[2019] FWCFB 6255

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.605 - Minister may apply for review of a decision

The Hon. Christian Porter MP, Attorney General and Minister for Industrial Relations
v
Metropolitan Fire and Emergency Services Board; United Firefighters' Union of Australia
(C2019/746, C2019/1128)

VICE PRESIDENT HATCHER
DEPUTY PRESIDENT MASSON
COMMISSIONER LEE

SYDNEY, 22 OCTOBER 2019

Applications for review of decisions by Deputy President Gostencnik in matter number AG2018/1278.

Application for variation of an enterprise agreement to remove ambiguity or uncertainty.

Introduction

[1] This decision concerns three applications relating to the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2016 (Agreement). The first two applications were originally made in the name of the Hon. Kelly O'Dwyer MP, then Minister for Jobs and Industrial Relations and Minister for Women. Following Ms O’Dwyer’s retirement from Parliament on the occasion of the most recent federal election, she was by consent substituted as applicant by the Hon. Christian Porter MP, Attorney General and Minister for Industrial Relations (Minister). The Minister’s applications seek Full Bench review pursuant to s 605 of the Fair Work Act 2009 (FW Act) of decisions made by Deputy President Gostencnik concerning an application by the Metropolitan Fire and Emergency Services Board (MFESB) for approval of the Agreement.

[2] The Minister’s first application (C2019/746), which was filed on 5 February 2019, seeks review of an interlocutory decision issued by the Deputy President on 15 January 2019 1 (first decision). In this decision the Deputy President determined that the Agreement did not contain any discriminatory or objectionable terms, passed the better off overall test and, with the exception of some terms concerning which he was not satisfied that they did not contravene s 55 of the FW Act, satisfied the enterprise agreement approval requirements in ss 186 and 187 of the FW Act. In reaching those conclusions, the Deputy President rejected a contention advanced by the then Minister, as well as the Victorian Equal Opportunity and Human Rights Commission (VEOHRC), that certain provisions of the Agreement were discriminatory terms within the meaning of s 195(1) of the FW Act because they indirectly discriminated against women and employees with parental and carer’s responsibilities, and were therefore unlawful terms under s 195(a) which prevented approval of the Agreement.

[3] The Minister’s second application filed on 21 February 2019 (C2019/1128) seeks the review of a further decision issued by the Deputy President on 18 February 2019 2 (second decision) in which he approved the Agreement on the basis of the acceptance of undertakings addressing his concern that certain terms of the Agreement contravened s 55.

[4] The principal ground of each of the Minister’s applications challenges the Deputy President’s conclusion that the Agreement did not contain discriminatory terms within the meaning of s 195(1) (discrimination ground). The Minister contends that the Deputy President proceeded upon an incorrect construction of s 195(1) whereby it was to be read as concerned only with terms of enterprise agreements which directly discriminate against employees on proscribed grounds. Rather, the Minister contends, s 195(1) is also concerned with terms which indirectly discriminate against employees, and that on the basis of the Deputy President’s own findings in the first decision it was apparent that the Agreement contained terms of this nature. Hence, the Minister contends, the Deputy President erred in approving an enterprise agreement which contained discriminatory terms. The Minister’s second application also contains a second ground of review that contends that the Deputy President erred in accepting the undertakings proffered by the MFESB, on the basis that they resulted in substantial changes to the Agreement and were accordingly incapable of acceptance under s 190(3)(b) (undertakings ground).

[5] The third application before us was made by the MFESB in the course of the hearing of the Minister’s review applications, and sought amendments to the Agreement pursuant to s 217 of the FW Act to remove from the Agreement or modify the remaining effective provisions of the Agreement which were said by the Minister to be indirectly discriminatory. The precise terms of this application (MFESB application) are set out later in this decision.

Statutory framework

[6] Section 186(1) of the FW Act establishes a “basic rule” that an application for the approval of an enterprise agreement made under s 182(4) or s 185 must be approved by the Commission if it meets the requirements set out in ss 186 and 187. There are two approval requirements directly relevant to the Minister’s application. The first is that set out in s 186(4), which provides:

Requirement that there be no unlawful terms

(4) The FWC must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).

[7] Section 194(a) defines the expression “unlawful term” used in s 186(4) to include, relevantly, a “discriminatory term”. The latter expression is, in turn, defined in s 195 as follows:

195 Meaning of discriminatory term

Discriminatory term

(1) A term of an enterprise agreement is a discriminatory term to the extent that it discriminates against an employee covered by the agreement because of, or for reasons including, the employee's race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Certain terms are not discriminatory terms

(2) A term of an enterprise agreement does not discriminate against an employee:

(a) if the reason for the discrimination is the inherent requirements of the particular position concerned; or

(b) merely because it discriminates, in relation to employment of the employee as a member of the staff of an institution that is conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed:

(i) in good faith; and

(ii) to avoid injury to the religious susceptibilities of adherents of that religion or creed.

(3) A term of an enterprise agreement does not discriminate against an employee merely because it provides for wages for:

(a) all junior employees, or a class of junior employees; or

(b) all employees with a disability, or a class of employees with a disability; or

[8] Section 253(1)(b) provides that a term of an enterprise agreement has no effect to the extent that it is an unlawful term.

[9] The second relevant approval requirement is that in s 186(2)(c), which is:

(2) The FWC must be satisfied that:

. . .

(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.)

. . .

[10] Section 55(1) provides that a modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards. This prohibition operates subject to various exceptions and qualifications in s 55(2)-(7), none of which are presently relevant. For relevant purposes, the National Employment Standards include an employee right to request a flexible working arrangement. In this respect, s 65 provides:

65 Requests for flexible working arrangements

Employee may request change in working arrangements

(1) If:

(a) any of the circumstances referred to in subsection (1A) apply to an employee; and

(b) the employee would like to change his or her working arrangements because of those circumstances;

then the employee may request the employer for a change in working arrangements relating to those circumstances.

Note: Examples of changes in working arrangements include changes in hours of work, changes in patterns of work and changes in location of work.

(1A) The following are the circumstances:

(a) the employee is the parent, or has responsibility for the care, of a child who is of school age or younger;

(b) the employee is a carer (within the meaning of the Carer Recognition Act 2010 );

(d) the employee is 55 or older;

(e) the employee is experiencing violence from a member of the employee's family;

(f) the employee provides care or support to a member of the employee's immediate family, or a member of the employee's household, who requires care or support because the member is experiencing violence from the member's family.

(1B) To avoid doubt, and without limiting subsection (1), an employee who:

(a) is a parent, or has responsibility for the care, of a child; and

(b) is returning to work after taking leave in relation to the birth or adoption of the child;

may request to work part-time to assist the employee to care for the child.

(2) The employee is not entitled to make the request unless:

(a) for an employee other than a casual employee--the employee has completed at least 12 months of continuous service with the employer immediately before making the request; or

(b) for a casual employee--the employee:

(i) is a long term casual employee of the employer immediately before making the request; and

(ii) has a reasonable expectation of continuing employment by the employer on a regular and systematic basis.

Formal requirements

(3) The request must:

(a) be in writing; and

(b) set out details of the change sought and of the reasons for the change.

