Application by Metropolitan Fire and Emergency Services Board [2019] FWC 106 | Case summary

[2019] FWC 106

Application by Metropolitan Fire and Emergency Services Board [2019] FWC 106 | Case summary | Zoe

[40]

[1] On 30 September 2010, an enterprise agreement commenced operation covering the Metropolitan Fire and Emergency Services Board (MFB), the United Firefighters' Union of Australia (UFU) and various firefighter employees employed by the MFB. It is titled the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2010 (2010 MFB Agreement). It remains in operation but has long since passed its nominal expiry date of 30 September 2013. Also on that day, another enterprise agreement commenced operation. It is titled the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Assistant Chief Fire Officers Agreement 2010 (ACFO Agreement). The ACFO Agreement covers employees of the MFB who are Assistant Chief Fire Officers (ACFO), the MFB and the UFU. Like the 2010 MFB Agreement, the ACFO Agreement remains in operation though it has passed its 30 September 2013 nominal expiry date.

[2] On 16 March 2018, an enterprise agreement titled the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2016 (Agreement) was made when a majority of employees employed by the MFB at the time who would be covered by the Agreement voted to approve it.

[3] By application lodged on 3 April 2018, the MFB has applied to the Fair Work Commission (Commission) pursuant to s.185 of the Fair Work Act 2009 (Act) for the Agreement to be approved. If approved by the Commission, the Agreement will replace the 2010 MFB and ACFO Agreements. The Agreement is a single enterprise agreement. The UFU is a bargaining representative for the Agreement. It supports the approval of the Agreement and has given notice pursuant to s.183 of the Act that it wants to be covered by the Agreement.

[4] The Minister for Small and Family Business, the Workplace and Deregulation (now the Minister for Jobs and Industrial Relations) (Minister) made application seeking leave to be heard in relation to the application for approval of the Agreement. I decided, in order to inform myself in relation to the application, to permit the Minister to make submissions[1] in relation to the following issues as well as to lead evidence[2] relevant to some of these issues:

[45]

[5] The Victorian Equal Opportunity and Human Rights Commissioner (VEOHRC) also sought leave to be heard in relation to the application for approval of the Agreement. I also decided to permit the VEOHRC to make submissions confined to the matters identified in its written submissions dated 29 May 2018 filed in support of its application for leave to be heard.[3] The VEOHRC was also permitted to file evidentiary material but did not do so.

[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)[4] (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.

[46]

[7] The Minister and the VEOHRC contend the Agreement contains a number of unlawful terms.

[8] An unlawful term is, relevantly, a term in an enterprise agreement that is a discriminatory term or an objectionable term.[5] 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, a number of specified characteristics or attributes, relevantly sex and family or carer's responsibilities.[6]

[9] Two broad issues require determination in relation to the discriminatory terms point that is raised. The first concerns the meaning of "discriminates" in s.195 of the Act and specifically whether "discriminatory term" extends to a term of an enterprise agreement which though facially neutral or appearing to treat one employee just as another, it nevertheless has a disproportionate adverse effect on an employee covered by the agreement with a specified characteristic or attribute: that is, an employee with a characteristic or attribute is treated less favourably than an employee without the characteristic or attribute. The issue to be determined therefore is whether "discriminates" in s.195 extends to an enterprise agreement indirectly discriminating against an employee covered by it. If that is so, the second issue concerns whether particular provisions of the Agreement which touch upon or effect the capacity of an employee covered by the Agreement to work part-time are discriminatory terms.

[10] It is contended by the objections raised that various terms of the Agreement:

prohibit part-time employees from performing operational firefighter duties, save in exceptional circumstances;

prevent the MFB from promoting part-time employees due to insufficient operational firefighting experience and, consequently, require the MFB to hold back other benefits only available to employees of certain classifications;

prohibit part-time employees from holding certain roles; and

impose additional obligations on employees seeking part-time work, such as requiring evidence in the form of a statutory declaration evidencing any entitlement (that is to make a request) to flexible work, and agreement from the UFU.

[11] These terms, which are said to be directed to restricting part-time employment and opportunities for part-time employees, are consequently said to be both discriminatory and objectionable terms.

[12] An objectionable term is a term of an enterprise agreement that requires, has the effect of requiring, or purports to require or have the effect of requiring or a term that permits, has the effect of permitting, or purports to permit or has the effect of permitting, a contravention of Part 3-1 of the Act.[7] That part deals with general protections that prohibit the taking of adverse action against, inter alia, employees, prospective employees and independent contractors for particular identified reasons.

[13] Here there is no contest as to the reach of "adverse action", described in Part 3-1 of the Act as action that "discriminates between employees". It is accepted that "discriminate" extends to indirect discrimination. The contest insofar as the part-time employment provisions of the Agreement is concerned, is about whether the terms broadly identified earlier have the requisite effect so as to bring them within the definition of an "objectionable term".

[14] There is a further issue which concerns the effect of certain provisions of the Agreement upon employees who are not members of the UFU and whether these terms singularly or in combination are also objectionable terms. The Minister contends that various terms of the Agreement are objectionable because they require or permit the MFB to discriminate against non-union members. The Minister says that these terms exclude non-union members (or their representatives) from committees and other fora under the Agreement and confer veto rights on the UFU with respect to the individual terms of employment of non-union members.

[15] Together, these matters engage with one of the matters about which the Commission must be satisfied as set out in s.186 of the Act. The Commission must be satisfied, inter alia, that the Agreement does not include any unlawful terms.[8] If the Commission has concerns that the Agreement might contain one or more unlawful terms then it is possible for the Agreement to nonetheless be approved with an appropriate undertaking.[9]

[16] The VEOHRC's objection is confined to whether the Agreement contains unlawful terms, and then only on discriminatory grounds or reasons based on sex and family and parental responsibilities.

[49]

[21] Section 186(2)(d) requires the Commission to be satisfied as a condition of approving an enterprise agreement, that the agreement passes the BOOT. The BOOT is assessed at test time, which for this Agreement is 3 April 2018. The relevant reference instrument for the purposes of assessing the BOOT is the Fire Fighting Industry Award 2010 (Award). These matters are not controversial.

[22] The proper application of the BOOT requires a finding that each award covered employee and prospective employee would be better off under the agreement than under the relevant modern award.[10] The requirement that "each" such employee and prospective employee be better off overall is a rigorous one. The ordinary meaning of "each" is "every, of two or more considered individually or one by one."[11] It follows that every award covered employee and prospective employee must be better off overall, with the corollary that if any such employee is not better off overall, the relevant enterprise agreement does not pass the BOOT.[12] The Commission is entitled to assume, in the absence of evidence to the contrary, that if a class of employees to which a particular employee belongs would be better off overall if the agreement applied to that class than if the relevant modern award applied, the employee would be better off overall if the agreement applied to the employee.[13]

[23] A proper application of the BOOT also requires an overall assessment to be made. This requires the identification of terms which are more beneficial for an employee, terms which are less beneficial, and an overall assessment of whether an employee would be better off under the agreement.[14]

[24] The Minister contends that the Agreement is unprecedented in its content. It breaks new ground in its interference in the ability of, in particular, women and people with family and carer responsibilities, to obtain part-time work. These restrictions on part-time employment cause the enterprise agreement to fail the BOOT. The Minister says that existing and prospective Award covered MFB employees seeking to work part-time are worse off under the Agreement than the Award because such employees are not permitted under the Agreement to perform operational firefighter duties, except in exceptional circumstances. Such employees are also precluded under the Agreement from performing certain roles and they are required to seek the approval of the UFU in order to make part-time arrangements.

[51]

[25] The capacity of the Commission to accept an undertaking in relation to the approval of an enterprise agreement is dealt with in s.190 of the Act. Section 190 is engaged, relevantly, if an application for approval of an agreement has been made under s.185 and the Commission has a concern that the agreement does not meet the requirements set out in ss.186 and 187.[15] It is uncontroversial in relation to the Agreement that there is an application for its approval under s.185. Whether I have concerns that the Agreement does not meet, inter alia, the requirements in ss.186(2)(c), (d) and (4) of the Act is dealt with later in this decision.

[26] Section 190(2) confers discretion on the Commission to approve an agreement under s.186 if satisfied that acceptance of the undertaking, subject to the fetters in ss.190(3) and (4), meets the concern. Any undertaking proffered must be responsive to and meet the concern that the agreement does not meet one or more of the identified requirements set out in ss.186 and 187 of the Act. By s.190(3), the Commission may only accept a written undertaking if satisfied that the effect of accepting the undertaking is not likely to cause financial detriment to any employee covered by the agreement or result in substantial changes to the agreement. Section 190(4) prevents the Commission from accepting an undertaking unless it has sought the views of each person who the Commission knows is a bargaining representative for the agreement. Finally, an undertaking that is proffered must meet the signing requirements prescribed by the regulations. A residual discretion remains to be exercised even if the undertaking that has been accepted meets the identified concern.

[27] The Minister contends that the issues identified cannot be remedied by way of written undertakings. The effect of the issues identified is that the Agreement should not be approved. The Minister contends that some of the Agreement terms identified as unlawful terms are central to the Agreement's operation, thus any undertakings purporting to cure these flaws in the Agreement would involve substantial changes to the Agreement and would, in effect, cause a rewriting of the Agreement itself. The Minister says that such undertakings would not be permitted under s.190 of the Act.

[61]

[31] I am satisfied based on the material contained in the Pearce Declaration and the documents which are annexed thereto that the MFB complied with ss.180(2), (3) and (5) and 181(2).

[32] According to the Pearce Declaration, at the time the MFB asked relevant employees to vote to approve the Agreement, there were 1,999 employees who were employed who would be covered by the Agreement. Of that voting cohort, 1,768 employees cast a valid vote, and 1,759 voted to approve the Agreement. Plainly, a majority of employees employed at the time who cast a valid vote, voted to approve the Agreement. There is no suggestion that the employees who were asked to vote to approve the Agreement did not meet the description in s.182(1), nor is it suggested that there are employees who met that description but were not asked to vote to approve the Agreement. I am therefore satisfied, based on the material contained in the Pearce Declaration, that the Agreement was made in accordance with s.182(1).

[33] Save for the matter raised by the Minister concerning the nature and extent of the matters which are said not to pertain to the requisite relationships, which I address later in this decision, there is no material before me nor am I aware of any other basis upon which I should conclude that there are other reasonable grounds for believing that the Agreement has not been genuinely agreed to by the relevant employees.

[34] As this is not a multi-enterprise agreement, the requirement in s.186(2)(b) does not apply. The requirements in s.186(2)(c) and (d) are the subject of the objections earlier summarised and are dealt with further below. That said, save for the matters identified in the BOOT objection, there is no suggestion that the Agreement does not pass the BOOT. After a review and comparison of the Agreement terms and the Award terms taking into account the less beneficial terms under the Agreement identified in Attachment F of the Pearce Declaration, I am satisfied (putting to one side the part-time employment issues) the Agreement otherwise passes the BOOT in respect of every other award covered and prospective award covered employee.

[35] The Agreement does not cover all of the MFB's employees. The Agreement covers employees of the MFB who may broadly be described as operational firefighters together with employees holding the ranks of Commander and ACFO. It is evident from the classification structure in the Agreement and the organisation of the MFB in respect of its firefighting services, that firefighters are engaged in particular classifications in which they are part of a "rank" or command structure commencing at Recruit Firefighter through to ACFO, and ultimately to the Chief Fire Officer, who understandably is not covered by the Agreement.

[36] The Agreement does not cover MFB employees engaged in administrative, clerical, engineering, technical and associated functions or employees engaged in the MFB's mechanical workshop. Separate enterprise agreements covering these employees are in operation. It appears to me clear that the group of employees covered by the Agreement is operationally distinct. The group may be broadly described as operational firefighters and higher ranking firefighters exercising some level of managerial or operational control over operational firefighters. This group is operationally distinct from other groups of MFB employees who are not covered by the Agreement identified above. There is nothing in the material before me, nor is it suggested that the group of employees covered by the Agreement was anything other than fairly chosen, and I am so satisfied. The requirements in ss.186(3) and (3A) are therefore met.

[37] The requirement in s.186(4) is the subject of the unlawful terms objection earlier summarised and is dealt with further below. That said, on a review of the terms of the Agreement, I am satisfied that the Agreement does not contain any term of the kind described in s.194(baa)-(h). No one has suggested otherwise.

[38] The requirement in s.186(4A) concerns outworker terms and does not arise in respect of the Agreement.

[39] The Agreement specifies a nominal expiry date of 1 July 2019. The requirement in s.186(5) is therefore met.

[40] Clause 21 of the Agreement contains a dispute resolution term. It allows the Commission to settle disputes about matters arising under the Agreement and in relation to the NES. It also allows for the representation of employees covered by the Agreement for the purposes of the procedure. The requirement in s.186(6) is therefore met.

