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[2018] FWC 6244
Fair Work Commission
2018-10-10
Original judgment source is linked above.
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
Application for termination of the Esso Offshore Enterprise Agreement 2011; application to stay or adjourn proceeding pending determination of related judicial review proceeding; application refused.
[1] Beginning in late 2014 and until 7 December 2016, Esso Australia Pty Ltd (Esso) had been bargaining with The Australian Workers' Union (AWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) (collectively "the Unions"), in their capacities as bargaining representatives for a proposed enterprise agreement or agreements that would replace, inter alia, the Esso Gippsland (Longford and Long Island Point) Enterprise Agreement 2011 (Longford & LIP Agreement) and the Esso Offshore Enterprise Agreement 2011 (Offshore Agreement).
[2] On 7 December 2016, Vice President Watson made an order[1] pursuant to s.424 of the Fair Work Act 2009 (the Act) purporting to terminate protected industrial action. Notice of this protected industrial action had been given by the Unions, was due to commence on 9 December 2016 and was to be taken in furtherance of proposed enterprise agreements to replace the Longford & LIP and the Offshore Agreements. The order was made on application by the Minister for Industrial Relations for the State of Victoria (the Minister).
[3] Prior to the making of the s.424 order, Esso lodged an application on 3 August 2016 under s.225 of the Act to terminate the Offshore Agreement. The Offshore Agreement had passed its nominal expiry date on 1 October 2014.
[4] On 9 September 2016, Esso filed material in support of its s.225 application, consisting of an outline of submissions and eight witness statements. In October 2016, the Unions applied for orders for the production of documents from Esso. After a hearing before the Vice President, an order for the production of documents was made.[2] Following the making of the s.424 order Esso applied to adjourn the s.225 application proceedings, and on 8 December 2016, the Vice President adjourned the proceedings sine die with liberty to apply.[3]
[5] During the course of 2017, a Full Bench of the Commission was convened to deal with making an ensuing workplace determination, to cover inter alia, employees to whom the Offshore Agreement applies, as contemplated by s.266 of the Act. A decision was reserved.
[6] On 6 December 2017, the High Court of Australia delivered judgment in Esso Australia Pty Ltd v The Australian Workers' Union[4] in which a majority of the Court allowed an appeal by Esso, holding that the industrial action organised by the AWU in relation to a replacement enterprise agreement or agreements for, relevantly the Longford & LIP Agreement and the Offshore Agreement was not protected industrial action subsequent to the AWU's contravention, on 6 March 2015 of an order of the Commission[5] directed, inter alia, to the AWU stopping unprotected industrial action in 2015.[6] This was because it did not meet the common requirements provided in s.413(5) of Act.[7]
[7] On 18 December 2017, Esso applied under s.603 of the Act for an order revoking the s.424 order. The Minister and the Unions opposed the revocation. A revocation order was made on 13 July 2018.[8] The Minister applied to the Federal Court of Australia for judicial review (judicial review proceeding) of the decision to make the revocation order on 10 August 2018.[9] That application is scheduled for hearing before a Full Court of the Federal Court on 13 November 2018.
[8] On 27 July 2018, Esso wrote to the Commission, seeking to progress its s.225 application. On 14 August 2018, the Unions wrote to the Commission indicating that they wanted a stay of the s.225 proceeding, in light of the judicial review proceeding. On 3 September 2018, the Unions lodged a formal application seeking an order that the s.225 application be stayed until further order.
[9] Pursuant to directions issued on 27 August 2018 the Unions and Esso have filed written submissions and are content for the application for a stay to be determined on the papers.
[10] It seems uncontroversial that s.589 of the Act confers on the Commission a power to make decisions "as to how, when and where a matter is to be dealt with".[10] The power in s.589 to make a decision as to how, when and where a matter is to be dealt with is sufficiently broad to encompass a decision that Esso's application under s.225 not be dealt with until judgment is delivered in the judicial review proceeding. The exercise of the power to make such a decision is clearly discretionary. In Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [11] the High Court made the following observations about the nature of 'discretion':
""Discretion" is a notion that "signifies a number of different legal concepts". In general terms, it refers to a decision-making process in which "no one [consideration] and no combination of [considerations] is necessarily determinative of the result." Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject-matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment."[12]
[11] However the discretion is not at large. It is to be exercised in a statutory context. The Commission is required to perform its functions and exercise its powers in a manner that is fair and just, quick, informal and avoids unnecessary technicalities, and is open and transparent.[13] In performing its functions and in exercising its powers in relation to a matter, including under s.603 of the Act, the Commission must take into account relevantly the objects of the Act, and any objects of a relevant part of the Act, and equity, good conscience and the merits of the matter.[14] The Commission is also required to act judicially.[15]
[12] Often cited in applications of this kind is McMahon v Gould[16] in which Wootten J set out some guidelines as follows:
"(a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court (Rochfort v John Fairfax & Sons Ltd at 19);
(b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds (ibid);
(c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with (Jefferson v Bhetcha at 905);
(d) Neither an accused (ibid) nor the Crown (Rochfort v John Fairfax & Sons Ltd at 21) are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;
(e) The court's task is one of "the balancing of justice between the parties" (Jefferson Ltd v Bhetcha at 904), taking account of all relevant factors (ibid at 905);
(f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (ibid at 905);
