Fair Work Act 2009
s.604—Appeal of decision

Appeal against decision [[2016] FWC 3538] of Commissioner Bissett at Melbourne on 6 June 2016 in matter number C2016/2447.

[1] On 6 June 2016, Commissioner Bissett issued a decision 1 (Decision) pursuant to s.739 of the Fair Work Act 2009 (FW Act) which found that had Monash College Pty Ltd (Monash College/Appellant) acted in accordance with the provisions of the Monash College Proprietary College Ltd (Monash University Foundation Year Teaching Staff) Agreement 2012 (the Agreement), it would have appointed some 35 of its Monash University Foundation Year (MUFY) teachers on an on-going basis with Monash College.2 The Commissioner found that the parties should consult to give effect to this decision.3

[2] On 15 June 2016, Monash College applied for a stay of the Decision on the basis that the Commissioner erred in construing clause 9.6 of the Agreement, and subsequently erred in finding that 35 MUFY teachers would have been appointed on an on-going basis in the event that Monash College had acted in accordance with the provisions of the Agreement. Vice President Catanzariti heard the parties on 21 June 2016 in relation to the stay application, and made a decision to grant the stay. 4

[3] At the hearing on 14 July 2016, Mr Bourke of Queen’s Counsel sought permission to appear for Monash College and Mr White of Counsel sought permission to appear for the Independent Education Union (IEU/Respondent). Given the complexity of the matter, and having regard to s.596 of the FW Act, permission was granted to both parties to be represented.

Background

[4] The relevant background to the dispute is provided in the opening paragraphs of the Decision:

“[16] The Monash University Foundation Year (MUFY) provides a pathway to university by providing international students from countries that do not have recognised final year school results and provide a qualification recognised for the purpose of entry into an Australian university. This particular program was, until some years ago, run by Taylors College. Monash College took over the running of the program in mid-2011.

[17] The MUFY program is run in three formats – a standard format consisting of two semesters of study, an intensive format of 1 ½ semesters and an extended format of three semesters. Student intakes for the MUFY course occur in January (for the standard course), March (for the intensive and extended course), July (standard course) and September (intensive and extended courses).

[18] There are currently some 80 MUFY teachers in the College (some of whom are engaged on a part-time basis). Those employed prior to 2015 were engaged on an on-going basis.

[19] Since 2015 it has been the practice of the College to employ MUFY teachers on fixed-term contracts. The fixed-term contracts run for, at most, one year. Any MUFY teacher re-engaged following the expiration of their fixed-term contract has been re-employed on a further fixed-term contract.

[20] There are currently 77 MUFY teachers, 35 of whom are employed on fixed-term contracts. The contracts the 35 staff are currently on commenced in late 2015, January 2016 or March 2016. Of the 35 staff the majority had a previous fixed-term contract immediately prior to their current contract.”

[5] Pursuant to clause 9.2 of the Agreement, a teacher who is employed for a fixed-term must have explained, in their letter of engagement, the reason for their appointment. Clause 9.2 of the Agreement says:

“9.2. A Teacher, other than a casual relief Teacher will be provided with a letter of appointment upon engagement which will detail the commencement date (and termination date if employment is for a fixed-term), the duties, employment status (ie: on-going, full time, part time and/or fixed-term), salary, hours of attendance, and if appointed on a fixed-term basis, the reasons for the fixed term appointment.”

[6] Clause 9.6 of the Agreement provides the reasons for which a teacher may be employed for a fixed-term and states as follows:

“9.6. A Teacher may be employed for a fixed period of time up to 12 months for the following reasons:

a. specific tasks or projects, where the period of engagement is reasonably ascertainable at the time of appointment

b. specific activities, where there is no reasonable certainty that there will be work for the Teacher on a continuing basis

c. to meet peak student enrolments

d. replacement of a current teacher

(i) on an approved period of leave (eg: parental leave, long service leave);

(ii) or undertaking a temporary assignment or secondment elsewhere with the Employer or with another organisation;

(iii) appointment to a vacant position whilst a new Teacher is recruited to that position and;

(iv) appointments to positions in new business activities, where the continuation or future of the activity is not certain (eg: introduction of a new course, pilot of a new activity).”

