Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [2017] FWCA 2940 of Commissioner Gregory at Melbourne on 30 May 2017 in matter number AG2017/1795 – failure to serve application for approval of enterprise agreement on a bargaining representative – denial of natural justice – decision quashed – matter referred to single member for hearing of application for approval.

[1] The National Union of Workers (“NUW”) has appealed a decision of Commissioner Gregory (“Decision”) 1 approving the Sigma (Berrinba) Enterprise Agreement 2017 (“Sigma Berrinba EA”).

[2] At the hearing of the appeal on 26 July 2017, Ms K. Sheehan appeared on behalf of the NUW and Mr J.W. Merrell, of Counsel, sought permission to appear for Sigma Company Limited (“Sigma”). Given the complexity of the matter, and noting the NUW did not make any objections, permission was granted to Sigma to be represented pursuant to section 596 of the Act. We subsequently quashed the Decision and informed the parties that we would publish our reasons in due course. These are our reasons.

The Appeal

NUW’s submissions

[3] The NUW relies on five grounds of appeal, but it is only necessary for us to deal with the first ground of appeal.

[4] The NUW contended that the Commissioner erred in approving the Sigma Berrinba EA in circumstances where the NUW was involved in the agreement making process as a bargaining representative, but had not been informed that Sigma had applied to the Commission for approval of the Sigma Berrinba EA.

[5] The undisputed facts relevant to this ground of appeal are as follows:

• On 27 April 2017, the NUW was appointed as the bargaining representative of one employee, Mr Lawrence, who was covered by the proposed Sigma Berrinba EA;


• On 16 May 2017, Mr Lawrence revoked his appointment of the NUW as his bargaining representative and appointed himself as his bargaining representative. The NUW was not a bargaining representative for any other employee covered by the proposed Sigma Berrinba EA;


• On 19 May 2017, a majority of employees who cast a valid vote approved the proposed Sigma Berrinba EA. The NUW was aware the vote was taking place on that day;


• On 22 May 2017, Sigma lodged in the Commission its application to have the Sigma Berrinba EA approved. On the Form F16 – Application for approval of an enterprise agreement, in response to question 4.1 which asks were there any employee organisations (unions) involved in the agreement making process as bargaining representatives, Sigma answered “No”;


• Sigma did not serve a copy of its application for approval of the Sigma Berrinba EA on the NUW;


• On 30 May 2017, the Sigma Berrinba EA was approved by the Commissioner. As is usually the case when there is no opposition to an application for approval of an enterprise agreement, the Commissioner dealt with the application for approval of the Sigma Berrinba EA in chambers and did not hold a hearing; and


• The NUW did not know that the application for approval of the Sigma Berrinba EA had been lodged in the Commission until after the Sigma Berrinba EA had been approved.

[6] Relevant to the NUW’s first ground of appeal is whether Sigma was required to serve its application for approval of the Sigma Berrinba EA on the NUW.

[7] The relevant service rule required Sigma to serve a copy of its application for approval of the Sigma Berrinba EA on “each employee organisation that was a bargaining representative and any other employee bargaining representative of whom the applicant is aware”. 2 There is an issue of construction in relation to this service rule. In particular, whether the service rule requires an applicant to serve a copy of its application for approval of an enterprise agreement on:

(a) Each employee organisation that was, at any time, a bargaining representative, as contended for by the NUW; or

(b) Each employee organisation that was a bargaining representative at the time the application was lodged, or alternatively at the time the enterprise agreement was made, as contended for by Sigma.

Sigma’s submissions

[8] As to the purpose of the service rule concerning an application for approval of an enterprise agreement, Sigma submitted that the rules must be construed as a whole and in the context of the other rules including rule 24(3) of the FWC Rules, which provides as follows:

“If the agreement is not a greenfields agreement, each employee organisation that is a bargaining representative and wants to advise the Commission about whether the organisation:

(a) supports approval of the agreement; or

(b) agrees with one or more statements in a declaration made by an employer under subrule (1);

must lodge a statutory declaration by an officer or authorised employee of the organisation before the Commission approves the agreement.”

