Federal Court of Australia

Teekay Shipping (Australia) Pty Ltd v Auld [2020] FCAFC 206

ORDERS

THE COURT ORDERS THAT:

1.    Orders 3 and 4 made by the twenty second respondent (the Commission) on 5 March 2020 be set aside.

THE COURT DECLARES THAT:

2.    The Model Consultation Term (MCT) prescribed pursuant to s 205(3) of the Fair Work Act 2009 (Cth) became a term of the Teekay Shipping (Australia) Pty Limited Seagoing Ratings Dry Cargo Enterprise Agreement 2015 by force of s 205(2) of the Act at the time of its approval by the Commission on 19 October 2017.

3.    The terms of the MCT applied to the exclusion of any rights or obligations in clause 9 of the Agreement and clause 8 of the Seagoing Industry Award 2010 in respect of the decision of the applicant made on or about 7 February 2019 to make each of the first to twenty first respondents redundant.

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

REASONS FOR JUDGMENT

RARES AND LOGAN JJ:

1    On 19 October 2017 a deputy president of the Fair Work Commission approved, pursuant to ss 186 and 187 of the Fair Work Act 2009 (Cth), the Teekay Shipping (Australia) Pty Limited Seagoing Ratings Dry Cargo Enterprise Agreement 2015 (the EA). In granting the approval the deputy president noted pursuant to s 201(1)(ii) of the Act that the model consultation term (MCT) prescribed pursuant to s 205(3) (in reg 2.09 and Sch 2.3 of the Fair Work Regulations 2009) was taken to be a term of the EA by force of s 205(2) ([2017] FWCA 5411). The MCT is in appendix 1 to the Court’s reasons.

2    The parties to the EA were the employer, Teekay Shipping (Australia) Pty Ltd, the Maritime Union of Australia and all “employees” (being defined as seagoing rating crew with the classification or capacity of chief integrated rating, integrated rating, chief cook, second cook, chief caterer, caterer or trainee) in relation to (i.e. were crew on) two ships, Lowlands Brilliance and Mariloula or a replacement ship (EA cl 5.1). Each of the first to twenty-first respondents was a rating (crew member) whom Teekay employed as part of the crew on Lowlands Brilliance and Mariloula.

3    EA cl 9 was headed “notification and consultation about change” and is in appendix 2 to the Court’s reasons. It was common ground that EA cl 9 did not comply with the requirements in s 205 for a consultation term in two respects that we will explain below.

4    In accordance with s 257 of the Act, EA cl 5.3(a) incorporated by reference the terms of the Seagoing Industry Award 2010 as in operation immediately before the EA was made. EA cl 5.3(b) provided that, in the event of inconsistency between any terms of the Award and an express provision of the EA, the provision in the EA prevailed to the extent of the inconsistency.

5    Relevantly, award cl 8 was a consultation term within the meaning of s 205 and is in appendix 3 to the Court’s reasons.

Background

The legislative context

6    Relevantly, the Act provided:

3 Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

(a)     providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia's future economic prosperity and take into account Australia's international labour obligations; and

…

(d)     assisting employees to balance their work and family responsibilities by providing for flexible working arrangements; and

(e)     enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms; and

(f)     achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;

…

201 Approval decision to note certain matters

Approval decision to note model terms included in an enterprise agreement

(1)     If:

(a)     the FWC approves an enterprise agreement; and

(b)     either or both of the following apply:

(i)    the model flexibility term is taken, under subsection 202(4), to be a term of the agreement;

(ii)     the model consultation term is taken, under subsection 205(2), to be a term of the agreement;

the FWC must note in its decision to approve the agreement that those terms are so included in the agreement.

…

205 Enterprise agreements to include a consultation term etc.

Consultation term must be included in an enterprise agreement

(1)     An enterprise agreement must include a term (a consultation term) that:

(a)     requires the employer or employers to which the agreement applies to consult the employees to whom the agreement applies about:

(i)     a major workplace change that is likely to have a significant effect on the employees; or

(ii)     a change to their regular roster or ordinary hours of work; and

(b)     allows for the representation of those employees for the purposes of that consultation.

(1A)     For a change to the employees' regular roster or ordinary hours of work, the term must require the employer:

(a)     to provide information to the employees about the change; and

(b)     to invite the employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities); and

(c)     to consider any views given by the employees about the impact of the change.

Model consultation term

(2)     If an enterprise agreement does not include a consultation term, or if the consultation term is an objectionable emergency management term, the model consultation term is taken to be a term of the agreement.

(3)     The regulations must prescribe the model consultation term for enterprise agreements.

…

389 Meaning of genuine redundancy

(1)     A person's dismissal was a case of genuine redundancy if:

(a)     the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and

(b)     the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2)     A person's dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a)     the employer's enterprise; or

(b)    the enterprise of an associated entity of the employer.

(emphasis other than to defined terms and headings added)

The ratings’ proceedings in the Commission

7    On 28 February 2019, the Union, on behalf of the ratings filed unfair dismissal applications in the Commission under s 394 of the Act. Those applications alleged that:

    on 10 January 2019, while each ship was sailing between ports in Australia and China, Teekay notified the Union that BHPB Freight Pty Ltd, which had chartering arrangements in place for both ships, was terminating its ship or crew management agreements with Teekay. The ratings were part of the crew on each ship. Teekay invited the Union to discuss the situation at a meeting on 11 January 2019;

    between 10 and 25 January 2019, Teekay, the affected employees and their Union representatives conducted meetings and engaged in communications arising from Teekay’s loss of the crewing contracts;

    on about 31 January 2019 the Union filed a dispute application in the Commission that included a ground alleging that Teekay had failed to consult in accordance with EA cl 9;

    on about 6 or 7 February 2019 Teekay terminated the employment of each of the ratings on the ground of redundancy; and

    Teekay had failed to comply with its obligations under EA cl 9 to consult about the particular rating’s redundancy and that it would have been reasonable for Teekay to redeploy that rating, so that his or her dismissal was not a case of genuine redundancy within the meaning of s 389 of the Act.

8    It was common ground that Teekay’s involvement with Mariloula ceased on 23 January 2019 and with Lowlands Brilliance on 4 February 2019 when each vessel was handed over to her owners or disponent owners.

9    On 24 June 2019, the President of the Commission, Ross J, made a direction under ss 582 and 615 of the Act that each of the ratings’ unfair dismissal applications “be dealt with by a Full Bench” comprising the President, Deputy President Gostenick and Commissioner Lee.

10    On 25 June 2019, Teekay and the ratings agreed the following question for the Full Bench to determine: “Does the [MCT], taken to be a term of the [EA], apply in substitution of, or in conjunction with, [EA cl 9]?”.

The parties’ rights and obligations to consult under EA cl 9

11    EA cl 9.1 provided that where Teekay “is likely to introduce changes” that are “likely to have significant effects on Employees”, Teekay had to notify the employees who may be affected and the national and relevant branch secretaries of the Union. “Significant effects” included termination of employment and certain other changes including “the alteration of hours of work”. Under EA cl 9.2 Teekay undertook, first, to discuss with the affected employees and the Union the introduction of those changes “as early as practicable after [Teekay] has determined it is likely to make the changes” and, secondly, prior to discussion occurring, to provide to those employees and the Union with “all relevant information” in writing. EA cll 9.3 and 9.4 provided that where Teekay had fully complied with “the notification and consultation pre-requisites” (in cll 9.1 and 9.2) and “makes a decision to implement change” then, if the Union disagreed with the decision it would refer the matter in dispute to the Commission for conciliation and or arbitration while work continued under the pre-existing conditions and arrangements or if the Union and the employees agreed with the change, Teekay could implement it.

12    An employee, seemingly, had no express right to appoint a representative or refer a dispute to the Commission. Other than including “the alteration of hours of work” as a change to which EA cl 9 applied, the EA did not deal expressly with any of the matters in s 205(1A).

The parties’ rights and obligations under the MCT

13    MCT cl 1 provided that the MCT applied if the employer “has made a definite decision to introduce a major change … that is likely to have a significant effect on the employees”. It also applied if the employer “proposes to introduce a change to the regular roster or ordinary hours of work of employees” (a roster change). MCT cll 2(a) and 10(a) provided that an employer had to notify the affected employees of the decision to introduce the major change or the roster change. Relevantly MCT cl 2(b) provided that cll 3–9 applied to a major change and cl 10(b) provided that cll 11–15 applied to a roster change.

14    MCT cll 3, 4, 11 and 12 provided that the affected employees could appoint a representative for the purposes of the procedures in the MCT and, if one or more employees did so, the employer had to recognise the representative.

15    MCT cl 5 provided that “as soon as practicable after making its decision” the employer had to discuss the change with the employees and for the purposes of the discussion provide them with all relevant information in writing. MCT cl 13 imposed a corresponding obligation on an employer, after it had proposed to introduce the roster change, to invite the employees, in accordance with s 205(1A), to give their views about the impact of the changes (including any impact in relation to their family or caring responsibilities).

16    MCT cl 7 and 15 required the employer to give prompt and genuine consideration to matters that the affected employees raised respectively about the major change or the roster change.

17    MCT cl 9 provided that “a major change is likely to have a significant effect on the employees if it results in”, among other outcomes, termination of employment.

The parties’ rights and obligations to consult under award cl 8

18    In contrast to the MCT, award cl 8.1(a) provided that the employer had to notify employees who may be affected when it “has made a definite decision to introduce major changes … that are likely to have significant effects on” those employees. The clause defined “significant effects” to include termination of employment and certain other major changes, unless the Award already provided for the making of such changes.

19    Award cl 8.1(b) provided that the employer had to discuss with the affected employees and their representatives, if any, the introduction of those changes and to give prompt consideration to matters that the employees or their representatives raised in relation to the changes. The discussions had to commence “as early as practicable after” the employer had made “a definite decision … to make the changes referred to in cl 8.1(a)” and for the purposes of those discussions the employer had to provide those employees and their representatives, if any, all relevant information in writing. Award cl 8.2 dealt with a roster change including the matters required by s 205(1A) in a similar way to the MCT in cll 10–15.

