The Civil Air Operations Officers' Association of Australia v Airservices Australia
[2018] FWC 331
•18 JANUARY 2018
| [2018] FWC 331 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.238 - Application for a scope order
The Civil Air Operations Officers' Association of Australia
v
Airservices Australia
(B2017/851)
COMMISSIONER BISSETT | MELBOURNE, 18 JANUARY 2018 |
Application for Costs by Applicant.
[1] On 14 September 2017 The Civil Air Operations Officers’ Association of Australia (CAOOAA) made an application for a scope order pursuant to s.238 of the Fair Work Act 2009 (FW Act) with respect to bargaining with Airservices Australia.
[2] The application was unusual. There have, traditionally, been three enterprise agreements that operate within Airservices Australia – one covering air traffic control and supporting staff, one covering aviation rescue and firefighting (not relevant for these proceedings) and a separate agreement for all other staff.
[3] The Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017-2020 1 (2017 ATC Agreement) was approved by the Fair Work Commission (Commission) on 23 March 2017 and has a nominal expiry date of 30 March 2020. Its approval followed 18 months of negotiations.
[4] The 2017 ATC Agreement covers employees classified as Air Traffic Controller, Simulator Support Officer (SSO), Airways Data Team (ADT) and Flight Data Co-ordinator (FDC). 2
[5] The Airservices Australia Enterprise Agreement 2013-2017 3 (known locally as the Corporate Agreement although it covers a much broader group of staff than “corporate” staff) (2013 Corporate Agreement) also covers employees of Airservices Australia. It has passed its nominal expiry date and on 17 August 2017 CAOOAA, along with other unions, was notified by Airservices Australia management that it intended to negotiate a replacement agreement (proposed Corporate Agreement). Airservices Australia also advised CAOOAA that it intended that the proposed Corporate Agreement would cover SSO and ADT employees.
[6] Airservices Australia issued its notice of employee representational rights to employees it intended to be covered by the proposed Corporate Agreement on 18 August 2017. On 25 August 2017 the CAOOAA sent a “notice of concern” pursuant to s.238(3) of the FW Act to Airservices Australia.
[7] On 14 September 2017 CAOOAA made an application to the Commission for a scope order. That order sought that SSO and ADT employees not be covered by the proposed Corporate Agreement.
[8] The first bargaining meeting with respect to the proposed Corporate Agreement occurred on 15 September 2017.
[9] The application for a scope order was subject to conciliation and discussions between the parties on a number of occasions, but no agreement could be reached. During this period the CAOOAA participated in negotiations with Airservices Australia and other unions for the proposed Corporate Agreement to ensure its members’ interests were protected but without concession as to the coverage of SSOs and ADTs within the agreement.
[10] Directions were subsequently issued to hear the scope order application and each party complied with these. The matter was set down for hearing on 28-29 November 2017.
[11] On 27 November 2017 the Commission received correspondence from lawyers acting for Airservices Australia to advise that it no longer sought to include SSO and ADT employees within the scope of the proposed Corporate Agreement. Whilst it had sought an undertaking from CAOOAA that it not press its application, it noted that CAOOAA had not indicated it would discontinue its application. CAOOAA indicated that evening that it intended to seek costs in relation to the application because it should have been reasonably apparent to Airservices Australia that its response to the application had no reasonable prospect of success.
[12] That costs matter was dealt with on 27 November 2017. This decision is in relation to the costs application.
The costs application
[13] The application for costs is made pursuant to s.611 of the Act. Section 611 states:
611 Costs
(1) A person must bear the person’s own costs in relation to a matter before the FWC.
(2) However, the FWC may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.
[14] The CAOOAA relies specifically on s.611(2)(b).
[15] The operation of s.611(2)(b) of the FW Act was considered by a Full Bench of the Commission in Baker v Salva Resources4 (Salva Resources). The Full Bench found:
[10] The concepts within s.611(2)(b) “should have been reasonably apparent” and “had no reasonable prospect of success” have been well traversed:
• “should have been reasonably apparent” must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test;5 and
• a conclusion that an application “had no reasonable prospect of success” should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless6 or so lacking in merit or substance as to be not reasonably arguable.7
[16] In Sharn Stanley v QBE Management Services T/A QBE 8 Commissioner Jones considered the relevant authorities in relation to s.611(2)(b) and, after setting out the finding in Salva Resources set out above, said (endnotes in original):
[17] Similarly, in Gray, 9 a Full Bench observed (endnotes omitted):
[20] The phrase “no reasonable prospect of success” in the context of costs applications was considered by a Full Bench of the Australian Industrial Relations Commission (AIRC) in Deane v Paper Australia Pty Ltd. In that decision the Full Bench said:
“[5] It was not disputed that for the purposes of s.170CJ(1)(a)(ii) the appeal instituted by the applicant was a proceeding begun by him. The question is whether he did so in circumstances where it should have been reasonably apparent to him that there was no reasonable prospect of success. If that question is answered in the affirmative the Commission is able to make an order for costs against him. Whether it should do so is a separate although closely related question which requires a separate exercise of discretion.