[7] The IEU submitted at first instance that the contracts of 22 of the 35 teachers employed for a fixed-term did not have included the reason it was that the teachers were employed on such contracts and that as a result, those contracts did not comply with clause 9.2 of the Agreement. 5

[8] The Commissioner reached the following conclusions with regards to clause 9.2 and clause 9.6 of the Agreement:

• All of the 35 teachers employed on a fixed-term basis were employed in contravention of clause 9.6 of the Agreement 6; and



• The failure to specify the reason for the fixed-term engagement for 22 of the teachers was in contravention of clause 9.2 of the Agreement. 7

[9] Having reached these findings, the Commissioner turned her mind to what relief could be provided in light of what she concluded was the non-compliance of the Agreement on the part of Monash College. The Commissioner thought that the circumstances of the case were not dissimilar to an earlier case before Commissioner Roe and said:

“[108] In NTEIU v University of Melbourne Roe C considered circumstances not dissimilar to those before me (albeit he was dealing with a single applicant and not 35 effected employees). The arguments against remedy sought by the NTEU in that matter are not different to those put here.”

[10] After quoting the reasons of Commissioner Roe in NTEIU v University of Melbourne 8 (University of Melbourne) the Commissioner said:

“[109] This decision is on point to the matters I am asked to decide. I respectfully adopt the reasoning and conclusions of Roe C. I need make no exception and do not repeat the general observations he makes.

[110] In this matter I am satisfied that there is nothing in the Agreement that would be inconsistent with imposing continuing contracts in place of the ill-founded fixed-term contracts provided to 35 MUFY teachers. The Agreement has as a principle that the College be an employer of choice and that the College is committed to maximising on-going employment. My decision is not discordant with these principles in the Agreement but, in fact, is aligned to those statements.

[111] There is no reason to assume that, had fixed-term contracts not been available, the College would not have otherwise employed the teachers. I am satisfied that, had the College not employed the MUFY teachers on fixed-term contracts it would have employed them on on-going contracts. Clearly it requires the teachers. The student demand is there and it renewed many of the contracts in late 2015 and entered into additional contracts in early 2016.

[112] In any event the MUFY teachers are currently employed by the College. Nothing can undo that fact. Some have been employed on successive contracts for in excess of a year. They are performing work for the College and are entitled to have the terms of the Agreement properly applied to them. I do not seek to do anything about the terms of their contracts but I do say that those contracts do not reflect the requirements of the Agreement.”

[11] The Commissioner determined that the existing fixed-term staff should have been appointed on an on-going basis at Monash College and instructed the parties to consult to give effect to her Decision. 9

The Appeal

[12] The appeal concerned what the Appellant alleged were four crucial errors in the Commissioner’s Decision. Firstly, the Appellant contended that the Commissioner wrongly determined that each and every one of the 35 fixed-term teachers were not permitted to be appointed under fixed-term contracts. Secondly, the Appellant contended that in the Commissioner’s reasoning path in determining that each and every one of the fixed-term teachers would have been appointed as on-going employees if Monash College knew it could not appoint such persons on fixed-term contracts, the Commissioner erred in her fact-finding task. Thirdly, the Appellant contended that a determination that each of the 35 fixed-term contracts would, as from the date of their contracts, be now treated as being on-going contracts was a determination that was without precedent and was beyond the power of the Commission. Fourthly, the Appellant contended that if the source of power for such a drastic determination did exist (which the Appellant disputes), the discretion to make such an order miscarried.

[13] We are of the view that the second, third and fourth alleged errors, which concern the Commissioner’s determination that the relevant teachers are to be treated as being employed under on-going contracts, are at the heart of the dispute. As such, we do not feel that it is necessary to reach a determination on the first error alleged by the Appellant and have confined our consideration of the parties’ submissions to the second, third and fourth alleged errors.

