Teekay Shipping (Australia) Pty Ltd v Auld

Teekay Shipping (Australia) Pty Ltd challenged the Fair Work Commission’s (FWC) decision to deem a model consultation term to be a term of an enterprise agreement (EA). The EA was between Teekay Shipping and the Maritime Union of Australia. The Full Bench of the FWC had found that the model consultation term prescribed pursuant to s 205(2) of the Fair Work Act 2009 (Cth) applied to the exclusion of any rights or obligations in the EA and an award in respect of the decision to make employees redundant. The Full Bench found that the model consultation term applied to the exclusion of insufficient and defective terms dealing with consultation in the EA and award. Teekay Shipping sought a declaration that the model consultation term did not apply to the exclusion of any rights or obligations in the EA and award and that the redundancy of the respondents was not a genuine redundancy. The Full Bench of the FWC had considered whether the model consultation term applied to the exclusion of insufficient and defective terms dealing with consultation in the EA and award. The Full Bench held that the model consultation term applied to the exclusion of any rights or obligations in the EA and award in respect of the decision to make employees redundant. The Full Bench found that the deeming provision in s 205(2) of the Act operated to make the model consultation term a term of the EA at the time of its approval by the FWC. The Full Bench found that the Act contemplated that a consultation term may involve a process that does not, or indeed cannot, result in any subsequent variation of the major change the subject of consultation in accordance with s 205(1). The Full Bench found that the stage of the employer’s thinking about making or implementing a decision was not necessarily crucial, provided that whatever consultation occurred was about the actual change that the employer finally implemented and the employees had a right to representation of their choice for that consultation. The Full Bench found that the deeming provision in s 205(2) of the Act operated to make the model consultation term a term of the EA at the time of its approval by the FWC and that it applied to the exclusion of any rights or obligations in the EA and award in respect of the decision to make employees redundant. The Court set aside the Full Bench’s decision and declared that the model consultation term became a term of the EA at the time of its approval by the FWC and that it applied to the exclusion of any rights or obligations in the EA and award in respect of the decision to make employees redundant. The Court did not address the question of whether the redundancies were genuine redundancies.