Regional Express Holdings Ltd v Australian Federation of Air Pilots

JESSUP J: 1 On 31 March 2016, I gave leave to the applicant, Regional Express Holdings Ltd, to appeal from a judgment of the Federal Circuit Court of Australia given on 17 February 2016, in which that court had rejected the applicant's application for the summary dismissal, pursuant to s 17A(2) of the Federal Circuit Court of Australia Act 1999 (Cth) ("the FCC Act") and r 13.10(a) of the Federal Circuit Court Rules 2001 (Cth), of a proceeding commenced by the respondent, Australian Federation of Air Pilots, against the applicant under s 340 of the Fair Work Act 2009 (Cth) ("the FW Act"). These are my reasons for having done so. 2 Because the judgment of the Federal Circuit Court was interlocutory, leave to appeal was required: Federal Court of Australia Act 1976 (Cth), s 24(1A). Leave would be given if the judgment was attended by sufficient doubt to warrant it being reconsidered by the Full Court, and if substantial injustice would result if leave were refused, supposing the judgment to be wrong: Décor Corporation Pty Ltd and Another v Dart Industries Inc (1991) 33 FCR 397, 398-399. 3 Compendiously stated, the respondent's case in the Federal Circuit Court was that the applicant had threatened to take adverse action against unidentified persons because the latter had, or would have if they became employed by the applicant, a workplace right constituted by an entitlement to a certain standard of overnight accommodation pursuant to the provisions of the relevant workplace instrument, the Regional Express Pilots' Enterprise Agreement 2011. The applicant contended that the respondent had no standing to commence that proceeding. Rejecting that contention, the primary Judge held that the respondent had standing under s 540(6)(b) of the FW Act, which provides as follows: An industrial association may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision, only if: … (b) if the contravention is in relation to a person: (i) the person is affected by the contravention, or will be affected by the proposed contravention; and (ii) the industrial association is entitled to represent the industrial interests of the person. 4 Although the applicant foreshadowed a number of grounds upon which its appeal would be based, counsel accepted that the only ground that could provide sustenance for an argument under the first limb of Décor was that the primary Judge had been in error to hold, as he did, that the respondent was "entitled to represent the industrial interests" of the persons in relation to whom, it was alleged, adverse action was threatened. Central to that ground was the circumstance that it was not part of the respondent's case that any of those persons was a member of the respondent. On the present application, counsel for the respondent stressed that her client did not know the identity of the persons concerned, and it may well be that some or all of them were members. But, to the extent that standing under s 540 required the "person" to be a member of the applicant association, that was necessarily part of the now respondent's case, and it had not, apparently, been alleged. 5 Deciding the standing point adversely to the applicant, the primary Judge said: Once one conceptualises the role of the industrial organisation as including the prosecution of alleged contraventions of the Act, it is difficult to see why s 540(2) should be read as requiring the organisation to have an affected person as a member of the organisation. In substance, the provision appears to enable the organisation to bring what is effectively an action against the employer for breaching the Act with respect to the whole of the class. The legislature can determine who may prosecute contraventions under the Act. The legislature has not provided for industrial organisations to have a right to prosecute any alleged contravention as the [Fair Work Ombudsman] can, but put in place limits upon the categories of cases industrial organisations can prosecute. That the limit is related to whether employees may be members of the industrial association limits industrial association's to cases with the industries with which they are concerned. That an industrial association doesn't have a member that has been directly affected does not show that they have no proper interest in enforcing the industrial laws with the relevant industry given their unique role in the operation of the legislative scheme. That is to say, his Honour held that it was not necessary for the "person" referred to in s 540 to be, or to have been, a member of the association. Elsewhere in his Honour's reasons, he made it apparent that he considered it sufficient if the person were eligible for membership. 6 In ResMed Limited v Australian Manufacturing Workers' Union [2015] FCAFC 195 at [4], the Full Court said: The formula "entitled to represent the industrial interests of" is ubiquitous in the FW Act, but is not defined. Its connotation in legislation which does not rely on the head of power in s 51(xxxv) of the Constitution was assumed rather than argued in the present appeal …. What did not need to be decided in ResMed was decided by the primary Judge in the present case, and it was that decision that was challenged by the applicant. 