FEDERAL COURT OF AUSTRALIA

ResMed Limited v Australian Manufacturing Workers’ Union

[2015] FCAFC 106

THE COURT ORDERS THAT:

1.    The application is dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Jessup J:

1    I agree with Buchanan J.

Associate:

Dated:    12 August 2015

REASONS FOR JUDGMENT

Buchanan J:

2    The applicant (“ResMed”) researches, develops, manufactures and produces medical devices. The first respondent (“AMWU”) is a federal organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) (“the FW(RO) Act”).

3    ResMed and the AMWU have been in disagreement and dispute for some time about the capacity of the AMWU to enrol, as members, employees of ResMed and the corresponding right of such persons to belong to the AMWU and to be represented by it.

4    On 19 December 2013, a Commissioner of the Fair Work Commission (“the FWC”) decided that the AMWU had the right to represent the industrial interests of some employees of ResMed at its manufacturing facility at Bella Vista in New South Wales, but not others ([2013] FWC 9725). That conclusion involved the formation and expression of an opinion about the proper meaning and construction of the AMWU rules.

5    The need for a conclusion about the meaning and construction of the AMWU rules arose because the AMWU had invoked s 236 of the Fair Work Act 2009 (Cth) (“the FW Act”), to seek a “majority support determination” and an issue to be determined was whether the AMWU had, under its rules, an existing right to represent ResMed employees in five particular categories identified by the AMWU.

6    The decision was appealed by both parties although there was no challenge to that part of the decision which found that the AMWU had some rights of coverage.

7    The AMWU’s appeal was partly successful. In the appeal decision ([2014] FWCFB 3501), a Full Bench of the FWC expressed different conclusions to the Commissioner about the work of some of the identified categories of employees and whether that work fell within the AMWU’s coverage. The conclusions did not turn on contested issues of fact. They were the result of the application of a different construction or meaning of the AMWU’s rules to uncontested facts about the work performed.

8    That construction or meaning was, in part, derived from an historical analysis of rule and award coverage of earlier unions which, over time and through a process of amalgamation, made up the AMWU under its present rules. Part of the analysis yielded a meaning of the term “assembler” in one part of the rules which was applied to the work of certain of the ResMed employees to derive a conclusion that the AMWU was entitled under its existing rules, to represent those “assembler” employees at ResMed, contrary to the conclusion of the Commissioner that the AMWU could not represent those particular employees under its rules.

9    The Full Bench upheld conclusions by the Commissioner that other particular categories of employees were not eligible to be members of the AMWU.

10    Vice President Hatcher was the Presiding Member on the Full Bench but the Full Bench decision was unanimous.

11    Subsequently, proceedings were commenced in this Court about the question of the extent of the coverage of the AMWU over employees of ResMed. The proceedings concern competing applications for declarations by those two parties about the meaning of the present rules. They are in the docket of Perry J.

12    Thereafter, on 7 November 2014, the AMWU filed an application (“the rule change application”) under s 158 of the FW(RO) Act seeking an alteration to its eligibility rules:

Particulars

…

3.    … to provide for unambiguous coverage of all persons employed by ResMed Limited, or employed to perform work at ResMed by a labour hire company or group training organisation, notwithstanding and without limiting any coverage arising from the AMWU’s current eligibility rules. …

13    ResMed objected to consent being given by the FWC to the rule change on the ground that it would extend the existing coverage under the rules, which would be “inappropriate”.

14    On 5 January 2015, ResMed applied to the FWC under s 137A(1)(b) of the FW(RO) Act for an order that the AMWU not have the right to represent the industrial interests of employees of ResMed (“the representation order application”). One ground of the representation order application suggested that the AMWU had no existing rights of representation of employees of ResMed. In fact, ResMed does not really challenge the limited findings about existing coverage made by the Commissioner. ResMed does not accept the wider findings made by the Full Bench.

