University of Newcastle v National Tertiary Education Industry Union
[2021] FWCFB 5392
•31 AUGUST 2021
| [2021] FWCFB 5392 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
University of Newcastle
v
National Tertiary Education Industry Union
(C2020/8998)
VICE PRESIDENT CATANZARITI | SYDNEY, 31 AUGUST 2021 |
Appeal against decision [2020] FWC 5994 of Deputy President Booth at Sydney on 24 November 2020 in matter number C2020/2269 - permission to appeal granted - appeal upheld in part by consent of the parties - appeal otherwise dismissed.
Dispute under agreement
[1] On 24 November 2020, Deputy President Booth handed down a decision in National Tertiary Education Industry Union v The University of Newcastle[2020] FWC 5994 in relation to an application under the dispute settlement provision in clause 75 of the University of Newcastle Professional Staff Enterprise Agreement 2018 (“Professional Staff Agreement”) and clause 48 of the University of Newcastle Academic Staff and Teachers Enterprise Agreement 2018 (“Academic and Teachers Agreement”). (Together referred to as the enterprise agreements).
[2] On 15 December 2020 the University of Newcastle (the Appellant) lodged an appeal against this decision, on the grounds that the Deputy President wrongly applied section 93(3) of the Fair Work Act 2009 (the Act), wrongly interpreted clauses 57.9 and 77.9, and erred in findings of fact in a number of respects. The Appellant objected to the Deputy President’s decision that the clauses in question were invalid and of no effect, said that the decision took into account an irrelevant consideration, and other matters. 1
[3] No issue was taken with the decision of the Deputy President to proceed to arbitration under the disputes settlement clauses and her jurisdiction to do so. The appeal related to the determination of the disputes pursuant to clauses 48.11 and 78.11 of the agreements, which provide for the Commission determining the matter by arbitration, subject to a right of appeal of this Full Bench which has sought to be exercised by the Appellant.
[4] During hearing of this matter it became apparent that the parties might be able to reach agreement. The matter was adjourned to enable the parties to engage in discussions.
[5] On 26 August 2021 the parties advised the Commission that it had reached agreement that the appeal be determined in the following manner:
1. Permission to appeal is granted, and the appeal upheld, only on the limited basis that the Deputy President exceeded her jurisdiction and thus erred in making the findings, or purported findings, at [113], [115] and [117] of the Decision that clause 57.9 of the University of Newcastle Professional Staff Enterprise Agreement 2018 and clause 77.9 of the University of Newcastle Academic Staff and Teachers Enterprise Agreement 2018 are contrary to s 93(3) of the Fair Work Act 2009 and pursuant to s 56 of the Fair Work Act 2009 are invalid and of no effect, as those questions were not properly before the Deputy President.
2. The Full Bench makes no finding as to the validity or otherwise of the clauses specified in Order 1, as it is not necessary to do so to resolve the appeal.
3. The appeal is otherwise dismissed.
The appeal
[6] The relevant dispute settlement procedures provide a party to a dispute with the right to exercise an appeal:
“…subject to a party to the dispute exercising a right of appeal under the Fair Work Act.” 2
[7] The Appellant seeks permission to appeal, and that the appeal be granted. An appeal under s.604 of the Act is an appeal by way of rehearing. The Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.3 There is no right to appeal and an appeal may only be made with the permission of the Commission.
[8] In Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s 604 of the Act as “a stringent one”.4 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.5 The public interest is not satisfied simply by the identification of error, or a preference for a different result.6 In GlaxoSmithKline,a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“… the public interest might be attracted where a matter raises issues 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.”7
[9] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of an appealable error.8 However, that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.
Agreement clauses
[10] The matter relates to four clauses in enterprise agreements. The Academic and Teachers Agreement provides:
“77.9 The University may direct a staff member to take, at such time as is convenient to the working of the University, annual leave for which the staff member is eligible, but as far as practicable the wishes of the staff member concerned will be taken into consideration when fixing the time for the taking of annual leave.
77.10 If a staff member reaches an annual leave accrual of 40 days and a leave plan cannot be agreed upon, the University will direct the staff member to take 10 days annual leave within 1 month of notification by the University.”
[11] The Professional Staff Agreement provides:
“57.9 The University may direct a staff member to take, at such time as is convenient to the working of the University, annual leave for which the staff member is eligible, but as far as practicable the wishes of the staff member concerned will be taken into consideration when fixing the time for the taking of annual leave.
57.10 If a staff member reaches an annual leave accrual of 40 days and a leave plan cannot be agreed upon, the University will direct the staff member to take 10 days annual leave within 1 month of notification by the University.”
