Note: Judicial review of this decision 11 May 2012 [2012] FCA 480.

[2011] FWAFB 6251

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Shop, Distributive and Allied Employees Association
(C2011/4864)

VICE PRESIDENT LAWLER
SENIOR DEPUTY PRESIDENT WATSON
COMMISSIONER HAMPTON



MELBOURNE, 14 SEPTEMBER 2011

Appeal against decision [[2011] FWA 3777] of Vice President Watson at Sydney on 20 June 2011 in matter number AM2010/226.

[1] This is an application by the Shop, Distributive and Allied Employees Association (SDA) for permission to appeal and, if permission is granted, an appeal against a decision of Vice President Watson 1 to allow an application by the National Retail Association Ltd (NRA) to vary the General Retail Industry Award 2010 (the Retail Award), a modern award, to create a qualified exemption to the minimum engagement period for casual employees provided for in clause 13.4 of the Retail Award. The Australian Retailers Association (ARA), the Australian Chamber of Commerce and Industry and the State of Victoria intervened in the appeal.

[2] The Vice President has yet to make a formal determination varying the Retail Award. His Honour published a decision indicating that he proposed to vary the Retail Award (albeit in a more limited way than that sought by the NRA), published a draft determination and invited submissions from the parties on the final form of the determination. The SDA lodged its Notice of Appeal before that process had been completed and a stay was granted on 29 June 2011. 2

[3] It may be noted that the Vice President was not prepared to accept the variation as proposed by the NRA and instead has proposed a more confined variation that is clearly crafted in deference to some of the arguments of the SDA.

[4] We consider that it is also appropriate to note that the matter before the Vice President followed an earlier application to vary the Retail Award by employer interests, including the NRA and ARA, which sought a general reduction in the minimum engagement provision within the award. The Vice President refused that application 3 and that decision was upheld on appeal by a Full Bench.4 In so doing the Full Bench indicated as follows:

[5] Pursuant to s.604 of the Fair Work Act 2009 (FW Act) an appeal against a decision by a single member of Fair Work Australia lies only with the permission of Fair Work Australia. Permission to appeal must be granted if the Full Bench considers that it is in the public interest to do so. Otherwise, permission to appeal is discretionary and falls to be determined on the basis of the usual considerations governing the discretion to grant leave or permission to appeal. If permission to appeal is granted the appeal proceeds as a rehearing. However, the Full Bench is not permitted to exercise its powers under s.607(3) of the FW Act unless error is demonstrated. 5 Because the decision at first instance was a discretionary decision, the error that must be established is an error within the well known principles in House v The King.6

[6] We consider that there will often be a public interest in granting permission to appeal against a decision of a single member of Fair Work Australia to vary a modern award. This is because a modern award has general application to national system employers and employees and a decision to vary a modern award will almost invariably affect the interests of a large number of employers and employees who were not party to the proceedings at first instance. We consider that there is a public interest in granting permission to appeal in this matter and do so.

[7] Clause 13 of the Retail Award provides:

[8] The application by the NRA sought a reduction in the minimum casual engagement period for secondary school students on school days. The Vice President decided that the Retail Award should be varied but in a manner that was more confined than the variation sought by the NRA. Based upon the draft order, the variation proposed by the Vice President would see clause 13.4 read:

[9] The Vice President’s summary of the evidence included the following:

[10] It is desirable to set out the Vice President’s consideration of whether the variation is necessary to achieve the modern awards objective:

[11] The SDA’s grounds of appeal can be distilled to the following:

[12] Section 157 of the FW Act relevantly provides:

[13] The modern awards objective is defined in s.134 of the FW Act:

Wrong Principle?

[14] The SDA submits that the Vice President

[15] As to (i), we reject the submission that the Vice President failed to consider whether the variation was “necessary to achieve the modern awards objective”. The heading that precedes paragraph [37] of the decision, the opening words of that paragraph and the ultimate finding in the last sentence of paragraph [48] demonstrate that the Vice President was focussed on the correct statutory test.

[16] It is also evident from the decision and the history of the matter, that the Vice President was applying the approach taken to s.134 of the FW Act in the earlier general application, as was endorsed by the Full Bench on appeal.

