Fair Work Act 2009

s.604 - Appeal of decisions

Appeal against decision [2018] FWC 3020 of Commissioner Wilson at Melbourne on 29 May 2018 in matter number B2018/391 and order in PR607481; whether the Commissioner erred in finding that there are exceptional circumstances justifying longer notice period pursuant to s.443(5) of the Act; error established; permission to appeal granted; appeal upheld; that part of the decision concerning notice period quashed; on a rehearing the Full Bench is not satisfied there were exceptional circumstances justifying a longer period of written notice; protected action ballot order varied.

[1] The National Tertiary Education Industry Union (NTEU) is a bargaining representative for a proposed enterprise agreement to replace the Charles Darwin University and Union Enterprise Agreement 2013. Charles Darwin University (the University) is the employer of employees who will be covered by the proposed agreement. On 28 May 2018, on application by the NTEU, Commissioner Wilson made a protected action ballot order (Order)[1] under s.443(1) of the Fair Work Act 2009 (Act). The University sought, pursuant to s.443(5) of the Act in relation to the proposed action, that the period of written notice of action be longer than three working days. It sought written notice of five working days. In making the Order, the Commissioner determined that before a person engages in protected industrial action which will have, or will be likely to have an impact upon the student population sitting exams, having exams marked, receiving exam results or graduating, the NTEU will provide the University with written notice of the proposed action in accordance with s.414 of the Act, with the period of notice to be at least five working days.[2] The Commissioner included a notice to that effect in the Order.[3]

[2] The NTEU seeks, by its Notice of Appeal lodged on 18 June 2018, permission to appeal and appeals against the decision of the Commissioner to require an extended period by which written notice of certain industrial action must be given and that part of the Order giving effect to the decision. The NTEU contends that the Order was made on the basis of a fundamental misconception as to the purpose and operation of s.443(5) and its purported interaction with an employer's right to seek the suspension or termination of proposed industrial action under s.424 of the Act.[4]

[3] The University is based in the Northern Territory of Australia. It has a number of campuses in the Northern Territory, but it also operates a centre out of Sydney and Melbourne and offers a wide range of tertiary courses. The University is currently in the midst of an exam period. The University contends that the Commissioner made no appellable error in extending the written notice period for the Relevant Action, that is, action which will have, or will be likely to have an impact upon the student population sitting exams, having exams marked, receiving exam results or graduating.[5]

[4] The matter was listed for hearing in respect of both permission to appeal and the merits of the appeal.

[5] By its Notice of Appeal, the NTEU advances a number of grounds of appeal. Grounds 1 to 3 concern the Commissioner's reliance on that which he describes as a "predisposition of the Commission faced with an application to suspend or terminate notified industrial action that had a direct negative impact on the student body"[6] as grounding his conclusion as to the existence of exceptional circumstances for the purposes of s.443(5). In summary, by these grounds, the NTEU contends the Commissioner erred by:

• Misconstruing the meaning of the term "exceptional circumstances" in s.443(5) of the Act;

• Acting on a wrong principle and/or misdirecting himself in the exercise of the discretion in s.443(5) of the Act in finding that "[t]he predisposition of the Commission faced with an application to suspend or terminate notified industrial action that had a direct negative impact on the student body of the type articulated within Monash and University of South Australia is the exceptional circumstance (the predisposition finding); and

• Taking into account or having regard to the predisposition finding for the purposes of determining of whether there were exceptional circumstances within the meaning in s.443(5) of the Act.

[6] Ground 4 is an irrelevant consideration ground by which the NTEU contends that the Commissioner erroneously took into account or had regard to the likelihood that the University would "seek suspension" of the notified industrial action and that "the Commission would likely lean towards its suspension" for the purposes of determining whether there were exceptional circumstances within the meaning in s.443(5) of the Act.

[7] Ground 5 contends jurisdictional error in that the Commissioner did not consider or find that there are exceptional circumstances "justifying" the order specifying a longer period of written notice.

