AGC Industries Pty Ltd T/A AGC [2019] FWC 1096

1 Fair Work Act 2009 s.185—Enterprise agreement AGC Industries Pty Ltd T/A AGC (AG2018/3663) DEPUTY PRESIDENT BEAUMONT PERTH, 28 FEBRUARY 2019 Application for approval of the AGC Industries Pty Ltd Kwinana Facility Agreement 2018 - Union Standing – s 590(1) – ‘contradictor’. [1] An application has been made for approval of an enterprise agreement known as the AGC Industries Pty Ltd Kwinana Facility Agreement 2018 (the Agreement). The application was made under s 185 of the Fair Work Act 2009 (Cth) (the Act) by AGC Industries Pty Ltd T/A AGC (AGC). The Agreement is a single enterprise agreement. [2] The Construction, Forestry, Maritime, Mining, and Energy Union, Construction and General Division, WA Divisional Branch (CFMMEU), the Australian Workers’ Union (AWU), and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union (CEPU) applied to the Commission to be heard concerning the application. It is observed that the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) was a bargaining representative for the Agreement. [3] The CFMMEU and the AWU (collectively the Unions) filed submissions on both of their behalves. The CEPU filed its own submissions, as did AGC. [4] In short, the Unions submitted the Agreement included an unlawful term; a term which excluded the application of the Agreement where a specific approved enterprise agreement applied to the location and the nominal expiry date had not been reached. This, said the Unions, was contrary to s 194(ba) of the Act. [5] Regarding the pre-approval process, the Unions advanced there were concerns about whether the Agreement had been genuinely agreed. The premise of the contention being, approximately seven modern awards covered the relevant employees and there was no evidence before the Commission that allowed it to be satisfied that AGC had taken all reasonable steps to explain the terms of the Agreement and their effect with regard to all the modern awards. [6] The basis of the CEPU’s objection was that there were concerns regarding the Better Off Overall Test (BOOT). The CEPU held the view that there was coverage by multiple modern awards but only the Manufacturing and Associated Industries and Occupations Award (Manufacturing Award) had been referenced. [2019] FWC 1096 DECISION -- 1 of 8 -- [2019] FWC 1096 2 [7] The Commission may choose to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard. In this particular case, however, the Commission has chosen not to hear from the Unions and the CEPU regarding the application for the approval of the Agreement. Reasons for this decision follow. Background [8] On 19 November 2018, my Chambers issued directions to the AWU to file and serve written submissions, witness statements, and any other documentation it wished to rely upon in support of its application under s 590 of the Act, by no later than 23 November 2018. AGC was directed to file submissions in reply, by no later than 1 December 2018. [9] On 23 November 2018, Chambers received an email from Mr Kivraj Singh (Mr Singh) attaching submissions on behalf of the Unions. These submissions did not address standing under s 590. [10] AGC filed submissions in objection the Unions’ application. Following receipt of AGC’s submissions, on 29 November 2018, my Chambers emailed Mr Singh. That email provided: Dear Mr Singh, We refer to the below submissions received on behalf of the CFMEU and AWU. … We note that these submissions do not deal with the issue of standing pursuant to section 590. In light of [the] directions, are the submissions received by Chambers those upon which you wish to rely? Noting that the time for filing submissions has past, should these not be the submissions upon which you wish to rely, an extension of time request should be made as a matter of urgency. [11] No response was received from Mr Singh, and on 10 January 2019 my Chambers again emailed him, providing the Unions with an extension in which to provide submissions that dealt with the application under s 590. [12] On 23 January 2019, Mr Singh contacted my Chambers and, having confirmed with Mr Zach Duncalfe, National Legal Officer AWU (Mr Duncalfe), that the submissions already submitted were those upon which the AWU wished to rely, Mr Singh clarified that the CFMMEU ‘relied on matters raised in a letter to the Deputy President’s Chambers on 13 November 2018’. [13] The letter, to which I assume Mr Singh referred, was dated 13 November 2018, addressed to the Member Assist Team, and provided to Chambers by AGC. Relevantly, it provided: (a) we are a registered organisation with industry and occupational coverage for the work that would be regulated by the Agreement; (b) we have particular expertise in respect of enterprise agreements in the building and construction industry; -- 2 of 8 -- [2019] FWC 1096 3 (c) we have particular expertise in the operation of the Building and Construction General On-Site Award 2010; and (d) we would be able to assist the Commission more efficiently determining whether the Agreement should be approved. [14] Mr Singh advanced that for