Transport Workers' Union of Australia v Darling Downs Express

[2015] FWC 2658

[2015] FWC 2658

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.236—Majority support determination

Transport Workers’ Union of Australia
v
Darling Downs Express Transport Pty Ltd
(B2014/1452)

COMMISSIONER SPENCER BRISBANE, 19 MAY 2015

Application for costs arising out of majority support determination application - s.611 - material did not support a majority support; Applicant sought to further test evidence in support of petition; further material filed - s.236 application withdrawn - initial application and its furtherance not vexatious, not without reasonable cause or no reasonable prospect of success - costs application dismissed.

Introduction

[1] This decision relates to an application for costs made by Darling Downs Express Transport Pty Ltd (DDET/the Employer/the Respondent/the costs Applicant) in relation to an application by the Transport Workers’ Union of Australia (TWU/the Applicant/the costs Respondent) for a determination as to whether there was a majority of employees who wanted to bargain with the Employer, for an agreement. The majority support determination application was made pursuant to s.236 of the Fair Work Act 2009 (Cth) (the Act). The TWU, after being advised by the Fair Work Commission (FWC/the Commission), that the petition of employees did not represent a majority, sought to confirm the number of employees at that time. The TWU subsequently withdrew their s.236. The Respondent then made an application for costs, pursuant to s.611 of the Act. This decision deals with the application for costs.

[2] The TWU was represented by Ms Margarita Cerrato, industrial officer and DDET was represented by Ms Lisa Oldham, solicitor, of McInnes Wilson Lawyers.

Background

[3] In assessing the costs application, it is necessary to consider the progress of the related s.236 application.

[4] Directions were issued for the filing of material, in relation to the majority support determination application and the material was filed accordingly. The TWU filed a petition, signed by employees, in support of bargaining. This was also provided by the TWU, of their own volition, to DDET. DDET (in correspondence in response to this) offered to provide a list of employees (to the TWU) to be examined with the petition. The TWU foreshadowed that, if the Commission, on comparing the petition and DDET’s list of employees, found there was not a majority in support of bargaining, the TWU would seek a copy of the list, so that they could verify it with their delegates, prior to the matter being finally determined.

[5] The TWU provided the petition to the Commission on 28 November 2014, and they also provided it to the Respondent at this time. The petition included 23 signatures dated from 16 September to 19 September 2014. The Respondent’s solicitor indicated in correspondence to Chambers on 1 December 2014, that she was following up her client in relation to the provision of the outstanding list of employees. There was a subsequent delay associated with the provision of the list of employees by DDET and on 18 December 2014, the Respondent’s solicitor indicated that the list would be provided to the Commission, with a copy to the TWU, on Monday, 22 December 2014. The Respondent’s solicitor further confirmed on 23 December 2014 that the Affidavit (containing the list of employees) would be provided to the Commission and to the TWU, when it was to hand.

[6] On 5 January 2015, the Respondent was Directed to provide the Affidavit containing the list of employees to the Commission. Later on 5 January 2015, the Respondent’s solicitor filed an Affidavit of Mr Jason Shannon, General Manager of DDET, which incorporated the list of employees. This was provided to the Commission, but a copy was not provided to the TWU, contrary to Respondent’s solicitor’s earlier correspondence. The list of employees contained 29 names of employees, and indicated whether those employees were still employed by DDET. Mr Jason Shannon deposed that the list contained those employees employed by DDET during the period of 18 September to 19 September 2014, who were drivers, freight forwarders, forklift operators or other employees engaged under the Road Transport and Distribution Award 2010.

[7] The petition was examined against the list of employees and the parties were notified by the Commission, on 8 January 2015, that it was evident on the material provided that there was not a majority of employees in support of bargaining. On 12 January 2015, as earlier foreshadowed by the TWU, they sought to view the list of employees (provided by DDET to the Commission) to confirm all relevant employees had been included.

[8] This is the point where DDET consider it should have been reasonably apparent to the TWU that the application had no reasonable prospects of success 1.