[41] There is no material before me, nor has it been suggested by any person who made a submission in relation to the Agreement, that the approval of the Agreement would be inconsistent with or undermine good faith bargaining by one or more of the bargaining representatives for the proposed Agreement. There is also no scope order in operation. I am therefore satisfied that the requirement in s.187(2) is met.

[42] The requirement in s.187(3) has no application to this Agreement since it concerns a multi-enterprise agreement.

[43] Section 187(4) requires the Commission to be satisfied as referred to in any of the provisions of Subdivision E of Division 4 (ss.196-200). Sections 197-200 have no application in relation to the Agreement.

[44] Section 196 of the Act is concerned with ensuring that a shiftwork employee covered by an enterprise agreement, who is entitled to an additional week's leave under the NES because an award that is in operation and covers the employee describes that employee as a shiftworker for the purposes of the NES, continues to be so entitled when the agreement is in operation. When s.196 applies, the Commission must be satisfied that the enterprise agreement also defines or describes the employee as a shiftworker for the purposes of the NES.

[45] Clause 28.2 of the Award defines or describes the kind of employee that is a shiftworker for the purposes of the NES. Such an employee is covered by the Agreement. Section 196 is therefore engaged. Clause 90.2 of the Agreement defines or describes such an employee as a shiftworker for the purposes of the NES in the same terms as the Award. I am satisfied therefore that the Agreement defines or describes the employee as a shiftworker for the purposes of the NES. The requirement in s.187(4) is therefore met.

[46] The requirements in ss.187(5) and (6) have no application as the Agreement is not a greenfields agreement.

[47] Section 202 of the Act requires an enterprise agreement to include a flexibility term that enables an employee and his or her employer to agree to an arrangement varying the effect of the agreement in relation to the employee and the employer, in order to meet the genuine needs of the employee and the employer. Such a term must comply with the content requirements set out in s.203.

[48] Clause 15 of the Agreement contains a flexibility term. It has a narrow permissible subject matter which can be the subject of a flexibility arrangement. It is confined to "when leave is to be taken in accordance with clause 107" of the Agreement. Nonetheless, it is a term described in s.202(1) and its terms comply with s.203.

[49] Section 205 requires that an enterprise agreement include a term that requires an employer to which the agreement applies to consult with employees about a major workplace change that is likely to have a significant effect on the employees. The term must also require consultation about a change to an employee's regular roster or ordinary hours of work, and must allow for the representation of employees for the purposes of the consultation.

[50] Clause 16 of the Agreement sets out a comprehensive consultation scheme. It is a term of the kind required by s.205(1) and it makes provision for the matters set out in s.205(1A).

[51] Accordingly, s.201(1) has no work to do in respect of this application.

[168]

[80] These principles of statutory construction are not seriously in contest. Their application to the provisions at issue in this case is quite another matter and the task is not without difficulty.

[81] The MFB contends that s.195 does not encompass indirectly discriminatory terms.[42] In the absence of an express definition of the word "discriminates" within the Act, it contends that the construction of s.195 must be approached in the context of its place within a scheme of provisions in the Act which complement State and Territory equal opportunity legislation in limiting the extent to which an agreement might operate with discriminatory effect.[43]

[82] Based on Commonwealth, State and Territory anti-discrimination legislation, the MFB contends that legislatures in the various jurisdictions have separately defined direct and indirect discrimination, or have expressly defined "discriminates against" as encompassing both direct and indirect discrimination.[44] It contends that these legislatures have incorporated an express "reasonableness" exception into definitions of indirect discrimination.[45] It contends therefore that, had Parliament intended s.195 to encompass indirect discrimination, it would have made express provision for this, as it did for s.351 of the Act.[46]

[83] The MFB also argues, contrary to the submissions of the Minister noted below, that s.195(3)(c) does not create a carve-out capable of applying to indirect discrimination.[47] That subsection provides that a term of an enterprise agreement does not discriminate against an employee merely because it provides wages for all employees to whom training arrangements apply, or to a class of such employees.

[84] The MFB argues in the alternative, that if s.195 extends to indirectly discriminatory terms, it could only extend to terms which necessarily produce, and only produce, a discriminatory outcome.[48] Further, if s.195 so extends, it should be read as not applying to terms of the Agreement which impose requirements, conditions or practices that are reasonable or reflect the inherent requirements of the position concerned.[49] It contends that the requirements imposed by the impugned terms are reasonable and reflect the inherent requirements of the position concerned.[50]

[85] As a further alternative, the MFB contends that if s.195 encompasses indirect discrimination and does not import a reasonableness test, then the 'inherent requirements' exception in s.195(2) will have to be read broadly, in a manner which effectively equates with the 'reasonableness' exception.[51]

[86] Like the MFB, the UFU advances a construction of s.195 that does not encompass indirect discrimination. Its submissions include that:

• the terms of s.195, when contrasted with how federal anti-discrimination legislation deals with direct and indirect discrimination, including by providing separate definitions and defences in each case, favour a narrow construction of the section limited to direct discrimination;[52]

• s.195 does not require the parties or Commission to scrutinise the Agreement for terms which might disparately impact on hypothetical employees with the full range of relevant characteristics unknown to the parties at the time of making the Agreement;[53]

• s.195 should be considered in the context of federal anti-discrimination legislation and its place in a statutory regime designed to allow scrutiny of the terms of industrial instruments;[54]

• the objects of Part 2-4 of the Act include ensuring that applications to the Commission for approval of enterprise agreements are dealt with without delay, and a construction of s.195 that extended to indirect discrimination would mean the parties and the Commission would need to be alive to and address all indirect consequences of facially neutral terms;[55] and

• the decision in National Retail Association (No 2), is the only directly relevant decision and supports a construction of s.195 that does not include indirect discrimination.[56]

[87] The UFU also contends that the text of s.195 requires the Commission to be satisfied that the Agreement does not contain a term that discriminates against an employee covered by the Agreement because of, or for reasons including, any of the employee's characteristics or attributes as identified, which is suggestive of a requirement that an employee covered by the Agreement be identified.[57] The UFU submits that the Minister did not identify any employee who is discriminated against by any term of the Agreement.[58] This submission is rejected. Contextually, the focus of the enquiry under s.195 is on effect of the term upon an employee who falls within the coverage of the Agreement.

[88] The Minister contends that "discriminates" in s.195 incorporates concepts of both direct and indirect discrimination.[59] The Minister's contention as to that which constitutes "indirect discrimination" differs from the construction for which the VEOHRC advocates. In the Minister's view, "indirect discrimination arises where a condition or requirement disadvantages people with a particular attribute (or is likely to do so), which is not reasonable in the circumstances."[60] [Emphasis added]

[89] In support of this construction, the Minister submits, inter alia, that:

the concept of indirect discrimination incorporates a requirement of reasonableness;

• the ordinary and natural meaning of "discriminates" includes both direct and indirect discrimination,[61] and judicial consideration of the word in Street v Queensland Bar Association[62] (Street), Waters v Public Transport Corporation[63](Waters) and Klein v Metropolitan Fire and Emergency Services Board[64] (Klein) supports this view;[65]

• to give effect to the object of the Act (s.3), and in the context of its predecessor provisions and other provisions in the Act that include the term "discriminates_"_ should be construed to include both direct and indirect discrimination;[66]

• a narrow construction of "discriminates" in s.195(1) is inappropriate given the provisions of the Act aimed at eliminating discrimination are beneficial and remedial in purpose. Rather, s.195 should be construed to give the fullest remedy of the situation with which it is intended to deal, available from the wording;[67]

• a construction which includes both direct and indirect discrimination provides the fullest remedy;[68] and

• the exceptions provided by ss.195(2) and (3) to the s.195(1) preclusion of discriminatory terms can apply to clauses that could be indirectly discriminatory.[69]

[90] The Minister argues the construction for which she contends is consistent with other provisions in the Act which concern the concepts of discrimination,[70] and that it should be presumed that the term has the same meaning in s.195 as elsewhere throughout the Act.[71]

[91] The VEOHRC contends that "discriminates" in s.195 should be given its ordinary meaning, which in its submission encompasses both direct and indirect discrimination. In doing so, it adopts the meaning of indirect discrimination articulated by Dawson and Toohey JJ in Waters:[72]

[199]

[102] Later their Honours observed that "...[i]nstead of making separate and independent provision for indirect discrimination, the legislature has chosen by sub-s.5 to make it clear that sub-s.1 applies to indirect discrimination of the kind described in sub-s.5... Accordingly, sub-s.5 is epexegetical to, or explanatory of, sub-s.1, spelling out the reach, though not necessarily the whole of the reach of that provision in its application to indirect discrimination..."[90] Their Honours did not, however, find s.17(5) to be an exhaustive statement of that which constitutes indirect discrimination for the purposes of s.17.[91]

[103] As to whether an intention to discriminate was required, their Honours considered that it would significantly impede or hinder the attainment of the objects of the EO Act if s.17(1) were to be construed as requiring an intention or motive on the part of the alleged discriminator that related to the status or private life of the person less favourably treated.[92]

[104] In National Retail Association (No 2),[93] Tracey J considered the meaning of "discriminate against" in s.153 of the Act, in the context of a controversy whether an amendment to clause 13.4 of the General Retail Industry Award 2010 contravened s.153 because it discriminated against school aged persons. Section 153 of the Act is in terms very similar to, but not the same as, s.195. Section 153(1) begins by providing that a "modern award must not include terms that discriminate against an employee because of, or for reasons including," and then proceeds to identify a number of attributes or characteristics commonly found in anti-discrimination legislation. Reading s.195(1) together with ss.186(4) and 194(a), in considering whether to approve an enterprise agreement, the Commission "must be satisfied that the agreement does not include any term(s) to the extent the term(s) discriminate(s) against an employee covered by the agreement because of, or for reasons including, the employee's" identified attribute or characteristic. The prohibition against approving an enterprise agreement that includes a term that is "a discriminatory term" is found in s.186(4) informed by s.194(a). Section 195(1) proceeds to describe that which is a "discriminatory term" by providing that a "term of an enterprise agreement is a discriminatory term to the extent it discriminates against an employee covered by the agreement because of, or for reasons including" and then proceeds to identify the same attributes or characteristics found in s.153(1), and indeed in s.351(1).

[105] The exceptions in ss.153(2) and (3) and 195(2) and (3) are in all material senses, the same.[94]

[106] Tracey J observed that the ordinary and natural meaning of the word "discriminate" connotes the making of distinctions. In the case of s.153, which prohibited discriminating against an employee, what was proscribed was the making of adverse distinctions between employees.[95] His Honour did not consider that the proscription extended to indirect discrimination. His Honour said of Federal and State anti-discrimination legislation, "[t]ypically, such legislation defines discrimination so that it covers both direct and indirect discrimination."[96] Relying on passages of the joint judgment of Dawson and Toohey JJ's decision in Waters,[97] his Honour said that the reason this was considered necessary was "because the proscription of discrimination, without more, is not apt to pick up "facially neutral" discrimination which is otherwise known as indirect discrimination."[98]

[107] His Honour found that no attempt had been made in the Act to provide an extended definition of the term "discrimination" so that it encompassed indirect discrimination, and that it was highly unlikely Parliament intended that s.153(1) could be contravened by indirect discrimination.[99] Further, the exceptions in ss.153(2) and (3) to the general rule contained in s.153(1) all covered terms that would meet the description of direct discrimination.[100] I will return shortly to the question of whether I should apply National Retail Association (No 2) to the construction of "discriminates" in s.195.

[108] The approach in National Retail Association (No 2) was not followed by Gordon J in Klein.[101] In Klein, Gordon J considered the meaning of "discriminates" in Item 1(d) of s.342(1) of the Act. That section relevantly provides that adverse action is taken by an employer against an employee if the employer "discriminates between the employee and other employees of the employer." In finding that "discriminates" extends to indirect discrimination, Gordon J observed that the text of Item 1(d) is to be construed in the context of the Act and in a manner consistent with the policy and purpose of the legislation, noting that the ordinary and natural meaning of the word "discriminates" connotes the making of distinctions.[102] Her Honour noted:

[204]

[110] Gordon J construed "discriminates" in s.342 to include both direct and indirect discrimination, taking the view that too narrow a construction of the provisions would be contrary to the objects of the Act and particularly Part 3-1.[105]

[111] Both the MFB and the UFU have urged that I should apply National Retail Association (No 2) to the construction of s.195. They argued that ss.195 and 153 are in all material respects the same and that the criticisms found in Klein does not displace the force of National Retail Association (No 2) as Klein concerned the meaning of "discriminates between" in s.342 of the Act in the context of an application under Part 3-1 of the Act. Moreover, it is said that though there were differences as to the characterisation of some of the reasoning in Waters, Gordon J in Klein merely declined to adopt the observation of Tracey J, in reliance upon particular passages in Waters that the proscription of discrimination without more, is not apt to pick up indirect discrimination.

[112] It is also the case that Tracey J did not rely solely on the identified passages in Waters in coming to his view on the proper construction of s.153. As is evident from the passages extracted further below and as already noted earlier, his Honour took into account other considerations related to the purpose of the provision which informed his construction.[106]

[113] It is also said that I should follow National Retail Association (No 2) because it is on point and it is not plainly wrong.

