[2011] FWAFB 6845 |
FAIR WORK AUSTRALIA |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT WATSON |
|
Appeals against decision [2011] FWA 3934 of Deputy President Sams at Sydney on 4 July 2011 in matter numbers AG2010/24340 and AG2011/406 - appeal against decision to permit applicant to discontinue application for approval of an enterprise agreement - whether application can be withdrawn once agreement made - appeal against refusal to extend time for filing of application for approval of an enterprise agreement - statutory construction - Fair Work Act 2009, ss 182, 185, 588, 604.
Introduction
[1] This decision concerns two applications for permission to appeal by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) against a decision of Deputy President Sams at Sydney on 4 July 2011. The decision concerned two separate applications for approval of the Manfield Colair and CEPU Electrical Division Northern Territory Enterprise Agreement Gove Alumina Refinery and Mine Site 2010-2012 (the Agreement). The first application was made by CJ Manfield Pty Ltd (CJ Manfield) on 23 December 2010 (the CJ Manfield application) and the second application was later made by the CEPU on 7 March 2011 (the CEPU application).
[2] The first appeal concerns the withdrawal of the CJ Manfield application and whether the Tribunal can permit an applicant to discontinue an application for approval of an enterprise agreement once an agreement has been made in accordance with the Act. The second appeal concerns the refusal by the Deputy President to allow an extension of time for the CEPU to make its application for approval of the Agreement.
[3] At the hearing of the appeals in Sydney on 27 September 2011 Ms C Howell of counsel with Mr M Wright represented the CEPU and Mr M Follett of counsel represented CJ Manfield.
Background and the Decisions under appeal
[4] As noted above the CJ Manfield application was made on 20 December 2010. The Agreement was negotiated between the CEPU and CJ Manfield and is to cover employees who work on the Rio Tinto Alcan (RTA) Refinery site at Gove, Northern Territory, and who provide electrical and refrigeration services to the site.
[5] The CJ Manfield application was initially heard by telephone on 20 January 2011. During the hearing CJ Manfield sought to withdraw its application for approval of the Agreement.
[6] In his decision the Deputy President said:
“[4] At the telephone hearing, Mr K Francis appeared with Mr A Avila for the Company and Ms P Rogers with Mr T Gauld appeared for the Union, (because of a subsequent Union application about the same subject matter, I shall hereinafter refer to the parties as the Company and the Union, rather than the applicant and the respondent.) Mr Francis made a preliminary application seeking to withdraw the application on the basis that the Agreement contained a significant error in clause 41.1 in respect to breaks during a 10 hour shift. The disputed clause, which is the centrepiece of the competing arguments in this case, is recorded in the Agreement as follows:
“An employee who is required to work 2 or more hours overtime shall be allowed a crib time of 20 minutes at the prevailing overtime rate. For each four hours of overtime worked after that an employee is entitled to a further 20 minute crib break paid at the prevailing overtime rate.”
[5] It seems obvious enough that the effect of this clause is a requirement for employees to take three breaks, rather than the existing two, in a 10 hour shift. Mr Francis put that this outcome was never the intention of the Company, nor would the Company have ever agreed to such a provision. He described it as a ‘technical error’ or ‘oversight’, which needed correction.
[6] Ms Rogers opposed any withdrawal of the application on the basis that an agreement was made, under s 182 of the Act, when the employees voted to approve the agreement. This Agreement was therefore validly made and, unless there was some other statutory basis why the Agreement should not be approved, FWA is obliged to do so. In any event, Ms Rogers argued that the disputed clause was not an ‘error’ as it had been discussed by the parties and deliberately included in the Agreement after the second vote of employees had been unsuccessful.
[7] During the hearing, the Tribunal noted that, while some applications under s 185 of the Act had been discontinued by consent, I was not aware of any authority for the proposition (advanced by Mr Francis) that an application for approval of an enterprise agreement could be discontinued by an applicant, in the face of opposition to the discontinuance and following a valid vote of employees which had approved the agreement under s 182 of the Act. In short, the circumstances appeared to me to be unique and unparalleled; certainly under the terms of the present legislative regime. In view of these unusual considerations, I encouraged the parties to engage in further negotiations over whether some consensus might be reached over the disputed clause and, if it was necessary, to recommit the Agreement to another vote of the employees in light of any consensus reached. On that basis, the matter was adjourned for two weeks.
