//
[2017] FWCFB 2806
General information, not legal advice.
Fair Work Commission (Full Bench)
2017-05-23
Mr J
Original judgment source is linked above.
s.604 - Appeal of decisions
Health Services Union & Australian Nursing and Midwifery Federation
Appeal against decision [ [2017] FWCA 1201] of Deputy President Wells at Hobart on 2 March 2017 in matter number AG2017/165 - Permission to appeal - Finding of ambiguity or uncertainty - Exercise of discretion - Retrospective amendment - Fair Work Act 2009, ss. 53, 54, 217 and 604.
[1] This Decision concerns an application for permission to appeal by Aged Care Services Australia Group Pty Ltd ("ACSAG") against a Decision of Deputy President Wells handed down on 2 March 2017.[1] The Decision of the Deputy President under section 217 of the Fair Work Act 2009 (Cth) ("the Act") was to make a variation to remove an ambiguity and/or uncertainty in the Aged Care Services Australia Group Pty Ltd - Nurses and Aged Care Employees Enterprise Agreement 2014 ("the 2014 Agreement"). The 2014 Agreement was approved on 28 October 2014. It commenced operation 7 days later on 4 November 2014. The application to vary the 2014 Agreement was made by ACSAG on 20 January 2017.
[2] At the hearing of the appeal on 17 May 2017, Mr R. Dalton, of Counsel, appeared on behalf of ACSAG with permission pursuant to section 596(2)(a) of the Act. We were satisfied that the matter was invested with sufficient complexity such that we would be assisted in the efficient conduct of the matter if we granted ACSAG permission to be represented. Mr J. Eddington appeared on behalf of the Health Services Union ("HSU").
[3] The 2014 Agreement contains a coverage clause which states that:
(a) Aged Care Services Australia Group Pty Ltd; and
(b) Nurses and Aged Care employees employed by Aged Care Services Australia Group Pty Ltd as classified in Schedule 3 of this Agreement; and
(c) subject to the requirements of the Fair Work Act 2009, the Australian Nursing and Midwifery Federation Tasmanian Branch ('ANMF'), and the Health Service[s] Union, Tasmania No. 1 ('HACSU')."
[4] In its application to vary the 2014 Agreement, ACSAG alleged clause 5 was ambiguous. Before the Deputy President and before us, ACSAG contended that the wording of clause 5 is ambiguous and that the clause should be varied to clearly define the employees covered as being employees of ACSAG "employed in Tasmania".
[5] In her Decision, the Deputy President:
"[23] Having applied the principles espoused in these authorities I am satisfied that, on an objective assessment, and considering the context of clause 5 and the combination of Schedule 3, and clauses 27 and 38, the employees to be covered by the Agreement is susceptible to more than one meaning and is therefore ambiguous."
"[24] It is clear from the documentation provided by ACSAG with its submissions that the voting and approval process undertaken with the Agreement in 2014 involved only ACSAG's Tasmanian employees, and that neither the ANMF nor the HSU raised any concerns involving the coverage of the Agreement, or the voting process for its approval.
[25] ASCAG have established, on an objective assessment, an arguable case for the contention that coverage of the Agreement can be read to include only those of its employees classified under Schedule 3 of the Agreement and employed within Tasmania.
[26] I am also satisfied that on reading clause 5, in isolation of the other provisions of the Agreement, that a conclusion could be drawn that the Agreement covers ACSAG employees classified under Schedule 3 of the Agreement, regardless of where they work.
[27] As I have determined that ambiguity and/or uncertainty exists as to clause 5(b) of the Agreement, I am of the view it is appropriate for the Commission to exercise its discretion under s.217 to remove that ambiguity or uncertainty, to provide clarity to all parties covered by the Agreement."
"[28] In conclusion, I am satisfied that the intention of the parties was that the Agreement would cover employees of ACSAG as described in Schedule 3 of the Agreement and that are employed in Tasmania. It is appropriate to vary the Agreement by inserting the words "employed in Tasmania" at the end of sub clause (b) of clause 5.
