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[62]
[2018] FWC 2441
General information, not legal advice.
Fair Work Commission
2018-05-23
Original judgment source is linked above.
The attached document replaces the document previously issued with the above code on 23 May 2018.
A typographical error in paragraph [19] has been corrected.
s.185 - Application for approval of a single-enterprise agreement
Application for referral to a Full Bench - Fair Work Act 2009 (Cth) - s 615A.
[1] On 3 April 2018 the Metropolitan Fire and Emergency Services Board (MFESB) made an application pursuant to s 185 of the Fair Work Act 2009 (FW Act) for the approval of the Metropolitan Fire and Emergency Services Board & United Firefighters Union Operational Staff Agreement 2016 (Agreement).
[2] In correspondence addressed to the President dated 11 April 2018, an application was made by the Honourable Craig Laundy MP, Minister for Small and Family Business, the Workplace and Deregulation (Minister), for the MFESB's application for approval of the Agreement to be referred to a Full Bench for hearing and determination by way of a direction under s 615A. Omitting formal parts, the Minister's correspondence stated:
"I refer to the application to approve the Metropolitan Fire and Emergency Services Board & United Firefighters Union of Australia Operational Staff Agreement 2016 (Agreement).
I write to apply under section 615A(2)(b) of the Fair Work Act 2009 (Fair Work Act) for you to direct a Full Bench to deal with the application to approve the Agreement. I consider there to be strong public interest considerations in having this matter considered by a Full Bench.
The Agreement is large and complex, consisting of 321 pages and a number of highly prescriptive clauses. There has been significant public controversy in relation to the terms and conditions of the Agreement.
There may be significant questions as to whether the Agreement includes unlawful terms, specifically, discriminatory terms and objectionable terms, as well as terms that may be inconsistent with the Fair Work Act or other legislation.
I also understand that the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) has drafted a report arising from its Independent Review into Equity and Diversity issues within Metropolitan Fire Brigade and Country Fire Authority. Commissioner Kristen Hilton has publicly stated that the "equity and diversity problems within the [Victorian] fire services are well documented over the past few years and the case for change is clear". While the Report has not yet been published, the views of the VEOHC demonstrate that the Agreement should be carefully scrutinised by a Full Bench to ensure that its terms are lawful and promote cooperative, productive and inclusive workplace relations within the Metropolitan Fire Brigade."
[3] Section 615A, pursuant to which the Minister's application was made, provides as follows:
615A When the President must direct a Full Bench to perform function etc.
(1) The President must direct a Full Bench to perform a function or exercise a power in relation to a matter if:
(a) an application is made under subsection (2); and
(b) the President is satisfied that it is in the public interest to do so.
Note: The President gives directions under section 582.
(2) The following persons may apply to the FWC to have a Full Bench perform a function or exercise a power in relation to a matter:
(a) a person who has made, or will make, submissions for consideration in the matter;
[4] On 27 March 2018, the President delegated to me all his powers and functions under the FW Act, except under s 581A(1)(b) and ss 620 and 625, for the period from midday on 27 March 2018 through to 25 April 2018. This general delegation encompassed the Minister's referral application. After the general delegation expired, on 3 May 2018 the President delegated his functions and powers under ss 582, 615 and 615A of the FW Act specifically in respect of the Minister's referral application to me pursuant to ss 582 and 584 of the FW Act. Accordingly it is necessary for me to determine the Minister's referral application pursuant to these delegations.
[5] On 24 April 2018 the Minister, pursuant to the Commission's directions, filed written submissions in support of his application. In those submissions, the Minister submitted that the referral of the application to approve the Agreement to a Full Bench would be in the public interest having regard to the following matters:
The law is not settled as to whether the FW Act, in the context of discriminatory and objectionable terms under s 194, prohibits terms of industrial instruments that indirectly discriminate against certain employees. In particular, conflicting authority exists between Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402 (Klein) and Shop, Distributive and Allied Employees Association v National Retail Association & Anor (No 2) [2012] FCA 480 (SDA).
If the FW Act protects against indirect discrimination, a number of the terms of the Agreement are of concern, such as: restrictions on the availability of part-time work that indirectly discriminate against MFESB employees who are women, have family or carer's responsibilities or are disabled; and terms that require or permit adverse action against MFESB employees who are non-union members by requiring the approval of the United Firefighters' Union (UFU) for their operation, by providing for a member of a dispute panel to be nominated by the UFU, and providing only for UFU membership on certain committees.