The question of construction that the Commission considered

20    Importantly, an enterprise agreement must include, by force of s 205(1)(a)(i), a consultation term that requires the employer to consult the employees about a major workplace change, being a decision, that, when operative, will alter the workplace in a way that is likely to have a significant effect on the employees affected, including by the termination of their employment.

21    Here, EA cl 9.1 created an obligation for Teekay to consult before it made an operative decision to make a major workplace change. That is because EA cl 9.2 required that the consultation process had to commence “as early as practicable after [Teekay] has determined it is likely to make the changes”. And, EA cl 9.3 made clear that, only after Teekay had complied fully with the pre-requisites” of notifying and consulting about its “determination that it was likely to make the change”, could it make the decision to implement the change.

22    In other words, EA cl 9 required Teekay to consult before it made any definite decision to implement a change whereas award cl 8 and the MCT each required the employer to consult only when the employer had made a definite decision to implement a change. Moreover, under EA cl 9 only after the consultation process had occurred, could Teekay implement the change. And, under EA cl 9.3, if the Union disagreed with the change, it could refer the dispute to the commission for conciliation and or arbitration.

23    This raised a question for the Commission of how to construe and reconcile the terms of EA cl 9, award cl 8 and the requirements of s 205 as well as the MCT, if it applied.

The Full Bench’s decisions

24    On 2 September 2019, the Full Bench published a “decision” on the question that had been referred to the Full Bench: Auld v Teekay Shipping (Australia) Pty Ltd [2019] FWCFB 6047 (the first reasons).

25    The Full Bench construed Div 4 of Pt 2-4 of the Act, titled “Approval of enterprise agreements” which included ss 186 187 and s 201. They also had regard to the object of both the Act, in s 3, and of Pt 2-4, in s 171. They said that those sections, read in their context, did not preclude the Commission exercising its power to approve an enterprise agreement that did not contain one or both of a flexibility term or a consultation term. That followed from the deeming provisions in ss 202(4) and 205(2) that, if an enterprise agreement did not contain one or both of those terms, the model flexibility term and or the MCT were “taken to be a term of the agreement” (the first reasons [46]–[65]). The Full Bench considered that the scheme of the Act disclosed “a purpose of preserving as much of [an enterprise] agreement as made while also protecting against encroaching upon existing rights (the NES) or protections (unlawful terms)” ([67]). They said that, unlike the operation of ss 55 and 56, which rendered a term of an enterprise agreement inoperative to the extent that it contravened a national employment standard (NES), there was no provision invalidating a term of an enterprise agreement that did not satisfy s 205. They said that both a flexibility term and a consultation term were “in a category altogether different” from a statutory entitlement such as an NES ([72]).

26    The Full Bench reasoned that the deemed inclusion of a model term, by force of ss 202(4) or 205(2), in an enterprise agreement, did not prevent the continuing operation of whatever terms it already contained that dealt with the same subject-matter but failed to comply fully with the Act’s requirements for a flexibility or consultation term (the first reasons [66]–[73]). They said at [73]–[74]):

Consistent with the policy and evident purpose of the agreement making provisions of the Act, a non-compliant consultation term of an enterprise agreement need not be rendered as having no effect, because it does not offend against some other statutory entitlement or protection. Such a term can continue to operate, but the relevant model term that is taken to a term of the agreement and (sic) also operates.

We therefore consider that the both textual and contextual considerations lead to a conclusion that s.205(2) of the Act does not have the effect of rendering inoperative an existing term in an agreement dealing with consultation. On the assumption that s.205(2) of the Act operated in this case, it follows that clause 9 of the Agreement together with the model consultation term operate as terms of the Agreement. Any conflict between the two provisions may be resolved through the usual means of interpreting agreements.

27    The Full Bench noted that there were two obvious deficiencies in EA cl 9 in respect of its failure to meet the requirements of s 205, namely that, first, it allowed representation only by the Union during consultation, when s 205(1) required a consultation term to allow for representation of employees without qualification and, secondly, it did not comply with s 205(1A) because it did not make any provision about a roster change (the first reasons [76]–[78]). They noted that the MCT, operating as a term of the EA, would cure those deficiencies but said (at [79]–[80]):

However, as we earlier noted, clause 5.3 of the Agreement incorporates the Award as in operation just before the Agreement and provides that an express provision of the Agreement will prevail to the extent of any inconsistency between any term of the Award and an express provision of the Agreement. Clause 8 of the Award provides for consultation.

Read together, clause 9 of the Agreement and clause 8 of the Award would comply with the content requirements in s.205. Clause 8 of the Award makes provision for both representation during consultation and consultation of employees about changes to rosters and ordinary hours of work.

28    The Full Bench said that there was no direct inconsistency between EA cl 9 and award cl 8. They stated that award cl 8 did not take away any rights that EA cl 9 conferred on Teekay or alter, impair or detract from EA cl 9 (the first reasons [82]–[86]). They said (at [87]–[88]):

Moreover, even if it could be said that there is direct inconsistency between the terms of clause 9 of the Agreement and clause 8 of the Award dealing with consultation about major change having a significant effect, there can be no direct inconsistency between the provisions dealing with consultation about changes to regular rosters and ordinary working hours, a subject on which clause 9 of the Agreement is silent.

At the very least, clause 9 of the Agreement does not prevail over those provisions in clause 8 which deal with representation and with consultation with employees about changes to rosters or ordinary working hours. Therefore, when clause 9 of the Agreement is read with clause 8 of the Award operating as incorporated term, the Agreement contains a consultation term which meets the description in s.205 of the Act. At the time that the Agreement was approved, s.205(2) of the Act did not operate upon the Agreement such that the model consultation term is taken to be a term of the Agreement.

(emphasis added)

29    The Full Bench also discussed the legal effect of the notation that the deputy president made pursuant to s 201(1), when approving the EA, namely that the MCT was included in the EA. They concluded that the notation had no effect if, as they also found, that by reading EA cl 9 together with award cl 8, the EA did include a consultation term within the meaning of s 205 ([93]–[99]). Therefore, they reasoned, the MCT was not included in the EA (the first reasons [88]).

30    The first reasons did not record or set out the President’s direction of 24 June 2019 or the agreed question, nor give any answer to it. Teekay sought relief in this Court in respect of the first reasons. As Logan, Wigney and Anderson JJ held on 11 February 2020 the “decision” did not identify any question that the Full Bench was considering or its decision on any such question. The Full Court issued a constitutional writ of mandamus requiring the Full Bench to answer by decision the question or questions that the President had posed for it: Teekay Shipping (Australia) Pty Ltd v Auld [2020] FCAFC 19.

31    On 27 February 2020, the Full Bench published a “statement” in which it explained the circumstances in which the President had come to make the direction on 24 June 2019. The “statement” attached a document dated 25 June 2019, in which the parties recorded that they had agreed a question to be determined by the Full Bench. The Full Bench also gave its provisional views in the “statement” as to how that question should be answered, together with a second answer, premised on the assumption that the first answer were wrong: Teekay Shipping (Australia) Pty Ltd v Auld [2020] FWCFB 1074 (the second reasons).

32    The Full Bench explained that, initially, the unfair dismissal applications had been allocated to a commissioner to consider, as a preliminary matter, whether the ratings’ dismissals were cases of genuine redundancy, including whether Teekay had complied with its obligations under s 389(1)(b).

33    The commissioner considered that because the question of whether the MCT displaced a non-compliant consultation term in an enterprise agreement was of general importance it should be referred to the President to allocate a Full Bench.

34    The Full Bench proposed answers were that, first, the agreed question did not arise because, based on [75]–[97] in the first reasons, the MCT was not taken to be a term of the EA and, secondly, based on [46]–[73] of the first reasons, the MCT applied in conjunction with EA cl 9 and award cl 8 also had effect “subject to any inconsistency with an express provision of the [EA]”. The Full Bench said (the second reasons at [15]):

However, we would observe that the answer we give to the referred question will not resolve the underlying controversy. It will merely identify the provision or provisions of the Agreement regulating an obligation to consult.

35    On 5 March 2020, the Full Bench made a consent order in which, first, the President directed the Full Bench to answer the two new questions under s 615 nunc pro tunc and, secondly, the Full Bench then gave those questions answers substantially as follows (Teekay Shipping (Australia) Pty Ltd v Auld [2020] PR 717279):

Q1:     Is the effect of reading EA cll 5.3 and 9 properly construed, and read together with award cl 8 operating as an incorporated term of the EA, that the EA contains a consultation term that complies with s 205 of the Act so that s 205(2) is not engaged?

A1:     Yes, for the reasons set out in [75]–[97] of the first reasons, the MCT is not taken to be a term of the EA.

Q2:     Does the MCT, taken to be a term of the EA, apply in substitution of, or in conjunction with, EA cl 9?

A2:     If A1 were incorrect, then for the reasons set out in [46]–[74] of the first reasons and in addition to the “answer” in [74], the MCT taken to be a term of the EA applies in conjunction with EA cl 9 and award cl 8 operates as an incorporated term of the EA having “effect subject to any inconsistency with an express provision of the [EA]”.

36    The consent order noted that the referral to the Full Bench was otherwise concluded.

37    On 6 March 2020 Teekay filed an originating application in this Court seeking, first, constitutional writs to quash the orders containing answers to questions 1 and 2 in the consent orders, or prohibiting or restraining the Commission from giving those answers effect, and, secondly, declarations pursuant to s 563 of the Act, that the EA did not contain a consultation term that complied with s 205, the MCT was a term of the EA, and Teekay and the Commission had to apply the MCT to the exclusion of EA cl 9 in respect of Teekay’s decision to make each of the ratings redundant.

38    Because the Full Bench was constituted with the President as a member, s 20(2) of the Federal Court of Australia Act 1976 (Cth), required a Full Court to hear the matter.

The ratings’ submissions

39    The parties agreed before the Commission that EA cl 9 did not comply with the requirements of s 205 for at least two reasons, first, EA cl 9 did not provide for an unfettered right of representation of employees in accordance with s 205(1)(b) but, rather, required them only to be represented by the Union and, secondly, did not require Teekay to consult about a change to the employees’ regular roster or hours of work and, in particular, any of the matters prescribed in s 205(1)(a)(ii) and (1A). Before the Full Court, the parties’ positions diverged from that agreement somewhat.