[9] Sigma submitted that the reference in rule 24(3) to “each employee organisation that is a bargaining representative” (our emphasis) is telling. Sigma contended that the use of the present tense (“is”) suggests that the purpose of the service rule is to ensure that all bargaining representatives who remain bargaining representatives at the time the application for approval of the enterprise agreement is lodged in the Commission have an opportunity to be heard and to lodge a statutory declaration in accordance with rule 24(3) of the FWC Rules. We do not accept that the purpose of the service rule is so confined.

Consideration – Permission to Appeal

[10] The Commission will grant permission to appeal if it is in the public interest to do so. 3 The test of assessing whether a matter is in the public interest is discretionary and involves a broad value judgement.4 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,5 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.”

[11] Alternately, the second ground for granting permission to appeal is that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused. 6

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

[13] 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 proper construction of rule 24(3) of the FWC rules, which requires an applicant for approval of an enterprise agreement to serve the application on, inter alia, “each employee organisation that was a bargaining representative”. We consider this to be an important matter and, 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

[14] In CFMEU v Collinsville Coal Operations Pty Ltd, 7 a Full Bench of the Commission considered the proper construction of the phrase “an employee organisation that was a bargaining representative for the proposed enterprise agreement” in the context of section 183(1) of the Act. We agree with the following reasoning of the Full Bench in Collinsville in relation to this issue:

“[27] Section 183 provides as follows:

183 Entitlement of an employee organisation to have an enterprise agreement cover it

(1) After an enterprise agreement that is not a greenfields agreement is made, an employee organisation that was a bargaining representative for the proposed enterprise agreement concerned may give the FWC a written notice stating that the organisation wants the enterprise agreement to cover it. (our emphasis)

(2) The notice must be given to the FWC, and a copy given to each employer covered by the enterprise agreement, before the FWC approves the agreement.

Note: The FWC must note in its decision to approve the enterprise agreement that the agreement covers the employee organisation (see subsection 201(2)).”

[28] The CFMEU submitted that s.183 operates so that an employee organisation that was at any time during the bargaining for a proposed agreement a bargaining representative of an employee, is entitled to give notice that it wants to be covered by the agreement. This is said to be so even if at the time the notice is given the employee organisation is no longer a bargaining representative. Consequently as the CFMEU was a bargaining representative for Employee 2 at least during that period before Employee 2 appointed himself as a bargaining representative, it was entitled to give notice and the Senior Deputy President erred in concluding otherwise. The ACTU was given permission to make submissions on appeal and supported the CFMEU’s construction.

[29] Collinsville submitted that s.183 should be interpreted so that an employee organisation would only have standing to provide written notification if it was a bargaining representative for the proposed Agreement at the time the agreement was made. It submitted that a contrary construction would lead to improbable and irrational results in that an employee who evinced an intention that an employee organisation not be a bargaining representative by appointing the employee or someone else as a bargaining representative would have the wish contradicted by the capacity of the employee organisation to later be covered by the Agreement. It submitted that once an employee takes the step under section 176(1)(c) to appoint another person as a bargaining representative of that employee for the proposed agreement, or revokes the status of an employee organisation as a bargaining representative in accordance with section 178A(2), the employee organisation ceases to have any standing or rights in relation to the bargaining process, including the right to give notice under section 183. The Australian Industry Group was also given permission to make submissions on the appeal and supported Collinsville’s construction.

[30] Although an employee organisation must have been a bargaining representative for the proposed agreement that ultimately produced the agreement made, we do not think the narrow operation of s.183 posited by Collinsville is correct, for the following reasons.

[31] Textual and contextual considerations weigh against the construction. The language of s.183 suggests that the employee organisation need not be a bargaining representative when notice is given. This is evident by the use of the verb “was”, which in the present context is used in the third person singular past tense.

[32] If it was intended to limit the capacity of a bargaining representative to give notice under s.183 to circumstances in which the bargaining representative held that capacity at the time an agreement was made or at the time the notice is given, one would expect the provision to say so. The words “was a bargaining representative for the proposed agreement concerned” are not qualified in the manner suggested by Collinsville and the construction proposed would need those words to be read into the provision.

