DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support
v
Australian Municipal, Administrative, Clerical and Services Union; Transport Workers' Union of Australia
(C2017/5221)

Appeal against decision [2017] FWC 4311 of Commissioner Wilson at Melbourne on 31 August 2017 in matter number AG2017/1424.

[1] Aerocare Flight Support Pty Ltd (Aerocare) has applied for permission to appeal and appealed a decision of Commissioner Wilson issued on 31 August 2017 1 (Decision) in which he dismissed an application for approval of the Aerocare Collective Agreement 2017 (2017 Agreement). The Commissioner was not satisfied that the 2017 Agreement passed the better off overall test (BOOT) approval requirement in s 186(2)(d) of Fair Work Act 2009 (FW Act), and was also not satisfied that the group of employees covered by the agreement was fairly chosen, as required by s 186(3). In respect of both of these grounds of rejection, the Commissioner found that it was not appropriate to ask Aerocare for undertakings under s 190 to address these matters, as any undertakings would lead to substantial changes to the 2017 Agreement. In respect of the fairly chosen requirement, the Commissioner said in the Decision:

“[121] I do not consider it appropriate in the circumstances to ask for an undertaking in respect of my finding that the group of employees covered by the 2017 Agreement was not fairly chosen because the result of seeking such an undertaking would, in my view, lead to substantial changes to the 2017 Agreement. Many hundreds more employees would be brought into the Agreement and its contents would need to be modified in substantial regards to provide for casual rates of pay and other provisions specific to the employment of casual employees. Further, it is a matter of fact that none of the employees in question were afforded an opportunity to vote on the Proposed Agreement.”

[2] Aerocare’s notice of appeal contained three grounds of appeal. The first ground challenged the Commissioner’s conclusion concerning the “fairly chosen” requirement in s 186(3). The second ground challenged the conclusion concerning the BOOT, and the third contended that the Commissioner erred in concluding that any undertakings about his BOOT concerns would amount to substantial changes to the 2017 Agreement without first identifying the content of those undertakings or giving Aerocare an opportunity to be heard on the issue. No ground of appeal challenged the Commissioner’s conclusion in paragraph [121] of the Decision. No amendment to the notice of appeal in this respect (or any other respect) was ever sought by Aerocare.

[3] On 27 November 2017 we issued our decision in respect of the first ground of appeal only 2 (Appeal decision). The reasons why we dealt with the first ground only, and deferred dealing with the other two grounds, are set out in paragraphs [2]-[4] of the Appeal decision. We determined to grant permission to appeal with respect to the first ground of appeal, and then considered and rejected it. We then concluded by saying:

“[38] As earlier stated, the Commission’s satisfaction under s 186(3) that the group of employees covered by an enterprise agreement was fairly chosen is a requirement for approval of the agreement. We have found that the Commissioner did not err in concluding that this approval requirement was not satisfied. There is no challenge in Aerocare’s appeal to the Commissioner’s further conclusion that this could not be remedied by the provision of an undertaking.”

[39] That would appear to result in a position whereby the determination of Aerocare’s other appeal grounds would have no utility because, even if Aerocare were to succeed on those appeal grounds, this could not lead to the 2017 Agreement being approved. However that is only a provisional view and we will give Aerocare and the two unions an opportunity to make submissions about the further disposition of the appeal in light of our conclusions with respect to appeal ground 1. We direct that such submissions be made in writing and filed on or before 5.00pm Monday 4 December 2017.”

[4] In response to the above direction, the union respondents to the appeal, the Transport Workers' Union of Australia (TWU) and the Australian Municipal, Administrative, Clerical and Services Union (ASU), submitted that there was no utility in determining the remaining two appeal grounds, and that either permission to appeal should be refused in relation to those grounds or the appeal should be dismissed in its entirety. However Aerocare sent correspondence addressed to the presiding member dated 4 December 2017 which relevantly stated:

“In its submissions and during the hearing, Aerocare confirmed that casual employees would be provided benefits on the approval of the 2017 Agreement, including a 5% backdated pay increase and casual employees no longer needing to pay the car parking co-contribution. (See: Outline of Submissions of the Appellant, paragraph 19(f), 19(g), Transcript PN226, PN231, PN248)

In accordance with the above, we are instructed that our client seeks the opportunity to address the Full Bench on whether an undertaking giving effect to the above commitments to casual employees address the “fairly chosen” finding.” [sic]

[5] Aerocare’s correspondence did not otherwise take issue with the provisional view expressed in paragraph [39] of the Appeal decision.