[8] Ground 6 contends that the Commissioner made an order specifying a longer notice period under s.443(5) of the Act in the absence of evidence. Ground 7 contends that the Commissioner failed to have regard to or take into account the regular, routine and/or normally encountered circumstances in the tertiary education industry.

[9] Ground 8 contends a denial of procedural fairness in relation to the predisposition finding. Ground 9 contends there was a failure to give adequate reasons for the decision to specify a longer period under s.443(5) of the Act.

[10] For reasons that will shortly become apparent we have found it necessary only to deal with grounds 3, 4 and 5 of the Notice of Appeal.

[11] The Commissioner commences his consideration of whether he should exercise his discretion under s.443(5) of the Act at [53] of the decision. There the Commissioner outlines the University's contention that there are exceptional circumstances warranting an order that the period of notification of protected industrial action be longer than three working days.

[12] The Commissioner observes that the University's case was:

"...not sophisticated and not based in evidence before the Commission and is entirely comprised in the proposition that if there were to be protected industrial action notified that fell within the scope of the considerations in Monash and University of South Australia, then it would need longer than three working days' notice in order to seek the suspension or termination of the industrial action."[7]

[13] The Commissioner then summarised the NTEU's case. Next, the Commissioner decided to make provision for a longer notice period. His conclusion and his reasons are set out at [54] of the decision as follows:

"Despite this matter not being the subject of evidence before me, I am prepared to find exceptional circumstances within the matter before me. The predisposition of the Commission faced with an application to suspend or terminate notified industrial action that had a direct negative impact on the student body of the type articulated within Monash and University of South Australia is the exceptional circumstance. It may be seen both that the University would likely seek suspension of such action and that the Commission would likely lean toward its suspension. For that reason, the order to be issued by me will include the following s.443(5) extension;

In accordance with section 443(5) of the Act, before a person engages in protected industrial action which will have, or will be likely to have an impact upon the student population sitting exams, having exams marked, receiving exam results or graduating, the NTEU will provide Charles Darwin University with written notice of the proposed action in accordance with s.414 of the Act, with the period of notice to be at least 5 working days."

[14] An appeal under s.604 of the Act is an appeal by way of rehearing and the Commission's powers on appeal are only exercisable if there is error on the part of the primary decision maker.[8] There is no right to appeal and an appeal may only be made with the permission of the Commission.

[15] It will rarely be appropriate to grant permission to appeal unless an arguable case of appellable error is demonstrated. This is so because an appeal cannot succeed in the absence of appellable error.[9] However, the fact that the member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.[10]

[16] The NTEU contends that permission to appeal should be granted as the grounds of appeal firstly demonstrate that the Commissioner fell into error in making the order and that it is in the public interest that an order based on numerous errors not be permitted to stand.[11] Secondly, the NTEU contends that the appeal raises important issues of broad application in the tertiary education sector as to the meaning of the term "exceptional circumstances".[12] Thirdly, the NTEU contends that permission to appeal should be granted because it was denied procedural fairness.[13] Fourthly, the NTEU contends that the appeal raises important issues about the making of decisions by the Commission on the basis of factual findings reached in other proceedings.[14]

[17] The University contends that permission to appeal should not be granted as there is no arguable case of appellable error, no substantial injustice and no other public interest considerations attracted to the appeal.[15]

[18] We are persuaded that it is in the public interest to grant permission to appeal in the instant case. We are persuaded grounds 3, 4 and 5 of the NTEU's grounds of appeal raise an arguable case of appellable error. The errors identified in the Notice of Appeal are of the kind identified in House v The King[16] and on the face of the Commissioner's reasons for the decision are arguable.

[19] Section 443(5) of the Act provides:

"443 When the FWC must make a protected action ballot order

(5) 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."

[20] 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.

[21] The meaning of "exceptional circumstances" in the context of s.463(5) of the Workplace Relations Act 1996 (WR Act) was discussed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation.[17] In the case, Lawler VP said:

"[10] ... 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."[18]

[22] Section 463(5) of the WR Act is in all material respects the same as s.443(5) of the Act. We consider the discussion extracted above is apposite to the phrase "exceptional circumstances justifying" in s.443(5).

