to transferring staff and the conditions applicable to non-transferring staff under the PSE Award, and that the implementation of differential employment conditions for non-transferring staff would hinder rather than help TasTAFE achieve the objectives of its corporate plan.

The AEU led evidence from Simon Bailey, the President of the TasTAFE Division of the AEU’s Tasmanian branch. He gave evidence concerning bargaining for the 2021 Agreement, which was approved by the Tasmanian Industrial Commission on 27 May 2022 and has a nominal expiry date of 30 June 2023. Mr Bailey said that during the negotiations TasTAFE refused an offer made by the AEU to negotiate an agreement under the FW Act (when it was known that, pursuant to the TasTAFE Act, TasTAFE would become a national system employer under the FW Act from 1 July 2022). Mr Bailey’s evidence was that the AEU had requested that TasTAFE enter into negotiations with it for an enterprise agreement under the FW Act to cover both teaching and non-teaching staff, but that TasTAFE had refused. Mr Bailey said that the views of transferring staff to whom he had spoken were that the grant of a consolidation order would be fairer and create a better working environment, and that they held concerns about equity amongst staff and confusion in timetabling arising from new staff being engaged on different conditions of employment which had not been negotiated. He also said that different working conditions would complicate fair enterprise bargaining.

The UWU’s case was concerned with non-transferring Education Facility Attendants (EFAs) employed by TasTAFE who, unless the consolidation order it sought was made, would be covered by the Miscellaneous Award 2020 (Miscellaneous Award). The UWU contended that the Miscellaneous Award did not meet the business or productivity needs of TasTAFE when compared to the copied State instruments applying to transferring EFAs, and that non‑transferring EFAs would be better off if they were covered by the copied State instruments because of higher penalty rates and better leave entitlements. The UWU also contended that although TasTAFE refused to commence bargaining for an enterprise agreement prior to the beginning of 2023, all parties were ultimately committed to bargaining for an enterprise agreement under the FW Act and thus the copied State instruments would, if the order it sought were granted, only apply to non-transferring EFAs for a limited period.

The UWU adduced evidence from three witnesses. Amy Brumby, the Lead Organiser in the UWU’s Public Sector portfolio, said that the EFAs included cleaners, groundspersons, kitchen attendants, storepersons, utility officers, caretakers, matrons and housekeepers. Ms Brumby described discussions with TasTAFE about EFAs in the first half of 2022, during which TasTAFE indicated that it would not be in a position to have an enterprise agreement covering EFAs until the end of 2023. Ms Brumby said that she had identified at least one casual EFA who had commenced working some shifts for TasTAFE since 1 July 2022, and this person conveyed a reluctance to work shifts for TasTAFE, preferring to work shifts for other employers because of the low rate of pay offered by TasTAFE. Ms Brumby said she did not understand what benefit TasTAFE would derive from having transferring EFAs under the relevant copied State instruments and non-transferring EFAs under the Miscellaneous Award, and was concerned that this would create inequities in the workplace. Connie Ling, a transferring EFA who has been employed by TasTAFE for 17 years, gave evidence that the differential in pay and conditions between transferring and non-transferring EFAs would give rise to a disincentive to work on the part of non-transferring EFAs, would threaten the job security of transferring EFAs, and would discourage TasTAFE from negotiating a new enterprise agreement. Darryl McKendrick, a transferring EFA with 30 years’ experience who manages lower-level EFAs, gave evidence that different employment conditions for transferring and non-transferring EFAs caused him concern because he currently had difficulty recruiting staff, which would be exacerbated by the low rates of pay under the Miscellaneous Award, and because it would result in confusion. He also expressed concern that this would make it more difficult to negotiate a new enterprise agreement because TasTAFE would rely on the conditions for the new EFAs as the standard, resulting in a loss of conditions.

TasTAFE’s case below was that the grant of the orders sought by the AEU and the UWU would undermine the objectives of the TasTAFE Act and the reforms it was intended to introduce. It contended that the TasTAFE Act arose from a 2021 report issued by the Premier’s Economic and Social Recovery Advisory Council (PESRAC), a body established by the Tasmanian Government to advise on how Tasmania should best mitigate the economic and social impacts of the pandemic, and to identify opportunities for economic and social renewal. This report found that TasTAFE was unable to meet the training needs of the Tasmanian economy because it was constrained by staffing inflexibility, with the current employment framework of award and registration requirements adding further inflexibility. It recommended that TasTAFE be re-established as a government business under the control and accountability of its Board of Directors with authority and power to employ its workforce under the FW Act. This recommendation was adopted by the Tasmanian Government. The second reading speech for the TasTAFE (Skills and Training Business) Bill 2021 referred to the need for TasTAFE to deliver training in different ways across more hours in a week and across more weeks of the year, meet seasonal training requirements, provide training through holiday periods and take account of business operating requirements, provide more flexibility and choice for learners, including apprentices, particularly those in small business and be able to attract new trainers from industry in a competitive labour market. The speech also stated that new employees who joined TasTAFE after the commencement date would be employed either under a new enterprise agreement or through a contract of employment underpinned by the equivalent modern award and having regard to market pay rates.

TasTAFE contended that the copied State instruments did not permit it to offer higher salaries that were market competitive, nor did they allow it to deliver sufficient teaching hours to meet service needs, because of their caps on teaching hours per annum and restrictions on weekly teaching hours and hours of operation. Its position was that a consolidation order would undermine its flexibility and productivity, preclude it from offering more courses to more students, and make it more difficult to recruit and retain teaching staff, thus defeating one of the key legislative purposes of the TasTAFE Act and hampering TasTAFE’s ability to fulfil its statutory functions.

TasTAFE adduced evidence from five witnesses. Mark Bowles, the Secretary of the Department of Business and Jobs, gave evidence concerning the need to alter TasTAFE restrictions on teaching hours and leave entitlements. He said that the number of students enrolling in TasTAFE and the number of teaching hours delivered had declined (despite increased funding) and it was difficult for TasTAFE to attract appropriately-qualified staff.

