FEDERAL COURT OF AUSTRALIA

ResMed Limited v Australian Manufacturing Workers’ Union [2015] FCAFC 195

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

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

REASONS FOR JUDGMENT

THE COURT

1    This is an appeal from a judgment of a single Judge of the Court delivered on 20 April 2015, in which the application of the appellant, ResMed Limited, for remedies in the nature of prohibition and certiorari directed to a single member, and to the Full Bench, of the Fair Work Commission was refused. At both levels, the Commission had ruled that the application of the first respondent, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) (“the Union”), for the making of a majority support determination under s 236 of the Fair Work Act 2009 (Cth) (“the FW Act”), in relation to specified categories of employees of the appellant, was valid.

2    The Union is an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) (“the RO Act”). According to the primary Judge, it sought to engage processes to facilitate the initiation of bargaining between the appellant and a group of its employees for the making of a proposed enterprise agreement under Pt 2-4 of the FW Act.

3    In the context of an existing enterprise such as the appellant’s, an enterprise agreement is made between the employer and its employees at the time who will be covered by the agreement: s 172(2)(a). The means provided by the FW Act for the representation of those employees during the process of collective bargaining which presumptively leads to the making of an agreement is by way of bargaining representatives. Any employee may appoint his or her own bargaining representative: s 176(1)(c). Such a representative might be, for example, an organisation of employees such as the Union. Additionally, an organisation of employees is the default bargaining representative of employees in the relevant group who are members of the organisation: s 176(1)(b)(i).

4    Whether by specific appointment or by the operation of s 176(1)(b)(i), however, an organisation of employees cannot be the bargaining representative of an employee unless it is “entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement”: s 176(3)(a). This limitation applies also to an official of such an organisation, whether or not acting in that capacity: s 176(3)(b). 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, but nonetheless lies at the core of the appellant’s case, in respects to which we shall turn.

5    Bargaining for an enterprise agreement commences with a notice, which must be given by the employer concerned to the relevant employees, of their right to be represented by a bargaining representative: s 173(1). The obligation to give such a notice is triggered by the happening of any one of four events listed in s 173(2). Relevantly here, two of those events are the employer agreeing to bargain, or initiating bargaining, and the operation of a majority support determination that relates to the agreement. If, as in the present case, the relevant employer neither agreed to bargain nor initiated bargaining, employees who sought to commence bargaining by the means contemplated by s 173(1) would, self-evidently, need to procure the making of a majority support determination.

6    That takes one to Div 8 of Pt 2-4 of the FW Act, which deals with the subject of the Commission’s role in facilitating bargaining. There is a range of “bargaining orders” which the Commission may make on application (s 229), but, again, only where (relevantly), the employer has agreed to bargain, or to initiate bargaining, or a majority support determination in relation to the agreement is in operation: s 230(2).

7    The provisions with which this appeal is specifically concerned are to be found in Subdiv C of Div 8. They are ss 236 and 237, as follows:

236    Majority support determinations

(1)    A bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to the FWC for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.

(2)    The application must specify:

(a)    the employer, or employers, that will be covered by the agreement; and

(b)    the employees who will be covered by the agreement.

237    When the FWC must make a majority support determination

Majority support determination

(1)    The FWC must make a majority support determination in relation to a proposed single‑enterprise agreement if:

(a)    an application for the determination has been made; and

(b)    the FWC is satisfied of the matters set out in subsection (2) in relation to the agreement.

Matters of which the FWC must be satisfied before making a majority support determination

(2)    The FWC must be satisfied that:

(a)    a majority of the employees:

(i)    who are employed by the employer or employers at a time determined by the FWC; and

(ii)    who will be covered by the agreement;

want to bargain; and

(b)    the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and

(c)    that the group of employees who will be covered by the agreement was fairly chosen; and

(d)    it is reasonable in all the circumstances to make the determination.

(3)    For the purposes of paragraph (2)(a), the FWC may work out whether a majority of employees want to bargain using any method the FWC considers appropriate.

(3A)    If the agreement will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (2)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Operation of determination

(4)    The determination comes into operation on the day on which it is made.

8    In short, the appellant’s argument is that an organisation of employees, albeit a valid bargaining representative for some of the employees who would be covered by a proposed enterprise agreement, is incompetent to apply under s 236 unless all of the employees specified for the purposes of para (b) of subs (2) are eligible for membership (whether or not they are in fact members) of the organisation. An alternative argument, advanced for the first time on appeal, is that such an organisation is competent to make such an application only if the majority of employees who are the subject of the application are eligible for membership of it.

