Fair Work Act 2009
s.604—Appeal of decision

The Australian Workers’ Union
v
John Holland Queensland Pty Ltd, Construction, Forestry, Maritime, Mining and Energy Union; Australian Manufacturing Workers’ Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(C2022/5610)

Appeal against decision [2022] FWCA 2599 of Deputy President Colman at Melbourne on 2 August 2022 in matter number AG2022/3078

Introduction

[1] The Australian Workers’ Union (AWU) has lodged an appeal, for which permission is required, against a decision of Deputy President Colman made on 2 August 2022 1 to approve the John Holland Queensland Pty Ltd Gold Coast Light Rail Stage 3 Project Agreement (the Agreement). The Agreement is said to be a greenfields agreement made pursuant to s 172(2)(b) of the Fair Work Act 2009 (Cth) (FW Act) between John Holland Queensland Pty Ltd (John Holland), the applicant for approval of the Agreement, and three employee organisations, namely the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). The substantive part of the Deputy President’s decision was as follows:

“[2] This is a greenfields agreement that meets the requirements of s 172(2)(b) of the Act. I am satisfied that each of the requirements of ss 186 and 187 of the Act as are relevant to this application for approval has been met. In accordance with s 187(5) of the Act, I am satisfied that the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) are entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement in relation to work that is to be performed under it, and that it is in the public interest to approve the Agreement.

[3] I note that pursuant to s 53(2)(b) of the Act, the Agreement was made with the CFMMEU, the AMWU and the CEPU and that the Agreement covers these organisations.

[4] The Agreement was approved on 2 August 2022 and, in accordance with s 54, will operate from 9 August 2022. The nominal expiry date of the Agreement is 2 August 2026.”

[2] The AWU challenges the approval of the Agreement on three grounds:

(1) The Deputy President erred in finding that the Agreement met the requirements of s 172(2)(b) of the FW Act because the Agreement does not relate to a genuine new enterprise that John Holland is establishing or proposing to establish.

(2) The Deputy President erred in being satisfied, as required by s 187(5)(a) of the FW Act, that the CFMMEU, the AMWU and the CEPU are entitled (as a group) to represent the industrial interests of a majority of the employees who will be covered by the Agreement.

(3) The Deputy President erred in being satisfied, as required by s 187(5)(b) of the FW Act, that it was in the public interest to approve the Agreement, having regard to the earlier decision by Commissioner Simpson made on 16 June 2022 2 to dismiss an earlier application by John Holland for approval of a greenfields agreement (first agreement) in virtually identical terms to cover the same project.

[3] It is only necessary for us to consider, in this decision, the second ground of appeal. For the reasons which follow, we grant permission to appeal, uphold the second ground of appeal, and quash the Deputy President’s decision to approve the Agreement.

Factual background

[4] The background to this matter requires some short explanation. John Holland is a business which operates in the civil construction industry. It is the head contractor for construction of main works on Stage 3 of the Gold Coast light rail project (project). On 1 March 2022, John Holland applied for approval of the first agreement. The first agreement was said to have been made with the CFMMEU, the AMWU and the CEPU and would cover “Employees employed by John Holland on the Gold Coast Light Rail Stage 3 Project… for which classifications and rates of pay are prescribed by this Agreement…” (cl 1.1). The AWU opposed the approval of the Agreement on grounds which included that the agreement had not been properly made because it had not been executed by the CEPU and that the CFMMEU, the AWU and the CEPU were not, as a group, entitled to represent the industrial interests of the majority of employees who will be covered by the Agreement, as required by s 187(5) of the FW Act. Section 187(5) provides:

Requirements relating to greenfields agreements

(5) If the agreement is a greenfields agreement, the FWC must be satisfied that:

(a) the relevant employee organisations that will be covered by the agreement are (taken as a group) entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement, in relation to work to be performed under the agreement; and

(b) it is in the public interest to approve the agreement.