7 In ResMed, the Full Court also referred ([2015] FCAFC 195 at [15]) to - … the proposition best known for its articulation in the judgment of the High Court in R v Dunlop Rubber Australia Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia (1957) 97 CLR 71, 82-87, and more recently given expression in R v Williams; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1982) 153 CLR 402, 408, as follows: The eligibility provisions in the rules of a registered organization of employees serve the function of defining the general area or areas of industry or industrial pursuit from which members can legitimately be drawn and with which the organization can legitimately be concerned (see Reg. v. Dunlop Rubber Australia Ltd.; Ex parte Federated Miscellaneous Workers' Union of Australia [(1957) 97 C.L.R. 71, at p. 87.]; Reg. v. Clarkson; Ex parte Victorian Employers Federation [(1973) 131 C.L.R. 100, at pp. 111,113]; Co-operative Bulk Handling Ltd. v. Waterside Workers' Federation of Australia [(1980) 49 F.L.R. 355, at pp. 357-358.). Since such eligibility provisions constitute a reference point for courts, commissions, employers, employees and other organizations in determining or ascertaining an organization's proper coverage and field of operation, they must be construed objectively (see Reg. v. Aird; Ex parte Australian Workers' Union [(1973) 129 C.L.R., at p. 659.]; Reg. v. Cohen; Ex parte Motor Accidents Insurance Board [(1979) 141 C.L.R. 577, at pp. 580,587.]. 8 It was in the context of this line of jurisprudence that the notion that a registered organisation (not any industrial association, it may be noted) represented not only its members as individuals but also the industrial interests of those in the relevant class marked out by its conditions of eligibility gained currency. That notion eventually found statutory expression in s 142A of the Conciliation and Arbitration Act 1904 (Cth) (see now s 133 of the Fair Work (Registered Organisations) Act 2009 (Cth)). 9 As noted in ResMed, the formula "entitled to represent the industrial interests of" is ubiquitous in the FW Act. What it means has not, it seems, been the subject of any authoritative judicial pronouncement. In my view, it is not, with respect, self-evident that the primary Judge's conclusion was the correct one on this important issue. I stress that it is not my function to decide the point, and I do not do so. At the moment, and without the benefit of full argument, I do not know what the correct conclusion would be. But the importance of the question persuades me that even the doubt which I presently entertain as to the correctness of his Honour's conclusion is sufficient to warrant the matter being considered by the Full Court. Indeed, if I may say so, I take the view that the principled development of industrial law under the FW Act would greatly benefit from an authoritative ruling on this point. 10 Turning to the second limb in Décor, it was submitted on behalf of the respondent that no injustice would result from leaving the Federal Circuit Court's judgment undisturbed even if it were wrong. That judgment did not represent the outcome of the case: if, for example, the matter went to trial and the now applicant prevailed, justice would have been done, and the erroneous ruling on the standing point would be neither here nor there. 11 That argument had its attractions, but I was not disposed to accept it for the following reasons. First, the applicant's point involved a challenge to the competence of the proceeding before the Federal Circuit Court as such. The point was, therefore, a jurisdictional one. Assuming that his Honour was wrong in the ruling which he made, he would have been exercising powers which in truth he did not have. Secondly, both the FCC Act and the relevant rules provided for a challenge of the kind made by the applicant to be made and determined as a question in its own right. As it happens, his Honour heard argument and reserved on the matter for three months. The challenge had, as it were, its own discrete compartment in the case, as distinct, for example, from being a ruling made in the course of the running of a trial. And thirdly, in the proceeding in the Federal Circuit Court, the applicant would be in the unusual position of carrying the onus of proof in relation to its reasons for acting: s 361 of the FW Act. Merely by making the allegation that the applicant acted for a particular reason, the respondent was able to cast upon the applicant the obligation of carrying the evidentiary case on that aspect. 12 These considerations, in combination, persuaded me that, on the assumption that the respondent's application in the Federal Circuit Court was incompetent, the continuation of the case in that court would amount to a substantial injustice for the applicant. 13 I took the view, therefore, that this was a case in which leave to appeal should be given. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.