FEDERAL COURT OF AUSTRALIA

ResMed Limited v Australian Manufacturing Workers’ Union (No 2) [2015] FCA 537

THE COURT ORDERS THAT:

1.    The proceedings be stayed until matters D2014/70 – Application by the AMWU and C2015/1008 – ResMed v AMWU are heard and determined by the Fair Work Commission.

2.    The parties to notify the Court within 2 working days of the applications referred to in order 1 above being determined by the Commission.

3.    Either party has liberty to apply on three days’ notice to vary these orders.

4.    The question of costs is reserved.

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

THE COURT ORDERS THAT:

1.    The proceedings be stayed until matters D2014/70 – Application by the AMWU and C2015/1008 – ResMed v AMWU are heard and determined by the Fair Work Commission.

2.    The parties to notify the Court within 2 working days of the applications referred to in order 1 above being determined by the Commission.

3.    Either party has liberty to apply on three days’ notice to vary these orders.

4.    The question of costs is reserved.

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

REASONS FOR JUDGMENT

1.    THE ISSUES

1    This is an application for a temporary stay of two proceedings. First, in proceedings NSD 846 of 2014 filed on 14 August 2014, ResMed Limited (ResMed), seek a declaration that the Australian Manufacturing Workers’ Union (the AMWU) is not entitled to represent the industrial interests of certain ResMed employees who would be covered by a proposed enterprise agreement on the ground that they fall outside the scope of the AMWU’s eligibility rule. Secondly, in proceedings NSD 915 of 2014 filed on 9 September 2014, the AMWU seeks declaratory relief against ResMed with respect to the same issue, namely, whether the AMWU’s eligibility rule permits the same ResMed employees to have their industrial interests represented by the AMWU. Both sets of proceedings are currently listed to be heard together for four consecutive days commencing on 28 July 2015.

2    By interlocutory applications filed on 8 May 2015, the AMWU seeks a temporary stay of both proceedings pending the hearing and determination by the Fair Work Commission (FWC) of two applications filed in the FWC, namely:

(a)    an application by the AMWU instituted on 7 November 2014 under reg 121 of the Fair Work (Registered Organisations) Regulations 2009 (Cth) for consent of the FWC for an alteration of its eligibility rule under s 158 of the Fair Work (Registered Organisations) Act 2009 (Cth) (the RO Act) (matter D2014/70) (the AMWU Rule Change Application); and

(b)    an application by ResMed filed on 5 January 2015 under s 137A(1)(b) of the RO Act for an order that the AMWU is not to have the right to represent the industrial interests of the employees employed by ResMed under the Fair Work Act 2009 (Cth) (FW Act) or the RO Act (matter C2015/1008) (the ResMed Representation Application).

3    ResMed also filed an objection to the AMWU Rule Change Application on 17 December 2014. Those objections do not relate to the jurisdiction of the FWC to entertain the AMWU Rule Change Application but to the question of whether the FWC can or should give its consent to the proposed changes, consent being necessary under s 158(1) of the RO Act in order for the proposed changes to take effect.

4    For the reasons set out below, a temporary stay is warranted in order to permit the AMWU Rule Change and the ResMed Representation applications to be heard and determined first as those proceedings may render futile the grant of any declaratory relief in either proceeding before this Court and may resolve the real dispute between parties which this Court lacks power to do.

2.    BACKGROUND

2.1    The parties

5    ResMed is a corporation established under the Corporations Act 2001 (Cth) and is engaged in manufacturing products for people with sleep disordered breathing and other respiratory disorders. It has a product development and manufacturing facility at Bella Vista, north-west of Sydney, New South Wales.

6    The AMWU has had ResMed employees as members since at least 1996. The AMWU contends that it currently has members in the production, maintenance and warehouse workgroups at ResMed’s Bella Vista site and estimates that approximately half of the production and warehouse workers are current members. ResMed, however, does not accept that the AMWU is entitled to represent its warehouse and production employees under the AMWU eligibility rule.

7    There are approximately five AMWU delegates at ResMed at any given time, being employees who have been nominated by their co-workers and alleged fellow AMWU members to be their day-to-day representatives. The AMWU designates specific officers and officials to assist in representing members at ResMed. These designated officials have historically undertaken, and arranged for other officials and organisers to undertake, a range of activities to assist in representing AMWU members at ResMed and to promote their interests. These activities include raising collective and individual industrial concerns held by AMWU members with ResMed on their behalf, holding discussions with ResMed in relation to these issues, and attending disciplinary meetings as a representative and/or support person.

2.2    The origins of the dispute about the AMWU’s representation of ResMed employees

8    ResMed employees do not presently have an enterprise agreement with their employer.

9    The AMWU notified ResMed in December 2012 that it believed that a majority of its production, warehouse and maintenance workers wish to enter into bargaining for an enterprise agreement. ResMed refused to commence bargaining and raised concerns about the AMWU’s eligibility to represent the relevant employees by letter to the AMWU on 30 January 2013. Since this time, there has being ongoing controversy between the parties about whether ResMed employees can be represented by the AMWU and to what extent. I accept that this dispute has led to uncertainty among those who wish to be represented by the AMWU as to the entitlement of the AMWU to do so and, as I later explain, is having an immediate and practical impact upon the capacity of the AMWU to represent these employees (see at [24]-[27] below). It has also led to a complex web of proceedings in this Court and in the FWC.

2.3    The MSD application to the FWC made in March 2013 and related applications for judicial review

10    On 31 January 2013, the AMWU applied to the FWC for a majority support determination (the MSD application) under s 236 of the FW Act. That application was withdrawn on 22 March 2013 and a second application was made on 25 March 2013 by the AMWU. Under the current MSD application, the AMWU seeks to initiate bargaining with ResMed, for a proposed enterprise agreement under Part 2-4 of the FW Act which would cover some, but not all, of ResMed’s employees.