15    Shortly after it made the representation order application, ResMed applied to the President of the FWC for a direction that the rule change application and the representation order application each be assigned to a Full Bench for hearing and determination, and that they be assigned to the same Full Bench. The President accepted ResMed’s arguments. In a decision issued on 9 February 2015 (ResMed Limited v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) [2015] FWC 848), the President said:

[14]    In support of its application ResMed submits that if the matters are dealt with and heard by separate members (or Full Benches) of the Commission, there will be a duplication of the resources of the Commission because both proceedings relate to the interpretation of the AMWU eligibility rules and their application to ResMed employees, and whether those rules should have an expanded application to ResMed employees. Further, it is submitted that if matters C2015/1008 and D2014/70 were dealt with and heard separately, there is a potential for inconsistency in the determination of the matters involving the scope and application of the rules of the AMWU by separate members or Full Benches of the Commission. It is also submitted that there will be increased legal costs for the parties, as well as duplication in witnesses, the cross examination of those witnesses, and legal issues addressed in submissions.

…

[16]    I accept that the question of the AMWU’s current coverage is one of the matters which may arise in both of these applications. Indeed given the history between ResMed and the AMWU I think that it is likely that such a matter will arise. If Matter D2014/70 were to be dealt with by a single Member (as is presently the case) and Matter C2015/1008 were to be dealt with by a Full Bench (as required by s.137A of the FW (RO) Act) there is a significant likelihood that they will deal with some similar issues and evidence. This, in turn, gives rise to a risk of inconsistent evidentiary findings or inconsistent decisions in respect of the AMWU’s coverage of ResMed’s employees.

[17]    It is in the public interest that there is consistency and an avoidance of conflict between decisions of Members of the Commission and on this basis I am persuaded that it is in the public interest to refer matter D2014/70 to a Full Bench and specifically to the Full Bench to be constituted to deal with Matter C2015/1008.

16    Not surprisingly, given the generally accepted importance of such an objective, the principle invoked by ResMed of fostering consistency in decision-making was endorsed by the President (see at [17]).

17    The proceedings before Perry J were to be heard commencing 28 July 2015. However, on 29 May 2015 Perry J granted a temporary stay of those proceedings in order to allow the FWC to consider the later, competing, applications made to it which would have the effect of expanding, or limiting, the representation rights decided by the Full Bench. As Perry J pointed out when she granted the stay of proceedings for declaratory relief in this Court, neither party wishes to maintain the status quo represented by the existing rules (ResMed Limited v Australian Manufacturing Workers’ Union (No 2) [2015] FCA 537 at [54]). The AMWU wants the right to represent all employees of ResMed (and others). ResMed claims that the AMWU should not have the right to represent any of ResMed’s employees. On 19 June 2015, Jessup J refused leave to appeal against Perry J’s orders granting a temporary stay of the proceedings in this Court (ResMed Ltd v Australian Manufacturing Workers’ Union [2015] FCA 615).

18    The rule change application and the representation order application have been assigned for hearing to a Full Bench of the FWC on which Vice President Hatcher will preside. They are listed for hearing in the FWC for five days in late September and October 2015.

19    ResMed applied to Hatcher VP to recuse himself from sitting on the later Full Bench. Initially, there was an application before the Full Bench to stay the proceedings in the FWC and initially Hatcher VP deferred consideration of the recusal application until after that issue was determined. However, the stay application in the FWC was ultimately not pressed and Hatcher VP decided to deal with the recusal application because he saw no reason why the competing applications in the FWC which had been allocated to the Full Bench should not be heard and determined ([2015] FWC 4007).

20    The ground of the application for recusal was that Hatcher VP, as a member of the Full Bench which heard the earlier appeal, had expressed “clear views” about the existing rights of the AMWU under its rules to represent some employees of ResMed and that a fair minded observer would have a reasonable apprehension that he “might not bring an impartial and unprejudiced mind to the proceedings” with respect to that matter, which was a “live and significant issue” in each of the applications.

21    Hatcher VP referred to authority in the High Court and in this Court to explain his view that he should not decline to sit on the Full Bench in September and October for a number of reasons. I need not mention them all. They included the fact that the issues dealt with by the earlier Full Bench, on which he presided, concerned opinions about legal issues based on uncontested facts, that the same issues might not arise for consideration or might not be determinative in resolving the applications now before the FWC, that ResMed had not disclosed the basis upon which it would challenge the correctness of the legal conclusions earlier expressed but if it did so upon the basis of new facts there was no reason to think that he would not be prepared to deal with those matters on their merits, that as a matter of comity any Full Bench would probably strive for consistency with legal conclusions of an earlier Full Bench but there was no basis for a reasonable apprehension that any arguments to the contrary might not be properly considered by him on their merits.