Grant Dreher, the Chief Executive Officer of TasTAFE, gave evidence concerning TasTAFE’s strategy to offer learning to students in a manner that works for students, at a time and place that works for students, requiring a shift in focus to more training at a time and place that suits the student, a strong digital presence, workplace delivery and assessment, full-year coverage and out-of-hours training. He said that the current employment conditions for transferring staff were more aligned to a year 7-12 school environment and did not meet the needs of TasTAFE or its learners. Mr Dreher also gave evidence that there was a requirement to offer competitive salaries, and the new employment arrangements applied to non-transferring staff were competitive and compared favourably with the national market. He said that applying the copied State instruments to non-transferring employees would severely restrict TasTAFE’s ability to change its delivery models and restrict productivity. He expressed a particular concern about the instruments limiting teaching hours to 760 per annum, which would reduce direct training delivery per teacher by approximately 300 hours per year, or 126,000 teaching hours per annum.

Rachel Holland, the Manager of Education and Training for VET in the Schools, Tourism, Hospitality, Land and Food Division of TasTAFE, gave evidence concerning the benefits of non-transferring employees being able to teach an extra week compared to transferring employees. She said that the current requirement for compulsory leave leads to six to eight weeks of leave being taken at a time, which impacts on the regularity of training and assessment for apprentices. The removal of compulsory leave periods would allow activities to be scheduled during January or any other month, would allow scheduling of block training in January and would allow staff to take leave when it suited them. Ms Holland said the relevant modern award increased the span of hours for teachers, allowing flexibility in scheduling for subjects such as hospitality, farm work, automotive and baking, in respect of which there was a desire for more night classes. She also identified the modern award conditions as allowing greater flexibility for individuals and more flexibility in delivery of training courses.

Scott Adams, the Chief Operating Officer of TasTAFE, gave evidence that TasTAFE would be negotiating new enterprise agreements with staff under the FW Act, with the relevant modern award being the basis for the application of the better off overall test (BOOT). He said it was appropriate to move away from the copied State instruments as soon as possible to facilitate the move to the modern awards, and that 12-18 months after the commencement of TasTAFE (on 1 July 2022) was a realistic timeframe for negotiation of a new enterprise agreement. Mr Adams gave evidence that TasTAFE had incurred significant cost and resources to establish the employment framework for non‑transferring employees, including the drafting of contracts and changes to the payroll system, and the revised salaries were significantly higher than existing salaries for teachers and had been advertised extensively in the market. He said that to revert to the copied State instruments’ pay scales would severely impact TasTAFE’s ability to recruit. Mr Adams’ evidence was that TasTAFE had had difficulty filling advertised teaching and non-teaching positions, that advice from a remuneration consultant had demonstrated that it needed to offer a higher salary for teachers to recruit them, and that TasTAFE’s hours of work and leave entitlements were more generous than those offered elsewhere in the market.

Mr Adams also gave evidence that, as at 11 November 2022, TasTAFE had:

·456 headcount and 403 FTE teaching staff;
·383 headcount and 333 FTE non-teaching (general) staff; and
·59 headcount and 56 FTE EFAs.

Of the above, the numbers of non-transferring staff recruited since 1 July 2022 were:

·10 teachers (four permanent, four fixed-term and two casual);
·14 non-teaching (general) staff (seven permanent, five fixed-term and two casual); and
·two EFAs (both casual).

Mr Adams also said that nine teaching and four non-teaching positions were currently being advertised.

Finally, Mr Timothy Witt, the Industrial Relations Manager at TasTAFE, gave evidence that the views of the 12 non-transferring employees employed at the time of his witness statement were ‘positive’ to the extent that they had felt able to agree to their contracts of employment. He said that TasTAFE intended to establish unified conditions of employment on which all TasTAFE teachers could vote, so the state of having two sets of conditions for teachers was not permanent and would depend on enterprise agreement negotiations. Until that could occur, TasTAFE sought to establish conditions that supported its teachers’ productivity. Mr Witt calculated that the hourly rate for non‑transferring teachers for ‘productive time’ was 1.08 to 5.73 per cent higher than for transferring teachers, except that there is a slightly lower rate for a transferring Level 3 teacher. He said that in respect of non-transferring general staff, TasTAFE has offered competitive above-award salary rates informed by external advice. He said that non-transferring EFAs were paid slightly more or the same as under the copied State instrument, and the hourly rates for casual non-transferring employees were slightly less. Mr Witt also gave evidence concerning bargaining for the 2021 Agreement. He said that the parties had been unable to agree on a package that would see hours of work and direct teaching hours increase at an agreeable adjustment percentage.

Decision under appeal

In his decision, the Commissioner considered each application before him separately. In relation to the AEU application, the Commissioner made findings concerning each of the matters requiring consideration under s 768BG(4). In relation to s 768BG(4)(a)(i), the Commissioner first rejected a submission advanced by TasTAFE that the views of transferring employees should not be taken into account because they are not ‘affected by the order’ sought by the AEU if made.[7] The Commissioner considered that there was no basis to construe s 768BG(4)(a)(i) as being confined to employees who have a ‘legal right or interest’ in the making of the order, and concluded that ‘affected employees’ takes its ordinary meaning to encompass those affected in some way by the making of an order, including by being influenced or impaired in some way.[8] The Commissioner found there was insufficient evidence to establish what the views of non-transferring employees were regarding the AEU’s application and treated this as a neutral consideration.[9] As to the transferring employees, the Commissioner accepted Mr Bailey’s evidence as indicative of the views of significant numbers of the transferring employees he represented, with these views weighing in favour of making the order sought by the AEU.[10]