Agreeing to the request

(4) The employer must give the employee a written response to the request within 21 days, stating whether the employer grants or refuses the request.

(5) The employer may refuse the request only on reasonable business grounds.

(5A) Without limiting what are reasonable business grounds for the purposes of subsection (5), reasonable business grounds include the following:

(a) that the new working arrangements requested by the employee would be too costly for the employer;

(b) that there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested by the employee;

(c) that it would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the new working arrangements requested by the employee;

(d) that the new working arrangements requested by the employee would be likely to result in a significant loss in efficiency or productivity;

(e) that the new working arrangements requested by the employee would be likely to have a significant negative impact on customer service.

(6) If the employer refuses the request, the written response under subsection (4) must include details of the reasons for the refusal.

[11] Section 190(1) and (2) provide, in summary, that where the Commission has a concern that an agreement for which an application for approval has been made does not meet the requirements in ss 186 and 187, it may nonetheless approve the agreement under s 186 if the Commission is satisfied that an undertaking accepted by it under s 190(3) meets the concern. Section 190(3) provides:

(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.

[12] Section 191 sets out the legal effect of undertakings which are accepted by the Commission as follows:

191 Effect of undertakings

(1) If:

(a) the FWC approves an enterprise agreement after accepting an undertaking under subsection 190(3) in relation to the agreement; and

(b) the agreement covers a single employer;

the undertaking is taken to be a term of the agreement, as the agreement applies to the employer.

(2) If:

(a) the FWC approves an enterprise agreement after accepting an undertaking under subsection 190(3) in relation to the agreement; and

(b) the agreement covers 2 or more employers;

the undertaking is taken to be a term of the agreement, as the agreement applies to each employer that gave the undertaking.

Relevant provisions of the Agreement

[13] Clause 6 of the Agreement provides that it applies to, covers and binds the MFESB, the United Firefighters’ Union (UFU), and all employees of the MFESB engaged in or performing work that may be engaged in a classification or occupation referred to in the Agreement. Clause 12.2 sets out the classifications in the Agreement. They encompass firefighters at all levels as well as Station Officers, Fire Service Communications Controllers (FSCCs), Commanders and Assistant Chief Fire Officers (ACFOs).

[14] Clause 4.1 of the Agreement provides that it is to come into force seven days after approval and has a nominal expiry date of 1 July 2019, and will remain in force until replaced by a new agreement.

[15] The provisions of the Agreement in the form in which it was made which the Minister contends in the review applications were discriminatory all concerned restrictions on the employment and utilisation of part-time firefighters. They may be grouped into three categories. First, there are terms which the Minister contends prevent part-time employees performing operational firefighting duties, namely clauses 9.1.4, 9.1.5, 9.1.6, 9.1.7, 44.1.1 and 44.1.2 (first category). Clauses 9.1.4, 9.1.5, 9.1.6 and 9.1.7 all form part of clause 9.1, which is entitled “Obligations on the MFESB”. They provide as follows:

9.1.4. In addition to any other obligations, the MFB acknowledges the obligations to make reasonable accommodation for employees with parental or carer responsibilities and to make reasonable adjustments for employees with disabilities. However the MFB have determined and the parties have reached agreement that the MFB's operational requirements mean generally that on-shift employees should be employed on a full-time basis. The MFB will meet the obligation to give reasonable accommodation/adjustments as required on a case by case basis, but the parties acknowledge that this may, in some cases require an employee to transfer off-station or from their current work location to another position.

9.1.5. To avoid doubt, in addition to other obligations, this Agreement does not limit the rights of employees, who are entitled to make a request for a change in working arrangements under s 65 of the Act, to make such a request and to have it considered by the MFB in accordance with that section. However, the MFB has determined and the parties have reached agreement that the MFB's operational requirements mean generally that on-shift employees should be employed on a full-time basis. As required by the Act, the MFB will consider every request from an entitled employee for flexible working arrangements and will assess each request on a case by case basis, but the parties acknowledge that this may, in some cases require an entitled employee to transfer off-station or from their current work location to another position. Without limiting the foregoing, this subclause applies to the following clauses and schedules: 12.3, 43.1, 69, 121.1, 136.1.1, 138.1, 139, 152.1, 153, Schedule 3, and Schedule 14 despite any inconsistent terms therein.

9.1.6. Where in accordance with this clause the MFB agrees to a request to work other than full time, for the reasons of service delivery, safety and welfare of employees, the employee will be rostered pursuant to clause 124.

9.1.7. Save in exceptional circumstances where there is no risk to service delivery, safety and welfare of employees, the MFB agrees that anyone accessing part-time arrangement will not work on the 10/14 Roster or form a part of minimum safety crewing in Schedule 2.

[16] Clauses 44.1.1 and 44.1.2 are part of clause 44, which is entitled “Rights under NES”. They provide:

44.1.1. Where in accordance with this clause the MFB agrees to a request to work other than full-time, for the reasons of service delivery, safety and welfare of employees, the employee will be rostered pursuant to clause 124.

44.1.2. Save in exceptional circumstances where there is no risk to service delivery, safety and welfare of employees, the MFB agrees that anyone accessing part-time arrangements will not work on the 10/14 Roster or form a part of minimum safety crewing in Schedule 2.

[17] Clause 124, referred to in clause 44.1.1 above, is entitled “Special Administrative Roster” and applies to employees rostered to work “Special Administrative Duties” (an expression not defined in the Agreement). The “10/14 Roster” referred to in clause 44.1.2 is set out in clause 122.

[18] Second, the Minister says that there are terms which do not provide for the employment of FSCCs on a part-time basis (second category). These are said to be clauses 43.6 and 152, which provide:

43.6. Employees shall have their normal hours of work arranged in the following manner:

43.6.1. With the exception of operational dayworkers, full-time employees shall work and be rostered in accordance with the operational "10/14" roster set out in clause 133 and the conditions in clause 123 or the conditions set out in clause 153 for FSCCs.

43.6.2. Full-time operational dayworkers (professional firefighters who are not working on a roster referred to in 43.6.1) shall work and be rostered in accordance with the special administrative duties roster set out in clause 135.

43.6.3. Where part-time employment is agreed, part-time operational dayworkers will:

a) work and be rostered on hours negotiated and agreed in writing between the MFB the employee and the UFU that, on average are less than 42 hours per week. These hours may be worked over a 5 day cycle and may include evening or weekend work;

b) Be paid special administrative duties allowance not at a pro rata rate; and

c) be paid for any additional hours worked at overtime rates.

. . .

152. ORDINARY HOURS OF WORK

152.1. FSCCs will work in accordance with clause 43 and where applicable clause 153.

152.2. The ordinary working hours for employees shall be 38 per week, over a cycle of eight weeks for which the roster of hours and leave operates. Employee's shall be rostered and worked an average of 42 hours per week, two of which hours shall be overtime work and paid for as such and the remaining two hours shall be taken as accrued leave, in accordance with the roster laid down for this purpose.

