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[27]
[2021] FWCFB 128
General information, not legal advice.
Fair Work Commission (Full Bench)
2021-01-22
Original judgment source is linked above.
s.604 - Appeal of decision
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
Appeal against decision [2020] FWCA 5198 of Deputy President Dean at Sydney on 29 September 2020 in matter number AG2020/1731.
[1] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) has lodged an appeal pursuant to s 604 of the Fair Work Act 2009 (Cth) (FW Act), for which permission to appeal is required, against a decision of Deputy President Dean issued on 29 September 2020[1] (Decision) in which she approved the Fredon Industries Pty Ltd NSW Enterprise Agreement 2020 (Agreement). The Agreement covers Fredon Industries Pty Ltd (Fredon). The Agreement commenced operating on 6 October 2020.
[2] The Agreement was purportedly made on 5 June 2020 when a majority of employees voting for the Agreement voted to approve it.[2] At that time three employees were said to be covered by the Agreement. Two employees, Mr Michael Taylor and Mr Siegfried Eichholz, voted in favour of approving the Agreement while another employee, Mr Dylan Squillari, voted against its approval.
[3] It is not in dispute that the CEPU was, at all relevant times, a bargaining representative for the Agreement. Prior to April 2020, Mr Taylor and Mr Eichholz were each employed by Fredon as foremen. Thereafter, on or about 27 April 2020 both commenced roles as an Electrical Worker Grade 5 Leading Hand for which the Fredon Industries Pty Ltd NSW Enterprise Agreement 2016 (2016 Agreement) made provision.[3] The Agreement also makes provision for the roles occupied by Mr Taylor and Mr Eichholz.[4] In their employment with Fredon prior to 27 April 2020, neither was covered by the 2016 Agreement.
[4] Fredon lodged the application for approval of the Agreement on 18 June 2020. During the period leading to the making of the Agreement, there were other employees of Fredon covered by the 2016 Agreement. Mr Matthew Betts was employed by Fredon from late August 2018 until 17 April 2020. His dismissal was effected by letter dated 3 April 2020.[5] Mr Samuel Sinclair was employed by Fredon from 29 January 2019 until 17 April 2020. His dismissal was effected by letter dated 3 April 2020.[6] Had Mr Betts and Mr Sinclair been employed by Fredon on 5 June 2020 in the positions they occupied at the time of their dismissals, each would have been entitled to vote in relation to the approval of the Agreement.
[5] The CEPU's notice of appeal contains eight appeal grounds. The first five appeal grounds contend error in the Deputy President's decision not to make an order directed to Fredon for production of certain documents. By these grounds the CEPU variously contends the Deputy President applied the wrong test; that she erred in failing to find that the documents had apparent relevance to the issues that were to be determined; that she erred in finding the documents had minimal probative value and in finding that the production of the documents would not assist the Commission in determining the application; and that by failing to make the order sought the Deputy President denied the CEPU procedural fairness (Production Grounds).
[6] The remaining appeal grounds are concerned with the decision to approve the Agreement and by which the CEPU contends error in the Deputy President's consideration of whether the employees who voted in the ballot for the Agreement were employed at the time; error in finding that there were no other reasonable grounds for believing that the Agreement was not genuinely agreed to by the relevant employees; and error in her conclusion that Mr Taylor and Mr Eichholz were each employees employed at the time who will be covered by the Agreement (Approval Grounds).
[7] In the Decision, the Deputy President commences with a short summary of the procedural context and the objections raised by the CEPU to the approval of the Agreement.[7]
[8] Next the Deputy President addresses an application by the CEPU for an order requiring the production of various documents which was initially made on 13 July 2020 and refused by email of 15 July 2020, without reasons but with a statement that the Deputy President would reconsider the application on request after the CEPU's material was filed in accordance with the directions. The application for production orders was reagitated by the CEPU by email dated 17 July 2020 and pressed at the hearing on 27 July 2020 (by that time, amended to include expanded categories of documents sought, apparently in response to further evidence filed by Fredon).[8]
[9] The eighteen categories of documents the CEPU sought be produced in its amended application, as pressed at the hearing on 27 July 2020, are reproduced at paragraph [6] of the Decision. Fredon resisted production of all categories sought on grounds including that some documents sought were already in Fredon's evidence;[9] relevance;[10] that some documents will not assist the matter;[11] and that the application amounted to a fishing expedition.[12] It did not contend the proposed orders were oppressive.
