Australian Manufacturing Workers' Union v ResMed Limited [2015] FCA 788 | Case summary

BUCHANAN J: 1 The applicant ("the AMWU") is an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) ("the FWRO Act"). 2 The respondent ("ResMed") researches, develops and produces medical devices. It operates a manufacturing facility at Bella Vista, Sydney. In that facility is a work group which is described in the present proceedings as the patient interface (liquid silicone rubber) work group ("the LSR work group"). Employees in the LSR work group produce silicone rubber face cushions for face masks and other silicone rubber accessories. The production operators within the LSR work group use automated and semi-automated machines. 3 For some time, the AMWU and ResMed have been in disagreement and dispute about whether the AMWU has the right under its rules to enrol, as members, employees of ResMed including employees in the LSR work group. On 19 December 2013, Commissioner Bull of the Fair Work Commission ("the FWC") decided that production operators in the LSR work group were not eligible to be members of the AMWU ([2013] FWC 9725). In particular, Commissioner Bull decided that an LSR operator was not engaged in "engineering and kindred trades" (a term used in the AMWU rules) and that the production employees were not "machinists" (a calling nominated in the AMWU rules). 4 Commissioner Bull's decision was challenged on appeal. Although some of Commissioner Bull's findings were reversed on appeal, the Full Bench of the FWC which heard the appeal decided: [79] We agree with the Commissioner's finding that employees in the LSR work group are not eligible to join and be represented by the AMWU. They are not machinists in accordance with the meaning of that term as we have earlier explained it. Nor does the evidence demonstrate that there is any functional connection between their work and the work of the assemblers such as to support the conclusion that they perform work "in connection" with that of the mask assemblers. Although they produce some of the components (rubber face cushions and chassis seals) which are ultimately assembled by the assemblers to form the final product, their work was not referable or significant to the work of the assemblers. ([2014] FWCFB 3501) (Emphasis in original.) 5 The AMWU has taken further steps to assert, or establish, its right to enrol employees of ResMed in various work groups including those in the LSR work group. It has applied to this Court seeking declarations that its rules entitle it to enrol, as members, ResMed employees including employees in the LSR work group. It has applied to the FWC for an alteration to its rules which, it contends, would put that question beyond dispute. At the same time, ResMed has also commenced proceedings both in this Court and in the FWC, effectively seeking contrary outcomes. 6 The two proceedings in this Court have been stayed pending the hearing and determination of the proceedings in the FWC. 7 Now, a more immediate issue has arisen. It concerns notification by ResMed to employees in the LSR work group on 8 July 2015 that ResMed had decided to restructure the LSR work group by reducing the number of permanent, full-time, production operator positions by 20 and offer redeployment to persons in the 20 redundant positions to other work groups. ResMed said it would consult with employees. 8 The AMWU takes the view that the employees in the LSR work group are covered by the Manufacturing and Associated Industries and Occupations Award 2010 (Cth) ("the Award"), and that cl 9 of the Award requires consultation and discussion not only with employees but also with "their representatives, if any". Those contentions have not been challenged by ResMed. 9 The most immediately relevant part of cl 9 is cl 9.1, which provides: 9. Consultation … 9.1 Consultation regarding major workplace change (a) Employer to notify (i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any. (ii) Significant effects include termination of employment; major changes in the composition, operation or size of the employer's workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect. (b) Employer to discuss change (i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 9.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes. (ii) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 9.1(a) (iii) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer's interests. 10 ResMed takes the view that the AMWU does not have the right under its rules to be the industrial representative of employees in the LSR work group. In that connection, it has support from the decisions by the FWC to which I have referred although it is well established that the FWC (an administrative body; not a court) cannot conclusively decide the legal issue which lies at the heart of that proposition. ResMed advised the AMWU on 13 July 2015 that it did not intend to meet or discuss with it the question of redundancy or redeployment of any of the members of the LSR work group. 11 Faced with this resistance, and conscious of the reasons for it, the AMWU invited individual employees to nominate the AMWU as their representative for the specific purposes of consultation about the proposed changes which had been notified to them. Thirty employees in the LSR work group executed such a nomination (as did three others from other work groups). ResMed refused to recognise the effectiveness of the nominations. 