Construction, Forestry, Maritime, Mining and Energy Union v DP World Sydney Ltd

Federal Court of Australia (Full Court)|2019-06-20|Before: Bromwich JJ

The application be dismissed.
In the event that either party wishes to make an application for costs, that party must file and serve written submissions (limited to 2 pages) within 7 days of the delivery of the Full Court's reasons, and the other party must file and serve its written submissions (limited to 2 pages) in response within 7 days thereafter. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT: 1 On 30 May 2019, at the conclusion of the hearing of this matter, we ordered that the application for relief under s 39B of the Judiciary Act 1903 (Cth) be dismissed. These are our reasons for that order which we indicated would be published subsequently. 2 By its application, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) sought writs of certiorari quashing, first, part of the orders made by a Deputy President of the Fair Work Commission on 12 February 2019 extending the time under s 443(5) of the Fair Work Act 2009 (Cth) for the purpose of s 414(2)(b) of the Act, for the giving of notice of the taking of industrial action from 3 to 5 working days as defined in s 12 of the Act and, secondly, the orders made by the Full Bench of the Fair Work Commission (FWC) on 4 March 2019 dismissing the CFMMEU's appeal to it against that part of the orders. 3 It is well settled that this Court's jurisdiction is confined to determining whether the decision of the Full Bench of the FWC was subject to jurisdictional error as explained in Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [31] as follows: There would only have been jurisdictional error on the part of the Full Bench if it had misconceived its role or if, in terms used by Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council [(1947) 47 SR (NSW) 416], it "misunder[stood] the nature of [its] jurisdiction ... or 'misconceive[d] its duty' [R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 at 242-243] or '[failed] to apply itself to the question which [s 45 of the Act] prescribes' [R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 at 242-243] ... or '[misunderstood] the nature of the opinion which it [was] to form' [R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 432.]". 4 The CFMMEU contended that the Full Bench's decision was affected by jurisdictional error because the Full Bench had failed to correct three jurisdictional errors by the Deputy President.

