Fair Work Act 2009

s.604 - Appeal of decision

The Trustee For P&J Cunningham Family Trust t/a Health Select Group

Appeal against interim order [PR715707] of Commissioner Bissett at Melbourne on 3 January 2020 in matter number B2019/1416 - stay of decision

[1] This decision concerns an application for a stay order brought by the trustee for the P&J Cunningham Family Trust (Appellant). The stay is sought pursuant to s 606 of the Fair Work Act 2009 (the Act) in connection with an appeal against an interim order issued by Commissioner Bissett on 3 January 2020.[1] The Appellant seeks a stay of the entire interim order.

[2] Section 606(1) of the Act provides as follows:

"If, under section 604 or 605, the FWC hears an appeal from, or conducts a review of, a decision, the FWC may (except as provided by subsection (3)) order that the operation of the whole or part of the decision be stayed, on any terms and conditions that the FWC considers appropriate, until a decision in relation to the appeal or review is made or the FWC makes a further order."

[3] It is well established that, in deciding whether to exercise its discretion to grant a stay order, the Commission must first be satisfied that the appellant has an arguable case with some reasonable prospects of success in the appeal, both in respect of permission to appeal and the substantive merits of the appeal. In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed.

[4] The interim order in respect of which the stay is sought was made following an application lodged on 23 December 2019 by the Victorian Ambulance Union Incorporated (VAU) for a bargaining order under s 229 of the Act. In that application, the VAU contended that the Appellant had failed to comply with the good faith bargaining requirement in s 228(e), which states that bargaining representatives for a proposed enterprise agreement must refrain from capricious or unfair conduct that undermines freedom of association or collective bargaining.

[5] The VAU's application under s 229 advanced two principal concerns. First, it said that the Appellant had told employees that it would put its proposed agreement, the Health Select Services Pty Ltd Enterprise Agreement 2019 (2019 Agreement), to a vote, without having informed the bargaining representatives of this intention. Secondly, it said that the Appellant had provided misleading information to employees about the proposed agreement, in particular by stating that the Appellant currently pays wages that meet or exceed those of its competitors. The application sought an order that the vote on the proposed agreement not take place until certain rates of pay had been clarified and a further bargaining meeting had taken place.

[6] The vote on the proposed 2019 Agreement commenced on 27 December 2019 and was scheduled to conclude on Monday 6 January 2020.

[7] The VAU's application under s 229 was listed for conference before the Commissioner on 30 December 2019. The next day, the Commissioner issued an interim order requiring the Appellant to direct the ballot agent for the vote not to finalise, count or report the result of the ballot until further order of the Commission. That interim order is not subject to appeal and the Appellant complied with it. The Commissioner also issued directions for the programming and final hearing of the s 229 application, requiring the parties to file and serve submissions and materials and listing the matter for hearing on 21 January 2020.

[8] On 2 January 2020, the VAU wrote to the chambers of Commissioner Bissett requesting an urgent hearing in relation to alleged misleading statements that had been made in an email sent that afternoon to employees by Ms Jeanette Cunningham, the Appellant's managing director, about what had occurred at the conference before the Commissioner on 30 December 2019. The VAU sought interim orders to correct the statements, on the basis that those statements might influence the vote on the agreement, which still had four days to run.

[9] Two paragraphs in Ms Cunningham's email were contentious. First, paragraph 4 of the email stated: 'Further, when the Commissioner asked the VAU Lawyer to identify which rates were incorrect, she and the two VAU Reps were unable to do so. The VAU have advised that there is a more recent, but as yet unreleased Agreement containing new rates.' Secondly, paragraph 5 of the email stated that during the conference, the Commissioner had asked Ms Alessandro Moussa, the VAU's lawyer, whether the agreement was good or bad, and that Ms Moussa had replied that it was 'a good agreement'. The VAU contended that these statements were incorrect.

[10] At 10.00am on Friday 3 January 2020, the Commissioner's chambers advised the parties that the application for a further interim order would be heard by telephone at 2.00pm that day. The VAU was directed to provide the Commission with a draft interim order and the grounds for seeking the order by 11.00am that morning. The Appellant was directed to provide its views on the interim order to the Commission by 1.00pm. The VAU filed a four-page written submission and two statements in support of its application. Ms Cunningham submitted a one-page email setting out the Appellant's position as to why no order should issue.