[12] As the Deputy President noted at [31] ‘It will be observed that the provisions in relation to professional staff and teachers are identical’.
Paragraphs 113, 115 and 117 of the decision
[13] The parties now ask the Commission to determine the appeal by finding that the Deputy President erred in paragraphs 113, 115 and 117 of the decision, which provide:
“[113] Clause 57.9 of the Professional Staff Agreement and clause 77.9 of the Academic and Teachers Enterprise Agreement appear to me to share the defects that were found by the Full Bench in the CSRP decision.
[114] The clauses confer a wide discretion on the University and do not disclose the particular circumstances in which the power to require an employee to take annual leave will be exercised. Furthermore the way the clauses were applied in relation to the exemption process failed to allow the wishes of the staff member concerned to be properly considered because the communication of the exemption process focussed on the operational needs of the University not the personal needs of the individual.
[115] I consider the clauses to be unreasonable in that they contain no obligation upon the University to engage with the individual employee so that their particular needs can be considered, there is no required notice (or reference to reasonable notice) for the timing of the taking of the leave and there is no requirement for a certain leave balance to remain once the directed leave is taken – something that was considered necessary by the Federal Parliament when they enacted the Jobkeeper legislation in response to the COVID-19 situation.
[116] Furthermore, the direction issued under the clauses fails the tests of reasonableness contained in the Explanatory Memorandum.xxvi The University exemption process was insufficient to allow it to take into consideration the individual needs of employees in relation to the taking of leave or the timing of taking the leave. It was weighted towards the needs of the University.
[117] Guided by the CSRP decision I consider that the clauses are contrary to s.93(3) of the Act and pursuant to s.56 of the Act have no effect. The enterprise agreements do not otherwise allow the direction and consequently the direction was not available to the University under the Act.’ [emphasis added]
[14] Section 93(3) of the Act provides:
“Modern awards and enterprise agreements may include terms relating to cashing out and taking paid annual leave
…
Terms about requirements to take paid annual leave
(3) A modern award or enterprise agreement may include terms requiring an employee, or allowing for an employee to be required, to take paid annual leave in particular circumstances, but only if the requirement is reasonable.”
[15] The operation of s.93(3) of the Act is explained in the Explanatory Memorandum (at 381-2):
“381. Subclause 93(3) permits terms to be included in an award or agreement that require an employee, or that enable an employer to require or direct an employee, to take paid annual leave in particular circumstances, but only if the requirement is reasonable. This may include the employer requiring an employee to take a period of annual leave to reduce the employee's excessive level of accrual or if the employer decides to shut down the workplace over the Christmas/New Year period.
382. In assessing the reasonableness of a requirement or direction under this subclause it is envisaged that the following are all relevant considerations:
• the needs of both the employee and the employer's business;
• any agreed arrangement with the employee;
• the custom and practice in the business;
• the timing of the requirement or direction to take leave; and
• the reasonableness of the period of notice given to the employee to take leave.”
[16] In the decision the Deputy President was guided by references to the Explanatory Memorandum in Australian Federation of Air Pilots v HNZ Australia Pty Ltd. 9There is a slight but arguably significant difference in the language used in this decision and the Explanatory Memorandum. The Explanatory Memorandum provides (at 382) that ‘In assessing the reasonableness of a requirement or direction under this subclause [s.93(3)] it is envisaged that the following are all relevant considerations’. In the Pilots decision the Full Bench said that ‘all relevant considerations needed to be taken into account … including those … in the Explanatory Memorandum’:
“[25] In assessing the reasonableness of the requirement, counsel for HNZ accepted that all relevant considerations needed to be taken into account including those which are set out in paragraph [382] of the Explanatory Memorandum to the Fair Work Bill 2008.”
[17] We will use the language of the Explanatory Memorandum.
[18] Even if the agreements were inconsistent with s.93(3), the National Tertiary Education Industry Union (the Respondent) submitted we need to consider the operation of a savings clause:
“Both Agreements contain a NES savings clause: clauses which are inconsistent with the NES in a manner which is detrimental to an employee do not apply to the extent of the inconsistency. In other words, the clauses, if inconsistent with s.93(3), fall away by force of the Agreements themselves. It should also be observed that this means that the submission at 3.7 that the Commission ‘must have assessed the term as…consistent with s.93(3)’ is wrong; the savings clause meant there was no need or reason to do this as the Agreements are self correcting.”
[19] A similar savings clause 10 was present in the Air Pilots Decision matter and may have been relevant but was not discussed in that decision.
