DECISION

Fair Work Act 2009
s.604—Appeal of decision

Kuhle Pty Ltd
v
Bus and Coach Drivers Association Incorporated
(C2020/5720)

Appeal against decision [2020] FWC 3208 of Commissioner Hunt at Brisbane on 2 July 2020 in matter number B2020/250 – majority support determination – whether group of employees fairly chosen – permission to appeal refused.

[1] By its notice of appeal lodged on 22 July 2020, Kuhle Pty Ltd as trustee for the Kuhlewein Family Trust, trading as Coast and Country Buses (Kuhle), seeks permission to appeal and appeals a decision made on 2 July 2020 by Commissioner Hunt to make a majority support determination (decision). 1

[2] By consent of the parties, this appeal and the application for permission to appeal have been dealt with on the basis of the written submissions filed and served by the parties.

Background

[3] Kuhle conducts a business providing bus services at various locations in south east Queensland. Its business operates out of five depots and employs about 58 bus drivers. The application for a majority support determination concerned only the bus drivers at Kuhle’s Bundaberg depot. Twelve bus drivers work at that depot, as does one manager. The work undertaken from the Bundaberg depot, as well as the other depots, is primarily school bus runs, together with bus charters for sporting clubs and local businesses. The 12 bus drivers who are based at the Bundaberg depot are casual employees and are covered by the Passenger Vehicle Transportation Award 2020 (Award). The bus drivers at the other depots are also casual employees and are covered by the Award.

[4] By email dated 26 February 2020, the Bus and Coach Drivers Association Incorporated (respondent), on behalf of its members, requested that Kuhle commence bargaining for an enterprise agreement. On 4 March 2020 Kuhle informed the respondent that it did not have any intention to commence negotiations for an enterprise agreement. An application was subsequently made to the Commission for a majority support determination.

[5] The Commissioner heard the application on 4 June 2020 and published her decision on 2 July 2020. The Commissioner relied on a petition signed by a number of the bus drivers based at the Bundaberg depot to find that a majority of employees who will be covered by the proposed enterprise agreement want to bargain. 2 The Commissioner found that the group of employees was geographically distinct because the bus drivers in question “typically only perform work from the Bundaberg Depot, and they are not asked to operate out of the other depots”.3 Having considered evidence concerning the nature of the work undertaken by Kuhle’s bus drivers across its five depots and the nature and organisation of its business, the Commissioner was “not satisfied” that the group of employees was operationally or organisationally distinct.4 The Commissioner ultimately found that the group of employees was fairly chosen. Two reasons were given for this finding: first, the group of employees was geographically distinct; and secondly, the bus drivers based at the Bundaberg depot had a strong desire to bargain with their employer.5 In contrast, bus drivers based at Kuhle’s other depots were not interested in bargaining for an enterprise agreement. Kuhle relied on this difference in preference as the basis for its contention that it did not wish to bargain because it did not wish to have disparate terms and conditions of employment applying to its employees at different depots.6 After considering this argument and a range of other matters, the Commissioner was satisfied that it was reasonable in the circumstances to make the determination.7

Permission to appeal

[6] Section 604 of the Fair Work Act 2009 (Cth) (Act) provides for an appeal by an aggrieved person to the Full Bench of the Commission, but only with the permission of the Full Bench. The Act does not confer on a party a right to appeal a decision of the Commission. 8 An appeal under the Act is conditional on permission to appeal being granted. It follows that Kuhle requires permission to appeal from the decision, in accordance with s 604(1) of the Act.

[7] Subsection 604(2) of the Act requires the Commission 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 In GlaxoSmithKline Australia Pty Ltd v Makin 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.” 10

[8] Other than granting permission to appeal on a public interest basis, the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying 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 refused. 11

[9] Further, 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 appealable error. 12 However, the fact that the member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.13

[10] An application for permission to appeal is not a de facto or preliminary hearing of the appeal. In determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal. 14 However, it is necessary to engage with the appeal grounds to consider whether they raise an arguable case of appealable error.

Appeal grounds

[11] Kuhle’s notice of appeal contains 6 appeal grounds.

[12] The first appeal ground contends that the Commissioner made an error of law in finding that the group of employees was fairly chosen in accordance with s 237(2)(c) of the Act.

