[2011] FWAFB 1327

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Power Projects International Pty Ltd
v
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
The Australian Workers’ Union

(C2010/6021 and C2010/6022)

SENIOR DEPUTY PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT HARRISON
COMMISSIONER RAFFAELLI

MELBOURNE, 1 MARCH 2011

Appeals against decisions issued in transcript and Orders [PR505143 and PR505210] of Deputy President Harrison at Newcastle on 15 and 16 December 2010 in matter numbers B2010/3725 and B2010/3732 respectively - permission to appeal granted - appeals upheld.

[1] This decision arises from appeals by Power Projects International Pty Ltd (PPI) against protected action ballot orders made by Deputy President Harrison on 15 December 2010 1 and 17 December 2010.2 The orders relate to employees of PPI who work at the Eraring Power Station on the “Eraring Energy Shutdown and Upgrade Construction Project” who are members of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (the AMWU) and The Australian Workers’ Union (the AWU) (collectively, the unions) respectively.

[2] The first order arose from an application by the AMWU under s.437 of the Fair Work Act 2009 (the Act) on 14 December 2010, following a hearing and decision in transcript 3 on 15 December 2010. The second order arose from an application by the AWU under s.437 of the Act on 16 December 2010, following a hearing on that day and a decision in transcript.4 The hearings at first instance were of limited duration and scope, with limited evidence. They canvassed similar ground save that additional arguments and evidence arose in the second matter. Given the common ground, the appeals were dealt with together. Indeed before this Full Bench, it was accepted that the result in the appeals should be the same.

Brief background

[3] PPI has held maintenance contracts at Eraring Power Station since 1998, with the work undertaken by its employees under the Power Projects International Certified Agreement 2008 5(the 2008 Agreement), an agreement made under the Workplace Relations Act 1996 (the WR Act). In December 2007 and December 2008 respectively, PPI, in consortium with Doosan Heavy Industries and Construction, won contracts for the upgrade of turbo-generators and boilers at the Eraring Power Station (the upgrade project work). The s.437 applications were made by the unions, as bargaining representatives for their members, following approaches to PPI to negotiate an enterprise agreement to apply to the upgrade project work. The unions contended that the upgrade project work was properly to be defined as construction work and therefore beyond the scope of the 2008 Agreement, which they characterised as a maintenance agreement.

[4] The 2008 Agreement is expressed to apply to employees of PPI, within any of the occupations of the agreement, “whilst engaged in the life extension, maintenance, repair and/or rehabilitation on industrial or power station sites”. 6 An additional sentence in the application clause, which was not in the previous certified agreement, states: “The agreement shall apply to all work and activities on such sites, including areas deemed as a ‘Construction Site’, except where there is a specific mandatory ‘Site Agreement’ in operation at the commencement of the work”.7

[5] The ballot orders made by Deputy President Harrison identified the group of employees to be balloted as members of the relevant union “who work at Eraring Power Station on the Eraring Energy Shutdown and Upgrade Construction Project.” 8

The Appeal Grounds

[6] The grounds of appeal, broadly characterised, are that Deputy President Harrison erred in:

Preliminary Matters

[7] The Full Bench, constituted by the President, Senior Deputy President Watson and Commissioner Raffaelli, sat on 21 January 2011, dealing with procedural applications, including the grant of leave to amend the notices of appeal. 10 Permission was granted to The Australian Industry Group (AIG) and the Australian Council of Trade Unions to make submissions.11 Following the hearing, the Full Bench was reconstituted by the President, with Senior Deputy President Harrison replacing him, in order to facilitate the timely completion of the substantive appeal.

[8] PPI’s appeal grounds introduced arguments not put to Deputy President Harrison. In the AMWU matter, at first instance, PPI identified the issue before Deputy President Harrison as whether the 2008 Agreement covered the work which was the subject of the AMWU application. 12 PPI’s submissions canvassed two of the appeal grounds arising from this question:

[9] In the AWU matter, PPI essentially relied on the argument and evidence it put in the AMWU matter, but put additional evidence in relation to the making of the 2008 Agreement 15 and an additional argument concerning modification of the application clause in the 2008 Agreement.16

[10] It may be noted that the final three appeal grounds, as broadly categorised above, were not ventilated before Deputy President Harrison.