Potential problems with the Agreement have been acknowledged in the Form F17, suggesting that the MFESB's attention has been drawn to questions concerning the lawfulness of some Agreement terms, but has not satisfied itself as to whether these terms are lawful or not.
An important question arises as to whether a provision such as clause 3.1.11 of the Agreement (which states, "in implementing the Agreement the parties will act consistently with equal opportunity and anti-discrimination legislation") has any and, if so, what effect, where a provision is discriminatory or objectionable.
The issues raised by the application have significant wider implications beyond this matter. It is in the public interest that decisions about the operation of the FW Act regarding novel or unsettled questions of potential concern to Australian workplaces are legally sound and ensure certainty of rights and obligations for employers and employees.
This matter has attracted public controversy, and has been the subject of inquiry and report by the VEOHRC. Public confidence in the workplace relations arrangements underpinning this essential service is likely to be promoted by referral to a Full Bench.
While applications under s 615A of the FW Act have not previously been granted where it was considered that there was no divided authority on the question of the proper construction of the FW Act, the objects of the FW Act include "enabling fairness and representation at work and the prevention of discrimination".
The public interest would be served by consideration of the FW Act's interpretation by a Full Bench of the Commission.
[6] The Minister's application for referral to a Full Bench is opposed by the MFESB and the UFU.
[7] In response to the submissions filed by the Minister, the MFESB submitted that there were insufficient public interest considerations to warrant referral of the application to a Full Bench for the following reasons:
Klein and SDA were not conflicting authorities, as Klein was concerned with the meaning of the expression "discriminates between" in s 342 in the context of an application under Pt 3-1 of the FW Act, whereas SDA was concerned with an application under s 153, a provision which was relevantly identical to s 195, and made clear that the meaning did not extend to indirect discrimination;
• the proposition that there were terms of the Agreement that required or permitted adverse action was inconsistent with the Federal Court Full Court decision in United Firefighters Union of Australia v Country Fire Authority[1] as well as Klein;
[8] The UFU likewise submitted that there no public interest grounds supporting the referral because there was no conflict between the decisions in Klein (which relevantly dealt with the expression "discriminates between") and SDA (which dealt with the expression "discriminates against").
[9] The general principles relevant to the determination of an application under s 615A of the FW Act were set out in Collinsville Coal Operations Pty Limited as follows (footnote omitted):[2]
"[5] The issue for determination is whether I am satisfied that it is in the public interest to refer the agreement approval application to a Full Bench. The expression 'in the public interest', when used in a statute, imports a discretionary value judgment to be made by reference to undefined factual matters and confined only by the subject matter, scope and purpose of the relevant statute. [O'Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210 at 216 per Mason CJ, Brennan, Dawson and Gaudron JJ]
[6] Sections 577 and 578 of the FW Act are relevant to the exercise of the President's powers under s 615A.
The FWC must perform its functions and exercise its powers in a manner that:
(b) is quick, informal and avoids unnecessary technicalities; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581).
[8] Section 578 directs the Commission to take into account, among other things, the objects of the FW Act and 'equity, good conscience and the merits of the matter'.
[9] Section 581 is also apposite. It provides, relevantly, that the President is responsible for ensuring that the Commission performs its functions and exercises its powers in an efficient manner."
[10] In subsequent decisions made under s 615A, it has been determined that:
• the number of employees affected by the substantive application does not, of itself, enliven the public interest,[3] but may do so where the number of employees is so large as to be of public significance because of the potential economic and commercial effects;[4]
• the mere fact that the matter involves issues of public controversy does not enliven the public interest;[6]
• the mere fact that there may otherwise be no contradictor does not enliven the public interest;[7] and
• the public interest will not be attracted in relation to a question of the proper construction of the FW Act where there is established and consistent authority on the question.[8]
[11] The starting point for the consideration of the Minister's application is that he intends to oppose the approval of the Agreement, and the only basis disclosed for that opposition appears to be that the Commission could not be satisfied, as required by s 186(4) of the FW Act, that the agreement does not include any "unlawful terms". Section 194 defines an "unlawful term" to include, relevantly, a "discriminatory term" and an "objectionable term". "Discriminatory term" is defined in s 195(1) to mean:
(1) A term of an enterprise agreement is a discriminatory term to the extent that it discriminates against an employee covered by the agreement because of, or for reasons including, the employee's race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
[12] The definition operates subject to certain exceptions set out in s 195(2) and (3). One of the exceptions, in s 195(2)(a), is that a term does not discriminate against an employee if "the reason for the discrimination is the inherent requirements of the particular position concerned".