In relation to s 768BG(4)(a)(ii), the Commissioner accepted that TasTAFE opposed the making of a consolidation order because it would adversely impact on its objective to transition to the modern award system for non-transferring employees, and considered that this factor weighed against the making of the order.[11] As to s 768BG(4)(b), the Commissioner was satisfied that no employees would be disadvantaged by the order and considered that this weighed in favour of making the order sought.[12] The Commissioner found in relation to s768BG(4)(c) that the nominal expiry date for the 2021 Agreement was 30 June 2023 and for the 2019 Agreement was 30 June 2022. The Commissioner found that this consideration weighed in favour of making the order sought because this was not a case where the agreements were well past their nominal expiry dates and were no longer relevant to the workforce. The 2021 Agreement commenced operation in May 2022, only one month before the commencement of the new TasTAFE and provided for a pay increase in March 2023, and the 2019 Agreement had only recently passed its nominal expiry date. The Commissioner also noted that Mr Witt agreed in his evidence that the conditions negotiated in the 2021 Agreement were appropriate at least for transferring employees, while Mr Dreher confirmed that TasTAFE was aware of the changes to take place to TasTAFE at the time the 2021 Agreement was concluded.

The Commissioner determined that s 768BG(4)(d) was to be construed as concerned with the impacts on productivity of a future order applying the copied State instruments to non‑transferring employees and, by reference to the Penalty rates decision,[13] proceeded on the basis that ‘productivity’ referred to the economic concept of the number of units of output per unit of input.[14] The Commissioner was satisfied that there was evidence that the copied State instruments would have a negative impact on the productivity of TasTAFE’s workplace, although he considered that the extent of this had been overstated by TasTAFE, and concluded that this weighed against making the order sought. As to s 768BG(4)(e), the Commissioner found that there was no evidence that TasTAFE would incur significant economic disadvantage if the order were not made and treated this as a neutral consideration.

In regard to s 768BG(4)(f), the Commissioner found that the copied State instruments applicable to the transferring employees and the modern award applicable to non-transferring employees were remarkably dissimilar in key areas. This had required TasTAFE to implement a ‘two system’ model to adapt to operating under these instruments,[15] and he concluded that the ‘evident’ lack of any degree of business synergy between the relevant instruments weighed in favour of making the order sought.[16]

As to s 768BG(4)(g), the Commissioner said that the public interest:[17]

…is something distinct from the views of the parties, though the considerations may overlap. It is a discretionary value judgement confined by the subject matter, scope and purpose of the FW Act. The objects of the FW Act are clearly relevant to a consideration of the public interest as well as matters that may affect the public as a whole.

The Commissioner discussed the recommendations of the PESRAC report and the Tasmanian Government’s ‘policy imperative’ in respect of its TasTAFE reforms.[18] He noted that TasTAFE’s submissions concerning the public interest focused on the public benefit that would flow from the reforms to TasTAFE and the shift towards the modern award system for non-transferring employees, and said that this was a restatement of the productivity benefits which TasTAFE had already outlined as being associated with employing non-transferring employees under the terms of the modern award system in combination with common law contracts. He said this was a matter which he had already taken into account under s768BG(4)(d). The Commissioner went on to say:

[149] The objects of the FW Act are clearly relevant to the consideration of the public interest. The most relevant of these is s.3(f) of the FW Act which provides “achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action”. The productivity and fairness objectives of both parties can likely be achieved through enterprise bargaining. There was clearly contemplation of changes during the recently concluded bargaining on significant issues highlighted by the Respondent affecting productivity in teaching. However, the parties were unable to agree to a package of changes at that time. I think it more likely that making the consolidation order would lead to an emphasis on enterprise level collective bargaining as the parties would be negotiating from a framework of a common set of conditions, rather than the two system model currently in operation. This is consistent with the objects of the FW Act. When Mr Witt was asked if he accepted that unilaterally changing employment conditions for non-transferring employees is not facilitating enterprise bargaining he rejected that stating that he thought it would facilitate enterprise bargaining “down the track”. I can understand how the approach adopted by TasTAFE will improve the bargaining position of the employer over time as a greater proportion of employees are engaged on the common law contracts underpinned by the award. However, how that facilitates enterprise bargaining is not apparent. Indeed, it builds in an incentive for the employer to delay bargaining to somewhere further “down the track”.

[150] The stated objectives of PESRAC, adopted by the government to improve TasTAFE’s performance and consequently expand the supply of a skilled and trained workforce in order to improve levels of employment are certainly objectives that are in the public interest. It is apparent from the evidence that TasTAFE has formed the view it can most easily realise those gains by way of a shift to the modern award system for new employees. However, productivity improvements can still be achieved under enterprise bargaining, though they will need to be negotiated, not imposed. This approach will be consistent with the object of the Act, and also consistent with the objective of PESRAC, adopted by the Tasmanian Government, to re-establish TasTAFE as a government business with authority to employ its workforce under the FW Act.

[151] Taking into account the consideration[s] above, my assessment of the public interest consideration weighs in favour of making the order sought.

In paragraph [152] of his decision, the Commissioner summarised his conclusions about each of the matters requiring consideration under s 768BG(4). He then concluded:

[153] Taking into account all the factors, I am satisfied it is appropriate to make the order sought.

[154] While the negative productivity impacts and the strong views of the employer weigh against making the order, all of the factors must be considered. There are a significant number of factors which weigh in favour of making the order.

[155] On balance, taking into account each of the requirements in s 768BG of the Fair Work Act, I am satisfied that the order sought should be granted.

In relation to the UWU’s application, the Commissioner made the same findings under s 768BG(4)(a)(i) as for the AEU’s application. In relation to s 768BG(4)(a)(ii), the Commissioner found that TasTAFE opposed the making of the order sought and, although noting that TasTAFE was not particularly vigorous in its opposition, considered that this weighed against the making of the order sought. As to s 768BG(4)(b), the Commissioner found that no employees would be disadvantaged by the making of an order and that this weighed in favour of making the order. The Commissioner found that the nominal expiry date of the copied State instruments relevant to EFAs were 19 September 2022 and 31 December 2022 respectively, and found for the purpose of s 768BG(4)(c) that, because one instrument remained within its nominal term at the time of the hearing and the other had only recently expired, this was a factor weighing in favour of making the order sought.