9    In its application for a majority support determination in the Commission, the Union specified (under s 236(2)) five categories of employees who would be covered by the proposed enterprise agreement. It was not controversial that the Union had at least one member in each of these categories of employees. It was, therefore, validly a bargaining representative of at least five employees who would be covered by the agreement. The factual premise upon which the case proceeded, however, was that something less than all of the employees in the categories specified were eligible for membership of the Union pursuant to so much of its rules as, conformably with s 141(1)(a) of the RO Act, specified “the purposes for which the organisation is formed and the conditions of eligibility for membership”.

10    The appellant’s primary argument was rejected by the primary Judge for reasons which, we would hold, are free of error. Indeed, we take the view that her Honour’s reasons so clearly and comprehensively dealt with the appellant’s argument that it would be a distraction for us to enter upon the subject again in any detail. The primary Judge’s reasons may be viewed at ResMed Limited v Australian Manufacturing Workers’ Union [2015] FCA 360.

11    In deference to the detailed submission advanced on appeal on behalf of the appellant, we propose to supplement the reasons of the primary Judge with the following brief reasons of our own.

12    The appellant’s primary argument placed considerable emphasis upon the use by the FW Act of the notion of an organisation’s entitlement to represent the industrial interests of employees. In point of content, this notion was said to be a reflex of the eligibility rule of the organisation, a proposition accepted by the Union. What is conspicuous in the context of the appellant’s argument, however, is that s 236 does not invoke that notion. It is not an organisation’s entitlement to represent the industrial interests of any or all of the specified employees which gives it standing to apply under s 236, it is the circumstance that the organisation is a bargaining representative of at least one – and it need be no more than one – of the employees so specified. It is true, of course, that, under s 176(3), the organisation cannot be a bargaining representative unless it is entitled to represent the industrial interests of the employee or employees concerned, but, once that bridge has been crossed, it is qua bargaining representative that the organisation may apply under s 236.

13    By definition, a majority support determination is concerned with the question whether a majority of the employees who will be covered by the agreement want to bargain with the employer. Beyond the limited operation of s 176(3), there is no reason for an applicant bargaining representative which happens to be an organisation of employees to have an entitlement to represent the industrial interests of any of the employees proposed to be covered. The bargaining representative of one employee only may apply under s 176(3), thereby commencing the process whereby it will be determined whether a majority of the employees who will be covered by the agreement want to bargain with the employer. The section is utterly unconcerned with the relationship between the eligibility rule of an applicant and the circumstances of employees for whom the applicant is not a bargaining representative.

14    It was submitted on behalf of the appellant that its case raised the question of the competence of a federally registered organisation, as a body corporate, to engage in activities, and to pursue objectives, outside the purposes for which it was formed and its conditions for eligibility for memberships. Neither at first instance nor on the appeal, however, was the appellant’s case structured around the application of the jurisprudence first articulated in Amalgamated Society of Railway Servants v Osborne [1910] AC 87 to the circumstances of such an organisation, a subject which was discussed at some length by Fullagar J in Williams v Hursey (1959) 103 CLR 30. For that reason, we propose to say nothing further on the subject.

15    The appellant’s case, rather, was built around 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.].

16    It was fundamental to the line of jurisprudence upon which the appellant relied that a registered organisation acted as a party principal, and not merely as the agent or representative of its members, in agitating for, or in resisting, changes in terms and conditions under which employees worked. As such, some delimitation of the area within which the organisation might validly do these things was necessary, the judgment in Dunlop Rubber being the consequence of the jurisprudence developed in Burwood Cinema Ltd v Australian Theatrical & Amusement Employees’ Association (1925) 35 CLR 528 and Metal Trades Employers Association v Amalgamated Engineering Union (1935) 54 CLR 387.

17    The system of industrial regulation which obtains under the FW Act is, however, quite different from the system which gave birth to the principles referred to above. It will be sufficient to note that, under Part 2-4 of the FW Act, an organisation does not act as a party principal. The scope of its ability to act as a bargaining representative is specifically addressed in s 176(3) and, if it has been validly appointed as such a representative by at least one employee, its standing to make application under s 236 is established. Nothing further is required.

18    From what we have said above in relation to the appellant’s primary argument, it will be apparent that its alternative argument could not succeed. Once it is established that the organisation of employees in question is validly a bargaining representative for at least one employee, such alignment as there may be between the employees the subject of the majority support determination – whether all of them, a majority of them, or some of them – and the eligibility rule of the organisation is neither here nor there. By limiting the alternative formulation of its argument to a majority of the relevant employees, the appellant does not overcome the problems encountered by its primary argument, as were comprehensively exposed by the primary Judge and upon which we have provided the brief additional reasons set out above.

Associate:

Dated:    23 December 2015