Consideration
[20] The parties to this appeal ask us to determine the appeal by setting aside the Deputy President’s conclusions in paragraphs 113, 115 and 117 but does not provide a submission explaining why we should do so. We therefore look to the submissions put during the appeal. We also have regard to other paragraphs of the decision which explain those paragraphs.
[21] First, in paragraph 115 the Deputy President says that the clauses under challenge ‘contain no obligation upon the University’ to consider certain things. However there is an obligation in the clauses on the university to take into consideration ‘as far as practicable the wishes of the staff member concerned’:
“The University may direct a staff member to take, at such time as is convenient to the working of the University, annual leave for which the staff member is eligible, but as far as practicable the wishes of the staff member concerned will be taken into consideration when fixing the time for the taking of annual leave.”
[22] This is an ‘obligation’ on the university. Whether it is sufficient for the clauses to be ‘reasonable’ within s.93(3) was not explained by the Deputy President and may not have been considered by her.
[23] Second, there is no obligation to include lists of specific matters in a clause to meet the requirements of s.93(3), and general tests are sufficient. To the extent that the Deputy President states or implies that there is a list of specific ‘tests’ in the Act or Explanatory Memorandum (paragraph 116 may explain some of the conclusions reached) which must be expressly stated in the agreement clauses we respectfully disagree. Tests of a general nature such as those used in the clauses under challenge in this matter are not precluded.
[24] Thirdly, a consideration of the operation of s.93(3) also required the Commission to consider the operation if any of the savings clauses before a conclusion was drawn that the agreement clauses ‘have no effect’ in paragraph 117 of the decision. This was not done in this case. We therefore respectfully disagree with the conclusions of the Deputy President.
Disposition of the appeal
[25] The parties asked that we ‘make no finding as to the validity or otherwise of the clauses specified in Order 1, as it is not necessary to do so to resolve the appeal’. We therefore come to no final conclusion as to the operation of s.93(3) or the savings clauses in the agreements.
[26] The Appellant, with which the Respondent agreed, asked us to confine our decision to certain limited matters and not to proceed with other grounds of the appeal. We therefore will not make any determination about those other grounds of appeal.
[27] The parties have understandably had a high degree of difficulty in considering these agreement clauses, and have not reached a concluded view on their operation in this case, including the savings clauses. As a matter of caution we would respectfully suggest that it would be prudent to do no more than use the words of s.93(3) in such clauses to prevent litigation. However that is a matter for the drafters of agreements.
Order
[28] We grant permission to appeal. We uphold the appeal to the extent only of setting aside paragraphs 113, 115 and 117 of the decision. We dismiss the remainder of the appeal by consent.
VICE PRESIDENT
Appearances:
Mr Y Shariff SC and Ms V Bulut of Counsel for the Appellant.
Ms L Saunders of Counsel for the Respondent.
Hearing details:
2021.
Telephone hearing.
26 February.
Printed by authority of the Commonwealth Government Printer
<PR733354>
1 Form F7, Notice of Appeal.
2 University of Newcastle Professional Staff Enterprise Agreement 2018, cl. 75; University of Newcastle Academic Staff and Teachers Enterprise Agreement 2018, cl. 48.
3 Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194, 204 [17] (Gleeson CJ, Gaudron and Hayne JJ) (‘Coal and Allied Operations Pty Ltd’)
4 (2011) 192 FCR 78; (2011) 207 IR 177 [43].
5 O’Sullivan v Farrer and another (1989) 168 CLR 210, 216 – 217 (Mason CJ, Brennan, Dawson and Gaudron JJ); applied in Hogan v Hinch (2011) 243 CLR 506, 548 [69] (Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ); Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78; (2011) 207 IR 177 [44] - [46].
6 See: GlaxoSmithKline Australia Pty Ltd v Makin (2010) 197 IR 266, 273 - 274 [26] - [27] (‘GlaxoSmithKline’); Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth], (2010) 202 IR 388, 396 [28] affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office (2014) 241 IR 177, 188 [28].
7 GlaxoSmithKline (n 6) (2010) 197 IR 266, 274 [27].
8 Wan v AIRC (2001) 116 FCR 481, 489 [30].
9 [2015] FWCFB 3124 at paragraphs 25-26.
10 The Helicopter Pilots - Australian Operations Enterprise Agreement 2013 provided: Cl. 6 - RELATIONSHIP WITH PRINCIPAL AWARD AND THE NES … Cl. 6.3 - The NES shall have effect subject to any terms of this agreement permitted by sub-sections (2) and (4) of section 55 of the Act.’
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