[13] Grounds 2 and 3 contend that the Commissioner made the following significant errors of fact:

•  determining that it was reasonable to make the majority support determination on the basis that the group of employees was geographically distinct and had a strong desire to commence bargaining; and

•  not taking into account that the application for a majority support determination was only based on a small percentage of Kuhle’s workforce and whilst the remaining members’ views were commented upon, no weight was given to those views.

[14] The fourth appeal ground contends that the Commissioner made an error of law in not giving sufficient weight to whether the group of employees seeking the majority support determination was geographically, operationally or organisationally distinct.
[15] Ground 5 contends the Commissioner made an error of law in determining that it would be possible to find that a group of employees was fairly chosen even though they might be geographically, operationally and organisationally distinct.

[16] Ground 6 contends that the Commissioner made a significant error of law in finding that it is possible to make a determination based on s 237(2)(d) alone.

[17] Kuhle accepts that several of its grounds of appeal overlap and it did not make separate submissions in relation to each ground of appeal. 15 We will consider each of the appeal grounds in convenient groups.

Appeal grounds 1 and 4 – whether the Commissioner erred in finding that the group was fairly chosen

[18] Kuhle’s principal argument in relation to these appeal grounds is that the Commissioner erred by placing too much weight on the question of geographical distinctness, and in doing so, decided the ‘fairly chosen’ question on her consideration of the geographical distinctness alone. In support of this argument, Kuhle points to the following findings of fact made by the Commissioner in relation to the issues of operational and organisational distinctness:

(a) The bus drivers based at the Bundaberg depot perform the same work as the bus drivers at the other depots.

(b) While operating a school bus or a charter bus requires a particular set of skills, it is the same set of skills across all of Kuhle’s bus drivers.

(c) The Bundaberg depot could not continue to operate if head office, for some reason, did not exist.

(d) A substantial sum of capital is required to operate a bus company operating out of five depots with 58 drivers.

(e) It is clear that Kuhle’s management team at head office make decisions for and on behalf of all the business.

(f) A great number of the administrative functions relevant to the drivers based at the Bundaberg depot are carried out at Kuhle’s head office, including the payment of wages, pay slips, employment inquiries, rosters and timetables.

(g) All of Kuhle’s casual bus drivers across its business are paid under the Award.

[19] Kuhle accepted in its submissions that it is generally a matter for the decision maker at first instance to determine the appropriate weight to be given to relevant considerations, but relies on the following observations made by Justice Mason in Minister for Aboriginal Affairs v Peko-Wallsend and Others: 16

“I say ‘generally’ because both principal and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of any irrelevant considerations, but that the decision is ‘manifestly unreasonable’.”

[20] To these observations by Justice Mason we would add the following reasoning of Justice Aickin (with whom Mason and Wilson JJ agreed) in Gronow v Gronow:

“It is however a mistake to suppose that a conclusion that the trial judge has given inadequate or excessive weight to some factors is in itself a sufficient basis for an appellant court to substitute its own discretion for that of the trial judge. As Kitto J said in Lovell v Lovell at p 533:

‘The proposition that the appeal court will consider whether ‘no sufficient weight’ has been given relevant considerations is not inconsistent with the principle that the appeal court does not deal with the appeal as if it were exercising the original jurisdiction; even if it considers that insufficient weight has been given to some relevant consideration, it will still not substitute its judgment for that of the primary judge unless it come clearly to the conclusion for that reason that the discretion has been exercised wrongfully.’

It is clear that test will not be satisfied merely by reason that the appellant court, considering the matter de novo, would itself have arrived at a different result.” 17

[21] Similarly in the High Court decision in Queensland Electricity Commission, Re; Ex parte Electrical Trades Union 18 the majority (Mason CJ, Wilson and Dawson JJ) said that failure to give sufficient weight to a relevant factor did not “generally speaking ... entitle an appellate court to overturn the discretionary decision of a primary judge”. And in Milillo v Konnecke the NSW Court of Appeal (Ipp JA, with whom Macfarlan JA and Sackville JA agreed) said that it was incorrect that in respect of a discretionary decision inadequate weight could give rise to appellant intervention, and that when an appellate court said a matter was given “little or no weight”, this was “akin to saying that the relevant factor was not considered at all”, which was strictly in accordance with the test for appellate intervention recognised in House v The King.19

[22] Kuhle does not appeal against the Commissioner’s finding that the group of employees who will be covered by the proposed agreement was geographically distinct. That finding had a solid foundation in the evidence before the Commissioner.

