//
[78]
[2021] FWCFB 3191
General information, not legal advice.
Fair Work Commission (Full Bench)
2021-06-03
Original judgment source is linked above.
s.604 - Appeal of decisions
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
Appeal against decision [2021] FWC 866 of Deputy President Binet at Perth in matter number RE2020/1146.
[1] Amec Foster Wheeler Australia Pty Ltd (Amec) has lodged an appeal, for which permission is required, against a decision of Deputy President Binet to decline to transfer matter RE2020/1146, which had been allocated to her to deal with, to another member of the Commission for arbitration. The matter in question was an application made by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) pursuant to s 505 of the Fair Work Act 2009 (FW Act). Amec's notice of appeal identifies the date of the decision it seeks to appeal as 3 March 2021. However, the relevant decision was in fact announced by the Deputy President at the conclusion of a hearing on 18 February 2021, with the Deputy President indicating that she would provide her written reasons at a later time.[1] The Deputy President published her reasons on 3 March 2021.[2] Pursuant to s 586(b) of the FW Act, we waive this irregularity in the notice of appeal.
[2] The facts of the matter are as follows. The CEPU filed its application on 15 December 2020. After the matter was allocated to her, the Deputy President conducted a conciliation conference on 19 January 2021. The matter was not resolved at the conference and was adjourned to allow further discussions between the parties. The matter remained unresolved and so, on 3 February 2021, the Deputy President issued directions for the determination of the matter by arbitration.
[3] On 10 February 2021, AMEC sent correspondence to the Deputy President's chambers which relevantly stated:
"...We are further instructed that the Deputy President conducted a lengthy conciliation conference in the above matter on 19 January 2020. We are instructed that during this conference:
On the basis that the Deputy President has expressed pre-determined views as to the merits of the matter during conciliation, the Respondent objects to the Deputy President arbitrating the matter and requests that she recuse herself (in line with the principles established by Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 and Kirby v Centro Properties Limited (No 2) [2011] FCA 1144; (2011) 202 FCR 439 as examined by the Full Bench in CFMMEU v Watpac Construction Pty Ltd [2019] FWCFB 3855 (Watpac) at [33] - [43]). We draw the Deputy President's attention to paragraphs [46] - [47] of Watpac, where the Full Bench found:
"...either party should be free to object to a member subsequently arbitrating a matter which he or she has conciliated. In our view, once a party to a dispute objects to a member of the Commission who has been involved in conciliating that dispute from undertaking arbitration, that by itself should generally be enough to persuade the member to arrange for the matter to be reallocated ... this is particularly the case where a member has participated in private discussions separately with the parties in conciliation [and has] expressed views in conciliation about the merits of the dispute". [emphasis added]"
[4] Correspondence from the CEPU dated 11 February 2021 opposed Amec's request that the Deputy President recuse herself and denied that the Deputy President had expressed any views about the merits of the CEPU's application at the conference on 19 January 2021 either "in open session or private session with the Applicant".
[5] On 11 February 2021, the Deputy President's chambers sent an email to the parties in response to Amec's recusal request which stated (omitting formal parts):
"As is the Deputy President's practise at the outset of all conferences she holds, she informed the parties at the conference held on 19 January 2021, that any views she expressed were not her firm fixed or final views but were intended to assist the parties reach a conciliated outcome, or to identify for the parties potential evidentiary or legal complexities they might face if the matter proceeds to hearing.
The Deputy President has not reached any final or fixed view about the merit of the Application and did not express that she had done so in either joint or separate session.
The Deputy President does not propose to request the reallocation of the Application.
If the Respondent wishes to make a recusal application, they should inform Chambers by 4pm AWST, Friday, 12 February 2021 and directions will be issued for the Respondent to file submissions and evidence in support of the recusal application.
In the interim, the Directions for the determination of the substantive Application remain on foot and must be complied with."
[6] On 12 February 2021, Amec wrote to the Deputy President's chambers and stated that it did "not believe a recusal application hearing is appropriate in this circumstance, and that the Deputy President ought seek that the matter be allocated to another member". Amec again referred to the passage from the decision in CFMMEU v Watpac Construction Pty Ltd[3] (Watpac) which it had quoted in its earlier correspondence of 10 February 2021, and went on to say:
"The Full Bench in Watpac gave cogent reasons as to why a recusal application hearing is not required or desirable in these circumstances. Those reasons included:
If the Deputy President is not minded to reallocate the matter (without conducting a recusal hearing), we are instructed to write to the President of the Commission and request that his Honour direct that the matter be transferred to another member under section 582(4)(d) of the Fair Work Act 2009 (Cth). We look forward to hearing from Chambers in that regard."
[7] On 15 February 2021, the Deputy President declined to re-allocate the matter to another member and listed Amec's recusal application for hearing on 18 February 2021. The same day, as it had foreshadowed, Amec sent correspondence to the President of the Commission, Justice Ross, which set out the background to the matter, reiterated that the Deputy President had expressed "a clear view" about the merits of the CEPU's application at the conference, and stated:
"In a further effort to avoid the evidentiary and public policy difficulties arising from a recusal hearing identified by the Full Bench in Watpac, we respectfully request that the President exercise his powers under s 582(4)(d) of the Fair Work Act 2009 (Cth) to make a direction requiring that the matter be allocated to a different member of the Fair Work Commission (noting the parties and relevant witnesses are all located in Western Australia)."