11    In paragraph 2.2 of the MSD application, the Union identified the following categories of employees as those who would be covered by the proposed agreement:

Employees of ResMed Limited who work at the Bella Vista site, who are covered by the Manufacturing and Associated Industries and Occupations Award 2010 and who are engaged as:

a)    Production Operators, Line Leaders or Line Coordinators in the Patient Interface work group; or

b)    Production Operators, Line Leaders or Line Coordinators in the Ventilation work group; or

c)    Production Operators, Line Leaders or Line Coordinators in the Machines work group; or

d)    Warehouse Operators, Line Leaders or Line Coordinators in the Warehouse work group; or

e)    an employee in the Manufacturing Equipment and Tooling Support (METS) work group who holds a trade certificate or equivalent, or who is undertaking an apprenticeship or traineeship, other than any team leader(s) and/or any employee who is engaged as a supervisor, manager or equivalent.

For the avoidance of doubt, any employee engaged as a team leader, supervisor, manager or equivalent will not be covered by the proposed enterprise agreement.

12    In essence, the proposed agreement would cover non-leadership roles in the production, warehouse, and manufacturing equipment and tooling support areas at ResMed’s Bella Vista site.

13    The eligibility rule of the Union is contained in rule 1A(a) of the Union’s Rules:

RULES OF THE “AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION” KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS’ UNION (AMWU).

1 – NAME OBJECTS AND CONSTITUTION

The Union formed under these Rules (hereinafter called the “Union”) shall be named the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU). It shall be a registered Trade Union.

1A.    Without in any way limiting or being limited by sub-rules 1B, 1C, 1D, 1E, 1F, 1G, 1H and 11 the Union shall consist of an unlimited number of persons who are employed or usually employed in or in connection with the following trades or calling or branches thereof:

(a) Smiths, ship smiths, angle iron smiths, drop-hammer smiths, spring smiths, oliver smiths, spring fitters, swaging machine operators, operators on smithing machines similar to swaging machines, nut and bolt makers, windmill erectors, motor, motor cycle and cycle mechanics, tuners and testers in motor industry, enamellers, typewriter mechanics, well-borers, scale-makers, metal safe makers, locksmiths, forge hammermen, forgemen, strikers, drop-hammer stampers, forging machine workers, forge, iron and brass furnace-men, ship’s plumbers, fitters, turners, grinders, whetstone grinders and glazers, sea-going engineers, shift engineers, roll turners, patternmakers, model makers, millwrights, mechanical draughtsmen, technical assistants, planners, borers, slotters, machine drillers, milling machine workers, shapers, machinists, brass founders, brass finishers, brass smiths and operators of machines in connection with same, coppersmiths, armature winders, equipment examiners, and electrical engineers generally, radio workers, mechanical and scientific instrument makers and optical glassmakers, linotype mechanics, press mechanics, machine joiners employed in the construction of cotton, silk, flax, woollen or other machines, die sinkers, press tool makers and stampers, electroplaters, polishers, electroplate makers up, sheet metal spinners, assemblers, skilled acetylene and electrical welders, aero mechanics, duralium workers, including forgers, fitters and all other aircraft workers who are employed on the fuselage or engine work, and all workers engaged in the engineering, shipbuilding and kindred trades.

(Emphasis added.)

14    On 19 December 2013, Commissioner Bull determined that the MSD application was a valid application under s 236 of the FW Act: “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v ResMed Limited [2013] FWC 9725. In so finding, the Commissioner rejected ResMed’s submission that none of the employees specified in the application were eligible to be members of the Union, finding that it had coverage of one of the five categories of employees proposed to be covered by the agreement, namely, category (e).

15    While ResMed appealed to the Full Bench, it did not appeal the Commissioner’s finding that the AMWU’s rules had coverage of employees in category (e). Rather, in its submission, it was necessary for all employees covered by the proposed agreement to be eligible for membership of the AMWU. That appeal was dismissed by the Full Bench of the Commission on 11 April 2014: ResMed Limited v The Australian Manufacturing Workers’ Union (AMWU) [2014] FWCFB 2418. I upheld the validity of the MSD application to the FWC on an application for judicial review of the Full Bench decision: ResMed Limited v Australian Manufacturing Workers’ Union [2015] FCA 360 (the ResMed Jurisdictional Decision). The ResMed Jurisdictional Decision is the subject of a pending appeal to the Full Court of the Federal Court likely to be heard in the November Full Court list.

16    In a separate decision, the Full Bench of the FWC purported to allow in part the appeal by the AMWU against the findings by the Commission at first instance as to the coverage of the AMWU’s eligibility rules: The Australian Manufacturing Workers’ Union (AMWU) v ResMed Limited [2014] FWCFB 3501 (the Second Full Bench Decision). However, on 22 April 2015, I summarily dismissed the application by ResMed in NSD 846 of 2014 insofar as it sought judicial review of that decision on the ground that certiorari would not lie to quash a decision with no apparent legal effect and mandamus could not issue where there was no duty to be discharged: ResMed Limited v Australian Manufacturing Workers’ Union [2015] FCA 379 (the Summary Judgment Decision). That decision left for determination in NSD 846 of 2014, and in the concurrent proceedings by the AMWU in NSD 915 of 2014, the declaratory relief sought by ResMed and the AMWU respectively as to the coverage of the existing eligibility rules.

2.4    The AMWU Rule Change Application and the ResMed Representation Application

17    The AMWU Rule Change Application filed on 7 November 2014 was published in the Government Gazette, with interested persons given the opportunity to object before 17 December 2014. Two objections were lodged: the first objection was made on 15 December 2014 by the Australian Workers Union (AWU); and the second objection, on 17 December 2014 by ResMed.