[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 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).

[26] We now turn to the grounds of appeal for which permission to appeal is given.

[27] The NTEU contends that the finding at [54] of the decision demonstrates that the Commissioner construed the term "exceptional circumstances" as involving an assessment of the purported "pre-disposition of the Commission faced with an application to suspend or terminate" certain industrial action, the purported likelihood that the University would "seek suspension" of that certain industrial action and the purported likelihood that the Commission would "lean towards the suspension".[19] It contends that the assessment was inherently speculative. It was based on an assessment that the University, when faced with a certain type of industrial action, which the NTEU says was not the subject of the proposed ballot questions, would apply to suspend or terminate that action and that the Commission would more likely than not accede to such an application.[20]

[28] The NTEU contends that there is authority[21] supporting the position that in determining whether "exceptional circumstances" exist warranting the exercise of the discretion afforded in s.443(5), one should not engage in a speculative assessment as to whether an employer will bring an application to terminate industrial action nor does it involve, in the absence of evidence, whether such an application would be granted, but rather involves a factual enquiry of all the circumstances in respect of the industrial action.[22] The NTEU says that the Commissioner also erred in taking into account and having regard to the speculative prospect that the University would seek and be granted an order to terminate industrial action.[23]

[29] The University contends that these grounds do not raise any appellable error, but rather quarrel with the conclusion reached by the Commissioner.[24] The University contends that the Commissioner applied well-establish principles to the task before him and having done so, the only basis upon which the conclusion can be challenged is under the "plainly unreasonable" limb of House v The King.[25] The University contends that the NTEU's complaint that the Commissioner's assessment was speculative was merely a reflection of the Commissioner correctly applying himself to the task before him.[26] It says that whether an extension is justified by reference to exceptional circumstances if particular proposed industrial action is taken, is by its very nature, forward looking and involves and level of speculation.[27]

[30] The University contends that it is not arguable that the potential for a mandatory suspension or termination of proposed industrial action is "irrelevant" to the exceptional circumstances question. It says that the absence of a discretion in s.424 of the Act evinces that the Parliament considers industrial action which is being engaged in or is threatened, impending or probable as something which should not occur.[28] The University says that extending the notice period enables an employer to take appropriate steps to see that statutory goal manifest and that this is central to the question of whether exceptional circumstances justifying the extended notice period do exist.[29]

[31] Although we accept the University's submission as to the requirement to show appellable error, we do not accept that such error is not raised.

[32] Grounds 3 and 4 of the Notice of Appeal contend that the Commissioner took into account an irrelevant consideration, which we earlier describe as the "predisposition finding".

[33] As we have earlier indicated, before considering whether to exercise the discretion under s.443(5) the Commissioner was required to identify the particular facts or circumstances in relation to the proposed industrial action which are said to inform the evaluative judgement that he was satisfied that these are exceptional circumstances. Although there was a submission made on the behalf of the University that there was a "very strong likelihood that [it] would need to make an appropriate application under s.424 to the Commission"[30] there was no basis for the Commissioner to conclude that "the Commission would likely lean toward its suspension".

[34] Section 424 of the Act requires the Commission to suspend or terminate protected industrial action for a proposed new agreement that is being engaged in or is threatened, impending or probable, if it is satisfied that the action has threatened or is threatening or would threaten, relevantly to endanger the life, personal safety or health, or the welfare, of the population or a particular part of it. Reaching the requisite satisfaction requires the Commission to inform itself on the evidence and to make an evaluative judgement about the consequences or potential consequences of the identified industrial action.

[35] There is nothing in the section or the practice or decisions of the Commission which would suggest some predisposition or leaning towards a particular outcome. If there is satisfaction as to the prerequisite state of affairs, a particular outcome must ensue, but first must come the satisfaction. To suggest otherwise is, respectfully, plainly wrong. It seems evident on the face of the reasons for the decision that the Commissioner proceeded upon an assumption as to the likely outcome of an application under s.424. That assumption was wrong. There was no evidence about the impact of particular proposed industrial action or about the steps the University might be able to take to ameliorate the effect of any proposed industrial action. That the Commissioner took the assumption into account was an irrelevant consideration in the circumstances and led the Commissioner into error. Grounds 3 and 4 of the notice of appeal are therefore made out.