[114] The facts in National Retail Association (No 2) were relevantly that Fair Work Australia (FWA) varied Clause 13.4 of the General Retail Industry Award 2010 (GRI Award) which had previously fixed three hours as the minimum period for which casual employees could be engaged. The variation permitted employers to employ secondary school students on a casual basis for periods of less than three hours per day subject to certain conditions. The Shop, Distributive and Allied Employees Association (SDA) brought judicial review proceedings challenging FWA's decision to vary the Award.

[115] The SDA contended, inter alia, that Clause 13.4 as amended was a form of indirect discrimination on the basis of age, and therefore proscribed by s.153(1) of the Act. That section provides:

[231]

[121] There is even greater need to conform with this approach so far as an administrative tribunal is concerned. As an administrative tribunal the consideration is not one of judicial comity but rather whether I am bound to apply a judgment of the Federal Court. I consider that I am bound to apply National Retail Association (No 2) as it is on point, not plainly wrong, and has not been overruled. Although the judgment in National Retail Association (No 2) was concerned with a different provision of the Act, both provisions are concerned with the non-permissible discriminatory content in industrial instruments. In Klein, Gordon J did not conclude that National Retail Association (No 2) in its construction of s.153 of the Act was plainly wrong. Indeed, her Honour distinguished it as not binding her Honour in the construction of s.342. No one suggested that the provisions of ss.153 and 195 are materially different either in terms or in context so as to allow me to distinguish National Retail Association (No 2). Moreover, National Retail Association (No 2) has not been overruled.

[122] There can be little doubt that so far as the Commission is concerned, National Retail Association (No 2) in its interpretation of s.153 is currently a binding statement of the law as to the meaning of "discriminates" in that section. It follows that terms may be included in Modern Awards which indirectly discriminate. Whether such terms should be included will be determined by other considerations including the Modern Award's objective.[112] It is to be noted that ss.195 and 153 are related, not only because they concern the content of industrial instruments made or approved by the Commission, or because they are expressed in substantially the same language. The provisions are also related because they are capable of interacting in a very practical way. If different interpretations were to be adopted of the word "discriminates", this may lead to an absurd result. A simple example will suffice.

[123] Consider that an enterprise agreement covering a retail employer is made. Consider also that that agreement incorporates the terms of the GRI Award including clause 13.4. Assuming for the purpose of the example that clause 13.4 indirectly discriminates and is a discriminatory term (broadly construed) within the meaning of s.195. The agreement could not be approved, at least not without an undertaking. This would be so despite the term on the authority of National Retail Association (No 2) having been properly included in the GRI Award because it is not a discriminatory term within the meaning of s.153 of the Act. The term would also be relevant in the assessment whether the agreement passed the BOOT, but it could not be a term of the agreement.

[124] As I have already noted, no one has suggested, and on my review, I cannot identify any term of the Agreement that directly discriminates against an employee covered by the Agreement because of, or for reasons that include, one or more of the characteristics or attributes identified in s.195 of the Act. I am therefore satisfied that the Agreement does not include a discriminatory term.

[125] As I have foreshadowed, were I free to conclude otherwise, I would do so. Since the issues were fully ventilated before me, I will express my view as to the meaning of "discriminates" in s.195 of the Act and the consequences of that construction upon the impugned terms.

[126] Applying the statutory construction principles earlier discussed, the construction of s.195 as including indirect discrimination is to be preferred. My reasons for that view follow below.

[127] The starting point is to consider the word "discriminates" in the context of the actual provision.

[128] A person or thing "discriminates" if the person or thing makes a distinction or differentiates. In the context of s.195, the thing is a term of an enterprise agreement, and the making of a distinction between employees covered by the Agreement. Section 195 is not concerned with all distinctions, just those because of, or for reasons including, the protected employees attribute. "Discriminates" is followed by "against", which as Tracey J observes in National Retail Association (No 2), involves making an adverse distinction between employees.[113] An adverse distinction may occur directly or indirectly where employees are treated equally but the equal treatment results in less favourable treatment of one or more employees with a particular characteristic or attribute.

[129] The authorities discussed above provide guidance on the ordinary meaning of "discriminates" or "discriminates against". On balance, I consider these to favour a reading of "discriminates" that includes both direct and indirect discrimination. It is noted that treatment of s.195 by single Members of the Commission, while varied, has also been weighted towards such an interpretation of s.195.[114]

[130] As Gaudron J noted in Street, the framework of anti-discrimination legislation has, to a considerable extent, shaped our understanding of what is involved in discrimination.[115] With the exception of the Northern Territory, not only has the concept of discrimination encompassing both direct and indirect discrimination been adopted by Federal, State and Territory anti-discrimination statutes, but so has the protected attribute which is identified in s.195.[116] As Gaudron J also explained in Street, this has led to an understanding that discrimination may be constituted by acts or decisions having a discriminatory effect or disparate impact as well as by acts or decisions based on discriminatory considerations. The full context in which Gaudron J expressed these views has earlier been reproduced in this decision.

[131] As with s.17(1) of the EO Act considered in Waters,[117] s.195(1) is also, in my opinion, expressed in general terms, and so the use of the word discriminates seems also apt to apply to both direct and indirect or adverse effects discrimination.

[132] In Klein, Gordon J adopted similar reasoning in rejecting the notion that the proscription of discrimination, without more, is not apt to pick up facially neutral discrimination which is otherwise known as indirect discrimination.[118] Her Honour had also earlier noted that indirect discrimination is not necessarily a separate statutory concept and that where a statutory provision uses the ordinary and natural meaning of the word "discriminates" and expresses an obligation or restriction in general terms that it is apt to apply to both direct and indirect discrimination.[119] Gordon J noted, however, that the meaning of "discriminates" is ultimately a question of proper statutory construction.[120]

[133] The ordinary of meaning of "discriminates" used in s.195(1) expressed in general terms would appear to include a term of an enterprise agreement that indirectly discriminates against an employee covered by the agreement because of, or for reasons including, a particular characteristic or attribute of the employee.

[134] Turning to the remainder of s.195, subsection 195(2) sets out that a term of an enterprise agreement does not discriminate against an employee:

[244]

(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) making bargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.

[145] The process for bargaining and making an enterprise agreement, and the approval and content requirements are set out variously in Divisions 2 to 6 of Part 2-4 of the Act.

[146] The object of enabling the Commission to "facilitate...the making of enterprise agreements...through ensuring that applications to the [Commission] for approval of enterprise agreements are dealt with without delay" might be said to favour the more limited reading advanced by the UFU and the MFB. This is because the approval scheme might be said to be pragmatic in the sense that the approval process is not (and is not intended to be) a panacea for all non-compliant agreement content. Rather, the approval process is a 'point in time' assessment aimed at curing many (but not all) defects. Other provisions of the Act operate to address non-compliant content where the approval process is ill-suited to do so. Having regard to those other provisions,[121] s.195 need not do all of the 'heavy lifting' in addressing indirectly discriminatory terms.

[147] But the need for the approval of agreements without delay does not mean approval without scrutiny. There are many approval requirements in ss.186 and 187, which may in any given case, be complex and require some heavy lifting. For example, questions about whether the group of employees covered by the agreement has been fairly chosen; or whether the agreement has been genuinely agreed to by the employees covered by the agreement; or whether the agreement passes the BOOT, are each not without complexity. Indeed, satisfaction that the agreement does not contain unlawful terms is not merely confined to a consideration of whether the agreement contains one or more discriminatory terms. As s.194 discloses, there is an array of terms which are described as unlawful terms and the absence of such terms is a matter about which the Commission must be satisfied. Moreover, a consideration whether a term of an agreement is an objectionable term, and therefore an unlawful term, may itself involve consideration, for example, of whether a term requires or has the effect of requiring an employer to take adverse action by directly or indirectly discriminating between employees in circumstances that would contravene s.351.

[148] The nature of the assessment that is to be made by the Commission in exercising agreement approval powers is also relevant. Section 195 of the Act falls for consideration in amongst Part 2-4 as a whole, and as already noted, the Commission's task is principally set out in ss.186 and 187. The nature of that task is a factor which may distinguish s.195 from that confronting a Court in an application under Part 3-1 of the Act or under anti-discrimination legislation. This may suggest a different approach to the construction of the word "discriminates". The Commission is required to approve an enterprise agreement where the agreement meets the requirements in ss.186-187. Where the Commission has a concern that the agreement does not meet those requirements, it may approve the agreement subject to undertakings which meet the concern.

[149] A state of satisfaction as to the non-existence of a discriminatory term in an enterprise agreement must be arrived at on a proper basis. In R v Connell; Ex parte The Hetton Bellbird Collieries Ltd and Others,[122] Latham CJ observed:

[246]

[150] An assessment whether the requirement in s.186(4) is met is conducted before the agreement is in operation. Such an assessment can readily be made with respect of a term that directly discriminates against an employee covered by the agreement because the differential treatment that such a term imposes will emerge on the face of the terms itself. The assessment of whether a term indirectly discriminates is not as straightforward in every case. The question of whether a term is indirectly discriminatory involves an inquiry into the effect or impact of the term on a particular identified employee or group of employees. That inquiry necessarily gives consideration to the manner in which the term will operate in context and practice. It may be that such an inquiry sits awkwardly with ss.186(4), 194(a) and 195, given the time at which those provisions are considered by the Commission. Though this has some force, it is to be remembered that, the impact of conduct that may be indirectly discriminatory in contravention of Part 3-1 of the Act that is required or permitted by a term of an agreement, must also be assessed at that time. Indeed, although the considerations as to that which is an objectionable term and that which is a discriminatory term differ, it is possible that a term of an agreement may at the same time be a discriminatory term and an objectionable term.

[151] It is also to be observed that in some cases, that a term indirectly discriminates will be obvious from the term itself.

[152] Ultimately, the time at which the assessment is undertaken by the Commission impacts upon the state of satisfaction. But that in my view is not reason enough for a narrow construction of the word discriminates in s.195 to be adopted.

[153] Section 218 of the Act also provides context. It permits the variation of an enterprise agreement on referral by the Australian Human Rights Commission (AHRC). Section 218(1) requires the Commission to review any enterprise agreement referred to it under s.46PW of the Australian Human Rights Commission Act 1986. That provision deals with discriminatory industrial instruments and operates upon AHRC receiving a written complaint alleging that a person has done a discriminatory action under an industrial instrument_._

[154] By s.218(3) of the Act, if the Commission considers that the agreement reviewed 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, the Commission must vary the agreement so that it no longer requires the person to do an act that would be so unlawful. Both direct and indirect discrimination is unlawful under the Age Discrimination Act 2004, the Disability Discrimination Act 1992 and the Sex Discrimination Act 1984.[124] It follows that on referral, if a term of an enterprise agreement requires a person to do an act which would (but for the doing of the act in direct compliance with the agreement exception)[125] be indirectly discriminatory and unlawful under one of the aforementioned statutes, the agreement must be varied on review so that the agreement no longer requires the person to do that act.

[155] As the MFB has correctly pointed out, a review under s.218 of the Act is concerned with the actual (rather than conjectural) effect of the impugned term of the relevant agreement that is already operational. Those inquiries may sensibly encompass indirectly discriminatory terms. The MFB also contended that ss.186(4) and 218 can thus be seen as complementary. Section 186(4) operates to filter out directly discriminatory terms. Insofar as those terms are also capable of lawful operation, s.190 allows employers to provide undertakings to clarify (and limit) the nature of their operation. Section 218 operates once an agreement commences applying to employees. It deals with concrete factual scenarios in which indirectly discriminatory effect can be examined. Upon relevant application, where a term has such an effect, the agreement will be varied to remove that effect.

[156] So much is uncontroversial but it is only half the picture. As I have already noted, s.218 is concerned with an agreement that "requires a person to do an act that would be unlawful" under the identified Commonwealth anti-discrimination statutes. Section 195 is concerned with the terms of an agreement which are themselves discriminatory. The question whether terms of an agreement "require" a person to do an act that would be unlawful, is in essence the same enquiry as one would make in relation to an objectionable term vis-à-vis for example ss.342 and 351. Moreover, many terms of enterprise agreements that require the doing of an act that is unlawful under an identified anti-discrimination statute would likely be of no effect because they would be objectionable terms,[126] for example, if the term required an employer to discriminate between employees for a proscribed reason. The mere presence of s.218 does not obviate the need for the Commission to be satisfied that an agreement, the subject of an approval application, does not contain any objectionable term. Similarly, it does not provide contextual support for reading down s.195(1) as operating upon terms that only directly discriminate.