40    First, the ratings argued that, having regard to the construction of s 205 by Perram, Robertson and Griffiths JJ in United Firefighters’ Union of Australia v Country Fire Authority (2015) 228 FCR 497 at 553–554 [240]–[241], EA cl 9 did allow for the Union to represent the employees. They submitted that EA cll 11, 12 and 14, read together with EA cl 9 provided sufficiently for representation and amounted to a consultation term within the meaning of s 205. Secondly, during the course of argument before us, the parties discussed whether the words “the alteration of hours of work” in EA cl 9.1 were wide enough to satisfy the requirements of s 205(1)(a)(ii) and (1A). Thirdly, the ratings argued that award cl 8 provided both for representation and a roster change and cured any deficiencies in EA cl 9 when the two were read together.

Consideration

The legislative purpose of s 205

41    The object of the Act is to provide a balanced framework for cooperative and productive workplace relations, that promotes national economic prosperity and social inclusion for Australians. Section 3(e) provides that part of that framework is enabling fairness and representation at work, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms.

42    The objects of Pt 2-4 of the Act set out in s 171 are silent about the purposes of a consultation term. However, the legislative purpose of s 205(1) is not far to seek. It is to require an enterprise agreement to include a term that ensures that when an employer makes, or is about to make, a major change that is likely to have a significant effect on employees, the employer consults with them and allows them to be represented for that consultation. One possible outcome of the consultation process is an agreement that the major change, as decided or contemplated, is varied.

43    One means by which the Act seeks to achieve the object in s 3 is to strike a balance in cases where an employer makes an employee redundant. That occurs in s 389, where the employer can establish that an employee’s dismissal was a case of genuine redundancy only if the conditions prescribed in that section are satisfied, including the condition in s 389(1)(b) that the employer had complied with an obligation is a modern award or an enterprise agreement to consult about the redundancy.

44    Therefore, a legislative purpose of the requirement in s 205 that an enterprise agreement contain a consultation term, as defined in s 205(1) and (1A), is that if an employee is made redundant after the employer has complied with any obligation in the enterprise agreement (or modern award) to consult about the redundancy, and the employer no longer requires the job to be performed by anyone because of changes in the operational requirements of the enterprise, the employee’s dismissal would fall within the definition of a genuine redundancy in s 389(1).

45    It follows that the Act contemplates that a consultation term may involve a process that does not, or indeed cannot, result in any subsequent variation of the major change the subject of consultation in accordance with s 205(1). The stage of the employer’s thinking about making or implementing a decision is not necessarily crucial, provided that whatever consultation occurs is about the actual change that the employer finally implements and the employees have a right to representation of their choice for that consultation. There is no substantive difference in the effect of any decision to make an employee redundant created by the timing ofwhen the employer consults, if either (as EA cl 9.1 provides) it is likely to introduce a change resulting in redundancies and it later implements that very change on the one hand, or after it has made a definite decision (as MCT cl 1(1) provides) to make a major change to effect the same redundancies.

46    It is important to appreciate that the MCT is part of a regulation made pursuant to the regulation making power in s 796(1) of the Act. The content of the MCT is not available as an aid to construction of s 205. The MCT expands considerably on the defining features of a consultation term as set out in s 205(1) and (1A). But, once it applies to an enterprise agreement by force of s 205(2), the MCT will define how the legislative purpose of having a consultation term in that agreement will operate for those bound by it.

Did award cl 8 operate as part of the EA?

47    The principles for the construction of industrial instruments are well settled: see eg Treasury Wine Estates Vintners Ltd v Pearson (2019) 268 FCR 12 at 29–31 [73]–[79] per Rares, Perry and Charlesworth JJ. As Madgwick J said in his much followed judgment in Kucks v CSR Ltd (1996) 66 IR 182 at 184:

meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

(emphasis added)

48    It may readily be accepted that award cl 8.2 complied with s 205(1)(a)(ii) and (1A) and the whole of award cl 8 complied with s 205. However, EA cl 5.3 operated to make the terms of the Award, including award cl 8, part of the EA but provided that an express provision of the EA prevailed to the extent that “any terms of the Award” were inconsistent with the provisions of the EA. That raises the question of whether the provisions of EA cl 9 and in particular cll 9.3 and 9.4 operate consistently with award cl 8.

49    The structure of EA cl 9 appears to involve two separate and distinct stages in engagement between Teekay, on the one hand, and its employees and the Union, on the other. First, EA cl 9.1 required Teekay, where it was “likely to introduce changes…that are likely to have significant effects on Employees”, to notify the employees who may be affected and both the National, and relevant branch secretaries of the Union. Secondly, once Teekay gave such a notification, under EA cl 9.2, Teekay had to discuss the effects and measures to avert or minimise them with the employees and the Union.

50    EA cl 9.2 did not provide any right of choice of representation to employees and gave the Union the right to be part of the discussion regardless of whether it was representing any employee.

51    Next, EA cll 9.3 and 9.4 required Teekay to have complied fully with the notification and consultation processes in EA cll 9.1 and 9.2 before it made “a decision to implement change in the workplace”. Then, if Teekay made such a decision, EA cll 9.3 and 9.4 provided for two alternate courses. On the one hand, if the Union disagreed with the decision, it could refer the matter to the Commission for conciliation or arbitration and if the arbitration resulted in a change, it would take effect no earlier than 21 days after the award (or if there were an appeal, 14 days after the appeal decision). Alternatively, if the Union and the employees agreed with the decision, Teekay could implement it no earlier than 14 days after the date of that agreement. 

52    The provisions in award cl 8 begin their effective operation at the point of time in the process prescribed in EA cll 9.3 or 9.4, namely after the consultation about a “likely” change under EA cl 9.1 and 9.2. Yet, award cl 8 operates only when Teekay notifies the affected employees that it has made a definite decision. And, under award cl 8(1)(a) only at that point need Teekay deal with a representative of the employees concerned if he, she or they decide to have representatives in the consultation process, whereas under EA cl 9.2, Teekay had to consult with both the employees and the Union before it made a definite decision.

53    The requirements in EA cl 9 were express provisions within the meaning of EA cl 5.3(b) that were inconsistent with the provisions in award cl 8. That is because award cl 8 operated to require consultation only once Teekay had made a definite decision to introduce a major change. In contrast, at that stage (namely once Teekay had made a decision to implement the change), EA cll 9.3 and 9.4 gave the Union (but none of Teekay, the employees or their representatives) a right to refer to the Commission for conciliation and arbitration what it disputed about the decision or, if the Union and the employees agreed with the decision, it would be implemented. Inconsistently with award cl 8.1(a), the prefatory words of EA cl 9.3 made clear that Teekay could not make a decision to implement a change until it had complied fully with the consultation process in EA cll 9.1 and 9.2 about the likely introduction of a change.

54    For the reasons above, the Full Bench erred in concluding that there was no direct inconsistency between EA cl 9 and award cl 8 (FB [80]–[88]). With respect, the Full Bench did not explain how EA cl 9.3 permitted consultation once Teekay made a decision, since the Union could immediately refer a dispute to the Commission for conciliation and or arbitration, and do so without reference to, or consultation with, the employees, Teekay or any other representative of the employees.

55    Accordingly, EA cl 9 is inconsistent with award cl 8 in respect of the right of the employees to representation in any consultation about a major change and the former prevails over the latter, pursuant to EA cl 5.3(b). That conclusion then raises the questions whether EA cl 9 is a consultation term within the meaning of s 205(1) and (1A) or, if not, s 205(2) operated to make the MCT a term of the EA.

Did EA cl 9 comply with s 205?

56    We reject the ratings’ argument that EA cll 9, 11, 12 and 14 amounted to a consultation term in the sense discussed in United Firefighters’ 228 FCR at 553–554 [240]–[241]. In United Firefighters’ 228 FCR 497, Perram, Robertson and Griffiths JJ explained that the mere fact that the employees had voted to approve an enterprise agreement under s 182(1) as a step in obtaining the Commission’s approval of it under ss 186 and 187, did not mean that they had consented to be represented at a later time in the manner that the terms of the enterprise agreement provided. That is because, first, as their Honours explained, any employees who voted against approving the enterprise agreement had not consented to it, but the Act made that lack of consent immaterial because s 182(1) only required a majority of employees to cast a valid vote to approve it (228 FCR at 550 [224], 552 [234],). Secondly, the relevant clause in the enterprise agreement there in issue that created an enterprise bargaining implementation committee (cl 13.3), did not preclude non-Union representatives participating in the consultation process under that agreement’s consultation term (228 FCR at 553–554 [240]–[241]). Importantly, their Honours held that more than one clause in an enterprise agreement could amount to a consultation term if, when read as a whole, they provided for all the matters required by s 205(1) and (1A).

57    On one view, EA cl 9.2 allows the employees to be represented by the Union in the consultation process prescribed in that clause. Nonetheless, an employee may not want the Union to represent him or her at this stage and s 205(1)(b) requires that the employee be allowed his or her choice of representative for the purpose of the consultation process: United Firefighters’ 228 FCR at 550 [224], 552 [234]. However, EA cl 9.1 and 9.2 did not allow the employees to choose a representative or representatives other than the Union for the consultation which those processes required. Thus, that process did not comply with s 205(1)(b).

58    EA cl 11 provided that a “Consultative Committee shall be established to continue to maintain a direct link between the employees and Teekay management”. Its purposes included, relevantly, “maintain[ing] an open exchange of views between ratings and Teekay management” (EA cl 11.2(d)). The definitions of “employee” and “rating” in EA cl 3.8 and 3.15 differed only in that a “rating” excluded a trainee. The parties to the EA were all persons defined as “employees” in relation to one or each of Lowlands Brilliance and Mariloula. Thus EA cl 11 excluded or could exclude some of the employees, namely, trainees, on whom s 205 conferred rights of consultation.

59    In addition, EA cl 12 recognised the right of the Union to represent the industrial interests of its members but was silent as to the right to representation of non-members or its members who might have a different view about the subject matter of a consultation in accordance with employee’s rights under s 205.

