Fair Work Act 2009

s.604 - Appeal of decisions

Retail and Fast Food Workers Union Incorporated

Coles Supermarkets Australia Pty Ltd t/a Coles Supermarkets

Appeal against decision [2021] FWC 3068 of Deputy President Mansini at Melbourne on 28 May 2021 in matter number B2020/873.

[1] This decision reproduces in edited form the decision and reasons which were stated on transcript at the conclusion of the hearing conducted in relation to this matter on 23 July 2021.

[2] The Retail and Fast Food Workers Union Incorporated (RFFWUI) has lodged an appeal, for which permission to appeal is required, against a decision made by Deputy President Mansini on 28 May 2021.[1] The decision concerned the RFFWUI's application under s 236 of the Fair Work Act 2009 (FW Act) for a majority support determination in respect of a proposed enterprise agreement to cover all store-based employees of Coles Supermarkets Australia Pty Ltd (Coles) except for store managers and meatworkers (store workers). The Deputy President dismissed the application on the basis that she was not satisfied under s 237(2)(a) of the FW Act that a majority of the employees of Coles who would be covered by the proposed agreement wanted to bargain. The RFFWUI contends in its notice of appeal that the Deputy President erred in a number of respects in dismissing its application.

[3] The background facts are largely non-controversial. Coles employs approximately 103,600 store workers. They are currently covered by the Coles Supermarkets Agreement 2017,[2] which has passed its nominal expiry date. Coles has not agreed to bargain for the agreement proposed by the RFFWUI. Persons acting on behalf of the RFFWUI have, in the period from July to November 2020, circulated a petition for store workers to sign to indicate that they wanted to bargain with Coles for a new agreement. It is said that approximately 2,100 store workers signed the petition, although only a little more than 500 names and signatures on a physical petition were actually placed before the Commission, and the large majority of names on a further "electronic petition" were blacked out. It is accepted that, due to an annual employee turnover rate of about 15%, a proportion of those who signed the petition were likely to have left the employment of Coles by the time of the hearing before the Deputy President. The RFFWUI filed its application on 29 December 2020. In its application, the RFFWUI contended, among other things, that:

• more than 99% "of those petitioned" had responded "yes" to the petition or completed a hard copy petition in favour of bargaining;

• this was "clearly indicative of a majority of employees" wanting to bargain;

• the Commission should conduct an "electronic ballot" of the Coles store workers to determine if they wanted to bargain for a new enterprise agreement; and

• once the ballot result was returned, the matter should be relisted for determination.

[4] Section 237(1) of the FW Act provides that the Commission must make a majority support determination if, first, an application for the determination has been made and, second, if the Commission is satisfied as to the matters set out in s 237(2). As to the first requirement, there was no dispute that the RFFWUI's application was competent in the sense that it was accepted by Coles that the RFFWUI was the bargaining representative of at least one Coles store worker. Section 237(2) provides that the Commission must be satisfied that: (a) a majority of employees of the employer who would be covered by the agreement want to bargain; (b) the relevant employer has not yet agreed to bargain or initiated bargaining; (c) the group of employees who would be covered by the agreement was fairly chosen; and (d) it is reasonable in all the circumstances to make the determination. Section 237(3) provides that, for the purpose of s 237(2)(a), the Commission "may work out whether a majority of employees want to bargain using any method the FWC considers appropriate". In the proceedings below, Coles contended that the Commission could not be satisfied as to the matter in s 237(2)(a), and also contested the proposed coverage of the agreement.

[5] In her decision, the Deputy President found that the petitions obtained by the RFFWUI did not establish majority support for bargaining for the proposed agreement and, even if they were accepted as sufficiently robust, they demonstrated nothing more than that a small sample size of a significantly larger group of employees had indicated that they wanted to bargain.[3] The Deputy President also said that the RFFWUI could not persuasively argue that its view was representative on account of the small scale of its membership, which was an even smaller proportion of those petitioned, and the fact that employees covered by the current agreement were represented in the negotiation for that agreement by four other employee organisations that were entitled to represent their industrial interests and whose views were not before the Commission.[4] The Deputy President concluded that the RFFWUI had not established even a prima facie case that the majority of Coles store workers wanted to bargain,[5] that the circumstances of the COVID-19 pandemic did not change her conclusion in this regard,[6] and that the particular circumstances of the case did not justify the Commission's intervention to order a ballot to establish whether the RFFWUI could meet the s 237(2)(a) requirement.[7] The Deputy President stated her overall conclusion as follows:

"[19] For the above reasons, as I am not satisfied that the Commission should order a ballot to test whether or not a majority of employees who will be covered by the proposed agreement want to bargain, and am not satisfied that a majority of the employees who will be covered by the proposed agreement want to bargain, the requirement at s.237(2)(a) is not made out. It is therefore unnecessary to consider the other criteria at s.237 and the application is dismissed."