[19] Third, the Minister contends that terms which require UFU agreement for part-time employees were also discriminatory (third category). The relevant provisions in this respect were clauses 43.3, 43.4, 43.6.3, 138.4 and 138.4.1. Clauses 43.3, 43.4 and 43.6.3 are part of clause 43, Rostering. We have already set out clause 43.6.3. Clauses 43.3 and 43.4 provide:

43.3. The MFB will not employ an employee on a part-time or casual basis, and no employee may hold a position on such a basis, unless in each case there is agreement between all parties on a case by case basis (agreement is required for each employee).

43.4. This clause is subject to the rights of employees to work in a non- station based position pursuant to clause 44 below.

[20] Clause 138 is entitled “ACFO Hours of Work”. Clauses 138.4 and 138.4.1 provide:

138.4. The MFB will not employ an employee on a part-time or casual basis, and no employee may hold a position on such a basis, unless in each case there is agreement between all parties on a case by case basis (agreement is required for each employee).

138.4.1. Where part-time employment is agreed, part-time operational dayworkers will:

a) work and be rostered on hours negotiated and agreed in writing between the MFB the employee and the UFU that, on average are less than 38 hours per week. These hours may be worked over a 5 day cycle and may include evening or weekend work;

b) Receive special administrative duties allowance not at a pro rata rate; and

c) be paid for any additional hours worked at overtime rates, or

d) work in accordance with clause 43, and where any reference to 42 hours in clause 43 shall be read as 38 hours.

[21] The operation of a number of the above provisions has been affected by the undertakings accepted by the Deputy President in the second decision, as we will shortly explain.

First decision

[22] In the first decision, the Deputy President dealt with a number of objections advanced by the then Minister to the approval of the Agreement. Included in the matters raised by the Minister was a contention that the Agreement contained a range of discriminatory terms within the meaning of s 195 of the FW Act. These included, but were not limited to, the provisions identified in paragraphs [15]-[20] above. Apart from the matters raised by the Minister, the Deputy President also gave consideration as to whether provisions of the Agreement contravened s 55(1) of the FW Act. The overall conclusion reached by the Deputy President was summarised by him as follows:

“[6] I have concluded that I am unable to approve the Agreement because I am not satisfied that particular terms of the Agreement do not contravene s.55 of the Act. This concern might be resolved by the provision of appropriate undertakings. I have also concluded that I should apply the construction of “discriminates” adopted by Tracey J in Shop, Distributive and Allied Employees’ Association v National Retail Association (No 2) ([2012] FCA 480) (National Retail Association (No 2)) to the word as it appears in s.195, with the consequence that s.195 is only concerned with terms that directly discriminate against an employee covered by the agreement because of, or for reasons that include, the particular characteristics or attributes identified therein. I have concluded that the Agreement does not include terms that are directly discriminatory. I have also indicated that if I were unencumbered by the authority in National Retail Association (No 2) I would arrive at a different conclusion both as to the meaning of “discriminates” in s.195 and as to whether some of the terms of the Agreement are discriminatory terms. I have concluded that the Agreement does not include any objectionable terms. I have therefore concluded that the requirement in s.186(4) has been met. I have rejected the Minister’s contention as to particular terms of the Agreement not pertaining to a requisite relationship. I am satisfied the Agreement passes the BOOT. The requirement in s.186(2)(d) is met. Save for the s.55 matter identified above, I have concluded the other approval requirements contained in ss.186 and 187 have been met. My reasons for these conclusions follow.”

[23] As in the review applications before us, the Minister’s case before the Deputy President was based on the contention that the provisions of the Agreement in question, although not directly discriminatory, indirectly discriminated against women and employees with parental and carer’s responsibilities because of their various restrictions on part-time employment. This raised the question of whether s 195 should be interpreted as referring to terms which indirectly as well as directly discriminate against persons on the proscribed grounds. As he stated in paragraph [6] of the first decision, the Deputy President determined that in relation to that question he should follow the decision of a single member of the Federal Court (Tracey J) in SDAEA v National Retail Association (No 2) 3 (SDA v NRA). In that decision, the Court determined that s 153(1) of the FW Act, which in terms relevantly the same as s 195(1) provides that a modern award must not include discriminatory terms, encompassed only direct discrimination. On that basis, the Deputy President concluded that the 2016 Agreement did not contain any discriminatory terms.

[24] However the Deputy President went on to say that, were he free to determine the proper construction of s 195(1) for himself, he would conclude that the provision also encompassed indirect discrimination, and he set out in detail his reasons for that conclusion. While acknowledging that it was unnecessary to do so, the Deputy President also went on to express the view that the provisions which the Minister relies upon in the review applications all indirectly discriminated against women and employees with parental and carer’s responsibilities. The Deputy President’s analysis in this respect commenced from the following premise:

“I consider that it can now confidently be stated that a complete absence of, or limited access to flexible working arrangements in a workplace will have a disproportionately negative impact upon at least employees who are women, parents of young and early school age children and those with family or carer’s responsibilities.” 4

[25] The Deputy President then concluded that the following three categories of provisions of the Agreement were indirectly discriminatory because of the restrictions they placed upon part-time working arrangements:

(1) Clauses 9.1.4-9.1.7, read together, and the “mirrors” of clauses 9.1.6 and 9.1.7 in clauses 44.1.1 and 44.1.2, had the effect that part-time employees would only be permitted to perform operational firefighting duties in the “exceptional circumstances” where there is no risk to service delivery or the safety or welfare of employees. 5 This would adversely affect, and discriminate against part-time employees “because it deprives such an employee the opportunity to perform duties for which they were trained and to attain the skill and experience that would necessarily come from working as a fully functioning operational firefighter”.6 The “blanket restrictions” imposed on part-time employees by the provisions were not justifiable on the basis that the different treatment has a rational connection with an objective which is unrelated to the prohibited ground of discrimination.7

(2) Clauses 43.6 and 152 had the effect that FSCCs were not able to access part-time rostering, and there did not appear to be a rational connection with an object unrelated to a prohibited ground of discrimination which could justify this differential treatment. 8

(3) Clauses 43.3, 43.4, 43.6.3, 138.4 and 138.4.1 disadvantaged employees who wished to access part-time work or part-time rostering and work as operational firefighters by establishing a requirement for or “hurdle” of UFU approval. There was no evident objective for this unrelated to the prohibited grounds which would justify this. 9

[26] The Deputy President went on to find that clauses 43.3, 43.4, 43.6.3 and 44.1 contravened s 55(1) of the FW Act because they operated to exclude s 65. 10 He therefore concluded that he was not satisfied that the approval requirement in s 186(2)(c) was met and the Agreement could not be approved in the terms in which it was made. However he considered that his concern in this respect might be resolved by appropriate undertakings, and made directions to facilitate the provision of such undertakings by the MFESB.11

Second decision and undertakings

[27] In the second decision, the Deputy President accepted written undertakings proposed by the MFESB on the basis that they did not cause any financial detriment to any employee covered by the Agreement, did not result in any substantial change to the Agreement, and were supported by the UFU. 12 The Deputy President concluded that, with the undertaking, the Agreement no longer contravened s 55 and accordingly he was satisfied that the approval requirements in ss 186, 187, 188 and 190 as relevant were met.13 The Agreement was approved on that basis and operated from 25 February 2019.