60    And EA cl 14, in providing a settlement of disputes procedure, permitted reference “to the Commission at any time” (EA cl 14.2(e)(i)). If the matter did not concern an operational matter or could not be resolved by discussion at “shipboard level” then it had to be referred, first, by the Master to Teekay management and, secondly, “to the employees’ nominated shore-based representative(s), which may include the relevant [Union] Branch or [Union] official(s) who represented the Union and the ratings in negotiations towards this agreement or the [Union] National Office when the [Union] is the representative organisation of the employee’s choice” (EA cl 14.2(b)(iii)). Thus EA cl 14.2(b)(iii) contemplated that, where a matter in dispute did not concern an operational matter or could not be resolved by discussion at shipboard level, then the employee could choose his or her shore-based representative.

61    However, s 205 operated at a point anterior to a dispute and required that employees had a right to representation in a consultation process concerning a major workplace change that was likely to have a significant effect on an employee. Consultation and discussion can occur before the parties ever think that they may not be able to find a satisfactory solution or be in dispute as to how to take account of any such significant effect on the employee. Thus EA cl 14 is directed at a later point in time to that for the consultation referred to in s 205.

62    Accordingly, contrary to the ratings’ submissions, EA cll 11, 12 and 14 read with EA cl 9 do not provide for the right to representation that s 205(1) required be a term of the EA.

63    Nor did EA cl 9 deal with a roster change as required by s 205(1) and (1A) because, first, as already explained, it did not allow employees to choose their representatives and, secondly, it did not expressly require Teekay to give the employees the invitation to give it their views or to consider those views in accordance with s 205(1A)(b) and (c).

64    Accordingly, EA cl 9 is neither alone nor read with any other provision of the EA a term that satisfies the requirements of s 205. Nor does award cl 8 fill the gaps in EA cll 9.3 and 9.4, because EA cl 5.3(b) made the express terms of EA cl 9 prevail over any inconsistency with award cl 8.

65    Again, the Full Bench did not articulate any construction of how EA cl 9 and either the MCT or award cl 8 could operate together when, as explained above, they cannot.

66    Because EA cl 9 did not comply with the requirements of s 205, it follows that the deputy president was correct to note in his decision to approve the EA that the MCT was a term of the EA by force of s 205(2).

How do EA cl 9 and the MCT work together?

67    The Act requires, by force of s 205, an enterprise agreement to contain a consultation term and, in default of compliance with that requirement, deems a prescribed term to be a term of the enterprise agreement. That requirement and prescription evince the intention of the Parliament that the MCT should not only be part of an enterprise agreement that does not otherwise include a consultation term, but should also operate within the agreement in such a way that any clauses inconsistent with it must yield to it and be taken to be ineffective. There would be no point in the Parliament providing that a consultation term must be part of an enterprise agreement and using the mechanism in s 205(2) to deem a prescribed term to fill that role, if another clause of the same agreement could operate to sideline or palliate against that prescribed term operating according to its tenor

68    Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ held in Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199 CLR 321 at 338 [34] that:

In Project Blue Sky Inc v Australian Broadcasting Authority ((1998) 194 CLR 355 at 384, per McHugh, Gummow, Kirby and Hayne JJ), after pointing out that the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have, the majority said:

“Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.”

    (emphasis added)

69    Where an enterprise agreement does not contain a consultation term as defined in s 205(1) and (1A), the MCT must be the only operative term of the agreement dealing with the consultation process. After all, s 205(2) does not qualify the operation of the MCT as being to fill any deficiencies or gaps in whatever the terms of the enterprise agreement might be that went some way towards, but fell short of dealing with what the definition in s 205(1) and (1A) required a consultation term to provide. However, the Parliament intended that, if the terms of an enterprise agreement did not contain a consultation term, s 205(2) would provide certainty in the form of the prescribed MCT about the consultation process that the employer, the employees and their representatives, if any, must all follow in all circumstances to which s 205(1) and (1A) apply, including for the purposes of s 389.

70    EA cl 9.1 applies to all of the categories of change to which MCT cl 1 applies, being changes that “are likely to have a significant effect on employees”. But because EA cl 9 is not a consultation term within the meaning of s 205(1) and (1A), it cannot mandate that Teekay follow a process of consultation inconsistent with the MCT.

71    Importantly, s 205(1) and (1A) do not use the expressions “made a definite decision to introduce a major change” (MCT cl 1(a)) or “is likely to introduce changes” (EA cl 9.1). The language of s 205(1) requires the employer to “consult the employees” about a major workplace change, but does not specify the stage of the employer’s decision making at which consultation must occur. Thus an enterprise agreement could include a provision couched in the language of EA cl 9.1, taken by itself, so long as it also included terms that comply with the balance of s 205(1) and (1A). The problem here is that EA cl 9.1 commences a process that does not comply with s 205 and, if it is followed, would not allow the MCT to have any effect before EA cll 9.3 and 9.4 operate, at a stage and on the basis that any consultation under EA cl 9 had been exhausted. The Union’s right under EA cl 9.3 to refer its disagreement immediately after Teekay’s decision if operative, would cut across any possible process of consultation under MCT cl 5 that can only commence after Teekay had made such a definite decision, and thus render the statutorily deemed consultation term nugatory.

72    The MCT was a term that the Act required to be part of the EA. Therefore the MCT is not susceptible to a process of construction with the rest of the EA such as that which EA cl 5.3 required when it adjusted the internal hierarchy of the terms of the EA and the Award that EA cl 5.3(a) incorporated into the EA. Rather, once the MCT is deemed by force of s 205(2) to be part of an enterprise agreement, any inconsistent or competing provisions of that agreement cannot be permitted to interfere in the operation of the MCT. Such inconsistent or competing provisions are inoperative because they do not provide for a consultation term that s 205(2) imports in their stead.

73    The Full Bench erred in reasoning that, because there was no express provision in the Act that rendered of no effect any existing term of an enterprise agreement dealing with consultation, such a term would operate side by side with the MCT (the first reasons [68]–[74]). With respect, that reasoning failed to recognise that while the Parliament allowed parties to the process of formation of an enterprise agreement to agree on its terms, s 205 required them to include a term that complied with its requirements. In default of a term complying with s 205, the Act makes the MCT a term of the enterprise agreement when the Commission approves it so as to ensure that a consultation term, as prescribed by law, will apply regardless of the other terms of that agreement that may have dealt inadequately or inconsistently (as here) with the same subject matter.

74    The Full Bench relied on s 253 in reaching its conclusion that both the non-compliant provisions of an enterprise agreement dealing with a form of consultation and the MCT could coexist. That section provided that a term of an enterprise agreement had no effect to the extent that it was not a term about a permitted matter, or was an unlawful term (by force of ss 55 and 56 because it excluded all or any part, of the national employment standards) or contravened s 326 (that prohibited employers from deducting or requiring certain payments) or a designated outworker term (that related to certain outworkers in the textile, clothing or footwear industries). The Full Bench reasoned that, since neither s 253 nor any other provision of the Act made a term of an enterprise agreement of no effect, if it were inconsistent with the MCT (or the analogous model flexibility term provided for in s 202(4): see ss 202–204), the Parliament must have intended that the inconsistent term would remain operative. The Full Bench concluded that any conflict between the model and inconsistent terms could “be resolved through the usual means of interpreting agreements” (the first reasons [74]).

75    In our opinion, the Full Bench’s reasoning overlooked the significance of the Parliament mandating that, if an enterprise agreement did not contain a term (or more than one when read together) that complied with the definition of a consultation term in s 205(1) and (1A), the MCT became a part of the agreement so as to achieve what the Parliament intended. If the full effect of the MCT could be reduced by a process of contractual or industrial instrument construction so as to render it harmonious with the non-compliant or inconsistent term in an enterprise agreement, the certainty that the Parliament intended to achieve through its use of the MCT in respect of the rights and obligations to consult provided in s 205 would be undermined.

76    For example, here, the Full Bench’s reasoning would permit the Union to use its right under EA cl 9.3 unilaterally to refer a dispute to the Commission at the very time that the MCT begins to operate, namely once Teekay has made a definite decision. The Full Bench did not explain how those inconsistent terms were to be construed to operate harmoniously. Section 205(2) deems the MCT to be a term of an enterprise agreement that does not contain a consultation term, and the Act did not make the MCT subject to any terms of that agreement. The very circumstance that caused the MCT to be made a term of the enterprise agreement by force of s 205(2), was that it did not otherwise comply with s 205.

77    It follows that the MCT’s provisions must take precedence over the provisions of not only EA cll 9.3 and 9.4, but also the entirety of EA cl 9, that do not give effect to the requirements of s 205 and the object of the Act in s 3. The Parliament did not intend that, at a stage anterior to the consultation process that the Act required, the Commission could become involved, under a term of an enterprise agreement that itself did not comply with s 205, in conciliation or arbitration about a change on which s 205 operated. Once it is found that an enterprise agreement has not complied with s 205(1) and (1A), there is no room to construe the MCT together with the other terms of the enterprise agreement so as to alter or detract from the process that the MCT mandates.

78    The terms of the MCT as a statutorily imposed term cannot be read down in the process of construing it as part of an enterprise agreement. The MCT became a term of that EA because it did not contain a consultation term. To give effect to EA cl 9.3, and the antecedent process in EA cl 9.1 and 9.2, would negate both the express terms of the MCT and the achievement of the object of the Act (in s 3) to provide a balanced framework for “cooperative and productive workplace relations”, the provision of “accessible and effective procedures to resolve grievances and disputes” (such as the MCT provides if a consultation term were not otherwise already part of an enterprise agreement) and the achievement of productivity and fairness through “clear rules governing industrial action”. Moreover, the parties would not know with any clarity what consultation had to occur for the purposes of s 389, if the MCT alone did not provide that certainty by the use of the process that it prescribed.

79    The evident legislative intent in s 205(2) is that, if enterprise agreement fails to include a consultation term in accordance with the definition in s 205(1) and (1A), the persons bound by that agreement must consult in accordance with the MCT and not follow the insufficient process, if any, that the agreement contained apart from the MCT. The Parliament understood that an enterprise agreement might contain a term or terms that provided for some forms of consultation about a major workplace change or a roster change. But it also recognised, in s 205(2), that where an enterprise agreement fell short in complying with its requirements for what a consultation term must include, then a provision for consultation had to be imposed into it pursuant to s 205(2) in the form of the MCT.