[13] "Objectionable term" is defined in s 12 as follows:
(a) requires, has the effect of requiring, or purports to require or have the effect of requiring; or
(b) permits, has the effect of permitting, or purports to permit or have the effect of permitting;
(c) a contravention of Part 3-1 (which deals with general protections);
[14] The Minister's submissions do not with precision identify the grounds of his intended opposition to the approval of the Agreement, but appear to involve the contention that the restrictions on the availability of part-time employment in the Agreement would be indirectly discriminatory against women, people with family or carer's responsibilities or persons with a disability, and thus would constitute a discriminatory term, and that provisions in which UFU approval of certain arrangements is required, the UFU only has the right to nominate a member of the Disputes Panel, and certain committees only provide for UFU membership (on the employee side) are terms that require or permit adverse action, and are thus (presumably) objectionable terms as well as perhaps discriminatory terms.
[15] It was a fundamental element of the Minister's submissions in support of a Full Bench referral that there was a conflict between the single-member Federal Court decisions in Klein v Metropolitan Fire and Emergency Services Board[9] and Shop, Distributive and Allied Employees Association v National Retail Association & Anor (No 2)[10] as to whether the FW Act protected against indirect, as distinct from direct, discrimination. In this respect it must be accepted, contrary to the submission of the MFESB and the UFU, that there is a significant degree of inconsistency between these two identified decisions. In SDA it was determined by Tracey J that the requirement in s 153(1) that a modern award not contain terms that "discriminate against an employee" for specified reasons did not encompass "indirect discrimination". Tracey J said:
"[52] The Act does not define the word "discriminate" or the words "discriminate against". The ordinary and natural meaning of the word 'discriminate' connotes the making of distinctions: cf HBF Health Funds Inc v Minister for Health and Ageing [2006] FCAFC 34; (2006) 149 FCR 291 at 295. In the context of s 153(1) this involves the making of distinctions between employees whose employment is regulated by the Award.
[53] It is next to be noted that not all discrimination is proscribed. What is proscribed is discrimination against an employee. That means the making of an adverse distinction between employees: cf Helal v McConnell Dowell Constructors (Aust) Pty Ltd [2010] FCA 1462; (2010) 193 FCR 213 at [24] (per Ryan J). The adverse distinction must be drawn for one of the reasons, including age, which appear in the sub-section.
[54] As can be seen, the proscribed reasons for adverse discrimination are those which are commonly dealt with in Federal and State anti-discrimination legislation. Typically, such legislation defines discrimination so that it covers both direct and indirect discrimination: see for example the Disability Discrimination Act 1992 (Cth) ss 4, 5 and 6; Sex Discrimination Act 1984 (Cth) ss 5, 6, 7 and 7B; Equal Opportunity Act 2010 (Vic) ss 8 and 9. The reason that this was considered necessary is, as Dawson and Toohey JJ pointed out in Waters v Public Transport Corporation [1991] HCA 49; (1991) 173 CLR 349 at 392-3, because the proscription of discrimination, without more, is not apt to pick up "facially neutral" discrimination which is otherwise known as indirect discrimination. Indirect discrimination, as defined in anti-discrimination legislation requires the imposition of a requirement or condition which does not, in terms, distinguish between people on prohibited grounds but which, in practice, adversely impacts on such people. It must be established that the requirement or condition is one with which a substantially higher proportion of persons who are not aggrieved by its operation are able to comply, that the requirement or condition is not reasonable and that the aggrieved person is not able to comply with it.
[55] No attempt has been made in the Act to provide an extended definition of the term "discrimination".
[56] It would be highly unlikely that the Parliament intended that s 153(1) could be contravened by indirect discrimination. Awards typically contain many provisions that discriminate between employees. Wage rates, for example, are usually fixed by reference to criteria such as length of service and qualifications held. It is unlikely that Parliament intended that such provisions could be impugned on the ground that they indirectly discriminated on the grounds of age because younger employees as a group would not have had the length of service, or the time to obtain the requisite qualifications, in order to qualify for placement in the higher classifications which attract higher wages.