(g) One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused's "right of silence", and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding (ibid at 904). I return to this subject below;
(h) However, the so-called "right of silence" does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding (ibid at 904-5);
(i) The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings (ibid at 905);
(j) In this regard factors which may be relevant include:
(i) the possibility of publicity that might reach and influence jurors in the civil proceedings (ibid at 905);
(ii) the proximity of the criminal hearing (ibid at 905);
(iii) the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses (ibid at 905);
(iv) the burden on the defendant of preparing for both sets of proceedings concurrently (Beecee Group v Barton);
(v) whether the defendant has already disclosed his defence to the allegations (Caesar v Somner at 932; Re Saltergate Insurance Co Ltd at 736);
(vi) the conduct of the defendant, including his own prior invocation of civil process when it suited him (cf Re Saltergate Insurance Co Ltd at 735-6);
(k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant's obligation to the plaintiff;
(1) In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed (Beecee Group v Barton)."[17]
[13] As Dodds-Streeton J pointed out in Websyte Corporation Pty Ltd v Alexander (No 2)[18] McMahon v Gould did not purport to establish a rigid code, but expressly recognised that the relevant considerations will vary according to the individual case and that the guidelines were not exhaustive.[19] It is also to be observed that the judgment in McMahon v Gould concerned a stay of a civil proceeding pending the determination of a criminal proceeding. Plainly some of the matters identified in the guidelines do not arise in the case of an application for a stay or an adjournment of an administrative proceeding pending the determination of a judicial review proceeding.
[14] In Sterling Pharmaceuticals Pty Limited v The Boots Company (Australia) Pty Limited[20], a case concerning an application to stay a proceeding because another proceeding involving related entities operating with a degree a common management and control, were involved in earlier commenced proceeding in New Zealand, Lockhart J set out a number of considerations relevant to the question whether a stay ought be granted in that proceeding:
"In my opinion relevant consideration is to be taken into account in the present case includes the following:
"[46] The discretion exercised in the present case was only confined by the subject matter and objects of the FW Act and, as such, the decision maker had considerable latitude as to the decision to be made.
[47] In such circumstances the McMahon v Gould principles may be of some assistance, by way of broad guidance, but each case must be determined having regard to its particular circumstances and to the statutory framework within which the discretion is to be exercised. The discretion was required to be exercised having regard to the Commission's central obligation to provide a fair hearing to parties in proceedings before it. Such an obligation arises directly from s.577(a) of the FW Act, which directs the Commission to perform its functions and exercise its powers in a manner that 'is fair and just', and from the implied obligation to act judicially. One aspect of the duty to act judicially is the obligation to afford a party a reasonable opportunity to allow his or her case to be put.
[48] In our view the rigid application of the McMahon v Gould guidelines in the present context may also operate to inappropriately confine the exercise of the Commission's discretion. As Bowan LJ observed in Gardner v Jay:
'When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view to indicating the particular grooves in which the discretion should run, for if the act or the Rules do not fetter the discretion of the Judge why should the court so do.'
[49] Elevating any of the McMahon v Gould guidelines into a 'test' to be satisfied as a condition precedent to the exercise of the Commission's discretion - as the Appellant appears to contend - also serves to obfuscate the Commission's primary obligation, to ensure that the parties are afforded a fair hearing. Ultimately the relevant question is: what does justice require in the circumstances?"[23] [Endnotes omitted]
[16] The same observation might also be made about a rigid application of the considerations identified in Sterling Pharmaceutical. In an application of this kind, the proper exercise of the discretion requires that relevant matters be taken into account and weighed in order to determine whether a proceeding should be adjourned. In other words, having regard to the relevant considerations what does justice require, or as Esso puts it, whether the interests of justice would be best served by the grant of a stay or an adjournment. Matters or circumstances that are relevant will of course vary in each case.
[17] The Unions contend, consistently with the decision in Rustemovski, that the question of whether a stay of the s.225 application should be ordered is ultimately a question of that which justice requires in the circumstances.[24] The Unions say that justice is best served by staying the s.225 application until the Full Court has delivered judgment in the judicial review proceeding. They also contend that the considerations identified in Sterling Pharmaceutical favour the grant of a stay.
[18] The starting point is to consider the circumstances in which the Unions' application is made. Esso has applied for the termination of the Offshore Agreement that had passed its nominal expiry date. It made that application some time ago but as events transpired the application was adjourned sine die, in circumstances where proceedings for the making of a workplace determination affecting employees who are covered by that agreement were on foot. As the background earlier discussed discloses, proceedings for the making of a workplace determination had concluded and a decision had been reserved. Following the High Court's judgment in Esso, Esso successfully applied to have the underpinning order terminating the purported protected industrial action revoked with the consequence that the jurisdictional foundation upon which a workplace determination would have been built was removed. The decision to revoke the underpinning order is the subject of the judicial review proceeding. Esso now presses its application to terminate the Offshore Agreement.