18    However, as a consequence of the entry by the AWU and the AMWU into a Memorandum of Agreement on 19 February 2015, the AWU withdrew its objection. The only parties, therefore, to the AMWU Rule Change Application are the AMWU and ResMed.

19    Ms Saunders, a solicitor and the NSW Legal Officer of the AMWU, gave evidence of her belief that the AMWU will press the Rule Change Application regardless of the outcome of these proceedings as it considers that the variation is necessary to resolve the current dispute and avoid future coverage disputation.

20    ResMed filed its Representation Application subsequently on 5 January 2015 in the FWC. If granted, that application would remove the right of any ResMed employee to be represented by the AMWU regardless of whether they fall within the scope of its current eligibility rule.

21    On 9 February 2015 following a hearing, the FWC directed that the ResMed Representation and AMWU Rule Change applications would be heard together by the same Full Bench: ResMed Limited v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) [2015] FWC 848. However, at the directions hearing before the Full Bench on 20 February 2015, ResMed applied for both applications to be stayed pending the hearing and determination of the proceedings in this Court. The application for a stay in the FWC is set down on 9 June 2015. That application is opposed by the AMWU insofar as the AMWU Rule Change Application is concerned, although it would consent to a stay in the FWC of the ResMed Representation Application, as noted in ResMed Limited v Australian Manufacturing Workers’ Union [2015] FWC 3261 at [14] (Vice President Hatcher).

22    Resmed has also applied for the presiding member of the Full Bench to recuse himself on the ground of apprehended bias. That application will be determined after the FWC Full Bench considers the stay application on 9 June 2015: ResMed Limited v Australian Manufacturing Workers’ Union [2015] FWC 3261 at [24]-[25] (Vice President Hatcher).

23    No hearing dates for the substantive applications in the FWC have yet been programmed.

2.5    Impact of the dispute on the ResMed employees who wish to be represented by the AMWU

24    Throughout 2013 and most of 2014, ResMed continued to permit AMWU members to be represented by the AMWU and allowed AMWU’s officials to undertake the activities to which I have referred. However from late 2014, ResMed has on a number of occasions refused requests from the AMWU to attend meetings as a representative or support person for ResMed employees on the basis that it does not accept that the AMWU is entitled to represent the industrial interests of ResMed employees employed as production or warehouse operators.

25    In line with this, on 18 December 2014 ResMed wrote to the AMWU refusing a request to meet with the AMWU as the representative for three employees who are production operators to discuss employment related matters, and advising that:

The purpose of this letter is to reiterate that ResMed does not accept that the AMWU is entitled to represent the industrial interests of employees employed by ResMed as production and warehouse operators.

You are on notice that if you, or the AMWU, seeks to “represent” any employee employed as a production or warehouse operator in such meetings in the future, you will not be permitted to do so.

26    On 10 February 2015 ResMed wrote again refusing to meet with the AMWU on the ground that “ResMed does not accept that the AMWU is entitled to represent the industrial interests of production operators”. On this occasion the request to meet related to the transfer of Liquid Silicone Rubber (LSR) employees to manufacturing. As a consequence, the AMWU filed an application with the FWC under s 739 of the FW Act which is presently unresolved.

27    Ms Saunders gave evidence that she believed that the practical effect of the dispute between ResMed and the AMWU about the scope of the AMWU rules is that many employees are not able to be represented by the union of their choice in industrial matters, even though they wish to be represented by the AMWU. The AMWU also led evidence of concern among some ResMed employees who wish to be represented by the AMWU about the dispute and its impact on bargaining and other industrial issues, and that the AMWU has received frequent inquiries from such employees about the status of the dispute.

3.    RELEVANT LEGISLATIVE PROVISIONS

28    Before considering the merits of the stay applications, it is necessary to explain the nature of the AMWU Rule Change Application and the ResMed Representation Application by reference to the statutory framework within which those applications are made.

29    Section 158(1) of the RO Act provides that an alteration of the eligibility rules of an organisation does not take effect unless, relevantly, the FWC consents to the alteration under that section.

30    The circumstances in which the FWC may give consent are circumscribed in a number of ways.

(a)    First, the FWC must not consent to an alteration in the rules unless it is satisfied that the change or alteration has been made under the rules of the organisation (s 158(2)).

(b)    Secondly, under s 158(4) the FWC must not consent to an alteration of the eligibility rules if, in relation to persons who would be eligible for membership because of the alteration, there is, in the opinion of the FWC, another organisation to which those persons could more conveniently belong and which would more effectively represent those members. Subsection (4) does not apply, however, if the FWC accepts an undertaking from the organisation seeking the alteration that the FWC considers appropriate to avoid demarcation disputes that might otherwise arise from an overlap between the eligibility rules of that organisation and the other organisation (s 158(5)).

(c)    Thirdly, while not limiting the grounds on which the FWC may refuse consent by virtue of s 158(8) of the RO Act, the FWC may refuse to consent to an alteration under s 158(6) or (7) respectively if:

(i)    the FWC is satisfied that it would contravene an agreement or understanding to which the organisation is a party which deals with that organisation’s right to represent under the RO Act and the FW Act the industrial interests of a particular class or group (s 158(6)); or

(ii)    the FWC:

(A)    is satisfied that the alteration would change the effect of any order made by the FWC under s 133 about the right of the organisation to represent under the RO Act and the FW Act the industrial interests of a particular class or group of employees (s 158(7)(a)); and

(B)    considers that such a change would give rise to a serious risk of a demarcation dispute which would prevent, obstruct or restrict the performance of work in an industry, or harm the business of an employer (s 158(7)(b)).

31    In the present case, it is not in dispute that there is no objection on foot from another union to the AMWU Rule Change Application; nor has it been suggested that there is another organisation to whom the members could more conveniently belong.

