Maurice Blackburn-Fair Work Act clarity

27 July 2012

Three recent Full Court decisions of the Federal Court of Australia provide important guidance on the interpretation and operation of the Fair Work Act 2009 ('the Act').

In JJ Richards & Sons Pty Ltd v Fair Work Australia (2012) FCAFC 53 (JJ Richards), the Federal Court confirmed that the Act does not require bargaining to commence before the taking of protected industrial action.

In Qantas Airways Limited v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63 (Qantas), the Federal Court confirmed that "adverse action" and the concept of "altering a person's position to their prejudice" will be interpreted broadly by the court.

In Construction, Forestry, Mining and Energy Union v CSBP (No 2) [2012] FCAFC 64 (CSBP), the Federal Court awarded costs against the unsuccessful party to an appeal from a decision of a single Judge of the Federal Court.

This newsletter explores some of the issues raised in the above cases and their implications for industrial relations practitioners.


J.J. Richards & Sons Pty Ltd v Fair Work Australia (2012) FCAFC 53

The decision in JJ Richards arose in circumstances where Canterbury Council's tender for waste disposal changed from a company that employed workers on a Union Collective Agreement to J. J. Richards & Sons (the employer), who employed employees on minimum award rates.

The TWU sought, and the employer refused, to commence bargaining for an enterprise agreement. The TWU subsequently sought, and were granted, orders for a Protected Action Ballot of members.

The employer appealed the decision of the Commissioner at first instance to a Full Bench of Fair Work Australia.  A majority of the Full Bench consisting of Vice-President Lawler and Commissioner Bisset concluded that a union can be "genuinely seeking to seek agreement" even in circumstances where an employer had not agreed to bargain for an agreement.  However, the Full Bench rejected the TWU's application on a technicality.

The employer appealed the decision of the Commissioner at first instance and the decision of the Full Bench.

On 20 April 2012, the Full Court of the Federal Court, comprising Justices Jessup, Tracey and Flick, held that the Appeal by the employer should be dismissed, and that FWA had not erred in granting Protected Action Ballot Orders in favour of the TWU.

The Full Court held that an Applicant for a Protected Action Ballot Order under s 443 of the Act need not show that bargaining has commenced.

The Full Court confirmed that there are only two requirements under s 443 of the Act which set out when a Protected Action Ballot Order may be granted.  These are:

  1. that the Applicant has made an Application for a Protected Action Ballot Order under s 437 of the Act, and
  2. that the Applicant is genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

The effect of this is that employees may apply for and take protected industrial action before formal bargaining has started.

Michael Doherty of Maurice Blackburn's Sydney office ran the Full Court case for the TWU.  Following the Full Court decision Michael said "The decision sends a message to bosses around the country that there are consequences for employers who do not respect their workers' requests to enter into good faith bargaining for a collective agreement."

Qantas Airways Limited v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63

In December 2009, a Licensed Aircraft Maintenance Engineer (LAME) employed by Qantas (the employee) was posted from Australia to Narita in Japan. The posting ended on 16 January 2010.

Following his return from Narita, the employee put in a claim for pay and entitlements arising from his Narita posting.

The employee discussed his claim with a manager from Qantas followed by an exchange of emails on 8 March 2010 which led to a "heated telephone conversation".

On 25 March 2010 the employee sent an email to the same manager and copying in another two managers stating that Qantas had no right to reject his claim and that he would be initiating the dispute resolution process under the EBA.
On 26 March 2010 Qantas suspended all overseas postings for LAMEs out of Brisbane.

On 21 April 2010, the Australian Licensed Aircraft Engineers Association (ALAEA) filed an application in the Federal Magistrates Court alleging contraventions of the General Protections provisions of the Act.

On 27 April 2010, Qantas lifted the suspension of overseas postings for Brisbane LAMEs.

At the hearing at first instance, Qantas submitted that:

(a) because the employee had just completed a posting it was unlikely that he would have been selected for a posting between the time overseas postings were suspended and the time the suspension was lifted

(b) if it was unlikely that the employee would have been selected for a posting then the suspension did not impact the employee, and

(c) therefore the employee had not suffered an alteration of his position to his prejudice.