22    ResMed has now applied to this Court for an order which would have the effect that the FWC was prohibited from proceeding to deal with the two applications with Hatcher VP as a member of the Full Bench.

23    During argument on the present application, counsel for ResMed was pressed, at various times and in various ways, to indicate the way in which any conclusions expressed by the earlier Full Bench might bear upon the way in which the rule change application and the representation order application might be decided and on what basis those earlier conclusions might be challenged, whoever might sit on the Full Bench to hear those applications.

24    In part, the enquiry stems from the need to relate any suggestion of prejudgment or lack of impartiality in a logical way to the nature of the issues which will arise about those two applications (see Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [8], [30]). In part, the enquiry stems from concern that ResMed’s complaint may be based on no more than an apprehension that an issue in the case may go against it.

25    It appears that the arguments proposed by ResMed in support of its contention that the AMWU has more restricted coverage under its existing rules than the earlier Full Bench found will not depend on any new facts or any different analysis, except perhaps the proposition that the Full Bench misdirected itself about the significance of some of the historical circumstances to which it referred.

26    Although counsel affirmed that ResMed would argue that the conclusions against it by the earlier Full Bench were “manifestly wrong” I think, with respect, that this overstates the force of the argument which is likely to be available. If such an argument is available, it would not lightly be concluded that Hatcher VP would refuse to acknowledge its force once it was clearly exposed; but so far it has not been. It was not developed on the recusal application, nor on the present application.

27    It may also be doubted whether, in light of the area of debate framed by the two applications (claimed coverage under the rules for all ResMed employees and others as opposed to a claim of no right of representation for any ResMed employees) the specific conclusions earlier expressed about particular categories of employees would prove to be decisive in a search for a practical solution to the wider questions of contested representation, intended to operate for the future. No doubt it may fairly be said that the question of existing coverage (and hence existing rights of representation) cannot be dismissed as irrelevant, but that falls well short of accepting that identifying the precise limit of present coverage (to the extent that question has been debated) will be decisive (or even significant) to a resolution of the two applications.

28    The fact that the matters about which legal opinions have already been expressed may not arise for consideration, or be determinative, raises a question about whether the proceedings in this Court are premature. If the proceedings before the FWC were to be determined in a way which revealed an unthinking or predisposed application of earlier expressions of opinion despite, or regardless of, the facts and arguments in the later proceedings, that might afford grounds for judicial review but a significantly high threshold must necessarily be crossed in asking this Court, before the hearing of the applications, to prohibit a member of the FWC from discharging responsibilities assigned to that member by the President upon the ground of apprehended bias. It is to an application of that kind that attention must at present be given and that application need not wait for determination on its present merits.

29    As part of their duties when discharging their statutory responsibilities, members of the FWC are often required to form an opinion about legal issues. They are entitled to act on that opinion where it is relevant to the matters they are considering or deciding, although any findings made or opinion expressed about such matters will not be legally binding on the parties to proceedings in which they are made or expressed.

30    In Re Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140, Mason CJ, Brennan, Deane, Dawson and Toohey JJ said (at 149):

The making of a binding declaration of right is an instance of the exercise of judicial power. It stands outside the arbitral function. But there is no substance in the suggestion that an industrial tribunal cannot interpret laws, awards and other legal instruments. A tribunal could not discharge its arbitral functions if it were unable to form an opinion on a matter of interpretation. The formation of views and opinions on matters of interpretation in arbitral proceedings does not in itself amount to a usurpation of judicial power: Cessnock Collieries; Reg. v. Commonwealth Industrial Court; Ex parte Australian Coal & Shale Employees’ Federation; Key Meats. Indeed, a tribunal may find it necessary to form an opinion as to the existing legal rights of the parties as a step in arriving at the ultimate conclusions on which the tribunal bases the making of an award intended to regulate the future rights of the parties: Aberdare Collieries. Of course, the formation of such an opinion does not bind the parties and cannot operate as a binding declaration of rights.

(Footnotes omitted.)

31    The fact that a conclusion about a legal issue is not legally binding does not mean that the finding is a mere incident, or is unimportant, or is without any precedential value, or may legitimately be treated as irrelevant or non-existent. Nor does the fact that a member of the FWC considers and decides a legal question such as the proper meaning or construction of a rule of a union (whether sitting alone or on a Full Bench) signify that it might be reasonably anticipated that the member might not act impartially or properly if the same question arises again before him or her in a future proceeding between the same parties – e.g. an application to amend the same rule.