[10] At the hearing, the Deputy President refused the amended application for production orders.[13] The Deputy President summarised the arguments of the CEPU and Fredon at paragraphs [7] to [9] of the Decision and set out her reasons for refusing the application for production orders at [10] to [12] as follows:
"[10] Section 590(2) provides that the Commission may inform itself in relation to any matter before it in such manner as it considers appropriate. I did not consider on this occasion the production of the documents sought (and not already put into evidence) would assist me in determining the present matter. In particular:
[11] Overall, I was not satisfied that the documents requested, which had not already formed part of Fredon's evidence, were necessary and/or relevant to the matters I needed to determine, or otherwise had minimal probative value given what had already been filed on behalf of both parties.
[12] For the above reasons, I refused to issue the order."
[11] The Deputy President next turns to address the substance of Fredon's application for the approval of the Agreement. In addition to the Employer's Declaration in support of an application for approval of an enterprise agreement filed with the application to approve the Agreement, Fredon's evidence comprised witness statements of Ms Leigh Sargent (Human Resources Business Partner of Fredon) and Mr Cameron Stanfield (General Manager, Electrical, QLD).[14] Both gave oral evidence at the hearing.[15] The CEPU's evidence comprised witness statements of Mr Betts (former employee), Mr Sinclair (former employee) and Mr Beau Malone (CEPU Organiser), [16] who were not required to give evidence at the hearing.
[12] At paragraphs [16] to [25], the Decision records the "background" including the following facts which were not contentious:
On or about 2 March 2020, bargaining for the Agreement commenced, being an enterprise agreement to replace the 2016 Agreement;
On 2 March 2020, the Notice of Employee Representational Rights was issued to five employees including Mr Betts, Mr Sinclair and Mr Squillari;
As at 2 March 2020, four of the five employees (all except Mr Squillari) were employed on the Grafton Prison Project (Project);
On or about 4 March 2020, the CEPU was nominated as bargaining representative and subsequently took part in the bargaining meetings;
In April 2020, the four employees (all except Mr Squillari) were made redundant;
On or about 27 April 2020, Mr Taylor and Mr Eichholz, who had immediately prior held management roles, were redeployed to Grade 5 Electrician (enterprise agreement covered) roles; and
On 5 June 2020, the three employees who remained employed under the 2016 Agreement were asked to vote on the Agreement and all cast valid votes with the result being two in favour and one against (it was submitted in the appeal that it is also not contentious that those three employees were Mr Taylor, Mr Eichholz and Mr Squillari, and that Mr Squillari voted against the Agreement).
[13] At paragraphs [26] to [75] of the Decision, the Deputy President sets out a summary of the evidence and submissions of the parties. At paragraphs [80] to [86], the Deputy President makes a number of findings including that:
• the Project had come to an end and as a result a number of employees, and not just Mr Betts and Mr Sinclair, were made redundant;[17]
• there was no Tweed Hospital project for Mr Betts to go to and any discussions with Mr Betts to that effect were on an anticipated basis rather than an actual contract award which did not eventuate;[18]
• the reason Mr Betts and Mr Sinclair were made redundant was, as contended by Fredon, because the Project had come to an end and other redeployment options were not available, and for no other reason;[19]
• the former Foremen Mr Taylor and Mr Eichholz were redeployed at the end of the Project to roles covered by the 2016 Agreement and as a consequence were eligible to vote on the Agreement and it is immaterial that they were previously employed as Foremen (being non-enterprise agreement covered roles);[20]
• Mr Betts and Mr Sinclair were not employed at the time of the vote and therefore not eligible to vote;[21] and
• the CEPU's "conspiracy theory" was not grounded in evidence.[22]
[14] As to the objections raised by the CEPU to the approval of the Agreement, the Deputy President concluded:
"[87] In terms of the question of genuine agreement, I do not accept that Fredon manipulated the process to exclude people who otherwise would have voted (ie Messrs Betts and Sinclair) for the reasons outlined above. Messrs Betts and Sinclair were the last of a number of people who were made redundant as the Project ended. They were not singled out.