[11] Shortly before 4.30pm on 3 January 2020, the Commissioner issued the interim order. It required the Appellant to publish a retraction notice, stating that the relevant passages in paragraphs 4 and 5 of the email of 2 January 2020 referred to above were 'incorrect and therefore misleading' (paragraphs A and B of the interim order). It required a copy of the retraction notice to be sent by the Appellant to all employees, by SMS and by email, and copying the VAU (paragraphs C and D of the interim order).

[12] Paragraph E of the interim order required the Appellant to direct the ballot agent for the 2019 Agreement to set aside and hold separately the votes cast between 4.36pm on 2 January 2020 (the time at which Ms Cunningham's email was sent to employees) and the time at which the retraction notice was published.

[13] The interim order also required a copy of the retraction notice to be provided to the Commission, Ms Moussa, and the ballot agent (paragraph F). Finally, it stated that either party could apply to have the order varied (paragraph G).

[14] To date the Commissioner has not published a written decision setting out her reasons for issuing the interim order, and there is as yet no transcript of the telephone hearing.

[15] On Sunday 5 January 2020 the Appellant lodged its appeal against the interim order and sought its stay. It did not comply with the interim order.

[16] The Appellant raises five principal grounds of appeal, variously contending that the Commissioner's decision was affected by error. The grounds of appeal are not matters that are to be determined in the present proceedings. Rather, the question to be determined is whether the interim order made by the Commissioner on 3 January 2020 should be stayed. The purpose of examining the grounds of appeal is to consider whether they disclose an arguable case of error, with some reasonable prospect of success on appeal.

[17] The first ground contends that the Commissioner did not give appropriate consideration to whether she was satisfied that it was reasonable in all the circumstances to make the interim order. It contends that the Commissioner did not properly weigh the evidence, including the evidence that the VAU had itself made misleading statements to employees. The second ground of appeal contends that the Commissioner failed to provide sufficient reasons to explain her decision to issue the interim order. The third ground submits that the Commissioner erred by not following established case law. The fourth contends that the Commissioner had no power to issue an interim order because the VAU was not a bargaining representative for the agreement. And the fifth alleges that the Appellant was denied procedural fairness.

[18] It is difficult to assess the merits of the first ground of appeal, in the absence of written reasons or transcript. However, to the extent that the first ground of appeal contests the Commissioner's assessment of what was reasonable and her weighing of the evidence, I do not consider that it discloses an arguable case of error. These are matters in relation to which a decision-maker at first instance has a considerable discretion and it does not appear to me that there is an arguable case that the Commissioner's discretion miscarried.

[19] However, the first ground of appeal also contends, in effect, that the statutory requirements for the making of the order were not met. The VAU acknowledged that the interim order was made as an interim bargaining order under s 230, relying also on the Commission's power under s 589 to make an interim decision. The interim order could not be made otherwise than in compliance with subdivision A of Division 8 of Part 2-4, which deals with the Commission's power to make bargaining orders.

[20] Section 230(1) states that the Commission may make a bargaining order under that section in relation to a proposed enterprise agreement if an application for the order has been made (s 230(1)(a)), the requirements of s 230 are met (s 230(1)(b)), and the Commission is 'satisfied that it is reasonable in all the circumstances to make the order' (s 230(1)(c)). These circumstances would logically include the nature of the contravention of the good faith bargaining requirement in question. Further, one of the requirements of s 230 is that the Commission 'must in all cases be satisfied that one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements' (s 230(3)(a)).

[21] The interim order does not identify which of the good faith bargaining requirements was not met. However, the VAU's application for an interim order invoked the requirement in s 228(e). Further, at the stay hearing, counsel for the VAU stated that, according to the notes of a representative of the VAU who was present at the hearing, the Commissioner said that she had concluded that there was a serious issue or arguable case that Ms Cunningham's statements constituted a contravention of s 228(1)(e), and that the balance of convenience favoured the granting of interim orders sought. The Appellant's representative disputed the accuracy of the note in general terms, without identifying any particular points of inaccuracy, and said that on his instructions, there were no detailed reasons given by the Commissioner. The notes referred to by counsel of the VAU were not tendered in evidence however I am prepared to accept that they reflect what the Commissioner said at the conclusion of the hearing, in the absence of a specific contradiction from the Appellant, and in the context of a stay hearing which is interlocutory in nature. Therefore, it appears that the Commissioner identified the relevant good faith bargaining requirement and concluded that there was an arguable case that it had been contravened.