[28] It is important to note the precise effect of the undertakings which the Deputy President accepted because, as earlier stated, they operate upon provisions of the Agreement in each of the three categories of provision which are raised in the Minister’s review applications (which correspond with the three categories of indirectly discriminatory provisions identified by the Deputy President in the first decision). In respect of the first category, clause 44.1.1 was amended and clause 44.1.2 was deleted by the undertakings as follows:

44.1.1 If the MFB grants an employee's request for a change to his or her working arrangements under s.65 of the Act, the employee will be rostered taking into account the employee's preference, the existence of any relevant reasonable business grounds, service delivery requirements, safety and welfare of employees. If, for reasons of the employee's preference, the existence of any relevant reasonable business grounds, service delivery requirements, safety or welfare of employees, the employee cannot be rostered in accordance with the operational "10/14" roster, the employee may be rostered pursuant to clause 124. Where in accordance with this clause the MFB agrees to a request to work either than full time, for the reasons of service delivery, safety and welfare of employees, the employee will be rostered pursuant to clause 124.

44.1.2 Save in exceptional circumstances where there is no risk to service delivery, safety and welfare of employees, the MFB agrees that anyone accessing part time arrangements will not work on the 10/14 Roster or form a part of minimum safety crewing in Schedule 2.

[29] It is apparent that the above modifications remove the “exceptional circumstances” requirement for part-time employment on operational firefighting duties which was the basis for the Deputy President’s conclusion that clauses 44.1.1 and 44.1.2 were indirectly discriminatory. However this did not entirely resolve the first category of discrimination identified by the Deputy President in the first decision, because the “mirror” provisions in clauses 9.1.6 and 9.1.7 which also made reference to the “exceptional circumstances” requirement were not the subject of equivalent modification by the undertakings.

[30] In the second category, clause 43.6 was amended and a new clause 43.7 was added by the undertakings as follows:

43.6 Employees shall have their normal hours of work arranged in the following manner:

43.6.1 With the exception of operational dayworkers, full-time employees shall work and be rostered in accordance with the operational "10/14" roster set out in clause 133 and the conditions in clause 123 or the conditions set out in clause 153 for FSCCs.

43.6.2 Full-time operational dayworkers (professional firefighters who are not working on a roster referred to in 43.6.1) shall work and be rostered in accordance with the special ~~administrative~~ duties roster set out in clause ~~135~~ 124.

43.6.3 Where part-time employment is agreed, part-time ~~operational dayworkers~~ employees will:

a) work and be rostered on hours negotiated and agreed in writing between the MFB, the employee and (save as in relation to an application made under s.65 of the Act and in respect of clause 44) the UFU that, on average are less than 42 hours per week. These hours may be worked over a 5 day cycle and may include evening or weekend work;

b) Be paid special administrative duties allowance not at a pro rata rate; and

c) be paid for any additional hours worked at overtime rates.

43.7 For the avoidance of doubt, FSCCs are able to access the parttime rostering arrangements in accordance with this clause and clause 44.

[31] It is apparent that the above alterations to clause 43 effected by the undertakings made it clear that FSCCs may access part-time rostering arrangements, thus vitiating the second head of indirect discrimination identified by the Deputy President in the first decision.

[32] As to the Minister’s third category, the undertakings modified clause 43.3 to read as follows:

43.3. ~~The~~ Save as in relation to an application made under s.65 of the Act and in respect of clause 44, the MFB will not employ an employee on a part-time or casual basis, and no employee may hold a position on such a basis, unless in each case there is agreement between all parties ~~on a case by case basis~~ (agreement is required for each employee).

[33] The above modification removed, in respect of applications for flexible working arrangements made under s 65, any requirement for UFU agreement to part-time (or casual) employment. A corresponding variation was effected by the undertakings in the modified clause 43.6.3(a) which we have earlier set out, but no corresponding variation was made to clauses 138.4 or 138.4.1. The requirement for UFU agreement was the basis for the Deputy President’s third head of indirect discrimination in the first decision. The extent to which that has been vitiated by these modifications is discussed later in this decision.

Discrimination ground - submissions

[34] In respect of his discrimination ground of review, the Minister submitted that the Deputy President erred in considering that he was bound by the decision in SDA v NRA in construing s 195(1), given that the decision was concerned with a different (albeit similar) provision of the FW Act, and should have given the word “discriminates” in the provision its ordinary and established legal meaning. The weight of authority lay with the interpretation of “discriminates” as encompassing both direct discrimination and indirect discrimination that was not reasonable, and in this respect the Minister referred to the High Court decisions in Street v Queensland Bar Association 14 and Waters v Public Transport Corporation.15 The Minister submitted that the text and context of s 195(1) supported the position that this interpretation should apply:

• there was nothing in s 195 as a whole, including the exceptions, which would suggest a construction of “discriminates” which excluded indirect discrimination;

• the exception in s 195(3)(c) of wages of employees to whom training arrangements apply could only relate to clauses which are indirectly discriminatory, since it had no direct relationship with any of the protected attributes listed in s 195(1);

• in general, s 195(1) should be given a broad construction as a beneficial and remedial provision, and such a construction would also give effect to the object of the FW Act in s 3 (having regard in particular to paragraphs (d) and (e)) and the object of Part 2-4 set out in s 171;

• s 218(3) requires that if the Commission (upon a review conducted pursuant to a referral under s 46PW of the Australian Human Rights Commission Act 1986) considers that an enterprise agreement requires a person to do an act that would be unlawful under the Age Discrimination Act 2004, the Disability Discrimination Act 1992 or the Sex Discrimination Act 1984, it must vary the agreement so that it no longer requires the person to do such an unlawful act, and this necessarily encompassed acts that are unlawful because they are indirectly discriminatory under the identified legislation;

• it might reasonably be inferred that the ambit of s 195(1) precluded all discriminatory terms which are reviewable under s 218; and

• s 150A(2)(b) of the Industrial Relations Act 1988, which was the statutory ancestor of s 153(1), was considered by a seven-member Full Bench of the Australian Industrial Relations Commission to apply to indirectly as well as directly discriminatory award terms.

[35] The Minister also relied upon the decision of the Federal Court (Gordon J) in Klein v Metropolitan Fire and Emergency Services Board 16 (Klein). In Klein, Gordon J considered the meaning of “discriminates” in item 1 of s 342 (which describes what constitutes “adverse action” for the purpose of the general protections provisions in Pt 3-1 of the FW Act), and concluded that it countenanced both direct and indirect discrimination. In so concluding, Gordon J did not consider herself bound by SDA v NRA and in any case declined to follow it.

[36] The Minister relied upon the obiter conclusions of the Deputy President in the first decision that there were three categories of provisions in the Agreement which were indirectly discriminatory. On the basis of those conclusions, the Minister submitted that the Agreement contained provisions which offended s 195(1), properly construed, and therefore should not have been approved.

