On The Case By Jeffrey Phillips

1. In the ABC Insiders’ compere Barry Cassidy’s new book called, “Party Thieves” (Melbourne University Press), former Prime Minister Kevin Rudd is said to have referred to the United Nations Secretary-General Ban Ki-Moon as “Spanky Banky”. However, New South Wales Supreme Court Justice Michael Adams, in a series of decisions , whilst on secondment to the United Nations’ internal employee tribunal , the United Nations Dispute Tribunal( UNDT) has given some UN officials a thorough spanking. (See Betucci ats Secretary-General of the United Nations Judgment Order No. 59(NY/2010)/Rev.1). Justice Adams who a few years ago, delivered a leading case on gross workplace bullying (Naidu ats Group 4 Securitas Pty Limited & Anor [2005] NSWSC 618) was not going to be bullied by some unknown UN officials unwilling to submit to the orders of their own tribunal.

2. The UNDT is a tribunal which provides an internal justice system for the United Nations and its many thousands of employees. It became operational on 1 July 2009 taking over from what previously had been the United Nations Administrative Tribunal (UNAT) which had been established in 1949. The UNDT operates on a full time basis and is composed of a number of full time, part time and ad litem judges. It has registries in New York, Geneva and Nairobi. The tribunal, which also has an appeal panel, deals with employee contractual disputes, discipline and administrative matters such as promotional appeals. Justice Adams took up a year long appointment in New York as an ad litem judge with an option to renew. Whilst presiding he was referred to as Judge Adams.

3. The case of Betucci had a tangled history before the UNDT . The case concerned the legality of the selection process for the post of Assistant Secretary-General (ASG) in the Department of Economic and Social Affairs (DESA). The disappointed applicant was already a staff member, was short-listed but not selected. One interlocutory issue before Judge Adams was that the applicant had sought access to certain documents claimed to be relevant. The respondent (that is the Secretary-General) submitted that the documents were irrelevant in that the decision to appoint an ASG was comparable to that of a “head of state appointing cabinet level officials who is accountable politically, but not just judicially.” It was submitted therefore that , the Secretary-General’s decision was “not justiciable” [1].

4. This submission was rejected. However, the Secretary-General’s legal representative refused to produce the documents as ordered. The decision recounts the contumelious prevarication enlisted by the representatives of the Secretary-General refusing to produce the documents. Judge Adams was careful to note that his comments naming the Secretary-General were not made against Ban Ki-Moon personally, but related to those unnamed individuals within the United Nations who had refused to comply with his orders. Judge Adams, bristling but in clear, simple language, sets out some fundamental principles necessary for the orderly administration of justice. Such principles, irrespective of a common law or a civil law system, appear to have been unknown or unwilling to be followed by the nameless officials who continued to disobey his orders. He notes that the production of evidence at trial is “essential to the integrity of the administration of justice but also the right of the applicant to a fair hearing.” [3]. He concludes that a party who wilfully disobeys a direct order of a tribunal is not entitled to advance its case or call any evidence until the disobedience has been purged [4]. An order was even made for the person who made the decision not to comply with the order to appear before him. He was informed that such a legal officer would not be appearing as ordered. Counsel appearing before the tribunal was asked to explain this further disobedience. This was met with the previously rejected submission without elaboration. On further inquiry by the judge of counsel appearing before him said that the identity of the individual concerned was not known and it was not known whether the order previously made by the judge had been brought to that person’s attention. An order was then made for the respondent, within 24 hours, to supply the name and contact details of the officer who made the decision to disobey the order in the first instance. Inexplicably and lamentably it was noted, “It is a professional obligation of a lawyer to convey decisions of the court to the client.” [12] It was observed that an order made by a tribunal must be obeyed whether it is legally in error or not subject to it being reversed on appeal. It is “extant and compliance by the party to whom it is directed is an undoubted legal obligation.” [14]. With further dismay, his Honour referred to another aspect of a written submission made by counsel for the respondent who submitted,

“counsel reiterates the great respect the Secretary-General has for the administration of justice and as embodied by the system of justice which came into effect on 1 July 2009 and the judges of the Dispute and Appeals Tribunal.”

This which purported to be on instructions or authorised by the Secretary-General, was made on neither basis but, as His Honour described was a “mere advocate’s flourish” not consistent with “proper notions of professional integrity.” [18] He noted that the clients are not “mere mouthpieces of their client.” Further, “It is grossly improper for counsel to make statements attributed to their client but not actually made by the client.” This undermined “the necessary relationship of implicit trust between the Bench and the Bar.” [18] Another asinine submission made by the respondent was tartly dismissed with “I will not waste time attempting to prove a negative.” [28] The judge, now exasperated said that the Secretary-General( ie nameless officials) is not to determine the legality or otherwise of any particular order but that was for the tribunal as set up by the UN General Assembly. His despair is summed up by his rejection of a submission that the documents were protected by some privilege said to be for the benefit and protection of the organisation as,