the above reasons, the Commission should exercise discretion under ss 590(2)(a) and (b). [15] Following receipt of Mr Singh’s email dated 23 January 2019, I listed the matter for a directions hearing, by telephone, which took place on Friday, 1 February 2019. At this directions hearing, I invited the parties’ views with regard to the progression of the matter, and it was determined that the matter would progress to a hearing limited to the s 590 issue. [16] Following the directions hearing, on 1 February 2019, directions were issued for the filing and service of written submissions with regard to s 590, given up to that point the submissions filed by the Unions, were at best, simply not on point. [17] It has been observed that the AWMU submitted that it could be heard as a matter of right given its status as a bargaining representative. In its submissions of 8 February 2019, the AWMU respectfully reserved its rights to make submissions on the substantive agreement approval application when listed by the Commission. [18] The hearing was held on 20 February 2018. Representatives from the AWU, CFMMEU, CEPU, and AGC were present. Unions’ submissions [19] The Unions submitted that it was a relevant matter to consider, in exercising discretion under s 590 in an application for approval of an enterprise agreement, whether a registered organisation of employees would be able to assist the Commission to better perform its functions under Part 2-4.1 The Unions advanced: a) they had an extensive knowledge of onshore and offshore construction and maintenance, including the work arrangements in those industries; b) they had an extensive knowledge of the modern awards that the Agreement must be assessed against for the purpose of the BOOT; c) they had a significant membership in the onshore and offshore construction and maintenance industries and there was a likelihood that employees of AGC may be future CFMEU and AWU members; d) they had a legitimate interest in the industries and occupations purported to be covered by the Agreement and the maintenance of employment standards in those industries on behalf of their members; e) they would assist the Commission in discharging its duties; and f) each would be considered a ‘person aggrieved’ for the purpose of s 604(1) of the Act. [20] The CEPU submitted that its assistance would be by way of a contradictor, given it had a familiarity and knowledge of the Manufacturing Award. Its knowledge thereafter 1 Re Perth Access Scaffolding Pty Ltd [2016] FWC 8042, [2]; Re Site Fleet Services Pty Ltd [2017] FWC 2163, [3]. -- 3 of 8 -- [2019] FWC 1096 4 extended to the industries where the Agreement would potentially operate, and other modern awards of relevance to the application under s 185. AGC’s submissions [21] AGC accepted that as a bargaining representative for the Agreement that the AMWU had a legitimate interest in the application for approval so as to be granted permission to be heard by the Commission. [22] With respect to the applications of the Unions and the CEPU, it was AGC’s contention that all were strangers to the bargaining process leading to the making of the Agreement. In summary, AGC advanced that the Unions and the CEPU must show that they have a ‘right, interest or legitimate expectation’ in relation to the Agreement’s approval.2 This, contended AGC, they had not done, having based their argument on assertions such as those referred to in paragraph 19(a), (b), and (c) of this decision. Those assertions were considered in Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited (Collinsville) and were found to be an insufficient foundation for standing.3 [23] Further, while the AGC acknowledged the breadth of the discretion under s 590, it submitted in effect that there were no unusual characteristics about the matter, which would justify a departure from the approach taken in Collinsville. In response to the Unions’ reference to hypothetical scenarios such that the Agreement’s coverage extended to the State of Western Australia and therefore may cover future employees not covered by the Manufacturing Award, AGC submitted that the Commission was not charged with the task of assessing the Agreement’s viability for approval for a hypothetical group of potential employees. Consideration [24] With regard to an application under s 185 of the Act an employee organisation may establish standing to be heard because: (a) it is bargaining representative of one or more employees to be bound by the proposed agreement;4 (b) as a matter of procedural fairness if the employee organisation is able to establish a right, interest or legitimate expectation that it will be adversely affected by the decision;5 or (c) if invited by the FWC in the exercise of its power under s 590 of the FW Act to inform itself.6 2 Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940. 3 Ibid [48]. 4 Ibid [16]. 5 Ibid [72]. 