[23] The argument that the Commissioner decided the ‘fairly chosen’ question on her consideration of the geographical distinctness alone is not supported by the Commissioner’s reasons for decision. In particular, the Commissioner plainly understood that it was necessary when considering this question to take “into account whether the group is geographically, operationally or organisationally distinct” 20 and appreciated “that whether or not the group of employees covered by the agreement is geographically, operationally or organisationally distinct is not decisive, rather it is a matter to be given due weight, having regard to all other relevant considerations”.21 The Commissioner then gave detailed consideration to whether the group was geographically, operationally or organisationally distinct and made express findings in relation to each of those factors.22 In paragraphs [89] to [92] of the decision the Commissioner considered a range of other matters in relation to the ‘fairly chosen’ question and concluded as follows at [93]:

“Having regard to my finding that the Bundaberg Depot is geographically distinct, and the strong desire of the employees at that depot to bargain with their employer, I am satisfied that the employees to be covered by the proposed agreement was fairly chosen. Accordingly, s.237(2)(c) is met.”

[24] It is clear from the words “having regard to my finding” at the commencement of paragraph [93] that the Commissioner was not excluding consideration of other factors such as her earlier finding that the group of employees was not operationally or organisationally distinct. 23 Reading the decision carefully and as a whole, it is apparent that the Commissioner had regard to a range of matters, including the fact that the group of employees was geographically distinct but not operationally or organisationally distinct, in reaching her evaluative assessment that the group was fairly chosen.

[25] We reject the argument that the finding of fairly chosen was ‘manifestly unreasonable’. That the group was fairly chosen is supported by the unchallenged finding that the group was geographically distinct, together with the other matters to which the Commissioner referred.

[26] It seems to us that what Kuhle is really seeking to do on appeal is to point to facts which support the finding that the group is not operationally or organisationally distinct and have us exercise the original jurisdiction and substitute our judgment for that of the Commissioner. In circumstances where we are satisfied that the Commissioner had regard to relevant considerations, did not place weight on irrelevant considerations and did not otherwise err in her consideration of the ‘fairly chosen’ question, we are not permitted to take such an approach on appeal. Grounds 1 and 4 do not disclose any arguable appealable error.

Appeal grounds 2 and 3 – alleged significant errors of fact and failure to take matters into account

[27] Ground 2 contends that the Commissioner made a significant error of fact in finding that the group of employees had a “strong desire” 24 to bargain and was “strongly focused on their own terms and conditions of employment and do not consider it necessary to have regard to the terms and conditions that apply to employees of other depots”.25 Kuhle submits that there was no evidence to support such findings. We reject that submission. The following evidence supports the findings made by the Commissioner:

•  On 23 February 2020 a number of bus drivers from the Bundaberg depot met. A vote was taken at the meeting for approval for the respondent to act on behalf of the drivers in presenting to Kuhle “an application to engage in a fair & equitable Enterprise Bargaining Agreement”. The result of the vote was unanimous. 26

•  On 26 February 2020 the respondent provided Kuhle with a letter containing a request by the drivers for “formal Bargaining for an Enterprise Agreement”. 27

•  By email dated 5 March 2020 the respondent informed Kuhle that it had “instructions to proceed with Enterprise Bargaining and will apply to the Commission for a majority support determination as per our member’s instructions. 28

•  The petition signed by drivers from the Bundaberg depot contained the following relevant information:

“1. Mr D. Dickson prepared the Petition as Secretary of Bus and Coach Drivers Association incorporated based on the unanimous show of hands at a meeting, that resolved to seek to undertake Enterprise Bargaining with the Owner/Owners of Coast and Country Buses.

…

4. The application is based on the geographical location of the Bundaberg Depot from the Head Office at Wamuran and no other interested parties at the time we seek the Determination.

5. We seek to have an agreement between ourselves and our employer…” 29

•  An application for a majority support determination was subsequently lodged in the Commission. Eight drivers provided statements in support of the application for a majority support determination. 30 Although those statements did not expressly address the topic of their desire to bargain, they had already signed a petition in support of bargaining and the question of whether a majority of the relevant group of employees wanted to bargain was not in issue. None of the drivers who provided a statement in support of the application for a majority support determination were required for cross examination at the hearing.31

[28] Ground 3 contends that the Commissioner made a significant error of fact in not taking into account that the application for a majority support determination was only based on a small percentage of Kuhle’s workforce and whilst the remaining members’ views were commented upon, no weight was given to those views. This ground is somewhat confused. It is not an error of fact to fail to take into account a relevant matter. The alleged error is properly characterised as a failure to consider a matter that the first instance decision maker was required to take into account.