[37] The MFESB and the UFU both made submissions contrary to the position advanced by the Minister. Their submissions, which were similar in substance, may be summarised as follows:

• SDA v NRA was, if not binding on the Deputy President, at least highly persuasive, and there is no basis to adopt divergent constructions of ss 153 and 195;

• Klein was decided by reference to a materially different statutory context;

• there is no settled accepted legal meaning of the word “discriminates” that includes indirect discrimination, and cases such as Street v Queensland Bar Association and Waters v Public Transport Corporation have been decided in diverse statutory contexts;

• anti-discrimination legislation has generally characterised direct and indirect discrimination disjunctively by either separately defining them or by extending the definition of the phrase “discriminates against” to encompass both direct and indirect discrimination;

• such legislation has also expressly incorporated a “reasonableness” exception to the definition of indirect discrimination, in contrast to the Minister’s submission that construing s 195 to encompass indirect discrimination will necessarily import a “reasonableness” safeguard;

• the anti-discrimination protection in s 351 expressly imports a reasonableness exception in s 351(2)(a), but s 195 does not, indicating that the latter provision was not intended to encompass indirect discrimination;

• s 195(3)(c) is concerned with direct and not indirect discrimination, in that it deals with the directly discriminatory differential treatment of paying lower wages, and the exception will apply where the training arrangement engages a protected attribute listed in s 195(1);

• the statutory context of the approval process for enterprise agreements provided for in ss 186-187 indicates that s 195 is concerned only with direct discrimination, since the assessment required by s 186(4) which is conducted prior to the agreement commencing operation can plainly be made with respect to directly discriminatory terms, as the differential treatment they impose emerges on the face of the terms themselves;

• however, a determination of whether a term is indirectly discriminatory would require an inquiry into the impact of the term on a particular employee or group of employees and an assessment of whether that impact is reasonable, which would necessarily traverse in detail the manner in which the term will operate in context and practice;

• such a task would be impracticable, since unless the terms of the agreement have been rolled over from a previous agreement, the Commission would have no evidentiary basis upon which to proceed;

• the existence of the separate mechanism in section 218 to deal with actual discriminatory conduct under an enterprise agreement tells against the Minister’s construction of s 195; and

• in any event, even if s 195 does contemplate indirect discrimination, the undertakings resolved the instances of indirect discrimination identified by the Deputy President in the first decision.

Undertakings ground - submissions

[38] The Minister submitted that the undertakings accepted by the Deputy President in the second decision radically recast the part-time employment provisions of the Agreement and resulted in a scheme inconsistent with that intended by the MFESB and the UFU. He contended that while the Deputy President did not explain the basis upon which he was satisfied that the undertakings were not likely to result in substantial changes to the Agreement, his error was implicit because the requisite state of satisfaction could not be formed reasonably on a correct understanding of the law. The Deputy President failed to consider whether the undertakings resulted in substantial changes to the Agreement and thereby did not take into account a relevant consideration, and reached a conclusion which was not reasonably open to him.

[39] In response, the MFESB and the UFU said that the Deputy President had, in the second decision, specifically addressed the question of whether the undertakings were likely to result in substantial changes to the Agreement and made a finding that they did not. The analysis of the substantial change question needed to be made by reference to the Agreement as a whole, not just the provisions the subject of the undertakings. Having regard to the scope and detail of the matters dealt with in the Agreement, it was reasonably available to the Deputy President to reach the conclusion that he did, and the Minister’s submission was no more than a plea that the Full Bench should arrive at a different conclusion.

MFESB application and submissions

[40] The MFESB application seeks two variations to the Agreement pursuant to s 217 of the FW Act. The first is the deletion of clauses 9.1.6 and 9.1.7. The second involves modifications to clause 138.4 as follows:

138. ACFO HOURS OF WORK

. . .

138.4 ~~The~~ Save as in relation to an application made under s. 65 of the Act and in respect of clause 44, the MFB will not employ an employee on a part-time or casual basis, and no employee may hold a position on such a basis, unless in each case there is agreement between all parties ~~on a case by case basis~~ (agreement is required for each employee).

138.4.1 Where part-time employment is agreed, part-time ~~operational dayworkers~~ employees will:

a) work and be rostered on hours negotiated and agreed in writing between the MFB the employee and (save as in relation to an application made under s. 65 of the Act and in respect of clause 44) the UFU that, on average are less than 38 hours per week. These hours may be worked over a 5 day cycle and may include evening or weekend work;

b) Receive special ~~administrative~~ duties allowance not at a pro rata rate; and

c) be paid for any additional hours worked at overtime rates, or

d) work in accordance with clause 43 , and where any reference to 42 hours in clause 43 shall be read as 38

hours.

138.4.2. Full-time employees shall work in accordance with clauses 138.5 to 138.10.

138.4.3. For the avoidance of doubt, ACFOs are able to access the part-time rostering arrangements in accordance with this clause and clause 44.

. . .

[41] The MFESB contended that the changes effected by the undertakings accepted in the second decision resulted in ambiguity and uncertainty in at least two respects:

(1) The amendments made to clause 44.1.1 and 44.1.2 by the undertakings left uncertain the operation of clauses 9.1.6 and 9.1.7. While it was the MFESB’s position that clauses 9.1.6 and 9.1.7 were merely introductory and had no operative effect, their presence gave rise to ambiguity and uncertainty, particularly as concerned the textual construction of the amended clauses 44.1.1 and 44.1.2.

(2) The amendments to clauses 43.3 and 44 by the undertakings left uncertain the operation of the words of clause 138.4 in respect of ACFOs. Because clause 138.4 requires ACFOs to be rostered in accordance with clause 43, there is ambiguity concerning whether UFU approval is required.

[42] The MFESB contended that the amendments proposed in its application should be made because:

• they would remove the identified ambiguity and uncertainty by bringing other clauses into line with the amendments made by the undertakings;

• the proposed amendments would not make further changes of a substantively different nature to those already made by way of the accepted undertakings; and

• the grant of the MFESB application would be consistent with the Commission’s facilitative role under Pt 2-4 of the FW Act and would avoid unnecessary technicalities and would be consistent with the substantial merits of the matter.

[43] The MFESB submitted that should its application be granted, the Minister’s review ground 1 dealing with the balance of the terms impugned as discriminatory would fall away. It would follow that there remained no utility, and hence no public interest, in granting permission to review the first decision or the second decision.

[44] The UFU supported the grant of the MFESB application on the same grounds as advanced by the MFESB.

[45] In respect of the MFESB’s application, the Minister made submissions concerning the proper approach to s 217 of the FW Act and the implications of the MFESB application for the Minister’s review applications. In respect of the first matter, the Minister submitted that:

• it was necessary as a jurisdictional prerequisite for the Commission to identify whether there was any uncertainty or ambiguity, and whether the proposed variation was capable of resolving that uncertainty or ambiguity; and

• if the jurisdictional prerequisite was met, the Commission then had to consider whether to exercise its discretion to vary the agreement to remove ambiguity or uncertainty.