[19] Esso is entitled to press its application and to have the application determined as expeditiously as circumstances will allow. This weighs against an adjournment of its application. Unnecessary delay in a proceeding speaks against the proper administration of justice.
[20] The Unions contended that Esso's termination application will involve lengthy proceedings and that there is little prospect in the matter being completed within a short time frame. I am inclined to agree. There will likely be a need for both parties to update evidentiary material prepared for the proceeding before the case was adjourned. The Unions will also likely as they have foreshadowed, seek orders for production of further documents, and it is to be expected that there will be a contest about any orders for production and their scope, as well as contests about individual documents. There has already been filed a significant number of witness statements. New statements might also need to be prepared. Given the likely need for cross-examination, the duration of an oral hearing may require more than the three days anticipated by Esso. It is not a simple matter to weigh these matters. On the one hand the need to undertake more work means that a timetable for both preparation and hearing should be fixed so that the parties can get on with the preparatory tasks at hand. On the other, it seems clear to me that the matter will not be ready for a hearing before the Full Court hears the judicial review proceeding and quite likely, particularly given my availability, the matter will not be fixed for hearing until February 2019, with the decision not likely delivered until some period thereafter. It may be that the outcome of the judicial review proceedings is known before the oral hearing of the s.225 application begins.
[21] Plainly, if the Minister succeeds in her judicial review proceeding, all the preparatory work undertaken and possibly the hearings might have been for naught. On the other hand an adjournment of the s.225 proceeding will result in a significant delay in the commencement of both the preparatory work and of the hearing, and thus in the determination of an application which is properly before the Commission.
[22] A refusal to adjourn the termination proceedings does have the potential to prejudice the Unions in the event that the Minister's judicial review proceeding is successful, because they will have devoted time and incurred the expense involved in the preparation of a case which may not ultimately need to proceed. Esso will suffer a prejudice if its application is adjourned particularly if the judicial review proceeding does not result in favour of the Minister. It will have been delayed in the prosecution of its application.
[23] In evaluating these considerations is plainly inappropriate that I express a view as to the likelihood of the Minister's judicial review proceeding succeeding. Similarly the prejudice identified by the Unions arising from the possibility that the termination application will be successful and thereafter Minister is successful in the judicial review proceeding, is not a matter to which I assign any significant weight because the scenario presupposes an outcome of an application on which I presently have no view. In any event any void of uncertainty created by such a result (at least so far as rostering is concerned) would be filled, one way or another, by a workplace determination that would follow a judgment in favour of the Minister by the Full Court of the Federal Court. Moreover, given the views I have expressed about timetabling, I consider it more likely that a result in the judicial review proceeding will be known before a decision in relation to the s.225 application is made.
[24] In the normal course of events I would regard the factors I have identified on balance as weighing in favour of the Unions application for an adjournment. That is, justice may require in circumstances where a pending judicial review proceeding will have a material legal effect on a proceeding before the Commission, an adjournment to await the Court's judgment. However that is not this case. Esso's application to terminate the Offshore Agreement does not depend for its efficacy on the outcome of the judicial review proceeding. The outcome of the judicial review proceeding may in a practical sense render the s.225 application unnecessary and Esso may elect not press its application, but the outcome of the judicial review proceeding will not prevent Esso from pressing its application nor will it affect the jurisdiction I have to deal with the application, at least not until a workplace determination is made or agreement replacing the Offshore Agreement is made.
[25] In the totality of these circumstances I consider on balance that the interests of justice favour that Esso's application be heard and determined in the normal course without undue delay.
[26] I do however propose to accede to the substance of the Unions submission at [49] of its 3 September 2018 submissions where it proposes some directions for the future conduct of this matter should its stay application fail. I therefore propose to direct that Esso file and serve any additional evidentiary material on which it intends to rely and an outline of submissions by 5.00pm on Wednesday 7 November 2018. Esso should also indicate whether it continues to rely on any of the material that has already been filed, the statement of Ian Masson being an obvious example. I also propose to direct that the Unions advise Esso and my Chambers within seven business days of the service of Esso's additional material whether they wish to make an application for orders for production of documents and the time they require to file any further evidentiary material. At this stage I propose to make available the week commencing 4 February 2019 for the hearing of the application.
[27] Directions for the further conduct of the s.225 application are issued separately.
[28] For the reasons stated, the Unions' application for a stay or adjournment of the s.225 application is dismissed.
[6] [2017] HCA 54 at [64].
[8] See Esso Australia Pty Ltd v "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU); The Australian Workers' Union and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2018] FWCFB 4120; PR588352.
[9] VID981/2018 Minister for Industrial Relations for the State of Victoria v Esso Australia Pty Ltd & Ors.
[15] R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 552; Re Australian Bank Employees Union; Ex parte Citicorp Australia Ltd [1989] HCA 41; (1989) 167 CLR 513 at 519; Coal and Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; (2011) 192 FCR 78 [25].
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(2000) 174 ALR 585
(1969) 122 CLR 546
(2011) 192 FCR 78
(1989) 167 CLR 513
(1992) 34 FCR 287