[8] Amec's correspondence attached the previous correspondence which had passed between itself and the Deputy President's chambers. The CEPU thereafter wrote to the President opposing Amec's request. On 16 February 2021, the President sent the following correspondence in response to AMEC's request (omitting formal parts):
"I refer to your correspondence of 15 February 2021 seeking that I transfer matter RE2020/1146 from Deputy President Binet to another Fair Work Commission (Commission) Member under s.582(4)(d) of the Fair Work Act 2009 (Fair Work Act).
I do not consider that it is appropriate for me to remove a matter from a Member and allocate it to another Member based on a submission by one party, particularly in circumstances where the other party objects.
I understand that the Deputy President has listed the recusal application for hearing on 18 February 2021. If the Respondent is dissatisfied with the Deputy President's recusal decision or any procedural decision she makes in relation to dealing with the recusal application, the Respondent may seek leave to appeal those decisions.
I appreciate you raising your concerns with me, however as this matter is currently before the Commission, it is not appropriate for me to comment further."
[9] On 16 February 2021, Amec filed its evidence and written submissions. Its written submissions commenced as follows (footnotes omitted, underlining added):
"1. The Respondent respectfully seeks that the Deputy President exercise her evaluative judgment under s 589(3) of the Fair Work Act 2009 (Cth) (FW Act) to transfer the proceeding another member of the Commission for the conduct of the arbitration hearing.
[10] The evidence filed by Amec consisted of a witness statement made by Mr Marcus Clarke, an industrial relations manager employed by AMEC who attended the conference before the Deputy President on 19 January 2021. Mr Clarke described what he recalled occurred at the conference, including what the Deputy President had said during private discussions with himself and a representative of an affected contractor at the relevant site. Broadly speaking, Mr Clarke's evidence was to the effect that the Deputy President made a number of comments that indicated a view that the CEPU's application was meritorious. Mr Clarke said he based his recollection on notes which he took during the conference, but these notes were not annexed to his witness statement.
[11] The CEPU filed its evidence and written submissions on 17 February 2021. The CEPU's evidence consisted of a witness statement made by Adam Woodage, an organiser, who attended the conference on 19 January 2021. He contradicted Mr Clarke's evidence concerning what the Deputy President said during those parts of the conference which were in "open session".
[12] The hearing of Amec's recusal application proceeded before the Deputy President on 18 February 2021. Neither Mr Clarke nor Mr Woodage were required for cross-examination.
[13] In her consideration of Amec's recusal application in her reasons, the Deputy President first dealt with Mr Clarke's evidence, which she characterised as describing her expressing a concluded view about the CEPU's application at the conference on 19 January 2021.[4] The Deputy President then noted that Mr Woodage's recollections, and her own, differed from those of Mr Clarke,[5] and the Deputy President set out the respects in which her recollection and records differed from Mr Clarke's account.[6] This included that she did not observe Mr Clarke taking any notes. The Deputy President stated in summary:
"[27] I have not yet reached any final or fixed view about the merit of the Application and did not express that I had done so, in either joint or separate session.
[28] I also note, that as is my practise at the outset of all conferences I hold, I informed the parties that any views I expressed in joint or private session were not my firm, fixed or final views but were intended to assist the parties reach a conciliated outcome, or to identify for the parties potential evidentiary or legal complexities they may wish to consider if the matter proceeds to hearing so that they could prepare for the hearing. As I routinely arbitrate matters which I conciliate, I am particularly careful to avoid using language which might be interpreted as me having reached any conclusion about the facts or law in dispute."
[14] The Deputy President then noted that Amec did not seek that she recuse herself on apprehended bias grounds, did not identify any statement or conduct which it says might form the basis of an apprehension of bias, and did not "identify any particular statement which it says it relies on in the absence of apprehended bias to meet some lower threshold, justifying the exercise of a discretion to transfer the Application to another Member".[7] The Deputy President then referred to the Watpac decision relied upon by Amec, and observed that it concerned an appeal in which the Full Bench upheld a single member's decision not to recuse herself on the basis of a reasonable apprehension of bias and that any comments within it concerning members reallocating matters which they have conciliated prior to arbitration as obiter.[8] The Deputy President also noted that legislative provisions preventing a member from arbitrating a matter which they had previously conciliated were removed in 2005,[9] and said she concurred with the views of Asbury DP in Cullen v AEG Ogden (Convex) Pty Ltd t/as Brisbane Convention and Exhibition Centre[10] (Cullen) that the decision in Watpac did not require a member who had conciliated a matter to automatically accede to a request from a party that the member not hear the matter.[11] The Deputy President said:
"[37] The workload of the other Members in Western Australia is currently at unusually high levels. In addition to dealing with an increase in Western Australian matters arising from the COVID-19 pandemic we are also assisting our colleagues in New South Wales and Queensland by hearing and determining applications originating in their regions. The reallocation of this matter would result in a delay in its hearing and determination. Relevantly, the reallocation is also opposed by the CEPU."