[5] The Commissioner conducted a hearing in relation to John Holland’s application on 18 May 2022. At the hearing, the Commissioner heard evidence from witnesses called by the parties, including evidence concerning the number of employees likely to be employed in various classifications under the agreement, and received extensive submissions including in relation to the scope of the eligibility rule of the CFMMEU. In a lengthy and closely-reasoned decision issued on 16 June 2022, the Commissioner found that:

(1) The agreement was properly made, but the CEPU was not a party to it by reason of its failure to execute the agreement.

(2) The union parties to the agreement (the CFMMEU and the AMWU) were not entitled to represent the industrial interests of a majority of employees who would be covered by the agreement in relation to work to be performed under the agreement. This conclusion would not change even if the first conclusion was incorrect and the CEPU was also a party to the agreement.

[6] The Commissioner found, accordingly, that the agreement did not satisfy the requirement for approval in s 187(5)(a), and he dismissed John Holland’s application. There was no appeal from the Commissioner’s decision.

[7] On 22 July 2022, John Holland lodged its application for approval of the Agreement. The coverage of the Agreement is expressed in precisely the same terms as in the first agreement, and the classifications are the same except that the first agreement included and the Agreement did not include classifications for piling and fire sprinkler services. The Agreement was executed on 8 July 2022, approximately three weeks after the Commissioner’s decision. At paragraph 1.3 of the application, in response to the question “Are you aware of any other agreement that has been lodged or dealt with by the Commission that has identical or substantially identical terms?”, the answer “Yes” was given, and the application went on to identify the “other agreement” in the following terms:

“John Holland Queensland Pty Ltd Gold Coast Light Rail Stage 3 Project Agreement (AG2022/545), which was dealt with in the decision by Commissioner Simpson, Application for approval of the John Holland Queensland Pty Ltd Gold Coast Light Rail Stage 3 Project Agreement [2022] FWC 1524.”

[8] The application was accompanied by a Form F20 statutory declaration made by Trent Smith, the Group IR Manager of John Holland, who had given evidence at the hearing before Commissioner Simpson. In this declaration, Mr Smith:

•  stated that the Agreement would cover all of John Holland’s “blue collar” employees on the project for whom classifications and rates of pay were prescribed by the Agreement, as distinct from supervisory and managerial staff;

•  answered “yes” to the question “Are the employee organisations that will be covered by the agreement, taken as a group, entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement in relation to work to be performed under the agreement?”; and

•  stated that John Holland agreed to bargain, or initiated bargaining, for the Agreement on 20 June 2022 (four days after the Commissioner published his decision).

[9] The CFMMEU, AMWU and CEPU all filed Form F21 declarations supporting the approval of the Agreement. Each of these declarations answered “Yes” to the question “Are the employee organisations that will be covered by the Agreement, taken as a group, entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement in relation to work to be performed under the Agreement?”. None of the declarations made reference to the Commissioner’s decision to refuse approval for the first agreement.

[10] Prior to issuing his decision, the Deputy President neither requested nor received any other submissions or information from any of the parties to the Agreement. The AWU did not request to be heard in relation to the matter.

Submissions as to the second ground of appeal

AWU

[11] The AWU submitted that, on the material before him, there was an insufficient basis for the Deputy President to conclude that the approval requirement in s 187(5)(a) was satisfied. In order to reach the requisite state of satisfaction under s 187(5)(a), it was submitted, it is necessary for the Commission to construe the eligibility rules of the organisations concerned and apply those rules to evidence as to the number and type of employees to be employed on the project and who will be covered by the greenfields agreement. However, in this case, the only material which the Deputy President had before him bearing upon whether the CFMMEU, the CEPU and the AMWU could meet the majority coverage requirement was the bare answers given on this issue in the declarations filed by John Holland and the three unions. The AWU submitted that, while it might be debatable whether such bare answers in declarations might be sufficient to reach satisfaction about majority coverage in some cases, it could not be sufficient in circumstances where Commissioner Simpson had found in his decision that he could not be satisfied that the same three unions met the majority coverage requirement in relation to the same project. The Deputy President, it was submitted, had no material at all available to him as to the number of employees likely to be employed in any classification, the work to be undertaken by employees in any classification or the purpose for which those persons were to be employed.