[36] The NTEU contends that the Commissioner erred in basing the relevant order solely on a finding that there were purported exceptional circumstances and failing to engage in any assessment of whether there were exceptional circumstances which justified the period of written notice being longer than three working days.[31] It contends that it is plain from the authorities that the Commissioner was required to undertake an assessment of whether the purported "exceptional circumstances" justified the making of the order.[32] That is, the Commissioner should have, but failed to, engage in a balancing exercise weighing the interests of the employer as against third parties in the employer having an opportunity to engage in industrial action vis-à-vis the diminution of the employee's bargaining power that results from such an extension.[33] The NTEU contends that the Commissioner did not engage in any such exercise and that it is apparent from [54] of the decision that the Commissioner did not have regard to the question of whether the purported "exceptional circumstances" were such to justify the five day written notice period.[34]

[37] The University contends that this ground of appeal lacks substance and is solely based on considering [54] of the decision in isolation of [53] where, as the University submits, the Commissioner refers to authorities, which discuss the application of the statutory test before him.[35] The University contends that the NTEU's position that the Commissioner failed to consider the correct statutory test has no foundation.[36]

[38] We reject the University's submission. We earlier observed that not only was the Commissioner required to evaluate whether particular identified circumstances are exceptional circumstances, but he was also required to determine whether those circumstances justified a longer period of notice. On the face of the decision, the Commissioner does not appear to have turned his mind to the question whether the exceptional circumstances identified by him justified a further period, let alone that they justified "at least five days" written notice. That the Commissioner referred to the correct section of the Act and to some relevant decisions does not by itself disclose that he made a finding that he was satisfied that there are exceptional circumstances justifying the period of written notice referred to in s.414(2)(a) being longer than three working days. Such a finding should not be regarded as self-evident. It is not evident in the reasons for the decision that such a finding was made. We consider the NTEU is plainly correct. By failing to consider whether there were exceptional circumstances justifying a longer period of notice, the Commissioner erred in the exercise of his discretion. Ground 5 is made out.

[39] For the reasons given, we consider that the appeal should be upheld on grounds 3, 4 and 5 and on that basis that part of the decision requiring a further period of notice in respect of certain industrial action should be quashed.

Whether discretion under s.443(5) should be exercised?

[40] The University contended that if the Appeal is upheld, it was content for the Full Bench to determine the matter on the basis of the material before us rather than to remit the matter to a single member.[37] We propose to adopt that course. We are not persuaded in relation to the proposed industrial action, the subject of the Order, that the University established that there are exceptional circumstances justifying a longer notice period. Our reasons for that conclusion may be shortly stated.

[41] The exceptional circumstances justifying a longer period than three working days' notice of protected industrial action are said to be first, that the industrial action for which authorisation is sought in the ballot is of a kind that would very likely result in the University applying for an order under s.424 to suspend or terminate the industrial action. Secondly, that such an application, if made, is highly likely to succeed.[38] The likelihood of success limb of the circumstances is put on the basis that industrial action of the kind which is contemplated in the protected action ballot order has or would threaten to have a particular impact on student welfare. This impact has been considered in other cases before the Commission which resulted in the suspension or termination of industrial action [for example see NTEIU v Monash University[39] (Monash)]. The justification for the longer period (five working days) having regard to the asserted exceptional circumstances related to the industrial action, is that five days will coalesce with the period within which the Commission must determine an application made under s.424.[40]

[42] The University contends that student welfare impact evidence of the kind given in Monash is expert evidence by reference to the consequence of industrial action. That evidence is not specific to the circumstances which prevailed in Monash, rather it is said to be generic.[41] To the extent that this is correct, the generic nature of that evidence appears to us to have the result that evidence gathering and preparation time and effort in making and prosecuting an application is reduced. This seems to weigh against, rather than in favour of, the circumstances justifying a longer period of written notice.

