[2018] FWCFB 2011
General information, not legal advice.
Fair Work Commission (Full Bench)
2018-04-06
Ms J
Original judgment source is linked above.
s.604 - Appeal of decision
Appeal against decision ( [2018] FWC 1000) of Commissioner McKinnon on 15 February 2018 in matter no. B2018/94 - permission to appeal granted - appeal upheld - originating application not remitted as protected industrial action which was the subject of that application has now ceased.
[4] We have decided to grant permission to appeal and uphold the appeal, for the reasons below.
[5] Section 425(1) of the FW Act states:
'425 FWC must suspend protected industrial action - cooling off
(1) The FWC must make an order suspending protected industrial action for a proposed enterprise agreement that is being engaged in if the FWC is satisfied that the suspension is appropriate taking into account the following matters:
(a) whether the suspension would be beneficial to the bargaining representatives for the agreement because it would assist in resolving the matters at issue;
(b) the duration of the protected industrial action;
(c) whether the suspension would be contrary to the public interest or inconsistent with the objects of this Act;
(d) any other matters that the FWC considers relevant.'
[6] At first instance, Commissioner McKinnon found that:
Suspending the protected industrial action would be beneficial to the bargaining representatives because the Appellant and the Respondent were at an 'impasse' and 'it [was] hard to see how the positions of the parties could be more entrenched'. Neither party was willing to abandon its position, and 'the strategies each has adopted [were] preventing necessary dialogue that would allow progress to be made'.[5]
The fact that the protected industrial action had been going on for four weeks uninterrupted and would continue indefinitely if not suspended weighed in favour of suspending it.[6]
Suspending the protected industrial action would not be contrary to the public interest or inconsistent with the objects of the FW Act, because '[t]he parties' rights in relation to industrial action would be deferred for a short period but not displaced'. The suspension would also 'create the opportunity for dialogue between the parties', which is 'entirely consistent' with the objects of the FW Act.[7]
She was 'not in a position to make any findings' in relation to the Appellant's submission that the Respondent had acted inconsistently with the good faith bargaining requirements in s.228 of the FW Act, nor whether the Appellant itself had acted inconsistently. As such, she gave this matter 'limited weight' in considering whether to make an order.[8]
[8] The Appellant contended that in respect of s.425(1)(a) of the FW Act, there was no evidence which provided a basis to conclude that the suspension of protected industrial action will assist in resolving the dispute by allowing revised positions to be shared, discussed and considered for the first time in more than five weeks.
[9] The Appellant submitted that the Commissioner erred in relying upon the duration of industrial action, and its financial impact on Paper Australia. These factors are extraneous and irrelevant to the matter required to be considered under s.425(1)(b) of the FW Act. Furthermore, the Appellant contended that the Commissioner failed to take into account the contribution of the employer's failure to negotiate and in this respect, the Decision was one-sided, unjust and unreasonable.
[10] The Appellant asserted that the Commissioner erred in finding that there was no evidence which provided the basis to conclude that a cooling-off period would create the opportunity for dialogue between the parties. Moreover, the Appellant advanced that it would be contrary to the public interest and the objects of the FW Act, if conduct that was inconsistent with the bargaining requirements was rewarded.
[14] The Respondent asserted that there was evidence before the Commissioner to find that a cooling-off period would create the opportunity for dialogue. The enabling of collective bargaining is indisputably a relevant consideration for the Commissioner, and one that ought to be taken into account in assessing the objects of the FW Act under s.425(1)(c). Moreover, the Respondent contested that Paper Australia had not yet been provided the opportunity to be heard on the matter concerning conduct that was allegedly inconsistent with the good faith bargaining requirements. As a matter of fact, the determination had not yet been determined in that respect. What the evidence does disclose is that the parties had reached an impasse, that is:
'The AMWU did not seek a meeting, nor did it propose a compromise. The evidence demonstrated only that Paper Australia was not prepared to compromise its own position whilst protected industrial action continued. Paper Australia was entitled to adopt this position and was not required to make concessions or reach agreement with the AMWU by reason of the good faith bargaining requirements.'[15]
[17] An appeal under s.604 of the FW Act is an appeal by way of rehearing. However, there is no automatic right to appeal; an appeal may only be made with the permission of the Commission.
'... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.'[24]
[20] Having heard the parties' submissions on appeal, there are two grounds on which we grant permission to appeal the Commissioner's decision.
