FEDERAL COURT OF AUSTRALIA

Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees’ Union [2015] FCA 109

THE COURT ORDERS THAT:

1.    The operation of the order made by the Full Bench of the Fair Work Commission on 18 September 2014 (PR555611) is stayed by suspending Order 2 until the final hearing and determination in this Court of the present application.

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

REASONS FOR JUDGMENT

Background

1    This judgment deals with an application for interlocutory relief, in the form of a stay, in proceedings commenced by the applicant under s 39B of the Judiciary Act 1903 (Cth) challenging two decisions and two orders made by a Full Bench of the Fair Work Commission (“FWC”).

2    The two decisions and two orders had the overall consequence that an earlier approval of an enterprise agreement under s 186 of the Fair Work Act 2009 (Cth) (“the FW Act”) was “quashed”, and the application for that approval by the present applicant to the FWC was dismissed.

3    The enterprise agreement was entitled the Teys Australia Beenleigh Pty Ltd Production Departments Enterprise Agreement 2013. It was originally approved by Deputy President Asbury with effect on and from 4 October 2013, with a nominal life of four years, but that initial approval was quashed by an order made on 25 March 2014 for reasons given in an earlier Full Bench decision on 4 March 2014.

4    An application to this Court to set aside that Full Bench decision, and the consequent order, for jurisdictional error was dismissed on 12 February 2015 (Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union [2015] FCAFC 11).

5    Meanwhile, on 10 April 2014 Deputy President Asbury again approved the enterprise agreement, with effect from 17 April 2014 with a nominal expiry date of 10 April 2018. A further appeal was filed by the applicant.

6    A Full Bench of the FWC on 18 September 2014, (by majority) gave permission to appeal, upheld the appeal, and issued an order which quashed the further decision to approve the enterprise agreement. In another decision and order issued on 19 December 2014, the same Full Bench finally dismissed the application to approve the enterprise agreement (The Australasian Meat Industry Employees Union v Teys Australia Beenleigh Pty Ltd [2014] FWCFB 8589).

7    The present proceedings were commenced by originating application filed on 24 December 2014. They seek orders quashing each of the decisions and orders made by the Full Bench on both 18 September 2014 and 19 December 2014, and an order prohibiting the FWC from proceeding further in reliance on any of them. It appears to be assumed that no question of completing the appeal process which resulted in the decisions and orders of the Full Bench would arise if the decisions and orders were quashed.

Application for a stay

8    The originating application (as initially filed) also sought an interlocutory order for a stay of the order made by the Full Bench on 19 December 2014 which finally dismissed the application to approve the enterprise agreement.

9    By contrast, an affidavit sworn by John Alexander Salter, filed on 18 February 2015 in support of the stay application, suggested that the applicant desired a stay of the order made by the Full Bench on 18 September 2014 to quash Deputy President Asbury’s renewed approval of the enterprise agreement on 10 April 2014. At the hearing of the interlocutory application, the applicant sought leave (which was not opposed) to amend the originating application to seek interlocutory relief by way of stay of both the order made by the Full Bench on 18 September 2014 and the order made on 19 December 2014. Leave was granted.

10    The applicant accepted that a strong case based on exceptional circumstances would normally be required to justify the exercise of a discretion to grant a stay (Re Australian Nursing Federation; Ex parte State of Victoria [1993] HCA 8; (1993) 112 ALR 177 per McHugh J; EnergyAustralia Yallourn Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FCA 360 (at [34]); MI&E Holdings Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Plumbing, Postal and Allied Services Union of Australia [2013] FCA 944 (at [15]); see also Re Marks & Federated Ironworkers’ Association; Ex parte Australian Building Construction Employees’ & Builders Labourers’ Federation (1981) 34 ALR 208 at 211.

11    In assessing whether there is a strong case for a stay, and whether sufficiently special or exceptional circumstances exist it will be necessary, obviously, to come to a view about whether the applicant has a sufficiently arguable case for relief at a final hearing. It will also be necessary to consider whether the present circumstances justify a stay.

12    However, it is not desirable to canvass, in anything more than outline, the nature of the issues which will arise for determination on the final hearing of the present application for relief. That application will be heard in the Full Court and Appellate Sitting period which commences on 4 May 2015 and, at the hearing of the application for a stay, I made directions to prepare the matter for hearing at that time.

Is there a sufficiently arguable case for final relief

13    The background circumstances revealing the underlying legal contest about approval of the enterprise agreement were discussed in the Full Court decision of 12 February 2015, referred to earlier. The principal contest concerned the eligibility of a group of 21 employees of the applicant to vote whether to accept the terms of the enterprise agreement. In her more recent decision, Deputy President Asbury again took the view, for reasons which were explained in detail, that all those employees who might have voted to approve the enterprise agreement were entitled to do so. She held that they had not ceased to be production workers who “will be covered” by the terms of the enterprise agreement.

14    The latest Full Bench, on the other hand, by majority held that cl 1.3 of the enterprise agreement required that those to be covered by the enterprise agreement were those whose particular work was covered by the classifications contained in the enterprise agreement, a condition which Deputy President Asbury did not regard as necessary or determinative.