[11] In the appeal, PPI sought to supplement the fairly limited evidence before Deputy President Harrison. We declined to admit additional evidence in the appeal.

[12] The conventional principles for the admissibility of new evidence are summarised in the following passage in Akins v National Australia Bank 17 (Akins) and both counsel accepted the applicability of these principles to applications in Fair Work Australia to admit new evidence at the hearing of an appeal:

[13] The majority decision in JJ Richards 18 considered these principles in the context of an application under s.437 of the Act:

[14] The substantial body of additional evidence in this case was in existence and known to be in existence at the time of the hearings before Deputy President Harrison. Accordingly, the application to admit additional evidence does not satisfy the first of the conventional tests in Akins for its admission. Further, we are not satisfied that special circumstances exist to warrant the admission in this case. In circumstances where the volume of additional evidence is significant, includes much documentary material readily available to PPI at the time of the hearing at first instance and no application was made by PPI at first instance for an adjournment to better prepare evidence, we are not satisfied that this is an appropriate case for departing from the conventional tests in Akins.

[15] We think that the qualification “in an appropriate case” to the departure from the conventional tests for the admission of new evidence in relation to a s.437 application contained within the majority decision in JJ Richards is important. Departure from the conventional tests simply because s.441(1) of the Act requires Fair Work Australia, as far as practicable, to determine an application for a protected action ballot order within two working days after the application is made would create a risk that, for contested applications involving evidentiary conflicts, first instance hearings would be rendered otiose, with substantive cases and evidence being run on appeal. The qualification “as far as practicable” in s.441(1) to the determination time might have work to do, in appropriate cases, where a s.437 application raises significant issues as to evidence and/or law in which circumstances a party might apply for a brief adjournment to allow evidence and arguments to be properly put before a member at first instance. The determination of any such application might raise natural justice considerations and would, of course, be a matter for the member at first instance in the particular circumstances of the matter before them.

Appeal Principles

[16] The appeal is brought pursuant to s.604(1) of the Act with the permission of Fair Work Australia. The conventional considerations for the granting of permission under s.604(1) apply, namely whether the decision is attended with sufficient doubt to warrant its reconsideration or whether substantial injustice would result if permission was refused. Section 604(2) of the Act also provides that Fair Work Australia must grant permission if it is satisfied that it is in the public interest to do so.

[17] In relation to an application for permission to appeal, the Full Bench needs to consider whether it is “seriously arguable” that the decision subject to review has actually been wrong on the point taken as the ground for an alleged error in the decisional process. Where the alleged error of the decision maker is said to occur in relation to a necessary pre-conditional finding of jurisdictional or constitutional fact, the Full Bench must be mindful of the observations in Pawel v. Australian Industrial Relations Commission, 19 i.e. the Full Bench must be concerned with whether the member at first instance reached the right conclusion not simply whether the decision was reasonably open at first instance.

[18] An appeal pursuant to s.604(1) of the Act is an appeal by way of re-hearing. The observations of the High Court in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission 20 as to the nature of an appeal under s.45 of the WR Act remain relevant. The Full Bench is required to be satisfied that there is error on the part of the primary decision maker before it can exercise its appellate power.

Consideration

The validity of the applications before Deputy President Harrison

[19] We commence our consideration by addressing the item 17 of Schedule 13 ground, which challenges the validity of the applications before Deputy President Harrison.

[20] This ground was argued in the appeal by AIG in the following terms:

[21] AIG submitted that:

Submissions and evidence and decision in the AMWU matter (B2010/3725)

[22] In the AMWU matter before Deputy President Harrison, PPI referred to item 17 of Schedule 13 of the Transitional Act and submitted that the application should be dismissed as there is a transitional instrument which covers the employees who would be covered by the enterprise agreement proposed by the applicant and the application had been made earlier than 30 days before the normal expiry date of that transitional instrument. 23

[23] There was some evidence before Deputy President Harrison as to the work undertaken on the upgrade projects:

[24] In its closing submissions, PPI referred to the evidence from Mr McWilliam, said to be accepted by Mr Wallace, that “upgrade work typically encompasses - although Mr Wallace didn’t accept that this was exhaustive - but typically encompasses some elements of life extension, maintenance and repair...”. 32 PPI again referred to item 17 of Schedule 13, submitting that it is not contested that if the 2008 Agreement applies to the employees then PPI’s contention about the 30 day time constraint on bringing an application for a ballot order would not be disputed.33