[157] It is also to be remembered that a provision in an agreement which required, for example, an employer to do an act that would be unlawful under one of the identified anti-discrimination statutes, would not at the approval stage be binding on the employer since the agreement did not apply to the employer but only covered the employer.[127] There could not at that stage be any requirement to do the act. It therefore makes sense in the scheme of the Act, which has an object "enabling fairness...at work" and "the prevention of discrimination"[128] for the Commission to raise concerns about whether such a term is a discriminatory or objectionable term before the agreement is approved, commences operation and the term is thus binding. Section 218, like s.253(1)(b), does not operate to read down the meaning of discriminates in s.195(1), rather it operates upon terms of an agreement that were not identified by the Commission in the process of approving it.

[158] The general protections provisions in Part 3-1 of the Act and the objects found in s.336(1) also provide relevant context. The objects include "to provide protection from workplace discrimination", and "to provide effective relief for persons who have been discriminated against".

[159] Section 342(1) of the Act sets out the circumstances in which a person takes adverse action against another person. The taking of adverse action for various reasons (or for reasons which include those reasons) is proscribed by, inter alia, ss.340, 346 and 351. Adverse action by an employer against an employee will be taken if, for example, the employer discriminates between the employees and other employees of the employer.[129] Adverse action in the form of "discriminates against" is also identified as against prospective employees and independent contractors.[130] The meaning of "discriminates" in s.342(1) (Item 1(d)) was, as already noted, held in Klein to include both direct and indirect discrimination.

[160] Section 351(1) of the Act proscribes the taking of adverse action by an employer against an employee or prospective employee "because of the person'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." The proscription does not apply to action that is:

[251]

[161] Paragraphs (b) and (c) above are in essence the same exceptions as are to be found in ss.195(2)(a) and (b) of the Act, save for differences that are necessary because s.195 is concerned with the terms of an enterprise agreement and s.351 is concerned with action taken by an employer.

[162] The absence of an exception in s.195 of the Act which corresponds with s.351(2)(a) is also explained for the same reason. Section 195 is not concerned with conduct or action by an employer that discriminates but with a term of an enterprise agreement that discriminates. The range of anti-discrimination laws in respect of which s.351(2)(a) is directed are concerned with proscribing conduct. Moreover, conduct taken in direct compliance with a term of an enterprise agreement that is an unlawful term is not exempt under a number of anti-discrimination laws identified in s.351(2)(a).[132] A corresponding provision in s.195 would add little.

[163] Contextually then, the Commission is required by s.186(4) to be satisfied an enterprise agreement does not contain an objectionable term. Assessing whether a term relevantly requires or permits a contravention of, for example, s.351, will involve considering whether the term requires or permits adverse action to be taken against an employee in the form of direct or indirect discrimination between an employee and other employees covered by the agreement. Consistent with the objects of the Act, there seems to me to be no good reason why, so far as discriminatory terms are concerned, the assessment required by s.186(4) as concerns a discriminatory term would be limited to those terms which directly discriminate but the assessment of an objectionable term would examine both. Considered in this way, ascribing the same broad meaning to "discriminates" in s.195 and s.342(1) - Item 1(b) and thus requiring under s.186(4) satisfaction that an enterprise agreement does not include terms that directly or indirectly discriminates or require or permit such discrimination for proscribed reasons, is consistent with the objects of the Act.

[164] Sections 26, 27 and 29 of the Act also provide some context. They deal with the interaction of the Act with particular State and Territory laws and with the interaction of, relevantly, enterprise agreements with particular State and Territory laws. Section 26 provides that it "is intended to apply to the exclusion of all State or Territory industrial laws so far as they would otherwise apply in relation to a national system employee or a national system employer." This intention however is expressly excluded in respect of laws enumerated in s.27.

[165] Section 27(1A) of the Act provides that s.26 does not apply to any of the identified State and Territory anti-discrimination statutes. Section 29(1) provides that "a modern award or enterprise agreement prevails over a law of a State or Territory, to the extent of any inconsistency." Section 29(2) provides that:

[259]

[169] The MFB contends the practical effect of these provisions is that the operation of State and Territory anti-discrimination legislation is left undisturbed. As a term of an enterprise agreement that has an indirectly discriminatory effect would contravene State and Territory laws, such a term is of no effect to the extent of that operation. The MFB contends that there is nothing remarkable about the Act leaving the regulation of indirectly discriminatory matters to State and Territory equal opportunity legislation. This is true, but the same may be said about terms of an agreement that directly discriminate, yet on the MFB's analysis, the Parliament elected to leave the regulation of indirectly discriminatory matters to State and Territory anti-discrimination legislation but not terms that directly discriminate and those are to be weeded out, initially at least pursuant to ss.186(4), 194(a) and 195. It did this apparently but without expressly saying so. I would not accept this construction.

[170] Section 29(2) operates on terms of an agreement that, relevantly, discriminate. If a term of an agreement diminishes, by direct or indirect discrimination against an employee covered by the agreement, a protection afforded by an applicable State or Territory anti-discrimination law, the term operates subject to that law. These provisions therefore say little about whether s.195 should be confined to direct discrimination. If anything they, together with the various other provisions in the Act to which reference has already been made, suggest the Parliament intended a comprehensive approach to the prevention and elimination of discrimination in the workplace. A narrow reading of s.195 would seem to me to be inconsistent with that approach.

[171] I turn then to s.153 of the Act. As already noted, that section has been construed as being confined to terms that directly discriminate. It is in substantially the same terms as s.195, though s.195(1) is prefaced with the words "to the extent", whereas s.153(1) is not. I do not consider this to be a significant difference. If free to do so, I would come to a different conclusion to that of Tracey J in National Retail Association (No 2) for the following reasons. First, I agree with the difficulties in the reasoning of Tracey J identified by Gordon J in Klein, which are, in my respectful opinion, compelling. Secondly, for the reasons earlier given, I do not share the view expressed by Tracey J that the exceptions in ss.153(2) and (3) "all cover terms which would meet the description of direct discrimination."[136] Plainly, ss.153(2)(a) and (b) and 153(3)(c) are capable of being invoked in respect of an indirectly discriminatory term. Thirdly, I would depart from his Honour's view that it would be highly unlikely that Parliament intended s.153(1) could be contravened by indirect discrimination as awards typically contain many provisions that discriminate between employees, and in particular, that wages are often fixed by reference to criteria such as length of service and qualifications. His Honour reasoned that it is unlikely that Parliament intended such provisions could be impugned because they indirectly discriminate on the ground of age as an example.[137] Respectfully, this analysis pays insufficient attention to the fact that the legal concept of discrimination does not extend to different treatment appropriate to a relevant difference.[138] To paraphrase Brennan J in Street, where a reason for different treatment has a rational connection with an objective unrelated to a prohibited ground, the different treatment will not be discriminatory.[139] Fourthly, the weight of authority, and particularly High Court authority, lies with the interpretation of "discriminates" favoured by Gordon J. I would also regard this as apposite to the meaning of "discriminates" in s.153.

[172] In my respectful opinion, reading the word "discriminates" in the context of s.195 and the Act as a whole leads to a conclusion that "discriminates" in s.195 includes indirect discrimination. Preferring such an interpretation is consistent with a purposive approach to the construction of statutory provisions having regard to the objects of the Act earlier noted.

[173] Reference was also made during the course of proceedings to relevant legislative history. I do not consider it necessary to refer to that history in this decision. Were it necessary for me to do so, I would be inclined to adopt the submissions and analysis of the VEOHRC of that legislative history.[140]

[174] It should also be evident from the analysis above, that I consider both persuasive and applicable the notion discussed by both Gaudron and Brennan JJ in Street which is to the effect that the legal concept of discrimination does not extend to different treatment that is appropriate to a relevant difference. It follows that I would reject so much of the VEOHRC's submission as invited me to adopt a construction of the word "discriminates" unencumbered by any filter of reasonableness.

[261]

[175] It is strictly unnecessary, given my earlier conclusion, to consider whether any of the impugned terms is a discriminatory term in the sense that a term indirectly discriminates for impermissible reasons against an employee covered by the Agreement. Nevertheless, as the matters were fully ventilated, I will express my view.

[176] As the description of that which is a discriminatory term in s.195(1) suggests, it is the term that must discriminate against an employee because of, or for reasons including, one or more of the enumerated characteristics or attributes. It is not enough, in my view, that the term be capable of indirectly discriminating for one or more reasons proscribed. A term must actually do so. Put another way, the term must produce the proscribed discriminatory outcome vis-à-vis an employee covered by the Agreement. A term may have both a proscribed and a lawful operation. It is only to the extent a term has a proscribed operation that it will be a discriminatory term.

[177] This seems clear from the text of s.195 and from other related provisions of the Act. Section 195 provides that a term is a discriminatory term "to the extent that" it discriminates against an employee. Section 56 renders a term of no effect "to the extent that" it contravenes s.55. Section 253 renders a term of no effect "to the extent that" it is not a term about a permitted matter, it is an unlawful term, or is a designated outworker term. Section 356 renders a term of no effect "to the extent that" it is an objectionable term. These provisions each contemplate that a term may operate in both a permissible and impermissible way. Provisions of an agreement which can operate in a permissible way without impermissibly discriminating continue to operate. Determining whether a term of an enterprise agreement is one caught by s.195 is a matter of construction of the term.

[178] Much like the approach to construing a statute, the construction of an enterprise agreement or a term of an agreement begins with a consideration of the ordinary grammatical meaning of the words used, having regard to the context and evident purpose of the provision or expression being construed. Context may be found in the provisions of the instrument taken as a whole, or in their arrangement and place in the instrument being considered. The statutory framework under which the instrument is made may also provide context, as might an antecedent instrument or instruments from which particular provisions might have been derived.[141]

[179] The Agreement also contains a number of terms which may be described as aspirational. It is relevant therefore to consider how such provisions ought be construed. In National Tertiary Education Union v La Trobe University (La Trobe),[142] both Bromberg and White JJ considered the effect of particular aspirational terms contained in the La Trobe University Collective Agreement 2014. An issue in La Trobe was whether the following term imposed any binding obligation on La Trobe University in the context of a proposed restructure that would result in 280 redundancies:

[278]

[186] It is relevant to provide some evidentiary context against which the impugned terms are to be considered. The MFB and the UFU led evidence by which they sought to establish the following:

numbers of firefighters in the MFB are essentially fixed by government;

the ability to replace the loss in full-time equivalent employee numbers is affected by the lengthy and rigorous selection and training processes that are necessary for requisite skills acquisition and retention;

there are existing minimum crewing requirements that govern deployment; for these reasons and for reasons of safety, service delivery and employee welfare, full-time employment must be the norm; and

the MFB could not across any meaningful period of time accommodate a significant number of requests for part-time employment as they would necessarily affect the numbers of full-time equivalent firefighters available for deployment as part of the minimum crewing requirements.

[187] The UFU submitted that it follows that part-time employment is the exception, hence the language used in clauses 9, 43 and 44 of the Agreement.

[188] Evidence was also adduced about the possible impact on career progression because of the limited forms of part-time employment said to be available under the Agreement. In particular, the evidence adduced sought to blunt the attack on the impact of the absence of the opportunity to work, except in exceptional circumstances, as an operational firefighter and the deployment of part-time employees into special administrative duties.[155] There was some evidence about the impact on a part-time firefighter of not forming part of the minimum crewing numbers[156] although it is clear that there have been no part-time firefighters assigned to a station above the minimum crewing level and that this was because there had been no such requests.[157]

[189] Indeed, the evidence was that there had been no requests made by any firefighter employed by the MFB to work alternative work arrangements while carrying out operational firefighter duties.[158]

[190] There was evidence that the MFB currently employed three operational firefighters who were working on a part-time basis.[159] But this is not the same work as these "operational firefighters" performing operational duties as firefighters.[160] This was apparent as, of the three "operational firefighters" working part-time none were assigned to a fire station. Two of these "operational firefighters" were engaged in a job sharing arrangement in relation to a single position deployed in the MFB's emergency management department and the other employee was working reduced hours at the "district office of Oakleigh".[161]

[191] It must also be said that there was no evidence from which it could be concluded that any employee covered by the Agreement was actually disadvantaged by terms in the 2010 MFB Agreement which restricts part-time employment in similar ways to those in the Agreement.

[192] Returning then to the impugned terms. The text of clauses 9.1.4, 9.1.5 and their mirrors in 44.1.1 and 44.1.2 is set out in chapter 2 of this decision.

[193] The Minister contends that these clauses have the effect of preventing part-time employees from performing operational firefighter duties, save in exceptional circumstances.

[194] In summary, the Minister submits that:

(a) clauses 9.1.5 and 44.1 include aspirational words that do not provide any real safeguard;

[290]

[197] The VEOHRC submits that conditioning the rostering of part-time employees so that they can only perform station duties or work on a 10/14 roster in exceptional circumstances is, of itself, discriminatory, as these conditions do not apply to other employees. It describes clauses 9.1.4, 9.1.5, and 44.1 as merely aspirational.

