FEDERAL COURT OF AUSTRALIA

Aerocare Flight Support Pty Ltd v Transport Workers’ Union of Australia [2018] FCAFC 74

ORDERS

THE COURT ORDERS THAT:

1.    The application 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    Aerocare Flight Support Pty Ltd applies for a writ of certiorari quashing orders of the Fair Work Commission (the FWC) and an associated writ of mandamus. Aerocare’s application relates to both a first instance decision by a Commissioner of the FWC and an appeal to the Full Bench of the FWC: Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support [2017] FWC 4311; Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Transport Workers’ Union of Australia [2017] FWCFB 5826; and Aerocare Flight Support Pty Ltd t/a Aerocare Flight Support v Australian Municipal, Administrative, Clerical and Services Union [2018] FWCFB 59.

2    Under the Fair Work Act 2009 (Cth) (the FW Act) an employer and employees can make enterprise agreements which regulate the terms and conditions of employment of the employees covered by the agreement. To have force and effect, an enterprise agreement so made must be approved by the FWC in accordance with s 186 of the FW Act.

3    The Commissioner refused to approve the Aerocare Collective Agreement 2017 (the 2017 Agreement). The Full Bench of the FWC dismissed Aerocare’s appeal against that decision.

4    Relevant background matters may be shortly stated. Aerocare is a provider of aviation ground handling services. It relevantly employed two categories of employees in the performance of those services, part-time employees called “PSEs” and casual employees. Both the PSE employees and the casual employees performed the same work, for the same supervisors, and in the same location. In the bargaining for and the making of the 2017 Agreement, Aerocare excluded the casual employees from the group of employees to be covered.

5    Aerocare claims an entitlement to certiorari and mandamus on the ground that the Commissioner committed jurisdictional errors in deciding that he was not satisfied that the group of employees covered by the 2017 Agreement was fairly chosen as required by s 186(3) of the FW Act and the Full Bench of the FWC did not cure those jurisdictional errors on appeal.

6    For the reasons which follow Aerocare has not established that the Commissioner committed the alleged jurisdictional errors. It follows that the decision of the Full Bench of the FWC is immaterial. The application must be dismissed.

Ground (a)

7    Aerocare contends that the Commissioner misconstrued s 186(3A) of the FW Act. Section 186(3A) is to be understood in the context of s 186(3). The sections are in these terms:

186

…

(3)  The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.

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

8    Aerocare contends that the Commissioner, in taking into account whether the group was “organisationally distinct”, strayed into forbidden territory by considering the nature of work which was performed by casual employees (who were not covered by the 2017 Agreement) compared to the work of the employees who were covered by the 2017 Agreement. As Aerocare would have it, in deciding that there was insufficient evidence that the group covered by the 2017 Agreement was “organisationally distinct”, the Commissioner erred. Aerocare contends further that on the undisputed facts the Commissioner was bound to find that the group covered by the 2017 Agreement was “organisationally distinct” but instead the Commissioner focussed on the work performed by the casual employees which was irrelevant to that question.

9    We disagree.

10    First, the nature of the work performed is not prohibited from being considered under s 186(3A), whether in relation to geographical, operational or organisational distinctiveness. Nothing in the statutory language supports the conclusion that the nature of the work is prohibited from being taken into account in evaluating these matters.

11    Second, the undisputed fact that the employees not covered by the 2017 Agreement were casual employees did not mean that the Commissioner was bound to find that the group covered by that agreement was “organisationally distinct”. We reject Aerocare’s submission that, of necessity, the fact that the excluded employees were casual employees demonstrated that the group of employees covered by the 2017 Agreement was “organisationally distinct”.

12    The concept of a group being “organisationally distinct” is not defined in the FW Act. It is not a narrow term. Aerocare itself submitted that the concept of “organisational” takes a broad meaning. We agree. “Organisationally distinct” is sufficiently broad to permit consideration of the nature of the work of employees covered and not covered by an agreement. In our view, the guidance which the Full Bench of the FWC provided at [27] of its reasons is persuasive. The Full Bench said this (citations omitted):

Additionally, guidance may be obtained as to how to interpret and apply the expression “organisationally distinct” in s 183(3A) [sic] from decisions concerning the use of the same expression in ss 237(3A) and 238(4A). The following propositions are relevant:

•    the term “organisation” refers to the manner in which the employer has organised its enterprise in order to conduct its operations;

•    the performance by a group of employees of duties which are qualitatively different from duties performed by other employees may justify a conclusion that the group is organisationally distinct;

•    however the mere performance by a group of employees of different tasks or roles to others may not be sufficient to render it organisationally distinct where the employees work in an integrated way with the other employees to perform a particular business function; and

•    most businesses have organisation structures which will allow organisationally distinct groups to be identified.