In relation to s 768BG(4)(d), the Commissioner noted that TasTAFE’s evidence and submissions had said little in respect of the productivity issues related to the UWU’s application and found that there was no significant evidence, and he was not satisfied, that the copied state instruments would have a negative effect on the productivity of the new employer. The Commissioner considered that this weighed in favour of making the order sought. As to s 768BG(4)(e), the Commissioner found that there was no evidence that TasTAFE would incur significant economic disadvantage if the order were not made and that this was a neutral consideration. For s 768BG(4)(f) and (g), the Commissioner made essentially the same findings as for the AEU’s application. The Commissioner concluded in relation to the UWU’s application:

[190] Taking into account all the factors, I am satisfied it is appropriate to make the order sought.

[191] While the strong views of the employer weigh against making the order, all of the factors must be considered and there are a significant number of factors which weigh in favour of making the order.

[192] On balance, taking into account each of the requirements in s.768BG of the Fair Work Act, I am satisfied that the order sought should be granted.

Appeal grounds and submissions

TasTAFE advances six grounds of appeal in its amended appeal notice. The first ground is:

The Commissioner erred in his consideration of the public interest (subsection 768BG(4)(g)).

Particulars

(a) The Commissioner impermissibly treated the public interest as exhaustively attracted by a potential for enterprise bargaining. In so doing, he impermissibly treated the interests of employees and their unions as conclusory of the public interest.

(b) The Commissioner failed to consider, evaluate and give due weight to a number of matters that the Appellant said went to the public interest.

TasTAFE submits in support of the first ground of appeal that it was not open for the Commissioner to find that TasTAFE was reluctant or not intending to bargain and that, regardless of these findings, it was an error for the Commissioner to treat the public interest as exhaustively attracted by a potential facilitation of enterprise bargaining. While enterprise bargaining is one way to pursue the objects of the FW Act, there is no statutory nor public interest imperative for enterprise bargaining at TasTAFE, and the achievement of matters that may attract the public interest such as employment levels, the maintenance of industrial standards, prosperity, social inclusion, and so on, are able to be realised through other means established by the FW Act. The Commissioner was led into this error, it was submitted, by the unions’ private interest in having all employees (pre-existing and new) subject to the same terms and conditions for the purpose of future enterprise bargaining. This private interest was to be taken into account under s 768BG(4)(a) but has nothing to do with the public interest. TasTAFE submits that the narrow scope assigned by the Commissioner to the public interest meant he failed to consider, evaluate, and weigh a range of matters attracting the public interest including all of the objects of the FW Act, employment levels, and the maintenance of proper industrial standards. In addition, declining to treat productivity as a matter needing to be accounted for in the public interest was a further error.

TasTAFE’s second ground of appeal is:

The Commissioner erred in his consideration of the views of the employees who would be affected by the order (subsection 768BG(4)(a)(i)).

Particulars

(a) The views of transferring employees were not a relevant consideration.

(b) In the alternative, and to the extent their views were relevant, consideration of the views of transferring employees only extended to whether or not their own terms and conditions would be affected by the order, rather than emotional or intellectual concerns about the order.

TasTAFE submits in relation to this ground that the Commissioner made three errors in his construction of s 768BG(4)(a)(i):

(1)The words ‘the views of … employees who would be affected by the order’ must be read in context to accord with the restricted standing given to non-transferring employees and their representatives to make an application under s 768BG(3)(b). It would be anomalous for transferring employees to be denied standing if they would be relevantly affected by a consolidation order.

(2)The Commissioner substituted for the statutory formulation the phrase ‘affected employees’ and then proceeded to interpret that phrase. The statutory language limits affectation to ‘employees who would be affected by the order’.

(3)The Commissioner’s interpretation is circular because it defines an employee’s affectation by reference to whether they possess views. Affectation by the order circumscribes whose views are relevant, rather than the other way round.

In the alternative, TasTAFE submits that there was no evidence that the rights, privileges or interests of transferring employees would be affected by the making of a consolidation order, and views about ‘concern’, ‘morale’ and bargaining footing were not relevant affectation.

The third ground of appeal was:

The Commissioner erred in his consideration of whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment (subsection 768BG(4)(b)).

Particulars

(a) Where (as here) there is an absence of disadvantage, this criterion directs the Commission to a neutral conclusion or the conclusion that no order should be made.

It is submitted in relation to this ground that the inquiry in s 768BG(4)(b) is framed by the word ‘whether’ disadvantage exists, rather than by the phrase ‘whether or not’ used on 59 occasions in the FW Act to signify a dualistic command. Given that the default position is modern award coverage for non-transferring employees, then disadvantage, if established, has potential to count against the making of an order. But, it is submitted, if there is no disadvantage, there is no basis to conclude that the default position should be altered, and this can only be a neutral consideration.

The fourth ground of appeal is:

The Commissioner erred in his consideration of the degree of business synergy between the relevant instruments (subsection 768BG(4)(f)).

Particulars

(a)The Commissioner’s analysis did not proceed from the legal and factual proposition that the default position of Part 6-3A of the FW Act requires the imposition of separate terms and conditions for non-transferring employees (cf Part 2-8 of the FW Act).

TasTAFE submits in relation to this ground that ‘business synergy’ in s 768BG(4)(f) is intended to be protective of an employer’s interest in having ‘a degree of fit’ between a copied State instrument and arrangements that are already in place at the time that a consolidation order is to be made, and encompasses considerations spanning the entirety of the ‘business’ – a subject matter peculiarly within the knowledge of the employer. It submits that, because the default position is that the FW Act requires the imposition of separate terms and conditions for non-transferring employees unless a consolidation order is made, if at the time of an application a business synergy between instruments has already been practically implemented, it is for the employer to identify the desirability or undesirability of the degree of synergy in place. Here, the Commissioner ignored the evidence of TasTAFE’s experience in applying the modern award when compared to the copied State instruments, and his decision does not disclose any evidence or path of reasoning that led to that evidence being contradicted, and the ultimate result was not open.