[9] On 12 January 2015, the Commission requested whether the Respondent would provide a copy of the Affidavit, containing the list of employees, to the TWU, as the Respondent’s solicitor had previously indicated, on two occasions, that it would be provided to the TWU.

[10] On 13 January 2015, contrary to the prior offers, the Respondent submitted that it had significant concerns about the TWU’s use of the Affidavit and the names of the employees set out within (no other information was included on the list). The Respondent requested that the TWU provide DDET with a list of financial members of the TWU, being current employees of DDET, and noted that any objection the TWU may have to the request to provide a list of its financial members [ie. privacy of its members, disclosure of such details] are those same reservations held by DDET, in relation to its release of the Affidavit to the TWU.

[11] The Respondent also stated that, should the Commission, order that the Affidavit be provided to the TWU, it would immediately comply with such request.

[12] In an endeavour to finalise the matter, and respecting the concerns of both parties, (given only the Union could resolve the accuracy of the list against their concerns), on 22 January 2015, arrangements were made for the viewing of the Affidavit and list of employees, by the TWU and a delegate, at the Brisbane FWC Registry. However, the TWU delegate, that the TWU sought to attend the viewing, was not able to be released by DDET from her duties (due to operational reasons), until 16 February 2015.

[13] Accordingly, on 30 January 2015, given that the list of employees, and the viewing arrangements had not been able to be effected, the Affidavit containing the list of employees was provided to Ms Cerrato (Industrial Officer of the TWU), on the condition that (she undertake in writing that) its use only related to confirming the application for a majority support determination. Ms Cerrato acknowledged, in writing, the receipt of the Affidavit for this purpose only. Ms Cerrato also stated that she would be in a position to inform the Commission as to whether the TWU wished to progress the application or withdraw it the following week.

[14] On 6 February 2015, the TWU filed a further three Affidavits in relation to the majority support determination and a list of additional employees, they contended, should have been included in the list of employees. These employees had signed the petition and the TWU submitted that there was a majority in support of bargaining. Directions were set for the Respondent to file material in response.

[15] On 13 February 2015, the Respondent filed further submissions, stating that the Respondent refuted that the three deponents of the Affidavits filed by the TWU were covered by the Award. On 18 February 2015, the TWU filed further submissions, stating that the Respondent’s further submissions were not supported by evidence. On 24 February 2015, the Respondent’s solicitor filed and served on the TWU an Affidavit of Jason Shannon, General Manager of DDET. The Respondent also filed a second affidavit of Mr Shannon with the Commission only, which requested that the Affidavit be treated as a confidential Affidavit pursuant to s.594 of the Act. This matter was to be dealt with at hearing.

[16] Accordingly, given the circumstances where the material had to be tested, on 26 February 2015, the matter was listed for hearing on 27 March 2015. On 27 February 2015, at the request of the Respondent, the hearing listing was amended to 25 March 2015.

[17] On 9 March 2015, the TWU, by correspondence (under the signature of Mr Peter Biagini, Branch Secretary), withdrew their application for a majority support determination. The TWU stated:

“Whilst it is clear that a majority of employees supported bargaining in September 2014, in all of the circumstances of this matter, we are unable to provide further evidence that a majority of employees who are covered by the Road Transport and Distribution Award 2010 supported bargaining at that time.”

[18] DDET then, on 10 March 2015, sought orders for costs, pursuant to s.611 of the Act. DDET submitted that the TWU contributed to DDET’s legal costs, on the following basis:

(i) the TWU made the application for a majority support determination vexatiously or without reasonable cause; and

(ii) the TWU made the application when it was reasonably apparent, that the application had no reasonable prospects for success; and/or

(iii) continued the Application after 8 January 2015 when it was reasonably apparent that the application had no reasonable prospects for success.

(emphasis added)

[19] The parties consented to the costs application, being determined ‘on the papers’.