Appellant’s Submissions

[14] The Appellant submitted that the Commissioner erred in determining that she had the power pursuant to s.739 of the FW Act to in effect convert 35 fixed-term contracts into contracts for on-going employment. The Appellant posited that to the extent that the Commissioner relied upon Commissioner Roe in University of Melbourne to reach her determination the decision was wrongly decided.

[15] The Appellant contended that on top of this, such a radical approach is contrary to the history of industrial relations in Australia where the regulatory regime established under the FW Act is separate from and independent of the ordinary law of contract. The Appellant relied on the observations of McHugh J in argument in Byrne v Australian Airlines 10 to make this assertion.

[16] The Appellant posited that the determination reached by the Commissioner is more striking as it seeks without the agreement of the parties to in effect change the nature of the contracts from fixed-term to on-going contracts. The Appellant contended that this determination has retrospective effect and should be quashed.

Respondent’s Submissions

[17] In relation to the Appellant’s submissions that the Commissioner acted beyond power, the Respondent posited that the determination made by the Commissioner is no more than the application of the interpretation of the Agreement to the employment of the 35 fixed-term teachers. The Respondent further contended that regardless of any other forms of provision of teaching services that the Appellant might have adopted, the Appellant employed the 35 fixed-term teachers in circumstances where the criteria enabling them to do so set out in clause 9.6 had not been met. The Respondent posited that with this criteria not being satisfied, the only other basis for the employment of those 35 teachers were as full time or part time teachers.

[18] The Respondent posited that the Appellant is in error to contend that the contracts are changed with retrospective effect. The Respondent submitted that the only obligation imposed on the parties by the Commissioner was that they should consult to give effect to the Decision. The Respondent posited that such consultation could have dealt with the desire of the parties as to their on-going contractual relationship but, importantly, the determination of the Commissioner did not change those contractual relationships. The Respondent refers to paragraph [112] of the Commissioner’s Decision to posit that the Commissioner specifically stated that she did not seek to do anything about the terms of the contracts of the 35 teachers. The Respondent contended that there is no order but rather a determination as to what would have been the position had the Appellant complied with the terms of the Agreement at the time that it employed the 35 teachers.

[19] The Respondent relied on CFMEU v AIRC 11 to contend that the Commission’s power to arbitrate disputes and make determinations is not constrained by the constitutional powers invested in the Commission by the Act.12 The Respondent posited that a determination that employees were employed in circumstances where criteria permitting employment of fixed-term teachers did not exist is clearly a determination within the bounds of the Agreement. The Respondent contended that the reasons of Commissioner Roe in University of Melbourne are correct.

[20] In relation to the Appellant’s contention that the Commissioner erred in finding that the college would have employed the teachers on on-going contracts, the Respondent submitted that the Commissioner correctly assumed that the College required teachers to perform the work that the 35 fixed-term teachers were employed to perform and that the Commissioner’s findings must be understood in that context. The Respondent posited that further and in any event, being faced with the employment of the 35 employees and the obligations imposed by the Agreement, it cannot be argued that the determination made by the Commissioner was plainly unjust or unreasonable.

[21] The Respondent contended that the determination made by the Commissioner imposes no long term obligation on Monash College and, to the extent that the determination might be put into effect in the way contemplated by the Appellant, the determination merely provides the 35 fixed-term teachers with the benefits of permanent employment. The Respondent submitted that to the extent that the determination has the effect alleged by the Appellant, the employees and the employer are in no better or worse position than the other full time teachers employed pursuant to the Agreement.

[22] In light of the above submissions, the Respondent submitted that the Decision is a standard dispute resolution process and that permission to appeal and, in the alternative, the appeal, should be dismissed.