[33] Further the use of the words “was a bargaining representative for the proposed enterprise agreement” to describe the capacity in which an employee organisation may give notice under s.183, is not explained by the fact that an agreement has been made and so the role of the bargaining representative has ended. The FW Act envisages a continued role for bargaining representatives after an agreement is made. Bargaining representatives have standing to apply for an agreement that has been made to be approved by the Commission and in considering whether to accept an undertaking the Commission must not accept an undertaking unless it has sought the views of each person who the Commission knows “is a bargaining representative for the agreement”. The change in the language from “bargaining representative for the proposed agreement” in the sections of the FW Act dealing with preapproval stages (ss.173-182) to “bargaining representative for the agreement” in the sections which follow (when an agreement is made), for example s.185, is explained by the fact that when an agreement is made it is no longer proposed.

[34] Where the legislature intended that a particular state of affairs be apparent at a particular time it has expressly said so by use of a temporal connection. For example, s.172(2)(a) provides that an enterprise agreement may be made with “the employees who are employed at the time the agreement is made and who will be covered by the agreement”. The same formulation is used in relation to multi-enterprise agreements. Similarly s.181(1) provides that an employer that will be covered by a proposed enterprise agreement may request “the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it”. There is nothing particularly significant about an employee organisation having been a bargaining representative for the agreement when an agreement was made for the purposes of s.183. In our view the language of s.183 recognises that an employee organisation may have ceased to be a bargaining representative for a proposed agreement at some point prior to an agreement being made but nevertheless retaining a right to give notice that it wants to be covered by the agreement.

[35] Coverage by an agreement gives the person covered certain rights beyond the terms and conditions of the agreement. A person covered by an agreement may apply for the approval of a variation or for the termination of the agreement, or for orders in relation to a contravention of the agreement. Section 183 is therefore the vehicle through which important rights may be conferred on an employee organisation. In our view the narrow operation of s.183 argued by Collinsville should not be adopted absent express language to that effect.

[36] Fifthly, there is nothing in the language of s.176 which is suggestive of the appointment by an employee for whom an employee organisation is a default bargaining representative for a proposed agreement, of another person as bargaining representative for that agreement, has the effect that the employee organisation never had the status of bargaining representative for the proposed agreement. This is true also of s.178A. If that were the intended operation of those sections then one would expect to find such an intention given expression in those sections.

[37] When read in context the reference to “was a bargaining representative for the proposed agreement” in s. 183 does not operate in the narrow manner suggested by Collinsville. We think it is sufficient for a valid notice to be given under s.183 that an employee organisation was at some point a bargaining representative of an employee for the proposed agreement for which approval of the Commission is sought.

[38] It does not follow however that the capacity of an employee organisation, which is no longer a bargaining representative, to give notice under s.183, results in the organisation having standing to make submissions or to otherwise be heard in opposition to an application approval of an agreement. Section 183 is of limited utility. It serves only to alert the Commission to the fact that an employee organisation that was a bargaining representative for the proposed agreement now wishes to be covered by the agreement. The result of a valid notice under s.183 is that the employee organisation will be noted in the decision approving the agreement as being covered by the agreement.” (references omitted)

[15] Although the Full Bench in Collinsville was considering the proper construction of the phrase “an employee organisation that was a bargaining representative for the proposed enterprise agreement” in the context of section 183(1) of the Act, which is quite different from the service rule we are considering in this appeal, much of the reasoning adopted by the Full Bench in Collinsville in relation to section 183 of the Act is apposite to our construction of the relevant service rule. In particular:

(a) The language of the service rule suggests that the employee organisation need not be a bargaining representative when the application for approval of the enterprise agreement was lodged. This is evident by the use of the word “was”, which in the present context is used in the third person singular past tense;

(b) If it was intended to limit the category of bargaining representatives on whom an application for approval of an enterprise agreement had to be served to bargaining representatives who held that capacity at the time an agreement was made or at the time the application for approval was lodged, one would expect the rule to say so. The words “was a bargaining representative” are not qualified in the manner suggested by Sigma and the construction proposed would need those words to be read into the rule; and

(c) Where the legislature and maker of the rules intended that a particular state of affairs be apparent at a particular time, it has expressly said so by use of a temporal connection.