15    One issue then, upon which the decision of the Full Bench turned, was an issue about the construction of the enterprise agreement, and its coverage. Those questions of coverage also raise questions about the operation and application of s 53 of the FW Act, as informed by s 256A of the FW Act.

16    Those issues may readily be seen as legal issues, at least in part. The applicant will argue that the Full Bench made errors of law. That will not necessarily be sufficient. To obtain final relief in the present proceedings the applicant will need to show that the Full Bench made a jurisdictional error.

17    The respondent argued that there was no arguable case of jurisdictional error to support the present application for a stay, relying upon the following passage in the judgment of Hayne J in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 (at [163]):

163    In deciding whether writs of prohibition and certiorari (and analogous forms of relief) should be granted, a distinction is drawn between jurisdictional error and error within jurisdiction. This Court has not accepted that this distinction should be discarded. As was noted in Craig v South Australia, that distinction may be difficult to draw. The difficulty of drawing a bright line between jurisdictional error and error in the exercise of jurisdiction should not be permitted, however, to obscure the difference that is illustrated by considering clear cases of each species of error. There is a jurisdictional error if the decision maker makes a decision outside the limits of the functions and powers conferred on him or her, or does something which he or she lacks power to do. By contrast, incorrectly deciding something which the decision maker is authorised to decide is an error within jurisdiction. (This is sometimes described as authority to go wrong, that is, to decide matters within jurisdiction incorrectly.) The former kind of error concerns departures from limits upon the exercise of power. The latter does not.

(Footnotes omitted.)

18    The applicant, on the other hand, referred to Craig v South Australia (1995) 184 CLR 163 where the High Court said (at 179):

If … an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal’s exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it.

19    The applicant wishes to argue that the Full Bench made a jurisdictional error because it exercised its power to quash the approval based on an error of law and it thereby exceeded or misunderstood its authority or powers or the basis upon which they might be exercised. I think such a case is sufficiently arguable, so far as it concerns the order made on 18 September 2014.

20    Ultimately, the task for the FWC, including the Full Bench, was whether approval of the enterprise agreement was mandated by s 186 of the FW Act. If the Full Bench misunderstood the legal principles which it was to apply to decide that question, or misconstrued or misapplied the statutory provisions, it is arguable that the Full Bench made a jurisdictional error when it quashed the approval.

21    I accept, therefore, that there is a sufficiently arguable case for relief at the final hearing of the application that the order made on 18 September 2014 was invalid and ineffective to quash the approval of the enterprise agreement.

22    The challenge to the Full Bench decision and order of 19 December 2014 probably only arises, it seems to me, if the applicant fails in its challenge to the order made on 18 September 2014. The consequence of that failure would be that it must be taken that the decision to quash, based on the construction favoured by the majority of the Full Bench, was not invalid. The legal (and jurisdictional) error then asserted will be that the Full Bench wrongly failed to accept an undertaking from the applicant proffered under s 190 of the FW Act.

23    Two undertakings were offered, ranked as a preferred undertaking and an alternative undertaking. The preferred undertaking suggested a drafting modification to cl 1.3 of the 2013 enterprise agreement. The alternative undertaking proposed to confine the duties of the 21 disputed employees to work under the enterprise agreement for a period of at least three months.

24    The Full Bench took the view that neither suggested undertaking could overcome the invalidity in the approval process which it had identified. The Full Bench went on to say, however, that it would not in any event have accepted either of the undertakings in the exercise of its discretion.

25    The proposition inherent in the contention that the Full Bench was able to accept the proffered undertaking depends, I think, first upon acceptance of the argument that an invalid vote may be validated by altering the permitted voting constituency after the event, by amending coverage of an agreement retrospectively.

26    Then the argument depends upon the contention that the Full Bench was obliged to accept one or other of the undertakings.

27    It is unnecessary to express a view about the ultimate strength of those contentions. At their highest the argument which depends on them seems to me to have less force than the other challenge. For reasons which I give later, I would not, in any event, grant a stay of the order made on 19 December 2014. There would be no useful purpose served in doing so.

Special or exceptional circumstances

28    In Mr Salter’s affidavit, and in an affidavit sworn by Nicola Badger which was filed also on 18 February 2015, a series of complaints were made about the difficulties which would be occasioned if attempts were to be made to revert from the enterprise agreement to the terms of an earlier 2010 agreement. Each affidavit asserted a variety of business and organisational repercussions if the 2013 enterprise agreement was not to operate and if the earlier 2010 agreement applied.

29    The terms of the enterprise agreement have been implemented since 4 October 2013. That did not change in response to the Full Bench decision on 4 March 2014 and the consequent order on 25 March 2014 which quashed the earlier approval. It did not change when the later Full Bench quashed the later approval on 18 September 2014.

30    Whatever the perceived justification for pursing that approach after the order on 25 March 2014 (and I am not to be taken as suggesting it was justified) the Full Court decision referred to earlier has resolved that question against the applicant. It must now be taken that the enterprise agreement did not validly or legally apply at any period before 17 April 2014. No response made to the present application for a stay should be seen as supporting any other position.