TasTAFE’s fifth appeal ground, which relates only to the decision to grant the UWU’s application, is:

The Commissioner erred in his consideration of whether the copied State instrument for employee A would have a negative impact on the productivity of the new employer’s workplace (subsection 768BG(4)(d)).

Particulars

(a) Where (as here) there is an absence of negative impact on productivity of the new employer’s workplace, this criterion directs the Commission to a neutral conclusion or the conclusion that no order should be made.

It is submitted by TasTAFE that the Commissioner’s reasoning concerning s 768BG(4)(d) suffers from the same constructional errors that are the subject of ground 3 of its appeal. It was not open for the Commissioner to find this consideration weighed in favour of the order sought being made based on a finding of no negative productivity impact in respect of EFAs. It submits that the consideration should have been treated as neutral.

The final appeal ground is:

The Commissioner’s final analysis reveals latent error.

Particulars

(a) The Appellant refers to and repeats the Grounds above and the particulars subjoined therein.

TasTAFE advances this ground of appeal on the basis that it invokes the ‘second limb’ of error in House v The King[19] and only arises for consideration if none of the specific errors alleged in grounds 1-5 is made out. TasTAFE submits that the outcome determined by the Commissioner was unreasonable or unjust such that it may be inferred that the discretion was wrongly exercised. This inference is available on the basis that the Commissioner did not reveal the weighting placed on any criterion nor disclose how the criteria intersected with one another in the ‘balance’. It is submitted accordingly that the only conclusion is that the Commissioner did not weigh them but rather gave them equal weight, and this was an error.

The AEU and the UWU submitted generally in relation to ground 1 of the appeal that it was founded on an incorrect reading of the decision and that the Commissioner had considered and evaluated the matters going to the public interest raised by TasTAFE. As to ground 2, the AEU and the UWU submitted that the Commissioner had correctly construed s 768BG(4)(a)(i) in taking into account the views of transferring employees and additionally, had correctly determined that they were persons who would be affected by the order sought in each case. In relation to ground 3, and in relation to ground 5 by the UWU only, it was submitted that the weight to be given to the unchallenged findings made by the Commissioner the subject of these appeal grounds was within his discretionary latitude. In relation to ground 4, the AEU and the UWU submitted that there were obvious dissimilarities between the copied State instruments and the relevant modern awards which supported the finding made by the Commission under s 768BG(4)(f). As to ground 6, it was submitted that the outcome determined by the Commissioner in each case was not manifestly unjust and did not permit the inference that the discretion was wrongly exercised.

Consideration

Permission to appeal

We consider that permission to appeal should be granted because the appeal raises novel questions concerning the proper construction and application of s 768BG of the FW Act and is of industrial significance.

Appeal ground 1

TasTAFE’s first appeal ground proceeds on the premise that, in his decision, the Commissioner treated his consideration of the public interest under s 768BG(4)(g) as ‘exhaustively attracted by a potential facilitation of enterprise bargaining’, treated the interests of employees and unions as conclusory of the public interest, and failed to consider properly a number of matters relevant to the public interest that were raised in TasTAFE’s case. However, we consider this to be an unfounded premise because it proceeds upon an unfair and incorrect reading of the decision.

We have earlier summarised the salient parts of the Commissioner’s decision, including his consideration under s 768BG(4)(g) with respect to each application. As stated, the Commissioner set out in detail the process by which the TasTAFE Act was enacted, including the conclusions of the PESRAC report and the Minister’s second reading speech in relation to the Bill. These matters were clearly understood by the Commissioner as explaining the purpose of the changes effected by the TasTAFE Act and informed his consideration of the applications. The Commissioner also set out in detail the evidentiary case advanced by TasTAFE, including those matters regarded by TasTAFE as bearing upon the public interest.

In his consideration under s 768BG(4)(g) in relation to the AEU’s application, the Commissioner stated that the public interest is distinct from the views of the parties (although the considerations may overlap), requires a discretionary value judgement confined by the subject matter, scope and purpose of the FW Act, and that the objects of the FW Act are clearly relevant to a consideration of the public interest as well as matters that may affect the public as a whole. These principles are derived from the Full Bench decision in Parks Victoria v AWU.[20] Although that decision concerned the reference to the public interest in the different context of s 275(d) of the FW Act, both the AEU and TasTAFE cited this decision below as identifying the correct approach to be taken to the conception of the public interest in s 768BG(4)(g). No criticism is made of this statement of principle by TasTAFE in its appeal, and the Commissioner may therefore be taken as having proceeded upon a correct understanding of the statutory task under s 768BG(4)(g).

The Commissioner next gave direct consideration to the matters which featured foremost in TasTAFE’s case concerning the public interest, namely the PESRAC report and the underlying policy imperative of the Tasmanian Government to improve training services offered to Tasmanians and deliver greater value from its investment in TasTAFE for the benefit of the Tasmanian community. At paragraph [143] of the decision, the Commissioner expressly accepted that this matter was relevant to the public interest. However, the Commissioner went on in paragraph [144] to identify with precision what in fact the PESRAC report recommended, namely the re-establishment of TasTAFE as a government business under the control and accountability of its Board, with the authority and power to employ its workforce under the FW Act. That recommendation was not, as the Commissioner found, affected by whether or not he made the consolidation order sought by the AEU. Further, as the Commissioner also found, and as TasTAFE’s witnesses accepted in cross-examination, the policy objective of paying more market-competitive salaries to new (non-transferring) teachers was not precluded by such teachers being covered by the relevant copied State instruments.

Having regard to these findings, TasTAFE’s contention that the Commissioner did not consider its case as to the public interest must be rejected. The Commissioner directly addressed the public interest objectives of the PESRAC report and the consequential TasTAFE Act but found that those objectives would not be defeated by granting the order sought by the AEU.