[22] Nevertheless, the requirement in s 228(e) is that bargaining representatives must 'refrain from capricious or unfair conduct that undermines freedom of association or collective bargaining'. It is not enough that conduct be capricious or unfair. The requirement is only contravened if the conduct has the stipulated effect. There is no indication that this element was considered or what the basis was for a conclusion that the misstatements had, or might have, the effect of undermining freedom of association or collective bargaining.

[23] I have considered whether it could be said that it is inherent in the nature of Ms Cunningham's alleged misstatements, which the Commissioner evidently accepted at least on an arguable basis, that it would have undermined collective bargaining. I do not believe this is the case. A misstatement of this kind might be intrinsically 'unfair' for the purposes of s 228(e), but it would not intrinsically or necessarily undermine collective bargaining. Whether this was the case would depend on the circumstances and would need to be considered in each case.

[24] I accept the VAU's submissions that the Commission should approach a stay application with the perspective that, unless otherwise established on an arguable basis, the order subject to appeal was regularly made. However, the available information about the decision that led to the making of the interim order does not reveal a consideration of how the alleged misstatements were considered to undermine freedom of association or collective bargaining. They reveal a conclusion as to the disposition of the application for an interim bargaining order. Based on the information before me, I consider that there is at least an arguable case, with some prospect of success, that the Commissioner did not take into account a relevant consideration, namely whether the misstatements in question undermined freedom of association or collective bargaining.

[25] Further, in my view there is an uneasy interrelationship between s 589, which allows the Commission to make interim orders that are based on an arguable position and a favourable balance of convenience, and provisions such s 230, which require the Commission to reach a state of satisfaction before issuing an order. In the case of s 230(3), the language is particularly emphatic: the Commission must in all cases be satisfied that the bargaining representative has not met, or is not meeting, a good faith bargaining requirement. At least on one view, it is not possible to reach a state of satisfaction on an arguable basis. One is either satisfied, or not satisfied, that a certain state of affairs exists. That would suggest that interim orders may not be available in relation to certain types of applications under the Act, including applications for bargaining orders. In my view, there is an arguable case that the Commission does not have jurisdiction to make an 'interim' bargaining order that is based on something less than satisfaction of the relevant requirements.

[26] I will briefly address the other grounds of appeal. The second ground does not disclose an arguable case of error. The Commissioner's order was issued only one week ago, and although s 601(1)(b) requires an interim decision to be made in writing, there is no requirement for such a decision to accompany an interim order. The Commissioner's decision has simply not yet been issued. As to the third ground of appeal, the Appellant does not explain which authority the Commissioner did not follow and what the underlying error is said to have been in any event. None is apparent to me. At the stay hearing, the Appellant abandoned its fourth ground of appeal, and acknowledged that, although the VAU is not a registered organisation and could not therefore be a 'default' bargaining representative for the purpose of s 176(1)(b), it had in fact been appointed in writing by an employee as a bargaining representative (see s 176(1)(c)), and therefore had standing to make the application under s 229.

[27] Finally, in my view the fifth ground of appeal does not make out an arguable case that the Commissioner denied the Appellant procedural fairness. The VAU made an urgent application. The Commissioner advised the parties early the next morning that she would hear it by telephone at 2.00pm the next day. She directed the VAU to file a submission prior to the hearing, which enabled the Appellant to understand the case against it. Ms Cunningham prepared a brief written response. I appreciate that the matter came on quickly, that the Appellant's representatives were not available, and that Ms Cunningham is not a lawyer. However, the Appellant acknowledged at the stay hearing that Ms Cunningham did not request an adjournment or advise the Commission that she believed that she was at any disadvantage. The content of natural justice and what it requires depend on the circumstances. In my view, there is nothing in the Commissioner's approach to the listing and hearing of the application for an interim order in this case that points to an arguable case of a denial of natural justice.

[28] Before granting a stay, the Commission must be satisfied that the balance of convenience weighs in favour of the order subject to appeal being stayed. I make the following observations.

[29] First, the VAU's application for interim orders indicated that the harm it sought to address was in part that employees might be influenced in their vote by the alleged misinformation in Mr Cunningham's email of 2 January 2020. The interim order can no longer address that concern because the vote concluded on 6 January 2020. The interim order would therefore appear to have no ongoing utility in that regard.