Consideration – permission to appeal

[23] The Commission will grant permission to appeal only if it is in the public interest to do so. 13 The test of assessing whether the public interest is enlivened is discretionary, involving a broad value judgement.14 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,15 the Full Bench summarised the test for determining the public interest as follows:

“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]

[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”

[24] Otherwise, the grounds for granting permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused. 16

[25] In determining whether permission to appeal should be granted we have read and considered all material filed by the parties including all submissions, correspondence and relevant authorities.

[26] We find that permission to appeal should be granted in this matter. We are of the view that the appeal raises important questions concerning the interpretation of enterprise agreements in circumstances where the Commission’s discretion to alter existing employment contracts is an issue in the dispute. We consider this to be an important matter with regards to the Commission’s approach to enterprise agreements and that therefore, the dispute arising in this case is a matter of public interest. It is on this basis that permission to appeal is granted.

Consideration – the appeal

[27] We note that a Decision under appeal is of a discretionary nature and such a Decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. We note that it is not open for us to substitute our view on the matters that fell for determination before the Commissioner in the absence of error of an appellable nature in the Commissioner’s original Decision. As the High Court said in House v The King 17:

“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.”

[28] The Respondent submitted that the Commissioner did not err in concluding that had the College not employed the teachers on fixed-term contracts it would have employed them on on-going contracts. The evidence of Ms Joanne Mithen, the Chief Executive Officer of the college included sworn evidence on this matter. In relation to Ms Mithen’s evidence, the Commissioner said:

“[93] With respect to the reasons given by Ms Mithen as to why she decided 35 teachers should be engaged on a fixed-term basis, for the reasons given above in my consideration of clause 9.6(b) I do not accept that the teachers were employed to perform specific activities where there was no reasonable certainty of on-going work or that it has been objectively demonstrated that, at the time of engagement of each fixed-term employee, there was a known peak in student demand.” 18

[29] In her witness statement, Ms Mithen said:

“In the event all current fixed term staff are deemed to be ongoing employees, given the profound impact this will have for the running of the MUFY business, and the impact that this will have on our loss of flexibility in managing staffing requirements, if I had known that this eventuality could have occurred, I would not have appointed any of these teachers on fixed-term contracts. I would have considered that the risk that these appointments may subsequently be deemed to be on-going employees as unacceptable to the business.” 19 (emphasis added)

[30] Furthermore, Ms Mithen said:

“I would not have exposed the business to the risk of having to manage teaching staff that may be excess to requirements, and also the risk in terms of the expense and impact on staff morale in the event that we were forced to engage in redundancies to avoid carrying excess staff. If I had known that this risk could eventuate in respect of the fixed term appointments, where additional staff were required, I would have been forced to engage a staffing agency to directly supply teaching staff in circumstances where such additional staff would not become employees of the College.” 20

[31] It follows that Ms Mithen’s evidence reveals that Monash College would not have employed the relevant teachers on on-going contracts of employment in the event that all fixed-term employees are deemed to be on-going employees. We see no reason not to accept her evidence on the material before us. On top of this, Mr Charles Taylor, one of the two Heads of Studies, gave evidence that at the time of the appointment of 13 of the teachers, there was no “reasonable certainty that there would be work” for a period of six to twelve months, let alone on a continuing basis. 21 Similarly, Ms Janene Chase, the other Head of Studies, gave evidence which similarly found that there was no reasonable certainty of work on an on-going basis for 21 teachers.22

[32] The weight of evidence provides no support for the conclusion that Monash College would have employed the relevant 35 teachers on an on-going basis. The Appellant’s contention that Monash College did not intend to employ the relevant 35 teachers on an on-going basis is consistent with the evidence. As such, we are of the view that the Commissioner, by determining that the evidence of Ms Mithen and others indicates that Monash College would have employed the relevant teachers on on-going contracts if it had not employed them on fixed-term contracts, mistakenly construed the evidence in her Decision.