The Commissioner’s subsequent discussion of the prospects for enterprise bargaining is not, as TasTAFE contends, exhaustive of his consideration of the public interest, but rather forms a continuation of his analysis of whether the grant of a consolidation order would be inconsistent with the achievement of the reform objectives of the PESRAC report and the TasTAFE Act. The starting point of this discussion, in paragraph [145] of the decision, is TasTAFE’s submission advanced below which sought to tie the TasTAFE reforms to ‘the shift towards the modern award system for non-transferring employees’. As the Commissioner noted, this submission effectively restated what TasTAFE had put in respect of the issue of productivity under s 768BG (4)(d). However, the Commissioner did not, as TasTAFE submits in its appeal, thereby disregard the submission for the purpose of s 768BG(4)(g). Rather, the Commissioner proceeded thereafter to address it directly.

The critical point made by the Commissioner, by reference to the Minister’s second reading speech, was that it had been envisaged that it was consistent with the reform objectives for new (non-transferring) employees to be employed either under a new enterprise agreement or under a contract of employment underpinned by the relevant modern award and providing for a market-competitive salary. The corollary of this was that the grant of the order sought by the AEU was not necessarily inconsistent with the policy imperative since an enterprise agreement could be achieved whether or not a consolidation order was made. Further, as earlier explained, an enterprise agreement would have the additional benefit of extinguishing the copied State instruments applying to transferring staff, which the mere employment of new teachers and general staff under contracts underpinned by the PSE Award would never achieve.

The Commissioner’s subsequent consideration of the prospects for enterprise bargaining, and that part of the object of the FW Act in s 3(f), must be read in this context. In considering enterprise bargaining, the Commissioner did not proceed on the basis that this was an end in itself, nor did he treat it as relevant only to the private interests of employees and the AEU. Rather, as he expressly stated in paragraph [149], he regarded the productivity and fairness objectives of both parties as being likely achievable through enterprise bargaining. Productivity and fairness (in the employment context) are matters encompassed by the object of the FW Act in s 3 and are therefore relevant to the public interest. The conclusion to the Commissioner’s process of reasoning in paragraph [150] explicitly ties together the objectives of the PESRAC report, the Tasmanian government’s adoption of that report, the achievement of productivity improvements, and the object of the FW Act, with enterprise bargaining. The Commissioner had earlier found, in paragraph [149], that enterprise bargaining would best be facilitated by the making of a consolidation order since this would proceed from ‘a framework of a common set of conditions, rather than the two system model currently in operation’. This finding is not challenged in this appeal. His course of reasoning makes clear that the Commissioner accepted the reform objectives of the Tasmanian Government as relevant to the public interest and as significant considerations, but rejected TasTAFE’s specific contention that these objectives would best be served by not making a consolidation order. The Commissioner instead reached the opposite conclusion.

We therefore conclude that the Commissioner did not impermissibly confine his consideration of the public interest under s 768BG(4)(g), nor did he fail to consider the case advanced by TasTAFE under that provision. That the Commissioner rejected TasTAFE’s case for the reasons outlined does not amount to appealable error. Because the Commissioner considered the UWU’s application under s 768BG(4)(g) in essentially the same way, we reach the same conclusion in respect of the appeal against this aspect of the decision.

We make a further observation which we consider to be supportive of the conclusion reached by the Commissioner under s 768BG(4)(g). We have earlier referred to the evidence before the Commissioner concerning the numbers of teachers, general staff and EFAs who have been employed since 1 July 2022 and who are therefore the non-transferring employees for the purpose of the respective applications of the AEU and UWU. On a headcount basis, only about 2 per cent of teaching staff, 3.5 percent of general staff and 3 per cent of EFAs are non-transferring staff. Based on the evidence concerning turnover levels and difficulties in filling vacant positions, it is apparent that non-transferring employees will not constitute a majority or perhaps even a significant proportion of TasTAFE staff for many years, and certainly not before the end of the five-year default period for copied State awards for which s 768AO(2) provides. In the appeal, TasTAFE filed a declaration made by Mr Witt on 26 May 2023 which it sought to adduce as evidence in any rehearing of the matter should its appeal be upheld. Mr Witt’s declaration provides the numbers of non-transferring employees engaged by TasTAFE as at 24 May 2023, and indicates that there has been some acceleration in the recruitment of new teachers, who appear to now constitute about 12 per cent of all teaching staff (on a full-time equivalent basis), as well as a greater proportion of general staff and EFAs. Even if we were to take into account this evidence, it remains the case that non-transferring teaching staff still constitute only a small minority of all teachers. Therefore, we consider, TasTAFE’s case that it could achieve the PESRAC reform objectives to transform TasTAFE’s operations simply by employing any new staff on individual contracts underpinned by the relevant modern award is inherently lacking in credibility, since the majority of staff would remain under the existing employment arrangements (i.e. the copied State instruments). Enterprise bargaining, by contrast, provides the possibility for the immediate reform of employment conditions across the whole of TasTAFE’s workforce, and thus is more likely to achieve the PESRAC objectives. In this context, it is pleasing that we were informed at the appeal hearing that, since the Commissioner’s decision, enterprise bargaining has commenced.

It is unclear how the submission that the Commissioner erred in finding that TasTAFE ‘was reluctant to or not intending to bargain’ connects with the first appeal ground. In any case, the Commissioner did not make such a finding. The Commissioner did find that TasTAFE had a ‘rather sluggish’ — that is, slow-moving — approach to commencing bargaining, and this finding was amply supported by the evidence.

For the reasons stated, the first ground of appeal is rejected.