[57] It is also to be observed that the exceptions to the general rule contained in s 153(1), which are to be found in sub-sections (2) and (3), all cover terms which would meet the description of direct discrimination. A modern award may, for example, discriminate on the ground of age by expressly providing for minimum wages for young employees of a certain age or on the ground of disability when fixing wage rates for such employees: see s 153(3)."
[16] Section 153 is not, for relevant purposes, distinguishable from s 195(1).
[17] In Klein, Gordon J considered whether s 342(1), which defines (in item 1(d)) "adverse action" of the type prohibited by s 340 to include where the employer "discriminates between the employee and other employees of the employer", encompasses indirect discrimination. In relation to the decision in SDA, Gordon J said:
"[94] The MFESB submitted that I should follow the recent decision in National Retail Association (No 2) at [52]-[58] that the word "discriminate" did not extend to "indirect discrimination". I reject that contention. National Retail Association (No 2) considered s 153(1) of the FW Act and the phrase "discriminate against". One of the issues was whether s 153(1) could be contravened by "indirect discrimination". The Court held that it could not. The decision dealt with a different provision in the FW Act. To that extent, it does not bind me.
[95] Further, even if the decision did bind me, I would decline to follow it. In considering the phrase "discriminate against" and whether it extends to "indirect discrimination" the trial judge referred at [54] to the High Court decision in Waters. With great respect, I do not agree with his Honour's analysis. After noting that typically Federal and State anti-discrimination legislation defines discrimination so that it covers both direct and indirect discrimination, the trial judge said that the reason that was considered necessary was that, as pointed out by Dawson and Toohey JJ in Waters at 392-3 (see [93] above), "the proscription of discrimination, without more, is not apt to pick up 'facially neutral' discrimination which is otherwise known as indirect discrimination". A number of points need to be made. First, the analysis of Mason CJ and Gaudron J (with which Deane J agreed) (see [91]-[92] above) is to the opposite effect. The trial judge did not refer to this analysis. Second, such a view is contrary to the historical source of the concept of "indirect discrimination" and, third, as the trial judge himself recognised, the question is ultimately one of statutory construction. Dawson and Toohey JJ's analysis of whether conduct which was "facially neutral" would fall within one section or another was ultimately resolved by construction of the statute. With respect, I do not consider that the extracted passage is authority for the proposition advanced by the trial judge that "the proscription of discrimination, without more, is not apt to pick up 'facially neutral' discrimination which is otherwise known as indirect discrimination"."
"[102] The MFESB's submission proceeds upon a fundamental misconception of what may constitute indirect discrimination. It is now recognised that an employer's particular reason for choosing a "facially neutral" criterion may in fact be its adverse impact on a protected group. In another words, although the employer chose a seemingly innocent or innocuous criterion, the employer did so for a prohibited reason or basis. There is nothing in the language of Pt 3-1 of the FW Act that would support limiting "discrimination" for the purposes of Item 1(d) of the definition of "adverse action" in s 342 so as to exclude "facially neutral" or indirect discrimination of that kind. As Mason J said in General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 at 617 in relation to the predecessor of s 361 of the FW Act:
... the plain purpose of the provision [is to throw] on to the defendant the onus of proving that which lies peculiarly within his own knowledge."
[19] Although it may be characterised as obiter, paragraph [95] of Klein cannot be disregarded. Gordon J expressed the view that, on the basis of the judgment of Mason CJ and Gaudron J (with which Deane J agreed) in the High Court decision in Waters v Public Transport Corporation,[11] the expression "discriminate against" used in s 153(1) encompassed indirect discrimination. Neither SDA nor Klein dealt directly with s 195(1), so they could be not regarded as strictly binding on the question of whether that provision encompassed indirect discrimination. Nonetheless either decision could be called in aid of the competing propositions in that respect. It is also important to note that in United Firefighters' Union of Australia v Country Fire Authority[12] the Federal Court Full Court did not foreclose a future argument that a provision in an enterprise agreement might constitute an objectionable term on the basis of indirect discrimination.[13] SDA was concerned only with award terms alleged to be discriminatory under s 153(1), and not with objectionable terms as defined in s 12.
[20] However notwithstanding this, I am not satisfied that it is in the public interest to direct under s 615A that a Full Bench determine whether the Agreement should be approved, for the following reasons.
[21] First, a Full Bench of the Commission is obviously not in a position to resolve authoritatively any conflict in decisions of the Federal Court.