Background 5 One of the requirements for industrial action in the form of proposed employee claim action to be protected industrial action, for the purposes of the Act, is that written notice of the action be given by a bargaining representative of the employees to the employer: s 414(1). By s 414(2) the period of notice must be 3 working days or, if a protected action ballot order for the employee claim action specifies a longer period of notice, the longer period. Section 443 deals with the circumstances in which the FWC must make a protected action ballot order. Section 443(5) provides that: If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days. 6 By s 441(1): The FWC must, as far as practicable, determine an application for a protected action ballot order within 2 working days after the application is made. 7 The Deputy President determined the application within 2 working days as required by s 441(1). The CFMMEU acknowledged that in the decision, Construction, Forestry, Maritime, Mining and Energy Union v DP World Brisbane Pty Ltd T/A DP World and Others [2019] FWC 908, the Deputy President correctly identified the applicable law. Accordingly, the Deputy President explained that: [36] The proper interpretation and application of the words 'exceptional circumstances' has been considered in a number of decisions of the Commission. In Transport Workers' Union of Australia [[2012] FWA 133] it was noted that the uniform approach adopted by this Commission is that of Vice President Lawler in CEPU v Australia Post [[2007] AIRC 848] dealt with under the Workplace Relations Act 1996 which cites with approval the decision of Rares J of the Federal Court of Australia in Ho v Professional Services Review Committee No 295 [[2007] FCA 388]: "[10] In this passage his Honour was concerned with the ordinary meaning of the expression "exceptional circumstances" and the approach identified is, in my view, equally applicable to the use of that expression in s.465(3). In summary, the expression "exceptional circumstances" requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe "exceptional circumstances" as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural "circumstances" as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of "exceptional circumstances" includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon. [11] However, it is important to note that when considering whether to make an order pursuant to s.463(5) the Commission is not simply concerned with determining whether there are exceptional circumstances. There must be exceptional circumstances "justifying" the specification of a longer notice period. The notion of justification is critical and calls for a consideration of the purpose of the notice required by s.441." [37] The Vice President went on to state: "[21] Essentially, what is required in determining whether exceptional circumstances justify an extension of the required notice period is a weighing of the interests of the employer and third parties in the employer having a greater opportunity to take appropriate defensive action as against the diminutions in the effectiveness of the employees' bargaining power that results from such an extension. The fact that the legislature has seen fit to condition the ordering of an extension of the required notice period on the presence of exceptional circumstances justifying it, as distinct from merely conferring a simple discretion to extend the required notice period, indicates that ordinarily there should be no extension." 8 These statements are consistent with the observations in Plaintiff M174/2016 v Minister for Immigration and Border Protection [2018] HCA 16; (2018) 353 ALR 600 at [30] per Gageler, Keane and Nettle JJ that "exceptional circumstances" "need not be unique, or unprecedented, or very rare; but … cannot be … regularly, or routinely, or normally encountered". 9 At [38] the Deputy President said: More recently a Full Bench of the Commission in National Tertiary Education Industry Union v Charles Darwin University [[2018] FWCFB 4011] (NTEIU) accepted that the words "exceptional circumstances" in s 463(5) of the Workplace Relations Act 1996 is in all material respects the same as the phrase "exceptional circumstances justifying" contained in s.443(5) of the Act. The Full Bench further concluded that the making of an order to extend the period of notice for the taking of protected industrial action involves: "[23] The determination of whether the circumstances in a particular case are 'exceptional' involves an evaluative judgement. A proper approach to the exercise of the Commission's discretion under s.443(5) requires first that a member identify or make findings about the particular facts or circumstances in relation to the proposed industrial action which are said to inform the evaluative judgement that such factors or circumstances are exceptional circumstances. The phrase "exceptional circumstances" carries its ordinary meaning. [24] Secondly, there must be a consideration whether the identified exceptional circumstances are circumstances "justifying" a longer notice period. This also involves an evaluative judgement made on the basis of probative material. The use of the verb "justifying" in s.443(5) signifies that the identified exceptional circumstances must show or prove that it is reasonable or necessary or the circumstances warrant or provide good reason to require a longer period of written notice. [25] Thirdly, if the member is satisfied there are exceptional circumstances justifying a longer period of notice, there must be a consideration of whether to exercise the discretion and, if so, the additional period of notice that should be given in the circumstances (noting the maximum period)." 