United Firefighters' Union of Australia v Country Fire Authority

[2014] FWCFB 8703

[2014] FWC 8703

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

United Firefighters' Union of Australia
v
Country Fire Authority
(C2014/7731)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 4 DECEMBER 2014

Appeal against decision [[2014] FWC 7929] and Order PR557585 of Deputy President Smith at Melbourne on 11 November 2014 in matter number B2014/442; Stay application; Stay granted subject to condition

Introduction

[1] On 19 November 2014 I issued an order 1 staying the operation of a particular part of an order made by Deputy President Smith on 11 November 2014.2 These are my reasons for doing so.

Background

[2] Operational firefighters employed by the Country Fire Authority (CFA) are covered by the Country Fire Authority/United Firefighters Union of Australia Operational Staff Enterprise Agreement 2010 (Current Agreement). The nominal expiry date of Current Agreement is 30 September 2013. The Current Agreement also covers the United Firefighters Union of Australia (UFU). The CFA has for some time been bargaining with the UFU in its capacity as a bargaining representative, for a proposed enterprise agreement to replace the Current Agreement.

[3] In June 2012 the UFU commenced proceedings in the Federal Court of Australia in which it sought, amongst other things, a declaration that the CFA had contravened section 50 of the Fair Work Act 2009 (Act) by contravening clause 27 of the Current Agreement. Clause 27 deals with that which in the current Agreement is described as “safe staffing levels”. In its defence of the proceeding the CFA contended that clause 27 of the Current Agreement was invalid because it infringed the implied constitutional limitation on the Commonwealth legislative power described in Melbourne Corporation v Commonwealth. 3 The CFA also brought a cross-claim in the proceeding in which it sought declarations that certain other provisions of the Current Agreement were invalid on the same basis.

[4] The application and the cross-claim were heard by Justice Murphy and on 31 January 2014 Justice Murphy dismissed the UFU application and made declarations sought by the CFA in relation to certain of the provisions of the Current Agreement which it had sought to impugn by reason of the Melbourne Corporation principle. 4

[5] On 14 January 2014 the CFA applied under section 229 of the Act for a bargaining order directed to the UFU. Arising from that application Deputy President Smith made an interim order which required the parties to serve on each other a consolidated log of claims in the form of a draft enterprise agreement and established a process for further bargaining. 5 Subsequently the parties exchanged various documents and correspondence about their respective claims and participated in bargaining meetings.

[6] On 24 June 2014 the CFA applied for further bargaining orders. That application sought orders, inter alia, to the effect that the UFU was to advise the CFA that it no longer seeks to pursue particular matters in the UFU log of claims. In determining the application Deputy President Smith set aside his earlier interim order and made a final order 6 and set out his reasons for doing so.7

[7] Without reproducing the order it relevantly provides as follows:

“[2] The United Firefighters’ Union (UFU) shall advise the Country Fire Authority (CFA) that it will not pursue clauses 44 and 45 of the log of claims dated 9 May 2014 or clauses of an identical character which would infringe the implied limitation expressed by Murphy J [(2014) 218 FCR 210].”

[8] By notice of appeal dated 14 November 2014 the UFU seeks permission to appeal the Deputy President’s decision and order. A stay order was also sought by the UFU. The grounds of appeal are as follows:

“1. The Deputy President erred in concluding that clauses 44 and/or 45 of the Log infringed the implied limitation on Commonwealth legislative power enunciated in Melbourne Corporation v Commonwealth (1947) 74 CLR 31 and Re AEU; ex parte Victoria (1995) 184 CLR 188 (the implied limitation).

2. The Deputy President erred by concluding that the Appellant was not bargaining in good faith and by making an order under s. 230(1) of the Fair Work Act in circumstances where clauses 44 and 45 were arguably valid and the Commission had no power to conclusively determine they were invalid.

3. The Deputy President erred by failing to find that it was not reasonable to make an order under s. 230(1) of the Fair Work Act when the question of whether terms of an enterprise agreement voluntarily entered by a State agency could infringe the implied limitation was, and is presently, the subject of a reserved appeal before the Full Federal Court.

4. The Deputy President erred by failing to find that it was not reasonable to make an order under s. 230(1) of the Fair Work Act when the judgment in UFUA v CFA (2014) 218 FCR 210 was, and is presently, the subject of a reserved appeal before the Full Federal Court.

