FWAFB 2901
FAIR WORK AUSTRALIA
Fair Work Act 2009
s.604—Appeal of decision
SENIOR DEPUTY PRESIDENT WATSON
Appeal against ex tempore decision of Commissioner Cribb at Melbourne on 16 March 2012 in matter numbers B2012/520 and C2012/2779 - permission to appeal granted - appeal upheld - interim order issued.
 This is an appeal which arises out of bargaining for a multi-employer agreement between the Health Services Union (the HSU) and various Health Services represented by the Victorian Hospitals’ Industrial Association (the VHIA) and proceedings, in relation to the bargaining before Commissioner Cribb.
 The relevant proceedings arose out of:
1. B2012/520 - an application by the HSU, pursuant to s.229 of the Fair Work Act 2009 (the Act), for a bargaining order requiring:
2. C2012/2776 - an application by VHIA, under s.587 of the Act, to dismiss the HSU application in B2012/520;
3. C2012/2779 - an application by HSU under ss.589 and 230 of the Act for the making of an interim order that until application B2012/520 is heard and determined the VHIA and the employers respondent to that application shall not take steps under ss.180 and 181 of the Act.
4. B2012/558 - an application by VHIA, under s.248 of the Act, for a single interest employer authorisation.
 All matters, other than B2012/558, were listed before Commissioner Cribb on 24 February 2012, with a substantive hearing set down for 14 March 2012. The application in B2012/558 was also listed on 14 March 2012 and was granted by the Commissioner on that day. 1 During the 14 March 2012 hearing, the VHIA indicated it was prepared to have its other application adjourned,2 with the HSU application for an interim order being dealt with in the hearing. The application for the interim order could not be completed on 14 March 2012 and was relisted on 16 March 2012.
 At the conclusion of the 16 March 2012 hearing, Commissioner Cribb announced an ex-tempore decision, refusing the HSU application for an interim order. On 19 March 2012 the HSU lodged an appeal against that decision. The appeal was heard on 30 March 2012.
 In her decision, the Commissioner:
● Applied, as the principles in determining whether or not to make an interim order - whether there was a serious question to be tried and whether the balance of convenience favoured the granting of the interim order sought. No issue was taken with this approach in the appeal and it is consistent with authority; 3
● Addressed herself to the question of whether there was a serious issue to be tried in respect of the application for the bargaining order, focusing on the requirements of s.230 of the Act; 4
● Indentified the central issue in contention as whether the VHIA has been acting in good faith as a bargaining representative (s.230(3)(a)(i) of the Act), 5 having found that the other requirements for the making of a bargaining order had been satisfied;6
● Addressed the question of whether the VHIA has been acting in good faith as a bargaining representative by reference to s.228(1) of the Act; 7
● Set out “certain factual pegs” from the evidence: 8
● Found, against that factual matrix,
“there was an in-principle agreement reached with the bargaining representative on behalf of employees to be covered by the proposed agreement, and that after there was advice to the VHIA that the HSU’s bargaining representative, with respect to mental health employees, was Mr Williams. The VHIA made an effort to accommodate the changed circumstances that they were presented from the other side of the bargaining table and it would seem to me that from the first draft on 16 December right through until 25 February there was that accommodation. However, as I understand it, the submission was that the VHIA, following consultation with its membership, found that it was not in a position to continue with a proposed agreement if it excluded mental health and that it needed to adhere to the agreement in principle that was reached in November and was the subject of a heads of agreement - November 2011, subject of a signed heads of agreement which included mental health employees.”; 13
● Found that the VHIA, in negotiating the in principle agreement that culminated in a signed Heads of Agreement on 7 November 2011, was entitled to accept that the HSU officer, Ms K Jackson, was the HSU bargaining representative for the proposed agreement; 14
● Found that the VHIA, having attempted to accommodate the changes in coverage of the agreement that had occurred on the HSU side of the table and receiving instructions from their members, were unable to do so and were entitled to go back to the agreement in principle that had been negotiated, it was said, in good faith at that time; 15
● Found that there was an in principle agreement reached in good faith in November 2011 and that the VHIA was entitled to seek adherence to it. 16
 Ultimately, the Commissioner was not satisfied that the VHIA had not met the good faith bargaining requirements as set out in s.228 of the Act and was not persuaded that there was a serious question to be tried. 17 She found that it would make it difficult, absent a serious question to be tried, to find that the balance of convenience favoured the making of the interim orders sought.18
 The appeal is brought pursuant to s.604 of the Act and subject to the permission of Fair Work Australia. 19 It is not suggested that the decision of Commissioner Cribb involves jurisdictional error. The appeal grounds go to the exercise of discretion by the Commissioner. Accordingly, the appeal is to be considered in accordance with the principles of House v The King:20
“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.” 21
 It follows that it is not a matter of the Appeal Bench reaching its own conclusions in relation to the application before Commissioner Cribb. The Appeal Bench will only intervene if satisfied that the decision of the Commissioner - that there was not a serious issue to be tried in relation to whether the VHIA has been acting in good faith as a bargaining representative - reflects error of the House v The King type.