32    It is apparent that where the FWC exercises the power to consent to an alteration in the eligibility rules of an organisation, the effect of its decision is to create new rights. That power is executive in nature.

33    Section 137A(1) of the RO Act provides that the FWC may on the application of an organisation, an employee or the Minister make an order in relation to a dispute that an organisation of employees is to have the exclusive right to represent the industrial interests of employees in a particular workplace group, or not have the right to represent the industrial interests of the employees in a particular workplace group. Such an order may be subject to conditions or limitations (s 137D). Section 137B of the RO Act requires the FWC to have regard to certain factors in considering whether to make an order under s 137A(1), namely:

(a)    the history of award coverage and agreement making in relation to the employees in the workplace group; and

(b)    the wishes of the members of the workplace group; and

(c)    the extent to which particular organisations of employees represent the employees in the workplace group, and the nature of that representation; and

(d)    any agreement or understanding of which the FWC becomes aware that deals with the right of an organisation of employees to represent under this Act or the Fair Work Act the industrial interests of a particular class or group of employees; and

(e)    the consequences of not making the order for any employer, employees or organisation concerned; and

(f)    any matter prescribed by the regulations.

4.    CONSIDERATION

4.1    To what extent does the Court have a discretion to grant a stay pending the resolution of an application to change the rights in issue before the FWC?

34    It is well established that the Court has an extensive jurisdiction to stay proceedings in the interests of justice as a matter of judicial discretion: Websyte Corporation Pty Ltd v Alexander (No 2) [2012] FCA 562 at [53] (Dodds-Streeton J); Clorox Australia Pty Ltd v International Consolidated Business Pty Ltd [2005] FCA 1135; (2005) 66 IPR 506 at [5] (Sundberg J).

35    The AMWU submits that the relevant principles to be applied in the exercise of that discretion are articulated by Lockhart J in Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Limited (1992) 34 FCR 287 (Sterling Pharmaceuticals). In that case, Lockhart J held at 290-291 that the Court has a general power to control its own proceedings, which extends to enable it to order a temporary stay of proceedings in various circumstances, including the case where proceedings are pending in another court and it is desirable that those proceedings should be resolved first. His Honour continued at 291 to identify relevant considerations to be taken into account, including:

•    Which proceeding was commenced first.

•    Whether the termination of one proceeding is likely to have a material effect on the other.

•    The public interest.

•    The undesirability of two courts competing to see which of them determines common facts first.

•    Consideration of circumstances relating to witnesses.

•    Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.

•    The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.

•    How far advanced the proceedings are in each court.

•    The law should strive against permitting multiplicity of proceedings in relation to similar issues.

•    Generally balancing the advantages and disadvantages to each party.

36    Nonetheless, despite acknowledging that a party who has properly invoked the jurisdiction of Australian court is prima face entitled to have its case heard and determined by that court, Lockhart J held that the question is ultimately where the interests of justice are best served (at 294). In this regard, his Honour distinguished authorities dealing with a permanent stay of proceedings in an Australian court where proceedings are pending in a foreign country between the same parties for the same cause of action, pointing out that “[t]he court remains in full control of the proceeding before it when it is stayed only temporarily or where, as I propose, the proceeding will be stood out of the list for a substantial time until later this year” (at 294).

37    The decision in Sterling Pharmaceuticals concerned an application for a temporary stay pending the determination of proceedings in a foreign court where there was a substantial identity of issues. Here the “competing” proceedings are not proceedings in a court and, aside from one potential issue, the issues are very different. The function of this Court in these proceedings is to interpret the AMWU eligibility rules authoritatively in the exercise of judicial power. By contrast, the task of the FWC in the exercise of executive power is to determine whether to vary those rules so as to expand coverage of the rules to all ResMed employees or whether the AMWU should not have the right to represent the industrial interests of the employees employed by ResMed. As such, a number of the considerations identified by Lockhart J will not be relevant here or will apply only by analogy.

38    While initially accepting that the considerations identified in Sterling Pharmaceuticals were relevant to the determination of the stay application here, at the hearing ResMed sought to distinguish Sterling Pharmaceuticals by contending that a different approach should be applied. While falling short of submitting that the Court has no discretion to grant a temporary stay pending the outcome of an application to an administrative tribunal to vary the parties’ rights, ResMed contends that, once seized of proceedings, the Court ought not to defer the resolution of the proceedings because the rights of the parties may be altered by an administrative decision. That approach receives some support in the authorities.

39    First, in Commonwealth Bank of Australia v Finance Sector Union of Australia [2003] FCAFC 212; (2003) 124 IR 453 (the FSUA Full Court decision), the Bank sought a stay of representative proceedings instituted on behalf of a group of former employees. The employees, who had resigned, alleged that the Bank had breached the relevant award by failing to make severance payments on the basis that they had been made redundant. The stay was sought pending determination by the Australian Industrial Relations Commission (the Commission) of an application to vary the award so as to make it clear that the Bank would have no obligation under the award to make any severance payment to the group members.

40    In refusing the application for leave to appeal from Moore J’s decision refusing the stay, the Full Court did not cast doubt on the existence of the discretion to grant a stay in such a case. Rather, the Full Court considered that it would have been very difficult for the primary judge to have done otherwise than refuse the stay given that there was no immediate prospect of the Commission dealing with the application to vary the award, on the one hand, and that the applicants were anxious to press ahead with judicial proceedings to enforce existing rights under the award, on the other hand: the FSUA Full Court decision at [11] (Wilcox J), [31] (Marshall J) and [37]-[38] (Merkel J). However, Marshall J also emphasised that no question of identical issues in different courts arose, the Commission being an administrative body exercising a different function, and the Court proceedings also included a claim for alleged breach of contract (at [32]-[33]).