[29] As to the contention that the Commissioner failed to take into account that the application for a majority support determination was only based on a small percentage of Kuhle’s workforce, it is clear from the Commissioner’s reasons for decision that she was aware that the application related only to drivers based at the Bundaberg depot, 32 of which there were 12,33 and that there were 58 drivers employed by Kuhle across its five depots.34 The Commissioner made express reference to Mr Kuhlewein’s evidence that it “would not be economically feasible to have separate agreements or different terms of employment apply to different depots”.35 The Commissioner also recorded Kuhle’s submission that “the proposed signatories [to the petition] do not reflect a majority of the workforce”.36 The Commissioner then found that it was reasonable “in all the circumstances” for a majority support determination to be made.37 Reading the decision fairly and as a whole, we do not consider it to be arguable that the Commissioner erred in not taking into account that the application for a majority support determination was only based on a small percentage of Kuhle’s workforce.

[30] As to the contention that the Commissioner failed to take into account the remaining members’ views, the Commissioner was aware that there was no interest from drivers at other depots to be involved in bargaining or to support the application by the drivers at the Bundaberg depot. So much is clear from paragraphs [57] and [89] of the decision. Further, the Commissioner expressly stated that she “had regard to the evidence” of a lack of interest in supporting the application by drivers from other depots. 38 By having regard to such evidence, the Commissioner plainly gave it the weight that she considered appropriate. It follows that ground 3 does not disclose an arguable case of appealable error.

Ground 5 – error of law in finding of fairly chosen

[31] Ground 5 contends that the Commissioner made an error of law in determining that it would be possible to find that a group of employees was fairly chosen even though they might be geographically, operationally and organisationally distinct.

[32] If a group of employees is geographically distinct, operationally distinct and organisationally distinct, each of those factors will tell in favour of a finding that the group is fairly chosen. 39 Absent other relevant considerations, those factors not only make it “possible to find that a group of employees was fairly chosen”, they make it very likely that such a finding will be made.

[33] In its written submissions, Kuhle submitted that “in relation to the Commissioner’s consideration of s 237(2)(d) of the Act … the Commissioner was incorrect in her conclusion at paragraph 88 of the decision when the Commissioner states:

“It appears to me that it is possible in determining whether the group of employees who will be covered by a proposed agreement was fairly chosen, that even after determining that the group is either geographically, operationally or organisationally distinct, or more than one, the Commission can decline to make a majority support determination.” 40

[34] There are a number of problems with this submission. First, paragraph [88] of the decision is concerned with the question of whether the relevant group of employees was fairly chosen, not whether it was reasonable in all the circumstances to make the determination (s 237(2)(d)). 41 Secondly, there is no error in paragraph [88] of the decision. While a determination of the ‘fairly chosen’ question in a case concerning a subset of all the employer’s employees requires the Commission to make findings about, and take into account, whether the group is geographically, operationally or organisationally distinct, those factors are not determinative.42 Even if a finding of geographical, operational and organisational distinctness is made, there may be other good reasons to support a conclusion that the group was not fairly chosen or that it was not reasonable in all the circumstances to make the majority support determination.

[35] For the reasons given, there is no arguable case of appealable error in relation to ground 5.

Ground 6 – making a determination on s 237(2)(d) alone?

[36] Kuhle submits that paragraph [95] of the decision discloses a significant error of law. We disagree. The Commissioner reasoned as follows in paragraph [95]:

“[95] I consider Commissioner Simpson’s consideration in Monadelphous to be persuasive. If an employer does not hold any objections relevant to s.237(2)(a), (b) or (c), any objections an employer holds relevant to s.237(2)(d) must be properly considered, with the onus falling upon the applicant to satisfy the Commission that it is reasonable in all the circumstances to make the determination. An application could be refused on failing to satisfy the Commission relevant to s.237(2)(d) alone. It carries as much weight as the other considerations.”

[37] It is plain from the use of the conjunction “and” between paragraphs (a), (b), (c) and (d) of s 237(2) of the Act that the Commission must be satisfied as to each of those matters to be empowered to make a majority support determination pursuant to s 237(1) of the Act. It follows that if the Commission is not satisfied that it is reasonable in all the circumstances to make the determination (s 237(2)(d)), the application must be refused.