[15] The Deputy President considered, alternatively, that even if the statement from Watpac was binding upon her, none of the "public policy grounds" which arose in that case were present in the matter before her, in that no settlement offers were made during the conciliation, AMEC did not concede any points during the conciliation, nothing was said by Mr Clarke during the private session that would not be raised in Amec's evidence and submissions in the hearing, and the parties were made aware of the discussions held in separate session.[12] The Deputy President then reiterated that she had not expressed any provisional view at the conference in either joint or private session, and Mr Clarke's evidence that final views were expressed in the joint session was contrary to the evidence of Mr Woodage and her own recollections.[13] The Deputy President then said that there were public policy reasons for exercising hesitancy in reallocating matters in circumstances where apprehended bias is not alleged or made out, including that some registries have limited numbers of members available which meant that reallocation would delay the expeditious disposition of matters, reallocation at the whim of members would encourage forum shopping and thereby undermine the public perception of the independence of the Commission, and it assisted in the efficient arbitration of matters if members could identify legal and evidentiary complexities in a case at conference.[14] Having regard to the these matters, the Deputy President said that she determined it was not appropriate to reallocate the CEPU's application.[15]
[16] Amec's amended notice of appeal identifies ten grounds of appeal which, in its submissions, are grouped into six discrete contentions of appealable error. The first of these is that the Deputy President's ultimate refusal to transfer the proceeding to another member was subject to appealable error in that:
(a) a failure to take into account, or otherwise to give manifestly inadequate weight to, the public policy considerations articulated in the Full Bench decisions in Watpac and United Firefighters' Union v Gavin Wright; Country Fire Authority[16] (UFU);
(b) a failure to take into account, or otherwise to give manifestly inadequate weight to, the unchallenged evidence of Mr Clarke concerning the statements made by the Deputy President in private conference; and
(c) an unreasonable or plainly unjust outcome falling in the second category of discretionary error in House v The King.[17]
[17] Amec submitted that Watpac and UFU had articulated the proper approach to be taken to a request to transfer the arbitration of a proceeding which the member had conciliated, namely that the mere fact of a person objecting ought ordinarily be sufficient for the arbitration to be transferred. The Deputy President purported to summarise the public policy considerations underlying that approach, it was submitted, but ignored a critical component of the analysis, namely that the presence of certain features in a given case might underscore the appropriateness of a transfer but were not necessary to enliven the public policy considerations. Amec relied in particular on the "chilling" effect upon conciliation in general if parties cannot have confidence that they can object to the conciliating member arbitrating the matter. Amec accepted that the statements in Watpac and UFU it relied upon were obiter dicta, but submitted they were nonetheless carefully considered dicta of two Full Benches and reflected the public policy considerations articulated by the Federal Court Full Court in Heap, in the matter of an Application for Writs of Prohibition, Certiorari and Mandamus against the Australian Industrial Relations Commission[18] (Re Heap). It was submitted that there was no cogent basis to depart from the approach taken in Watpac and UFU, and the unchallenged evidence of Mr Clarke demonstrated that the Deputy President expressed views in private conference about the merits of the proceedings and perceived problems in Amec's case.
[18] Second, it was submitted by Amec that the Deputy President denied it procedural fairness in rejecting the unchallenged evidence of Mr Clarke based on her own "records" and "recollections", in that:
the case was conducted on the basis of Mr Clarke's unchallenged evidence, in circumstances where the Deputy President did not put Amec on notice that she intended to take issue with Mr Clarke's evidence;
the Deputy President's "records" and "recollections" were not in evidence and it was not open to her to take them into account;
none of the "records" or "recollections" were disclosed to the parties; and
even if they had been disclosed, they would not have been able to be tested.
[19] Third, Amec submitted that the Deputy President made some adverse findings about Mr Clarke, including that he appeared to lack some respect for the proceedings, interrupted and talked over her and did not appear to be taking notes, but none of these matters were raised with Amec during the course of the hearing with the consequence that neither Mr Clarke nor Amec had an opportunity to respond to them. This amounted to a further denial of procedural fairness.
[20] Fourth, Amec submitted that the Deputy President ought not to have dealt with Amec's transfer request by way of a contested hearing which, as stated in Watpac, was a course both unnecessary and "fraught with difficulty" because it posed evidentiary challenges and ran the risk of undermining the effectiveness of the conciliation process by exposing in open court confidential settlement discussions. The apparent conflict between Mr Clarke's unchallenged evidence and the Deputy President's "recollections" was fatal to the Deputy President's ability to properly undertake the fact-finding exercise before her and, it was submitted, should have caused the Deputy President to immediately recuse herself from hearing the transfer application. Her failure to do so resulted in a denial of procedural fairness.
[21] Fifth, it was submitted that the finding that Amec did not identify any particular statement it relied upon in the absence of apprehended bias to meet some lower threshold justifying the exercise of the discretion to transfer the application was wrong, in that Amec's written and oral submissions did identify the particular statements it relied upon.