[16] A person that is a bargaining representative at the time an application is lodged for approval of an enterprise agreement has standing to be heard in relation to the application for approval. 8 Although a person who was a bargaining representative at some point in the bargaining process, but ceased to be a bargaining representative prior to the lodgement of the application for approval of the enterprise agreement, does not have an automatic right to be heard in relation to an application for approval of an enterprise agreement,9 the person can request the member considering the application for approval of the enterprise agreement to exercise his or her discretion under section 590 of the Act to be heard in relation to the application.10 Further, such a person is entitled to be given a proper opportunity to develop their argument on the question of whether they should be heard.11 These features of the statutory bargaining regime are important, because they assist to inform the purpose of the service rule. In our view, the purpose of the service rule is to ensure that relevant persons are notified of the fact that an application for approval of an enterprise agreement has been lodged with the Commission and are, therefore, given an opportunity to consider whether they wish to be heard, or apply to be heard, in connection with the application. The category of relevant persons who may wish to be heard, or apply to be heard, include current bargaining representatives and persons who were a bargaining representative at some point in the bargaining process but ceased to be a bargaining representative prior to the lodgement of the application for approval of the enterprise agreement. When viewed in this way, it is apparent that the purpose of the service rule in respect of an application for approval of an enterprise agreement supports the NUW’s construction of the rule.

[17] For the reasons set out above, we are of the view that rule 41(1) and Schedule 1 (Forms F16 and F17) of the FWC Rules require an applicant for approval of an enterprise agreement to serve a copy of the application (Form F16) and the employer’s statutory declaration in support of the application for approval (Form F17) on each employee organisation that was, at any time, a bargaining representative in relation to the enterprise agreement. Sigma did not comply with that rule in connection with its application for approval of the Sigma Berrinba EA.

[18] Sigma failed to serve its application for approval of the Sigma Berrinba EA on the NUW in accordance with the FWC Rules. The NUW was not aware that the application had been lodged until after the Sigma Berrinba EA was approved. As a result, the NUW was denied natural justice because it was not given an opportunity to make submissions as to why it should be heard in relation to the application for approval of the Sigma Berrinba EA. It follows that there was an error in the approval of the Sigma Berrinba EA.

[19] However, in reaching this conclusion, we make the following observations.

[20] The Commissioner cannot have had any knowledge, on the basis of the material before him, that the NUW was or had been a bargaining representative for the Sigma Berrinba EA. In contrast, the material filed in the appeal indicates that Sigma knew that the NUW had been appointed as a bargaining representative for one employee who would be covered by the Sigma Berrinba EA, notwithstanding that the employee concerned later revoked the status of the NUW by appointing himself as a bargaining representative. The material filed in the appeal also indicates that the NUW informed Sigma prior to the ballot for approval of the Sigma Berrinba EA that it wished to have discussions about the proposed enterprise agreement. This knowledge should have placed Sigma on notice of the requirement to serve the application on the NUW. Further, the material in the appeal indicates that the NUW was aware that the ballot for the approval of the agreement was to be conducted on 19 May 2017. The NUW could have ascertained that an application for approval of the Sigma Berrinba EA had subsequently been filed in the Commission by taking the simple step of consulting the “Agreements in progress” list on the FWC website, and taken steps to seek to be heard on the application for approval.

[21] Notwithstanding these matters, for the reasons set out above, the appeal must be upheld and the Decision of Commissioner Gregory must be quashed. In light of the fact that the workplace, the subject of the application for approval of the Sigma Berrinba EA, is located in Brisbane, we referred the application to Deputy President Asbury.

Conclusion

[22] Permission to appeal is granted.

[23] The appeal is upheld.

[24] The Decision of Commissioner Gregory is quashed.

[25] The matter is referred to Deputy President Asbury for rehearing.

VICE PRESIDENT

Appearances:

K. Sheehan, for the National Union of Workers.
J.W. Merrell, of Counsel, for Sigma Company Limited.

Hearing details:

2017
Melbourne via video link to Brisbane:
26 July.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR594818>

 1   [2017] FWCA 2940.

 2   Rule 41(1) and Schedule 1 (Form F16) of the Fair Work Commission Rules 2013 (FWC Rules).

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

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

 5   [2010] FWAFB 5343, [27].

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

 7   [2014] FWCFB 7940 (“Collinsville”).

 8   Ibid [16].

 9   Ibid [26].

 10   Ibid [75].

 11   Ibid [76].