[2015] FWCFB 5585

The attached document replaces the document previously issued with the above code on 22 October 2015.

The appearance list has been updated.

Associate to Vice President Hatcher

Dated 23 October 2015

[2015] FWCFB 5585
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.156 - 4 yearly review of modern awards

Family and domestic violence clause
(AM2015/1)
Family friendly work arrangements clause
(AM2015/2)

VICE PRESIDENT HATCHER
SENIOR DEPUTY PRESIDENT ACTON
COMMISSIONER SPENCER



SYDNEY, 22 OCTOBER 2015

4 yearly review of modern awards – preliminary and jurisdictional issues.

Introduction and background

[1] In a conference on 29 September 2014, as part of the 4 yearly review of modern awards being conducted pursuant to s.156 of the Fair Work Act 2009 (FW Act) the Australian Council of Trade Unions (ACTU) identified two clauses that it sought to include in all 122 modern awards. The first was a domestic violence clause that would provide an employee experiencing family and domestic violence with 10 days per year of paid leave. The second was a family friendly work clause that relates to parental and antenatal leave. A number of employer parties opposed the issues being dealt with as common issues and the Australian Chamber of Commerce (ACCI) and the Australian Industry Group (Ai Group) submitted that any jurisdictional objections to the ACTU claims should be dealt with as threshold matters prior to hearing the substantive claims.

[2] In a Statement issued by the President of the Commission on 1 December 2014, it was determined that the ACTU claims would be dealt with as a common issue and any preliminary and jurisdictional issues would be considered prior to commencing substantive merit proceedings. 1 The ACTU, ACCI and Ai Group were directed to submit draft consent directions including a description of the preliminary and jurisdictional issues to be decided. Agreed draft directions were filed by Ai Group and ACCI on 13 February 2015 identifying four preliminary jurisdictional issues as follows:

[3] On 13 February 2015 the ACTU submitted drafts of the Family and Domestic Violence clause and the Family Friendly Work Arrangements clause which it claimed, and confirmed its position by filing draft determinations reflecting its claim on 2 March 2015. Ai Group, ACCI, the Housing Industry Association (HIA) and the National Farmers’ Federation (NFF) (collectively “employer parties”) subsequently filed submissions addressing the identified preliminary jurisdictional issues. It is important to note that at this stage of the matter the employer parties’ jurisdictional objections went to substantial portions of the Family and Domestic Violence clause and the entirety of the Family Friendly Work Arrangements clause.

[4] In response to these objections, the ACTU filed a submission on 15 June 2015 which attached an amended claim in response to the jurisdictional objections of the employer parties. The ACTU’s amended claim for a Family and Domestic Violence Leave clause was as follows:

[5] The ACTU no longer claimed a Family Friendly Work Arrangements clause; its amended claim instead contained a proposed Parental Leave Clause as follows:

[6] The ACTU’s amended claim had the effect of removing to a substantial degree the employer parties’ jurisdictional objections. At the hearing on 13 August 2015 it became clear that the only remaining jurisdictional objections were to clause X.3.3 of the Family and Domestic Violence Leave clause and clause X.1 of the Parental Leave clause.

FW Act provisions concerning permissible modern award terms

[7] Section 136 of the FW Act identifies terms that may, and must not, be included in modern awards as follows:

[8] Section 137 provides that “A term of a modern award has no effect to the extent that it contravenes section 136”.

[9] Section 139, which falls within Subdivision B of Division 3 of Part 2-3 (that is, the subdivision referred to in s.136(1)(a)) provides:

[10] Section 142, which also falls within Subdivision B, provides:

[11] Section 55 deals with the interaction between the National Employment Standards (NES) and modern awards (as well as enterprise agreements) and, relevantly, provides as follows:

[12] As stated in the note to s.55(7), s.56 provides that “A term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55”.

[13] Section 65, which is a NES provision, provides a right for an employee to request flexible working arrangements in a number of circumstances including where the employee is the parent of, or has the responsibility for the care of, a child who is of school age or younger. As relevant to this matter, it provides:

[14] Section 84, which is also a NES provision, provides for a return to work guarantee for an employee returning to work from unpaid parental leave in the following terms:

Submissions

Employer parties’ submissions

[15] In response to the ACTU’s amended claim, the employer parties (primarily ACCI and Ai Group) made submissions which substantially overlapped and made a number of common points. In relation to the Family and Domestic Violence clause, it was submitted that clause X.3.3, which deals with confidentiality, is not “about” a matter in s.139(1) and is not an incidental or machinery term as permitted by s.142, and therefore cannot be included in a modern award. In relation to the Parental Leave clause it was submitted that clause X.1 would operate to exclude s.65 in that it negated the “right” of an employer under s.65(5) to refuse, on reasonable business grounds, a request by an employee with parental responsibilities for altered working arrangements. The consequence of this was that the proposed provision offended s.55(1), and therefore was not permitted under s.136(2)(b) to be included in any modern award. The Full Bench NES Inconsistencies decision 2, in which it was stated that an award provision which “negated the effect” of a NES provision contravened s.55(1), was cited in support of the submission.3 It was further submitted that clause X.1 could not be characterised as one that was ancillary or incidental to s.84 or supplemented it and was thus permissible under s.55(4). In particular it did not supplement s.84 because it did not add anything to complete it or apply it in a different way; clause X.1 was simply a new “stand alone” entitlement. A provision which operated to exclude the NES - as clause X.1 did with respect to s.65 - could not in any event be an incidental, ancillary or supplementary provision authorised by s.55(4).4 In addition, clause X.1 could cause detriment to employees compared to the NES in certain postulated circumstances, which was submitted to be a further reason why it was not permissible under s.55(4).

ACTU submissions

[16] The ACTU submitted that clause X.3.3 of the Family and Domestic Violence Leave clause was a term that might be included in a modern award pursuant to s.142 of the FW Act because it was incidental to the entitlement in clause X.2 and is essential for the purpose of making the leave entitlement operate in a practical way. In relation to the Parental Leave clause, the ACTU submitted that clause X.1 was an award term permitted by s.139(1)(b), in that it concerned regular part-time employment and the facilitation of flexible working arrangement for employees with family responsibilities, and s.139(1)(h), in that it concerned leave and arrangements for taking leave. Clause X.1 was supplementary to s.84 and thus permissible under s.55(4), because it added an additional return to work right to an employee at the end of a period of unpaid parental leave. The proposed clause did not exclude any employer “right” in s.65(5), because it did not in terms operate with respect to an employee “request” for alternative working arrangements, and left s.65(5) with work to do with respect to any such request. In any event, the NES consisted of a set of minimum employment rights for employees, and to the extent that clause X.1 would give employees a superior right to that in s.65 by removing the capacity of the employer to refuse an employee request on reasonable business grounds, that did not constitute an exclusion of a NES provision. Alternatively, as long as clause X.1 could be characterised as supplementary to s.84, and was therefore permissible under s.55(4), the effect of s.55(7) was that it did not contravene s.55(1), which meant that it was not necessary to determine whether it excluded s.65.

Consideration

[17] There are circumstances where it may be convenient for a court or statutory tribunal to consider applications to strike out claims prior to the final hearing of the matter and before any evidence is received. However the power to do so will only be employed where it is clear that the claim is manifestly groundless and incapable of success. In General Steel Industries Inc v Commissioner for Railways (NSW) 5 Barwick CJ considered the test to be applied in determining whether to exercise powers of summary dismissal:

[18] Where a claim is sought to be struck out on jurisdictional grounds, it must be demonstrated that the existence of jurisdiction to grant the claim is inarguable and that there is no order that could be made in favour of the applicant which would be within jurisdiction. In the NSW Court of Appeal decision in Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd 6 Kirby P (as he then was) said:

[19] As earlier stated, the employer parties do not contend that the whole of the amended ACTU claim should be struck out. Nor do they contend that there is no modern award provision which the Commission can make dealing with the subject matters of the ACTU claim, namely domestic violence leave, antenatal leave and a return to work from parental leave of part-time or reduced hours. Accordingly the determination of the employer parties’ jurisdictional objections to discrete aspects of the amended ACTU will not avoid the need to conduct a final hearing in respect of the ACTU claim. There is no suggestion here of the Commission proceeding to a hearing which it has no authority to conduct. The ACTU would not be prevented by any decision we might make at this juncture from further amending its claim to overcome any jurisdictional difficulties which might be identified by us in a preliminary decision. Nor would the Commission be prevented, after hearing the evidence and submissions at the final hearing of the matter, from granting modern award provisions different in form to those claimed by the ACTU if it is considered such provisions are consistent with the modern awards objective in s.134 of the FW Act and the Commission has the requisite power under the FW Act (subject, of course, to the parties being afforded procedural fairness). That is because the Commission, in the exercise of its modern award-making functions, is obliged to act within the scope of its statutory powers and to discharge its statutory obligations but is not confined by the terms of an application made by a particular party as if it were a pleading before a court.

[20] These matters by themselves indicate that the determination of the employer parties’ jurisdictional objections at this preliminary stage would be premature. In addition however, we are not satisfied that the employer parties have discharged the “heavy burden” of demonstrating that even the discrete aspects of the amended ACTU claim which they have challenged are, in jurisdictional terms, without legal foundation.

