FEDERAL COURT OF AUSTRALIA

MI&E Holdings Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Plumbing, Postal and Allied Services Union of Australia [2013] FCA 944

THE COURT ORDERS THAT:

1.    The application be dismissed.

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

REASONS FOR JUDGMENT

1    The applicant has applied for judicial review of a decision of a Full Bench of the Fair Work Commission (FWC) which, on appeal by the first, second and third respondents (the Unions), overturned a decision of McCarthy DP approving an enterprise agreement: the MI&E Holdings Pty Ltd Western Division Enterprise Agreement 2012 (the Agreement).

2    Pending review, the applicant presently seeks a stay of the orders of the Full Bench.

3    The stay application is supported by the affidavit of Dean Brajevic sworn 17 June 2013.

Facts and proceedings below

4    The applicant is engaged in construction projects, and employs workers in that field.

5    On 18 April 2012, the applicant lodged an application for approval of the Agreement. The Agreement is a single enterprise agreement.

6    On 6 November 2012, McCarthy DP approved the Agreement: MI&E Holdings Pty Ltd re MI&E Holdings Pty Ltd Western Division Enterprise Agreement 2012 [2012] FWA 9503.

7    Before McCarthy DP and on appeal, the Unions asserted that cl 2 “Coverage and Application of this Agreement” did not meet the requirements of s 186 of the Fair Work Act 2009 (Cth) (the FW Act). Clause 2 provides:

2.    Coverage and Application of this Agreement

(a)    Subject to clause 2(b), this Agreement shall apply to;

•    MI&E Holdings Pty Ltd (MIE) (“the Company”); and

•    Employees of the Company employed in and performing work as set out in the classifications specified in Schedule 1 - Classifications, of this Agreement in Western Australia.

(b)    The Company undertakes separate project or site specific work that is regulated by its own site specific terms and conditions. This Agreement does not cover or apply to any employees working at those project sites where any of the following agreements are in operation (whether before their nominal expiry dates or not);

a)    A greenfields agreement made in accordance with section 172(4) of the Act or predecessor legislation; or

b)    Any other enterprise agreement made with employees in replacement or, or as a successor to, a greenfields agreement in (a).

8    Four employees were involved in the making of the Agreement. Those four employees were employed for the purposes of the new direction of the business that the Agreement was designed to support at the time that it was made.

9    At the time, over 200 other employees were covered by greenfield agreements with the applicant at the Shenton Park Solid Waste Treatment Plant Project (the Shenton Park Project) and the Worsley Efficiency & Growth Project (the Worsley Project). Work at those two projects was then expected to be completed shortly.

10    After the original approval of the Agreement, the applicant secured additional work at two major construction sites, namely the Wheatstone Project and the Macedon Project. In consequence, approximately 200 other employees were engaged by the applicant pursuant to the terms of the Agreement.

11    The issue on appeal to the Full Bench was whether the group of employees expressly covered by the Agreement was “fairly chosen” for the purposes of ss 186(3) and 186(3A) of the FW Act.

The legislation

12    Section 186(3) of the FW Act provides that, before approving an enterprise agreement “[t]he FWC must be satisfied that the group of employees covered by the agreement was fairly chosen”.

13    Because the Agreement did not cover all of the applicant’s employees, s 186(3A) applied. It provides that, in deciding whether the group of employees covered by the Agreement was fairly chosen, the FWC must “take into account whether the group is geographically, operationally or organisationally distinct”.

14    The applicant says that ss 186(3) and 186(3A) of the FW Act are directed at preventing unfair discrimination between employees. However, there can, in effect, be fair discrimination which is the reason s 186(3A) requires consideration of any geographical, operational or organisational distinction between the employees covered and those not covered.

Test for stay

15    A strong case for review must be shown before a stay will be granted. In EnergyAustralia Yallourn Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FCA 360 at [31], Murphy J observed:

[31]     In some circumstances a stay of an order of the Commission, or the granting of an interlocutory injunction against a party to an order of the Commission, may be appropriate to preserve the subject matter of a proceeding pending its hearing. The Court has an inherent or implied jurisdiction to enable it to discharge its duties as a Court by preserving the subject matter so as to preserve its processes and prevent a proceeding being rendered nugatory. Often it is exercised by the grant of a stay pending the hearing of an appeal (Tait v The Queen (1962) 108 CLR 620 at 623-4), or alternatively by grant of an injunction to preserve the subject matter of a proceeding until the proceeding is heard (Re Minister for Immigration and Multicultural Affairs; Ex parte Fejzullahu & Others (2000) 171 ALR 341 at [7] per Gleeson CJ): Minister for Immigration and Citizenship v SZQRB [2013] FCAFC 33 at [280] to [292] per Lander and Gordon JJ.

        (Original emphasis.)