[17] As to (ii), it is true that the relevant portion of the Vice President’s decision places a particular focus on the social inclusion criterion in s.134(1)(c). However, this was reflective of the arguments of the parties before the Vice President where the social inclusion criterion was the focus of submissions on whether the variation was necessary to achieve the modern awards objective. That focus does not mean that the Vice President did not consider the modern awards objective as a whole. Reading the decision as a whole, we are not persuaded that the Vice President erred in the manner submitted.

[18] We observe that the modern awards objective is ultimately concerned with the existence of modern awards which, together with the National Employment Standards, provide “a fair and relevant minimum safety net of terms and conditions”. While it is true that in any case that requires a consideration of the modern awards objective Fair Work Australia must take account of all of the matters specified in paragraphs (a) to (h) of s.134(1), this does not mean that each of those factors will be applicable or relevant to a particular application or that a single criterion in s.134(1) can never be a sufficient basis for a variation to a modern award as necessary to achieve the modern awards objective.

[19] At this point, it should also be observed that counsel for the SDA placed emphasis on findings in paragraphs [19] and [41] of the decision by reference to circumstances that “may” exist. However, reading the decision as a whole, it is tolerably clear that the Vice President was satisfied that if shorter periods of minimum engagement were available for secondary school students then this would increase employment opportunities for secondary school students who wish to obtain casual employment after school but who are presently unable to do so, albeit that the Vice President was unable to quantify this.

[20] As to (iii), we are not persuaded that the Vice President adopted an incorrect view of the content of the social inclusion criterion in the modern awards objective. Again, reading the decision as a whole we are not persuaded that the Vice President proceeded on the basis that if social inclusion is promoted by the variation then the variation should be made. Again, it is tolerably clear that the Vice President was satisfied that some secondary school students, particularly from low socio-economic, regional, migrant or refugee backgrounds 7 presently suffer social exclusion through an inability to obtain employment after school and that a variation that enabled them to obtain work and earn the money necessary to participate more fully in society would promote social inclusion. We see no error in that position.

[21] There was evidence and submissions from the SDA in relation to the countervailing negative effects for other employees if the variation as proposed by the NRA was made. The variation proposed by the Vice President is more limited than the variation sought by the NRA. The restrictions introduced by the Vice President in his proposed variation are reflective of a concern to limit the potential for those countervailing negative effects.

Adequacy of Reasons

[22] This ground is related to the previous ground. The SDA submitted that if the Vice President did not act on a wrong principle then his Honour did not give adequate reasons for how the proposed variation was “necessary to achieve the modern awards objective”. The principles governing the adequacy or reasons are well known and need not be restated here. 8 We have set out key portions of the Vice President’s decision. We consider that the decision of the Vice President adequately discloses his reasoning process in rejecting the variation sought by the NRA but approving an alternative variation which was tightly constrained to address the matter that led him to refuse the broader provision. An understanding of the historical context reinforces our conclusion on this aspect of the appeal.

No evidence?

[23] The SDA submitted that there was no evidence for particular findings made by the Vice President. That submission must be rejected. The NRA and the State of Victoria in their submissions identified evidence that it was open to the Vice President to act on and which was capable of supporting the impugned findings. The evidence may fairly be described as thin. Moreover, the survey evidence relied upon by the NRA was the subject of telling criticism in expert evidence called by the SDA to the point where it could not be regarded as more than “a series of notes drawn from conversations with members”. The Vice President acknowledged the limitations of that evidence. Nevertheless, even as characterised by the SDA’s expert, it remained evidence on which the Vice President was entitled to place some weight.

[24] In this context we note that it is inherently difficult to demonstrate by direct evidence the employment effects of a proposed award variation such as that being considered by the Vice President, let alone quantify those effects. It should also be remembered that the tribunal is not bound by the rules of evidence and that the Vice President was entitled to place weight on material such as the response of the Brotherhood of St Laurence referred to in paragraph [23] of the Vice President’s decision.

[25] The Vice President also had before him some of the material directly touching upon the matter that was tendered in the earlier general application, and was considered by the earlier Full Bench.

[26] A “no evidence” ground is not made out if there is some evidence on which the impugned finding could be made. It matters not that another member may not have been persuaded by such evidence.

Whether variation is discriminatory?

[27] Section 153 of the FW Act provides:

[28] The SDA submits that the proposed variation, and any variation that creates a different standard for school students, discriminates on the basis of age because school students are overwhelmingly young people. That discrimination is arguably indirect discrimination because, in theory at least, a person of any age can be a secondary school student.