[21] First, it is in the public interest to grant permission to appeal the Commissioner's decision, because this appeal raises a matter of importance and general application. Specifically, this appeal requires us to consider the interaction of Division 8 of Part 2-4 (titled 'FWC's general role in facilitating bargaining') and s.425 of the FW Act. We think it is important to take this opportunity to provide guidance on this issue, especially given that applications under s.425 of the FW Act are reasonably uncommon; the Commission's records indicate that only 42 such applications have been filed since the FW Act commenced almost nine years ago.
[22] Secondly, we find that the Commissioner made errors of the type described in House v The King by failing to take into account a relevant consideration when making her finding in relation to s.425(1)(c) of the FW Act (whether the suspension would be contrary to the public interest or inconsistent with the objects of this Act), and mistaking the facts in relation to the Appellant's willingness to bargain.
'The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.'[27]
[25] We now turn to consider these errors and their impact in more detail.
The Commissioner's finding on the Appellant's willingness to bargain under s.425(1)(a)
[26] In finding that the suspension of protected industrial action would be beneficial to the bargaining representatives under s.425(1)(a), the critical factual conclusion reached by Commissioner McKinnon was that a suspension order would assist the parties in resolving the dispute by allowing revised positions to be 'shared, discussed and considered for the first time in more than five weeks'.[28] More specifically, in reaching that determination the Commissioner found that the parties had reached an 'impasse' in the course of bargaining. She stated:
'There is no doubt that Paper Australia could achieve what it seeks in this application - that is, a resumption in bargaining - by abandoning its current position. The AMWU could do the same. Unfortunately, neither has indicated a willingness to do so. In the circumstances, it is hard to see how the positons of the parties could be more entrenched although in my view, the impasse is more about who concedes first than the substantive matters in dispute. Both parties submitted that they wanted bargaining to resume. In my view, the strategies each has adopted are preventing necessary dialogue that would allow progress to be made.'[29] (Emphasis added).
[27] The Commissioner implies in this paragraph of the Decision that the Appellant, like the Respondent, had refused to bargain. We consider that she fell into error here because we do not think she could reasonably have made this finding on the evidence before her. In the hearing before the Commissioner, Mr Grealy for the Appellant led the following evidence in chief from Mr Griffiths:
You mentioned the outstanding issues. What are those again, please?---
At the moment, my members have said to me that the outstanding issues are the grandparenting of the pay increase, their rates, the RDOs being dropped from 16 to 12, the offer - the financial offer put by the company and they are also asking for back pay to 29 March 2017 because it's been a year since the EBA expired.
PN130 Since 29 March [2017], have you been, as a bargainer - are you a bargaining representative - let me put it another way? I'm part of the team.
PN131 As a bargaining representative, have you been bargaining in good faith? I feel we have.
PN132 Are you continuing to do so? Yes, I've made it clear to the company on occasions that even though there is industrial action happening at the moment, the door's always been left open for them to walk that 15 metres from the office to the picket line and we'll walk inside and start the conversation there and then.
PN133 When did you last communicate that willingness to meet and negotiate to the company? On 21 January, I sent an email through to Rod reminding him of what the outstanding issues were and that the door will always be open and Rod replied, "Thank you for the reminder, but the company's position is while there is industrial action taking place, we will not be negotiating."
PN134 I understand that, perhaps because this matter has been prepared at short notice, we don't have a paper copy of that document today; is that right? No, it was a bit of a - - -
PN135 But you would be happy to provide that to the Commission and to Australian Paper? Yes, I can send through the emails that were exchanged.
PN136 I suppose I might seek the Commission's latitude in terms of tendering that document.
PN137 THE COMMISSIONER: Has there been any discussion between the parties about whether that is in contest?
PN139 THE COMMISSIONER: It's not contested, all right.
PN141 Mr Griffiths, if the industrial action were suspended, would that assist the parties to reach an agreement or not? My personal opinion is no and that's the same opinion that the members on the line have given me as well.
PN142 Why is that? As was referred to earlier, they've lost trust with the company because we've been given different versions of what the company's asked for and things have been - have changed during the discussions.
PN143 Do you remain willing to meet with the company to enter into further negotiations? Of course. There's nothing I would like more than would bring my members back to work and earning their proper wage. Don't get me wrong, I don't enjoy getting up at five in the morning and sitting on a picket line for 12 hours a day.
PN148 [THE COMMISSIONER:] I think the company would welcome you back at any time? Mate, I'd be there tomorrow, I'm telling you. Sorry. I'd be in there straight away and try to get it nutted out.