32    In the case of a judicial officer, it is clearly established that a contention to this effect, based merely on an apprehension that a party may lose a case, or an issue in a case, will not be accepted.

33    In Re JRL; Ex parte CJL (1986) 161 CLR 342 (“JRL”), Mason J, in a passage which has since been cited on very many occasions, said (at 352):

It seems that the acceptance by this Court of the test of reasonable apprehension of bias in such cases as Watson and Livesey has led to an increase in the frequency of applications by litigants that judicial officers should disqualify themselves from sitting in particular cases on account of their participation in other proceedings involving one of the litigants or on account of conduct during the litigation. It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party. There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be “firmly established”: Reg. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group; Watson; Re Lusink; Ex parte Shaw. Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.

(Emphasis added.) (Footnotes omitted.)

34    In Re Finance Sector Union of Australia; Ex parte Illaton Pty Ltd (1992) 66 ALJR 583; 107 ALR 581, the passage above was cited in the unanimous judgment of Deane, Toohey and Gaudron JJ (ALJR at 584; ALR at 583) as one of the authorities to support a statement of principle applying to the statutory predecessor to the FWC, as follows:

… Obviously, the functioning of the Commission requires that its members participate in the determination of matters in circumstances where they have a familiarity with the industry in which the particular dispute arises, with the context of the dispute and, inevitably, with facts relevant to the dispute and with one or more of the parties to the dispute. In that regard, it has long been recognised that, in most cases, that familiarity is an advantage rather than a disqualifying factor. Again, the Act itself obliges the President of the Commission to constitute industry panels to which a Presidential member and at least one Commissioner shall be assigned: s 37(1).

In these circumstances, the need for caution which this Court has consistently identified (see, eg, Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352; Re Polites (1991) 173 CLR, at 86-87; R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100 at 116) in relation to applications for an order preventing a member of a statutory tribunal from participating in the discharge of the functions of that tribunal by reason of apprehended bias is particularly apposite when such an application is directed against a member of the Commission. It is that care must be taken to bear in mind that the basis for disqualification by reason of apprehended bias is that there are grounds upon which a party or the public might entertain a reasonable apprehension that the particular member of the Commission will not decide the case impartially or without prejudice. The basis for disqualification is not merely that the member’s past decisions, on questions of fact or law, might lead to a reasonable expectation that she or he will decide the case adversely to one of the parties. Nor is it that she or he has had previous contact or experience, as a member of the Commission, with the facts involved in the particular matter, with the context in which the particular matter arises, or with one or more of the parties involved in the particular matter.

(Emphasis added.)

35    In Helljay Investments Pty Ltd v Deputy Commissioner of Taxation (Cth) (1999) 74 ALJR 68; 166 ALR 302, Hayne J, sitting as a single judge also referred to the passage from JRL and then said (at [12]):

[12]    The principles about apprehension of bias must be understood in the context of a judicial system founded in precedent and directed to establishing, and maintaining, consistency of judicial decision so that like cases are treated alike and principles of law are applied uniformly. The bare fact that a judicial officer has earlier expressed an opinion on questions of law will therefore seldom, if ever, warrant a conclusion of appearance of bias, no matter how important that opinion may have been to the disposition of the past case or how important it may be to the outcome of the instant case. Fidelity to precedent and consistency may make it very likely that the same opinion about a question of law will be expressed in both cases. But that stops well short of saying that the judicial officer will not listen to and properly consider arguments against the earlier holding. As Lush J said in Ewert v Lonie:

“Every reasonable man knows that consistency in decision is one of the aims of judicial or quasi-judicial institutions, but if he is exercising his quality of reasonableness he does not suppose that a tribunal will refuse to entertain or will fail to give proper attention to a submission opposed to its former decision merely because it is so opposed. In this case, the reasonable onlooker might have thought that the appellants would not have much chance of succeeding, but this is not the same thing as feeling or believing that they would not get a proper hearing. It is not a characteristic of the law’s reasonable man either to be irrationally suspicious of every institution or authority or to think that every cynical appraisal represents an absolute truth.”