 The approach to a serious issue to be tried for the purpose of interim relief does not require the HSU to show that it is more probable than not that its substantive application would succeed; it is to show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the determination of its substantive application. 22
 We observe that the reasons of Commissioner Cribb were announced, ex-tempore, in a decision at the conclusion of the hearing of 16 March 2012 because of the urgency of the application for interim relief pending a final hearing and determination of the substantive application. The reasons for decision of Commissioner Cribb are to be read in that context. We also observe that the Commissioner was not assisted with the bifurcated approach which appeared to be adopted by the HSU on the day.
 It should also be noted that whilst industry panels are no longer provided for in the Act, the work of Fair Work Australia is still organised within industry panels within which Members have a familiarity with the circumstances of the particular industries with which they deal. In the context of the complex factual circumstances of the current matter, some weight should be afforded to the particular knowledge of Commissioner Cribb of the health industry in Victoria. 23 In both respects some latitude should be afforded to the Commissioner in considering her decision.
 The first ground of appeal was that the Commissioner erred in finding that the 7 November 2011 Heads of Agreement between the HSU and VHIA included mental health employees, in light of the terms of the Agreement: 24 its description, the definitions, background and parties clauses, references to employees formerly covered by HSU Branches (other than the Branch which represents mental health employees), the execution clauses and the capacity in which Ms Jackson executed the Heads of Agreement and the HSU rules. The HSU submitted that on its face there can be no doubt that the Heads of Agreement excluded mental health employees and there could be no doubt that it was, at the very least arguable, that the agreement was confined to employees other than mental health employees. The VHIA contended that the HSU case rested on a narrow legal argument and ignored the evidence as to the industrial deal struck in November 2011, in which the Heads of Agreement was intended to apply to all employees, including mental health employees. It relied on the evidence as to the understanding and intention of the principle negotiators, Mr A Djoneff (for the VHIA) and Ms Jackson, the comparable scope of the existing certified agreement that covered the relevant employees and negotiations between VHIA and HSU East in respect of predecessor agreements.
 On its terms, the Heads of Agreement is as an agreement with HSU East, completing negotiations in respect of all employees “who are eligible to be members of HSU East” and was executed by Ms Jackson as Executive President (of HSU East). The terms of the Heads of Agreement and the HSU rules were relevant matters to consider in determining whether there was a serious question to be tried. In our view, they were material considerations to be weighed by the Commissioner against the evidence as to the negotiation of the Heads of Agreement relied on by VHIA. We do not suggest that the Commissioner failed to have regard to the terms of the Heads of Agreement in finding that it includes mental health employees. However, we do find that the evidence as a whole does not reasonably support a conclusion that there is no basis to find that there is a serious issue to be tried as to the operation of the Heads of Agreement and the Commissioner erred in not finding that the HSU position in respect of the operation of the Heads of Agreement was arguable.
 The Commissioner’s conclusion in respect of the operation of the Heads of Agreement affected other elements of her decision, including VHIA’s reversion to the Heads of Agreement coverage on 25 February 2012.
 In a further appeal ground, the HSU submitted that the Commissioner erred in not finding that the VHIA did not engage in good faith bargaining between 1 December 2011 and 15 March 2012, when, being aware that only named officers of the HACSU were authorised to negotiate on behalf of HSU in respect of mental health employees, the VHIA failed to respond to HSU correspondence seeking information from the VHIA in respect of the scope of proposed agreements affecting mental health employees. 25 The evidence also indicated that the same issues were raised and requests for the same information were made during negotiations between the VHIA and HSU, represented by officers of HACSU, without response.