12 On 16 July 2015, the AMWU commenced proceedings in this Court seeking declarations that ResMed breached the Fair Work Act 2009 (Cth) ("the FW Act") by refusing and/or failing to consult with "the nominated representative of the employees" in accordance with cl 9 of the Award, seeking an injunction prohibiting the termination of employment or permanent transfer of any employee within the LSR work group unless consultation with it occurs and the imposition of a penalty on ResMed, to be paid to the AMWU. The application sought an interim injunction until conclusion of the proceedings. It is the question of an interim injunction which arises for immediate consideration. 13 On 20 July 2015, I took submissions from both parties about the application for urgent interim relief. The matter was listed then in response to concern by the AMWU that any listing after 22 July 2015 might be too late. However, towards the end of the argument it became apparent that matters would come more into focus over the following week, and that no employee was at immediate risk of retrenchment or compulsory transfer. 14 By letter dated 16 July 2015, ResMed advised the affected employees, in part, as follows: The following steps will be taken to implement the LSR restructure. 1. As noted above, any employee who wishes to express an interest in a transfer or voluntary redundancy must do so by end of shift 22 July 2015. 2. ResMed will consider all expressions of interest for transfer and voluntary redundancy once they have all been received after 22 July 2015. ResMed will then decide, taking into account your expression of interest and the needs of the business, whether to offer a transfer or cease employment due to voluntary redundancy. ResMed retains the right to make this decision even if an expression of interest has or has not been received. 3. ResMed will advise all employees of its decision by 29 July 2015. 4. If, after the process in 1 to 3 above, there are not enough employees who have either been offered and accepted a transfer to another workgroup, or been given notice to cease employment due to voluntary redundancy, ResMed will then undertake a process to select employees for redundancy. As previously advised, ResMed will use the selection criteria as contained in your letter of 8 July 2015 to make this selection. ResMed intends to complete this selection process by 29 July 2015. 15 Upon the respondent's assurance that no decision about individual employees would be implemented before the matter returned to Court, the application for interim relief was adjourned, part-heard, until 30 July 2015. 16 In the intervening period ResMed continued with its process of consultation with employees in groups and individually, but without any direct contribution from the AMWU. By 23 July 2015, ResMed had received 94 signed "expressions of interest". Most (58) expressed interest in a transfer to another work group (46) or voluntary redundancy (12). The remainder (36) may be taken to have expressed a desire to remain in the LSR work group. 17 On 28 July 2015, ResMed selected 16 employees for transfer and 4 employees for voluntary redundancy. The selections were said to have accorded with the expressions of interest of those employees. The remaining 76 employees in the LSR work group would remain "on their current shift crew within LSR". 18 Those general outcomes were communicated to meetings of employees on 29 July 2015, with affected employees to be notified on or before 30 July 2015. 19 ResMed management indicated that ResMed proposed to commence a phased process of transfers on or around 10 August 2015 and to proceed with voluntary redundancies on or about 7 August 2015. 20 That proposed timing afforded an opportunity for a further adjournment (to 3 August 2015). 21 On 3 August 2015, ResMed provided a further affidavit that showed that, of 30 employees in the LSR work group who had nominated the AMWU as representative, ResMed proposed to offer a (non-obligatory) transfer to six employees (in accordance with their expression of interest it was said) and allow voluntary redundancy to a further two employees who expressed interest in that outcome. On the face of matters, therefore, all those employees were to be treated in accordance with their wishes. 22 The position may, however, not be quite as straightforward as that and it is important that I indicate what view I take of all the evidence to this point, so there is no misunderstanding. 23 At the resumed hearing on 3 August 2015, I received into evidence not only a further affidavit from ResMed but also a second affidavit from Ms Lucy Saunders, the NSW Legal Officer of the AMWU, who deposed that she had spoken directly with four of the six employees who had nominated the AMWU as representative and who had been selected by ResMed for transfer, supposedly in accordance with their expressions of interest. Ms Saunders' affidavit gives some reason to think that those four employees are unenthusiastic about the question of transfer. Furthermore, in one case at least, a foreshadowed transfer does not fairly reflect what in fact appears on the expression of interest form. In that case, a box was ticked indicating a preference on transfer for a particular work group but the form was then endorsed with some clear written comments, including: … My Expression of Interest if it is possible to stay in LSR [sic]. … (Underlining in original) 24 I find it hard to see this as an active expression of interest in transferring to another work group. 