41    Subsequently, Moore J in Finance Sector Union of Australia v Commonwealth Bank of Australia [2004] FCA 187; (2004) 205 ALR 582 (the second FSUA decision) questioned whether the considerations identified in Sterling Pharmaceuticals applied beyond cases where the application is for a stay of proceedings in one court pending proceedings in another court. This was the second application by the Bank for a stay and was made on the ground that circumstances had changed.

42    Moore J held at 589 [18] that he would consider the stay application generally by reference to the approach adopted by Lockhart J in Sterling Pharmaceuticals. Nonetheless, in a passage on which ResMed placed particular reliance, his Honour held that:

…I am not confident that his Honour intended that the considerations [Lockhart J] identified would be applied other than in situations where the jurisdictions of two courts were invoked by the same or related parties to resolve substantially the same legal issues by reference to substantially the same facts. As is evident from the clear line of authority discussed by Gray J in Jupp v Computer Power Group Ltd [(1994) 122 ALR 711] and McGarry v Boonah Clothing Pty Ltd [(1988) 80 ALR 284] above, courts have steadfastly refused to modify the course of proceedings because the law may change and alter the rights of the parties. There is a parallel between the alteration of rights by the legislature and their alteration by legal processes in courts or tribunals.

(Emphasis added.)

43    The question raised by Moore J was also considered by the Full Court in Warramunda Village Inc v Pryde [2002] FCA 250; (2002) 116 FCR 58 (Warramunda). That case concerned whether employees were engaged in “work” while undertaking the “sleepover shift” for the purposes of applicable awards prescribing fixed remuneration by reference to hours worked. The employees sought the imposition of penalties for breaches of the awards and recovery of underpayments and interest. The primary judge first determined the question of construction and did so in favour of the employees. Upon the employer foreshadowing an application to the Commission to vary the award retrospectively to overcome the primary judge’s construction, the primary judge acceded to an application by the employees to bring forward the hearing date for the remaining issues in the trial. The appeal relevantly against the exercise of discretion in varying the date of the resumed hearing was unanimously dismissed. In so holding, the Court held that the employer’s failure to act expeditiously in seeking relief from the Commission, rather than waiting to see whether it succeeded in the Court on the question of construction, was fatal to its appeal on this ground: Warramunda at [19]-[20] (Lee J), [56] (Finkelstein J) and [97] (Gyles J).

44    Finkelstein J also considered (at [57]-[59]) competing lines of authority as to the relevance of pending legislative change in the exercise of discretions relating to the management of proceedings, namely, that:

(a)    on the one hand, it is the Court’s duty to adjudicate a case upon the law as it presently is, and it was not appropriate to adjourn a case to await the result of a proposal to amend legislation in a way that would affect the parties’ rights (McGarry v Boonah Clothing Pty Ltd (1988) 80 ALR 284 (Gray J)); and,

(b)    on the other hand, there is no rule that impending legislative change is never a material consideration in the exercise of discretions but rather everything turns upon the subject matter and relevance of the pending legislation or possibility of change to the issues before the court (Sparks v Harland [1997] 1 WLR 143 at 147 (Sedley J)).

45    Significantly, while acknowledging that these cases, if they apply, are relevant only by analogy to a case concerning an unanticipated change to an industrial award, Finkelstein J pointed out at [60]-[61] that even the underlying principle that the court must determine a case in accordance with the present state of the law is subject to exceptions. Specifically, his Honour observed that:

In Meggitt Overseas Ltd [v Grdovic (1998) 43 NSWLR 527] at 534-535, Mason P noted two exceptions. The first is where an adjournment is sought to enable a proposition established in a decided case to be tested in an appeal. The second is where the court is dealing with an application for a discretionary remedy where relief may be denied on the ground of futility. In such a case Mason P said that it may be proper to have regard to imminent legislative changes.

If the principle applies not only to statute law but to whatever law is recognised as governing the rights of the parties (a proposition that may be doubted), then an application for a retrospective variation of an award, provided it has some prospects of success, should be regarded as an exception to the rule…. So, if it appears that the Commission may rectify an award, it would be proper to afford the parties, or any one of the parties, the opportunity to seek a variation before disposing of a claim under the award. This is particularly so where, having regard to the circumstances of the case, there is relative certainty that the award will be rectified. One reason for this is that it would be unjust if the court were to determine the rights of the parties based upon an instrument which it knows, or suspects, does not reflect their actual intention, or was otherwise inappropriately procured.

46    Thus, even assuming that there is a rule that pending legislative change is not a reason for deferring resolution of proceedings which applies by analogy where the prospect of a change in the parties’ rights and obligations arises through the exercise of administrative powers, that rule does not apply where the relief sought is discretionary and the exercise of administrative power may affect the utility of the grant of that relief. In both sets of proceedings, declaratory relief only is sought, such relief being discretionary in nature. As Mason CJ, Dawson, Toohey and Gaudron JJ held in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582:

It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which “[i]t is neither possible nor desirable to fetter … by laying down rules as to the manner of its exercise.” However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have “a real interest” and relief will not be granted if the question “is purely hypothetical”, if relief is “claimed in relation to circumstances that [have] not occurred and might never happen” or if the Court’s declaration will produce no foreseeable consequences for the parties”.

(Footnotes omitted.)

47    While the power to make binding declarations of right is conferred by s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the exercise of that power also involves an exercise of discretion governed by the same considerations.

48    I do not therefore consider that the application for a stay in these proceedings is determined by any rule that the Court must determine the case in accordance with the parties’ existing rights and obligations. The question of whether a stay should be granted must be resolved in the exercise of discretion having regard to the potential impact of the applications before the FWC on the utility of the relief sought in these proceedings.