[20] Whilst not all of the evidence and submissions provided, have been referred to in this decision, all have been considered in making the determination.

Relevant legislative provisions and case law

[21] Section 611 has general application in relation to matters before the Commission and provides as follows:

“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 of the 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.

Note: The FWC can also order costs under sections 376, 400A, 401 and 780.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4 1).”

[22] In Keep v Performance Automobiles Pty Ltd 2 a Full Bench of the Fair Work Commission relevantly stated that:

“The FWC’s power to order that a person bear some or all of the costs of another person in relation to an application is only enlivened if the FWC is satisfied as to the matters set out in either s.611(2)(a) or s.611(2)(b).

The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v Eastern Health t/as Easter Health Great Health and Wellbeing (Church). 3 Church is authority for the following propositions:

(i) The power to order costs pursuant to s.611(2) should be exercised with caution and only in a clear case. 4

(ii) A party cannot be said to have made an application ‘without reasonable cause’ within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful. 5

(iii) One way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether upon the facts known to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. 6

(iv) The test imposed by the expression ‘without reasonable cause’ is similar to that adopted for summary judgment, that is, ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed’. 7

As to s.611(2)(b), the FWC may make a costs order against a person if satisfied that ‘it should have been reasonably apparent’ to that person that their application had ‘no reasonable prospect of success’. The expression ‘should have been reasonably apparent’ in s.611(2)(b) imports an objective test, directed to a belief formed on an objective basis as opposed to the applicant’s subjective belief. 8

There is Full Bench authority for the proposition that the Commission should exercise caution before arriving at the conclusion that an application had ‘no reasonable prospects of success’. 9 In Deane v Paper Australia Pty Ltd10 a Full Bench made the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996;

“unless upon the facts apparent to the applicant at the time of instituting the [application], 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”. 11”12

(emphasis added)

[23] A Full Bench of the Commission in the costs decision, of Qantas Airways Limited v Mr Paul Carter 13 stated as follows:

“[20] It is clear from the terms of s.611 of the Act that the point at which the Commission must determine whether or not Qantas' application to appeal was vexatious, without reasonable cause or had no reasonable prospect of success, is when Qantas made the application to appeal.” 14

(emphasis added)

[24] In examining the TWU’s application for a majority support determination, at the time they made the application, the issue is whether they were making the application vexatiously, or without reasonable cause, or whether the application, at this time, had no reasonable prospects of success.

Summary of submissions

[25] DDET submitted that the TWU made the application ‘vexatiously or without reasonable cause’, within the meaning of s.611(2)(a), and, further, that it should have been reasonably apparent to the TWU (before or after the 8 January 2015 assessment of no majority support) that the application had ‘no reasonable prospect of success’ within the meaning s.611(2)(b).

[26] DDET submitted that the application was made vexatiously because it was made to harass 15 or otherwise annoy DDET. The TWU application had been made following a series of allegedly acrimonious workplace events between the TWU and DDET. DDET submitted these events included the TWU officers, publically and in person, supporting employees of DDET in unprotected industrial action on 4 September 2014.

[27] DDET argued that the application was made without reasonable cause, because on the TWU’s own version of the facts, the application must fail 16. It was submitted by DDET that throughout the course of the application, the TWU was “belligerent” in its contentions that there existed, and that there was evidence of, a majority support to bargain, despite clear and significant evidence to the contrary (including the email of the FWC on 8 January 2015). It was also submitted that the application was ‘misconceived’17, as it was submitted, it was made by the TWU, without proper preliminary enquiries and without appropriate evidence.

[28] Further, DDET argued that, from 8 January 2015, the TWU was aware that the Commission had assessed no majority support with reference to the petition, but continued to pursue the application, in circumstances, which, DDET contended, it should have been reasonably apparent to the TWU, that the application had no reasonable prospect of success or was, from that point on, manifestly untenable or otherwise groundless 18. The costs Applicant noted that the TWU had recognised that, an appropriate response to a finding of a ‘non-majority support’ may be the withdrawing of the application.