[29] Accordingly, the application is granted and the variation, as sought, will operate from today."
[6] In the appeal, no attack was made on the central finding of the Deputy President that clause 5 was ambiguous and that it should be amended by the Variation Order.
[7] The appeal focused solely on the Deputy President's decision to amend the 2014 Agreement with prospective effect from the date of the Decision (2 March 2017), rather than retrospectively from the date that the 2014 Agreement commenced operation (4 November 2014).
[8] An appeal lies with the permission of the Commission. The Commission must grant permission if it considers that it is in the public interest to do so. Other grounds for granting permission may also be available. The Decision to approve the variation involves the application of a number of statutory tests, many of which involve the exercise of discretion as described by the High Court in Coal and Allied v AIRC.[3] In that case, Gleeson CJ, Gaudron and Hayne JJ said:[4]
"'Discretion' is a notion that 'signifies a number of different legal concepts'. In general terms, it refers to a decision-making process in which 'no one [consideration] and no combination of [considerations] is necessarily determinative of the result.' Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject-matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment." (references omitted)
[9] Discretionary decisions are subject to review on the grounds expressed by the High Court in House v The King:[5]
"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."
[10] Insofar as any aspect of the Decision is not properly considered a discretionary decision, we are required to determine whether the Decision is correct.[6]
[11] The Decision involves a number of conclusions and a principal finding that the 2014 Agreement contained an ambiguity that was to be remedied by making an amendment to clause 5 with prospective operation. The grounds of appeal seek to challenge only that aspect of the Decision that relates to the prospective nature of the amendment.
[12] The grounds of appeal advanced by ACSAG are that:
The Deputy President erred in failing to consider ACSAG's application for the section 217 Variation Order to operate from 4 November 2014, the commencement date of the 2014 Agreement;
The Deputy President erred in not providing any reason for giving the Variation Order a prospective operation, and not a retrospective operation as sought by ACSAG;
In giving the Variation Order a prospective operation and not a retrospective operation as sought by ACSAG, the Deputy President failed to take into account a material consideration, being the fact (as found by the Deputy President at [28] of the Decision) that the common intention of the parties was that the geographical scope of the 2014 Agreement was limited to the State of Tasmania.
[13] ACSAG submits that it is in the public interest for the Commission to grant permission to appeal for reasons, including that:
It is in the public interest to grant permission to ACSAG to appeal on the first appeal ground, given that the appeal ground identifies an injustice, being the failure of the primary decision-maker to consider the part of the ACSAG's section 217 application seeking retrospectivity; and
More generally, permission to appeal should be granted on conventional grounds. The Decision is attended with sufficient doubt and ACSAG would suffer substantial prejudice if permission were refused, as it could be exposed to potential unwarranted underpayment claim in respect of its employees outside Tasmania who worked in the retrospective period.
[15] On 9 May 2017, the Australian Nursing and Midwifery Federation wrote to the Commission and indicated that it would not be filing submissions in respect of the appeal and would not appear at the appeal hearing.
[16] Nonetheless, on 9 May 2017, the HSU filed an outline of submissions. However, before us, the HSU indicated that it withdrew its objection to the granting of permission to appeal and no longer relied upon its submissions filed in the matter.
[17] We consider the ACSAG's first ground of appeal determinative of the appeal.
[18] In the present matter:
ACSAG made an application for a variation to the 2014 Agreement and for that variation to be made retrospectively;
In its submissions, ACSAG sought Orders including that the Variation Order apply retrospectively;
The Decision does not address the issue of retrospectivity;
The Order made was prospectively;
The Deputy President did not put ACSAG on notice that she was going to order that the Variation Order apply prospectively rather than retrospectively; and consequently
ACSAG was denied procedural fairness in relation to the date of operation of the Variation Order.
[19] Thus, ACSAG was not given an opportunity to make submissions about the prospective operation of the Variation Order. We are satisfied this was a denial of procedural fairness and an appealable error. We are satisfied that it is in the public interest to grant leave to appeal. On the basis of that finding, we have decided to quash the Decision and Order of Deputy President Wells.