49    In this regard, Bennett J in Apotex Pty Ltd v Les Laboratoires Servier (No 6) [2012] FCA 745 identified a number of guidelines as generally apposite to assist in identifying how the discretion to grant a stay should be exercised. In that case, the respondents sought a stay of proceedings in the Court which sought the revocation of a patent pending the decision of the Australian Patent Office on whether to grant or refuse a patent the subject of a notice of opposition filed by Apotex.

50    The guidelines identified by her Honour at [9] included that:

a.    Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the Court (Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 (Rochfort) at [19]).

b.    It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification of proper grounds (Rochfort at [19]).

c.    The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with (Jefferson Ltd v Bhetcha [1979] 2 All ER 1108 at 1113).

d.    The Court’s task is one of “the balancing of justice between the parties”, taking account of all relevant factors (Jefferson at 1113).

e.    Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (Jefferson at [1113]).

51    I agree with and adopt that approach.

52    Relevant also, as her Honour accepted, is s 37M, FCA Act providing that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. That overarching purpose includes the following objectives:

(a)    the just determination of all proceedings before the Court;

(b)    the efficient use of the judicial and administrative resources available for the purposes of the Court;

(c)    the efficient disposal of the Court’s overall caseload;

(d)    the disposal of all proceedings in a timely manner;

(e)    the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

4.2    Application of principles in the present case

53    Bearing in mind, therefore, the gravity of the application for a temporary stay of proceedings, has the AMWU demonstrated that it is just and convenient that ResMed’s ordinary right to have both matters tried in the ordinary course of the procedure and business of the Court be interfered with pending the resolution of the applications in the FWC? In my view, in the unusual circumstances of this case, the AMWU has discharged that burden notwithstanding its delay in making this application, and the temporary stay should be granted subject to liberty to apply on three days’ notice.

4.2.1    The capacity for the outcome of the FWC proceedings to affect the utility of the grant of declaratory relief

54    The unusual feature of this litigation is that, despite seeking declaratory relief as to the coverage of the existing eligibility rules in the Federal Court, neither party wishes to maintain the status quo under those rules. As counsel for the AMWU succinctly submitted, “both parties are saying to the Court, ‘we want a determination of what the status quo is,’ and secondly, simultaneously, ‘we want the Fair Work Commission to change the status quo’”. Thus, by its Rule Change Application in the FWC, the AMWU seeks amendments to its eligibility rules which would give the AMWU coverage of all employees of ResMed, including persons supplied by labour hire providers to ResMed and apprentices and trainees engaged by group training services which are hosted by ResMed. As such, the amendments sought by the Rule Change Application, if made, would mean that the eligibility rules were expanded so as to cover all ResMed employees including, but not limited to, those categories of ResMed employees in respect of whom ResMed and the AMWU seek declaratory relief. Conversely, as earlier explained, in its Representation Application in the FWC, ResMed seeks an order that the AMWU is not to have the right to represent the industrial interests of any employees employed by ResMed. As such, a determination of these proceedings will not resolve the real issues between the parties. As the AMWU submitted:

The present stay application is made because, regardless of the outcome of the present proceedings in the Court, the FWC will be required to determine whether the AMWU’s rules should be altered as sought by the AMWU, and whether the AMWU’s representation rights should be restricted as sought by ResMed.

55    No party submitted that any variation to the eligibility rule would have retrospective operation. As such, a declaration of existing rights would not be deprived of utility in that sense. However, the AMWU submits that it is highly likely that the applications to the FWC will resolve for all practical purposes this litigation and the issues between the parties.

56    Nonetheless, it is open to the FWC, as the AMWU accepts, to refuse both applications to change the status quo. That would mean that the rights of those employees falling within the disputed categories would still fall to be resolved by this Court. Given this, ResMed submits that the submission by the AMWU that any decision by the FWC would make the declarations futile is:

…speculation on speculation… a court does not stay its hand in dealing with the matter because there is a prospect that the rights of the parties may be altered by some action down the track… as [the AMWU] has said, …[the AMWU] cannot guarantee that what the Fair Work Commission is going to do will resolve in this matter becoming of no use or being futile… And that, your Honour, is the problem with this case: there is no public interest at all that would justify this Court not proceeding to deal with the matter that is before it, based on the law as it is. This court is seized of the matter regularly. It has been seized with this matter for some time.

57    It is true that the outcome of the applications before the FWC cannot be predicted with any certainty and, in particular, that it will in fact resolve the dispute between the parties. Nonetheless, I accept that, subject to any application for judicial review from the FWC’s decision, the real dispute between the parties as it presently exists, namely, whether the AMWU can represent all or none of the ResMed employees, can be resolved only by the FWC. Moreover, if either application in the FWC is acceded to, there is no suggestion by either party that a declaration as to the coverage of the existing rules would be of any utility to either party.

58    ResMed also relies upon the statement in the Summary Judgment Decision at [56] that ResMed’s submission on the application for summary dismissal of ResMed’s claim for judicial review that “the parties and the FWC may find the second Full Bench decision persuasive and that it is relevant to the exercise of other rights by the parties ignores the fact that the very issue considered in that decision will be resolved in an authoritative manner in these proceedings.” That statement was made before the Court was seized of any application for a stay and was one of a number of grounds on which I rejected the submission by ResMed that the “orders” made in the Second Full Bench Decision had “apparent” legal effect so as to be subject to a writ of certiorari or mandamus. So understood the statement in the Summary Judgment Decision has no bearing on the outcome of the application for a stay. I also note that the FWC is only ever capable of forming an opinion as to the proper construction of the eligibility rule. Its decisions, being administrative in nature, cannot give rise to a res judicata or issue estoppel but can have only the legal effect given to them by the statutory provision pursuant to which they are made.