[6] The RFFWUI's appeal is brought on two grounds. The first is that the Deputy President erred by applying the wrong test and/or by constructively failing to exercise jurisdiction. The RFFWUI submits in this connection that s 237(2)(a), read with s 237(3), requires the Commission to undertake the task of determining whether a majority of employees want to bargain, and cites the Federal Court Full Court decision in ResMed Limited v Australian Manufacturing Workers' Union[8] (ResMed) as standing for this proposition. It further submits that this task involves the Commission testing whether the desire of the applicant bargaining representative to commence negotiations for a proposed enterprise agreement is supported by the majority of employees to be covered by that agreement, and that the Deputy President failed to undertake that task and failed to use any method at all pursuant to s 237(3).

[7] The second appeal ground is that the Deputy President placed an onus on the RFFWUI to establish that there was majority support, or at least establish a prima facie case that there was majority support, when under s 237 the RFFWUI was obliged to do neither of these things. The RFFWUI submits that it was entitled to do nothing more than ask the Commission to determine whether there was a majority and to conduct a ballot for that purpose, and it was not required to present material to justify the making of a majority support determination or the conduct of a ballot. Alternatively, if the RFFWUI was required to establish a prima facie case or a "reasonable hypothesis" that a majority wished to bargain, it submits that it had done so, in that it demonstrated that more than 2,100 employees had indicated that they wished to bargain, that less than one percent who completed the survey said they did not wish to bargain, and the sample size was "statistically valid".

[8] The RFFWUI submits that permission to appeal should be granted because:

• the decision is contrary to established precedent, including the ResMed decision;

• the appeal raises significant questions concerning the right of employees through their bargaining representatives to access the process prescribed by ss 236 and 237 of the FW Act and (potentially) to bargain with their employer;

• the appeal will directly affect the industrial interests or more than 100,000 employees; and

• there is an inherent public interest in decision-makers acting according to law and, if the errors are made out, that public interest is a sufficient reason to grant permission to correct them.

[9] The RFFWUI submits that the decision should be set aside, that a ballot of Coles store workers should be ordered to determine whether a majority of them wish to bargain, and to otherwise remit the matter to the Deputy President for hearing and determination according to law.

[10] Having considered these submissions, we are not satisfied that the grant of permission to appeal would be in the public interest or that discretionary considerations favour the grant of permission, for the following reasons.

[11] First, the appeal does not challenge the Deputy President's conclusion that, on the material before her, she could not be satisfied that a majority of Coles store workers want to bargain for the proposed agreement, as required by s 237(2)(a). This is consistent with the fact that the RFFWUI never positively contended before the Deputy President that a majority of Coles store workers wanted to bargain and accepted, at least implicitly, that its petition was not demonstrative of the existence of such a majority. Its case rose no higher than the proposition that its application "bears out a reasonable foundation for the reasonable hypothesis... that there is a majority support for bargaining" and therefore that a ballot should be ordered to test that hypothesis. On this analysis therefore, the appeal is in substance concerned only with the Deputy President's refusal to order the ballot sought.

[12] The power to order a ballot of this nature in respect of a majority support determination is clearly discretionary in nature. The source of the power is to be found in s 237(3), to which we have earlier referred, in combination with s 590(1), which relevantly provides that the Commission "may... inform itself in relation to any matter before it in such manner as it considers appropriate". Both provisions confer a very broad discretion on the Commission. The appeal against the Deputy President's refusal to order a ballot is, therefore, one against a discretionary decision of an interlocutory character. This presents a high hurdle for an applicant for permission to appeal.