[6] We were taken to a number of authorities which were said to bear upon the construction of s.170CJ. None of those authorities deals with the operative expression which now appears in s.170CJ(1)(b), namely: ‘no reasonable prospect of success’.
[7] The expression ‘no reasonable prospect of success’ also appears in ss.170CF(2)(d), 170CF(3)(b) and 170CF(4). Section 170CF(4) provides for the summary dismissal of an application for relief pursuant to s.170CE, by the issue of an appropriate certificate, if the Commission concludes that the application has no reasonable prospect of success. The construction of the expression in that context was considered by a Full Bench of the Commission in Wright v Australian Customs Service. In that case the Full Bench, drawing upon relevant authority relating to summary dismissal of proceedings in various jurisdictions, held that a conclusion that an application had no reasonable prospect of success should only be reached with extreme caution and where the application is manifestly untenable or groundless.
[8] Making due allowance for the caution which must attend the exercise of a discretion to summarily dismiss an application, it appears to us that the approach in Wright is one we should follow. In other words, unless, upon the facts apparent to the applicant at the time of instituting the appeal, the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available.”
[21] In Smith v Barwon Region Water Authority, a Full Bench of the AIRC in considering the phrase “no reasonable prospect of success” in the context of s.650 of the Workplace Relations Act 1996 (Cth) (WR Act) concerning AIRC advice to the parties about an application for relief in respect of termination of employment said:
“[48] Having regard to the authorities ... it seems to us that an application will have no reasonable prospects of success if it is so lacking in merit or substance as to be not reasonably arguable.”
[18] It is relevant that French CJ and Gummow J in Re Spencer, 10 in considering the genesis of the criterion ‘no reasonable prospect of success’ observed it would include a case in which there is unanswerable evidence of a fact fatal to the pleaded case.11
[19] It is clear from the express term of s.611(2)(a) which speak of a person who ‘made the application’ that the reference point for deciding whether s.611(2)(a) is satisfied is the point at which the application is made.
[20] In my opinion s.611(2)(b) is not so constrained. Whilst the subsection refers to a person who ‘should have been’, this use of past tense is a reference to the steps in the proceeding up until the matter is determined or discontinued. 12 The words of s.611(2)(b) do not limit the test to the making of the application. The subsection includes in the conduct to be examined a ‘response to the application’. Clearly, s.611(2)(b) cannot be limited to the time at which the application is made but applies in the course of proceedings until the time at which the matter is determined by FWA or discontinued.
[17] I respectfully agree with the view expressed by Commissioner Jones that the “test time” with respect to s.611(2)(b) is not restricted to that point in time at which an application was made or responded to, but applies to the course of proceedings. Were it otherwise an applicant might continue with an application, or respondent continue to defend a matter, on the face of overwhelming evidence adduced during a hearing or provided in line with directions of the Commission that could not possibly succeed.
Scope order provisions
[18] Section 238 of the FW Act provides jurisdiction to the Commission to make a scope order. Section 238(1) of the FW Act states:
(1) A bargaining representative for a proposed single-enterprise agreement (other than a greenfields agreement) may apply to the FWC for an order (a scope order) under this section if:
(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.
[19] The Commission may make a scope order if it is satisfied of those matters provided for in s.238(4)(a)-(d). Sections 238(4) states:
(4) The FWC may make the scope order if the FWC is satisfied:
(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of bargaining; and
(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.
Submissions
The Civil Air Operations Officers’ Association of Australia
[20] In brief the CAOOAA submits that, in considering whether Airservices Australia’s response to the application for a scope order lacked any reasonable prospect of success, I should consider:
(a) The clear unfairness and inefficiency in including the SSOs and ADTs within scope of the proposed Corporate Agreement in circumstances where some five months earlier the 2017 ATC Agreement was approved which covers the SSO and ADT employees until March 2020. In these circumstances if SSO and ADT employees were included within scope of the proposed Corporate Agreement that agreement would not cover them until the 2017 ATC Agreement passed its nominal expiry date. Further, the SSO and ADT employees would be denied the capacity provided for in the FW Act to participate in industrial action with respect to their terms and conditions of employment in the relation to the proposed Corporate Agreement because they were covered by an agreement.