[8] On 3 February 2010, the Tribunal was advised in a further telephone conference that notwithstanding efforts to resolve the matter, the parties remained in dispute. Despite being provided with two authorities arguably supporting the Union’s primary contention, I indicated that I would not be making ‘a ruling on such a new and significant issue on the basis of simply a telephone conference between the parties’. In any event, Ms Rogers further proposed calling witness evidence as to what had occurred during the negotiations for the Agreement. For reasons of convenience and cost, it was decided to list the matter for formal hearing in Darwin on 19 and 20 April 2011. Accordingly, directions in preparation for the hearing were issued.
[9] For completeness, two other matters which occurred before the arbitration deserve mentioning. Firstly, on 24 February 2011, the Company filed and served a Notice of Discontinuance (Form F50) of the Application. On 7 March 2011, the Union filed its own application under s 185 of the Act, for the approval of the same Agreement as was voted upon by the employees on 17 December 2010 (AG2011/406). Notwithstanding the obvious difficulty of the Union’s application being filed well outside the 14 day time limit set by s 185(3) of the Act, the Form F17 - Employer’s Declaration in Support of Application for Approval of Enterprise Agreement and the terms of the Agreement itself were identical to the Company’s originally filed Agreement in AG2010/24340. This added a further overlay of complexity to these proceedings; although I understand entirely why the Union took that pre-emptive step. For convenience, both applications were joined at the hearing in Darwin. The Tribunal ruled that the evidence in one, would be the evidence in the other.”
[7] The Deputy President concluded that CJ Manfield had properly discontinued its application pursuant to s 588 of the Act by the filing of the Notice of Discontinuance using Form F50 on 24 February 2011.
[8] In relation to the CEPU application the Deputy President concluded:
“[104] To accept the Union’s application would require an exercise of discretion by FWA to extend the time for filing the application well beyond the 14 day time period specified by s 185(3)(b) of the Act if the Tribunal considers it fair to do so.
[105] Of course, there is no statutory impediment to a Union lodging a s 185 application. However, while I understand the tactical reason as to why the Union filed its own identical application to the one sought to be discontinued, I do not believe that the dispute between the parties can be cured or resolved by accepting a de facto application of this kind. In addition, there is a further technical difficulty with the Union’s application in that the Agreement annexed thereto is not signed by the Company’s authorised representative, or at all. This is a mandatory requirement of Reg 2.06A(2) which requires a signed copy of the Agreement (s 185(2)(a) of the Act) to be signed by the employer covered by the Agreement.
[106] For the reasons I have expressed, I would decline to exercise my discretion to extend the time for filing of the application. It would not be fair to do so, given the extraordinary circumstances surrounding the substance of the issues in dispute between the parties.”
THE FIRST APPEAL
Grounds of appeal and submissions of the parties
[9] The CEPU contends that the Deputy President erred in permitting CJ Manfield to discontinue its application for approval of an enterprise agreement made in accordance with s 185 of the Act after an agreement has been made pursuant to s 182 of the Act. It submits that s 588 must be construed in the context of the agreement approval provisions of the Act and that those provisions would be substantially undermined if an employer were permitted to withdraw from a properly made agreement simply by discontinuing an application for approval. It submits that the mandatory provisions regarding the approval of agreements that meets all of the statutory requirements could be circumvented by the withdrawal of an application whilst FWA is in the process of exercising its statutory functions.
[10] CJ Manfield submits that s 588 unequivocally permits any application to be withdrawn and ordinary canons of statutory construction suggest that s 588 be construed in the context of its immediate surrounding context and this context supports the interpretation that implied limitations should not be read into the terms of s 588.
[11] The disposition of this appeal depends on whether the Deputy President was correct in regarding the application as validly discontinued in accordance with the Act. This includes considerations of whether the application was able to be unilaterally discontinued.
Was the application discontinued?
[12] Section 588 occurs in Chapter 5, Division 3 of the Act regarding the conduct of matters before FWA. The surrounding provisions (s 585 - s 588) deal with the requirements for making, amending, dismissing and discontinuing applications. A note to s 585 makes specific reference to the operation of that section in conjunction with other specific provisions such as provisions regarding applications for the approval of agreements. It is indisputable that the provisions of this Division were intended to apply to applications for approval of agreements.
[13] The terms of s 588 are clear. In our view they permit the unilateral discontinuation of an application made in accordance with the applicable procedural rules. The application in this matter was made in accordance with such procedural rules being the form contained in the Fair Work Australia Rules 2009.