[25] In his decision in the AMWU matter, Deputy President Harrison found that the maintenance work covered by the 2008 Agreement is fundamentally different from the upgrade project work and noted “The difficulty ascribed by Mr McWilliam to separating the upgrade and ongoing maintenance, life extension, repair and/or rehabilitation work may be a practical matter that the parties need to address in their negotiations. But it is not the basis on which upgrade work could be called something that it is not...”. 34

Submissions and evidence and decision in the AWU matter (B2010/3732)

[26] The application for a ballot order by the AWU was heard by Deputy President Harrison on the day following the hearing and decision in the AMWU matter. Mr Wallace intervened for the AMWU. The Deputy President and the parties and intervener in the AWU matter proceeded on the basis that all that had occurred on the preceding day would be taken into account. The witness statement of Mr McWilliam tendered in the AMWU matter was also tendered in the AWU matter.

[27] Additional evidence was led by PPI to cast light, at least from its point of view, about what was meant by the final sentence in clause A.1.0. of the 2008 Agreement. Additional submissions by PPI were directed to negotiations for the 2008 Agreement and the insertion of the additional sentence in clause A.1.0. Nowhere in the transcript is there specific reference to the item 17 Schedule 13 argument.

[28] The decision of Deputy President Harrison in the AWU matter does not address the item 17 of Schedule 13 point, nor the organisation of work between the various PPI contracts. Deputy President Harrison found that the additional sentence in clause A.1.0 did not extend to the upgrade project work. 35

Decision on the validity of the applications

[29] In order to address how it is said that the Deputy President erred in his application of item 17 of Schedule 13, we need to refer to a number of other provisions of the Transitional Act and the WR Act. The need to refer to the latter act arises as the Transitional Act continues in operation provisions of the WR Act about the parties bound by agreements made under that act, the manner in which such agreements could be varied or terminated and the way in which such agreements interacted with other industrial instruments.

[30] The 2008 Agreement was, as we have earlier noted, one made under the WR Act and there described as either a workplace agreement or an employee collective agreement. It was approved by employees on 18 December 2008. Section 340 of the WR Act used the term “approved” as meaning the date when a majority of employees who cast a valid vote decided they wanted the agreement. It was then lodged with the Workplace Authority for consideration about whether it passed the no-disadvantage test. On 19 February 2009, PPI was advised the agreement had passed that test and, on 26 February 2009, the 2008 Agreement came into operation. 36 Its nominal expiry date is expressed to be three years from the date of registration.37 It is not clear whether this is meant to refer to the date PPI lodged the 2008 Agreement with the Workplace Authority or the date it came into operation. At this time nothing turns on this as even taking the earlier nominal expiry date it is clear the 2008 Agreement still has several months to run.

[31] Section 351 of the WR Act provided that a workplace agreement “binds” the “employer in relation to the agreement” and “all persons whose employment is, at any time when the agreement is in operation, subject to the agreement...”. Having come into operation an agreement would then cease to operate in relation to an employee if it passed its nominal expiry date and been replaced by another collective agreement in relation to that employee. 38

[32] The WR Act provided that a workplace agreement could only be terminated in limited circumstances. It could be terminated at any time if the employer and the employees agreed but otherwise only after it had reached its nominal expiry date. In that event there were two ways in which a termination could occur. If the agreement provided for the manner in which it could be terminated then, in that manner or upon application by an employer or majority of employees to the Australian Industrial Relations Commission for a ruling, it would not be contrary to the public interest to terminate the agreement. In each case other procedural requirements were to be observed, details of which we do not need refer to. 39

[33] Section 348 of the WR Act provided that only one workplace agreement could have effect at a particular time in relation to a particular employee. If a collective agreement binding the employee was in operation and a later collective agreement was lodged before the nominal expiry date of the first, the latter had no effect in relation to the employee until the nominal expiry date of the first.

[34] We now turn to relevant provisions of the Transitional Act. The 2008 Agreement is one of a number of industrial instruments made under the WR Act which became transitional instruments, upon the repeal of that act. The 2008 Agreement continues in existence in accordance with Schedule 3 of the Transitional Act and, by virtue of item 2(5), is now classified as a collective agreement-based transitional instrument.