[46] The Minister did not express any view as to whether the identified jurisdictional precondition was met in this case, except to say that if the Minister was successful on the undertakings ground of review, the basis upon which the MFESB contended that there was ambiguity or uncertainty would dissipate. In respect of the exercise of the discretion, the Minister submitted that the changes proposed would effect substantial changes to the Agreement since they would constitute a further recasting of the part-time employment arrangements which the employees who voted upon the Agreement overwhelmingly approved.

[47] The Minister also submitted that, even if granted, the MFESB application would not resolve the discrimination grounds of the review applications, since it would leave unaffected provisions of the Agreement which the Deputy President had held were indirectly discriminatory:

(1) The requirements for UFU agreement with respect to the approval for part-time arrangements in clauses 43.3, 43.4, 43.6.3, 138.4 and 138.4.1 remain insofar as the Agreement applies to the UFU, because under s 191(1) of the FW Act undertakings are taken to be a term of the relevant agreement only as the agreement applies to the employer.

(2) Clauses 43.3 and 43.6.3, as revised by the undertakings, carve out any requirement for UFU approval in respect of an application under s 65. The clauses still require UFU approval where an application under s 65 is not possible. Section 65 does not apply to new employees, since it relates to changes in working arrangements only, nor does it apply to employees with less than 12 months’ continuous employment.

[48] The Minister also submitted that the reviews should be decided before and irrespective of the MFESB application. Firstly, it would be necessary to determine the undertakings ground since the MFESB’s contention of ambiguity or uncertainty arose from the existence of the undertakings. Secondly, the issue of the proper construction of s 195 of the FW Act was an issue of importance and general application, and it was undesirable that the grant of the MFESB application might remove this issue from consideration.

Consideration

Nature of a Ministerial application for review

[49] All parties before us proceeded on the basis that:

(1) the Commission has a discretion as to whether to conduct a review under s 605 of the FW Act (which is an analogue of the requirement for permission in respect of appeals under s 604), subject to the requirement in s 605(2) that it must conduct the review where it is satisfied that it is in the public interest to do so; and

(2) if the review is conducted, the Commission will not interfere with the decision under review unless appealable error is demonstrated in accordance with the principles stated in Coal and Allied v AIRC. 17

Undertakings ground

[50] We consider, consistent with the Minister’s submissions, that we should deal with the undertakings ground first. If this ground is upheld, it is clear that the second decision to approve the Agreement must be quashed and the application for approval of the Agreement dismissed because, absent the undertakings, the Agreement cannot satisfy the approval requirement in s 186(2)(c) as the Deputy President found in the first decision. That would make it unnecessary to consider either the discrimination ground of the review applications or the MFESB application.

[51] We have decided that the Minister’s application for a review of the second decision on the undertakings ground should be rejected, for two reasons. First, it raises no issue of importance or general application which would attract the public interest or provide a discretionary justification for the conduct of the review. The principles concerning the interpretation and application of s 190(3)(b) are well established, and the Minister’s second review application raises nothing new in this respect.

[52] Second, we consider that the undertakings ground is entirely lacking in merit. Section 190(3)(b) requires an evaluative judgment, in the nature of the exercise of a discretion, to be made as to whether a proposed undertaking is likely to effect a substantial change to an agreement. That requires an assessment to be made as to the nature and effect of those changes in the context of the Agreement as a whole. In this case, the Agreement consists of 163 clauses and 20 schedules dealing in considerable detail with almost every conceivable feature of the employment of firefighters. The undertakings affect a small number of clauses concerning part-time employment, in circumstances where it is not in dispute that there are only a few employees of the MFESB who actually work part-time. The undertakings have no consequence for the pay or other employment benefits of employees under the Agreement. Insofar as the purpose and effect of the undertakings is to remove impediments to employees freely exercising their statutory right to request flexible working arrangements under s 65 of the FW Act, they may be regarded as a conferring a benefit upon employees. As was recently stated by the Full Bench in CFMMEU & Ors v Specialist People Pty Ltd, 18 it is not likely that employees would object to “…modifications that fundamentally protect their interests”.19

[53] The Minister does not in truth identify any appealable error in the Deputy President’s consideration under s 190(3)(b), but in substance merely advances submissions contending for a different conclusion. This does not constitute a proper basis for the conduct of a review.

The MFESB application

[54] We will next consider the MFESB application, ahead of any consideration of the Minister’s discrimination ground of review. This course is appropriate because, as we will explain, the grant of the MFESB application would entirely dispose of the three heads of indirect discrimination identified by the Deputy President in the first decision and thereby render the discrimination ground moot.

[55] The principles applicable to the consideration of an application made pursuant to s 217 were recently summarised in the Full Bench decision in CFMMEU & Ors v Specialist People Pty Ltd 20 as follows (footnote omitted):

“[41] The principles that apply to the Commission’s consideration of such applications are well-settled. First, the Commission must identify whether there is any ambiguity or uncertainty in the agreement. The Commission must make a positive finding as to whether the relevant provisions of the agreement are ambiguous or uncertain. This is a jurisdictional pre-requisite to the exercise of the discretion to vary the instrument. The process of considering whether there is ambiguity or uncertainty involves an objective assessment of the words in question, construed in context. The mere existence of rival contentions as to the proper construction of the terms of an agreement is not a sufficient basis to conclude that there is ambiguity or uncertainty. The competing contentions should have merit.

[42] Once ambiguity or uncertainty has been identified, the Commission must then consider whether to exercise its discretion to vary the agreement. The Commission has discretion to “remove ambiguity or uncertainty”, not to give effect to a new and substantive change to the agreement. Applications that seek the latter must be made under s 210 of the FW Act. A decision of the Commission under s 217 to remove uncertainty or ambiguity should give effect to the substantive agreement that was ambiguously or uncertainly reduced to writing in the terms of the enterprise agreement.”

[56] We are satisfied that there is ambiguity and uncertainty associated with the provisions the subject of the MFESB application. As we have earlier explained, clauses 9.1.6 and 9.1.7 mirrored the terms of clause 44.1.1 and 44.1.2 in the Agreement as it was originally made. The latter pair of clauses was found by the Deputy President in the first decision to contravene s 55 because the provisions excluded in part the operation of s 65, and the undertakings accepted by the Deputy President in the second decision were intended to remove this contravention. No equivalent finding concerning clauses 9.1.6 and 9.1.7 was made in the first decision, even though logic suggests that such a finding should have been made, and this presumably explains why the undertakings proposed by the MFESB did not seek to modify the operation of these clauses in the same way as in relation to clause 44.1.1 and 44.1.2. The upshot is that it is uncertain whether clauses 9.1.6 and 9.1.7 should be read as retaining substantive effect in light of the modifications effected by the undertakings to the identical clauses 44.1.1 and 44.1.2 and the apparent intention of the MFESB to remove any inconsistency with s 55 by those undertakings.