[22] Sixth, Amec submitted that the Deputy President relied upon public policy reasons arising from the Commission's own internal practices which were not raised by either party and not drawn to Amec's attention, and thereby again denied Amec procedural fairness.
[23] Amec submitted that permission to appeal should be granted because the decision is attended by sufficient doubt to warrant reconsideration, substantial injustice would result if permission was refused, the appeal raised several questions of general application enlivening the public interest, and the status of the Watpac/UFU approach has been the subject of diversity of opinion in first instance decisions and thus further appellate guidance is warranted.
[24] In supplementary submissions filed, with leave, after the appeal hearing, Amec submitted that:
it did not submit that it had a right to compel a transfer of the matter on public policy grounds, but it did have a right to request this arising under s 589(1) and (3)(b) of the FW Act;
s 589(1) authorised a member to deal with Amec's request by way of a decision, in the same way as it authorised a member to deal with a recusal application on bias grounds;
the statements said by Mr Clarke to have been made by the Deputy President at the conference engaged the considerations articulated in Watpac, UFU and Re Heap;
the Deputy President could have avoided conducting a contested hearing by simply inviting written submissions from the CEPU; and
if the appeal was successful, the Full Bench or a member of the Full Bench could re-determine the issue itself on the basis of the material that was before the Deputy President but excluding consideration of the Deputy President's untested recollections of the conference.
[25] The CEPU submitted that:
permission to appeal should not be granted because the matters raised by the appeal have already been considered in Watpac and UFU, which decisions made it clear that the public policy grounds referred to are not binding on a member;
permission to appeal in relation to the public policy matters raised in the appeal was refused in UFU;
the Deputy President's decision was not attended by sufficient doubt to warrant its reconsideration, and was an interlocutory procedural decision for which the grant of permission to appeal has been discouraged;
the Deputy President gave substantial consideration to the public policy grounds, and little or no weight should be attributed to these given that they derive from obiter statements in Watpac and UFU and did not in either case result in the member being required to cease dealing with the relevant matter;
upholding the appeal would cause an unreasonable or plainly unjust outcome in that previous legislative provisions requiring a member not to arbitrate a matter they had conciliated upon objection had not existed in industrial legislation since 2005, delay and procedural complexities would ensue contrary to the Commission's obligations in s 577(b) of the FW Act, and that in the absence of actual or apprehended bias members have a duty to continue to hear and determine matters;
the comments said by Mr Clarke to have been made by the Deputy President in private session during the conference did not involve the identification of problems in Amec's case nor the expression of views about the merits of the CEPU's application;
the Deputy President was entitled to rely on her own recollection of the conversations, as was the case in Watpac and, in any event, her recollection was of little significance in her decision;
any adverse findings against Mr Clarke did not have any impact on the Deputy President's determination; and
Amec did not rely on any legislative provision or jurisprudential principle that required the Deputy President not to hold a hearing.
[26] Although this is an appeal from an interlocutory procedural decision, we have decided to grant permission to appeal in order to dispel confusion which appears to have arisen in light of the Full Bench decisions in Watpac and UFU. Those decisions appear to have been taken by some, including Amec, as establishing a basis separate from the rule against bias upon which an application may be made for a member who has conciliated a matter to recuse themself. That is a fundamental misunderstanding.
[27] It is necessary to begin by explaining the basis upon which matters are allocated within the Commission. The power to allocate matters to particular members of the Commission or Full Benches for determination rests with the President by the issue of directions under s 582 of the FW Act. The President's powers in this respect include, in s 582(4)(d), the power to make "a direction about the transfer between FWC Members (including a transfer between Full Benches) of one or more matters being dealt with by the FWC". In day-to-day practice, this power is often exercised by other presidential members of the Commission by way of a delegation of power by the President pursuant to s 584(1). Members are required to comply with directions made under s 582: s 582(5). There is no express indication in the FW Act that these powers are exercisable upon application by parties to particular proceedings, nor that the exercise of these powers constitutes a "decision" within the meaning of s 598 capable of being appealed under s 604.
[28] Separate to this, the President has power under s 615 to direct that a matter be dealt with by a Full Bench and, under s 615A, is required to direct that a matter be dealt with by a Full Bench if an application is made by a party who has made, or will make, submissions for consideration in the matter or by the Minister, and the President is satisfied that it is in the public interest to do so. Section 615A operates in contradistinction to s 582 (and s 615) since it expressly contemplates an application being made for referral to a Full Bench. Because the power in s 615A is only exercisable upon application, this may give rise to a decision within the meaning of s 598.[19]
[29] The above provisions operate subject to the duty to afford procedural fairness, which is a fundamental common law doctrine not excluded by the FW Act and is therefore applicable to the exercise of the Commission's powers and functions. The observance of the rules of procedural fairness, which include the rule against bias, is an implied condition of the exercise of the Commission's jurisdiction. Therefore, if a member in the course of dealing with a matter engages in conduct which gives rise to a reasonable apprehension of bias (or demonstrates actual bias), the member is disqualified from further dealing with the matter and must recuse themself. In that circumstance, it would be necessary for the President, or a delegate, to reallocate the matter pursuant to s 582.