13    For these reasons, the first ground of challenge to the Commissioner’s decision cannot be sustained.

Grounds (b) and (c)

14    Aerocare contends that the Commissioner failed to have regard to relevant considerations in deciding whether the group covered by the 2017 Agreement was “fairly chosen”, being Aerocare’s legitimate business rationale for the chosen coverage and Aerocare’s other reasons for that coverage summarised as follows (in the Affidavit of Lucienne Mummé, Annexure LM-5 at [19]):

…

b) the commitment in clause 9.2 of the 2017 Agreement to "long term, sustainable and permanent jobs and ongoing career development opportunities";

c) Aerocare was only going to employ operational employees as PSEs and was not going to employ any more of them as casuals;

d) Aerocare gave casual employees the option of transferring to a PSE (including after approval of the agreement) and being covered by the Agreement or remaining as casuals under the 2012 Agreement;

e) casual employees were to continue to be paid a loading on their wages and be engaged on an hourly basis;

f) the casual employees were to receive a 5% pay increase on approval of the enterprise agreement, backdated to 19 February 2017;

g) the casual employees would no longer have to pay the car parking co-contribution on approval of the enterprise agreement;

h) in the period from the commencement of the access period until July 2017, the number of casuals had dropped from 597 to 389 and Aerocare's General Manager Employee Relations expected a large number of the remaining casuals to convert to PSE in the months following the approval of the 2017 Agreement.

15    As Aerocare would have it, the Commissioner merely referred to some of, but did not consider, these matters which were centrally relevant to Aerocare’s case.

16    There is no doubt that the Commissioner identified at least part of the essence of Aerocare’s submissions at [108] and [109] of his reasons. Aerocare says, however, that these references exclude the matters in Aerocare’s submissions in paragraph 55 which were in these terms:

The enhanced benefits to be applied to casuals administratively upon the approval of CA17 are:

(a)    On the approval of CA17, casual employees will receive a 5% pay increase on an ex gratia basis quite independent of CA17; and

(b)    This pay increase will be backdated to 19 February 2017; and

(c)    On approval of CA17, casual employees will no longer have to pay the car-parking co-contribution;

(d)    Casuals will still have the option to convert to PSE at any time.

17    These, it will be apparent, are the matters in sub paras (f) and (g) quoted above.

18    These matters, said Aerocare, were centrally relevant to the question under s 186(3). Further, according to Aerocare, the Commissioner did not refer to these matters nor subsequently deal with their substance at [114]-[117] of his reasons.

19    Assuming that, in particular, [109] and [114]-[117] of the Commissioner’s reasons do not address the substance of these matters then, in any event, we are not persuaded that these matters were capable of constituting material centrally relevant to the task the Commissioner had to perform. Accordingly, there is no jurisdictional error: Minister for Immigration and Border Protection v MZYTS [2013] FCAFC 114; (2013) 230 FCR 431 at [70] citing Minister for Immigration and Citizenship v SZRKT [2013] FCA 317; (2013) 212 FCR 99. Section 186(3) requires the FWC to be satisfied that the “group of employees covered by the agreement was fairly chosen”. The focus is on the group covered. Section 186(3) is a “protective provision”: Aldi Foods Pty Ltd v Shop, Distributive & Allied Employees Association [2017] HCA 53; (2017) 270 IR 459 at [84] and [87]. Understood in context, s 186(3) protects the process of collective bargaining with which this part of the FW Act deals. This is disclosed by the objects provision to Pt 2-4 of the FW Act in s 171(a) as follows:

The objects of this Part are:

(a)  to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; …

20    In this context, the fact that the employer had decided to provide particular benefits to the casual employees not covered by the 2017 Agreement (and thus excluded from participating in bargaining for that agreement) cannot be a matter that is centrally relevant under s 186(3). This is because a primary purpose of s 186(3) is to ensure that the group of employees is able to participate as an appropriate collective of employees in the collective bargaining process, so that the process does not miscarry.

21    We would not go so far as to say that the provision of particular benefits to the casual employees not covered by the 2017 Agreement was an irrelevant consideration prohibited from being taken into account. But these are at best matters peripheral to the question which s 186(3) poses. It follows that if the Commissioner did not consider these matters, that failure is incapable of founding jurisdictional error. That material could not have the required importance to engage the doctrine of jurisdictional error: see again MZYTS at [70].

22    Otherwise, it is apparent that the matters said to be centrally relevant to the s 186(3) question were considered by the Commissioner in the paragraphs as mentioned above.

Ground (d)

23    Aerocare contends that the Commissioner had regard to irrelevant considerations in deciding the s 186(3) question. The alleged irrelevant considerations are that the casual employees were excluded from bargaining for a new agreement, when this was not so, and were excluded from the 2017 Agreement, which was necessarily so, given that they were not covered by that agreement.