[13] The Deputy President exercised her discretion to decline to order a ballot on the basis that the RFFWUI had not established even a prima facie case to justify the conduct of such a ballot. That was an evaluative judgment that was reasonably open to be made given the obvious disproportionality between the number of persons who signed, or purportedly signed, the petition and the total number of Coles store workers. Neither of the RFFWUI's grounds of appeal allege that the Deputy President made any error of a House v The King[9] nature in respect of her exercise of the discretion. The RFFWUI asserted in its submissions, in a manner detached from its grounds of appeal, that it had demonstrated a prima facie case or a reasonable hypothesis that a majority wished to bargain, but this proposition finds no support in the evidence. There is no evidence as to the manner in which the petition process was carried out. The proposition that the "sample size" is "statistically valid" was not raised at first instance, and there is no evidence that the number of signatories represents any attempt at sampling the total workforce at all let alone that it was selected on a random or representative basis. The further proposition that only one percent of "the employees who completed the survey" said they did not wish to bargain is simply an unsupported assertion since, on its face, the hard-copy petition at least only contains the names and signatures of those who said they wished to bargain, and there is no evidence about what is purported to be shown by the electronic petition. To all appearances, the so-called "sample" was self-selecting in nature, and the best inference is that the number of signatories represents the maximum number which the RFFWUI could obtain over five months of effort. In short, there is no arguable basis to consider that the Deputy President erred in making the interlocutory discretionary decision not to order the ballot sought by the RFFWUI.

[14] Second, there is no merit to the proposition advanced in connection with the first appeal ground that s 237(2)(a), read with s 237(3), requires the Commission to take steps to determine for itself whether or not a majority of relevant employees want to bargain. The task of the Commission in respect of a majority support determination application is set out in plain terms in s 237(2): the Commission must determine whether it is satisfied as to the four matters specified, including that a majority of relevant employees want to bargain. If this state of satisfaction is reached, section 237(1) requires a majority support determination to be made. There is nothing in section 237 which requires the Commission to take any particular step in order to determine whether it has reached the requisite state of satisfaction. Section 237(3), as already stated, is plainly cast in discretionary terms, and it would do violence to the language of the provision to read it as requiring the Commission to take some positive step itself to "work out whether a majority of employees want to bargain".

[15] The discretionary character of s 237(3), as well as s 590(1), means that it will usually be open to a Commission member to determine whether they are satisfied in relation to s 237(2)(a) on the basis of the evidence and submissions put by the parties before the Commission. There may be a range of circumstances which might justify the exercise of the discretion in s 237(3) to order a ballot or some other means to assess the existence of majority support, including whether the applicant has advanced a "reasonable hypothesis" supported by evidence that majority support exists,[10] but no authority supports the conclusion that the s 237(3) is to be construed as compelling the Commission to exercise power under the provision merely because an applicant requests that it do so. The Full Court decision in ResMed, which affirmed the construction of s 237 stated by the Court (Perry J) at first instance,[11] does not stand as authority for any proposition of the nature contended for by the RFFWUI. It is perhaps unnecessary to add that the proposition that any individual store worker employed by Coles and acting as their own bargaining representative could, simply by filing an application under s 236, compel a ballot of over 100,000 employees to be undertaken is an unattractive one unlikely to be consonant with the purpose of the statutory scheme.

[16] Third, we do not consider it is reasonably arguable that in her decision the Deputy President erred by "by placing an onus" on the RFFWUI, as it contends in its second appeal ground. On any fair reading of the decision, the Deputy President simply found that, on the basis of all the material before her, she did not reach the state of satisfaction required under s 237(2)(a). No notion of "onus" was involved in reaching that conclusion beyond the well-established proposition that, where the FW Act requires satisfaction as to a specified matter in order for a particular power to be exercised, the party invoking the Commission's jurisdiction will bear the risk of failure if the material before the Commission is inadequate to permit the requisite state of satisfaction to be reached.[12] As earlier stated, it is not contended by the RFFWUI on appeal that the material before the Deputy President was sufficient for her to be satisfied under s 237(2)(a).

[17] Fourth, in the absence of any credible evidence that a majority of Coles store workers supported bargaining for an agreement as proposed by the RFFWUI, it cannot be said that the refusal of permission to appeal could result in any injustice by way of the denial of the vindication of any right under s 237. Additionally, the decision does not foreclose the capacity of the RFFWUI to make a further application under s 236, supported by a more substantial evidentiary case, at any time in the future.

[18] For the above reasons, permission to appeal is refused.

R Dalton QC with A Pollock of counsel for the respondent.

[1] [2021] FWC 3068

[8] [2015] FCAFC 195, 243 FCR 386, 256 IR 355 at [10]

[9] [1936] HCA 40, 55 CLR 499

[10] See Inpex Australia Pty Ltd v AWU [2020] FWCFB 5321, 201 IR 424 at [11]

[11] [2015] FCA 360, 243 FCR 332

[12] Teterin v Resource Pacific Pty Limited [2014] FWCFB 4125, 244 IR 252 at [23]- [30]; Jain v Infosys Ltd [2014] FWCFB 5595 at [34]- [37]

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