[198] In construing the impugned sub-clauses within clause 9 (and, where applicable, clause 44), regard must be had not only to the text of the individual sub-clauses but to their relationship with the rest of clause 9. Clause 9 deals with the obligations of the MFB. In clause 9.1.4, the first sentence and the first part of the third sentence provide that the MFB acknowledges that it will meet its obligations to make reasonable accommodation for employees with parental or carer responsibilities and to make reasonable adjustments for employees with disabilities. The second sentence and second part of the third sentence qualify this acknowledgment, providing that generally, on-shift workers should be employed on a full-time basis and making reasonable accommodation may require an employee to transfer off-station or from their current work location to another position.

[199] Clause 9.1.5 operates to similar effect as clause 9.1.4, but with respect to requests for flexible work arrangements under s.65 of the Act.

[200] Both clauses 9.1.4 and 9.1.5 provide that generally "on-shift" employees will be required to work full-time. The Agreement distinguishes between employees working on the 10/14 roster provided by clause 122, and those working on the SADR provided by clause 124. Employees on the 10/14 roster are described as "on-shift", while employees not working on-shift are described as being on "day shift" or "day work duties". Clause 124, which deals with the SADR, provides that employees working this roster will work an average of 42 hours per week and will receive the same total weekly wages as employees on a 10/14 roster as well as the SADR allowance.[163] This clearly suggests that an employee working on a SADR will not work in accordance with the 10/14 roster. As clause 124.3 makes clear, if the MFB agrees to a request for work other than full time, such employees will not be required to work the average number of hours specified in clause 124.1.1. This suggests that a part-time employee will work an average number of hours which is less than 42 hours per week, but plainly will not work those hours in accordance with a 10/14 roster.

[201] This position is reinforced by clause 9.1.6, which expressly states that where, in accordance with clause 9, 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. When read with the forgoing provision, this means that where the MFB agrees to an employees' request under s.65 of the Act for flexible working arrangements, the employee will be rostered on "day shift", not "on-shift". The same view may be taken of clause 44.1.1.

[202] Clause 9.1.7 operates to qualify clause 9.1.6 to a limited extent, as clause 44.1.2 does for clause 44.1.1.

[203] The combined effect of clauses 9.1.4-9.1.7 is in my view clear. Notwithstanding the MFB's obligations under s.65 of the Act, or more generally to make reasonable accommodations for employees with parental or caring responsibilities or disabilities, employees accessing a part-time arrangement will not be permitted to work on the 10/14 "on-shift" roster or form a part of minimum safety crewing in Schedule 2 of the Agreement, save in exceptional circumstances. Rather, they will be rostered on the SADR.

[204] What is not clear is whether being rostered on the SADR means that a part-time employee is prevented from performing operational firefighting duties. There is disagreement about whether this is the case.

[205] The words "special administrative duties" of themselves lend support to the view that the work to be performed is other than operational. The Macquarie Online Dictionary provides a number of definitions for "special", the most applicable of which appears to be, "having a particular function, purpose, application, etc", or "distinguished or different from what is ordinary or usual: a special occasion". It defines "administrative" as "relating to administration".

[206] Clause 85.17, which provides for a Special Administrative Duties Allowance, says: "Special Administrative Duties shall include all rostered duty in all MFB departments including but not limited to Training and Education, Fire Safety and Administrative areas of Operations as well as the orders of all day work personnel on [the Operational Support Group]." Clause 85.17 does not expressly exclude operational firefighting, but the omission of operational firefighting from any express mention in the non-exhaustive definition is, I think, telling. If SADR involved operational firefighting duties then the need for the detailed references to all but those duties would seem unnecessary. Although characterised as a non-exhaustive list of work, it operates in my view as restricting the SADR to that work or work of that kind. Moreover, it is clear that working on the SADR, will not, save for exceptional circumstances, involve work on a 10/14 roster nor as part of minimum crewing.[164] SADR might involve work as an "operational dayworker" but it is clear that that work will never involve working on a 10/14 roster.[165]

[207] The language used in other parts of the Agreement indicates the drawing of a distinction between MFB Operations and MFB Departments,[166] and operational and administrative duties.[167] For example, clause 74 provides that employees (except ACFOs) rostered on other than a 10/14 roster are required to work at least one on-shift roster per annum at a fire station performing operational duties for which they are equipped for the purpose of skills maintenance. Similarly, clause 158.3 provides that all on shift FCSSs shall undertake at least one roster of skills maintenance in a day work position on the SADR within each year. These clauses suggest that employees on the SADR do not ordinarily perform operational firefighter duties.

[208] It is notable that the description of Special Administrative Duties in clause 85.17 is similar to that in the Fire Fighting Industry Services Award, which provides that special administrative duties will include "all rostered duty in the training and education, fire safety and administrative areas of operations."[168] The Award makes separate provision for operational firefighting.

[209] I consider that reading the Agreement as a whole, the better construction of special administrative duties is that the duties do not extend to operational firefighting and specifically not as minimum crew members working on a 10/14 roster. As a consequence, the effect of the impugned sub-clauses within clause 9 is that part-time employees will only be permitted to perform operational firefighting duties in exceptional circumstances, where there is no risk to service delivery, safety and welfare of employees. As the VEOHRC submits, this is a requirement that only applies to part-time employees and relevantly under clause 44, employees who want to work part-time because of, relevantly, family or carer's responsibilities. This in itself is discriminatory. The restriction imposed on part-time employees covered by the Agreement, given that which earlier appears, will adversely impact disproportionately on women and employees with family or carer's responsibility. That a part-time employee cannot work as an operational firefighter save in exceptional circumstances, adversely impacts 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.

[210] It can be accepted that not every form of part-time hours could be accommodated operationally, for example, working as an operational firefighter as a member of the minimum crewing for two hours of a 12 hour shift may not be practical or even operationally possible. But the reason why it is that a part-time employee could not be accommodated by working some but not all of the full days that a full-time employee would work on a 10/14 roster frankly escapes me. The evidence given as to the need to work full-time on a 10/14 roster as the only means by which to ensure safety or through which necessary training can be given or received, was unpersuasive.[169] The blanket restrictions imposed on part-time employees by the impugned terms identified are 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. A much more nuanced approach would be required to achieve this result. I would conclude, for the reasons stated, that the terms identified are discriminatory terms because they indirectly discriminate. Part-time employees and those wishing to work part-time because of at least family or carer's responsibilities are unfavourably treated. It follows that I would not be satisfied by reason of the identified provisions that the Agreement does not include any unlawful terms.

[292]

[211] The Minister contends that part-time employees are disadvantaged as a consequence of not being permitted to perform operational firefighter duties, save in exceptional circumstances, because they lose the opportunity to participate in firefighting operations and associated job satisfaction. Additionally, their career progression is stalled because to progress through the classifications of "Firefighter" set out at clauses 12.3.1 to 12.3.11 of the Agreement, part-time employees must have had minimum service periods of "career firefighting service" or served in roles that required such minimum service. Stalled career progression means a loss of salary increase and other benefits, such as access to secondment opportunities, only available to employees of certain classifications.

[212] The text of clauses 12.3.1 to 12.3.17 and clauses 41.1 and 41.3.2 is set out in chapter 2 of this decision.

[213] Becoming a Leading Firefighter or Station Officer requires the employee to be a firefighter who has completed a prescribed period of "career firefighting service with the MFESB."[170] This might be contrasted with the definitions in clauses 12.3.3 and 12.3.5, which provide that to become a Firefighter Level 2(C) or Firefighter Level 3(C) requires the employee to be a firefighter who has completed a prescribed period of service with the MFB. Clauses 12.3.3 and 12.3.5 do not stipulate that the required service be "career firefighting service." This difference might be explained as simply imprecise drafting or the use of infelicitous language.

[214] Career progression through the positions identified in clauses 12.3.11 to 12.3.17 is contingent on a relevant employee having held a position which required a prescribed period of career firefighting service. Similarly, clauses 41.1 and 41.3.2 provide that eligibility to undertake a secondment is contingent upon an employee having reached the rank of Leading Firefighter or above, which again requires the completion of the prescribed period of career firefighting service.

[215] What then does "career firefighting service" mean? If it requires only operational firefighting service then, as may be seen from the foregoing discussion, part-time employees will be disadvantaged in that the Agreement only provides for such employees to perform operational firefighting service in exceptional circumstances.

[216] "Career Firefighter" is defined in clause 11.6 as "a paid employee of the MFB in one of the classifications of this Agreement and who has been appointed in accordance with this agreement including clause 12.3. A career firefighter is also referred to in this agreement as a Professional Firefighter."

[217] The MFB contends "career firefighter" in clause 11.6 should not be read down to encompass only periods of service that involve operational duties. It submits that a Qualified Firefighter working on the SADR will suffer no disadvantage in progressing to the Leading Firefighter classification as their service on the Special Administrative Duties Roster will count as "career firefighting service."[171]

[218] Clause 43.6 deals with rostering and refers to professional firefighters. Clause 43.6.1 provides for full-time employees to be rostered in accordance with the 10/14 roster, with the exception of operational dayworkers. Full-time operational dayworkers are defined as "professional firefighters who are not working on a roster referred to in 43.6.1". This indicates that operational dayworkers are considered professional firefighters. Clause 43.6.3 refers to part-time operational dayworkers but does not include a definition.

[219] Other parts of the Agreement appear to use Career or Professional Firefighter as a way of distinguishing between Recruit Firefighters and those who are not recruits,[172] or between professional firefighters and volunteers.[173]

[220] While the wording of the Agreement is somewhat ambiguous and imprecise, on balance, I consider the better view is that the Agreement does not require an employee to be engaged in operational firefighting duties in order to accrue career firefighting service. If this is accepted, then the impugned sub-clauses within clause 12 are not discriminatory against part-time employees and, it follows, against persons with the characteristics identified by the Minister and the VEOHRC.

[298]

[230] The Minister contends that clauses 43.3, 43.4, 43.6.3, 138.4 and 138.4.1 of the Agreement are discriminatory terms as they impose further restrictions on part-time employment in that they require the UFU's approval for an employee to work part-time or the UFU's approval of the hours worked by part-time employees.[178]

[231] The VEOHRC says clause 43.3 prevents employment of anyone on a part-time or casual basis unless there is agreement between "all the parties", which includes the agreement of the UFU.[179]

[232] The MFB says that nothing on the face of the clauses necessarily and only results in a discriminatory operation such as to render them discriminatory terms. Rather, the clauses impose a facially neutral requirement for the MFB and UFU to agree to a proposal.[180]

[233] The UFU submits that clause 43.3 does not condition the right of an employee to make an application under s.65 of the Act.[181]

[234] The text of clauses 43.3, 43.4 and 138.4 are set out in chapter 2 of this decision.

[235] Clause 138.4 mirrors clause 43.3 but applies to Assistant Chief Fire Officers.

[236] The plain meaning of clauses 43.3 and 138.4 is that no employee can hold a part-time or casual position unless all parties to the Agreement, which includes the UFU, agree on a case by case basis.

[237] Clause 43.4 provides that the clause is subject to the rights of employees to work in a non-station based position pursuant to clause 44. Clause 44.1.1 is discussed above, but relevantly provides that generally on-shift employees should be employed on a full-time basis. The effect of this is that clause 43.4 provides that the clause is subject to the rights of employees to work in a role other than an operational firefighting role. For reasons discussed earlier above, this is discriminatory.

[238] The question is whether the requirement that the UFU approve all part-time employment arrangements is discriminatory. The terms require employees who wish to access part-time arrangements to overcome greater hurdles than are provided for in s.65 of the Act. While all employees who wish to access part-time arrangements are affected equally in respect of those hurdles, employees who wish to access part-time arrangements and work as operational firefighters are disadvantaged. Discerning the intentions of the parties from the text of the Agreement, clauses 9 and 44, clauses 43.3 and 43.4 indicates that the common intention of the parties, which includes the UFU, is that permission to work as an operational firefighter on a part-time basis will not usually be granted by either party.

[239] The effect of this, embedded in the impugned terms, is that part-time employees are discriminated against as they are restricted from performing part-time operational firefighting duties, and this indirectly discriminates against employees with the characteristics identified by the Minister and the VEOHRC. There is no evident objective unrelated to the prohibited grounds which would justify the differential treatment.

[240] It follows that I would not be satisfied by reason of the identified provisions that the Agreement does not include any unlawful terms.

[344]

[254] The word "permit(s)" in the definition of "objectionable term" means to "authorise", rather than "afford the possibility" and connotes actual authorisation which calls for the positive operation of the clause in question rather than a passive one.[190] Relevantly, in assessing whether a term of an enterprise agreement is an objectionable term, consideration of an employer's potential conduct is entirely speculative and of no assistance if a clause is capable of being given a lawful operation.[191]

[255] In Klein, Gordon J considered whether consultative provisions under the MFESB and UFU Operational Staff Agreement 2005 were objectionable terms. Her Honour adopted the position in Australian Industry Group v Fair Work Australia[192] (AIG v FWA) that "permit" in the definition of "objectionable term" means "authorise", rather than "afford the possibility", and that a clause may require or permit conduct in contravention of Part 3-1 of the Act either directly or by necessary implication.[193]

[256] In United Firefighters' Union of Australia v Country Fire Authority (UFU v CFA),[194] the Full Court considered an appeal from a judgment of Murphy J[195] in which his Honour held that clauses 13, 14 and 16 of the Country Fire Authority/United Firefighters' Union of Australia Operational Staff Enterprise Agreement 2010, referred to as the "consultation clauses", were not objectionable terms. The Country Fire Authority (CFA) had argued that the clauses authorised it to discriminate against its non-union staff by providing for a consultation regime which excluded their participation, as the clauses did not provide any machinery by which non-union employees would be required to be involved in the consultation regime.