[30] Secondly, the retraction order was, according to the VAU, directed also at vindicating Ms Moussa's position that she did not say the things attributed to her in the two paragraphs of Ms Cunningham's email. The VAU says that in this regard, the comments of Ms Cunningham remain uncorrected and continue to 'fester', which the VAU says could do her and it damage between now and the time of any final order of the Commissioner.

[31] However, in my view the VAU would be entitled and able to put out its own version of events to employees. It could distribute information, perhaps also the interim order that was issued, to members and employees, whether electronically or in hard copy, directly or through employees it represents, about what they say is the correct version of the events and what Ms Moussa said and did not say. Such practical steps could significantly mitigate the concern just mentioned and is relevant to the balance of convenience. Further, the final hearing of the VAU's application is only 11 days away, and any final order requiring a retraction, if that is the outcome, can soon be issued. (The stay would apply to the interim order, not a future final order.) On the other hand, an immediate retraction would be in the nature of final relief, requiring Ms Cunningham now to tell employees that her email was incorrect and misleading. The balance of convenience in respect of this matter is in favour of staying the order to issue the retraction letter pending determination of the appeal.

[32] Thirdly, the interim order required the Appellant to direct the ballot agent for the vote on the 2019 Agreement to set aside and hold separately all votes cast between the time when Ms Cunningham sent her email to employees on the afternoon of 2 January 2020, and the time when the retraction notice was published. The retraction notice was not sent, but the vote has now concluded and there are no more ballots that can be set aside. In my view, there is no reason why the Appellant cannot or should not make this direction now, as required by paragraph E of the interim order. There is no prejudice to the Appellant arising from doing so, particularly given Commissioner Bissett's first interim order, which required the Appellant to direct the ballot agent not to finalise, count or publish the result of the ballot until further order of the Commission.

[33] In my opinion, the balance of convenience favours a stay of paragraphs A, B, C, D, and F, but not E, of the interim orders, pending the determination of the appeal.

[34] The VAU said that the failure of the Appellant to comply with the interim order was a discretionary reason for which the Commission should refuse to grant a stay. I accept that in a proceeding under s 606 the Commission may, in connection with its general obligations under s 577 to perform its functions and exercise its powers in a manner that is fair and just, take into account the failure of a party to comply with the order that it seeks to have stayed. The interim order did not explicitly set a time for compliance, but paragraph A of the order required the publication of the retraction 'on receipt of this interim order'. At least on one view, this required an immediate response. However, a person affected by an order has a right under the Act to seek permission to appeal the order and ask that it be stayed. The interim order was made late on the afternoon of Friday 3 January 2020, and the Appellant filed its notice of appeal on Sunday 5 January 2020. It did not simply ignore the order. It is no fault of the Appellant that the Commission was not able to accommodate an earlier listing of the stay application.

[35] I agree with the VAU that the Appellant could have, and should have, complied with paragraph E of the interim order. Paragraph E required the Appellant to direct the ballot agent to hold separate the votes cast between the sending of Ms Cunningham's email and the sending of the retraction notice, and the latter was not sent. However, the Appellant could have complied with this paragraph of the order, despite not sending the retraction notice. As the ballot agent would not have been advised of the timing of any retraction notice, there would have been no cut-off time for the setting aside of ballots, and the agent would have simply had to set aside all of the votes cast from 4.36pm on 2 January up until the end of the ballot on 6 January 2020.

[36] Nevertheless, I do not consider the Appellant's failure to comply with paragraph E to warrant a departure from the usual course, one I consider to be fair and appropriate in the present case, which is to stay the elements of the order which are affected by an arguable case of error with some reasonable prospect of success, and which should reasonably be held in abeyance pending the determination of the appeal because the balance of convenience favours that course.

[37] Finally, the VAU said that the Appellant ought to have applied to the Commissioner to vary the interim order, as contemplated by paragraph G of the order. However, it is not clear what variation it ought to have sought. The vote on the agreement concluded on Monday 6 January 2020. And it could not reasonably have been expected that if an application were made to vary the interim order, the Commissioner would simply change her mind and reverse or substantively alter the order she had only just made.

Taking all of these matters into account, I consider that it is appropriate to make an order staying the operation of paragraphs A, B, C, D and F of the interim order of Commissioner Bissett in PR715707, pending the determination of the appeal. An order giving effect to my decision is issued separately in PR715844.

E. White of counsel for the Victorian Ambulance Union Incorporated

[1] PR715707, 3 January 2020

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