25 ResMed sought to answer any concern about the process it was following by relying upon the following statement in its latest affidavit: 19. It is open to employees who are provided a letter of offer of transfer, as referred to in paragraph 18(a) to reject the offer. This has been advised to each of the employees identified in paragraph 7 (above). and by submitting that the process is truly voluntary and will not be imposed on employees against their wishes. I accept those assurances for the purpose of the present application. 26 There is a further matter to mention which is also troubling. As part of its written presentations to meetings of employees on 21 July 2015 the following statements were made by ResMed. AMWU Application in Federal Court of Australia • The AMWU made an application to Federal Court seeking an order to require ResMed to consult with the AMWU on the LSR restructure • The AMWU were not successful. • The Judge reminded the AMWU of two decisions from the Fair Work Commission which confirmed that the AWMU is not legally entitled to represent the industrial interests of LSR employees. • ResMed's process for the LSR restructure will continue as previously communicated. … (Emphasis in original.) 27 The second and third of those statements were not accurate. They were misleading. They should not have been made. 28 The AMWU had not been unsuccessful, either in the proceedings as a whole, or on its interlocutory application. The proceedings had been adjourned to allow a more pragmatic evaluation of a forecast by ResMed's "HR Manager Manufacturing" that it was likely that no-one would be transferred or made redundant contrary to their signed expression of interest form. 29 The third statement was a serious misstatement of what I said, early in the proceedings, to narrow and focus the issues for attention. What I said to counsel for the AMWU was (Transcript, p 7): HIS HONOUR: … I can see that that has been before a Commissioner of the Fair Work Commission and it has been before a full bench and that the AMWU has had some acceptance of its claims, but not in relation to the LSR workgroup, and I know that there are challenges about the degree of success it has already had. There are proceedings in the Fair Work Commission which will consider applications by the AMWU to amend its rules and an application by ResMed to confine you in your representative rights. Now, I'm aware, of course, that the Fair Work Commission can't make conclusive and binding decisions about legal issues, but it can certainly reach an expressive view for the purpose of performing its own functions, so - and the proceedings that you've got in this court are stayed and you've got no right - I think ResMed sought leave to appeal and was denied leave to appeal, so that's all on hold. So you don't have a binding decision against you, but you do have against you, an expression of opinion by an administrative body that is usually thought to have a good degree of expertise in the area. (Emphasis added.) 30 I have given serious thought to the possibility that employees were misled about those matters in a way which might reasonably and realistically be thought likely to have altered any real expression of their views but there is no evidence that the particular misstatements had an effect on any of the employees who nominated the AMWU. 31 Based on the foregoing facts and circumstances, the question is whether the applicant has established an arguable case for relief, and whether the balance of convenience favours interim restraint on ResMed pending a final hearing. 32 Decisions within the FWC have concluded that the AMWU has no present right to enrol members of the LSR work group into the union. That does not represent a final, binding, legal conclusion but it is a necessary foundation from which the FWC will assess the AMWU's application to alter its rules. Because proceedings in this Court for declarations have been stayed, the FWC will give attention to that issue before this Court deals with the question of the meaning of the present rules. An application for leave to appeal against the stay decision was refused by Jessup J on 19 June 2015 (ResMed Ltd v Australian Manufacturing Workers' Union [2015] FCA 615). The question of the AMWU's right to enrol, as members, employees in the LSR work group is therefore contentious and unresolved. 33 However, for the purposes of its present application the AMWU does not assert that it has the right to enrol, as members of the union, the persons who have nominated it as representative. It asserts that, if necessary, it may be nominated as a representative for the purposes of cl 9 of the Award by persons who are not eligible to become members. The AMWU contends that neither the Award nor the FW Act limit the concept of "representative", of an employee affected by major workplace change, to a union which has a right of coverage under its rules. 