[12] The AWU further submitted that John Holland, the CFMMEU, the CEPU and the AMWU were on notice that the AWU challenged that the three unions met the majority coverage requirement and that Commissioner Simpson had not been satisfied that the requirement in s 187(5)(a) was met. Despite this, not only did none of the parties to the Agreement provide the Commission with any material which addressed the concerns Commissioner Simpson had identified, they provided no material at all in relation to the majority coverage requirement above the bare declarations. Additionally, it was submitted, the Deputy President did not address or consider essential relevant considerations which would need to be addressed in order for the Commission to be satisfied the majority coverage requirement was met, including the number of employees to be employed on the project, the work the employees will undertake or the purpose of their employment within John Holland’s enterprise. In the circumstances, it was not open to the Deputy President to be satisfied that the requirement in s 187(5)(a) of the FW Act was met and it cannot be said that the state of satisfaction required by s 187(5)(a) was actually formed.

John Holland

[13] John Holland submitted that the assumption in the AWU’s submissions that the Commission was incapable of being properly satisfied as to the requirement in s 187(5)(a) on the basis of the Form F20 and F21 declarations is not correct. The ultimate question, it submitted, is whether the existence and content of Commissioner Simpson’s decision prove appealable error and the answer to this must be in the negative. The only basis upon which such an error could be established is by the AWU showing that the existence and content of the Commissioner’s decision was a mandatory relevant consideration that the Deputy President was legally obliged to take into account and have regard to, and the Deputy President had not done this. It was submitted that the existence and content of the Commissioner’s decision was plainly not a mandatory relevant consideration since it concerned a different agreement made between different parties at a different time, in circumstances where the decision turned upon the Commissioner’s state of satisfaction as to certain factual conclusions. Once cogent material (in the form of the declarations) was before the Deputy President as to s 187(5) and he had made an evaluative assessment that, in the circumstances of the case, he was satisfied of the majority coverage, consideration of appealable error ends other than in respect of the rare case involving the second limb of House v The King. It was further submitted that, even if the Commissioner’s decision was a mandatory consideration, there was no basis for an inference that the Deputy President failed to have regard to it, since it was specifically referred to in the application for approval of the Agreement and the inference would readily be drawn that the Deputy President had regard to the application and the materials filed in support of it.

CFMMEU

[14] The CFMMEU submitted that, because the application before the Deputy President was not opposed, he was entitled to rely upon the declarations filed by the respective parties and, in addition, otherwise undertake the assessment required by s 187(5) by reference to the classifications identified in Appendix B to the Agreement and his specialised expertise and industry knowledge. On the established law, the CFMMEU together with the AMWU and the CEPU could represent the industrial interests of 112 of the 135 roles described in Appendix B. Because, it was submitted, the assessment required by s 187(5)(a) must be conducted in the absence of any actual employment, the prospective and uncertain nature of the judgment to be made affects the range of reasonable opinions that could be formed, and it is a matter about which reasonable minds might be expected to reasonably differ. The CFMMEU submitted that there was a wealth of material upon which a person, properly instructed in the law and having regard to the undisputed facts, could reach a state of satisfaction that the three unions could cover a majority of employees. The mere fact that Commissioner Simpson did not reach that state of satisfaction is not relevant to that question.

Other unions

[15] The AMWU and the CEPU supported the submissions made by the CFMMEU.