[14] We do not consider that the terms of s 185 alter this situation. Section 185(1) provides:
“(1) If an enterprise agreement is made, a bargaining representative for the agreement must apply to FWA for approval of the agreement.”
[15] This section does not identify which bargaining representative “must” apply. There is no penalty provided for bargaining representatives who fail to apply. In our view this provision does nothing more that require an application to be made in order to set the approval process in motion and to set down requirements for applications. There is no basis for applying this provision to read down the right to discontinue an application under s 588.
[16] It follows in our view that the Deputy President was correct to regard the CJ Manfield application as discontinued. As the matter involves the interpretation of important statutory provisions we grant permission to appeal. We dismiss the appeal.
THE SECOND APPEAL
Grounds of appeal and submissions of the parties
[17] The CEPU contends that if the employer application had been regarded as withdrawn there was a compelling case for the necessary extension of time being granted to the union to make its own application. Insofar as the Deputy President had regard to the apparent broader disagreement that had emerged this was an irrelevant consideration. Insofar as the Deputy President had regard to the conclusion that there was no genuine agreement and there was a unilateral mistake he was in error.
[18] CJ Manfield submits that the CEPU has failed to establish any error in the exercise of the Deputy President’s discretion such that the appeal can be upheld.
[19] An application for an extension of time involves a discretionary decision. An appeal can only succeed on this type of decision if it is established that an error is demonstrated in the way the discretion vested in the Tribunal was exercised.
Was the application for an extension of time properly determined?
[20] The parties had some difficulty in identifying the precise reasons for the Deputy President’s decision in this matter. The confusion arises because of the lengthy discussion of issues immediately following the extract quoted above under the headings “Propositions 2 and 3”, “Was the proposed agreement genuinely agreed?” and “Is this a case involving unilateral mistake?”. The Deputy President’s conclusion at paragraph [106] commences with the words “For the reasons I have expressed...” On one view this is a reference to the preceding paragraph. Another interpretation is that the phrase “For the reasons I have expressed...” is intended to include the subsequent discussion. Having regard to the opening words of paragraph [107] it appears to us that the Deputy President’s reasons for declining to allow an extension of time are contained in paragraph [105].
[21] The Deputy President was required to exercise his discretion to extend the time limit for lodging the application for approval of the agreement. The discretion needed to have regard to all relevant circumstances. In our view the withdrawal of the application by CJ Manfield was a relevant consideration. In the circumstances it is a factor which strongly supports the granting of the extension because that is the only way the CEPU could have sought approval of the agreement, and the delay is entirely explicable by the application made by CJ Manfield within time and its subsequent discontinuation. It is not apparent that this factor was considered by the Deputy President. A failure to have regard to this issue is an error in the decision-making process.
[22] The Deputy President did rely on the lack of a signature on the version of the agreement submitted with the CEPU application. It appears that the same defect did not arise in the CJ Manfield application to approve the same agreement. In our view it is an over-technical approach to decline to grant an extension of time for this reason. There are avenues available to remedy technical defects of this nature. In our view the reliance on this factor is also an error in the exercise of the Deputy President’s discretion.
[23] The other reason for failing to grant an extension is the Deputy President’s view that the dispute between the parties cannot be resolved by accepting the CEPU application. He referred to the application as a “de facto” one and made for a “tactical reason.” We do not believe that the CEPU can be criticised for seeking approval of the agreement it has made or that the outcome of the application is beyond doubt. It may be that for one reason or another, including the matters raised in the hearing of this appeal, the application may not be successful. But so long as the application had prospects of success the CEPU should have had the opportunity to make its application if it could adequately explain and justify the late lodgement of its application.
[24] For these reasons we are of the view that the Deputy President’s discretion miscarried. We grant permission to appeal, allow the appeal and quash his decision to refuse the application to extend time. We propose to consider the application for an extension of time ourselves as we have the materials for doing so. Because of the unusual circumstances of an employer lodging an application within time and subsequently withdrawing the application, and having regard to all of the other circumstances we grant an extension of time to the CEPU to make its application at the time it was filed on 7 March 2011.
Conclusions
[25] For the reasons above we grant permission to appeal in both matters. We dismiss the first appeal and allow the second appeal. We grant the application by the CEPU for an extension of time to make its application. The file will be returned to the panel head for reallocation and determination.
VICE PRESIDENT WATSON
Appearances:
C. Howell of counsel with M. Wright for the CEPU
M. Follett of counsel for CJ Manfield Pty Ltd
Hearing details:
2011.
Sydney
September, 27
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