5. Order [2] of the Deputy President Orders exceeds the power conferred by s. 230(1) of the Fair Work Act by requiring the Appellant to remove from the bargaining the subject matter and terms of clauses 44 and 45, contrary to what was held by the Federal Court in Endeavour Coal v APESMA (2012) 206 FCR 576.

6. The Deputy President erred by not dismissing the application for an order under s.230(1) of the Fair Work Act.”

Principles for staying the operation of a decision or order

[9] A person aggrieved by a decision made by a single member of the Commission may only appeal a decision with the permission of the Commission. 8

[10] An appeal of a decision is therefore not as of right and permission to appeal must first be obtained. Subsection 604(2) requires the FWC to grant permission to appeal if satisfied that it is ‘in the public interest to do so’. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 9 The public interest is not satisfied simply by the identification of error, or a preference for a different result.10 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of Fair Work Australia identified some of the considerations that may attract the public interest:

“... the public interest might be attracted where a matter raises issue of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...” 11

[11] Other than the special case in s.604(2), the grounds for granting permission to appeal are not specified but examples of considerations which would usually justify the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration; and that substantial injustice may result if leave is refused. 12

[12] The principles that are to be applied in considering whether to grant a stay order should, in my view, be applied against the statutory constraints on appeals of this kind noted above. Moreover, this tribunal and its predecessor have approached applications for a stay on the basis that, unless otherwise established, there is a presumption that the order or decision that is subject to appeal has been regularly made. 13

[13] It is well established that in deciding whether to exercise a discretion to grant a stay order, the Commission must first be satisfied that there is an arguable case with some reasonable prospects of success, both in respect of permission to appeal and the merits of the appeal, and that the balance of convenience favours the granting of a stay order. 14 This was accepted by the UFU and the CFA.

Arguable case

[14] The UFU advanced a number of arguments aimed at establishing that it had an arguable case with some reasonable prospects of success as to permission to appeal and the substantive merits of its grounds of appeal. It is unnecessary for me to deal with each of the arguments advanced as I am satisfied that in respect of ground 5 of the notice of appeal the UFU established relevantly an arguable case both on the question of permission and merits.

[15] Paragraph [2] of the order the subject of the appeal requires, in effect, the UFU to abandon and not pursue the entirety of its claims as set out in clauses 44 and 45 of its log of claims dated 9 May 2014.

[16] Before a bargaining order may be made the Commission must be satisfied relevantly that “one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements”. 15

[17] Section 228(2) provides that the good faith bargaining requirements do not require a bargaining representative to make concessions during the bargaining for the agreement or to reach agreement on the terms that are to be included in the agreement.

[18] In Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia and Another, 16 Flick J concluded that certain bargaining orders made by Fair Work Australia, which required Endeavour Coal Pty Ltd to list subject matter that it would be prepared to include in an enterprise agreement and to list terms of an enterprise agreement that it would be prepared to enter into, were beyond power because they trespassed into the areas that good faith bargaining requirements do not require by reason of section 228 (2).17

[19] It seems to me clearly arguable that paragraph [2] of the order the subject of the appeal suffers from the same flaw in that it impermissibly trespasses into areas that are expressly not required by the good faith bargaining requirements that are set out in section 228 (1) of the Act. Arguably the order prohibits the UFU from pursuing in bargaining any part of clauses 44 or 45 of its log of claims, whether or not that part in isolation would infringe the implied constitutional imitation. The order also arguably requires the UFU to make a concession during the bargaining that clauses 44 and 45 of its log of claims would, if included in a final agreement that is approved by the Commission would, infringe the implied constitutional limitation and therefore concede a claim or claims. I am therefore satisfied that the UFU has established an arguable case with some reasonable prospect of success in relation to the merits of its appeal.

[20] As under this appeal ground the UFU is to argue the limits of the Commission’s power to make a bargaining order and specifically that the particular order in paragraph [2] of the order the subject of the appeal was beyond power, I am also satisfied that the UFU has established an arguable case with some reasonable prospect of success in relation to permission to appeal.

[21] The UFU accepted that in the proceeding before the Deputy President the decision in Endeavour Coal was not brought to the attention of the Deputy President. 18 This is unfortunate but it is not a matter that affects the question whether there is an arguable case.