Conclusion

80    Hence, by force of law, if an enterprise agreement fails to contain a consultation term that complies in all respects with s 205(1) and (1A), s 205(2) deems the MCT to be a part of the agreement so that consultation must occur only in accordance with the statutorily prescribed mechanism. The purpose of prescribing the MCT was to provide “accessible and effective procedures to resolve grievances and disputes”, “effective compliance mechanisms”, and “clear rules governing industrial action” (see s 3 of the Act). Compliance with that mechanism cannot yield to, or be affected by, other terms of the enterprise agreement that fall short, and hence caused the MCT to become the consultation term.

81    For these reasons, the consent orders answering questions 1 and 2 that the Full Bench made on 5 March 2020 must be set aside because of its jurisdictional error in construing the Act. There should be declarations that:

(a)    the MCT was a term of the EA by force of s 205(2) of the Act at the time of its approval by the Commission on 19 October 2017; and

(b)    the terms of the MCT applied to the exclusion of any rights or obligations in EA cl 9 and award cl 8 in respect of Teekay’s decision on or about 7 February 2019 to make each of the ratings redundant.

Associate:

Dated:    27 November 2020

REASONS FOR JUDGMENT

WIGNEY J:

82    I have read the reasons for judgment to be published by Rares and Logan JJ. I agree with the orders proposed by their Honours. Subject to what follows, largely by way of elaboration or further explication, I also agree with their Honours’ reasons.

BACKGROUND

83    It is unnecessary for me to rehearse at length the background to this application or the relevant facts and circumstances that have given rise to it given the detailed discussion of those matters in the reasons of Rares and Logan JJ. It is, nevertheless, useful to summarise briefly the nature of the controversy between the parties and how it arose for consideration by this Court.

84    The issue raised by this application is whether the Full Bench of the Fair Work Commission erred in a jurisdictional sense in answering preliminary questions of law that it had been directed by the President of the Commission to answer pursuant to s 615 of the Fair Work Act 2009 (Cth). Those questions, in general terms, related to the operation of the model consultation term, which is a term that is, by operation of s 205(2) of the Act, taken to be a term of an enterprise agreement if that agreement does not include a consultation term that satisfies the requirements set out in ss 205(1) and (1A) of the Act. The terms of the model consultation term are set out in reg 2.09 and Sch 2.3 of the Fair Work Regulations 2009 (Cth).

85    When the matter was first referred to the Full Bench for consideration, it was accepted or considered that the model consultation term was taken to be included in the enterprise agreement to which the applicant, Teekay Shipping (Australia) Pty Ltd, the respondents, who may conveniently be referred to as the employees, and the Maritime Union of Australia, were parties (the Enterprise Agreement). That was in large part because, when the Enterprise Agreement was approved by a Deputy President of the Commission, the Deputy President noted, pursuant to s 201(1)(ii) of the Act, that to be the case.

86    The question that the Full Bench was initially directed to answer was, in simple terms, whether the model consultation term, as taken to be in the Enterprise Agreement, operated in substitution of, or in conjunction with, another clause in the Enterprise Agreement, cl 9, which provided for consultation, but which to that point had been considered not to satisfy the requirements of ss 205(1) and (1A) of the Act.

87    When the Full Bench first addressed that question, it found that, contrary to what to that point had been considered to be the case, the model consultation term was not taken to be a term of the Enterprise Agreement: Auld v Teekay Shipping (Australia) Pty Ltd [2019] FWCFB 6047 (Auld v Teekay No 1). That was said to be because cl 9 of the Enterprise Agreement, when read together with another clause that was taken to be incorporated in the Enterprise Agreement, satisfied all the requirements in ss 205(1) and (1A) of the Act and s 205(2) of the Act therefore had no application: Auld v Teekay No 1 at [75]-[97]. That other clause was cl 8 of the Seagoing Industry Award 2010. Clause 5.3 of the Enterprise Agreement provided, in effect, that the terms of the Award were incorporated in the Enterprise Agreement, save for those that were inconsistent with an express term of the Enterprise Agreement. Critically, the Full Bench found that cl 8 of the Award was not inconsistent with cl 9 of the Enterprise Agreement.

88    Despite finding that the model consultation term was not taken to be a term of the Enterprise Agreement, the Full Bench nevertheless proceeded to consider the question which had been posed for it in the event that its finding was incorrect. It found, in effect, that if the model consultation term was taken to be a term of the Enterprise Agreement, it operated in conjunction with cl 9 of that agreement, not in substitution for it: Auld v Teekay No 1 at [46]-[73]. The essential basis of that finding was that, on its proper construction, s 205(2) of the Act did not render inoperative any existing term in an enterprise agreement dealing with consultation. It also found, in that context, that cl 8 of the Award operated as an incorporated term of the Enterprise Agreement subject to any inconsistency with any express provision in that agreement. It followed, in effect, that the model consultation term also operated in conjunction with cl 8 of the Award as incorporated in the Enterprise Agreement.

89    Teekay’s initial attempt to challenge the Full Bench’s findings in this Court was unsuccessful. That was because it was found that while the Full Bench, in Auld v Teekay No 1, had published reasons for a decision, it had not made a formal decision or order in respect of the question it had been directed to answer by the President of the Commission: Teekay Shipping (Australia) Pty Ltd v Auld [2020] FCAFC 19. It was also noted that the Full Bench had addressed an additional or supplementary question, being the question whether the model consultation term was taken to be a term of the Enterprise Agreement, even though there had been no formal direction from the President to answer that question. The Court issued a constitutional writ of mandamus to the Commission requiring it to answer the question or questions it had been directed to answer.

90    The matter came back before the Full Bench. It issued a statement in which it appeared to maintain that it had already answered the “referral question”, apparently missing the point that there had been no formal decision answering the question. The Full Bench also expressed a provisional view in respect of the question which was consistent with the reasons in Auld v Teekay No 1 and invited the parties to respond. The product of that exercise was that consent orders were in due course made on 5 March 2020. Those orders included both directions to the Full Bench by the President of the Commission pursuant to s 615 of the Act to answer two questions and the answers to those two questions. Thus the formalities previously absent were satisfied.

91    The first question was as follows:

Is the effect of reading clauses [sic] 5.3 and clause 9 of the Teekay Shipping (Australia) Pty Limited Seagoing Ratings Dry Cargo Enterprise Agreement 2015 (Agreement), properly construed, and read together with clause 8 of the Seagoing Industry Award 2010 operating as an incorporated term of the Agreement, that the Agreement contains a consultation term that complies with s.205 of the FW Act so that s.205(2) is not engaged? (Question 1)

(Emphasis in original.)

92    The answer given to that question was:

Yes. For the reasons set out at [75]-[97] of the decision in Auld and Ors v Teekay Shipping (Australia) Pty Ltd [2019] FWCFB 6047, the model consultation term is not taken to be a term of the Agreement.

93    The second question was as follows:

Does the model consultation term, taken to be a term of the Teekay Shipping (Australia) Pty Limited Seagoing Ratings Dry Cargo Enterprise Agreement 2015, apply in substitution of, or in conjunction with, clause 9 of that agreement? (Question 2)

(Emphasis in original.)

94    The answer given to that question was:

If the answer to Question 1 were incorrect, then for the reasons set out at [46]-[73] of Auld and Ors v Teekay Shipping (Australia) Pty Ltd [2019] FWCFB 6047, and further to the answer given at [74] thereof, the model consultation term taken to be a term of the Agreement applies in conjunction with clause 9 of the Agreement. Clause 8 of the Seagoing Industry Award 2010 operates as an incorporated term of the Agreement and has effect subject to any inconsistency with an express provision of the Agreement.

95    The issue for resolution by this Court is whether the Full Bench erred jurisdictionally in answering either or both of the two questions it had been directed to answer. In arriving at these answers, did the Full Bench misconstrue or misapply the relevant provisions in the Act, or err in its consideration of the relevant provisions in the Enterprise Agreement, in such a way that it can be concluded that it failed to exercise, or lawfully exercise, its jurisdiction under s 615 of the Act?

THE FIRST QUESTION: DID THE ENTERPRISE AGREEMENT INCLUDE A COMPLIANT CONSULTATION TERM?

96    As has already been outlined, the first question, in simple terms, is whether the Enterprise Agreement included a consultation term that satisfied the requirements in ss 205(1) and (1A) of the Act. It if did, s 205(2) of the Act did not apply and the model consultation term was not to be taken to be a term of the Enterprise Agreement. If it did not, the converse was the case and the model consultation term was to be taken to be a term of the agreement by force or operation of s 205(2) of the Act.

97    To constitute a consultation term for the purposes of the Act, a term in an enterprise agreement must satisfy three requirements.

98    First, the term must require the employer to consult the employees about two things: a “major workplace change that is likely to have a significant effect on the employees”; and a “change to [the employees’] regular roster or ordinary hours of work”: ss 205(1)(a)(i) and (ii).

99    Second, the term must allow for the representation of the employees for the purpose of the consultation: s 205(1)(b).

100    Third, in respect of a change to the employees’ regular roster or ordinary hours of work, the term must require the employer to do three things: first, provide information to the employees about the change; second, invite the employees to give their views about the impact of the change; and third, consider any views given by the employees about the impact of the change: s 205(1A).

101    In considering whether the Enterprise Agreement contained a term which satisfied those three requirements, it is first necessary to consider whether cl 9 of the Enterprise Agreement alone satisfies those three requirements. It appeared to be common ground before the Full Bench that cl 9 did not satisfy the three requirements. It was not common ground in this proceeding and thus needs to be addressed. If cl 9 does not satisfy the three requirements, it is then necessary to consider whether the incorporation of cl 8 of the Award creates a situation where there is a term that satisfies the three requirements. The critical issue in that regard is whether there is any inconsistency between cl 8 of the Award and cl 9 of the Enterprise Agreement.

Does cl 9 alone satisfy the three requirements in ss 205(1) and (1A)?