[30] Absent any disqualification because of a breach of the rule against bias, we do not consider that a single member of the Commission who has been allocated a matter to deal with to finality has the power to cease dealing with it and transfer it to another member on the basis of an "objection" by a party that the member has conciliated the matter. As earlier stated, Amec submitted that such a power exists in s 589(1) of the FW Act and that this power may be exercised on application by a party pursuant to s 589(3)(b). We disagree. Section 589(1) confers a broad procedural power upon the Commission as to "how, when and where a matter is to be dealt with". We do not consider this provision, when read in the context of the other provisions of the FW Act to which we have just referred, is to be understood as empowering a single member who has been directed to determine a matter to simply cease dealing with it and transfer it to another member. The words "how, when and where" are not apt to describe such a power, nor can they be read as operating inconsistently with the obligation of a member to comply with an allocation direction made pursuant to s 582 or the power conferred on the President exclusively (subject to the delegation power) by s 582(4)(d) to direct the transfer of a matter between members.
[31] It is of course the case that parties may make a request that the powers conferred by s 582 concerning the Commission's internal administrative affairs be exercised in a preferred way in relation to matters in which they are participants. However, absent procedural fairness considerations, that is a long way from saying that the exercise of such powers is justiciable so that parties may make "applications" about such matters which will then be determined by appealable decisions.
[32] It is also relevant to make reference to s 592 of the FW Act, which (in subsection (1)) empowers the Commission, for the purposes of performing its functions or exercising its powers, to direct persons to attend a conference at a specified time and place (except in relation to minimum wage matters under Pt 2-6). Subsection (3) of s 592 establishes the default position (except for unfair dismissal and general protections matters) that any such conference must be conducted in private, unless the person conducting the conference directs that it be conducted in public. Subsection (4) provides that at a conference the Commission may mediate, conciliate, make a recommendation or express an opinion. Section 592 makes it clear, in our view, that the conduct of conferences by members of the Commission in relation to matters before them, the conduct of such conferences in private, and the making of recommendations and the expression of opinions at such conferences, is contemplated by the FW Act to be an entirely normal and regular feature of the performance of functions and the exercise of powers by the Commission. In this context, it is all the more significant that, as the Deputy President observed in her reasons, the FW Act does not contain any provision preventing members from arbitrating a matter which they have conciliated upon an objection by a party, unlike previous federal industrial relation legislative regimes.
[33] It is in this context that the Full Bench decisions in Watpac and UFU must be understood. We will turn to Watpac first, since that was the decision primarily relied upon by Amec. Watpac concerned an appeal from a decision in which a single member of the Commission had declined an application for her to recuse herself from a s 739 matter on the basis of alleged apprehended bias arising from things she had said and done whilst conciliating the matter. The Full Bench was not satisfied that the member had made any appealable error in declining to recuse herself, and dismissed the appeal. However, it went on to make a number of observations. After reviewing the legislative history in which previous statutory regimes had prohibited the arbitration of an industrial dispute by a member who had conciliated the dispute where a party objected, the Full Bench said:
"[39] While the provisions of s.105 of the IR Act no longer form part of the FW Act, the public policy considerations underlying those provisions remain relevant. In particular, there are good reasons why it will often be inappropriate for a member of the Commission to arbitrate a matter where he or she has previously been involved in conciliation proceedings about the same matter.
[40] While the circumstances of this case focus on comments made by the Commissioner which allegedly gave rise to a reasonable apprehension of bias, a number of concerns can arise where a member of the Commission arbitrates a matter after having been involved in conciliation. This is so even where the member has given no indication of any view he or she may have formed. It would be common, for example, for conciliation proceedings to include offers and counter-offers by parties to settle a matter. Even if the member makes no comment about any such offer or counter-offer, it is conceivable that a member who subsequently has to arbitrate a matter might be influenced by being aware of the content of such negotiations.
[41] Similarly, parties may be willing privately to concede points in conciliation that they would not be willing to concede in an arbitration. Again it is conceivable that knowledge of any such concession might influence a member who subsequently has to arbitrate the matter.
[42] During conciliation conferences, members also commonly have private discussions with one party in the absence of the other. While this is often a very effective mechanism in helping resolve matters by consent, it also means that the absent party does not know what has been said in any such discussion.
[43] These are just some of the considerations that might make it inappropriate for a member to arbitrate a matter that he or she has conciliated.
[44] It is not just a matter of avoiding a reasonable apprehension of bias. Conciliation is a vital function of the Commission. Indeed, most disputes referred to the Commission under the terms of a DSP are resolved by conciliation. Not only is this often the parties' preference, but it is also consistent with the Commission's general obligation to promote harmonious and cooperative workplace relations.
[45] It is essential for the proper functioning of the Commission that parties feel they may speak openly in conciliation, either in plenary session or in private with the member, without fearing that what they say might subsequently adversely affect their interests in arbitration if the matter does not settle. That is one reason why conciliation proceedings are confidential and not recorded.