Consideration

[16] Because the point was not conceded by John Holland, it is first necessary to find that the AWU is, in relation to the Deputy President’s decision, a “person who is aggrieved” within the meaning of s 604(1) of the FW Act and therefore has standing to institute this appeal. The AWU’s rules permit it to represent the industrial interests of persons who will be employed on the project and to whom the Agreement will apply. The practical effect of the decision under appeal is to reverse the outcome which the AWU succeeded in obtaining before Commissioner Simpson in defeating the approval of the first agreement, which (as we discuss below) was in relevantly identical terms to the Agreement considered by the Deputy President. These circumstances mean that the decision has affected the AWU’s interest in a way which is different to its effect on an ordinary member of the public. 3

[17] The requirement for approval of a greenfields agreement in s 187(5) is met if the Commission is satisfied as to the matters specified in paragraphs (a) and (b). Because this requirement for the member’s satisfaction indicates that the statute allows a degree of latitude as to the choice of the decision to be made, the House v The King standard of appellate review applies on appeal. 4 This means that the AWU must demonstrate, in order for its appeal to succeed, that the Deputy President acted upon a wrong principle, mistook the facts, took into account an irrelevant consideration or failed to take into account a material consideration, or made a decision which is plainly unreasonable or unjust. We note that John Holland submitted that a failure to take into account a material consideration would only constitute appealable error if the relevant consideration was a legally mandatory one. We reject this submission which, with respect, appears to conflate appellate review and judicial review. The question is whether the failure to take into account the relevant consideration caused the exercise of the discretion to miscarry.

[18] In the case, we consider that Commissioner Simpson’s decision was a relevant consideration which it was necessary for the Deputy President to take into account in order to properly exercise his discretion. Aside from the issue of whether the CEPU was a party to the first agreement, there was no material difference in coverage as between the first agreement and the Agreement. No party suggested that the non-inclusion of classifications for piling and fire sprinkler services in the Agreement made any practical difference in the coverage of the two agreements. As earlier recounted, the Commissioner found, on the basis of extensive evidence and submissions, that the approval requirement in s 187(5)(a) was not satisfied in relation to the first agreement even if the CEPU was taken to be a party to it. This finding would equally apply to the Agreement. In circumstances where the Deputy President had no material placed before him concerning satisfaction of the s 187(5)(a) approval criterion other than bare assertions contained in the declarations filed by John Holland and the three unions, the findings in the Commissioner’s decision constituted the most probative material available in relation to s 187(5)(a). That is not to say that the Deputy President was bound to follow the Commissioner’s decision, but the proper exercise of his discretion required that he consider it and, if he formed a different view in relation to the Agreement, explain his reasons for being satisfied as to the question of majority union coverage. 5

[19] As explained above, there was a reference to the Commissioner’s decision in John Holland’s application for approval of the Agreement, although not in relation to the s 187(5)(a) approval requirement. Contrary to John Holland’s submissions, we consider that it is plain that the Deputy President did not take the Commissioner’s decision into account. There is no reference to it at all in the Deputy President’s decision let alone reasons given as to why, in relation to s 187(5)(a), the bare assertions in the declarations of John Holland and the three unions were accepted having regard to the detailed analysis and findings contained in the Commissioner’s decision.

[20] That the Deputy President did not take the Commissioner’s decision into account was, we consider, a result of John Holland’s failure to properly identify its relevance and significance in its application for approval of the Agreement. It verged on misleading the Commission by omission for each of the declarations supporting the application to simply assert, without qualification or reference to the Commissioner’s decision, that the three unions were entitled to represent the industrial interests of a majority of employees who would be covered by the Agreement in relation to work to be performed under the Agreement. Had the Commissioner’s decision been properly drawn to the Deputy President’s attention, we are confident that he would have given detailed consideration to it.

[21] Had the Commissioner’s decision been taken into account, there is at the very least a real possibility that the Deputy President might have made a different decision. That is demonstrative of the conclusion that the failure to take it into account caused the exercise of the discretion to miscarry. That makes it appropriate to grant permission to appeal, uphold the appeal on the second ground, and quash the Deputy President’s decision.