31    Nevertheless, the challenge to the latest Full Bench orders proceeds upon different grounds from before, and I have found that challenge to be sufficiently arguable at least so far as the order made on 18 September 2014 is concerned. There is no doubt, also, that the passage of events has created considerable uncertainty about which enterprise agreement now validly applies (i.e. after 17 April 2014) which will not be resolved in a legally conclusive way until determination of the present application.

32    The respondent opposed any stay but pointed, correctly, to the fact that the interests of affected third parties (in this case employees of the applicant) should be taken into account (Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1 at [65]-[66]).

33    Both Mr Salter and Ms Badger deposed that when the applicant commenced to apply the 2013 enterprise agreement from 4 October 2013, the applicant ceased to keep some “detailed and complex” records which might be necessary to now apply the 2010 agreement and calculate entitlements under it. If that occurred that may have been foolish. The AMIEU lodged a timely appeal against the approval which took effect on 4 October 2013. From the time it did so no prudent assumption could be made that approval of the 2013 enterprise agreement would indisputably withstand the challenge made to it. Within six months the 2013 enterprise agreement had been set aside. If, despite those matters, the management of the applicant conducted the business upon some assumption that ultimate success was guaranteed to the applicant, the consequences of that error are ones which the applicant alone must bear. I will give no weight to that circumstance on the present application.

34    The difficulties which might be occasioned by a temporary reversion to the 2010 agreement are another question. I accept that the two agreements operate differently and that may be a difficult adjustment to make. There would be little benefit to it being attempted if the applicant ultimately succeeds.

35    Mr Salter deposed to the fact that many (perhaps most) employees would suffer an immediate reduction in income, although others would benefit, if the earlier 2010 agreement was re-introduced. Observance of the 2010 agreement will be unavoidable if the present application is dismissed, but the real question is whether the applicant should be (at least legally) obliged to do so immediately. If its application is upheld it would then have to undo all those steps.

36    One answer to that concern, which was made by the respondent, was that interlocutory relief was not required because the applicant would likely suffer no change in circumstances. The submission was based on an assumption that the applicant would not in fact attempt to alter the present arrangements until the legal position was clarified by the Full Court, as a final hearing will be available in the near future. The submission came close to accepting (at least in a practical sense) that it would be unrealistic to expect a change in current arrangements when the final hearing will soon occur.

37    On the approach formally put by the respondent (if I accepted it) I would not attempt to relieve any present uncertainty but leave it to the applicant to decide how to deal with its dilemma pending the final hearing on the basis that continuation of the unilateral position already taken by the applicant would not add to whatever difficulties already exist.

38    However, in the present case, the interests of employees, as well as the applicant, would I think be served by making it clear that further debate about which enterprise agreement applies (or should apply at the moment) should await the decision of the Full Court on the present application, even if delivery of a judgment takes some further time.

39    It is not desirable to leave in place any dispute or debate about whether the applicant should attempt some immediate reversion to the earlier 2010 agreement out of respect for the order of the Full Bench, or continue to defy it. Although, perhaps surprisingly, no earlier application was made to this Court to address this question, it now has been and some regard should be paid to the practical, as well as the legal, position. In my view, the circumstances are sufficiently special (or exceptional) to justify a temporary suspension of current legal obligations.

40    In my view, therefore, the operation of the order of 18 September 2014 should be suspended for the time being until the final hearing can take place in the relatively near future and there can be a legally decisive outcome about the issues dividing the parties – i.e. will the order of 18 September 2014 remain in place or not.

41    However, I do not see a persuasive case for a stay or suspension of the order of 19 December 2014.

42    If the order of 18 September 2014 is suspended or stayed in its operation (as it will be) it would add nothing at all to stay the order of 19 December 2014. Even if the first order was not stayed, a stay of the order of 19 December 2014 would have no consequence in any event. Staying or suspending the dismissal of the application for approval of the 2013 enterprise agreement would not have an effect of any kind on the rights and obligations of the parties pending the hearing and determination of the present application.

43    For those reasons, I am not persuaded that a case has been made out for a stay of the order of 19 December 2014.

Conclusion

44    In my view, it would be best to remove the present uncertainty until the Full Court has resolved it. One way of doing that is to suspend the operation of the order made on 18 September 2014 until the Full Court decides whether it is valid.

45    I therefore propose to suspend the operation of the Full Bench order of 18 September 2014, until the final hearing and determination of the present application. If that application is dismissed, dissolution of the suspension will remove any temporary protection the applicant may be afforded.

46    It should also be noted that nothing I do now is intended to have any effect on the obligations declared by the Full Court on 12 February 2015.

47    I propose, therefore, to make an order in the following terms:

1.    The operation of the order made by the Full Bench of the Fair Work Commission on 18 September 2014 (PR555611) is stayed by suspending Order 2 until the final hearing and determination in this Court of the present application.

48    There will be no order as to costs.

Associate:

Dated:    20 February 2015