24    The impugned paragraph of the Commissioner’s reasons is [116] in these terms

Cimeco, referred to above, held that it is appropriate to have regard to the interests of the employer, such as enhancing productivity. In this matter, Aerocare’s case included the proposition that it desired to incentivise the shift from casual employment to part-time, PSE employment, and that approval of the 2017 Agreement would do that. I accept that it might. However, incentivisation in the form put forward by Aerocare comes at the price of excluding casual employees from bargaining for a new agreement and ultimately excluding them from the benefits, such as they may be, of the 2017 Agreement. The only basis of their exclusion from the 2017 Agreement is that they are employed as casual employees. By all accounts they work in the same locations as PSE employees and they perform the same work, for the same supervisors.

25    It cannot be an irrelevant consideration that, as was the fact, the 2017 Agreement excluded casual employees. That fact underpinned the very issue with which the Commissioner was required to deal.

26    Nor can it be an irrelevant consideration, prohibited from being taken into account (which is the meaning of irrelevant consideration in this context), that the casual employees were excluded from bargaining for a new agreement. Even if the Commissioner made an error of fact in this regard, that error is incapable of constituting jurisdictional error. In any event, at worst, [116] of the Commissioner’s reasons is ambiguous. The Commissioner could not have meant that the casual employees were precluded under law from being able to bargain for a new agreement. That would be a nonsense and such a nonsense would not be attributed to the Commissioner. This part of the Commissioner’s reasoning may contain some loose phrasing but that is all. Read fairly, the Commissioner is merely saying that the casual employees were excluded from bargaining for the 2017 Agreement, as is the fact given that they were not covered by that Agreement.

Ground (e)

27    Aerocare contends that the Commissioner found that the casual employees were excluded from bargaining for a new agreement, on the basis of no evidence or no available inference. Even assuming this reading of the Commissioner’s reasons is correct (which, as we have said, we do not accept), there is no jurisdictional error. To found jurisdictional error on the basis of there being no evidence, there must be no material before the decision-maker which could justify the finding: see Australian Postal Corporation v D’Rozario [2014] FCAFC 89; (2014) 222 FCR 303 at [118]-[119]. The Full Bench’s reasoning at [36] indicates that there was material capable of justifying the finding.

28    At [36] the Full Bench said this:

Finally, we do not accept that the Commissioner erred in finding that Aerocare’s decision as to scope had excluded casual employees from bargaining for a new agreement. While it may technically be correct to say that the exclusion of casuals for bargaining for the 2017 Agreement did not mean that they could not seek a new agreement applicable to themselves only, it is clear that Aerocare’s business strategy meant that there was no prospect in reality of it agreeing to bargain for and enter into a separate new agreement for the casual employees. The practical consequence of Aerocare’s choice of coverage was that casual employees were denied the only realistically available opportunity to participate in bargaining for and voting upon a new enterprise agreement.

Conclusion

29    In summary we are not persuaded that the Commissioner’s decision is affected by jurisdictional error. It follows that it is unnecessary to consider the reasons given by the Full Bench of the FWC.

Other matters

30    There is a further possible difficulty for Aerocare. The Commissioner’s decision was founded on two independent bases as the Commissioner was not satisfied as to either the “fairly chosen” requirement in s 186(3) or the “better off overall test” in s 186(2)(d) of the FWC Act. As noted, these are independent bases for the refusal to approval the 2017 Agreement: Construction, Forestry, Mining and Energy Union v Thiess Pty Ltd [2017] FCAFC 179; (2017) 270 IR 354 at [33]. There is no challenge in this matter to the Commissioner’s finding that he was not satisfied in respect of the “better off overall test”. Accordingly, there is no proper basis upon which to quash the Commissioner’s decision even if Aerocare had established jurisdictional error in relation to the “fairly chosen” requirement in s 186(3). Aerocare’s approach, that there is utility in quashing the Commissioner’s decision if jurisdictional error is established, is misconceived. The Commissioner’s decision cannot be partially quashed. Accordingly, the Commissioner’s conclusion about non-satisfaction of the “better off overall test” necessarily remains. But this application need not be determined on the lack of utility, as we have rejected the arguments of jurisdictional error for the reasons given above.

31    We do not consider it necessary to engage in the question whether the relevant decision which affects legal rights for the purpose of this proceeding is that of the Commissioner or the Full Bench of the FWC or both. In short, different approaches have been taken in this Court: for example, Communications, Electrical, Electronic, Information, Postal, Plumbing and Allied Services Union of Australia v Abigroup Contractors Pty Ltd [2013] FCAFC 148 and Transport Workers’ Union of Australia v Mayne Nickless Ltd [1998] FCA 1022. The present matter does not demand that this question be resolved.

32    For these reasons the application must be dismissed.

Associate:

Dated:    18 May 2018