[257] In particular, the clauses provided for two committees: one which consisted of people involved in the decision making processes of both organisations (the UFU and CFA), which would necessarily not include non-union members. The other consisted of equal numbers of management and employee representatives 'as determined by the respective parties' (the UFU and CFA). The clause did not prevent the UFU from appointing non-members.

[258] One of the bases that the primary judge had concluded that the clauses were not discriminatory was that they did not authorise discriminatory selection of union members over non-union members. The Full Court noted that the relevant person whose discriminatory conduct was under consideration was the employer, not the union, and the question was whether the clause permitted (in the sense of authorise) or required the employer to discriminate between its employees on the basis of their union membership.

[259] As to whether a term is indirectly discriminatory_,_ the Full Court observed:

[369]

[273] The Minister contends that several clauses of the Agreement provide for various committees and working parties to be established to address issues that affect all employees, and for these committees and working parties to consist of only MFB and UFU representatives. The Minister concedes that none of the clauses expressly require the UFU to appoint representatives that are union members or MFB employees, while submitting that it could not reasonably be expected to do so. The Minister submits that these terms have the effect of requiring or permitting the MFB to discriminate against non-union members by engaging in a process which has a less favourable impact on those members, and by permitting the MFB to discriminate against its employees on the ground of union membership.

[274] Item 1(d) of s.342 provides that an employer takes adverse action against an employee if the employer discriminates between the employee and other employees of the employer. Section 346(a) relevantly prohibits taking adverse action against a person on the grounds that the person is not an officer or member of an industrial association.

[275] Item 7 of s.342 deals with adverse action taken by an industrial association or its officer or member. It is not, as the Full Court observed in UFU v CFA,[208] adverse action for a union to discriminate in favour of its own members and against non-members.[209] There the Full Court found that a clause establishing a committee was not objectionable where the members of the committee did not have to be members of the UFU, but were appointed by it. It said of the clause: "[it] does not require or authorise the CFA not to consult with it non-union employees. That result only comes about if the UFU itself decides to exclude non-union members from the consultation processes."[210] The same observation may be made about the impugned clauses.

[276] The Minister seeks to distinguish the position in UFU v CFA on the basis that there the Full Court considered whether a consultation clause was objectionable because it authorised the CFA to discriminate against its non-union staff, rather than considering the broader question of whether the term had the effect of permitting or requiring, or purporting to permit or require such discrimination. As noted earlier, the Full Court in UFU v CFA left open the possibility that a term of an agreement could be objectionable on the basis of indirect discrimination.

[277] In Klein, Gordon J held that consultation terms of the 2010 MFB Agreement, which are in essence the same as clauses 16 and 17 of the Agreement, were not objectionable terms.[211] There does not appear to me to be any reason why I should adopt a different view for clauses 16 and 17 of the Agreement. These clauses provide that a consultation committee be established comprising equal numbers of employee representatives appointed by the MFB and the UFU respectively. In Klein, Gordon J rejected the proposition that the impugned consultation terms were objectionable terms because they discriminated against non-union members.[212] This was because the provisions allowing for representation of employees by the UFU were consistent with the scheme of representation under the Act and there was nothing in the clauses that require or permit discrimination between UFU members and non-UFU members.[213]

[278] In UFU v CFA, the Full Court held that clauses 13, 14 and 16 of the Country Fire Authority/United Firefighters Union of Australia Operational Staff Enterprise Agreement 2010 (2010 CFA Agreement) were not objectionable terms.[214] Clauses 13, 14, and 16 of the 2010 CFA Agreement are in essence the same as clauses 16, 16A and 17 of the Agreement. The Full Court said that provisions allowing for representation of employees by the UFU were consistent with the scheme of representation under the Act. The Full Court also observed:

[373]

[281] Section 55 of the Act contains the interaction rules between the NES and a modern award or enterprise agreement, and relevantly provides that an enterprise agreement must not exclude the NES or any provision of the NES. That section also provides that an enterprise agreement may include terms that are ancillary or incidental to the operation of an entitlement of an employee under the NES and terms that supplement the NES, provided that the effect of any such term is not detrimental to an employee in any respect when compared to the NES. A provision of an enterprise agreement need not expressly exclude the NES in order to fall foul of s.55(1). A provision of an enterprise agreement, which would result in an employee not receiving the full benefit of the NES also contravenes the prohibition.[217]

[282] Section 186(2)(c) of the Act provides, as one of the requirements which must be met in order that an enterprise agreement may be approved, that the Commission be satisfied that the terms of the agreement do not contravene s.55. For the purposes of s.186(2)(c), a term or terms of an enterprise agreement will contravene s.55(1) if that term or those terms exclude the NES or a provision of the NES. If one or more terms of an enterprise agreement are ancillary or incidental to the operation of an entitlement under the NES or supplement the NES, such term or terms will contravene s.55(4) of the Act if the effect of that term or those terms is detrimental to an employee in any respect when compared to the NES.

[283] Clause 44.3.1 of the Agreement provides that an employee must provide appropriate evidence of their entitlement under the Act in the form of a statutory declaration, copies of which will be provided to the UFU and MFB. Clause 44.3.1 is not in terms confined to an NES entitlement under s.65 of the Act. Read in isolation, it is capable of operating upon a number of NES entitlements to which evidentiary requirements attach, such as parental leave, personal/carer's leave and compassionate leave, and community service leave. The heading to clause 44 of the Agreement is "Rights Under NES". Clause 44.1 makes reference to entitlements under s.65 of the Act. Clauses 44.1.1, 44.1.2 and 44.2 appear also to be concerned with entitlements under s.65 of the Act. The introductory words of clause 44.3 which appears to condition that which follows engage with "operational requirements". "Operational requirements" also appear to condition, at least at a level of generality, the right to make a request under s.65, to which reference is made in clause 44.1. Clause 44.4 also deals with an "employee who works flexible working arrangements in accordance with this clause". The words "in accordance with this clause" seem to me to clearly be a reference to clause 44 as a whole.

[284] Clause 44.3.1 is to be read in the context of clause 44 as a whole and that context strongly suggests that its operation is only upon the entitlement under s.65 of the Act and no other NES entitlements. I proceed on that basis and no person appearing to make submissions in relation to the application suggested a contrary view.

[285] Section 55(4) of the Act permits an enterprise agreement to include terms that are ancillary or incidental to the operation of an entitlement of an employee under the NES and terms that supplement the NES, but only to the extent that the effect of those terms is not detrimental to any employee in any respect when compared to the NES.

[286] Section 65 of the Act provides the following:

[401]

[287] Section 65 of the Act confers an entitlement on an employee who is a parent, or has responsibility for the care of a child who is of school age or younger, or is a carer, has a disability, is 55 years of age or older or is experiencing family violence, to request the employer for a change in working arrangements relating to those circumstances. The request must be in writing and set out details of the change sought and the reasons for the change. The reasons for the change would plainly include information sufficient to establish that one of the circumstances in s.65(1A) is engaged. It is to be doubted whether an employer can, through an enterprise agreement or otherwise, dictate that such a written request must be in the form of a statutory declaration, or that there be some further step in addition to the written request which involves the provision of a statutory declaration as evidence of an entitlement to make a request under s.65. An email or a letter to the employer from an employee making a request setting out the details of the change sought and the reasons for the change would seem to me to be sufficient to satisfy the requirements in s.65(3). No other or additional step appears to be required.

[288] The MFB submitted that as an employee has no right to request a flexible work arrangement per se and that as that right is predicated on the factual existence of one or more of the matters set out in s.65(1A) of the Act, a requirement that the employee substantiate the statutory basis for the request in the form of a statutory declaration is merely ancillary or incidental to the operation of that entitlement as contemplated by s.55(4).[218] This submission is rejected because it ignores the caveat in s.55(4). Moreover, the submission says nothing about the requirement to provide a copy to the UFU or the disadvantage an employee encounters in having to seek out an eligible person before whom a statutory declaration is made.

[289] There is no rational basis which would justify a copy of a written request for flexible working arrangements being given to the UFU as is plainly required by clause 44.3.1. The impugned term does not supplement the NES. To the extent that it might be said that clause 44.3.1 of the Agreement is ancillary or incidental to the operation of an entitlement under s.65 of the Act, it is plainly detrimental to an employee since it requires the additional step of preparing and obtaining the kind of written notice required by the clause and involves the provision of that notice to an organisation that is not required under the NES to be notified. Moreover, the requirement that, inter alia, an employee of the MFB who is experiencing family violence should have to advise the UFU in writing of that fact is frankly abhorrent.

[290] Where the Parliament has contemplated that an employer might require a particular form of evidentiary justification as a precondition to an NES entitlement it has expressly made provision.[219] The Parliament has made similar provision in respect of certain NES entitlements, for an enterprise agreement to include terms relating to the kind of evidence that an employee must provide in order to be entitled to a particular entitlement.[220] There are no such provisions in respect of the entitlement to request flexible working arrangements under s.65.

[291] Clause 9.1.5 of the Agreement provides that "[T]o 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 . . ." This provision does not save clause 44.3.1 from contravening s.55 of the Act. This is so because first, it is concerned with not limiting the rights of employees who are entitled to make a request, whereas clause 44.3.1 is concerned with requiring evidentiary material of a particular kind to establish the entitlement. Secondly, even if it purports to have some broader effect, it is not possible to reconcile the avoidance of doubt expressions in clause 9.1.5 with the text of clause 44.3.1. Thirdly, clause 9.1.5 is very broad whereas clause 44.3.1 is very specific. Clause 9.1.5 does not for example suggest that the terms of clause 44.3.1 which has the effect of adding additional burdens on an employee who is eligible and wishes to apply for flexible work arrangements, will have no effect. Fourthly, the second sentence of clause 9.1.5, which provides "[H]owever, 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", seems to me to disclose that the first sentence pays mere lip service to the right of an eligible employee who has made a request under s.65 of the Act to have his or her request properly considered. Fifthly, the statement in clause 9.1.5 that the Agreement does not limit rights to make a request under s.65, is plainly inaccurate. Clause 9.1.5 is nothing but a bold statement of a state of affairs under the Agreement which is not borne out by the terms of the Agreement.

[292] In my view, clause 44.3.1 of the Agreement contravenes s.55 of the Act in the manner stated. I am therefore not satisfied that the requirement in s.186(2)(c) of the Act is met. This is a matter that may be capable of an undertaking directed to this concern, a subject to which I will later return.

[293] The Minister also contends that a number of other terms of the Agreement contravene s.55 because they interfere with the manner in which the MFB gives consideration to a request, and in particular the grounds on which a refusal is to be founded. Specifically, although the MFB is permitted by s.65 to consider that a request for part-time employment cannot be refused on reasonable business grounds, however, contrary to s.65(5), the MFB will nevertheless be compelled to refuse it by terms of the Agreement that require:

requests for part-time work as a firefighter to be allowed only in "exceptional circumstances";

requests for part-time work as a FSCC to be refused in all circumstances; and

the MFB to refuse a request solely because the UFU does not agree to it.

[294] Clause 43 of the Agreement deals, inter alia, with rostering and provides:

[424]

[296] Clause 43.3 of the Agreement appears to me to present a major hurdle to an employee who is making a request under s.65 of the Act. Section 65(4) requires that an employer must give an employee a written response to the request within 21 days stating whether the employer grants or refuses the request. An employer is only permitted to refuse a request for flexible working arrangements "on reasonable business grounds".[222] Without limiting that which may constitute reasonable business grounds, some matters which are reasonable business grounds are set out in s.65(5A).

[297] The effect of clause 43.3 appears to me to be that, even if the MFB considered that there was no reasonable business grounds upon which to refuse a request, it could not agree to such a request until there was an agreement of "all parties". Although strictly speaking, an enterprise agreement made under the scheme of the Act is not made as between parties, in the context of the Agreement read as a whole, the use of "parties" throughout the Agreement is a reference to the parties identified in clause 6, which includes the UFU. The structure of clause 43.3 does not leave open a construction that the reference to "all parties" is a reference only to the MFB and the person being employed on a part-time or casual basis or wishing to hold a position on such basis. If I am wrong in this reading then the issue can be clarified by way of an undertaking, given that on my reading, the combined effect of clauses 43 and 44 is that these terms place additional hurdles in the way of an employee making a request and the MFB agreeing to or refusing a request made under s.65 of the Act.