34 The argument is based, in part, upon the history of cl 9, which is a "standard" award provision and, in part, upon the contention that the scheme for the registration and control of organisations which is to be found in the FWRO Act and the FW Act does not prohibit the AMWU from acting as a representative for the purpose of cl 9 of the Award. 35 Clauses such as cl 9 of the Award have their federal award origins in the Termination, Change & Redundancy Case ("TCR Case") decisions of the Australian Conciliation and Arbitration Commission ("the C & A Commission") in 1984 ((1984) 8 IR 34 and (1984) 9 IR 115) which decided upon a standard "Introduction of Change" provision which has been substantially retained as a federal award provision since that time. In its decisions the C & A Commission referred to consultation with "employees and their representatives" (see e.g. 8 IR at 52.9 and 9 IR at 126.5) but the terms of the standard provision itself then referred to notification to, and discussions with, employees "and their union or unions". 36 One change in cl 9 from this formulation is deletion of a reference to unions and its replacement with a reference to representatives. 37 In more recent decisions leading to the making of the Award and other modern awards (Award Modernisation Case (2008) 175 IR 120, Award Modernisation Statement (2008) 177 IR 8, Award Modernisation (2008) 177 IR 364, and Re Consultation clause in modern awards (2013) 238 IR 282) the Australian Industrial Relations Commission and the FWC appear to have been at pains to emphasise that it is employees who are the beneficiaries of the award provision and that the question of representation is primarily a matter for employees to decide. 38 In the present case it has not been submitted that employees may not nominate a representative of their choice. The AMWU claims to be such a representative. ResMed will argue at the final hearing that the AMWU cannot accept the nomination, or act as a representative, because to do so would be outside its legitimate and valid sphere of action under its rules. 39 The AMWU rules are not in evidence, but as I have said the AMWU expressly disclaimed (for the purpose of its present application) a right to enrol employees in the LSR work group as members. 40 This question is a complex one and I do not propose to resolve it in this judgment. In R v Williams; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1982) 153 CLR 402 ("the Metal Structures Case"), a joint judgment of six Justices of the High Court said: The eligibility provisions in the rules of a registered organization of employees serve the function of defining the general area or areas of industry or industrial pursuit from which members can legitimately be drawn and with which the organization can legitimately be concerned (see Reg. v. Dunlop Rubber Australia Ltd.; Ex parte Federated Miscellaneous Workers' Union of Australia; Reg. v. Clarkson; Ex parte Victorian Employers Federation; Co-operative Bulk Handling Ltd. v. Waterside Workers' Federation of Australia). (Emphasis added.) (Footnotes omitted.) 41 There is, therefore, real force in ResMed's argument that the AMWU may not act as a representative of persons who are not eligible to be its members. However, there have been significant legislative changes since the Metal Structures Case and I have not taken full argument about the question of whether it would be permissible for a registered organisation such as the AMWU to act as an agent or representative for persons it could not enrol as members. 42 One reason why it is not necessary to deal further with this question is that, wherever the balance of convenience lies (which I discuss hereunder), there are other reasons why I am not satisfied that the AMWU has a reasonably arguable case that it is entitled to bring the application for interim relief in circumstances where it does not (in relation to interim relief) claim a right to validly enrol the 30 persons in the LSR work group who have nominated the AMWU as their representative. 43 Section 540 of the FW Act states who may apply for orders for contravention of a civil penalty provision. Section 540(2) and s 540(6) provide: 540 Limitations on who may apply for orders etc. … Employee organisations and registered employee associations (2) An employee organisation or a registered employee association may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision in relation to an employee, only if: (a) the employee is affected by the contravention, or will be affected by the proposed contravention; and (b) the organisation or association is entitled to represent the industrial interests of the employee. … Industrial associations (6) An industrial association may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision, only if: (a) the industrial association is affected by the contravention, or will be affected by the proposed contravention; or (b) if the contravention is in relation to a person: (i) the person is affected by the contravention, or will be affected by the proposed contravention; and (ii) the industrial association is entitled to represent the industrial interests of the person. 