Appeal ground 2

TasTAFE’s second appeal ground proceeds, in the first instance, upon the contention that the expression ‘employees who would be affected by the order’ in s 768BG(4)(a)(i) is to be construed as referring to non-transferring employees only. We reject that contention. First, the words used are not, on their usual legal meaning, capable of being read in this confined way. Section 768AB relevantly provides that, in Pt 6-3A, the word ‘employee’ where used bears its ordinary meaning. ‘Affected’ is not confined to effects of a legal or proprietary nature and, like the expression ‘person aggrieved’, its content is to be seen in light of the subject, scope and purpose of the statute in which the word is used.[21] The subject matter and purpose of the FW Act, as disclosed by the object in s 3, is ‘to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians’ and, relevantly for employees, this encompasses matters such as job security, fairness at work, protection against unfair treatment and discrimination, and achieving productivity and fairness through enterprise-level collective bargaining. Thus, while non-transferring employees may be the only employees whose legal rights are directly affected by the making of a consolidation order, s 768BG(4)(a)(i) does not exclude from consideration the view of employees who would be affected in some other way bearing upon their legitimate employment interests if a consolidation order is made.

Second, within s 768BG itself, the expression ‘non-transferring employee’ is defined for the purpose of the section in subsection (2) and is used in subsections (1), (3)(b)(i) and (5) (both in the chapeau and in paragraph (a)). In subsection (3)(b)(iii), where the word ‘employee’ is used, it is qualified by the additional words ‘referred to in subparagraph (i)’ to make clear that the reference there is to ‘a non-transferring employee who performs, or is likely to perform, the transferring work’. No credible explanation is advanced by TasTAFE as to why, in s768BG(4)(a)(i), the words ‘employees who would be affected by the order’ would be used to refer only to non-transferring employees. If it had been intended that only the views of non-transferring employees were to be taken into account, it would have been a simple matter to say so in a manner consistent with the drafting of the rest of the section.

Third, the structure of s 768BG largely mirrors that of s 768BD, which deals with consolidation orders in relation to transferring employees. In particular, s 768BD(3), which sets out the matters which the Commission must take into account in deciding whether to make a consolidation order in relation to transferring employees, is in largely the same terms as s 768BG(4). Section 768BD(3)(a)(i), like s 768BG(4)(a)(i), requires the Commission to take into account the views of ‘the employees who would be affected by the order’. These provisions in turn reflect the earlier-enacted transfer of business provisions in s 318(3)(a)(ii) and s 319(3)(a)(ii). Thus, it may be inferred that the expression ‘employees who would be affected by the order’ is the common drafting mechanism used in the FW Act to describe a requirement to take into account the views of any relevantly affected employees rather than a description of a closed class of employees in each case.

Fourth, TasTAFE’s submission that ‘employees’ in s 768BG(4)(a)(i) does not include transferring employees because they do not have standing to make an application under s 768BG(3) is a non sequitur. No anomaly is involved. It is entirely logical that standing to make an application is confined to those whose legal rights would be directly affected by the grant of the application, but that the Commission must take into account a wider class of affected interests in determining whether to grant the application. Further, TasTAFE’s submission begs the question as to why, if the class of employees whose views are to be taken into account was intended to be the same as those employees entitled to make an application, the same language was not used to describe that class.

The second limb of the second ground of appeal is that there is no evidence of the degree of affectation requiring the views of transferring employees to be taken into account under s 768BG(4)(a)(i). We disagree. In respect of the AEU’s application, the Commissioner relied on evidence given by Mr Bailey to the effect that transferring employees who were members of the AEU had concerns relating to fairness and equity in the workplace arising from different remuneration and conditions of employment for employees doing the same work, practical difficulties including confusion about timetabling caused by the ‘two system’ model, and the complications that this model would cause for future enterprise bargaining. For the UWU’s application, the Commissioner relied on the evidence of Ms Brumby, Ms Ling and Mr McKendrick which related concerns on the part of transferring EFAs about a range of matters, most notably the effect on their job security if an order was not made and the effect on the starting point of conditions for future enterprise bargaining. These are all matters which, having regard to the object of the FW Act, are demonstrative of the type of affectation which s 768BG(4)(a)(i) contemplates.

The second ground of appeal is therefore rejected.

Appeal ground 3

TasTAFE’s third ground of appeal is, we consider, founded on a misconception about the nature of a statutory requirement for a decision-maker to take a matter into account. The requirement is to have regard to and consider the specified matter, and to give it weight as a fundamental element in the decision-making process.[22] It is not contended in the appeal that the Commissioner failed to take into account the issue of employee disadvantage, as required by s 768BG(4)(b). Nor is it contended that the Commissioner erred in finding that the grant of the orders sought by the AEU and the UWU would not disadvantage any employee. TasTAFE’s challenge is rather confined to the weight which the Commissioner chose to assign to his conclusion in respect of this consideration in his decision-making. That challenge must be rejected because, in the absence of any statutory indication as to the weight to be given to various considerations, it is for the decision-maker to determine the weight to be given to matters which are required to be taken into account in exercising a statutory power.[23] We do not consider that anything in s 768BG(4) dictates the weight to be given to the consideration in paragraph (b). While the use of the word ‘whether’ in s 768BG(4)(b) might suggest that the choice of finding to be made is binary in nature, it contains no directive as to the weight that might be given to the finding in the decision-making process. It may readily be conceived that the weight to be given to this consideration may differ depending on the circumstances: for example, if only a small number of employees would be disadvantaged and the level of their disadvantage is trivial, the matter might be given neutral weight, whereas if a large proportion of employees would suffer a high degree of disadvantage, this might be given significant weight against the grant of the application. Where the finding is that there is no disadvantage, we can detect nothing in the statutory language which would prevent the decision-maker from determining that this weighs in favour of the grant of the application.

The third appeal ground is therefore rejected.

Appeal ground 4

We consider that this appeal ground is, in substance, simply a complaint that the Commissioner did not accept TasTAFE’s submissions in respect of s 768BG(4)(f). It is a statement of the obvious that the analysis required by the provision proceeds upon the position applying if a consolidation order is not made, namely that copied State instruments apply to transferring employees and different FW Act instruments apply to non-transferring employees. Section 768BG(4)(f) requires the Commission to assess the degree of ‘business synergy’ between the different instruments. The Commissioner correctly stated the task he was required to undertake under the provision when he said in paragraph [136]: ‘The question is, having regard to the ordinary meaning of synergy, what is the evidence as to the combined or co‑operative action of copied state instruments and the Modern Award?’