[46] This is not to say that there will not be cases where the parties themselves prefer a matter to be arbitrated by a member who has been involved in conciliation. However, either party should be free to object to a member subsequently arbitrating a matter which he or she has conciliated.
[47] In our view, once a party to a dispute objects to a member of the Commission who has been involved in conciliating that dispute from undertaking arbitration, that by itself should generally be enough to persuade the member to arrange for the matter to be reallocated to another member for arbitration. This is particularly the case where the member has participated in private discussions separately with the parties in conciliation, the member has expressed views in conciliation about the merits of the dispute, the member has been made aware of without prejudice settlement offers made in conciliation, or one or more parties have made concessions in conciliation which they are not willing to make in a subsequent arbitration.
[48] This can occur without holding the sort of recusal hearing the Commissioner conducted in this case. We note that such hearings are fraught with difficulty.
[49] First, such hearings pose obvious evidentiary challenges. Conciliation proceedings are not recorded, for good reasons. This means, as in this case, that the member has to make findings on what he or she has said or done, based largely on personal recollection.
[50] Perhaps even more fundamentally, such hearings run the risk of undermining the effectiveness of the conciliation process. Hearings such as the one conducted by the Commissioner inevitably expose in open court the content of supposedly private and confidential discussions designed to settle matters by consent. The risk that such a hearing might occur has the potential to discourage the parties from being frank and open in conciliation. This is clearly undesirable from a public policy perspective.
[51] In relation to the matter currently under appeal, it follows that once the Commissioner had finished conciliating the matter (and assuming the matter did not settle), it would be preferable, in our view, for another member of the Commission to conduct any arbitration, including the resolution of any jurisdictional questions."
[34] The Full Bench finished by saying:
"[52] ...We would encourage the Commissioner however to have regard to the observations we have made in considering whether it would be preferable to arrange for the matter to be reallocated to another member of the Commission for arbitration."
[35] The following may be stated about the decision in Watpac:
(1) The "observations" were plainly obiter dicta (as Amec conceded in its submissions).
(2) The Full Bench did not anywhere state that a party has a right to disqualify a member who has conciliated, nor do we understand it to have said that a party has a right to apply for a member to disqualify themself on that basis. Reference was made to a party "objecting" to a member who has conciliated continuing to sit on a matter, but that is best understood as referring to a party expressing a preference about the future conduct of a matter rather than exercising any capacity to make an application for the exercise of power under the FW Act. As earlier stated, leaving aside a complaint of a breach of the bias rule, the FW Act makes no provision for an application of this nature to be made.
(3) The Full Bench expressly eschewed any notion that there should be a hearing in relation to an "objection" to a member arbitrating a matter which the member has conciliated.
(4) The Full Bench nowhere suggested that its observations related to the making of an application or the exercise of power under s 589.
(5) The Full Bench nowhere suggested that a member who has conciliated a matter should automatically cease to deal with it. The Full Bench repeatedly expressed itself in contingent terms: "it will often be inappropriate" for the member to arbitrate (at [39]); public policy considerations "might make it inappropriate" to arbitrate (at [43]); and an objection by a party "should generally be enough to persuade the member" to arrange for reallocation to another member (at [47]). In this respect, we do not consider that there is any inconsistency between Watpac and the approach taken in Cullen.
(6) Notwithstanding its observations, the Full Bench did not treat them as providing any basis for appellate intervention. The matter was remitted to the member with a mere encouragement for her to have regard to these observations. Thus, Watpac clearly did not purport to establish any "decision rule" that single members are required to follow.
[36] The Full Bench decision in UFU[20] concerned, among other things, appeals from decisions in which a single member declined to recuse herself from a s 739 application on the ground of apprehended bias and also declined an application that she not arbitrate the matter on the basis of the Watpac decision. The Full Bench refused permission to appeal insofar as the appeal dealt with these matters on the basis that, because the applicant in the s 739 matter had discontinued his application after the Full Bench had reserved its decision, there was no utility in hearing the appeal.[21]
[37] In what were clearly obiter comments, the Full Bench went on to say that it "endorse[d] the observations of the Full Bench in Watpac about the undesirability of a member of the Commission proceeding to arbitrate a matter over the objection of a party after having exercised conciliation functions in relation to the matter",[22] but in doing so it did not say anything contrary to what we consider to be the correct characterisation of what was said in Watpac. It may be noted that the Full Bench in UFU made reference to paragraph [27] of the Federal Court Full Court decision in Re Heap.[23] That reference is confirmative of our characterisation of the observations in Watpac, as endorsed in UFU. Re Heap concerned an application for judicial review of a decision of a Full Bench of the Australian Industrial Relations Commission which had upheld an appeal against a decision of a single member not to recuse herself on the ground of apprehended bias. The circumstances were that the single member had commenced to arbitrate an unfair dismissal application and, at a time when only the closing oral submission remained to be received, engaged of her own initiative but with the consent of the parties in an unsuccessful conciliation process. Certain statements made by the member during this process gave rise to one party making a recusal application. The Full Court determined that there was no error in the Full Bench's decision that the circumstances of the case gave rise to a reasonable apprehension of bias. In the course of its reasoning, it expressed considerable doubt that the single member had the power to engage in conciliation after arbitration had commenced.[24] The Full Court then said:
"[27] Even if, as a matter of law, it is open to a member of the Commission exercising the function of arbitration with respect to a termination of employment to engage in conciliation in the course of the exercise of that function, there is every reason to take the view that the member should be reluctant to do so. The possibility that the member might be told something in conciliation that would influence his or her decision as an arbitrator is so great that it ought to lead to extreme reluctance to mingle the two functions. There is also the risk that what the member says will exhibit prejudgement, will be perceived (rightly or wrongly) to be applying undue pressure, or will be seen as endeavouring to assist one side or the other. The risk that the exercise of the conciliation function in conjunction with the arbitration process might taint the latter is exacerbated where the member of the Commission confers privately with one party only. The longer the arbitration has been running, the greater is the risk that the time and effort put into it will be wasted if an attempt to conciliate fails. In the present case, the Senior Deputy President, at her own request, conferred with the representatives of the Bank, in the absence of Mr Heap or his counsel. She did so at a very late stage of the proceeding, when all that remained was for Mr Perry to put his oral submissions on behalf of the Bank. At the very least, the circumstances required that all present be very circumspect in what they said."