102    As has already been noted, it appeared to be common ground between the parties, when they were before the Full Bench, that there were two “obvious deficiencies” with cl 9 of the Enterprise Agreement: Auld v Teekay No 1 at [76]. The first deficiency was said to be that cl 9 did not allow for the representation of the affected employees for the purposes of the consultation. It only provided that Teekay was to discuss the changes with the employees and the Union. There was therefore no allowance for representation of affected employees who were not members of the Union and who may have wanted to be represented by someone other than the Union.

103    The second deficiency was said to be that cl 9 did not make provision for consultation in respect of a change to the employees’ regular roster or ordinary hours of work.

104    On this application, the employees appeared to take issue, albeit fairly half-heartedly, with the Full Bench’s finding that cl 9 did not make allowance for the representation of the affected employees. It argued, in short, that a consultation term that specifies a union as the employees’ representative for the purposes of consultation may meet the requirements of s 205(1)(b) of the Act, at least where the relevant enterprise agreement contains other provisions which, when read as a whole, establish that the employees had agreed to a regime which gave the union a role in selecting or approving a consultation committee or consultation officers.

105    The employees placed considerable reliance on the decision, both at first instance and on appeal, in United Firefighters’ Union of Australia v Country Fire Authority (2015) 228 FCR 497 (Full Court); (2014) 218 FCR 210 (first instance). The employees appeared to contend that the relevant provisions in the enterprise agreement in question in United Firefighters’ – which were found, when read as a whole, to provide for employee representation for the purposes of consultation – were analogous or not materially distinguishable from the provisions in the Enterprise Agreement. The employees, however, did not provide any detailed analysis of the relevant provisions of the Enterprise Agreement which were said to make up for the apparent deficiency in cl 9. Nor did they advance any detailed submissions on this point. In those circumstances, this issue may be addressed in similarly brief and summary terms.

106    It may be accepted that in some cases the combined operation of numerous clauses in an enterprise agreement may satisfy the requirements of s 205 of the Act. That was the case in United Firefighters’. Each case, however, must be considered on its own facts. The extensive consultative regime in the enterprise agreement which was considered in United Firefighters’ was materially different to the provisions in the Enterprise Agreement, which provided for the establishment of a Consultative Committee (cl 13), the Union’s representation of the industrial interests of its members (cl 13) and a disputes settlement procedure (cl 16). It suffices to note one significant difference, being that the relevant clauses in the enterprise agreement in United Firefighters’ included a clause (cl 14) which linked consultation about significant changes to the clause (cl 13) which established and provided for the operation of the consultative committee. There is no similar provision in the Enterprise Agreement.

107    The requirements of s 205 of the Act are not met by any of cll 11, 12, 13 or 14 of the Enterprise Agreement, read alone or in combination. While cl 11 establishes a consultative committee, there is nothing in the Enterprise Agreement which provides that the consultation required by cl 9 of the Enterprise Agreement and cl 8 of the Award, to the extent that cl 8 is incorporated, can or must take place through the consultative committee. Indeed, the purpose of the consultative committee as specified in cl 11.2 is quite narrow and says nothing about major workplace change. And while cl 12 provides that the Union has the “right to represent the industrial interests of its members”, it does not follow that all employees, including those who were not members of the Union and those who may not have voted in favour of the Enterprise Agreement, had appointed the Union as their representative, including as their representative in any consultations for the purposes of cl 9. Clauses 13 and 14 also do not assist in any way. In short, the effect or operation of cll 11, 12, 13 and 14 of the Enterprise Agreement, considered alone or in combination, cannot make up for the fact that cl 9 provides only that Teekay discuss the proposed changes with the affected employees and the Union, and does not allow, expressly or impliedly, for the representation of non-Union employees in respect of any consultation.

108    An issue also arose at the hearing of this application in relation to whether it was correct for the Full Bench to conclude that cl 9 did not require Teekay to consult the employees about a change to their regular roster or ordinary hours of work. This issue was not raised before the Full Bench. It nevertheless needs to be considered because cl 9.1 specifies the relevant changes that, by reason of cl 9.2, must be discussed with the employees as including changes in “production, program, organisation, structure or technology that are likely to have significant effects” on employees. Clause 9.1 also provides that “significant effects” includes, amongst other things, “alteration of hours of work”. It is perhaps arguable, therefore, that the combined effect of cl 9.1 and cl 9.2 is that Teekay was required to discuss with the employees any changes to their roster because a roster is a “program” and was also required to discuss changes to their hours of work because alteration of the hours of work is taken to be a “significant effect”.

109    Upon close analysis, however, the combined operation of cll 9.1 and 9.2 could not be said to be to require consultation about any changes to the employees’ regular roster or hours of work. There are at least two difficulties.

110    First, while cl 9.1 provides that “significant effects” includes “alteration of hours of work”, it nevertheless does not follow that Teekay was required to consult the employees in respect of any changes to their hours of work. It was only required to consult in respect of changes to hours of work that resulted from changes in production, program, organisation, structure or technology.

111    Second, there is, in any event, no clear requirement in cll 9.1 and 9.2 for Teekay to consult the employees in respect of changes to their roster. Even if the word “program” was sufficiently broad to include “roster”, Teekay was only required to consult in respect of changes in program that were likely to have significant effects on employees. Not all changes in roster could be said to have a significant effect on employees.

112    Third, and perhaps more significantly, even if cll 9.1 and 9.2 could somehow be read as requiring Teekay to consult the employees in relation to changes to their regular roster or ordinary hours of work, there is no provision in cl 9 which requires Teekay to invite the employees to give their views about the impact of the change as required by s 205(1A)(b). While cl 9.2 requires Teekay to discuss the changes with the employees and the Union, and provides that Teekay, the Union and the employees must act in “good faith in relation to the consultation and the procedure” provided in the clause, that does not necessarily comprise or constitute a requirement on the part of Teekay to invite the employees to give their views about the impact of the changes.

113    In all the circumstances, the Full Bench was correct to conclude that cl 9 alone did not satisfy all three requirements for a consultation term in ss 205(1) and (1A) of the Act.

The incorporation of cl 8 of the Award and its consistency with cl 9 of the Enterprise Agreement

114    The Full Bench found that cl 9 of the Enterprise Agreement and cl 8 of the Award, read together, would comply with the requirements in s 205 of the Act: Auld v Teekay No 1 at [80]. It was noted, in that context, that cl 8 provided for consultation in relation to a change to the employees’ regular roster or ordinary hours of work.

115    The Full Bench also concluded that there was no direct inconsistency between cl 9 of the Enterprise Agreement and cl 8 of the Award and that it was possible to comply with both provisions: Auld v Teekay No 1 at [82]. The Full Bench noted, in that regard, that cl 8 of the Award did not take away any right conferred by cl 9 of the Enterprise Agreement and that cl 8 did not have the effect of altering, impairing or detracting from cl 9 of the Enterprise Agreement in a way that would create a burden that amounted to an inconsistency: Auld v Teekay No 1 at [83]. The Full Bench also reasoned that there was no basis to conclude that cl 9 evinced an intention to “cover the field” in respect of consultation, particularly because it had “nothing to say” about consultation in relation to changes to the employees’ ordinary hours of work: Auld v Teekay No 1 at [86] and [87].

116    Despite the Full Bench’s reasoning and finding that there was no inconsistency between cl 9 of the Enterprise Agreement and cl 8 of the Award, it would not be unfair to say that the Full Bench did not really conduct or engage in any, or any detailed, analysis or consideration of exactly how cl 9 of the Enterprise Agreement and cl 8 of the Award could operate together if cl 8 of the Award was incorporated into the Enterprise Agreement. Was it nevertheless correct in concluding that the two clauses could operate together and cover all of the requirements for a consultation term in ss 205(1) and (1A) of the Act?

117    There is, at a superficial level, some scope or capacity for cl 9 of the Enterprise Agreement and cl 8 of the Award to operate together. That is essentially because, for the most part, the consultation obligations in the two clauses come into play at different stages of the overall decision-making process.

118    The consultation obligations in cl 9 of the Enterprise Agreement come into play at an early stage when Teekay is “likely to introduce changes” which are “likely to have significant effects” on employees. It is at that stage that Teekay is required to discuss the changes with the Union and the employees, though at that stage the changes are only “likely” changes. Clause 8 of the Award, however, operates at a much later stage: when Teekay has made a “definite decision to introduce major changes”. It is, in those circumstances, at least conceivable that cl 9 of the Enterprise Agreement and cl 8 of the Award could operate together, even though the result would be that there would have to be consultation at two stages of the decision-making process: first at the “likely” stage and then, if it comes to it, at the stage where there has been a “definite decision”. That is no doubt a somewhat cumbersome and unwieldy scenario, but it is not such that it could be said that it amounts to an inconsistency in and of itself.

119    Upon close analysis, however, there is a fundamental problem with the two clauses operating together. That problem is created by the operation of cl 9.3 of the Enterprise Agreement. That clause provides that where Teekay has complied with the notification and consultation “prerequisites” in cll 9.1 and 9.2 and the company nevertheless makes a decision to implement change with which the Union disagrees, the Union “shall” refer the “matter” to the Commission for “conciliation and/or arbitration”. If, on the other hand, after the notification and discussion required by cll 9.1 and 9.2, the Union and the employees agree to the change, cl 9.4 provides that Teekay may then implement the change in accordance with that clause. There is, in those circumstances, no need or requirement for any further consultation.

120    The effect of the procedure mandated by cl 9.3 is that there is no scope for the operation of cl 8 of the Award in relation to consultation about definite decisions to introduce major changes with which the Union disagrees. Once such a decision is made, cl 9.3 effectively mandates that the Union refer the dispute concerning the decision to the Commission. There is nothing in cl 9.3 which would prevent the Union from referring the dispute to the Commission before engaging any further consultation, in accordance with cl 8 of the Award or otherwise, even if Teekay endeavoured to engage in that further consultation. The result, at the very least, is that employees who are not members of, or otherwise represented by, the Union are deprived of the benefits of any consultation which would otherwise be required by cl 8 of the Award.