[6] In a Statement and Directions issued on 8 December 2017 3, we made directions which gave an opportunity to Aerocare to file written submissions concerning the matter identified in its 4 December 2017 correspondence.

[7] On 14 December 2017 Aerocare filed submissions in accordance with our directions. In those submissions it referred to the power of the Commission to approve an enterprise agreement with undertakings pursuant to s 190 of the FW Act where it had a concern that an approval requirement in s 186 was not met, and also referred to paragraph [35] of the Appeal decision, in which we stated:

“Aerocare’s submissions characterised its approach as giving casual employees an incentive to transfer to employment as PSEs, but the better inference is that Aerocare intended to place casual employees in an inferior position as to their employment rights than PSEs in order to establish a disincentive to remain in casual employment. That casual employees were, by grace and favour of Aerocare, to be afforded the same level of pay increase and the same carparking benefits that the group of employees covered by the 2017 Agreement were to obtain as a matter of legal right merely highlights the arbitrary nature of their exclusion from coverage.”

[8] Aerocare then submitted as follows:

“7. This FWC concern about the fairness of Aerocare’s choice to exclude casual employees is because casuals will not receive the benefits of the 2017 Agreement. This can be addressed by an undertaking which, rather than relying on the “grace and favour” of Aerocare, agrees to provide those benefits to casuals by way of undertaking. That is, Aerocare will undertake to provide to the relevant casual employees the 5% backdated wage increase, apply the same car parking benefit, minimum shift length and tenure bonus as will apply to permanent employees under the 2017 Agreement.

8. This undertaking does not alter the 2017 Agreement in a substantial way. It does not mean, as Commissioner Wilson stated, that “many hundreds would be brought into the agreement DocID: 72972822.1 4 and its contents would need to be modified in substantial regards to provide the casual rates of pay and other provisions specific to the employment of casual employees”. The effect of the undertaking is not to include casual employees within the coverage of the Agreement. The effect of the undertaking is to provide a commitment from Aerocare about the terms and conditions to apply to casual employees not covered by the 2017 Agreement. Its effect is not dissimilar to provisions in enterprise agreements which describe employment conditions for other parts of an employer’s workforce not covered by the enterprise agreement e.g. contractors.

9. The undertaking above also does not cause financial detriment to any employee covered by the 2017 Agreement. The preconditions for an undertaking in section 190 are met. The undertaking in the form of a commitment by Aerocare that casuals will receive the benefits of the 2017 Agreement, directly and completely addresses the Commission’s concern that excluding casuals was not a “fair choice” because casuals would not receive the benefits of the 2017 Agreement.”

[9] Aerocare’s submission that our conclusions concerning the first appeal ground expressed in the Appeal decision can be addressed by its proposed undertaking is, with respect, misconceived. Section 190 of the FW Act provide relevantly provides:

191 FWC may approve an enterprise agreement with undertakings

Application of this section

(1)  This section applies if:

(a)  an application for the approval of an enterprise agreement has been made under subsection 182(4) or section 185; and

(b)  the FWC has a concern that the agreement does not meet the requirements set out in sections 186 and 187.

Approval of agreement with undertakings

(2)  The FWC may approve the agreement under section 186 if the FWC is satisfied that an undertaking accepted by the FWC under subsection (3) of this section meets the concern.

Undertakings

(3)  The FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:

(a)  cause financial detriment to any employee covered by the agreement; or

(b)  result in substantial changes to the agreement.