[29] The TWU refuted the claims made by DDET. The TWU submitted that it is hardly unusual, in the realm of industrial relations, for relationships between employers and unions to be acrimonious at times, and that to suggest that acrimony, between the parties, proves that the predominant purpose of the application was to ‘annoy or harass’, is unsustainable. In any event, the TWU submitted that there is no evidence to suggest that the TWU organised the employees of DDET, in taking the alleged unprotected industrial action.

[30] The TWU submitted, that the evidence of Ms Cerrato confirmed that the TWU had a proper basis for believing that it had prospects of demonstrating majority support, at the time when the application was made. Ms Cerrato stated that she was provided with a copy of the petition containing the signatures of 23 employees of DDET. She was advised by Mr Brendan Bogle, TWU Organiser, that DDET had refused to provide details of its employees, but that the TWU workplace representatives had told him, there were around 40 employees and that around 33 of those employees were covered by the Road Transport and Distribution Award 2010 19.

[31] The TWU submitted that DDET’s assertion that the Commission had found no majority support on 8 January 2015 was not accurate. The TWU contended that the correspondence from Chambers on 8 January 2015 advised the parties that, on the material provided, there was not a majority support, in relation to bargaining. The TWU contended that there was no final finding made on that date. The TWU submitted that they had previously notified the Commission and had foreshadowed that, if the list of employees provided by DDET showed there was not a majority of employees in support, when compared with the petition, that the TWU would seek the opportunity to check the list, for accuracy, before the matter was finally determined.

[32] The TWU contended that the tests in s.611(2)(a) or (b) had not been met, as DDET had filed with the Commission (but not served on the TWU, contrary to DDET’s initial offer to provide) the Affidavit containing the list of employees on 5 January 2015. The TWU submitted that DDET’s provision of this list was following an inordinate and unexplained delay. Furthermore, after the receipt of that Affidavit and list, the TWU filed 3 Affidavits from employees. It was submitted that these employees did not appear on the Respondent’s list of employees. It was also submitted that, the further Affidavits, evidenced that these employees were covered by the Road Transport and Distribution Award 2010 and should have appeared on the list.

[33] The TWU also submitted that the final determination of whether or not there existed majority support, required the Commission to determine the status of the employees’ Award coverage, and other matters of accuracy in respect of the list filed by the Respondent. The TWU submitted that they had been endeavouring to confirm these matters, prior to the point of withdrawing the application. The TWU had not conceded that there was no majority support. At the time of withdrawing, they had the benefit of further evidence on the list of employees from the Respondent. The TWU simply confirmed in withdrawing that, at this point, they could not provide further evidence to sustain the majority support.

[34] The TWU submitted that their evidence, clearly established the basis and purpose for making the majority support determination application, and that their decision to pursue the application was well-reasoned, in all of the circumstances.

Consideration and conclusion

[35] According to the reasoning in the Full Bench Decision of Keep v Performance Automobiles Pty Ltd 20, as stated above, simply because the TWU’s argument was later unsuccessful and they withdrew the application, it does not follow that the application was made, without reasonable cause, particularly as the facts, in testing the petition, became apparent to the TWU during the proceedings. When instituting the proceedings, they submitted these facts were not known to them, but their assessment on the best information available to them (at the time of filing of the application) was that, a majority in support existed. It cannot be interpreted from these facts or the withdrawal of the application, that it was necessarily made vexatiously.

[36] The facts of the matter, examined at each relevant time, did not represent that the application was made without reasonable cause, nor was it so obviously untenable, that discloses a case that, from the outset, or after the provision of the petition (on the TWU’s material), could not simply succeed. After the correspondence from Chambers of 8 January 2015, the TWU provided further evidence, which, it was submitted, demonstrated a majority support.

[37] The costs Applicant’s submissions, regarding their frustration associated with the employees alleged unprotected industrial action, is acknowledged. However, this does not undermine the entitlement for the TWU to make the majority support application, nor the Union’s view or reasoning that there was a majority in support of bargaining in the workplace.