16    The applicant submits that it must show some particular detriment if the decision were to be allowed to stand while the judicial review application is pending, such that “special circumstances” exist which warrant the grant of a stay. The applicant referred to the judgment of Owen J in Stampalia v The Stewards of The Western Australian Trotting Association [1999] WASC 7 at [11]:

[11]     Adapting the concepts emerging from those cases I would shy away from phrases such as "exceptional circumstances". I think the test can be formulated in this way: has the applicant demonstrated that there are special circumstances sufficient to satisfy the court that it is just and reasonable to order a stay so as to preserve the subject-matter and integrity of the litigation? This formulation is sufficiently broad to encompass factors that would normally be taken into account in considering the balance of convenience.

17    The Unions submit that the applicant is required to demonstrate “exceptional circumstances” to warrant the grant of a stay, citing the remarks of Murphy J in EnergyAustralia at [34]:

[34]    … applicant must show some particular detriment if the order were to be allowed to stand while the judicial review application is pending – such that exceptional circumstances exist which warrant the grant of a stay.

        (Emphasis added.)

18    They further submit that this is undoubtedly so in an industrial context, where, as Brennan J observed in Re Griffin; Ex parte Professional Radio and Electronics Institute of Australia (1988) 167 CLR 37 at 42:

[a] stay of a Commissioner’s decision is exceptional. … [e]xceptional circumstances need to be shown to warrant the making of an order by this Court, before it determines the legality of an impugned decision, which affects the merits of a problem in industrial relations.

19    The Unions further point to the remarks of Mason J in Re Marks and Federated Ironworkers’ Association, Ex parte Australian Building Construction Employees and Builders’ Labourers’ Federation (1981) 34 ALR 208 at 211 as reiterating the high bar to be set before a stay will be granted:

[T]he stay of an order of the kind in question in the exercise of the inherent jurisdiction pending an application for prohibition is at best an exceptional undertaking.

20    I find it unnecessary to resolve the question of which is the appropriate test. This application, whatever the test, fails, for reasons I will explain, because relevant detriment has not been established, although I am persuaded that the applicant has a reasonably strong case in relation to at least one of its grounds of review.

21    The applicant has several grounds of review. It is enough to consider that which concerns the mandatory provisions of s 186(3A) FW Act, which the applicant contends the Full Bench completely disregarded. Whilst the Full Bench referred to this provision, it is difficult to discern where in its reasons it considered the criteria mandated by it. The provision is identified at [25] of the reasons but the reasoning at [24] contains no apparent consideration of the criteria in the provision. This ground alone constitutes a reasonably strong ground for certiorari to quash the decision: Construction, Forestry, Mining and Energy Union v Hamberger (2011) 195 FCR 74 at [55].

22    Under s 417 of the FW Act, it is not lawful to engage in industrial action before the nominal expiry date of the applicable enterprise agreement. Since the original application for approval, many employees have been engaged under the Agreement, because, in the event, no new greenfields agreement was made.

23    The applicant submits that the particular detriment and exceptional circumstances are that, despite the valid Agreement, the Unions have written to, met with and agitated for the applicant to accede to a new agreement that would cover employees who fall within the coverage of the Agreement. It contends that there is a real prospect of industrial action contrary to the FW Act and contrary to the statutorily endorsed purpose of entering an enterprise bargain.

24    It further submits that unless the Full Bench’s orders are stayed pending determination of the matter, the industrial circumstances created by these orders will defeat the proceedings that the applicant seeks to bring.

25    The applicant cites Stampalia, in which Owen J said at [9] that “preserving the subject matter of the litigation” was to be broadly interpreted. This view was endorsed by the Court of Appeal in John Zucal, RWWA Chairman of Stewards v Harper [2005] WASCA 76 at [58]. In this case, the applicant submits that the “subject matter” to be preserved is the industrial harmony that attends the Agreement until its nominal expiry: s 417 of the FW Act. The evidence of Mr Brajevic is to the effect that the taking of industrial action may result in the applicant either losing its projects at Wheatstone and Macedon or have to accede to the Unions’ enterprise bargaining claims – defeating the purpose of this proceeding.

26    I do not accept that there is any relevant detriment.

27    In Re Moore; Ex parte Pillar (1991) 103 ALR 11 at 14, Dawson J observed that the power to grant a stay is to be found only where it is necessary to preserve the subject matter of the litigation or where the refusal would make it difficult to grant the final relief sought. In my view, neither of these considerations apply in the present case.

28    In the event that the applicant was ultimately granted the writs sought then the decision at first instance of McCarthy DP would be enlivened and, pursuant to s 58 the FW Act, would apply to the workers on the relevant projects. Accordingly, the proceedings brought by the applicant are not defeated.

29    There is not, presently, any real prospect of industrial action. Protected industrial action can only occur subject to legislative provisions and following a vote of the workers conducted by the Australian Electoral Commission. The evidence does not establish that this is imminent. The Unions have made no application for a protected action ballot and have not contacted the applicant about this matter since mid-May of this year.

30    The alleged losses are identified only as “potential losses” and presume both the occurrence of protected industrial action and a capitulation by the applicant to all of the union demands.

Conclusion

31    I would for these reasons refuse the application for a stay.

Associate:

Dated:    18 September 2013