[38] It can be seen that the above passage has no direct relevance to the current circumstances or those discussed in Watpac and UFU. Re Heap was concerned with recusal for apprehension of bias, not some other undefined species of recusal. Further, the above passage referred to in UFU is concerned with the advisability of conducting conciliation after arbitration has started, not with whether a member should commence arbitration after they have conciliated a matter. What the Full Bench drew from the above passage (as demonstrated by its underlining in its partial quotation of the passage) is the reference to the reluctance that should apply to engaging in both conciliation and arbitration. That makes it clear that the Full Bench in UFU did not regard Watpac as establishing any sort of "decision rule" or binding principle but rather that it was simply indicative of a normally desirable course of action having regard to identified public policy considerations.
[39] We turn now to what may conveniently be referred to as the recusal application made by Amec at first instance. In its initial form, as articulated in Amec's correspondence of 10 February 2021, the recusal application is best understood as one based upon a reasonable apprehension of bias. Although it is not formulated expressly in those terms, the references to the decisions in Ebner v Official Trustee in Bankruptcy[25] and Kirby v Centro Properties Limited (No 2)[26] and to the Deputy President having expressed "pre-determined views" (i.e. prejudgment) makes that conclusion inescapable. The reference to paragraphs [33]-[43] of Watpac refers to it as having "examined" Ebner and Kirby, which relates it to apprehension of bias, although these parts of the decision are not concerned with that subject matter.
[40] The Deputy President's correspondence in response of 11 February 2021 declined the recusal application and indicated that, if the application was pressed, she would make directions for the filing of submissions and evidence. On the basis that the application was one founded on an apprehension of bias, this was the proper course. Amec's further correspondence of 12 February 2021 did not indicate that the basis of its recusal application had changed, but its reference to the obiter statement in Watpac to the effect that engaging in a formal hearing of a recusal application was not required or desirable was confusing and took it out of context. This is because the statement in Watpac did not relate to a situation where a reasonable apprehension of bias was claimed, but rather to the alternative situation whereby a party objected to a member arbitrating a matter simply on the basis that the member had conciliated the matter.
[41] The Deputy President did not recuse herself but rather listed Amec's recusal application for hearing. This was, in our view, the proper course, since to this point the recusal application was to all appearances at least principally based on an alleged apprehension of bias. Amec then wrote to the President seeking that he re-allocate the matter on the basis that a hearing of its recusal application should be avoided, but did not identify that its recusal application was no longer based on an apprehension of bias. It is apparent from the President's response, in particular his reference to Amec's contention that the Deputy President had expressed pre-determined views at the conference, that he considered that Amec was advancing a conventional recusal application founded at least in part on apprehension of bias and, consistent with normal principles, acknowledged that this would be determined in a hearing before the Deputy President.
[42] It was only when Amec filed its written submissions on 16 February 2021 that it made it apparent that it had changed the basis upon which it advanced its recusal application. It now eschewed any reliance on apprehended bias and, for the first time, sought to found its application entirely on the obiter dicta in Watpac and UFU and contended that it had a right to apply for the transfer of the matter under s 589. We agree with Amec's fourth appeal contention that an "application" of this nature should never have been the subject of a formal hearing, but not for the reasons submitted by Amec. As earlier stated, the obiter dicta in Watpac and UFU did not give rise to a right to have the Deputy President to recuse herself or a right to apply for this to occur, and the Deputy President did not have authority under the FW Act to simply transfer a matter which had been allocated to her to another member absent any breach of the rule against bias. The "application" now articulated by Amec was fundamentally misconceived and should not have been entertained. However, no criticism can be levelled at the Deputy President for taking the course that she subsequently did: the matter had been listed for hearing on the basis that it was substantially based on an apprehension of bias, and the President had left it for the Deputy President to decide based upon that understanding.