The “fair and unprejudiced mind” which must be brought to bear upon the determination of litigation is, as the Court said in R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group, “not necessarily a mind which has not given thought to the subject matter or one which, having thought about it, has not formed any views or inclination of mind upon or with respect to it”.

(Emphasis added.) (Footnotes omitted.)

36    The matters against which Mason J, Deane, Toohey and Gaudron JJ and Hayne J all spoke are, it seems to me, the same matters which explain, but do not justify, the present application.

37    Even if the applications now before the Full Bench to expand, or limit, the AMWU rules or rights of representation require conclusions about the meaning and operation of the rules in their present form, that does not appear to me to raise any question touching upon the impartiality (perceived or actual) of Hatcher VP, any more than it would touch upon the impartiality of other members of the Full Bench.

38    However the Full Bench was constituted it might be expected that it would normally respect the conclusions of the earlier Full Bench about the meaning of the AMWU rules, unless there was good reason to depart from that view. The filing of a fresh, or further, application before a tribunal such as the FWC does not mean that history is erased or the prior deliberations of the FWC on the same, or a similar, issue are put at nought. Consistency of decision-making, comity or respect for precedent do not signify a lack of impartiality in administrative tribunals any more than in courts. The premise implicit in the present application is that ResMed is entitled to re-open any legal issue it chooses, without regard or respect for any previous decision by the FWC on that issue. I do not accept that premise.

39    The view about the meaning of the AMWU rules to which Hatcher VP earlier subscribed as a member of a Full Bench of the FWC was an element of the exercise of the appellate powers of the FWC. If that view is legally unsound then any error of that kind may, in any event, be an error within jurisdiction (see Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union [2015] FCAFC 105). It may be unreviewable in any direct way. That would be the result of the independence and status of the FWC. That same independence and status requires that it be accepted that decisions of its constituent arms (single members and Full Benches) be accepted as effective and legitimate, subject to the statutory methods of review, such as appeals authorised by the FW Act or, more rarely, an application for judicial review to this Court or an appeal to the High Court.

40    The facility to separately seek a declaration of right from this Court about the meaning of the rules, which would be legally binding on the parties to those proceedings, does not mean that a decision of the FWC is, for the purposes of proceedings in the FWC, of any less value as a precedent within the FWC in the meantime.

41    In my respectful view, the present application is untenable and should be dismissed.

Associate:

Dated:    12 August 2015

REASONS FOR JUDGMENT

Wigney J:

42    I have read the judgment of Buchanan J and agree with his Honour’s reasons and order. I wish to add only one brief additional observation.

43    The question raised by this application is whether a fair-minded lay observer might reasonably apprehend that Vice President Hatcher, sitting as a member of the FWC Full Bench considering the rule change and representative order applications, might not bring an impartial mind to the resolution of any issue that might arise in those proceedings concerning the AMWU’s rights to represent ResMed employees because he was a member of an earlier Full Bench that expressed an opinion about that matter. That earlier opinion was based on agreed or uncontested facts and turned on the proper construction of the AMWU’s rules.

44    In considering this question, it is necessary to appreciate that an ordinary fair-minded observer would understand that, like a judge, a member of the FWC would, from time to time, be required to reconsider matters which might have been previously pronounced upon by the member, and would be capable of departing from an earlier expressed opinion if there was reason to do so: R v Burrell (2007) 175 A Crim R 21 at [11]; Sengupta v Holmes [2002] EWCA Civ 1104; [2002] TLR 351 at [35]-[37]; Kirby v Centro Properties Ltd (No 2) (2011) 202 FCR 439 at [20]-[22]. Once that is appreciated, there could be no basis for finding that a fair-minded observer might reasonably apprehend that Vice President Hatcher might not bring an impartial mind to any issue that might arise in relation to the construction of the AMWU’s rules.

45    Whether the issue concerning the AMWU’s rules is properly characterised as a question of law, or (as ResMed submitted) a mixed question of fact and law, it is far removed from the case where a judge has, in a previous case, “expressed ‘clear views’ about a question of fact constituting a live and significant issue in the subsequent case or about the credit of a witness whose evidence is of significance on such a question”: British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283 at [126]. There is no reason to think that Vice President Hatcher might not fairly and impartially consider any submission that might be made in the rule change and representative order applications to the effect that the previous Full Bench of which he was a member erred in some way in construing the AMWU’s rules.

Associate:

Dated:    12 August 2015