The Federal Magistrate rejected Qantas' submission and found that:

(a) when the suspension was put in place there was no date set for the lifting of the suspension

(b) although the employee may have been at the bottom of the list, it was a short list, and it was possible that the people above him would decline particular postings,

(c) the suspension deprived the employee of the benefit of being able to apply for an overseas posting, and

(d) therefore the employee had been injured, or at the very least had his employment altered to his prejudice.

Qantas appealed the decision of the Federal Magistrate at first instance on a number of grounds, including the finding that the suspension constituted "adverse action".

Qantas argued that the employee did not fall within the group of people affected by the decision because the employee was not likely to and did not expect to be posted overseas during the time in which the suspension was in place.

On 4 May 2012, in a joint decision, Justices Gray, North and Besanko rejected Qantas' appeal. 

The Full Court noted that Qantas did not challenge the finding that, at the time the suspension was implemented, it was for an indefinite period. Therefore at the time the suspension was implemented the employee was within the class of people affected by the suspension.  It was not open to Qantas to recast its actions in light of the subsequent lifting of the ban.

In considering the scope of prejudicial alteration of an employee's position, the Full Court said:

"The authorities thus establish that a prejudicial alteration to the position of an employee may occur even though the employee suffers no loss or infringement or a legal right.  It will occur if the alteration in the employee's position is real and substantial rather than merely possible or hypothetical."

Unions should ensure that when making claims pursuant to the general protections provisions of the Act that this ground of adverse action is included where relevant.

Giri Sivaraman from Maurice Blackburn's Sydney office ran the case for the ALAEA.  Following the decision of the Full Court he said: "the decision confirms that alteration of someone's position to their prejudice is a broad concept that cannot be fettered easily".

Construction, Forestry, Mining and Energy Union v CSBP (No 2) [2012] FCAFC 64

The Full Court of the Federal Court dismissed an application by the CFMEU to have a costs order awarded following an appeal against a decision of Justice McKerracher concerning a right of entry dispute.

On 12 August 2011, Justice McKerracher made a declaration that the CFMEU was not entitled to represent the industrial interest of certain employees at the CSBP chemical plant in Kwinana.

The CFMEU appealed to the Full Court of the Federal Court.  On 2 April 2012, the Full Court, consisting of Chief Justice Keane and Justices Siopis and Rares, dismissed the appeal and awarded costs against the CFMEU.

The CFMEU sought to have the costs order set aside on the basis that the Court did not have the power to award costs in the absence of a finding that the appeal was instituted vexatiously or without reasonable cause. On 7 May 2012, the same Full Court dismissed the appeal.

The court dismissed the CFMEUs arguments, drawing a distinction between the original and appellate jurisdiction of the court. The jurisdiction of the appeal arose under the Federal Court Act not the Fair Work Act 2009 or the Fair Work (Registered Organisations) Act 2009 (FWRO Act).Therefore the cost provisions of the Fair Work Act and the FWRO Act did not apply.  The effect of this reasoning of the court is that some appeals from a decision of a single judge of the Federal Court will be treated differently from appeals from a judgement of a Federal Magistrate or a state or territory court.

Unions considering prosecuting employers for contraventions of or seeking declarations in relation to the Fair Work Act 2009 should take this decision into account when considering which jurisdiction to file an application. Applications made in a state or territory court are likely to be subject to the cost provisions of the Fair Work Act, but appeals from a decision of a single member of the Federal Court exercising original jurisdiction are unlikely to be subject to the cost provisions of the Fair Work Act 2009.

It should be noted that the CFMEU are seeking leave to appeal this decision in the High Court.

Impacts of these decisions

The decisions of the Full Court provide valuable guidance on areas of the interpretation of the Fair Work Act.  The decision in JJ Richards makes it clear that commencement of formal bargaining is not required before an application for a protected action ballot is made. The court has also confirmed that "adverse action" and prejudicial alteration of an employee position will be interpreted broadly by the court and should be included in general protections claims where appropriate. When instituting proceedings, unions should consider the distinction  between appeals from state or territory courts and the Federal Court resulting from the CSBP decision.

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