121    The employees submitted that the operation of cl 9.3 of the Enterprise Agreement did not create any inconsistency with, or prevent the operation of, cl 8 of the Award. They submitted, in that regard, that even where Teekay makes a decision with which the Union agrees and that dispute is referred to the Commission pursuant to cl 9.3, there is still room for consultation pursuant to cl 8 after the decision is arbitrated. There is, however, no merit in that submission. The only matter that could be the subject of consultation after there has been an arbitration is the implementation of the decision reached at the arbitration. That does not constitute consultation about the decision. It is consultation about implementation. The fallacy in the employees’ submission is also exposed by the terms of cl 9.4, which provides that “[w]here the change is determined by means of arbitration, the arbitrated Decision shall take effect no earlier than twenty one days from the date of the Decision…”. There is no provision or scope for any consultation about the arbitrated decision itself. The only possible consultation would be about how the decision was to be implemented. Section 205 of the Act requires that there be a term that deals with consultation about the major workplace change itself, or a change to the employees’ regular roster or ordinary hours of work, not just consultation about the implementation of that change.

122    It follows that there is a clear inconsistency between cl 9 of the Enterprise Agreement and cl 8 of the Award. They cannot operate together. By reason of cl 5.3(b) of the Enterprise Agreement, cl 9 is taken to prevail to the extent of the inconsistency. It follows that there is no scope for cl 8 to apply. That is a problem because it is only the consultation provided by cl 8 which complies with the requirements set out in ss 205(1) and (1A) of the Act. That is because only cl 8 provides for the representation of non-Union employees at the consultation. The end result is that, because cl 9 of the Enterprise Agreement prevails to the exclusion of cl 8 of the Award, there is no consultation term in the Enterprise Agreement within the meaning of s 205 of the Act.

123    It should also be added, for completeness, that there is another potential inconsistency between cl 9 of the Enterprise Agreement and cl 8 of the Award. As discussed earlier, cl 9 of the Enterprise Agreement does not directly provide for consultation in relation to the employees’ regular roster or ordinary hours of work. It does, however, provide for consultation in relation to changes in, amongst other things, “program” that are likely to have significant effects. Significant effects are also defined as including “alteration of hours of work”. For the reasons given earlier, cl 9 cannot, in any event, be construed as containing the minimum requirements in s 205(1A) of the Act. Nevertheless, if cl 9 of the Enterprise Agreement applied to some decisions concerning significant changes to rosters or hours of work, it would follow that it is potentially inconsistent with cl 8.2 of the Award. Both clauses would potentially apply to such decisions, yet they contain different provisions concerning the precise nature of the consultation required. That said, the main inconsistency and the main problem with the two clauses working together is the inconsistency and problem created by cl 9.3 of the Enterprise Agreement.

124    It follows that the Full Bench’s answer to the first question it was directed to answer (quoted above at [91]-[92]) was wrong. It appeared to be common ground in this proceeding that if the Full Bench’s answer to this question was wrong, that error amounted to a jurisdictional error. The employees did not appear to contend otherwise. It is, in any event, tolerably clear that the error amounted to a jurisdictional error. The “function or power” which the Full Bench had been directed to perform involved the answering of preliminary or threshold questions of law in the context of the Commission’s exercise of jurisdiction under the Act in respect of unfair dismissal. The Commission’s failure to consider properly whether cl 9 of the Enterprise Agreement and cl 8 of the Award could operate together so as to result in a consultation term that complied with s 205 of the Act was an error which went to the very heart of the exercise of its jurisdiction.

THE SECOND QUESTION: DOES THE MODEL CONSULTATION TERM APPLY IN SUBSTITUTION OF OR IN CONJUNCTION WITH CL 9 OF THE ENTERPRISE AGREEMENT?

125    The second question was based on the premise that the model consultation term is taken to be a term of the Enterprise Agreement because the Enterprise Agreement does not otherwise include a consultation term within the meaning of ss 205(1) and (1A) of the Act. As the preceding discussion reveals, that premise is correct and the Full Bench erred in concluding otherwise. The question, in those circumstances, is whether the inclusion or incorporation of the model consultation term had the effect of supplanting or displacing cl 9 of the Enterprise Agreement, or whether both the model consultation term and cl 9 could both operate in accordance with their terms.

126    As has already been noted, the Full Bench concluded that the model consultation term operates “in conjunction with” cl 9 of the Enterprise Agreement and, subject to any inconsistency with cl 9 of the Enterprise Agreement, cl 8 of the Award. The Full Bench found, in that regard, that the proper construction of s 205 of the Act is that, when an enterprise agreement contains a consultation term that does not comply with the requirements of ss 205(1) and (1A) of the Act, the model consultation term is, by operation of s 205(2) of the Act, taken to be a term of the agreement so as to rectify the “deficiency” or “fill the gap”, while otherwise “preserv[ing]” the “whole of the subject matter of” the otherwise deficient clause: Auld v Teekay No 1 at [69]-[72].

127    The Full Bench identified three features of the statutory scheme which it considered supported that construction of s 205 of the Act. First, it found that the scheme of the Act “discloses a purpose of preserving as much of the agreement as made while also protecting against encroaching upon” existing rights and protections: Auld v Teekay No 1 at [67]. Second, it noted that there is no provision in the Act which “renders any existing term of the agreement dealing with an individual flexibility arrangement or consultation of no effect”: Auld v Teekay No 1 at [68]. Third, it observed that the Act does expressly provide that certain other types of clauses in an enterprise agreement are to have no effect: Auld v Teekay No 1 at [68]. It referred, in that regard, in particular to s 56 of the Act: Auld v Teekay No 1 at [69], [71].

128    The Full Bench was right to approach the second question by construing s 205 of the Act. Its construction of s 205 was not, however, correct.

129    The modern approach to statutory construction is well-settled and well-known. It does not need to be discussed at length in this judgment. In short, “[t]he starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose” and that “[c]onsiderations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with its statutory purpose, that meaning must be rejected”: SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at [14], citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 335 at [69]-[71].

130    There are textual indications in s 205 of the Act which suggest that, where the model consultation term is taken to be a term of an enterprise agreement by operation of s 205(2) of the Act, it is to be the term in the agreement dealing with that subject-matter. Those textual indications are that the section uses language which indicates that there is to be only one term which deals with consultation. First, s 205(1) provides that an enterprise agreement must contain “a” term that satisfies the requirements set out in paragraphs (a) and (b). Second, s 205(1A) provides that “the” term must require the employer to do the things referred to in paragraphs (a), (b) and (c). Third, s 205(2) also provides for what is to occur if the enterprise agreement does not contain “a” consultation term. Of course, the requirement that there be “a” term that meets the requirements of ss 205(1) and (1A) of the Act does not mean that “the” term cannot be constituted or comprised of a number of separate provisions in an enterprise agreement that, read together and as a whole, satisfy those requirements.

131    The other textual feature of s 205 of the Act which is important to note in this context is that s 205(1) effectively defines the expression “consultation term” as meaning a term which satisfies the requirements of s 205(1) and, in the case of changes to the employees’ regular roster or ordinary hours of work, the requirements in s 205(1A). It follows that a term which does not meet those requirements, such as cl 9 of the Enterprise Agreement, is not a “consultation term” for the purposes of the Act.

132    These textual features suggest that where the model consultation term is taken to be a term of an enterprise agreement, it is taken to be the consultation term and to supplant or displace any existing term that purports to deal with that subject-matter. The existing term, which must be deficient or defective if s 205(2) operates to make the model consultation term a term of the enterprise agreement, is not a “consultation term” as defined in s 205.

133    Some contextual considerations also support the above construction of s 205 of the Act.

134    The issue concerning the construction of s 205 that arises in this proceeding obviously does not arise where the relevant enterprise agreement does not contain any term that deals with consultation with employees. It only arises in cases, like this case, where the enterprise agreement contains a term that provides for consultation, but not in a way that meets the minimum requirements in ss 205(1) and (1A) of the Act; in other words, a deficient or defective consultation term. The incorporation of the model consultation term is plainly intended to overcome the deficiency or defect in the existing term of the enterprise agreement that purports to provide for consultation. It is difficult to conceive why the legislature would intend, in those circumstances, for the deficient or defective term to continue to operate in parallel with the model consultation term.

135    It is useful, in this context, to return to the wording of s 205(2), which provides that “[i]f an enterprise agreement does not include a consultation term … the model consultation term is taken to be a term of the agreement”. As adverted to, a “consultation term” is a term that satisfies the requirements detailed in ss 205(1) and (1A). Read together, if an enterprise agreement does not contain a term (or, as mentioned, even multiple terms) that constitutes a consultation term for the purposes of s 205, the model consultation term is, in effect, automatically included in the agreement. That model consultation term must therefore do the work, or satisfy the requirements of, ss 205(1) and (1A) – otherwise, there would be no reason for inserting that model term. As such, it would be an odd – or, perhaps, illogical – result if that inserted model consultation term was to now ensure compliance with ss 205(1) and (1A) alongside some otherwise deficient or defective term or terms.

136    A construction of s 205 of the Act which effectively allows for the continued operation of a deficient or defective term which provides for consultation, despite the incorporation of the model consultation term, would give rise to considerable uncertainty. It would also potentially permit a situation to arise whereby there is a conflict between the operation of the existing term and the incorporated model consultation term. As will be discussed shortly, this is a case where such an inconsistency would arise.

137    The important point to note, in this context, is that there is no provision in the Act, including s 205, which expressly provides for what would occur in the event of such a conflict between the existing, but deficient or defective, consultation term, and the incorporated model consultation term. There is, for example, no provision in the Act that provides that in such a case the model consultation term prevails to the extent of any inconsistency. If it was intended that any existing, though deficient or defective, term providing for consultation would continue to operate, despite the incorporation of the model consultation term, it might reasonably be expected that the Act would include such a provision, either in s 205 or elsewhere.

138    It is hardly an answer to this to say, as did the Full Bench, that any “conflict between the two provisions [the existing deficient or defective term and the incorporated model consultation term] may be resolved through the usual means of interpreting agreements”: Auld v Teekay No 1 at [74]. Given the evident legislative intent in the Act to provide for certainty in relation to the content of enterprise agreements, the better view is that s 205 should be construed in such a way as to avoid the potential for conflict in the first place.