[29] The word “discrimination” is not defined in the FW Act and has its ordinary meaning. The law recognises that discrimination may be direct or indirect. In Waters v Public Transport Corporation 9 (Waters), Dawson and Toohey JJ summarised the distinction between direct and indirect discrimination as follows:

[30] There is an issue as to whether the word “discrimination” in s.153 of the FW Act is confined to direct discrimination or whether it extends to indirect discrimination. As was noted by Mason CJ and Gaudron J in Waters, “[w]ithin the Australian legal system, it is usual for anti-discrimination legislation to ban discriminatory practices in terms which deal separately with treatment which differentiates by reason of some irrelevant or impermissible consideration and with practices which, although not overtly differentiating on that basis, have the same or substantially the same effect.” 10 Waters was a case where the complainants relied upon the statutory prohibitions against indirect discrimination, which prohibitions invariably contain a reasonableness qualification. It is at least arguable that the absence of any reference to indirect discrimination in the FW Act and the absence of a reasonableness qualification in s.193 and s.195 means that the legislature intended a section such as s.153 to apply to indirect discrimination. This issue was not the subject of full argument and we are disinclined to adopt a firm position in the absence of full argument. For the purposes of the present appeal we will assume that s.153 applies to indirect discrimination.

[31] When construing s.153 in the context of the FW Act as a whole we think that some weight must be given to the use of the word “against” in s.153. A modern award must not contain a term that “discriminates against an employee” on one of the enumerated grounds; grounds that constitute a relatively comprehensive specification of the grounds on which persons are subject to adverse discrimination. In our view, that language, and the nature of the enumerated grounds, suggests that the legislature intended only to proscribe terms that discriminate adversely against an employee so that s.153 does not prohibit terms that discriminate in favour of an employee. We recognise that a class of employee may be discriminated against by the mechanism of treating all other classes of employee more favourably.

[32] The Vice President clearly regarded the variation proposed in his draft determination as favourable to secondary school students. There was evidence from which the Vice President was entitled to conclude that the minimum engagement period in clause 13.4 of the Retail Award had the effect of preventing secondary school students who wanted to engage in casual work after school from engaging in that work. He was conscious of the scope for disadvantage accruing to secondary students engaged in accordance with the variation proposed by the NRA and confined it in ways designed to address that potential for disadvantage. The variation proposed by the Vice President discriminates in favour of secondary school children and not against them. We are also not satisfied that the intended provision would otherwise operate contrary to the requirements of s.153 of the Act. Accordingly, the proposed variation is not prohibited by s.153 and that ground of appeal is not made out.

[33] On the rehearing we are not persuaded that the decision of the Vice President is affected by error. Accordingly, we are not entitled to exercise the powers in s.607(3) of the FW Act. The appeal must be dismissed.

[34] We would note that the SDA mounted a substantial case at first instance and identified a variety of concerns about the variation sought by the NRA. As noted by the Vice President in his decision, the implementation of the final determination, and any evidence as to its effect, may be assessed by the Full Bench that conducts the review of the Retail Award in 2012 pursuant to item 6 of Schedule 5 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.

[35] The stay issued in this matter is also discharged.

SENIOR DEPUTY PRESIDENT

Appearances:

W. L. Friend SC, with C. Dowling, of counsel, for the Shop, Distributive and Allied Employees Association.

C. Symons for the National Retail Association and for the Australian Chamber of Commerce and Industry (intervening).

N. Tindley for the Australian Retail Association (intervening).

P. O’Grady, of counsel, for the Victorian Minister for Employment and Industrial Relations (intervening).

Hearing details:

2011.
Melbourne:
July 15.

 1   [2011] FWA 3777

 2   PR510998

 3   [2010] FWA 5068

 4   [2010] FWAFB 7838

 5   See Coal and Allied Operations Pty Ltd v AIRC (2001) 203 CLR 194 at [17] and [32]

 6   (1936) 55 CLR 499 at 504-5

 7   [2011] FWA 3777 at [39]

 8   See, for example, the summary in Barach v University of New South Wales [2010] FWAFB 3307 at [16]

 9   (1992) 173 CLR 349

 10   (1992) 173 CLR 349 at 357

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