 In the context of the continuing development of a general agreement which VHIA now proposes to distribute to employees for approval, the failure of the VHIA to respond to requests for information made in correspondence and within concurrent negotiations for an agreement covering mental health employees between the VHIA and the HSU, represented by HACSU officers, raises a serious issue to be tried as to whether the VHIA was engaging in good faith bargaining in its negotiations with the HSU. The Commissioner, in deciding that the HSU case for an interim order did not raise a serious question to be tried, did not expressly deal with this aspect of the VHIA’s conduct in the bargaining with the HSU in respect of mental health employees. In our view, the evidence in relation to that conduct was a material consideration supporting a finding that there was a serious issue to be tried.
 For these reasons, we are satisfied that the decision of Commissioner Cribb reflects error in the House v The King sense in respect of the question of a serious issue to be tried.
 We grant permission to appeal and uphold the appeal.
 For the reasons we have stated in finding that the Commissioner erred in exercising her discretion, we are satisfied that there is a serious question to be tried.
 The making of the interim order will potentially delay the agreement approval process. If the HSU primary application fails, the time will have been wasted and cannot be recovered, resulting in a delay in approval and operation of the Agreement to the detriment of the relevant employers and employees. Against that, if the interim order is not made, the HSU and its members in mental health will be denied the opportunity to have deficiencies in the bargaining in respect of an agreement to cover their employment rectified if the general agreement is put out for approval and approved. We think the balance of convenience favours the making of the interim order so that the status quo may be preserved. The purpose of the interim order is to permit the substantive application before the Commissioner, and any resulting orders, to be considered.
 We find there is sufficient likelihood of success to justify the preservation of the status quo pending the determination of the HSU’s substantive application.
 We will make an interim order [PR522059] that until application B2012/520 is heard and determined or until further order of Fair Work Australia, the VHIA and the employers respondent to that application shall not take steps under ss.180 and 181 of the Act.
 The completion of the hearing before Commissioner Cribb in applications B2012/520 and C2012/2776 is a matter for the Commissioner. We have made provision for the interim order to operate until application B2012/520 is heard and determined or until further order of Fair Work Australia, so that the Commissioner is not constrained from setting aside the interim order in the event of changed circumstances, including steps taken to rectify arguable deficiencies in the bargaining conduct prior to the determination of the
SENIOR DEPUTY PRESIDENT
R Reitano Counsel for the appellant.
F Parry SC with M Felman for the respondent.
1 Transcript of 14 March 2012 before Cribb C, at para 371.
2 Transcript of 14 March 2012 before Cribb C, at para 376.
3 National Tertiary Education Industry Union and University of Sydney Industrial Relations Office, PR951788, at para 8.
4 Transcript of 16 March 2012 before Cribb C, at para 1044.
5 Transcript of 16 March 2012 before Cribb C, at para 1045.
6 Transcript of 16 March 2012 before Cribb C, at paras 1047 and 1052.
7 Transcript of 16 March 2012 before Cribb C, at para 1053.
8 Transcript of 16 March 2012 before Cribb C, at paras 1054-1056.
9 Exhibit R4 before Cribb C.
10 Transcript of 16 March 2012 before Cribb C, at para 1055.
11 Transcript of 16 March 2012 before Cribb C, at para 1056.
12 Transcript of 16 March 2012 before Cribb C, at para 1056.
13 Transcript of 16 March 2012 before Cribb C, at para 1057.
14 Transcript of 16 March 2012 before Cribb C, at para 1058.
15 Transcript of 16 March 2012 before Cribb C, at para 1060.
16 Transcript of 16 March 2012 before Cribb C, at para 1061.
17 Transcript of 16 March 2012 before Cribb C, at para 1062.
18 Transcript of 16 March 2012 before Cribb C, at para 1062.
19 Section 604(1) of the Fair Work Act 2009.
20 (1936) 55 CLR 499, at 504-505.
21 (1936) 55 CLR 499, at 504-505, per Dixon, Evatt and McTiernan JJ.
22 Australian Broadcasting Corporation v O’Neill, (2006) 227 CLR 57 at 65, per Gumnow and Hayne JJ.
23 Media, Entertainment and Arts Alliance and the Australian Broadcasting Corporation, PR957436, at paras 20 and 21.
24 Appeal Book at pp. 592-601.
25 Commencing with the 1 December 2011 letter of Mr Williams at Appeal Book at pp. 306-307.
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