[22] It will be necessary for us to re-determine the application for approval of the Agreement. That will require us to consider not only whether the Agreement satisfies the approval requirement in s 187(5)(a) but also the matters raised by the AWU’s other grounds of appeal, namely whether the Agreement is truly a greenfields agreement within the meaning of s 172(2)(b), and whether under s 187(5)(b) it would be in the public interest to approve the Agreement. We consider that it will be necessary to give the parties an opportunity to adduce further evidence and make further submissions about all of these matters and, accordingly, they will not be dealt with in this decision. The presiding member will, at a date to be advised, conduct a directions hearing in order to identify the most efficient course to deal with these matters.

Postscript

[23] On 17 October 2022, after our reasons for decision had been prepared, we became aware that, late on Friday 14 October 2022, lawyers acting for John Holland sent an email to the Commission concerning the disposition of the appeal. This email stated that John Holland and the AWU, after having engaged in discussions, had reached an agreement that the Deputy President’s decision should be “quashed by consent without further reasons” and that the application for approval of the Agreement (current application) should be “remitted for determination”. Further, in the context that John Holland has applied to the Commission for approval of a further, non-greenfields agreement to cover the project 6 (new application), the email stated that John Holland and the AWU had agreed that the AWU will not contest the new application, that the redetermination of the current application will be held in abeyance until the new application has been determined, that if the new application is granted John Holland will discontinue the current application, and if the new application is dismissed the current application will be relisted for directions for hearing and determination. The email stated that “[w]e are informed by the other intervenors that they have no objection to this course”.

[24] As we have made clear, we have independently determined that the Deputy President’s decision was subject to appealable error and, accordingly, that permission to appeal should be granted, the appeal upheld and the decision under appeal quashed. It will generally not be appropriate to uphold an appeal and quash a decision by consent without the demonstration of appealable error in a published decision of the Commission. This is particularly the case in respect of decisions concerning the approval of enterprise agreements, since s 186(1) of the FW Act requires the Commission to approve enterprise agreements which meet the requirements of ss 186 and 187, and to quash a decision of this nature on appeal absent demonstrated error might be perceived as vitiating the Commission’s duty under s 186(1). Accordingly, we do not propose to accede to the parties’ request not to publish our reasons. However, consistent with the parties’ agreement, we will defer the directions hearing contemplated in paragraph [22] above until we receive further advice from the parties concerning the outcome of the new application.

Orders

[25] We order as follows:

(1) Permission to appeal is granted.

(2) The second ground of appeal is upheld.

(3) The decision of Deputy President Colman of 2 August 2022 ([2022] FWCA 2599) is quashed.

(4) The application in matter AG2022/3078 is stood over pending further advice from the parties.

VICE PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR746920>

Appearances:

M Gibian SC for the Australian Workers’ Union.

M Follett of counsel for John Holland Queensland Pty Ltd.

W Friend KC with C Massy of counsel for the Construction, Forestry, Maritime, Mining and Energy Union.

[There was no appearance for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia or the Australian Manufacturing Workers’ Union.]

Hearing details:

2022.

Sydney:
23 September.

 1   [2022] FWCA 2599

 2   [2022] FWC 1524

 3   See Fraser & CFMMEU v JFM Civil Contracting Pty Ltd [2020] FWCFB 4866, 300 IR 122 at [21]-[24] and the cases referred to there.

 4   [1936] HCA 40, 55 CLR 499 at 504-505; Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47, 203 CLR 194 at [19]-[21] per Gleeson CJ, Gaudron and Hayne JJ; Minister for Immigration and Border Protection v SZVFW [2018] HCA 30, 264 CLR 541 at [35]-[50] per Gageler J; Donnybrook Holdings Pty Ltd v CEPU [2021] FWCFB 1825 at [20]; National Electrical and Communications Association v Electrotechnology Group Training Company Ltd [2021] FWCFB 6073 at [29]

 5   See ResMed Limited v AMWU [2015] FCAFC 106, 232 FCR 152 at [38].

 6   Matter AG2022/3924