10 The Deputy President, before referring to these principles, had set out in some detail the evidence of Mr Hulme who was DP World's General Manager Operations for its container stevedoring terminal at Port Botany. The evidence was to the effect that because DP World had over 40% of the market for stevedoring services in the ports that would be affected, in order to avoid flow-on consequences to third parties, in particular shipping lines, it would take 6 or 7 days to arrange full subcontracting for substitute operators to perform its stevedoring duties. The Deputy President also referred to the evidence from the CFMMEU's Mr Smith who said that on previous occasions where protected action had occurred during enterprise agreement negotiations, the default period of 3 days' notice had applied. Further, Mr Smith said that the CFMMEU's members would ensure that reefer containers with perishable goods would be connected to a power source to avoid spoilage but would not otherwise be moved. 11 The Deputy President's conclusions were expressed in these terms: [42] It is noted that, for both parties, due to the shortage of notice requirements for a listing under s437 of the Act, the availability of fuller submissions and evidence is not always possible. [43] As is often the case in matters before the Commission, when applying the provisions of the Act discretionary decisions largely turn on their own facts and circumstances. As much was stated by the Full Bench in the NTEIU case referred to above. [44] There is no question that should the Commission exercise a discretion under s.443(5) of the Act to increase the notification period, the result is an interference with the right of the CFMMEU to otherwise provide three working days' written notice of industrial action that is to be organised and engaged in by employees in support of a proposed agreement. Such a right should not be lightly exercised. There must be "exceptional circumstances" justifying a longer period in relation to the proposed industrial action the subject of the order. [45] The CFMMEU submit that the justification for the additional 2 working days' notice put forward by DP World is no more than mere inconvenience to DP World and do not provide exceptional circumstances. It was submitted that DP World simply wants more notice to prepare for the proposed protected industrial action. Attention was also drawn to occasions where in response to protected industrial action having been taken previously DP World has responded with a lock out. I accept that, as put by the CFMMEU, where inconvenience and delay is caused to DP World this is generally part of what protected industrial action is designed to cause and cannot be seen as creating an exceptional circumstance. [46] I have had regard to the reasons put forward by DP World relating to the extension of the notice period and note as stated in the cross examination of Mr Hulme that delays in providing stevedore services can arise from a variety of events unconnected to the taking of protected industrial action by employees. [47] I have not been persuaded by the potential spoilage arguments put by DP World of delays in transporting perishable goods, particularly as the additional 2 working days' notice would not appear to add greatly to the time already spent in such goods either departing or arriving from/at their destination. [48] I am of the view however, that where the reasons for the extension application are beyond the immediate interests of DP World and the employees concerned and extend to the interests of third parties primarily the shipping lines, they are exceptional. While not being unique or unprecedented they are out of the ordinary course. In respect of whether the exceptional circumstances justify the specification of a longer notice period, I am satisfied on the evidence of Mr Hulme that three working days' notice is an insufficient period where DP World determines to subcontract out the stevedoring (assuming this is possible) in an attempt to mitigate the potential disruption to shipping schedules of third parties and the resultant costs to be borne by the shipping operator, transport companies and/or exporters and as such justifies the extension sought. [49] In accordance with s.443(5) of the Act, I am therefore satisfied that there are exceptional circumstances justifying an extension to the period of written notice contained in paragraph 414(2)(a) of the Act from 3 working days to 5 days, noting this period is short of the maximum extent possible of 7 working days. 12 The Full Bench of the FWC, Construction, Forestry, Maritime, Mining and Energy Union v DP World Brisbane Pty Ltd t/a DP World and Others [2019] FWCFB 1150, permitted but dismissed the CFMMEU's appeal.