[20] As stated above, in the appeal before us, there was no attack made on the central finding of the Deputy President that clause 5 was ambiguous and that it should be amended by the Variation Order.
[21] For the reasons stated by the Deputy President, we too are satisfied that:
On reading clause 5, in isolation of the other provisions of the Agreement, that a conclusion could be drawn that the 2014 Agreement covers ACSAG employees classified under Schedule 3 of the Agreement, regardless of where they work;
That potential reading of clause 5 gives rise to an ambiguity;
Having determined ambiguity exists as to clause 5(b) of the Agreement, it is appropriate to exercise our discretion under section 217 to remove that ambiguity and to provide clarity to all parties covered by the 2014 Agreement;
It was the objective intention of the parties that the 2014 Agreement would, from its commencement, cover employees of ACSAG as described in Schedule 3 of the Agreement and that are employed in Tasmania; and
It is appropriate to vary the 2014 Agreement by inserting the words "employed in Tasmania" at the end of sub clause (b) of clause 5.
[22] The Commission has the power to vary an existing enterprise agreement with retrospective effect in circumstances where a decision to vary matters giving rise to an ambiguity or uncertainty is made.[10]
[23] In the present matter, having determined that it was the objective intention of the parties that the 2014 Agreement would, from its commencement, cover employees of ACSAG as described in Schedule 3 of the Agreement and that are employed in Tasmania, it necessarily follows that the Variation Order that we make apply from the commencement of the 2014 Agreement; that is to say, the Variation Order that we make should apply retrospectively.
[24] For the above reasons we grant permission to appeal and uphold the appeal. Further, on the rehearing of the matter we are satisfied that:
The 2014 Agreement contains ambiguity and that, consequently;
It should be varied by inserting the words "employed in Tasmania" at the end of sub clause (b) of clause 5; and
The variation should apply from the date that the 2014 Agreement commenced operation on 4 November 2014.
[25] We order that:
Permission to appeal is granted;
The appeal is upheld;
The Decision of Deputy President Wells is quashed;
The 2014 Agreement is varied by inserting the words "employed in Tasmania" at the end of sub clause (b) of clause 5 (Our Variation Order); and
Our Variation Order will commence from 4 November 2014.
R Dalton, of Counsel, for the Aged Care Services Australia Group Pty Ltd.
[2] [2017] FWCA 1201, [18]-[20].
[3] Coal and Allied v AIRC [2000] HCA 47; 203 CLR 194; 74 ALJR 1348; 99 IR 309; 174 ALR 585 (31 August 2000).
[4] Coal and Allied v AIRC [2000] HCA 47; 203 CLR 194; 74 ALJR 1348; 99 IR 309; 174 ALR 585 (31 August 2000) at [19].
[5] House v The King [1936] HCA 40; (1936) 55 CLR 499 at [504]- [505] per Dixon, Evatt and McTiernan JJ.
[6] Pawel v Australian Industrial Relations Commission [1999] FCA 1660; (1999) 94 FCR 231.
[7] Islam v Cash [2015] FCA 815 at [14]; Tickner v Chapman [1995] FCAFC 1726; (1995) 57 FCR 451 at 462; Minister for Immigration and Citzenship v Khadgi [2010] FCAFC 145; (2010) 190 FCR 248 at [57]- [58], [63].
[8] Linfox Australia Pty Ltd v Fair Work Commission[2013] FCAFC 157; (2013) 240 IR 178 at [47].
[9] Soliman v University of Technology Sydney [2012] FCAFC 146; (2012) 207 FCR 277 at [50].
[10] Qantas Airways Limited [PR550766] and MSS Security Pty Ltd [2016] FWCA 2774.
Printed by authority of the Commonwealth Government Printer
Aged Care Services Australia Group Pty Ltd
Health Services Union & Australian Nursing and Midwifery Federation [2017] FWCFB 2806
(1936) 55 CLR 499
(1999) 94 FCR 231
(1995) 57 FCR 451
(2010) 190 FCR 248
(2013) 240 IR 178
(2012) 207 FCR 277