[298] Clause 43.4 provides that the whole of clause 43 operates subject to the rights of employees working in "a non-station based position pursuant to clause 44". That clause, as has already been observed, places further restrictions on the manner in which a request is made. Moreover, it ensures a particular request to work part-time on a 10/14 operational roster will not be assessed on its merits. Rather, the result is that such a request will be refused, save in "exceptional circumstances". This is so even if there are no reasonable business grounds for refusing a request of a firefighter to work part-time within the 10/14 roster arrangement. Clause 44 also makes clear that where the MFB agrees to a request for part-time work such a request will be agreed only on the basis that the employee will work in accordance with clause 124 which deals with the SADR.

[299] Furthermore, clause 43.6.3 of the Agreement requires that where part-time employment is agreed for part-time "operational day workers", such a worker will "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". Section 65 allows the employee to nominate the particular "change to his or her working arrangements" because of one of the circumstances set out in s.65(1A) in the written request made to the employer. Section 65(4) requires the employer to respond to that request. Clause 43.6.3 of the Agreement, apart from limiting the nature of the request that might be considered by the MFB, places the additional obstacle of requiring the working arrangements to be negotiated and agreed inter alia with the UFU.

[300] The introductory sentences in clause 44.1 do not save offending provisions. They are in terms and effect the same as those in clause 9.1.5 and my criticism of that provision is also apposite here.

[301] I consider these provisions to contravene s.55 of the Act with the consequence that I am not satisfied that the requirement set out in s.186(2)(c) is met. As I have already observed, concerns about this requirement having been met may be addressed through an undertaking with which I will later deal.

[425]

[302] As earlier noted, the Minister contends that the Agreement contains numerous terms about matters that are not permitted because they do not pertain to the relationship between the MFB and its employees or to the relationship between the MFB and UFU. This contention is advanced on the basis that various provisions in the Agreement confer "veto powers" on the UFU across managerial and operational matters. Particular terms are said to impermissibly interfere with matters that are solely to be regarded within the purview of managerial prerogative. It is said that these terms trespass on actual managerial control, that is, the ability of the MFB itself to manage and govern its own affairs in relation to decisions that may be required to be made from time to time.

[303] The Minister contends that the Agreement is drafted in such a way as to substantially deprive the MFB of its capacity as an employer to make decisions in the future. The level of interference in the ability of an employer to manage its business or organisation in the future is, according to the Minister, unprecedented. The Minister says that the consequence is achieved in two ways. First, because various terms of the Agreement provide the UFU with extensive veto powers, the MFB is prevented from meaningfully operating and managing its own fire service without the agreement of the UFU.[223]

[304] The veto powers identified include subject matter concerning:

any matters pertaining to the employment relationship of employees covered by the Agreement (clause 16);

any proposed change affecting the application or operation of the Agreement, employees' terms and conditions of employment or the employment relationship (clause 16);

employment entitlements (clauses 11.7, 12.9.15, 43.3, 43.6.3(a) and 130.4);

work functions and roles (clauses 12A, 13.3.1, 39.18.8 and 60.3) ;

training requirements (clauses 69.3, 69.5, 69.6, 69.9, 69.11, 69.13 and 70.1);

terminating the employment of employees (clauses 33.1.3 and 39.17);

managing employees and associated organisational issues (clauses 64.2, 64.3.6, 66.2, 66.3 67, 74.1, 75, 116.1 and 116.7);

determining and managing operational activities (clauses 27, 38.2.7, 38.3, 39.3, 39.18.7, 41, 129.3, 130.10, 131.5 and 132.8);

implementing or enforcing policies, including operational policies (clauses 36.2-36.4);

implementing change (clauses 16.3.2, 16.4, 16.5.1, 16.5.5, 16.5.11, 17, 20, 24, 25 and 26); and

• embarking on processes (including by making recommendations to government) which may result in organisational change (clauses 14 and 18).[224]

[305] The second is by terms of the Agreement (clauses 15.6, 39.8, 39.10, 44.3.1) requiring the MFB to provide information to the UFU to enable the UFU to more closely monitor the MFB's operations and management. It is said that these terms do not simply perform an information pathway for the UFU but permit the UFU thereafter, together with its veto powers under the Agreement, to substantially control how the MFB will function going forward.[225]

[306] The Minister contends that the combined effect of these provisions is sufficiently powerful that the MFB, through the Agreement, has in effect ceded its managerial power to the UFU. These provisions incapacitate the MFB, removing its ability to operate effectively as an employer. The terms are said to operate to deny the MFB the status, role and function of an employer as the entity legally responsible for the management and conduct of the enterprise to which the Agreement relates. In the case of veto power terms, they give the UFU a power to simply cancel the progressing of decisions and actions of management.[226]

[307] According to the Minister, two consequences flow from the identified terms of the Agreement.

[308] First, the veto interference at this level of decision-making cannot constitute a matter pertaining to the employment relationship. It lacks the necessary connection with the relationship between an employer in its capacity as an employer and an employee in his or her capacity as an employee in a way which is direct and not merely consequential.

[309] The veto terms pertain to a matter of a fundamentally different character. They do not operate to fix a particular term and condition of employment on the subject to which the term is directed. The terms are instead directed to the power to make a decision on the subject. As such, these terms are of a very different character and are not permitted matters.[227]

[310] The Minister contends that the veto terms go to the heart of the ability of the MFB to in truth be an employer and manage its business now and into the future. The veto terms also take the UFU well beyond its representative capacity and into a managerial capacity - at the managerial table. The presence of the UFU at the managerial table is not limited by way of discussion or consultation, but with a right of veto in respect of nearly all meaningful operational and managerial decisions that may otherwise have been made by the MFB. As such, these provisions do not pertain to the relationship between an employer and a union as described in s.172(1)(b). This is because the term must relate to the UFU's legitimate role in representing the employees to be covered by the Agreement.[228] The Minister contends that the veto right terms give a role to the UFU in a managerial capacity, rather than a representative.[229]

[311] Therefore, the Minister contends, the Agreement is not an enterprise agreement as contemplated by the Act and that s.253(2) of the Act, to which I will return shortly, does not alter that conclusion.

[312] The Minister also points to several other provisions, which although not containing veto terms, are said nonetheless not to pertain to the requisite relationship.[230] The first of these is the requirement under the individual flexibility arrangement in clause 15 of the Agreement for copy of the agreement to be provided to the UFU. The second is clause 44.3.1 to which I have earlier made reference. Apart from pointing to these clauses, the Minister makes no particular submission that these clauses in and of themselves mean that the Agreement is not an enterprise agreement. By themselves these clauses, even if not permitted (on which I need not express a view) matters, are contemplated by s.253(2). By themselves they are not of a character which would prevent the Agreement from being an enterprise agreement. Given that conclusion, there is nothing in the approval provisions of the Agreement which would prevent the Agreement from being approved by reason of the existence of these clauses even if, as the Minister contends, they are not permitted. Section 253(1)(a) spells out the consequence.

[313] The second consequence according to the Minister is that the impugned terms provide a basis to conclude that the Agreement was not genuinely agreed to by the employees covered by it.[231] The Minister contends that employees voted to approve the Agreement on the basis that it provided for profound control by the UFU over the operational and managerial decision-making of the MFB from the date of approval and into the future. This UFU control included, by way of an elaborate and extensive regime, UFU veto powers over MFB decision-making. As the terms to establish this control over the MFB by the UFU do not involve permitted matters, the fundamental regime of UFU control that is founded on these terms is of no effect. According to the Minister, employees voted on the Agreement on the basis that the UFU had this level of control over the organisation that employs the employees. Consequently, because the terms are of no effect, the entire character of the Agreement has changed. That which the employees voted to approve was an agreement with deep UFU control of the MFB, enforceable as terms of the Agreement. An agreement that did not have this UFU level of control was not approved by the employees. Hence, there are reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees.[232]

[314] The Minister's contentions are not accepted for the reasons which follow.

[315] Section 172 of the Act deals with making an enterprise agreement and relevantly provides:

[458]

[322] The foregoing suggests that only terms that clearly fall within 'managerial prerogative' are to be excluded. It also seems clear that the general thrust of the provision is intended to broaden the subject matters about which an enterprise agreement could be made. This is apparent from the reference to the making of "side deals" unnecessary. Those familiar with the industrial relations landscape prior to the Act, would recognise the reference to "side deals" as a reference to a common vehicle used by parties to workplace agreements to deal with subject matter that was prohibited content under s.356 of the Workplace Relations Act 1996 and regulations 8.4 to 8.7 of the Workplace Relations Regulations 2006. Further, the Explanatory Memorandum draws a distinction between an enterprise agreement that includes provisions that do not pertain to the requisite relationship and which will not impact upon whether or not it can be approved and an agreement which includes terms that are unlawful terms and which will impact upon approval. This is also evident from the scheme of the Act.

[323] As earlier noted, that which appears to be intended to be caught by subsections 172(1)(a) and 172(1)(b) is explained in the Explanatory Memorandum at [668]-[681]. Paragraphs [672] and [673] each list the types of matters which will or will not pertain to the employment relationship while [676]-[678] illustrate the types of matters which will or will not pertain to the relationship between an employer and the employee organisation covered by an enterprise agreement.

[324] It seems to me to be clear both from the terms of s.172(2)(b), and such exposition as the Explanatory Memorandum provides, that terms of an enterprise agreement which facilitate the capacity of an employee organisation covered by an agreement to represent its members who are covered by the agreement will pertain to the relationship between the employer and the employee organisation. It will only be in a case where there is clearly no nexus between a term of an agreement and the representative function of the employee organisation that the term will not pertain.

[325] I also agree with the MFB that the Minister's characterisation that terms of an enterprise agreement which deny, or which operate to overturn, or which are otherwise antithetical to the employer holding and exercising a fundamental management function, necessarily do not pertain to the requisite relationship, should be rejected. This is because the characterisation invokes a binary approach that is inconsistent with modern authority about whether a term pertains to the requisite relationship.

[326] As the decisions in Federated Clerks' Union of Australia v Victorian Employers' Federation[234] and Re Cram; Ex parte NSW Colliery Proprietors' Association Limited[235] make clear, an assessment whether a matter pertains is not to be conducted on the basis that there are mutually exclusive segments into which matters pertaining on the one hand and management or managerial decisions on the other can separately be assigned.[236] The issue is whether a matter pertains to the employment relationship. A matter will pertain to the relationship of employers and employees if it directly affects the conditions of employees, which includes all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting the employment.[237] If a matter pertains, then the fact that it also intrudes upon managerial prerogative does not change its character.

[327] I do not accept that the impugned terms of the Agreement do not directly affect the conditions of employees, which includes all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting the employment. Once it is understood that managerial prerogative and the requisite relationship are not consigned to mutually exclusive segments, it is difficult to conclude that the impugned terms, which are said to be "veto powers" and which on their face appear also to directly affect conditions of employment of the employees covered by the Agreement as just described, do not then directly affect the relationship between the MFB and the UFU in its capacity of representing its members.

[328] The Minister makes various criticisms of the impugned terms including that the terms:

constitute an unprecedented interference in the ability of the MFB to manage its business organisation in the future;

prevent the MFB from meaningfully operating and managing its own fire service without the agreement of the UFU;

concede managerial power to the UFU;

deny the MFB the status, role and function of an employer and as the entity legally responsible for the management and conduct of the enterprise to which the Agreement relates;

create a relationship between MFB and the UFU whereby the latter has a determinative and supervisory role with respect to the management and conduct of the enterprise; and

strip the MFB of its ability as an employer to manage its business in the future.

[329] In truth these criticisms are about the extent to which the MFB by this Agreement (and historically as evident in the 2010 MFB Agreement and its predecessors) wishes to engage with the UFU in decisions affecting the conduct of the service that the MFB provides in so far as they affect firefighters covered by the Agreement. These may be legitimate criticisms of the MFB in making enterprise agreements that so constrained aspects of its decision-making, but they do not in my opinion diminish the character of the impugned terms as terms that pertain to the requisite relationships.

[330] The question remains whether the provision can be characterised as pertaining to the relationships between the MFB and its employees or between the MFB and the UFU as an organisation representing its members covered by the Agreement. A term of an enterprise agreement will be so characterised if it directly affects the conditions of employees, which includes all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting their employment, or the capacity of the UFU to represent its members in respect of such matters.

[331] It is ultimately unnecessary at the stage of the Commission's approval of an enterprise agreement stage to undertake an assessment as to whether or not particular provisions of the Agreement pertain to one or other of the requisite relationships. It is sufficient for me to express a view that most of the terms identified do so pertain and that the Minister's contention that in effect the sheer magnitude of non-pertaining matters takes the Agreement outside of the description of an enterprise agreement is rejected. It follows that it is unnecessary for me to deal with the Minister's contention that impugned terms provide a basis to conclude that the Agreement was not genuinely agreed to by the employees covered by it. That said, as the vast majority of the impugned terms appear to me to be matters pertaining to the requisite relationships, it is difficult to see how the existence of a few terms which might not pertain could be said to provide a foundation for concluding that there are reasonable grounds for believing that the Agreement was not genuinely agreed to by the employees covered by it.