[43] We can now deal briefly with Amec's remaining contentions of appealable error. For the reasons we have already stated, we reject Amec's first contention, which is based on the proposition that Watpac and UFU established a binding or normative principle of recusal which the Deputy President was bound to follow. The second and third contentions of error are based on the way in which the Deputy President treated the evidence of Mr Clarke in her reasons for decision. We consider that, ultimately, the evidence of Mr Clarke even taken at its highest was irrelevant, because absent any allegation of apprehended bias based on prejudgment, the Deputy President did not have the capacity to transfer the proceeding to another member. In any event, we note that:
the Deputy President was not bound to accept Mr Clarke's evidence merely because the CEPU chose not to cross-examine him;
the CEPU's witness Mr Woodage contradicted Mr Clarke as to those parts of the 19 January 2021 conference at which he was present, and Mr Woodage's evidence was likewise "unchallenged" in the sense that Amec chose not to cross-examine him; and
• the Deputy President clearly placed Amec on notice at the hearing that she did not necessarily accept Mr Clarke's evidence that she had expressed pre-determined views about the merits of the CEPU's application at the conference.[27]
[44] We also reject the fifth contention of error. We agree with the Deputy President that, having not alleged actual or apprehended basis based on prejudgment, Amec never identified the import of Mr Clarke's evidence to the effect that the Deputy President had expressed views about the merits of the CEPU's application at the conference. If those statements did not convey that the Deputy President would not consider the CEPU's application impartially or potentially cause the fair-minded lay observer to believe that she might not consider the application impartially, then their relevance is obscure. As the Deputy President indicated, there is no "lower threshold" upon which an application for recusal based on alleged prejudgment can be advanced. Mr Clarke's evidence does not disclose that the Deputy President's alleged statements caused Amec to seek to settle the case on any basis or to make any concessions about its case. As to the sixth contention of error, we consider that the countervailing public policy considerations referred to in the Deputy President's reasons did not have to be specifically put to Amec for response at the hearing; they should have been well understood as relevant having regard in particular to their ventilation in other earlier decisions in this area.[28]
[45] Accordingly, we consider that the appeal should be dismissed. In reaching this conclusion, we have applied what we consider to be the correct principles which are summarised as follows:
(1) The conduct of conciliation conferences prior to the arbitration of matters is a normal and regular feature of the Commission's jurisdiction.
(2) If, in the conduct of a conciliation conference, a member exhibits actual bias or gives rise to a reasonable apprehension of bias, the member is disqualified from further dealing with the matter and must recuse themself. If a party considers that there has been a breach of the rule against bias by a member at a conciliation conference, the party may make an application for the recusal of the member. The usual practice is that this application should in the first instance be made informally and, if not acceded to, should be the subject of a formal hearing and decision. A party aggrieved at a member's decision in respect of a recusal application may, with permission, appeal the decision under s 604 of the FW Act.
(3) Apart from recusal for breach of the bias rule, single members do not have the capacity under the FW Act to decide to cease to deal with matters which have been allocated to them for determination by the President, or a presidential member exercising the President's powers on delegation, or to transfer such matters to another member.
(4) If a party to a matter which has participated in a conciliation conference considers that there are public policy reasons why the member who conducted the conference should not proceed to arbitrate the matter, they may convey that view to the member's chambers. It would be appropriate in this circumstance for the member to raise the matter with the President or presidential member who allocated the matter in the first place (allocating member). However, any request made by a party of this nature should not be treated as an "application" made under the FW Act to be subject to a formal adjudicative process.
(5) The allocating member may then decide to re-allocate the matter, or not, having regard to the circumstances of the case. We agree with the Full Benches in Watpac and UFU that where, in a conciliation conference, a party has made without prejudice settlement proposals, has made concessions, or has communicated information about its case which it would not be prepared to disclose at a hearing, that may, absent any relevant countervailing factors, lead to the matter being re-allocated.
(6) Countervailing considerations which may be taken into account by the allocating member may include: whether the parties engaged in the conciliation process on the basis that the member would continue to sit on the matter; the extent to which all parties were present at all stages of the conference; whether the conference was recorded; the need to avoid "member-shopping", especially at smaller Commission registries; any significant delay which might be caused by the re-allocation of the matter; the efficient use of the Commission's resources; and the general utility attached to conciliation conferences as a means to identify the real issues and the most efficient means for their adjudication.
[1] Transcript, 18 February 2021, PN 114
[3] [2019] FWCFB 3855, 287 IR 30
[17] [1936] HCA 40, 55 CLR 499 at 505
[18] [2003] FCAFC 36, 128 IR 346
[19] Eg. Application for approval of the Collinsville Coal Operations Enterprise Agreement 2014 [2014] FWC 3129, 246 IR 21
[23] [2003] FCAFC 36, 128 IR 346
[27] Transcript, 18 February 2021, PNs 54-57, 74-78
[28] See eg. Cullen [2019] FWC 6986 at [35]; Watpac Construction Pty Ltd v CFMMEU [2019] FWC 4076, 287 IR 54 at [37], [41]-[51]
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Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2021] FWCFB 3191
(2011) 202 FCR 439
(2000) 205 CLR 337