[88] Unlike the circumstances in One Key, all three employees who voted for the Agreement are experienced electrical workers who, I am satisfied, were at the time of the vote employed to perform work in classifications covered by the Agreement."
[15] The Deputy President approved the Agreement which commenced to operate on 6 October 2020.[23]
[16] An appeal under s 604 of the FW Act is an appeal by way of rehearing and the Commission's powers on appeal are exercisable only if there is error on the part of the primary decision maker.[24] There is no right to appeal and an appeal may be made only with the permission of the Commission. Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is "in the public interest to do so". Permission to appeal may otherwise be granted on discretionary grounds.
[17] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[25] The public interest is not satisfied simply by the identification of error, or a preference for a different result.[26] In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
"... 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..."[27]
[18] Other than the special case in s 604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if leave is refused.[28]
[19] For reasons which will shortly become apparent, we propose in this decision to deal only with the Production Grounds raised by the CEPU in its notice of appeal. It is uncontroversial that in considering whether to exercise its discretionary power to require production of documents under s 590(2)(c) of the FW Act the Commission will be guided by the practice followed by courts in civil proceedings when issuing subpoenas. In short compass, the test is whether the documents sought have an apparent relevance to the issues in the proceedings.[29] In this regard a Full Bench of the Commission in Kennedy v Qantas Ground Services Pty Ltd[30] observed:
"...The documents sought must have apparent relevance to the issues in the proceedings. Access to the documents sought must be for the purpose of supporting a case which is intended to be advanced, not to explore if there is a supportable basis for a case that might potentially be advanced. The documents required to be produced must be described with sufficient particularity, and the burden of producing them must not be oppressive."[31]
[20] It is plain enough on the face of the Decision that the Deputy President did not consider whether to order production of some or all of the categories of documents sought by the CEPU through the prism of whether the categories of documents or some of them had an apparent relevance to the issues in the proceedings. Instead, in declining to make an order, the Deputy President reasoned that some documents sought had been produced in the material filed by Fredon, while other documents sought were either not necessary or not relevant to matters she needed to determine or were otherwise of minimal probative value. In so doing the Deputy President erred.
[21] It is to be remembered that the case which the CEPU sought to advance below was that some employees who voted for the Agreement were not covered by it. In addition, the CEPU contended that a combination of the circumstances of the redundancies during bargaining of persons who would have been covered by the Agreement, and the redeployment of persons who were not, into roles that would be covered by the Agreement, raised reasonable grounds for believing that the Agreement was not genuinely agreed to by the relevant employees. The CEPU case was that the documents it sought were relevant because they would cast light on when the employees were employed and the capacity in which they were employed and whether they were entitled to participate in the ballot because they were employees who would be covered by the Agreement. The apparent relevance of at least some of the categories of documents went to the issue of whether there were reasonable grounds for believing that the Agreement was genuinely agreed by the employees. Some of the categories of documents had an apparent relevance to the issue of whether the inclusion of "foremen" through redeployment to other roles, and the exclusion of employees through redundancies who would otherwise have worked under the Agreement, raised reasonable grounds for believing that the Agreement was not genuinely agreed to and was something which deprived the Agreement's approval of its qualitative 'legitimacy' or 'authenticity'.
[22] It appears to us that documents described in categories 1-5, 7-8 and 11-12 (putting to one side the breadth of some categories and overlap) had an apparent relevance to the issues in the proceedings, namely eligibility to vote and genuineness of the agreement of employees. The documents described in categories 15-16 (noting that the reference to "Brennan" should read "Bremner") had an apparent relevance not least because Fredon's material filed in the proceeding makes reference to or deals with matters described in the categories and the documents were evidently sought to aid the CEPU in its cross-examination of Mr Stanfield. To the extent that the Deputy President concluded to the contrary, she was in error. Because the Deputy President failed to consider the application for an order for production by assessing the apparent relevance of each of the categories of documents sought, her discretion miscarried. Given the grounds advanced by Fredon below to resist an order for production, an order requiring production of some of the documents in the aforementioned categories of documents should have been made. It follows that the failure to make such an order arguably denied the CEPU procedural fairness.