This application 13 The CFMMEU alleged that the Deputy President's decision was affected by three jurisdictional errors which the Full Bench had failed to correct, thereby itself committing jurisdictional error. 14 As a general matter it is apparent that the formation of the discretionary judgment called for by s 443(5) is conditioned on the FWC forming a discretionary evaluative judgment about whether, having regard to all of the circumstances, there exists some characteristic of the foreshadowed proposed industrial action, in the whole of the context in which it is to occur, that justifies allowing a longer period of written notice. If the FWC so decided, then it must consider what, if any, additional days' notice up to 7 should be required. Inherently, the exercise of each discretion involved the FWC forming an overall evaluation of the merits of the application for a longer period of notice that was only reviewable for error by the Full Bench on the principles in House v The King (1936) 55 CLR 499. 15 First, the CFMMEU contended that the Deputy President had identified but then failed to apply the three stage process identified in an earlier Full Bench decision, National Tertiary Education Industry Union v Charles Darwin University [2018] FWCFB 4011. In particular, it was said that the Deputy President had found exceptional circumstances but then conflated the second step with the first step and omitted the third step, the exercise of discretion, altogether. 16 A fair reading of the Deputy President's decision provides no support for this contention. The Full Bench in National Tertiary Education Industry Union v Charles Darwin University was not suggesting that in order to properly discharge the statutory function the reasons for a decision had to be structured into three separate and distinct parts. The Full Bench was providing guidance on the statutory provision which provides that if the FWC is satisfied that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a), being longer than 3 working days, the protected action ballot order may specify a longer period. As [48] and [49] of his decision discloses the Deputy President was satisfied that there were exceptional circumstances, that those circumstances justified a longer period than the 3 working days, and that the power to extend the period should be exercised to extend the period from 3 to 5 working days. 17 The CFMMEU's first complaint, in truth, is one of form rather than substance. The form of [48] and [49] does not reflect a clear separation of the matters referred to in National Tertiary Education Industry Union v Charles Darwin University. But the substance of each of those matters is addressed. In circumstances where the decision had to be made and reduced to writing within 2 working days there cannot be any proper basis to conclude that the decision is affected by jurisdictional error on the basis of this first contention. 18 Secondly, the CFMMEU contended that the Deputy President failed to deal with its central argument that an extended notice period would diminish the employees' bargaining power. This contention cannot be accepted. It again elevates form over substance. As the CFMMEU's submissions to this Court disclose, the diminution in bargaining power was a central issue in the proceedings. The battle lines were clearly drawn. The CFMMEU wanted the standard 3 day period because, as must have been and was obvious, this would maximise its bargaining power. DP World wanted a longer period because, as must have been and was obvious, that would enable it to take more effective steps to mitigate the impact of the protected industrial action, a necessary corollary of which would be a diminution of the employees' bargaining power. The idea that in this context the Deputy President overlooked the CFMMEU's central argument about the impact on its bargaining position is unrealistic. In any event, it is apparent from his reasons that the Deputy President did no such thing. The CFMMEU characterised [44] of the reasons for the decision as nothing more than a misquote from [20] of National Tertiary Education Industry Union v Charles Darwin University, in which the Full Bench of the FWC said: The exercise of a discretion under s.443(5) results in an interference with the right of a bargaining representative to otherwise give three working days' written notice of industrial action that is to be organised and engaged in by employees in support of a proposed agreement. That this right should not lightly be curtailed by the imposition of a longer period of notice is evident in the grant of power itself. There must be "exceptional circumstances" in relation to the proposed industrial action the subject of the order justifying a longer period. 19 Contrary to the submissions of the CFMMEU, the mere fact that this statement does not expressly refer to the diminution of employees' bargaining power if an extension of time is granted is beside the point. The statement, which the Deputy President adopted in [44] of his decision, refers to "interference" with the right to give 3 working days', which should not lightly be curtailed. In context, the manifest reason this is so is that extensions of time necessarily diminish the employees' bargaining power. That the Deputy President recognised this to be so is apparent not only from [44] of the decision, but also the statement in [45] in which the Deputy President said "where inconvenience and delay is caused to DP World that is generally part of what protected industrial action is designed to cause and cannot be seen as creating an exceptional circumstance", as well as the reference in [48] to the interests of the employees. Their interest, which it must be taken the Deputy President had in mind, was in maximising their bargaining power during the enterprise agreement negotiations. 20 In these circumstances, there was no requirement for the Deputy President to say more than he did. Once the Deputy President decided that there were exceptional circumstances that justified a longer notice period, in the circumstances of this matter, he was entitled to conclude that the period of 5 days was appropriate on the basis of Mr Hulme's evidence. In concluding so at [44], [45] and [48], the Deputy President had already recognised the consequential impact on the employees, which must mean their bargaining power and was nevertheless persuaded that the discretion should be exercised. The Deputy President did not need to elaborate further in the circumstances: Plaintiff M64/2015 v Minister for Immigration and Border Protection [2015] HCA 50; (2015) 258 CLR 173 at [59]-[60] per French CJ, Bell, Keane and Gordon JJ; Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184; (2003) 236 FCR 593 at [46]-[47] per French, Sackville and Hely JJ. 21 Thirdly, the CFMMEU contended that the decision of the Deputy President was legally unreasonable in that the evidence was no more than that there was a practice of attempting to subcontract the work to avoid disruption to shipping lines, which was not an attractive option and created difficulties other than those flowing from the 3 working days' notice period. Further, the CFMMEU argued that there was no evidence of the impacts on shipping lines during previous periods of protected industrial action or the actions that DP World had taken to mitigate those impacts. The CFMMEU submitted that the Deputy President had failed to engage with that lack of evidence as it had put to him. Finally, the CFMMEU contended that Mr Hulme's evidence provided no guarantee that, in the event the notice period was extended to 5 days, the work would be subcontracted. In these circumstances, it was said, the Deputy President's conclusion was arbitrary, capricious, plainly unjust and lacked an evident or intelligible justification and was otherwise obviously disproportionate. 22 We do not accept these submissions. It was reasonably open to the Deputy President to draw the conclusions he did from Mr Hulme's evidence. It was not necessary for DP World to call more evidence merely because the CFMMEU submitted that such evidence would be better than the evidence available. Nor was it necessary for DP World to give any form of guarantee about subcontracting. The evidence of Mr Hulme provided a clear rational foundation for the decision. 23 We agree also with the observations of the Full Bench of the FWC at [23] that in circumstances where a written decision must be provided within 2 working days, the principle that the reasons for the decision must be read fairly and as a whole is of particular importance as the authorities we have cited at [20] above show.

Conclusion 24 For these reasons, we concluded that the application had to be dismissed. We also ordered a timetable if any party wished to apply for costs. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Rares, Jagot and Bromwich.

Fair Work Act 2009(Cth)ss 12, 414(1), 414(2), 443(5)

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