Balance of convenience

[22] The UFU contended that the balance of convenience favoured the grant of a stay. I agree. Firstly I am satisfied there is a strong arguable case that has been established in relation to paragraph [2] of the order the subject of the appeal. It is appropriate to determine the question of where the balance of convenience lies to have regard to the strength of the arguable case that has been established. 19

[23] Secondly, a stay of paragraph [2] of the order the subject of the appeal would restore the status quo in bargaining for the agreement. Bargaining for an agreement is a dynamic process and the capacity of a party not to make concessions on matters that the party regards as critical seems to me to be an important part of that dynamic. A stay would preserve rather than disturb that situation.

[24] Thirdly, it seems to me that an important consideration is that bargaining for a proposed agreement be permitted to continue and not be unnecessarily delayed or hindered pending the determination of the appeal. To that end both the UFU and the CFA accepted that I might stay the operation of paragraph [2] of the order pending the hearing and determination of the appeal but attached to the stay a condition that for the period a stay is in operation the CFA would not be required to respond to or to discuss clauses 44 and 45 of the UFU of claims. 20 A stay may be granted on such terms or conditions that I consider appropriate.21 In my view a stay order subject to such a condition would allow bargaining to continue without prejudice to the rights of either party. A stay order issued subject to such a condition also weighs in the balance of convenience in favour the grant of a stay.

[25] For these reasons I am satisfied that the balance of convenience favours the grant of a stay.

Conclusion

[26] I am satisfied that the UFU has established an arguable case both as to permission to appeal and the merits of the appeal in that paragraph [2] of the order the subject of the appeal is beyond power and that the balance of convenience favours the grant of a stay. There is no other discretionary consideration apparent that would tell against the granting of a stay order. The stay order will be subject to a condition.

[27] Consequently pending the hearing and determination of the appeal or further order, paragraph [2] of the order the subject of the appeal is stayed on the following condition. During the period the stay order that I make is in operation, the CFA is not required to respond to or discuss with the UFU clauses 44 or 45 of the UFU’s log of claims dated 9 May 2014

[28] An order giving effect to the stay was issued on 19 November 2014 in PR557960.

DEPUTY PRESIDENT

Appearances:

M. Harding of Counsel for United Firefighters’ Union of Australia

B. Mueller for Country Fire Authority

Hearing details:

Melbourne

2014.

19 November

 1   PR557960

 2   PR557585

 3 (1947) 74 CLR 31

 4   United Firefighters Union of Australia v Country Fire Authority (2014) 218 FCR 210

 5   PR548014

 6   PR557585

 7   [2014] FWC 7929

 8   Section 604(1)

 9   O’Sullivan v Farrer (1989) 168 CLR 210; Coal & Allied v Lawler [2011] FCAFC 54 at [44]-[46]

 10   GlaxoSmithKline Australia Pty Ltd v Making[2010] FWAFB 5343 at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], affirmed on judicial review; Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; Ferrymen Pty Ltd v Maritime Union of Australia[2013] FWCFB 8025; and NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663

 11 (2010) 197 IR 266 at [27]

 12   Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481. Also see the Explanatory Memorandum to what is now s.604, at para 2328.

 13   See for example Kellow-Falkiner Motors Pty Ltd v Edghill, Full Bench AIRC, 17 March 2000 (Print S4216) at [6]

 14   Kellow-Falkiner Motors Pty Ltd v Edghill, Full Bench AIRC, 17 March 2000 (Print S4216) and applied in this tribunal see for example Boom Logistics Limited v Bell and Mackay, [2013] FWC 1017 per Boulton J, GM Holden Ltd v Symonds, [2013] FWC 332 per Smith DP, Vondoo Hair v Crockett, [2012] FWA 9553 per Watson SDP, Vita Property Group Pty Ltd v Clayworth, [2012] FWA 6547 per Drake SDP, DesignInc (Sydney) Pty Limited v Xu, [2012] FWA 1088 per Watson SDP and Suncorp Staff Pty Limited v Brewer, [2012] FWA 823 per Boulton J

 15   Section 230 (3)(a)(i)

 16 (2012) 206 FCR 576

 17   Ibid at 596 – 597, [62] – [66]

 18   See transcript PN 86 – PN 94 and PN 147

 19   See for example Bullock and Others v The Federated Furnishing Trades Society of Australasia and Others (No 1) (1985) 5 FCR 464 at 472

 20   Transcript PN 162 – PN 165 and the PN 173 – PN 174

 21   See section 606(1)

Printed by authority of the Commonwealth Government Printer

<Price code C, PR558534>