44 The AMWU disclaims any present reliance on s 540(2) or s 540(6)(b). That is because, for the purpose of the present application, it does not claim to be entitled to represent the industrial interests of those employees who have nominated it as a representative. The AMWU relies on s 540(6)(a) and claims to be affected, in its own right, by ResMed's refusal to consult with it. 45 In my view, this contention is not sufficiently arguable to support an application for an interim injunction on the evidence which I have to this point. Clause 9 of the Award constitutes a right for employees. I see no basis at the moment upon which to conclude that any right or independent interest of the AMWU is affected by ResMed's refusal to consult with it. It cannot claim any effect upon its representative rights as an organisation and no employee whose rights might arguably be affected by a refusal to deal with that employee's representative is a party to the proceedings. 46 Furthermore, it appears to me to be the case that the alleged contraventions are "in relation to a person" within the meaning of s 540(6)(b) so that the opening words of s 540(6) confine any right of an industrial organisation to apply for an order to an organisation entitled under its rules to represent the person(s) (s 540(6)(b)(ii)). 47 I would not, in any event, have considered that the balance of convenience requires intervention at this stage, having regard to the character of any final relief which might be available, if the AMWU had standing to prosecute the claims for interim relief on the basis which it argued. 48 It is now apparent that no employees will be compulsorily retrenched. The evidence and assurances before me are that no employee will be dealt with contrary to their wishes either. 49 The AMWU contended that if transfers were effected, it would be impossible to retrieve the position. However, this contention should be seen in an appropriate context. What would be "irretrievably lost" would be the opportunity to be represented by the AMWU during the consultation process. 50 The unchallenged evidence before me at this stage is that there has been direct consultation with employees at a series of meetings and otherwise, as well as written notification of ResMed's proposals. The real concern of the AMWU was that employees may be transferred against their real wishes. At the hearing on 3 August 2015, the AMWU confined its claim for interim relief to an injunction against any permanent transfer of any employee pending a final hearing. In that connection, the AMWU has expressed concern that employees may have felt obliged to indicate that they would accept a transfer, even if they were really unwilling to do so. 51 I would not be prepared to entertain a claim by the AMWU for injunctive relief on an interim basis with respect to employees who have not nominated the AMWU as representative because there would be no asserted legal foundation for it. I will confine my attention, therefore, to the position of those who have nominated the AMWU as representative. 52 Of those, six employees have been selected for transfer at this stage. ResMed's clearly stated position (which I accept for the purpose of this judgment) is that none of those employees (or any others for that matter) will be finally transferred against their wishes. 53 The Award provision upon which the AMWU relies does not incorporate an embargo on the introduction of redundancy measures. On the contrary, the Award obligation is triggered where an employer has made a "definite decision" to introduce a major workplace change. The Award provision is certainly directed to enabling proper and effective consultation about measures to avert or mitigate the adverse effects of such changes on employees (cl 9.1(b)(i)) but not to the effect that employees or their representative could exercise any power of veto. I do not intend to diminish the value of any contribution which the AMWU might be able to make to such discussions but it is important to recognise that they are directed to efforts of persuasion rather than to an ability to control outcomes. 54 I am not persuaded that, at this stage, there is a proper basis to intervene to restrain ResMed, even if the AMWU had sufficient standing to ask for an interim injunction at this stage. There is no present reason to conclude that there is a sufficient basis for apprehension that employees will be dealt with compulsorily and contrary to their own wishes. The present is not a case, in my view, where the status quo needs to be preserved pending a final hearing. 55 In all the circumstances, I am not persuaded that the AMWU has made out a case on the balance of convenience for the Court to grant interim injunctive relief restraining ResMed from introducing the workplace changes notified to employees on 8 July 2015. 56 If, in due course, the AMWU can make out a case at a final hearing, the proceedings will not be inutile because it would remain open to the AMWU to seek penalties. If the AMWU succeeds and there are particular issues affecting individual employees, the powers under s 545 of the FW Act appear sufficiently wide and flexible to also allow consideration of such matters. 57 The application for interim relief will be dismissed. The matter will be listed for directions at 9.30 am on 14 August 2015 to discuss the arrangements for a final hearing. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.

Australian Manufacturing Workers' Union v ResMed Limited

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