[38] It is accepted that the TWU considered they had a majority support, which led to their decision to make the application for a majority support determination. There is no evidence to suggest that the application was made vexatiously or without reasonable cause.

[39] Adopting the approach in the Full Bench Decision on costs, in Qantas v Carter 21, the general rule is that any determination, as to whether it should have been reasonably apparent that the application had no reasonable prospects of success, is made on the circumstances at the time the application is made, not at some subsequent point in time.

[40] There is no evidence to suggest that the TWU’s application had no reasonable prospects of success, at the time of the application. The TWU reasonably sought to further test their petition on majority support, on the basis of the list of employees, which was prepared according to slightly different dates from the dates on which the petition was signed, and provided after the provision of the petition to the Respondent. The TWU had foreshadowed they would seek to do this.

[41] It is well established that there should be a cautious approach to the discretion to award costs. Having regard to all of the circumstances and the tests in s.611(2)(a) and (b), it cannot be satisfied that the application was made vexatiously or without reasonable cause. In addition, the conclusion cannot be drawn that it should have been reasonably apparent to the TWU that the application had no reasonable prospects for success at the time it was made. The TWU, on their material, considered they held a majority. There were matters the TWU, reasonably, sought to confirm at that time of making the application, and subsequently did so.

[42] The costs Applicant (DDET) has not satisfied the matters set out in s.611(2)(a) or (b) of the Act, that the first person (TWU) made the application, or the first person responded to the application, vexatiously or without reasonable cause, or that it should have been reasonably apparent to the first person (TWU) that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success. The application for costs pursuant to s.611 is therefore refused.

[43] I Order accordingly.

COMMISSIONER

 1   Submissions of the Respondent dated 20 March 2015 at paragraph 3(c)

 2   Keep v PerformanceAutomobiles Pty Ltd [2015] FWCFB 1956

 3   Church v Eastern Health t/as Easter Health Great Health and Wellbeing [2014] FWCFC 810

 4   Ibid at [27]

 5   Ibid at [30]

 6   see Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, cited with approval in Church at [30]

 7   Heidt v Chrysler Australia Limited (1976) 26 FLR 257 at [272 - 273]; Geneff v Peterson (1986) 19 IR 40 at [87-88]; Hatchett v Bowater Tutt Industries Pty Ltd (1991) 28 FCR 324 at 327; Re Ross and others, Ex Parte Crozier (2001) 111 IR 282 at [12]; Re Australian Education Union (NT Branch) (No.2) [2011] FCA 728 at [30]. Also see Wright v Australian Customs Service, PR926115, 23 December 2002 per Giudice J, Williams SDP and Foggo C and Church at [33]

 8   see Wodonga Rural City Council v Lewis (2005) 142 IR 188 at [6], and Baker v Salva Resources Pty Ltd[2011] FWAFB 4014

 9   Wright v Australian Customs Service, PR926115, 23 December 2002

 10   PR932454, 6 June 2003

 11   Ibid at [8], also see Baker v Salva Resources Pty Ltd[2011] FWAFB 4014 at [10]; and Metecno Pty Ltd T/A Bondor v Cameron[2014] FWCFB 2128 at [16]

 12   Keep v PerformanceAutomobiles Pty Ltd [2015] FWCFB 1956 at [16] - [19]

 13   Qantas Airways Ltd v Carter[2013] FWCFB 1811

 14   Ibid at [20]

 15   Ibid at [17]

 16   Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257

 17   Standish v University of Tasmania (1989) 28 IR 129

 18   Baker v Salva Resources Pty Ltd[2011] FWAFB 4014

 19   Affidavit of Margarita Cerrato dated 31 March 2015 at paragraph 3

 20   Keep v PerformanceAutomobiles Pty Ltd [2015] FWCFB 1956

 21   Qantas Airways Ltd v Carter[2013] FWCFB 1811 at [20]

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