[35] Item 3(1) of Schedule 3 provides that a transitional instrument “covers the same employees, employers and other persons that it would have covered (however described in the instrument or WR Act) if the WR Act had continued in operation”. Item 3(2) provides that the transitional instrument “applies to the same employees, employers and any other persons the instrument covers as would, if the WR Act had continued in operation” have been required by that act to comply with the terms of the instrument or been entitled to enforce the terms of the instrument.

[36] Item 5 of Schedule 3 provides that the same instrument interaction rules that applied in relation to WR Act instruments of a particular kind immediately before that act’s repeal date continue to apply in relation to instruments of that kind that become transitional instruments. The term “instrument interaction rules” is defined. In short, it relates to the manner in which the WR Act provided that one instrument might have priority over or excluded another or one instrument may cease to operate in whole or in part because of there being another instrument.

[37] Items 15 and 16 of Schedule 3 provide that the provisions of the Act dealing with the termination of enterprise agreements apply in the same way to collective agreement-based transitional instruments. It is sufficient to note that, like the WR Act, there are limited circumstances when an agreement may be terminated. The parties may agree to terminate an agreement at any time (and upon Fair Work Australia approval) but otherwise it can only be terminated after its nominal expiry date, upon application by either an employer or an employee and with Fair Work Australia being satisfied it is not contrary to the public interest to do so.

[38] Item 30(2) of Schedule 3 deals with the interaction of agreements made under the Act with collective agreement-based transitional instruments. It is in these terms:

[39] We now return to and reproduce the terms of item 17 of Schedule 13 of the Transitional Act:

[40] When the applicability of item 17 of Schedule 13 was raised before the Deputy President the question he then needed to consider and rule upon was whether the 2008 Agreement covered employees who would be covered by the proposed agreement. And, if the answer to that question was yes, the two applications for protected ballot orders could proceed no further. The enquiry to which item 17 of Schedule 13 is directed is not the same enquiry as, for example, the scope or description of the group of employees to be balloted as appears in the terms of orders sought by the applicants nor is it an enquiry about whether, in the event an order is to issue, the employees who may then take industrial action may include employees covered by the agreement which, AIG submitted, would be directly at odds with item 4 of Schedule 13 of the Transitional Act.

[41] In considering which employees the 2008 Agreement covers it is to be recalled that this requires reference back to the WR Act provisions about who was to be bound by an agreement. And, in relation to employees, this was “all persons whose employment is, at any time when the agreement is in operation, subject to the agreement...”.

[42] There was some disagreement between the parties about whether the reference to employees in the first sentence of item 17 of Schedule 13 should be interpreted as meaning all employees and, accordingly, unless it was established that all the employees covered by the 2008 Agreement were to be covered by the proposed agreement the item did not preclude consideration of the applications for ballot orders. We think the construction urged upon us by PPI and AIG is to be preferred. We read item 17 of Schedule 13 as meaning that if any of the employees presently covered by the 2008 Agreement are included within the group to be covered by the proposed agreement the applications for ballot orders could proceed no further. We think this is consistent with the provisions of the WR Act as continued by the Transitional Act as to who is bound by the 2008 Agreement. And, although not necessary to develop here in any detail, it is an interpretation consistent with the provisions of the WR Act as continued on by the Transitional Act limiting the circumstances whereby an agreement may come to an end or cease to cover an employee at a time prior to its nominal expiry date. Finally, we should note that the construction we place on the terms of item 17 of Schedule 13 is consistent with that of Senior Deputy President Hamberger in Construction Forestry Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd and others. 40

[43] We now turn to the facts in this case. It is apparent that the relevant evidence was limited. However, contrary to the unions’ submissions, we think it is sufficient to enliven the applicability of item 17 of Schedule 13. In our opinion the evidence does establish that there are employees who do maintenance work on existing plant and equipment that is done under the 2008 Agreement and who will be doing maintenance work on that plant and equipment and will be covered by the proposed enterprise agreement. This evidence was principally given by Mr McWilliam for PPI. We accept PPI’s submission that he was a person with direct knowledge of the manner in which work was, and would be, organised under both the 2008 Agreement and the proposed agreement. This aspect of his evidence was not disturbed in cross-examination.