[22] Second, although the Minister has not stated any intention to do so, it is difficult to imagine that a seriously arguable case that a provision of the Agreement is indirectly discriminatory could be advanced without adducing evidence at least going to the potential effect of the term upon the identified disadvantaged groups of employees (to the extent they actually exist in the MFESB's workforce) and also perhaps demonstrating a discriminatory intent on the part of those who made the Agreement (noting that the assessment of whether a provision of an enterprise agreement is discriminatory or objectionable does not involve any reverse onus). Additionally it could be expected that, in response to any evidence adduced by the Minister in this respect, the MFESB would seek to rely upon the "inherent requirements of the particular position" exception in s 195(2)(a), which would undoubtedly require it to adduce evidence concerning the nature of its operations and the duties of firefighters. As earlier stated, it is generally more appropriate for an evidentiary case of any significant duration to be heard by a single member because although there is no practical impediment to a Full Bench hearing and determining an evidentiary case, it is likely to be conducive of unnecessary delay.
[23] Third, to the extent that the Minister's case concerns those provisions of the Agreement which mandate a particular role for the UFU, it raises issues which have been dealt with in Federal Court decisions before. In Klein the Court rejected a claim that provisions of an earlier MFESB enterprise agreement concerning the UFU's right to nominate persons to comprise the Consultative Committee constituted objectionable terms,[14] and in UFU v CFA the Full Court also rejected claims that provisions in another firefighters' enterprise agreement which gave the UFU the right to determine the membership of two workplace committees authorised discrimination against non-union staff.[15] No novelty therefore attaches to this aspect of the Minister's foreshadowed case.
[24] Fourth, to the extent that the Minister raised issues concerning public confidence in the workplace relations arrangements underpinning the provision of an essential service and the object of the FW Act concerning the enablement of fairness and representation at work and the prevention of discrimination at work, there is no basis to consider that those matters cannot satisfactorily be addressed by the determination of the application for approval of the Agreement by a single member. If the Minister is dissatisfied with the decision of the single member in relation to the application such that he believes it to be contrary to the public interest, he has the right to apply under s 605(1) for a review of the decision by a Full Bench. Section 605(2) requires such a review to be conducted if the Commission is satisfied that it is in the public interest to do so, without limiting when the Commission may conduct such a review. Therefore any public interest concerns may be addressed by the use of this mechanism.
[25] Finally, if the Commission is concerned that it cannot be satisfied pursuant to s 186(4) that the Agreement does not contain unlawful terms by reason of the matters raised by the Minister, it would nonetheless be open to the Commission to approve the Agreement pursuant to s 190 by accepting undertakings from the MFESB which address those concerns. That operates to diminish the significance of the issues raised by the Minister. I also consider that any issue about appropriate undertakings could more efficiently be deal with by a single member than a Full Bench.
[26] For the above reasons, the application for a direction that a Full Bench hear and determine the application for approval of the Agreement is rejected.
J. O'Sullivan for the Minister for Small and Family Business, the Workplace and Deregulation.
C. O'Grady QC for the Metropolitan Fire and Emergency Services Board.
T. Dixon of Counsel and T. Sakkas for the United Firefighters' Union of Australia.
[2] [2014] FWC 3129, (2014) 246 IR 21
[3] Murdoch University v National Tertiary Education Union [2017] FWC 1553 at [17]
[4] Penelope Vickers [2017] FWC 2609 at [14]
[5] Murdoch University v National Tertiary Education Union [2017] FWC 1553 at [18]; Collinsville Coal Operations Pty Ltd [2014] FWC 3129 at [11]; Lend Lease Building Pty Ltd and Ors [2014] FWC 5026 at [13]; Metropolitan Fire & Emergency Services Board [2014] FWC 2498 at [17] - [18]; and Saeid Khayam v Navitas English Pty Ltd t/a Navitas English [2016] FWC 8759 at [11]; Penelope Vickers [2017] FWC 2609 at [15]
[6] Penelope Vickers [2017] FWC 2609 at [6] and [12]
[7] CEPU v Metcher [2016] FWC 8731 at [26] and [41]
[8] Mondelez Australia Pty Ltd [2018] FWC 2140
[15] [2015] FCAFC 1 at [220]- [236]
Printed by authority of the Commonwealth Government Printer
(1989) 168 CLR 210
(2006) 149 FCR 291
(2010) 193 FCR 213
(1991) 173 CLR 349
(1976) 12 ALR 605
(2015) 228 FCR 497
(2014) 246 IR 21