PN149 All right. I am having trouble understanding, given the positions of the parties, what the union thinks would be a useful step to get bargaining back on foot? Well, they've made it clear to me, my members, that they feel if they get taken back inside, we'll go back to where we started.
PN153 [THE COMMISSIONER:] Anything arising, Mr Grealy?
PN154 MR GREALY: You said earlier, Mr Grealy [sic], that the employees want to come back inside. Did you mean by that for the purpose of resuming negotiations? Is that what you mean by that? If the unmovable, the two - if the unmovables were able to be moved and we were able to get a guarantee that their conditions wouldn't be changed, then we'd probably be able to get them back to work, but, at the moment, they've got their sticking points and obviously the company has their sticking points and we are where we are.
PN155 Do you feel that if the industrial action was suspended, it would be harder to reach an agreement? Yes, that's the feeling that I received from my members on the line because they're worried that if they go back inside and let's say they get the four weeks' suspension that they've asked for, that they would restock, you know, manufacturing would kick off, they'd restock and they could always go back to their original position and we'd be back where we are.' (emphasis added)
[30] Another error disclosed in the Commissioner's decision is that she failed to take into account the extent to which a suspension order would be detrimental, thus not beneficial to the Appellant's bargaining representative. At PN155 of the Transcript of Proceedings on 14 February 2018, Mr Griffiths was asked by Mr Grealy for the Appellant, '[d]o you feel that if the industrial action was suspended, it would be harder to reach an agreement?' Mr Griffiths responded in the following manner:
'Yes, that's the feeling that I received from my members on the line because they're worried that if they go back inside and let's say they get the four weeks' suspension that they've asked for, that they would restock, you know, manufacturing would kick off, they'd restock and they could always go back to their original position and we'd be back where we are.'
[31] Here, a material factual consideration which directly opposed the view that a cooling-off period would be beneficial to the bargaining representatives, was in its entirety, omitted from the Commissioner's reasons and in turn was not considered or dealt with as it would be required in making a determination under s.425(1)(a). Such evidence which evinced the potential loss of bargaining power which had been gained under protected industrial action is invariably a significant piece of evidence, which a decision-maker exercising the discretion to suspend industrial action ought to have taken into account.
The Commissioner's finding in relation to s.425(1)(c)
'[Mr Grealy of the Appellant, cross-examining Mr Beales of the Respondent:]
PN80 You have an improved offer to put to the employees; is that right? We are prepared to negotiate around the three issues, that's correct.
PN81 Is there a reason why you can't put that offer to the employees now? Yes, because there's an indefinite stoppage on foot.
PN82 The reason that that concludes negotiations is that the company has a policy against negotiating during periods of industrial action; is that right? It's not a formal policy, it's just a longstanding position that we've had.
PN83 So there's that reason. Is there any other reason that the company can't enter into bargaining at this time? No.'[35] (emphasis added)
[38] It is not necessary for us to give consideration to all of the matters raised by the parties in these proceedings, because we are satisfied that for the reasons set out above, the Decision of Commissioner McKinnon discloses errors of fact in the consideration of whether a suspension would be beneficial to the bargaining representatives in assisting the resolution of the matters that were at issue. Those errors are, we consider, of sufficient significance to vitiate the conclusion that the suspension would be beneficial to the bargaining representatives and thus the entire assessment of whether suspension was appropriate.
[39] For the reasons stated above, we consider that the Decision and Order were attended by appealable error such that the exercise of the discretion involved in assessing the appropriateness of suspension of protected industrial action miscarried.
[40] We understand the protected industrial action, in the form of indefinite stoppage, which was the subject of the Respondent's originating application (B2018/94), has now ceased. Accordingly, we do not consider it necessary to remit that application to the Commissioner for redetermination. We dismiss that application.
[41] Permission to appeal is granted.
[42] The appeal is upheld.
[43] The Decision of Commissioner McKinnon ( [2018] FWC 1000) is quashed.
Mr G. Borenstein and Mr N. Grealy for the Appellant.
[27] (1936) 55 CLR 499, 504-505.
[28] [2018] FWC 1000, [10].
[29] [2018] FWC 1000, [9].
Printed by authority of the Commonwealth Government Printer
Australian Manufacturing Workers' Union
Paper Australia Pty Ltd T/A Australian Paper [2018] FWCFB 2011
(1989) 168 CLR 210
(2010) 194 IR 30
(1986) 161 CLR 513
(1936) 55 CLR 499
(2000) 203 CLR 194
(2011) 192 FCR 78