139    It should also be noted, in this context, that the Full Bench made no attempt to analyse and determine whether the model consultation term, taken to be a term of the Enterprise Agreement, could in fact apply “in conjunction with” cl 9 of the Enterprise Agreement and cl 8 of the Award, to the extent that cl 8 operated. If the Full Bench had conducted that analysis, it would have ascertained that the two provisions in fact could not operate together.

140    The difficulty is again created by cl 9.3 of the Enterprise Agreement. As discussed earlier, that clause provides that if Teekay has complied with the notification and consultation “prerequisites” in cl 9.1 and cl 9.2, which apply when Teekay is “likely to introduce changes”, and Teekay makes a decision to implement the change with which the Union disagrees, the Union “shall” refer the matter to the Commission for conciliation and/or arbitration. That procedure conflicts with the model consultation term, which applies where there has been a “definite decision” to introduce a major change. Once that point has been reached, there is no scope for any consultation in accordance with the model consultation term because if the Union disagrees with the decision, the dispute must be referred to the Commission. What, it may be asked rhetorically, would be the point in engaging in the consultation for which the model consultation term provides if, by the time there has been a definite decision, the “matter” has been referred to the Commission by operation of cl 9.3?

141    The Full Bench did not grapple with how the model consultation term could possibly operate in conjunction with cl 9 of the Enterprise Agreement. Nor did it grapple with the resolution of the conflict between those provisions. The better view is that s 205 of the Act should be construed in a way that there is no scope for any confusion or conflict between the existing, but deficient or defective, consultation term, and the model consultation term.

142    It should finally be noted that the contextual considerations which were relied on heavily by the Full Bench in construing s 205 of the Act are, upon close analysis, by no means compelling. It is true that neither s 205 nor any other provision in the Act expressly provides that any existing term of an enterprise agreement which deals with consultation has no effect once the model consultation term is taken to be part of the agreement. Nor, however, is there any provision in the Act which expressly provides that a deficient or defective term which deals with consultation continues to operate once the model consultation term is taken to be a term of the enterprise agreement.

143    It is equally true that the Act contains provisions, including ss 56 and 253, which provide that certain unlawful or impermissible terms in an enterprise agreement have no effect. It is not at all surprising that the Act specifically provides that certain sections that it defines as being unlawful or impermissible have no effect. Section 205 of the Act deals with an entirely different issue. It is not a section dealing with unlawful or impermissible terms. Quite to the contrary. It is a provision that an agreement must contain a term that deals with a particular issue (consultation), specifies the minimum requirements for that term and provides that if the agreement does not include a term that meets those requirements, the model consultation term is taken to be a term of the agreement. The fact that there is no similar provision to s 56 or s 253 in those circumstances is of little significance.

144    It may be accepted that the issue raised by this case in respect of the construction of s 205 of the Act is not entirely easy to resolve. The text of the provision does not squarely address the issue and there are contextual consideration that perhaps point both ways. The preferable construction, however, is the construction which avoids the uncertainty which would arise from the operation of parallel and potentially conflicting terms dealing with consultation.

145    It follows that the Full Bench erred in law in concluding (as quoted above at [93]-[94]) that s 205 of the Act operated in such a way as to permit the model consultation term, taken to be a term of the Enterprise Agreement, to operate in conjunction with cl 9 of the Enterprise Agreement and cl 8 of the Award, insofar as cl 8 operated. The Full Bench should have concluded that, once the model consultation term is taken to be part of the Enterprise Agreement, it effectively supplanted or displaced the otherwise deficient or defective clause or clauses that purported to provide for consultation. That error by the Full Bench was jurisdictional in nature. It involved an error in construing and applying s 205 in a way which materially affected the Full Bench’s exercise of its jurisdiction.

CONCLUSION AND DISPOSITION

146    The Full Bench erred in the exercise of its jurisdiction in determining the questions referred to it by the President of the Commission. I agree with the orders proposed by Rares and Logan JJ.

147    In accordance with s 570 of the Act, there should be no order as to costs in respect of the proceeding in this Court.

Associate:

Dated:    27 November 2020

Appendix 1

Model consultation term

(1)     This term applies if the employer:

(a)     has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees; or

(b)     proposes to introduce a change to the regular roster or ordinary hours of work of employees.

Major change

(2)     For a major change referred to in paragraph (1)(a):

(a)     the employer must notify the relevant employees of the decision to introduce the major change; and

(b)     subclauses (3) to (9) apply.

(3)     The relevant employees may appoint a representative for the purposes of the procedures in this term.

(4)     If:

(a)     a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b)     the employee or employees advise the employer of the identity of the representative; the employer must recognise the representative.

(5)     As soon as practicable after making its decision, the employer must:

(a)     discuss with the relevant employees:

(i)     the introduction of the change; and

(ii)     the effect the change is likely to have on the employees; and

(iii)     measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and

(b)     for the purposes of the discussion—provide, in writing, to the relevant employees:

(i)     all relevant information about the change including the nature of the change proposed; and

(ii)     information about the expected effects of the change on the employees; and

(iii)     any other matters likely to affect the employees.

(6)     However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

(7)     The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.

(8)     If a term in this agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in paragraph (2)(a) and subclauses (3) and (5) are taken not to apply.

(9)     In this term, a major change is likely to have a significant effect on employees if it results in:

(a)     the termination of the employment of employees; or

(b)     major change to the composition, operation or size of the employer’s workforce or to the skills required of employees; or

(c)     the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or

(d)     the alteration of hours of work; or

(e)     the need to retrain employees; or

(f)     the need to relocate employees to another workplace; or

(g)     the restructuring of jobs.

Change to regular roster or ordinary hours of work

(10)     For a change referred to in paragraph (1)(b):

(a)     the employer must notify the relevant employees of the proposed change; and

(b)     subclauses (11) to (15) apply.

(11)     The relevant employees may appoint a representative for the purposes of the procedures in this term.

(12)     If:

(a)     a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b)     the employee or employees advise the employer of the identity of the representative;

the employer must recognise the representative.

(13)     As soon as practicable after proposing to introduce the change, the employer must:

(a)     discuss with the relevant employees the introduction of the change; and

(b)     for the purposes of the discussion—provide to the relevant employees:

(i)     all relevant information about the change, including the nature of the change; and

(ii)     information about what the employer reasonably believes will be the effects of the change on the employees; and

(iii)     information about any other matters that the employer reasonably believes are likely to affect the employees; and

(c)     invite the relevant employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities).

(14)     However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

(15)     The employer must give prompt and genuine consideration to matters raised about the change by the relevant employees.

(16)     In this term:

relevant employees means the employees who may be affected by a change referred to in subclause (1).

Appendix 2

9.    NOTIFICATION AND CONSULTATION ABOUT CHANGE

9.1     Company Duty to Notify

Where the Company is likely to introduce changes in production, program, organisation, structure or technology that are likely to have significant effects on Employees, the Company undertakes to notify the Employees who may be affected by the proposed changes and the National Secretary and relevant Branch Secretary of the Union.

Without limiting the generality thereof, significant effects Includes termination of employment, changes in the composition, operation or size of the workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alteration of hours of work, the need for retraining or relocation or transfer of Employees to other work or locations, the restructuring of jobs

9.2    Company Duty to Discuss Change

The Company undertakes to discuss with the Employees affected and the Union in good faith, inter alia, the introduction of the changes referred to in Clause 9.1 and 9.2, the effects the changes are likely to have on Employees, measures to avert or mitigate any adverse effects of such changes on Employees and give prompt consideration to matters raised by the Employees and/or the Union in relation to the changes.

The discussion shall commence as early as practicable after the Company has determined it is likely to make the changes referred to in Clause 9.1 and 9.2. Prior to such discussion occurring, the Company undertakes to provide in writing to the Employees concerned and the Union, all relevant information, provided that the Company is not required to disclose confidential information, the disclosure of which would be contrary to the companies interest, about the changes including the nature of the proposed changes, the expected effects of the changes on Employees and any other matters likely to affect Employees.

The Company, Union and employees must act in good faith in relation to the consultation and the procedure provided within this Clause.

9.3    Dispute about Proposed Change

Where the Company has compiled fully (sic) with the notification and consultation prerequisites provided herein and the Company makes a decision to implement change in the workplace and the Union disagrees with that decision, the Union shall refer the matter in dispute to Fair Work Australia for conciliation and/or arbitration In conformity with the dispute resolution procedure contained herein.

Whilst the matter is being dealt with by Fair Work Australia, the work will continue under the conditions and arrangements that existed prior to the notification of change.

9.4    Implementation of Agreed Change

Where the above notification and discussion has taken place and the Company has given careful genuine consideration of the views of Employees and when the Union and the employees have agreed to the change, the Company may implement the change and that change shall take place no earlier than fourteen days after the agreement is reached. Where the change is determined by means of arbitration, the arbitrated Decision shall take affect no earlier than twenty one days from the date of that Decision or no earlier than fourteen days from any Appeal Decision, whichever occurs last.

Appendix 3

8. Consultation

[8    Consultation regarding major workplace change renamed and substituted by PR546288 ppc 01Jan14]

8.1     Consultation regarding major workplace change

(a)     Employer to notify

(i)     Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(ii)     Significant effects include termination of employment; major changes in the composition, operation or size of the employer's workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locutions; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

(b)     Employer to discuss change

(i)     The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(ii)     The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1(a).

(iii)     For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of die changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer's interests.

8.2 Consultation about changes to rosters or hours of work

(a)     Where an employer proposes to change an employee's regular roster or ordinary hours of work, the employer must consult with the employee or employees affected and their representatives, if any, about the proposed change.

(b)    The employer must:

(i)     provide to the employee or employees affected and their representatives, if any, information about the proposed change (for example, information about the nature of the change to (he employee's regular roster or ordinary hours of work and when that change is proposed to commence);

(ii)     invite the employee or employees affected and their representatives, if any, to give their views about the impact of the proposed change (including any impact in relation to their family or earing responsibilities); and

(iii)     give consideration to any views about the impact of the proposed change that are given by the employee or employees concerned and/or their representatives.

(c)     The requirement to consult under this clause does not apply where an employee has irregular, sporadic or unpredictable working hours,

(d)     These provisions arc to be read in conjunction with other award provisions concerning the .scheduling of work and notice requirements.

SCHEDULE OF PARTIES