[57] Similarly, in the Agreement as made, clause 138.4 was expressed in the same terms as clause 43.3, albeit that the heading for clause 138 apparently confines its operation to ACFOs whereas clause 43.3 has general application to part-time employment under the Agreement. The modification to clause 43.3 by the undertakings, which removes the requirement for UFU agreement to part-time employment in respect of a request for flexible working arrangements made pursuant to s 65, has left unclear and ambiguous the meaning and effect of clause 138.4. On one view, the modified clause 43.3 generally applies to all part-time employment under the Agreement, including the part-time employment of ACFOs, and overrides clause 138.4. This reading of clause 43.3 would appear to be consistent with an intention to remove any exclusion of the operation of s 65 and thus avoid a contravention of s 55. However there is clearly available the alternative interpretation that the modified clause 138.4 must be read down by reference to the unmodified clause 138.4, so that with respect to ACFOs, agreement is required for any part-time employment even if it is requested under s 65. That alternative approach gives meaning and effect to the plain words of clause 138.4.

[58] Having found that the jurisdictional pre-requisite for the exercise of the discretion under s 217 has been satisfied, we consider that we should exercise the discretion in favour of the grant of the MFESB’s application for the following reasons:

(1) The MFESB’s proposed variations would remove the identified ambiguities and uncertainties from the Agreement. The deletion of clauses 9.1.6 and 9.1.7 would eliminate the inconsistency between those provisions and clauses 44.1.1 and 44.1.2, and the variation of clause 138.4 so that it is expressed in the same terms as clause 43.3 would make it clear that there is no requirement for agreement of the parties where an ACFO seeks part-time employment pursuant to s 65.

(2) The grant of the MFESB’s application would resolve the identified ambiguities and uncertainties in a way which ensures that there is no exclusion of the operation of s 65 in respect of part-time employment and no contravention of s 55(1). That is consistent with the policy of the FW Act and with the intention of the MFESB in offering the undertakings which were accepted in the second decision, and would be beneficial to employees for the reasons stated in paragraph [52] above.

(3) The application by the MFESB is supported by the UFU which, it is not in dispute, acted as bargaining representative for virtually all of the employees covered by the Agreement.

[59] We reject the Minister’s submission that the grant of the MFESB application would constitute any fundamental re-casting of the part-time employment provisions of the Agreement. They merely perfect what was plainly intended by the undertakings proposed by the MFESB and accepted by the Deputy President in the second decision. Accordingly, we grant the MFESB application and order that the Agreement be varied in the terms sought in that application.

The discrimination ground

[60] The Minister’s discrimination ground of review is, as earlier stated, founded on the findings made by the Deputy President in the first decision that a number of the terms of the Agreement were indirectly discriminatory. However we consider that the modifications to the Agreement effected by the undertakings accepted in the second decision together with variations made as a result of our grant of the MFESB application have entirely removed the basis upon which those findings were made.

[61] We have earlier set out the three categories of provisions in the Agreement which the Deputy President found were indirectly discriminatory and the extent to which they have been affected by the undertakings. In relation to the first category, the deletion of clauses 9.1.6 and 9.1.7 as a result of the grant of the MFESB application means that “exceptional circumstances” requirement for part-time employment on operational firefighting duties which was found to be discriminatory has been entirely removed. The second category, which concerned the capacity of FSCCs to work on a part-time basis, has as earlier explained been resolved by the undertakings so that it is now clear that FSCCs may access part-time employment arrangements.

[62] In relation to the third category, the amendments made to clause 138.4 by the grant of the MFESB application together with the modifications to clauses 43.3 and 43.6.3 effected by the undertakings mean that there is no requirement in the Agreement for UFU agreement in respect of any application for part-time employment made pursuant to s 65 of the FW Act. As earlier stated, the Minister submitted that because, under s 191(1), the effect of an undertaking which is accepted by the Commission is that it is taken to be a term of the agreement but only “as the agreement applies to the employer”, the undertakings could not validly affect any right of the UFU under the Agreement. On this basis, the Minister submitted, the undertakings could not effectively remove the right of the UFU for its consent to be obtained to any part-time employment arrangement.

[63] We do not accept this submission. It is clear (as the MFESB submitted) that s 191(1) is concerned with the effect of undertakings with respect to a single-employer enterprise agreement, as compared to s 191(2) which concerns multi-employer agreement undertakings. In this context, the words “as the agreement applies to the employer” in s 191(1) are used in contradistinction to the words “as the agreement applies to each employer that gave the undertaking” in s 191(2), which are intended to ensure that an undertaking given by one employer party to a multi-enterprise agreement does not apply to another employer party which does not give the same undertaking. They are not to be read as meaning that undertakings are incapable of effecting any alteration to the rights of persons bound by an agreement other than the employer. This is confirmed by paragraphs 810-812 of the Explanatory Memorandum for the Fair Work Bill 2009, which state:

“810. This clause provides for the effect of an undertaking accepted by FWA under subclause 190(3).

811. Where FWA accepts an undertaking under subclause 190(3) in relation to an agreement that covers a single employer, the undertaking is taken to be a term of the agreement (subclause 191(1)).

812. Subclause 191(2) provides that where FWA accepts an undertaking under subclause 190(3) in relation to an agreement that covers two or more employers (whether or not single interest employers), the undertaking is taken to be a term of the agreement, as the agreement applies to each employer that gave the undertaking. For example, FWA may accept an undertaking from two employers in relation to a multi-enterprise agreement that covers five employers. The undertaking is taken to be a term of the agreement as it applies to those two employers but not in relation to the other three employers.”

[64] Because provisions of enterprise agreements will usually impose simultaneously an obligation on the employer and confer an entitlement on the employee, or vice versa, an interpretation of s 191(1) by which undertakings could only operate as a term of an agreement applying to the employer would render untenable the whole mechanism of undertakings as a means by which the approval of agreements may be facilitated. The Minister’s interpretation is rejected, and we express our surprise that it was even advanced. We reiterate our conclusion that the undertakings were effective to remove the requirement for UFU agreement in respect of s 65 applications in clauses 43.3 and 43.6.3.

[65] We also reject the Minister’s submission that, because s 65 does not apply to new employees or employees in the first 12 months of employment, the Deputy President’s third category of discrimination concerning the requirement for UFU agreement to part-time working arrangements has not been fully addressed. It may be accepted that, for a prospective employee to be offered part-time employment, or for an employee in the first 12 months to seek to move to part-time working arrangements, the consent of the UFU is still required under the Agreement. However there was no finding by the Deputy President in the first decision that a requirement for UFU consent for an employee to move to part-time working arrangements in the first 12 months of employment was indirectly discriminatory. The Deputy President’s finding was rather that a requirement for the UFU to approve all part-time employment arrangements was discriminatory in circumstances where clauses 9, 43.3, 43.4 and 44 in their original form disclosed an intention that permission for an operational firefighter to work part-time would not usually be granted. 21 Not only did the Deputy President not consider the position of a requirement for UFU agreement confined in its operation to the first 12 months of employment, the modifications to clauses 9 and 44 wrought by the undertakings and the grant of the MFESB application vitiate the conclusion that those provisions read together with clauses 43.3 and 44.4 demonstrate an intention that there would not usually be consent to a part-time working arrangement for an operational firefighter.