[44] Although Deputy President Harrison referred in his reasons for decision in the AMWU matter to one consequence of the evidence led by PPI as being a “difficulty” which was acknowledged by the union witness, he said it may be a practical matter the parties need address in negotiations. In our opinion it had another more immediate consequence and that was the applicability of item 17 of Schedule 13. It deprived the Deputy President of power to do anything further with the applications other than to refuse to grant the orders sought. In granting the orders as his Honour did he was in error. There was no valid application under s.437 of the Act for the purposes of the requirement for the making of a ballot order under s.443(1)(a) of the Act. The two applications should have been dismissed. Given the error, and its nature and effect, we grant permission to appeal and uphold the appeal.

[45] It should be apparent that in this decision we have not been required to consider several other provisions of the Transitional Act and the Act as to what might be able to be achieved by parties by agreement as to the terms of a new enterprise agreement or what may be open to parties at a time after 30 days before the nominal expiry date of the 2008 Agreement. Consideration would then require attention be given, at least, to Parts 3 and 5 of Schedule 3 of the Transitional Act and Divisions 2 and 3, Part 2-1 of Chapter 2 of the Act.

The remaining grounds of appeal

[46] In light of our decision on the item 17 of Schedule 13 ground, it is unnecessary to address the other grounds in the appeal. Further, we think it is not appropriate to do so in the circumstances of this appeal, given the paucity and/or absence of argument and evidence before Deputy President Harrison.

Conclusion

[47] For the reasons above, we grant permission to appeal, uphold the appeal and quash the orders of Deputy President Harrison in each appeal.

SENIOR DEPUTY PRESIDENT

Appearances:

M Moir, of counsel, for the appellant.

C Howell, of counsel, and later J Pearce, of counsel, with J Kennedy and M De Carne for the respondents.

S Smith with G Vaccaro for The Australian Industry Group (intervening).

T Clarke for the Australian Council of Trade Unions (intervening).

Hearing details:

2011.
Sydney:
January 21 (Giudice J, Watson SDP, Raffaelli C);
February 8 and 9 (Watson SDP, Harrison SDP, Raffaelli C).

 1   PR505143 in B2010/3725.

 2   PR505210 in B2010/3732.

 3   Transcript in B2010/3725, at paras 268-272.

 4   Transcript in B2010/3732, at paras 186-188.

 5   AC317297.

 6   Clause A.1.0, AC317297.

 7   Ibid.

 8   PR505143 and PR505210.

 9   [2010] FWAFB 9963 - 23 December 2010.

 10   Transcript in the appeals, before Giudice J, Watson SDP, Raffaelli C, at para 248.

 11   Ibid, at para 256.

 12   Transcript in B2010/3725 at para 18.

 13   Ibid, at paras 15, 16, 243 and 262.

 14   Ibid, at paras 252-261.

 15   Transcript in B2010/3732, at para 12.

 16   Ibid, at paras 14 and 182-185.

 17   [1994] NSWLR 155 at 160.

 18   [2010] FWAFB 9963, at para 95.

 19   (1999) 94 FCR 231 at para16.

 20   (2000) 203 CLR 194 at paras 13-15 and 17.

 21   AIG Updated Outline of Submissions, at para 34.

 22   Ibid.

 23   Transcript in B2010/3725, at para 15.

 24   Exhibit 1 in B2010/3725 and B2010/3752, at para 4.

 25   Ibid, at para 5.

 26   Transcript in B2010/3725, at para 33.

 27   Ibid, at para 44.

 28   Ibid, at para 57.

 29   Ibid, at para 114.

 30   Ibid, at para 119.

 31   Ibid, at para 180.

 32   Ibid, at para 255.

 33   Ibid, at para 262.

 34   Ibid, at para 272.

 35   Transcript in B2010/3732, at para 188.

 36   Section 340, 346D, 346M and 347, Workplace Relations Act 1996.

 37   Clause A.3.0, AC317297.

 38   Section 347(5), Workplace Relations Act 1996.

 39   Sections 381-397A, Workplace Relations Act 1996.

 40   [2010] FWA 8210 at paras 11-14.




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