Additional ground of appeal - arbitrariness

[38] Kuhle submits that, although not a ground of appeal in the Notice of Appeal, a further error was made by the Commissioner as to whether the employees were fairly chosen, on the basis of arbitrariness. Kuhle contends that the group of employees chosen were all members of the respondent. It is submitted that one factor that distinguishes the casual bus drivers based at Bundaberg from the other casual bus drivers at the other depots that has driven their selection as a ‘majority’ is their membership of the respondent.

[39] The point was not run at first instance before the Commissioner. It is always concerning when arguments not advanced at first instance are raised for the first time on appeal. It is fundamental to the proper administration of justice that the substantial issues between the parties are ordinarily settled at the first instance proceeding. 43 On appeal a party will be held to its case at first instance, except in the most exceptional circumstances.44

[40] There are a number of reasons why this new proposed appeal ground should not be accepted. First, the respondent has not been given an opportunity to adduce evidence in relation to the arbitrariness argument. It is potentially a matter about which relevant evidence could have been adduced at first instance. Secondly, accepting, without deciding, that the petition to which Kuhle points provides a proper foundation for a finding that the employees who signed the petition were all members of the respondent, 45 Kuhle has not pointed to any evidence to support a finding that all the other drivers in the other depots are not members of the respondent, such that membership of the respondent (a) was a factor that distinguishes the drivers at Bundaberg from other drivers or (b) establishes that the selection of the group was arbitrary. Thirdly and in any event, even assuming that each driver who supports the making of the majority support determination is a member of the respondent and no other driver employed by Kuhle is a member of the respondent, that does not establish that the group has been selected arbitrarily, in the sense of being based on random choice or personal whim, and does not establish, or support a finding, that the group was not fairly chosen.

Conclusion

[41] We are not persuaded that the matters set out in the grounds of appeal and submissions raise an arguable case of appealable error. We do not consider that the decision to make a majority support determination is attended with sufficient doubt to warrant its reconsideration, or that the decision manifests an injustice. The appeal does not raise any issues of general application. We do not consider the grant of permission to be in the public interest, nor do we consider that there is any other basis upon which permission to appeal should be granted.

[42] Permission to appeal is therefore refused.

DEPUTY PRESIDENT

Determined on the basis of written submissions

Appellant, 25 August and 29 September 2020
Respondent, 22 September 2020

Printed by authority of the Commonwealth Government Printer

<PR723584>

 1   [2020] FWC 3208

 2   Decision at [71]

 3   Decision at [76]-[77]

 4   Decision at [85]

 5   Decision at [93]

 6   Decision at [90]

 7   Decision at [98]

 8   DP World Brisbane Pty Ltd v Maritime Union of Australia (2013) 237 IR 180; [2013] FWCFB 8557 at [42]

 9   O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46] .

 10   [2010] FWAFB 5343, 197 IR 266 at [24] – [27].

 11   Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481.

 12   Wan v AIRC (2001) 116 FCR 481 at [30]

 13   GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 388, 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] FWCFB 1663 at [28]

 14   Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82]

 15   Kuhle’s submissions dated 25 August 2020 at [28]-[29]

 16   (1985-6) 162 CLR at 41

 17   (1979) 144 CLR 513 at 537-8, Mason and Wilson JJ agreeing at 526

 18   (1987) 72 ALR 1 at 7

 19   [2009] NSWCA 109 at [94]-[95]

 20   Decision at [73]

 21   Decision at [74] & [86]-[87]

 22   Decision at [76]-[85]

 23   Decision at [85]

 24   Decision at [93]

 25   Decision at [91]

 26   Appeal Book at pp132-133

 27   Appeal Book at p130

 28   Appeal Book at p131

 29   Appeal Book at p134

 30   Appeal Book at pp73-80

 31   Appeal Book at pp30-32, PN18-PN39

 32   Decision at [2]

 33   Decision at [19], [21] & [76]

 34   Decision at [82]

 35   Decision at [52]

 36   Decision at [61]

 37   Decision at [98]

 38   Decision at [89]

 39   QGC Pty Ltd v The Australian Workers’ Union [2017] FWCFB 1165 at [42]

 40   Kuhle’s written submissions dated 25 August 2020 at 29(xiii)

 41   Decision at [86]-[93]

 42   QGC Pty Ltd v The Australian Workers’ Union [2017] FWCFB 1165 at [42]

 43   Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 7

 44   University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483

 45   Appeal Book at p134