[66] The Minister did not attempt independently to demonstrate that a requirement for UFU agreement to part-time employment for firefighters in the first 12 months of employment, in the context of the altered framework of provisions concerning part-time employment, would constitute unreasonable indirect discrimination. One can readily identify sound operational reasons why it might be reasonable for there to be restrictions on access to part-time employment for operational firefighters in the first 12 months of employment, when presumably the acquisition of operational experience and on-the-job learning will be a priority. We do not consider that there is a proper basis upon which to conclude that any provision of the Agreement as it now stands is indirectly discriminatory, even if s 195 is construed as applicable to indirect discrimination.

[67] Accordingly we do not consider that there would be any practical purpose in reviewing the first or second decision on the discrimination ground. Any issue of indirect discrimination has been entirely resolved, and the point is now effectively moot.

[68] Although it is not necessary for us to do so, we observe in any event that the Minister’s proposed construction of s 195 seems to us to suffer from at least three fundamental difficulties. First, s 195 serves the function of defining what constitutes a “discriminatory term” for the purpose of the approval requirement for agreements in s 186(4) concerning unlawful terms. It must be construed in that context. The Commission’s assessment as to whether s 186(4) is satisfied is necessarily undertaken at a time prior to the agreement under consideration taking effect. In respect of s 195, the assessment required is whether a particular term “discriminates” against an employee covered by the agreement for a proscribed reason. This task presents no particular difficulty in terms of the identification of directly discriminatory terms, since the text of such a term will disclose whether it discriminates or not.

[69] However, the position is different with respect to indirect discrimination, which is concerned with the impact or effect upon persons of facially neutral requirements. As stated by Dawson and Toohey JJ in Waters v Public Transport Corporation, 22 “indirect discrimination occurs where one person appears to be treated just as another is or would be treated but the impact of such ‘equal’ treatment is that the former is in fact treated less favourably than the latter”. Given that indirect discrimination is concerned with actual impacts and effects, it is not clear to us how it could be relevant to s 195, which exists for the purpose of an assessment which must be made before an agreement commences operation and has any effect on anybody. In this sense s 195 is entirely distinguishable from s 342 (the provision considered in Klein), which is concerned with “adverse action” – that is, actual conduct which has adversely affected a relevant person.

[70] Second, the Minister was unable to provide any sensible explanation as to how, in a practical sense, the assessment required to be made pursuant to s 186(4) in respect of discriminatory terms could be conducted if s 195 was construed to include indirect discrimination. Clearly, an examination of the text of the relevant agreement would not suffice, since it would be necessary to explore the impact of facially neutral terms upon employees covered by the agreement. This would appear to require the Commission, with respect to each operative term of the agreement, to conduct an inquiry as to the potential impact it might have on each employee that might be covered by the agreement once it came into operation. Such an inquiry would in most cases have to involve the Commission acting on its own initiative, since the overwhelming majority of enterprise agreement approval applications do not have a contradictor. Because the actual effects of terms would not be known (unless perhaps “rolled over” from a previous agreement), the Commission would need to speculate as to what effects might occur in the future. In order for this to occur, the Commission would presumably need to receive evidence as to the composition of the workforce in terms of the attributes listed in s 195(1) – that is, the racial composition, gender balance, sexual orientation, age distribution etcetera of the workforce. That could conceivably be done in the case of an employer with an established and stable workforce. However in the case of a start-up business with only a few employees that intends to expand, or a business with a high labour turnover, or a greenfields agreement where there is as yet no workforce at all, we cannot conceive how the task could practically be undertaken. The reasonableness exception which the Minister contends is incorporated into s 195 would require further inquiry as to whether any future discriminatory impact of a term of the agreement which might be hypothesised is justifiable having regard to the business operations and commercial interests of the employer.

[71] We consider it implausible that the legislature intended that the Commission undertake such a task pursuant to s 186(4). The Explanatory Memorandum for the Fair Work Bill 2009 stated an intention that the approval process for enterprise agreements be a “simple, point in time assessment”, 23 and the Minister’s proposed construction of s 195 necessarily has consequences utterly at odds with this intention. We consider it more likely that s 218 of the FW Act constitutes the mechanism by which facially neutral terms in enterprise agreements which have actual discriminatory effects upon employees in their operation may be rectified.

[72] Third, the Minister’s contention that “discriminates” in s 195(1) includes indirect discrimination carries with it the proposition that a reasonableness exception is incorporated. However, no persuasive basis for this proposition was advanced. Section 195(2) and (3) set out in express terms the exceptions to the operation of s 195(1), and none of the prescribed exceptions operates as a general reasonableness exception. In this respect, s 195 is to be distinguished from s 351. Section 351(1) prohibits adverse action on identified proscribed grounds, but s 351(2)(a) provides that s 351(1) does not apply to action that is not unlawful under any anti-discrimination law that is applicable. This effectively incorporates the reasonableness exception for indirect discrimination invariably found in such legislation. The Minister’s contention that the word “discriminates” in s 351(1) by itself necessarily connotes indirect as well direct discrimination relies on passages in the High Court decisions in Street v Queensland Bar Association 24 and Waters v Public Transport Corporation,25 but those passages do not demonstrate that the general concept of indirect discrimination necessarily carries with it a reasonableness exception absent legislative prescription to that effect.

[73] Notwithstanding these observations, it is not necessary for us to determine to finality the issue of the interpretation of s 195 raised by the Minister for the reasons stated. Because the review applications lack a practical purpose, the public interest is not attracted and there is no discretionary basis to justify the conduct of the review that is sought.

Conclusion

[74] We order as follows:

(1) The Minister’s review applications are refused.

(2) The Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2016 is varied pursuant to s 217 of the Fair Work Act 2009 in the terms set out in Schedule A to this decision.

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

VICE PRESIDENT

Appearances:

J Firkin QC and F Leoncio of counsel on behalf of The Hon. Christian Porter MP, Attorney General and Minister for Industrial Relations.

C O’Grady QC and R Davern-Nelson and A Pollock of counsel on behalf of the Metropolitan Fire and Emergency Services Board

R Kenzie QC and T Dixon of counsel on behalf of United Firefighters’ Union of Australia

Hearing details:

2019.

Melbourne:

4 June.

Printed by authority of the Commonwealth Government Printer

Schedule A

The Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2016 is varied as follows:

1. Clauses 9.1.6 and 9.1.7 are deleted.

2. Clause 138.4 is deleted and replaced by the following

138.4 Save as in relation to an application made under s. 65 of the Act and in respect of clause 44, the MFB will not employ an employee on a part-time or casual basis, and no employee may hold a position on such a basis, unless in each case there is agreement between all parties (agreement is required for each employee).

138.4.1 Where part-time employment is agreed, part-time employees will:

b) Receive special duties allowance not at a pro rata rate; and

c) be paid for any additional hours worked at overtime rates, or

d) work in accordance with clause 43 , and where any reference to 42 hours in clause 43 shall be read as 38 hours.

138.4.2 Full-time employees shall work in accordance with clauses 138.5 to 138.10.

138.4.3 For the avoidance of doubt, ACFOs are able to access the part-time rostering arrangements in accordance with this clause and clause 44.

1 [2019] FWC 106

2 [2019] FWC 1023

3 [2012] FCA 480, 219 IR 382

4 [2019] FWC 106 at [183]

5 Ibid at [203], [209]

6 Ibid at [209]