[332] Taking into account that which appears earlier in this decision, I am satisfied that the Agreement has been genuinely agreed to by the employees covered by the Agreement, with the consequence that the requirement in s.186(2)(a) is met.

[459]

[333] As noted earlier, s.186(2)(d) requires the Commission to be satisfied that the Agreement passes the BOOT. The Minister contends that the Agreement's restrictions on part-time employment cause it not to pass the BOOT. This is because existing and prospective award covered MFB employees seeking to work part-time are not permitted under the Agreement to perform operational firefighter duties, except in exceptional circumstances. Such employees are also precluded under the Agreement from certain roles and are required to seek the approval of the UFU in order to make part-time arrangements.

[334] An enterprise agreement will pass the BOOT if the Commission is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the Agreement would be better off overall if the Agreement applied to the employee than if the relevant modern award applied to the employee.[238] An "award covered employee" is an employee who is to be covered by the Agreement and, at the test time, is covered by a modern award that is in operation, covers the employee in relation to the work that he or she is to perform under the Agreement and covers his or her employer.[239] A "prospective award covered employee" is a person who, if he or she were an employee at the test time of an employer covered by the Agreement, would be covered by the Agreement and would be covered by a modern award that is in operation and would cover the person in relation to the work that he or she would perform under the Agreement and covers the employer.[240]

[335] The assessment of whether an enterprise agreement passes the BOOT in relation to a prospective award covered employee is concerned with the hypothetical. It is established for the purposes of comparing the position of the hypothetical person who is treated as though he or she were an employee at the test time of an employer under the Agreement on the one hand and the award on the other. The hypothetical scenario is a construct. It does not require that one work backwards to construct a realistic narrative about the employer's hypothetical decision to engage an employee either under the award or agreement.[241] The prospective award covered employee description tells the Commission all that is required for the purposes of assessing whether the hypothetical person as at test time would be better off overall if the agreement applied to the hypothetical person than if the relevant modern award applied to that person.

[336] The Award covers employers throughout Australia in the firefighting industry and their employees in the classifications listed in Schedule B - Classifications to the exclusion of any other modern award.[242] There is no dispute that it is the relevant reference instrument against which the question whether the Agreement passes the BOOT is to be assessed.

[337] Schedule B to the Award contains classifications for, inter alia, Recruit, Firefighter Level 1, 2 and 3, Qualified Firefighter, Leading Firefighter, Station Officer, Senior Station Officer and FSCC. In contending that the Agreement does not pass the BOOT, the Minister provides an analysis that is said to be limited to the award covered and prospective award covered employees falling within these classifications.[243] This is inconsistent with that which is contended later which is to the effect that for the purposes of the Minister's submissions relating to the BOOT, the relevant class of employees is defined as part-time employees in the equivalent Agreement classifications to the Award classifications from Qualified Firefighter and above.[244] I take the reference to Recruit and Firefighter Levels 1, 2 and 3 in the Minister's submission to be an error, given that which later follows and as part-time employment in these classifications is not permitted under the Award.

[338] Clause 10 of the Award deals with types of employment in the public sector. Clause 10.3(a) describes an employee as a "part-time employee" in circumstances where an employee works less than the full-time hours of 38 ordinary hours per week; has reasonably predictable hours of work; and receives, on a pro rata basis, equivalent pay and conditions to those full-time employees who do the same kind of work.

[339] As already noted, clause 10.1(b) of the Award permits part-time employment by providing that, "an employer in the public sector may employ employees at the classification Qualified Firefighter or above on a part-time basis."

[340] A "Qualified Firefighter" means an employee who has completed a minimum of 36 months service and possesses a Certificate of Proficiency.[245] It seems clear from the definitions of Recruit and of Firefighter Levels 1, 2 and 3 in Schedule B of the Award, that a Qualified Firefighter is a higher classification than the aforementioned classifications. Employment of a person at the lower levels may only be on a full time basis under the Award.

[341] The Minister contends that Award covered and prospective Award covered part-time employees are not better off overall if the Agreement applied to these employees than if the Award applied. This is because the part-time provisions under the Agreement are less beneficial than the part-time provisions under the Award. The Minister contends[246] that under the Agreement:

• part-time employees are not permitted to perform operational firefighter duties, save in exceptional circumstances. This is to be contrasted with the Award which contemplates part-time work both on and off a 10/14 roster where such employees will be "rostered and work hours as agreed under clause 10.3(b) or varied under clause 10.3(c)"; [247]

[461]

• the enterprise agreement dispenses with the protections afforded by the Award in respect of part-time employment. The Award protections are the requirement that the employer and employee agree in writing the regular pattern of work, specifying at the number of hours worked each day; the days on the employee will work; the starting and finishing times; and that any variation will be in writing.[248] In addition, the Award requires a part-time employee to be rostered for a minimum of three consecutive hours on any shift,[249] whereas the Agreement does not.

[342] The Minister contends that although the Agreement makes provision for some monetary benefits for part-time employees, such as the insecure work allowance and the special administrative duties allowance, these benefits do not offset the substantially less beneficial provisions under the Agreement.[250]

[343] It seems to me that there are two comparisons relevant for the purposes of the BOOT so far as it concerns part-time employment. The first is the position of an employee or prospective employee who is or is hypothetically a part-time employee under the Agreement compared to the position of that employee or prospective employee under the Award. The second concerns the position of an employee or prospective employee who is not part-time but wants (or perhaps through circumstances, needs) to work part-time.

[344] The Minister's contention insofar as it concerns the first comparison appears to me to ignore a number of the other provisions of the Agreement. In the first place, the existing or prospective part-time employee, for the purposes of the comparison, is or is to be assumed to be has already been engaged in a part-time capacity at test time and so the barriers to which the Minister points have been or are to be assumed to have been overcome. It is necessary to examine the position of these employees under the Agreement vis-à-vis the Award on an overall basis.

[345] Apart from the substantially higher rates of pay in the Agreement compared to the Award for each classification, as the MFB has rightly pointed out, the Agreement makes provision for other benefits which apply on a pro rata basis to part-time employees by operation of clause 43.5 of the Agreement and included include a pro rata of the following leave entitlements:

• 65.06 days of annual leave;[251]

• 33 shifts of paid personal leave on commencement, a further 3 shifts after one years' service and a further 18 shifts on completion of two years' service and each year thereafter;[252]

[464]

• a spoilt meal allowance where the Award provides none;[274]

• a higher travel allowance and a longer period of notice of any change in location;[275]

• a substantially higher personal expenses and accommodation allowance;[276]

• a substantially higher vehicle allowance;[277]

• a tollway reimbursement allowance, where the Award provides none;[278]

• substantial temporary[279]and permanent[280]relocation allowances, where the Award provides none;

• a first aid allowance, where the Award provides none;[281]

• substantially higher qualification allowances;[282]

• long hours assistance allowance, where the Award provides none;[283]

• for station officers not working the 10/14 roster - a higher availability allowance;[284]

• an 'after hours disturbance allowance', where the Award provides none;[285]

• broader access to driving licence fee reimbursement;[286]

• a substantial 'language' allowance, where the Award provides none;[287] and

• a higher Special Administrative Duties allowance.[288]

[347] It is plainly the case that each employee or prospective employee will not obtain the benefit of every one of the array of leave entitlements and allowances for which provision is made under the Agreement. Nevertheless, existing and prospective part-time employees at test time would plainly be better off overall if the Agreement applied than if the Award applied. Although important, I do not consider the absence of a capacity to work as an operational firefighter, save in exceptional circumstances, outweighs the other benefits for which the Agreement provides. It is also relevant to note that although there is an absence of any restriction in the Award on part-time employees working as operational firefighters as part of a 10/14 roster, the Award does not mandate that this occurs. Such benefit as the Award confers in this regard is a contingent benefit and its value is difficult to assess. Section 193(7) of the Act provides that for the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the Agreement applied to that class than if the relevant modern award applied to that class, the Commission is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the Agreement applied to the employee. It seems to me plain that part-time employees as a class would be better off overall if the Agreement applied to part-time employees than if the Award applied. There is no evidence before me which would lead to a conclusion to the contrary in relation to a particular part-time employee.

[348] What then is the position of an employee or prospective employee who is not part-time but wants to work part-time? There can be little doubt that the strictures placed in the way of part-time employment under the Agreement are much greater than under the Award. As the Minister has identified, there are not insignificant barriers under the Agreement to an employee who wants or needs to work part-time being able to so do. The MFB's response that experience has shown that only a small percentage of its employees request part-time or other flexible working arrangements[289] is not really to the point. It is relevant to take into account the unusually generous leave entitlements applicable under the Agreement (and its predecessors), but I do not accept that these conditions explain the lack of take up of part-time arrangements.[290] It might just as readily be supposed that the lack of resort to part-time employment is a product of the barriers that the Agreement establishes to part-time employment.

[349] That said, as I have already observed, the Award does not create a right to part-time employment but merely facilitates the working of part-time employment in respect of persons who are engaged in particular classifications for which the Award provides. Such rights as are available for flexible working arrangements are exercisable under s.65 of the Act. Thus, although it is much more difficult to navigate through the barriers which the Agreement establishes in order that an employee or prospective employee might attain part-time employment, the position under the Agreement and under the Award is the same in the sense that under neither can it be said that a particular employee or prospective employee has a right to part-time employment. The barriers that exist under the Agreement offend s.65 of the Act for the reasons earlier stated. But ultimately, such detriments as exist by reason of the strictures apparent under the Agreement can only be contingent detriments since there is an absence of a right to insist to be engaged on a part-time basis under the Award.

[350] But even if I am wrong about this, given my conclusion earlier about the effect of particular provisions in the Agreement on s.65 of the Act, undertakings that might be given in relation to those concerns will plainly also impact on the BOOT since the undertakings will need to be directed to the very same restrictions.

[351] That said, it is difficult to see given the content of the Agreement compared to the Award, how award covered employees and prospective employees who want to work part-time would not be better off overall if the Agreement applied than if the Award applied.

[352] The superior leave entitlements and allowances together with the substantially higher minimum rates of pay under the Agreement compared with the shift loaded rates payable under the Award weigh heavily in the assessment.[291] Even assuming the restrictions on part-time operational duties, it cannot be said on that basis alone, having regard to the Agreement's more generous rates of pay, leave entitlements and allowances that any employee and prospective employee, at test time, is not better off overall if the Agreement applied to the employee than if the Award applied to that employee. There is no evidence that any particular employee covered by the Agreement will, by reason of a need to work part-time, not be better off overall under the Agreement.

[353] Apart from the part-time issue, there is no suggestion that any other existing or prospective employee covered by the Agreement would not be better off overall if the Agreement applied than if the Award applied.

[354] I therefore am satisfied that the Agreement passes the BOOT with the consequence that the requirement in s.186(2)(d) is met.

[465]

[355] For the reasons stated, I have concluded that:

I should apply the judgment of Tracey J in National Retail Association (No 2) to the construction of the word "discriminates" in s.195(1) of the Act. It follows that a term of an enterprise agreement will only be a discriminatory term to the extent that it directly discriminates against an employee covered by the agreement because of, or for reasons including, the employee's particular identified characteristic or attribute. I am satisfied that the Agreement does not therefore include any discriminatory terms. I would conclude differently if I felt free to disregard National Retail Association (No 2);

the Agreement does not include any objectionable terms. The requirement in s.186(4) is met;

the Agreement is predominantly about matters that pertain to the requisite relationships and the objection raised on this ground is rejected;

the Agreement passes the BOOT. The requirement in s.186(2)(d) is met;

save for the matter below, I am otherwise satisfied for the reasons stated that the approval requirements in ss.186 and 187 have been met; and

I am not satisfied that particular terms of the Agreement earlier identified in this decision do not contravene s.55 of the Act. I do not consider the requirement in s.186(2)(c) has been met.

[356] Appropriate undertakings might be formulated by the MFB to meet the concern in (f) above. Consequently, I direct as follows:

The MFB is to file in my Chambers and serve on the UFU any written undertaking that it wishes to give to meet the concern that the Agreement contains terms that contravene s.55 of the Act within 21 days of the date of this decision;

Before filing any undertaking, the MFB is to consult with the UFU in its capacity as bargaining representative for the Agreement about the undertaking;

The UFU may file in my Chambers and serve on the MFB any written submission it might wish to make in relation to any undertaking that is given by the MFB within seven days after the undertaking is filed;

The MFB may file in my Chambers and serve on the UFU any submissions in reply within seven days thereafter.

Application by Metropolitan Fire and Emergency Services Board [2019] FWC 106 (15 January 2019)

At a glance

Court

Decision date

Source

Judgment (646 paragraphs)

Application by Metropolitan Fire and Emergency Services Board [2019] FWC 106 (15 January 2019)

Legislation Cited (16)

Cases Cited (27)