[33] We have considered all of the submissions, evidence and authorities filed by the parties. We are of the view that the weight of the evidence of Ms Mithen, Mr Taylor, Ms Chase and others indicates that Monash College did not intend to employ the 35 teachers on an on-going basis, contrary to the findings of the Commissioner. It follows that the Commissioner mistakenly construed the evidence before her in arriving at the determination that she reached. We are therefore of the view that the Commissioner made an error in accordance with House v The King in exercising her discretion.

[34] The Respondent contended that the Appellant did not engage with or attack the Commissioner’s reliance on the decision of Commissioner Roe in University of Melbourne. 23 This submission is mistaken because the Appellant expressly submitted in writing that to the extent that the Commissioner relied upon Commissioner Roe’s approach, the decision was wrongly decided.24 In University of Melbourne, Commissioner Roe found on the evidence before him that it was most likely that had the University of Melbourne been required to act in accordance with the relevant Agreement, the applicant in that case, a single employee, would have been appointed on an on-going basis. Commissioner Roe refrained from ordering the parties to give effect to this finding, and instead directed the parties to:

“discuss the most appropriate resolution to the dispute in light of this decision and the findings I have made.” 25

[35] Commissioner Roe did not order the alteration of the employment contract to retrospectively become a contract of on-going employment. While the Respondent contended that the determination of the Commissioner at first instance did not retrospectively alter the contracts of the 35 relevant teachers, we are of the view that the Commissioner, by finding that “the commencement date of the on-going employment would have been the commencement date of any contracts that existed”, 26 in effect retrospectively transformed the contracts into contracts for employment on an on-going basis.

[36] It follows that the approach of Commissioner Roe in University of Melbourne does not provide support for the contention that the Commission has jurisdiction to retrospectively alter the contracts of 35 employees. Furthermore, we agree with the Appellant’s submissions that the jurisdiction for such a determination is not provided for in the FW Act or in the Agreement. We are therefore of the view that the jurisdiction for the determination that the Commissioner found to be appropriate is not supported in preceding decisions of the Commission, nor is it provided for in the FW Act or in the Agreement that is relevant to this dispute. As such, we are not satisfied that the Commissioner had the jurisdiction to arrive at the determination that she reached. We are of the view that this constituted an error in accordance with House v The King.

[37] In light of the above consideration of the parties’ submissions and having considered the relevant principles of law, we are of the view that the Appellant has demonstrated errors within House v The King in the second, third and fourth errors that it submitted were involved in the Commissioner’s decision. As such, we are of the view that the Commissioner did not properly exercise the discretion which is vested in the Commission. We are therefore satisfied that the appeal should be upheld and that the original Decision must be quashed.

Conclusion

[38] Permission to appeal is granted.

[39] The appeal is upheld.

[40] The Decision is quashed.

VICE PRESIDENT

Appearances:

Mr J. Bourke of Queen’s Counsel for the Appellant

Mr E. White of Counsel for the Respondent

Hearing details:

10am
14 July 2016

Melbourne.

 1   [2016] FWC 3538.

 2   Ibid, 117.

 3   Ibid, 118.

 4   [2016] FWC 4065.

 5   Ibid, n 1, 24.

 6   Ibid, n 1, 99.

 7   Ibid.

 8   [2012] FWA 1202.

 9   Ibid, n 1, 118.

 10   (1995) 185 CLR 410.

 11   (2001) 203 CLR 645.

 12   Respondent’s Submissions, paragraph 48.

 13   Fair Work Act 2009 (Cth) s 604(2).

 14   Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210 at [6].

 15   [2010] FWAFB 5343 at [27].

 16   Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210 at [7].

 17   [1936] HCA 40.

 18   Ibid, n 1, 93.

 19   Appeal Book, page 518, paragraph 88.

 20   Ibid, paragraph 89.

 21   Ibid, page 553, paragraph 74.

 22   Ibid, tab R.

 23   Transcript, PN328.

 24   Appellant’s Submissions, paragraph 39.

 25   Ibid, n 6, 88.

 26   Ibid, n 1, 117.

Printed by authority of the Commonwealth Government Printer

<Price code {C}, PR583009>