[21] Without hearing the evidence, we would not be prepared to conclude that clause X.3.3 of the proposed Family and Domestic Violence Leave clause is beyond jurisdiction. It was accepted by the employer parties that the substantive provisions of the Family and Domestic Violence Leave clause, which would establish an entitlement to 10 days per year domestic and violence leave to be taken for specific identified purposes, were authorised by s.139(1)(h) as terms which could be included in a modern award because they were about “leave”. We consider that if there was evidence demonstrating that the confidentiality requirement in clause X.3.3 was necessary in order for the proposed leave entitlement to operate effectively (for example because without confidentiality employees might not be prepared to disclose anything about domestic violence incidents and thus would not be able to access the entitlement), it would be reasonably arguable that clause X.3.3 was authorised by s.139(1)(h) as a term which was about “leave” or “arrangements for taking leave” and/or by s.142(1) as “incidental to a term that is permitted … to be in the modern award” and “essential for the purpose of making a particular term operate in a practical way”.

[22] The employer parties’ challenge to the jurisdictional foundation for clause X.1 of the ACTU’s proposed Parental Leave clause was, we acknowledge, a substantial one. However we are likewise not satisfied at this preliminary juncture, without having heard any evidence, that clause X.1 is clearly beyond power. Firstly, we consider that it is well arguable that the clause is authorised by s.139(1)(b) as a term which is about “regular part-time employment … and the facilitation of flexible working arrangements, particularly for employees with family responsibilities”.

[23] Secondly, we consider that it is reasonably arguable that clause X.1 is supplementary to the right in s.84, in that it builds upon the employee’s right to return to work after taking parental leave to the employee’s pre-parental leave position or another available position for which the employee is qualified and suited and which is nearest in status and pay to the pre-parental leave position by adding a right to return to such a position on part-time hours or reduced hours. We are not persuaded at this point that the proposed clause would be detrimental to employees when compared with the NES in any respect, with the result that we consider that it is reasonably arguable that the clause is authorised by s.55(4).

[24] Thirdly, we consider that it is reasonably arguable that the effect of s.55(7) is that a modern award term which, under s.55(4), is supplementary to a NES provision and does not result in any detriment to an employee when compared to the NES as a whole, does not contravene s.55(1) even if it excludes some other provision of the NES. If so, clause X.1 would be a permissible modern award term even if it excludes s.65(5).

[25] Finally and in any event, we consider that the evidence may potentially bear upon the question of whether clause X.1 would, in practical terms, operate to exclude s.65(5). For example, the evidence may demonstrate the extent to which employees returning from parental leave, who would be in a position to take advantage of the proposed right in clause X.1, currently make requests for alternative working arrangements of the type contemplated by clause X.1 and thus are subject to the employer’s right to refuse the request on reasonable business grounds. Arguably, any such evidence might go to whether clause X.1 in its operation would result in an outcome whereby s.65(5) was negated.

Conclusion

[26] Because we are not satisfied that the impugned aspects of the ACTU’s amended claim lack an arguable legal foundation, we are not prepared at this stage of the proceedings and without having heard any evidence to strike out those parts of the ACTU’s amended claim. The matter will proceed to a final hearing before a Full Bench of this Commission. We emphasise that in reaching this conclusion we have not formed any final view about the employer parties’ jurisdictional objections. Nor of course is anything we have stated in the decision to be taken as indicating any view about the merits of the ACTU’s amended claim - in particular whether it would meet the modern awards objective in s.134(1).

al of the Fair Work Commission with the memeber's signature.

VICE PRESIDENT

Appearances:

N. Ward for the Australian Chamber of Commerce and Industry, New South Wales Business Chamber Limited, Australian Business Industrial, Australian Hotels Association, National Retail Association, Business SA, Chamber of Commerce and Industry Western Australia and Master Builders Australia.

S. Smith for the Australian Industry Group.

M. Adler for the Housing Industry Association.

O. Valaire for the Master Plumbers Association.

L. Svendsen for the Health Services Union.

S. Maxwell for the Construction, Forestry, Mining and Energy Union.

F. Knowles of counsel with G. Starr for the Australian Council of Trade Union and the Textile, Clothing and Footwear Union of Australia.

M. Rizzo for the Australian Municipal, Administrative, Clerical and Services Union.

J. O’Dwyer for the Electrical Communications Association Queensland, Industrial Union of Employers.

Hearing details:

2015.

Sydney:

13 August.

 1   [2014] FWC 8583 at [29]

 2   4 yearly review of modern awards—Alleged NES Inconsistencies [2015] FWCFB 3023

 3   Ibid at [37]

 4   Ibid at [37]

 5   [1964] HCA 69; (1964) 112 CLR 125 at 128-9

 6   (1991) 28 NSWLR 443 at 446-7; (1991) 39 IR 169 at 170-1

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