6 Ibid [48], [75]. -- 4 of 8 -- [2019] FWC 1096 5 Section 590(1) of the Act [25] The Unions and the CEPU contended that AGC had conflated the approach regarding the establishment of a right, interest or legitimate expectation, with that of the exercise of discretion under s 590. Having considered the submissions advanced by the both the Unions and the CEPU, it did appear, in part, that the Unions had sought to rely on matters usually advanced when establishing an interest or right.7 Perhaps this goes some way to explain the content of AGC’s submissions filed in reply.8 [26] For example, the Unions advanced that they will be a ‘person aggrieved’ by any decision to approve the Agreement under s 604. At footnote 13 in Collinsville, the Full Bench clearly distinguished between standing to bring an appeal in respect of an enterprise agreement approval decision, and whether a person should be heard during an application to approve an enterprise agreement.9 While the Unions may have a right of appeal against any decision to approve the Agreement it does not follow that such a right therefore creates a right to be heard in relation to the approval application at first instance.10 Further, in the circumstances of this matter, I do not consider that such submission advanced their case for the exercise of discretion under s 590(1). [27] Understandably, the Commission required clarification from the Unions regarding the grounds on which the Unions sought to be heard. Both the Unions and the CEPU clarified that the Commission should use its discretion under s 590 of the Act to invite them to be heard. It was confirmed that no party sought to establish standing as a matter of procedural fairness by establishing a right, interest or legitimate expectation. The focus then, was whether discretion was to be exercised under s 590(1). [28] AGC submitted that the Commission had set a high bar on whether to exercise discretion under s 590(1); the examination being whether the intervenor had established a ‘compelling reason’ for such exercise.11 However, the Full Bench has rightly observed that the Commission may choose, in a particular case, to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard.12 The exercise of discretion is not such that there is a requirement for a ‘compelling reason’, but rather in the particular circumstances of the matter before the Commission, the Commission considered it appropriate to inform itself, by, for example, inviting oral or written submissions from a person of an organisation.13 [29] The Commission’s deliberations may, at times, be assisted by a considered contribution from a contradictor depending on the circumstances of a particular case. Relying on the decisions in Re Perth Access Scaffolding Pty Ltd14 and Re Site Fleet Services Pty Ltd,15 7 Outline of Submissions on behalf of the CFMMEU and AWU in relation to section 590, dated 9 February 2019, [11]. 8 AGC’s Submissions in reply to Submissions of the CFMMEU and AWU, dated 12 February 2019. 9 Collinsville [2014] FWCFB 7940, [48]. 10 Inco Ships Pty Ltd v The Australian Institute of Marine and Power Engineers and The Australian Maritime Officers’ Union [2016] FWCFB 3370, [15]. 11 Macmahon Contractors Pty Ltd [2018] FWC 869, [45]. 12 Collinsville [2014] FWCFB 7940, [48], [75]. 13 Fair Work Act 2009 (Cth) s 590. 14 [2016] FWC 8042. -- 5 of 8 -- [2019] FWC 1096 6 the Unions submitted that it was a relevant matter to consider whether a registered organisation of employees would be able to assist the Commission to better perform its functions under Part 2-4. However, I am unpersuaded that it can be discerned from these two decisions that attention is be to turned to that what would assist the Commission to ‘better’ perform its functions. [30] The first decision simply saw the Commissioner decide that he would be assisted in reaching a conclusion about the issues of genuine agreement and the BOOT if submissions were received from the union in that case. In the later decision the Commissioner considered it appropriate that he should better inform himself by allowing the union to be heard in respect to the matter. There was no suggestion that it was a relevant matter to consider whether a registered organisation would be able to assist the Commission to ‘better’ perform its functions. [31] The CEPU submitted that it would provide assistance by way of a contradictor and it had familiarity and knowledge of the Manufacturing Award. It advanced that the Commission could not be satisfied that AGC had complied with s 180(5), and further it was clear from the scope of the Agreement that other industries may fall within its scope; therefore it would not pass the BOOT. [32] In this later respect, the CEPU placed reliance on the case of Mr Warren Irving.16 In that case the Commissioner considered it appropriate to hear from the Construction, Forestry, Mining and Energy Union, stating the following: [39] In circumstances where a registered organisation with industry or occupational coverage for work that would be comprehended and regulated by the Agreement seeks to be heard at first instance proceedings, particularly in respect to the BOOT, it would seem to be logical and expedient to permit standing and invite a contradictor. Alternatively, as occurred in both the Concrete Construction