[43] Moreover, if the likelihood of success is to be regarded as a relevant exceptional circumstance providing justification, then more than mere assertion is required. This is so notwithstanding that some evidence as to welfare impact may be generic. We would need to consider, and form a view, based on probative material, whether there is a likelihood of an application being successful. There is no evidence as to examination or assessment timetables or of the nature and circumstances of examinations or assessments undertaken by students at the University. There is no evidence about the likely participation rate of employees in industrial action. There is no evidence about the steps that the University may be able to take to mitigate the effect on the welfare of students of the proposed industrial action. There is no evidence about practical barriers to some obvious mitigation steps such as altering venues for examinations so that fewer supervisory staff are required or the outsourcing of student examination marking and assessment. As the Full Bench in Monash observed, notwithstanding that which may have been the outcome of other cases involving tertiary section industrial action "[E]ach of these decisions turned on its own facts, and none of the decisions relieves us of our obligation to determine this case on the facts before us".[42]

[44] Without some probative material addressing the likelihood of success contention, we are not satisfied that the second limb advanced by the University, whether viewed alone or in combination with the first limb, constitutes exceptional circumstances justifying a longer period of written notice in the circumstances of this application. No other basis for concluding that there are exceptional circumstances justifying a longer notice period have been advanced. For these reasons we consider that the Order made by the Commissioner should be varied by deleting paragraph [14] thereof.

[45] For the reasons stated, permission to appeal should be granted in respect of appeal grounds 3 to 5, the appeal should be upheld on those grounds and so much of the Commissioner's decision requiring a greater period of written notice than that which s.414(2)(a) of the Act requires should be quashed. On the basis of the material before us, we are not satisfied, in relation to the proposed industrial action the subject of the Order, that there are exceptional circumstances justifying the period of written notice referred to in s.414(2)(a) being longer than three working days.

[46] We order that:

1. Permission to appeal is granted in respect of grounds 3 to 5 set out in the Notice of Appeal;

2. The appeal is upheld on those grounds;

3. So much of the decision in [2018] FWC 3020 as requires written notice of certain industrial action to be given other than in accordance with s.414(2)(a) of the Act is quashed; and

4. The order in PR607481 is varied by deleting paragraph [14].

Ms E Levine, Counsel for the National Tertiary Education Industry Union

Mr M Follett, Counsel for Charles Darwin University

[2] [2018] FWC 3020 at [54]

[4] NTEU's Outline of Submissions dated 25 June 2018 at [3]

[5] Charles Darwin University's Outline of Submissions dated 27 June 2016 at [2] - [3]

[6] [2018] FWC 3020 at [54]

[8] This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2); see Coal and Allied v AIRC [2000] HCA 47; (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ

[9] Wan v AIRC [2001] FCA 1803; (2001) 116 FCR 481 at [30]

[10] GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]- [27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28]

[11] NTEU's Outline of Submissions dated 25 June 2018 at [33]

[15] Charles Darwin University's Outline of Submissions dated 27 June 2016 at [27]

[16] [1936] HCA 40; (1936) 55 CLR 499

[17] [2007] AIRC 848

[19] NTEU's Outline of Submissions dated 25 June 2018 at [9]

[21] For example see Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australia Post [2007] AIRC 484 at [10]- [11]; Construction, Forestry, Mining and Energy Union v Loy Yang Management Pty Ltd [2012] FWA 3024 at [26] and The Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd [2015] FWC 1567

[22] NTEU's Outline of Submissions dated 25 June 2018 at [11]

[24] Charles Darwin University's Outline of Submissions dated 27 June 2016 at [10]

[25] [1936] HCA 40; (1936) 55 CLR 499

[33] Ibid at [16]. See also Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australia Post [2007] AIRC 484 at [21]

[35] Charles Darwin University's Outline of Submissions dated 27 June 2016 at [14]

[39] [2013] FWCFB 5982

[42] [2013] FWCFB 5982 at [33]

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