[23] If the procedure adopted by the Deputy President of itself failed to afford a fair opportunity to the CEPU to be heard, a denial of procedural fairness is established by nothing more than that failure, and the upholding of the appeal will be justified unless it can be shown that the failure did not deprive the CEPU of the possibility of a successful outcome.[32] The practical injustice in such a case lies in the denial of an opportunity which in fairness ought to have been given to the CEPU.[33]
[24] It appears to us difficult if not impossible to assess whether the failure in this case deprived the CEPU of the possibility of a successful outcome without reviewing the documents which ought to have been ordered to be produced. It was certainly denied the opportunity to run the case it wanted to in opposition to the approval application, but it is a significant step to quash the Decision (and render inoperative the Agreement) only to later determine on a rehearing of the application that the objections raised are not made out. Therefore, before assessing the remaining appeal grounds including whether there was a denial of procedural fairness, we consider that it is appropriate to grant permission to appeal on the Production Grounds. In addition to the reasons earlier given, we do so because in the circumstances the Decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if leave is refused. We also propose to make an order for production of documents in categories 1-5, 7-8, 11-12 and 15-16 (making allowance to reduce the breadth of the described categories and removing overlap) and once production is complete to allow the parties an opportunity to make further submissions on whether, in light of the documents produced, the CEPU was deprived of the possibility of a successful outcome and if so what consequences should follow.
[25] We order as follows:
(1) Permission to appeal is granted.
(2) An order requiring production of documents is issued concurrently with this decision in PR726114.
[2] Employer's Declaration in support of an application for approval of an enterprise agreement at p 7
[7] [2020] FWCA 5198 at [1]- [4]
[9] Transcript dated 27 July 2020 at PNs 59-60, PN66
[14] [2020] FWCA 5198 at [26]- [27]
[24] Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47, 203 CLR 194, 99 IR 309 at [17] per Gleeson CJ, Gaudron and Hayne JJ
[25] O'Sullivan v Farrer [1989] HCA 61, 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4, 243 CLR 506 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54, 192 FCR 78, 207 IR 177 at [44]- [46]
[26] GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343, 197 IR 266 at [26]- [27], Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/ Warkworth [2010] FWAFB 10089, 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54, 192 FCR 78, 207 IR 177; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663, 241 IR 177 at [28]
[27] [2010] FWAFB 5343, 197 IR 266 at [24]- [27]
[28] Also see CFMEU v AIRC [1998] FCA 1404, 89 FCR 200, 84 IR 314 at 220; and Wan v AIRC [2001] FCA 1803, 116 FCR 481 at [26]
[29] Trade Practices Commission v Arnotts Limited [1989] FCA 340, 21 FCR 306, 88 ALR 90 at 103; Re Clerks' (Alcoa of Australia - Mining and Refining) Consolidated Award 1985 [1989] AIRC 391, Print H2892, 2 June 1988 and Clermont Coal Operations Pty Ltd v Brown & Dews and Others [2015] FWCFB 2460 at [19]
[31] Ibid at [23]; see also Clermont Coal Operations Pty Ltd v Brown & Dews and Others [2015] FWCFB 2460 at [19]; Kirkman v DP World Melbourne Limited [2015] FWCFB 3995 at [19] and Esso Australia Pty Ltd v AWU and ors [2017] FWCFB 2200 at [6]
[32] See Minister for Immigration and Border Protection v WZARH [2015] HCA 40, 256 CLR 326 at [60] (per Gageler and Gordon JJ)
Printed by authority of the Commonwealth Government Printer
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
Fredon Industries Pty Ltd t/a Fredon [2021] FWCFB 128