The conclusion reached by the Commissioner that there was a lack of business synergy between the relevant copied State instruments and the modern awards applying to non‑transferring teaching and general staff and EFAs was not only open to him but was the obvious conclusion based on a comparison of the terms of the instruments and the evidence concerning their operation. For example, in respect of teaching staff, TasTAFE’s own witnesses pointed out the differences in the provisions concerning working and teaching hours and other matters between the copied State instruments applicable to teachers and the PSE Award. The clearest evidence of this was given by Ms Holland: she identified in her witness statement a range of operationally significant differences between the copied State instruments and the PSE Award concerning leave entitlements, rostering of teaching hours, continuity of training, and delivering training in rural and remote locations. Ms Holland raised these matters in support of her opinion that the PSE Award ‘has greater business synergy’, but the objective conclusion that may be drawn from her evidence is that the differences she identified demonstrate a lack of business synergy or ‘degree of fit’ (to use the phrase in TasTAFE’s submissions) between the copied State instruments and the PSE Award.

The proposition advanced by TasTAFE in its appeal that ‘it is for the employer to identify the desirability or undesirability of the degree of synergy’ is plainly incorrect. It is for the Commission under s 768BG(4)(f) to form its own view about the matter based on an objective analysis of the evidence, and for the Commission simply to defer to the subjective view of the employer would be in error. In any event, as explained, TasTAFE’s own evidence was demonstrative of the conclusion reached by the Commissioner.

Finally, we reject the submission that the Commissioner ‘ignored’ the evidence concerning TasTAFE’s experience in applying the modern awards when compared to the copied State instruments. In paragraph [138], the Commissioner made express findings, based on TasTAFE’s evidence, about the ‘two system’ model which it had put in place to adapt operating under the different instruments, and found that this was demonstrative itself of a lack of business synergy. That course of reasoning is clear and was reasonably open, and we agree with it.

The fourth appeal ground is rejected.

Appeal ground 5

We reject this appeal ground for the same reasons as for the third appeal ground. There is no challenge to the Commissioner’s finding that the copied State instruments for transferring EFAs would not have any negative impact on productivity, and the weight to be given to that finding in the decision-making process was a matter for the Commissioner.

Appeal ground 6

TasTAFE’s sixth appeal ground invokes the ‘second limb’ of discretionary error identified in House v The King,[24] namely that it may be inferred that the Commissioner failed to properly exercise his discretion in some way because the result embodied in his decision and orders is, upon the facts, unreasonable and plainly unjust. TasTAFE’s submissions do not explain why, on the facts and in the absence of any identifiable specific error in a fully-reasoned decision, the outcome determined by the Commissioner in each application was unreasonable or plainly unjust. While the discretionary latitude for the choice of decision to be made under s 768BG might arguably have allowed a different outcome to prevail (particularly in relation to the AEU’s application), we are not persuaded that the outcomes determined by the Commissioner meet the high standard of appealable error in the second limb of House v The King. We consider that the grant of each application was reasonably open in the exercise of the statutory discretion.

As to the respective weight given to the s 768BG(4) matters in reaching his conclusions, it is apparent from paragraphs [154] and [191] that the Commissioner determined the applications on the basis that his findings that the preponderance of matters weighed in favour of the grant of the applications justified him exercising his overall discretion in favour of the applicants. That was a permissible course reasonably open for him to take.

The sixth appeal ground is rejected.

Conclusion

Because we have rejected all of the grounds of appeal, the appeal must be dismissed. We order as follows:

(1) Permission to appeal is granted.

(2) The appeal is dismissed.

PRESIDENT

Appearances:

M O’Farrell SC with L Howard of counsel and M Jehne, solicitor, for TasTAFE.
A White of counsel for the Australian Education Union.
S Howe for the United Workers’ Union.

Hearing details:

2023.

Melbourne:
25 May.

[1] TasTAFE, as an organisation which charges fees for its courses, likely became a trading corporation upon being incorporated, and this would be sufficient to render it a national system employer under s 14(1)(a) of the FW Act. In any event, s 12(1) and item 7 of Sch 3 to the TasTAFE Act excluded TasTAFE employees from the operation of the State Service Act 2000 (Tas), with the result that such employees ceased to be excluded from the reference of power effected by the Industrial Relations (Commonwealth Powers) Act 2009 (Tas) and TasTAFE became a national system employer within the extended meaning in s 30N of the FW Act.

[2] Fair Work Act 2009 (Cth) s 768AS.

[3] Ibid s 768AT.

[4] Ibid s 768AU(2).

[5] [2023] FWC 391.

[6] PR760521 and PR760522.

[7] [2023] FWC 391 at [83]-[87].

[8] Ibid at [85]-[86].

[9] Ibid at [94] and [100].

[10] Ibid at [100].

[11] Ibid at [101]-[106].

[12] Ibid at [107]-[110].

[13] 4 yearly review of modern awards – Penalty Rates [2017] FWCFB 1001, 256 IR 1 at [220]-[225].

[14] [2023] FWC 391 at [119]-[120].

[15] Ibid at [138].

[16] Ibid at [139].

[17] Ibid at [142].

[18] Ibid at [143].

[19] [1936] HCA 40, 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ.

[20] [2013] FWCFB 950.

[21] Alphapharm Pty Ltd v SmithKline Beecham (Australia) Pty Ltd [1994] FCA 996, 49 FCR 250 at 272 per Gummow J; Allan v Transurban City Link Ltd [2001] HCA 58, 208 CLR 167 at [15]-[16] per Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ.

[22] R v Hunt; ex parte Sean Investments Pty Ltd [1979] HCA 32, 180 CLR 322 at 329 per Mason J.

[23] Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40, 162 CLR 24 at 41 per Mason J.

[24] [1936] HCA 40, 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ.

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