59    On the other hand, I consider that significant weight should be given to the level of uncertainty that currently exists for employees as to the capacity for the AMWU to represent their interests and to the practical consequences of that uncertainty for them in terms of the refusal by ResMed currently to permit the AMWU to represent the industrial interests of production and warehouse operators: see at [24]-[27] above. It may be, as ResMed submits, that a decision by the Court could resolve that uncertainty insofar as the existing rules are concerned, more expeditiously than the FWC on the AMWU Rule Change and ResMed Representation applications. Furthermore, while neither party has led any evidence as to the likely timeframe within which those applications might be determined, it may be, as ResMed submits, that the proceedings in the FWC would not be ready for hearing by 28 July 2015 when these proceedings are set down for hearing. However, the FWC has an obligation under s 577(b) of the FW Act to deal with the applications “in a manner that … is quick, informal and avoids unnecessary technicalities”. Moreover, while the issues before the FWC may be broader than these before this Court, there is no demarcation dispute with another union which would no doubt otherwise have added to the length and complexity of the FWC proceedings. ResMed’s own estimate was of a hearing before the FWC of at least five days and, even though the AMWU considered that the hearing would be less, no party suggests a hearing of many weeks before the FWC is likely.

60    Finally, as the AMWU submits with considerable force:

At best there will be an interval between the determination of the Court of current rights and the determination by the FWC of future rights. This creates the potential for a higher level of confusion and disruption about coverage issues. For example, if the AMWU is entirely successful in Court, the AMWU will have coverage of all production and warehouse employees, until such time as ResMed’s application for a Representation Order is determined, at which time the Court’s ruling may be overturned. Likewise, if ResMed is entirely successful in the Court, this position may shortly be overturned by the AMWU’s Rule Change application.

61    These matters suggest that the more efficient use of judicial and administrative resources and the Court’s overall workload is for these proceedings to await the outcome of the applications in the FWC (s 37M(2)(b) and (c), FCA Act). The burden of two sets of proceedings inevitably being pursued in the FWC and in the Court if the stay is not granted, even if the FWC grants a temporary stay pending the outcome of these proceedings, and the continued uncertainty that would attend a decision of this Court pending a determination of the FWC decisions, also suggests that the grant of a stay would better pursue the objective of “a just determination” of the proceedings before the Court (s 37M(2)(a), FCA Act).

4.2.2    Do the present proceedings have utility because they would assist in determining the AMWU Rule Change Application before the FWC?

62    ResMed’s primary submission is that the proceedings have utility because the FWC may still have to construe the existing eligibility rule and determine its coverage in order to resolve the AMWU Rule Change and ResMed Representation applications. As ResMed correctly submits, only the Court can give a legally binding declaration of right in respect of the coverage of the AMWU under its existing eligibility rule: the Summary Judgment Decision at [47].

63    In support of its submission as to the utility of the declarations in the context of the FWC applications, ResMed relied on passages in ResMed Limited v Australian Manufacturing Workers’ Union [2015] FWC 3261 in which the Vice President explained his reasons for deferring consideration of ResMed’s recusal application until after the Full Bench has heard and determined the stay application before the FWC. Specifically, [19]–[20] of his reasons, the Vice President observed that:

[19]    It may be accepted, at least in relation to the AMWU rules application if not the ResMed representation application, that the question of the AMWU’s current coverage of ResMed employees may need to be determined. Section 158(4) of the RO Act provides:

(4)    The FWC must not consent to an alteration of the eligibility rules of an organisation if, in relation to persons who would be eligible for membership because of the alteration, there is, in the opinion of the FWC, another organisation

(a)    to which those persons could more conveniently belong; and

(b)    that would more effectively represent those members.

[20]    As was made clear by the Federal Court Full Court in relation to the equivalent provision in the Workplace Relations Act 1996 in Re Australian Workers’ Union, Ex parte Construction, Forestry, Mining and Energy Union, [(2002) 120 FCR 527] it is necessary to identify the class of “persons who would be eligible for membership because of the alteration” in order that the specified statutory tests for approval may be applied to that class. Identification of that class requires a comparison of the existing coverage of the organisation compared to the coverage it would have if the rules alteration is approved.

64    However, as the Vice President continued (at [20]-[21]), s 158(5) of the RO Act qualifies s 158(4) in providing that it does not apply where the FWC accepts an undertaking from the organisation seeking the alteration that the FWC considers appropriate to avoid demarcation disputes that might otherwise arise from an overlap between the eligibility rules of that organisation and those of the other organisation. Thus, as the Vice President explained, “a finding on existing coverage for the purposes of s.158(4) may not be necessary if an undertaking is proffered and accepted under s.158(5). In that circumstance, whether the issue of the identification of the AMWU’s existing coverage then arises in the exercise of the Commission’s general discretion to consent to the rules change may depend upon the grounds upon which any objections to the rules change are made” (at [21]).

65    In the present case, the AMWU proposes to give an undertaking for the purposes of s 158(5) of the RO Act. While ResMed correctly submits that the FWC may not accept its undertaking, I accept the AMWU submission that that is unlikely given that no other union has lodged any objection and there is therefore no other union to which the FWC might find that those ResMed employees not presently covered by the eligibility rule might more conveniently belong.