(b) The evidence that the SSO and ADT employees were not fairly chosen. Airservices Australia’s reason for including the SSO and ADT employees within the scope of the proposed Corporate Agreement related to the “Accelerate” programme (which had the objective or transitioning to a simpler operating model) yet it commenced that programme in May 2016 during the period of bargaining for the 2017 ATC Agreement. Further it did not seek to include all employees affected by the Accelerate program who were covered by the 2017 ATC Agreement (FDC employees) in the proposed Corporate Agreement. Further the ADT and SSO employees are not organisationally or operationally consistent with employees to be covered by the proposed Corporate Agreement. For the last seven agreement SSO employees have been covered by the ATC Agreement and for six of the last seven agreements the ADT employees had been covered by the ATC Agreements.
(c) The clear inference that could be drawn that the reason for the inclusion of SSO and ADT employees in the proposed Corporate Agreement was in response to a notification of dispute by CAOOAA in relation to Christmas standdowns ; and
(d) Airservices Australia’s groundless defence to the notice of concerns.
Airservices Australia
[21] Airservices Australia submits that CAOOAA made an application to the Commission for a scope order and it was entitled to respond to that application. That it ultimately altered its bargaining position (in that it no longer seeks to include SSO or ADT employees covered by the proposed Corporate Agreement) cannot lead to any inference as to the strength or otherwise of the response it made to that application.
[22] Airservices Australia says that there were substantial contested facts in the material filed by the parties, none of which has been tested. Further, it submits that the CAOOAA filed substantial material in reply to its evidence after 6.00pm on Friday 24 November 2017. It assessed this material on the next available working day and reviewed its position in light of all of the material then available.
[23] In response to the specific issues raised by CAAOA, Airservices Australia submits that:
(a) Airservices Australia’s Board made a strategic decision in July 2017 with respect to who it considered should be covered by the proposed Corporate Agreement. Ultimately whether the decision would have made bargaining inefficient or unfair were matters for determination by the Commission.
(b) The Board decision was consistent with Airservices Australia’s “Accelerate” program;
(c) The inference sought to be drawn by CAOOAA in relation to the dispute over the Christmas standdowns is squarely denied by Airservices Australia witnesses.
[24] Airservices Australia submits that, prior to 27 November 2017, the day before the hearing, it was never specifically stated by CAOOAA that Airservices Australia’s response had no reasonable prospect of success.
[25] Airservices Australia says that the Commission cannot be satisfied that, viewed objectively, its response had no reasonable prospect of success.
Consideration
[26] In deciding if costs should be awarded the matter for consideration is not the strength of the case of CAOOAA but whether it should have been reasonably apparent (objectively determined) to Airservices Australia that its response had no reasonable prospect of success.
[27] In this respect, I do not consider it reasonable, in assessing Airservices Australia’s response to the application, to take into account the evidence filed by CAOOAA in reply because, having reviewed that evidence Airservices Australia withdrew its proposal to include the SSO and ADT employees within the scope of the proposed Corporate Agreement.
[28] On 24 July 2017 the Board of Airservices Australia endorsed an approach to bargaining for the proposed Corporate Agreement which included coverage of SSO and ADT employees. The Board resolution indicated the approach “was designed to support our business model”.
[29] In considering whether Airservices Australia’s response to the application of CAOOAA had no reasonable prospects of success, it is relevant to consider the timeline and correspondence between the parties leading up to the making of the application and the filing of Airservices Australia’s response once directions were issued.
[30] On 17 August 2017 Airservices Australia advised SSO and ADT employees that it intended they be covered by the proposed Corporate Agreement to “align our enterprise agreement to the new Operating Model”. On 21 August 2017, in response to correspondence from CAOOAA, Airservices Australia reiterated that the rationale for its decision related to the Accelerate program/new Operating Model.
[31] On 25 August 2017 CAOOAA sent its “notice of concern” to Airservices Australia. In the notice CAOOAA indicated that it objected to the inclusion of SSO and ADT employees in the proposed Corporate Agreement, that it did not believe the group of employees to be covered by the proposed Corporate Agreement had been fairly chosen as it appeared to be retribution in relation to the Christmas stand-down issue. CAOOAA also noted that the ADT and SSO employees were geographically and organisationally distinct and the actions of Airservices Australia constituted unfair conduct which undermined collective bargaining.
[32] On 31 August 2017 Airservices Australia responded to the notice of concern and rejected the propositions put forward by CAOOAA.
[33] On 14 September 2017 Airservices Australia wrote to CAOOAA and indicated that, as bargaining had not yet commenced (the first bargaining meeting was the following day) it failed to see how CAOOAA could maintain that bargaining was not proceeding efficiently. In doing so Airservices Australia put the CAOOAA on notice that it had concerns that CAOOAA could not meet the jurisdictional pre-requisites for a scope order to be made.
[34] CAOOAA responded on 15 September 2017 indicating that it had put Airservices Australia on notice as to its concerns on the matter.