…

[10] Aerocare’s application for approval of the 2017 Agreement was heard and determined by the Commissioner. As earlier explained, the Commissioner declined to entertain the acceptance of an undertaking under s 191 to address his concern that the “fairly chosen” requirement in s 186(3) was not satisfied, and Aerocare’s appeal did not challenge the Decision in that respect.

[11] The matter before us is an appeal from the Decision, not the application for approval of the 2017 Agreement. That application was dismissed by the Commissioner. In an appeal under s 604 of the Act, a Full Bench may only exercise its powers under s 607(3) (including its powers to quash or vary the decision under appeal or to make a further decision in relation to the matter that is the subject of the appeal) if appealable error is identified on the part of the primary decision maker. 4 In the Appeal decision, we have found that the Commissioner’s conclusion that the “fairly chosen” requirement in s 186(3) was not satisfied and was not attended by any appealable error. Accordingly there is no basis for us to make any further decision about that matter.

[12] The matters referred to in paragraph [35] of the Appeal decision were not “concerns” held by us that the 2017 Agreement did not meet the s 190(3) requirement in relation to an application for approval of that agreement. Rather, they were part of our reasoning as to why we considered that the “fairly chosen” conclusion reached by the Commissioner was not attended by error and that Aerocare’s first appeal ground should be rejected. Section 190 simply has no application in the current circumstances and accordingly there is no proper basis for consideration to be given to Aerocare’s proposed undertaking.

[13] The conclusion we have reached in this respect is consistent with the approach taken in the Full Bench decision in ALDI Foods Pty Ltd v Transport Workers' Union of Australia. 5

[14] In any event, even if it had been available to us to consider Aerocare’s proposed undertaking, we could not be satisfied (as required by s 190(3)(b)) that acceptance of the undertaking would not be likely to result in substantial changes to the 2017 Agreement. Under s 191, the effect of an undertaking, if accepted, is that it is taken to be a term of the agreement. The effect of the undertaking would be to purport to add to the 2017 Agreement pay and parking entitlement benefits for some hundreds of casual employees who did not participate in bargaining for the agreement, did not vote upon it, and to whom the agreement would not apply. Leaving aside the conceptual difficulty of how an enterprise agreement can be taken to contain a term conferring entitlements upon persons to whom it does not apply, on any view that would cause a major change to the 2017 Agreement and distort its intended effect. Accordingly the undertaking is not one that could be accepted.

[15] Aerocare has not raised any other reason why we should not proceed on the basis of the provisional view expressed in the Appeal decision, and accordingly we will do so. The requirements for approval of an enterprise agreement in s 190 are cumulative and (subject only to ss 189-190) must all be satisfied in order for an agreement to be approved. In the Appeal decision, we have affirmed the Commissioner’s conclusion that the 2017 Agreement did not satisfy the “fairly chosen” requirement in s 186(3). We do not consider therefore that there would be any utility in granting permission to appeal in respect of the remaining grounds of appeal challenging the Commissioner’s findings concerning the BOOT, since even if those grounds of appeal were upheld, the result could not be that the 2017 Agreement could be approved under the FW Act.

[16] Accordingly we order as follows:

(1) Permission is granted in respect of appeal ground 1, but is refused in relation to appeal grounds 2 and 3.

(2) The appeal is dismissed

VICE PRESIDENT

Appearances:

F. Parry QC and R. Dalton of counsel with L. Mumme on behalf of Aerocare Flight Support Pty Ltd.

A. Howell of counsel with W. Carr on behalf of the Transport Workers’ Union of Australia.

Y. Bakri of counsel with J. Cooney on behalf of the Australian Municipal, Administrative, Clerical and Services Union.

Printed by authority of the Commonwealth Government Printer

<PR599238>

 1   [2017] FWC 4311

 2   [2017] FWCFB 5826

 3   [2017] FWCFB 6555

 4   Coal and Allied v Australian Industrial Relations Commission [2000] HCA 47, 203 CLR 194 at [14]-[18]

 5   [2012] FWAFB 9398, 227 IR 120 at [28]-[29]