66    Secondly, as the AMWU contends, even if the FWC did reach a wrong opinion as to the extent of coverage of the current eligibility rules, that would not sound in jurisdictional error. Thus Moore and Gray JJ held in Re Australian Workers’ Union; ex parte Construction, Forestry, Mining and Energy Union [2002] FCAFC 150; (2002) 120 FCR 527 (Re AWU; ex parte CFMEU) at 551 [52] in relation to s 204(4) of the Workplace Relations Act 1996 (Cth) (which is materially the same as s 158(4) of the RO Act):

In our opinion, it is comparatively clear that any error the Commission might make (whether at first instance or on appeal) concerning the proper construction of the eligibility rules and the alteration would not be a jurisdictional error having regard to the nature of the power conferred on the Commission by s 204 and the specific duty created by subs (4). Whether, when an administrative tribunal makes an error of law, the error is jurisdictional, can depend on whether it is apparent the legislature intended that the tribunal could decide the issue itself even if the decision was wrong: see the discussion of Keifel J in Linett v Australian Education Union (2002) 117 FCR 189. In our opinion, it is probable that the Commission has been given by Parliament some latitude in exercising the power conferred by s 204 including latitude to take a mistaken view about the meaning of the eligibility rules and the alteration. This is subject, of course, to the matters we mentioned earlier, namely that the Commission (whether the designated Presidential Member or a Full Bench) understood the task required by the section, addressed the pre-existing eligibility rules and the alteration in determining who were the relevant employees and applied accepted principles of construction in ascertaining the meaning of the rules.

67    In oral submissions, ResMed accepted the correctness of this view. However, ResMed also pointed out that jurisdictional error may still be established if the FWC, for example, applied wrong principles of construction in determining the scope of coverage of the eligibility rules, and submitted that such error would be avoided if this Court were to authoritatively determine the scope of coverage. In this regard, as the AMWU conceded, there is no guarantee that any decision made by the FWC would not be challenged should the FWC not accept the undertaking and apply s 158(4). However, I consider the possibility that the FWC will fall into jurisdictional error at this stage to be speculative and is not a matter to which I should afford any real weight.

4.2.3    Do the present proceedings have utility because they would assist in determining the ResMed Representation Application before the FWC?

68    ResMed also contends that the declarations sought by the parties in these proceedings would be relevant to the FWC’s consideration of the factors which it must take into account under the RO Act in determining the ResMed Representation Application, including the considerations prescribed by s 137B(1)(c) concerning the extent to which the AMWU represents employees in the relevant workplace group and the nature of that representation and s 137B(1)(e) concerning the consequences of not making an order for the employer, employees and organisation concerned. ResMed also contends that the declaration would be relevant to certain grounds raised by it in the ResMed Representation Application. However, without deciding the point, the reasoning in Re AWU; ex parte CFMEU would seem to apply by analogy so as to suggest that any error in construction of the eligibility rule will be an error within jurisdiction.

69    Further and in any event, I do not consider that I should give much weight to the submission that the Court should refuse the stay so as to pre-empt the possibility that the FWC might fall into jurisdictional error. In common with other administrative decision-makers and tribunals, the FWC must form opinions as to matters of law and construction in the daily discharge of its duties. It would render unworkable the discharge of such duties if it were necessary for such decision-makers to have recourse to the courts each time such an issue arose and therefore the Court should be loath to accept the proposition that it is sufficient justification for the grant of declaratory relief that the possibility of error might thereby be averted. The remedy for any such error, if it should be made, lies in an application for judicial review. The more compelling consideration, in my view, is that it is apparent from the parties’ respective applications in the FWC that the question of whether proceedings in this Court ultimately resolve the real issues between the parties and have any utility will depend upon the outcome of the applications in the FWC.

4.2.4    Delay and status of proceedings

70    As ResMed submits, the delay in seeking a temporary stay is also a relevant consideration in the exercise of discretion. This consideration carries particular weight potentially where the matter sought to be stayed is substantially advanced and the risk, if the stay is granted, is that money and resources may have been wasted.

71    The AMWU has delayed substantially in making the applications for a stay only on 8 May 2015, albeit that the application was foreshadowed in Court on 8 April 2015, given that the AMWU Rule Change Application was filed on 7 November 2014 while the ResMed Representation Application was filed on 5 January 2015. In the interim, submissions were received, and judgment delivered, on the AMWU’s application for summary dismissal of the application in NSD 846 of 2014 insofar as it sought judicial review of the Second Full Bench Decision. Moreover, even though a timetable for preparation for trial has not yet been set, it is reasonable to assume that the parties have taken at least some steps already in preparation for the hearing given the July hearing dates. Certainly time and resources have been expended on the application by ResMed with respect to its application for confidentiality orders on which I ruled on 5 May 2015 after oral argument. Nor has the AMWU led evidence explaining why the application for a stay could not have been made at least in November 2014 after the AMWU filed its Rule Change Application in the FWC.

72    Ordinarily the AMWU’s delay in making this application would have carried considerable weight. However, in the unusual circumstances of this case, I do not consider that the delay should be determinative. First and crucially in my view, both parties have applied to the FWC for an alteration to the status quo which, if successful, would supersede any decision of this Court on the construction of the eligibility rule. Since filing their respective applications in the FWC both parties have therefore expended money and resources on these proceedings fully aware that they may ultimately lack any utility.

73    Secondly, I am not prepared to infer on the evidence before me that, in making the Rule Change Application, AMWU was “forum shopping” as ResMed suggest. This is not a case analogous to that in Warramunda where the employer applied to the Australian Industrial Relations Commission to retrospectively change the awards in question only after it was unsuccessful before the Court on the preliminary issue of construction of the awards (see at [43] above). In any event, if I were to infer forum shopping on the part of the AMWU, there seems no reason why I should not draw the same inference against ResMed. The ResMed Representation Application does not merely respond to the AMWU Rule Change Application but is a separate application which, in common with the AMWU application, seeks a different result from that contended for in this Court and which this Court has no power to remedy.

5.    CONCLUSION

74    In all of the circumstances, I consider that it is in the interests of justice to grant a temporary stay pending the determination of the AMWU Rule Change Application and the ResMed Representation Application, with liberty to either party to apply on three days’ notice. The latter is intended to enable the Court to respond promptly to any changes in circumstances so as to restore the proceedings to the list. I will allow the parties the opportunity to make submissions as to costs given the substantial and unexplained delay by the AMWU in applying for a stay of proceedings.

Associate:

Dated:    29 May 2015