[35] On 26 October 2017 CAOOAA again wrote to Airservices Australia setting out issues with respect to its proposal. In addition to setting out specific concerns with the proposed Corporate Agreement as it applied to the disputed group of employees, CAOOAA reiterated that, having just recently concluded bargaining for the 2017 ATC Agreement, it did not consider it reasonable that the group of members should be required to bargain again. Further, it reiterated its view that the group of employees was “geographically, operationally and organisationally distinct” from others to be covered by the proposed Corporate Agreement.
[36] On 29 October 2017 CAOOAA filed its submissions and witness evidence with the Commission. These reiterated and provided evidence in relation to those matters already communicated to Airservices Australia.
[37] On 17 November 2017 CAOOAA wrote to Airservices Australia and outlined how it considered that bargaining was not proceeding efficiently or fairly. This included Airservices Australia meeting with SSO and ADT employees without CAOOAA being invited to attend despite Airservices Australia indicating such an invitation would be extended, Airservices Australia refusal to release a CAOOAA delegate to attend a bargaining meeting and a failure of Airservices Australia to give consideration to CAOOAA’s position that its members not suffer any reduction in conditions from those enjoyed under the 2017 ATC Agreement.
[38] Airservices Australia filed its submissions and evidence with the Commission with respect to the scope orders application on 17 November 2017.
[39] Section 238(1)(a) of the FW Act is clearly written in the present (continuous) tense. To make an application to the Commission a bargaining representative must be concerned that bargaining is not proceeding efficiently or fairly. To reach such a conclusion, bargaining must have commenced. At the time of making the application bargaining had not commenced, with the first bargaining meeting occurring the day after the application was made. To this extent, it was fair and reasonable for Airservices Australia to maintain its position as to the coverage of the proposed Corporate Agreement.
[40] At the time of making its application however CAOOAA had a basis for its view that it did not consider it appropriate for the proposed Corporate Agreement to cover the SSO and ADT employees. It had clearly conveyed this to Airservices Australia on a number of occasions.
Conclusion
[41] Airservices Australia provided a rationale for the decision it took to include SSO and ADT employees in the proposed Corporate Agreement. It maintained this reasoning from the time it first communicated the matter to CAOOAA officials and its employees on 17 August 2017. Airservices Australia cannot be said to have “developed” this rationale in response to the concerns of CAOOAA, as it put this forward before it knew of any response from CAOOAA. CAAOA had a different view as to the reason from the decision of Airservices Australia. It communicated this in writing in its notice of concern on 25 August 2017.
[42] Whilst there were many matters that would require determination in order for the Commission to be satisfied that the application was properly made and the requirements for an order to be made were met, one of those matters would be the motivation and/or rationale behind the decision of Airservices Australia to seek to include the SSO and ADT employees in the proposed Corporate Agreement. That is a matter that could not be determined until such time as the evidence had been put and tested. The determination of that question would have a bearing on whether the group of employees in question had been fairly chosen (s.238(4)(c)) and the effect of an order on the fair and efficient conduct of the bargaining (s.238(4)(b)) for the proposed Corporate Agreement.
[43] Airservices Australia had an arguable case as to the rationale, as did CAOOAA. Each had evidence to support its respective case.
[44] In such circumstances, and given the evidence of the parties, it cannot be concluded that the response of Airservices Australia was manifestly untenable or so lacking in merit that it was not reasonably arguable.
[45] For this reason alone it cannot be said that Airservices Australia responded to (and maintained that response to) the application of the CAOOAA in circumstances, where it should have been reasonably apparent to it that its response had no reasonable prospect of success.
[46] It cannot be inferred from the decision of Airservices Australia to alter its bargaining position, as conveyed on 27 November 2017, that it was reasonably apparent to it prior to that time that its application had no reasonable prospect of success.
[47] For this reason the costs application is dismissed.
COMMISSIONER
Appearances:
C. Dowling of counsel for The Civil Air Operations Officers' Association of Australia.
J. Forbes of counsel for Airservices Australia.
Hearing details:
2017.
Melbourne:
November 28.
1 End notes:
AE423762.
2 2017 ATC Agreement, clause 4.1
3 AE403519.
4 (2011) 211 IR 374.
5 Wodonga Rural City Council v Lewis, PR956243, at para 6.
6 Deane v Paper Australia Pty Ltd, PR932454, at paras 7 and 8.
7 A Smith v Barwon Region Water Authority, [2009] AIRCFB 769, at para 48.
8 [2012] FWA 8397.
9 Hamilton James and Bruce Pty Limited v Michelle Gray, [2011] FWAFB 9235.
10 Spencer v Commonwealth, [2010] 241 CLR 118.
11 Ibid at 131.
12 Cf Kerr v Peacock Films Pty Limited [2011] FWA 3766 at [10].
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