and Levent Painting cases, the benefit of the contradictor may only be obtained at the Appeal Bench level. [40] The Commission is required to ensure that the Agreement complies with the Act, and the resolution of any concerns which have been identified should be conducted with transparency and appropriate rigour. Registered organisations with a legitimate interest in the industry and occupations covered by the Agreement may assist in the resolution of these issues of concern. Concerns about the BOOT in particular are likely to benefit from the presence of a contradictor. In this way, a process involving open, diligent and comprehensive scrutiny should provide for the correct outcome, and also enhance broader confidence in the Commission’s enterprise agreement approval role.17 [33] However, the decision in Mr Warren Irving does not in my view suggest that on each occasion a registered organisation identifies concerns about the BOOT, it is accepted there is a benefit to be gained from the presence of that same registered organisation as a contradictor. As will always be the case, much will turn on the particular circumstances of the matter before the Commission. Ultimately, it sits with the Commission as constituted to evaluate the manner it considers appropriate to so inform it. The absence of a contradictor does not in turn 15 [2017] FWC 2163. 16 [2017] FWC 4787. 17 Ibid [39] – [ 40]. -- 6 of 8 -- [2019] FWC 1096 7 mean that there is a dearth of transparency, or that the process undertaken concerning the application has been conducted without appropriate vigour. [34] The issues raised by the Unions regarding the application for approval, concern an unlawful term and issues concerning genuine agreement, with particular reference to s 180(5). Concerning the submissions relied upon by the Unions and the CEPU, it is not the case that they had relevant knowledge or information about the making of the Agreement, which would then in turn assist the Commission in its consideration of the application under s 185. With regard to an unlawful term, the Commission is positioned to consider this point without recourse to a third party. In short, the Commission is amply able to conduct the evaluative process required in an application under s 185, and in doing so is able to properly inform itself without the assistance of the Unions or the CEPU on this occasion. [35] Whether the AMWU was a contradictor was topical at hearing. Both the Unions and AGC provided oral submissions on what they considered to be the meaning of ‘contradictor’, and whether the AMWU was one. It was observed that the AWMU had reserved its rights to make submissions concerning the substantive agreement approval application. [36] However, whether the AMWU is, or is not, a contradictor has no bearing on the decision reached here given the reasons detailed at paragraph 34 of this decision. Nonetheless, for the sake of completeness the issue of the ‘contradictor’ is further explored. [37] It is observed that an issue arose in the Federal Court whether declaratory relief could, or could not, be granted in the absence of a contradictor. In reaching its decision, the Full Court referred to the decision in Forster v Jodoex Australia Pty Ltd,18 and clarified the meaning of a ‘contradictor’ stating: It is neither possible nor desirable to fetter the broad discretion given by s. 10 by laying down rules as to the manner of its exercise. It does, however, seem to me that the Scottish rules summarized by Lord Dunedin in Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd. should in general be satisfied before the discretion is exercised in favour of making a declaration: The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought…. 19 [38] The meaning of ‘contradictor’, as expressed by the Full Court, is ‘someone presently existing who has a true interest to oppose the declaration sought’.20 There does not appear to be any reason why the meaning attributed to the word ‘contradictor’ by the Federal Court would not be applicable here. Although, clearly the opposition would be toward the approval of the Agreement. Furthermore the Full Court observed there was a difference between having an interest to oppose the granting of declaratory relief and, having that interest, 18 (1972) 127 CLR 421, 437 – 438. 19 Australian Competition and Consumer Commission v MSY Technology Pty Ltd and Others (2012) 201 FCR 378, 382 (footnotes omitted); See also Fair Work Ombudsman v Lohr [2018] FCA 5, [20]. 20 Australian Competition and Consumer Commission v MSY Technology Pty Ltd and Others (2012) 201 FCR 378, 382. -- 7 of 8 -- [2019] FWC 1096 8 choosing whether or not to oppose the granting of the relief.21 However, as observed there is no need to reach a conclusion of the AMWU’s status as a ‘contradictor’ at this time. DEPUTY PRESIDENT Appearances: Mr D Fletcher for AGC Mr K Singh for the CFMMEU Ms A Ambihaipahar for the CEPU (by video) Mr Z Duncalfe for the AWU (by video) Hearing details: Friday, 20 February 2019 Printed by authority of the Commonwealth Government Printer <PR705114> 21 Ibid 383. -- 8 of 8 --