“The decision in question was not made by the Secretary-General but by some anonymous official of whatever rank who refuses to be identified or to take any responsibility for it amounts to the assertion that this claimed overriding discretionary protective power is reposed in any official who happens to decide he or she will do so, at the same time remaining unidentified. This cannot be correct. And protect from whom? The Dispute Tribunal? Such an argument is completely unacceptable.” [30]

His Honour also deals with the inherent power of tribunals exercising judicial power to protect its own processes from abuse [40]. This is so irrespective of whether one comes from the common law or civil law systems [42]. He outlines the jurisdiction of a tribunal itself having an obligation to determine whether or not its proceedings are stayed [44]. He deals with the principle of functus officio and whether a preliminary order or provisional judgment can be varied and when a res judicata has arisen.
5. He delivered a decision finding for the applicant on the merits in May 2010 ( UNDT /2010/080) . It is under appeal. In an addendum to that decision he deplores the professional ethics of the UN lawyers involved who had every opportunity to appear and explain their behaviour. They did not do so. The last sentence of the addendum is eloquent in its force and simplicity “They cannot by their silence expect to contrive the silence of the Tribunal” .Judge Adams had the option to stay in New York for 2011 as a judge ad litem .He is happily back on the bench in Sydney.

Image from The Australian National Affairs website

(this article was published in the December 2010, Workplace Review (2010) 1 WR108.

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McDonald’s Australia Enterprise Agreement 2009 Appeal [2010] FWAFB 4602

A Full Bench of Fair Work Australia (FWA) (Vice President Watson, Senior Deputy President Kaufman and Commissioner Raffaelli) on the 21 July 2010, have handed down its reasons for a decision in an appeal relating to the McDonald’s Australia Enterprise Agreement 2009. The decision at first instance was reported in Workplace Review (see (2010) 1 WR 20) in an article entitled “Egg McMuffin Over The Face” dealing with the decision of Commissioner Donna McKenna ([2010] FWA 1347 ,23 April 2010), in which she refused to approve the Enterprise Agreement covering McDonald’s 80,000 employees at its many outlets throughout Australia.

The Full Bench referred to Commissioner McKenna’s very lengthy decision, in which she dismissed  the application on each of the following grounds:

1. “The application, even with supplementary declarations, remains deficient as to the provision of required information;
2. McDonald’s did not take the required steps under s 180(3) of the Act;
3. McDonald’s did not discharge its responsibilities concerning the provision of information to satisfy the requirements of s 180(5)(a) of the Act;
4. The application failed to address the obligations in s 180(5)(b) and s 180(6) of the Act;
5. The employees who voted in favour of the Agreement cannot be said to have generally agreed to the Agreement;
6. There was a failure to comply with the provisions of s 180(2) of the Act;
7. The Agreement does not satisfy the no-disadvantage test.” [6]

The Full Bench stated that:

“The appeal under s 604 of the Fair Work Act is that of a re-hearing and the predecessor provisions in the Work Place Relations Act are equally applicable under the Fair Work Act.  Further, a successful appeal requires the identification of error on the part of the primary decision maker.”  [8]

The Full Bench neatly summarises the principles governing appeals under  the Act. This case is a good primer for anybody needing to understand  in a nutshell, what  appellate principles will be applied by Full Benches  .  (See [8]-[11] inclusive).

Commissioner McKenna below had said that each of the matters upon which she decided to reject the approval of the Enterprise Agreement alone, would have led to its demise let alone cumulatively.  The Full Bench dealt with  each of the  matters referred to above.It found that each finding  of the tribunal at first instance, was in error and amenable on appeal.

Some of the McNuggets of wisdom proffered by the Full Bench in setting aside the Commissioner’s decision were variously described as:

(i)    “(it) imposed additional statutory tests contrary to the terms of (the Act) [21]”; 

(ii)  “(Its) approach was not consistent with the Act [25]”;

(iii) “(It) mis-stated the (statutory) test [29] – [41]”;

(iv) “(The Commissioner) erred in her approach [34]”;

(v)  “No proper basis for (so) concluding [39]”; and

(vi) “(The Commissioner’s) conclusions were unsustainable [50].”

It appears what the Commissioner neglected to have regard to in an overall sense were the objects of the Act, in that the Fair Work Act was to provide a simple, flexible and fair framework for enterprises (s 171(a)).  Further, an object of Fair Work Australia was to facilitate the making of enterprise agreements (s 171(d)).  The Full Bench said:

“In considering the facilitative aspects of these objectives, the approval of enterprise agreements should be considered in a practical, non-technical manner and that reasonable efforts should be made to clarify matters with the parties and consider undertakings to clarify all remedy concerns to the extent that they may be available under s 190 of the Act” [13].

The union’s argument, inter alia, suggested that the Commissioner had an approach of “trying to find defects” [24].

An aspect of the Full Bench approach, in stark contrast to the approach of the Commissioner, was in the language used to describe either the parties or aspects of the proposed Enterprise Agreement.  The Commissioner had described parts of the Enterprise Agreement as “industrially confronting”[1] “exploitative”[2] whereas the Full Bench praised the “collaborative approach of the parties and commended them for their efforts [26].”

This decision comes no doubt as a great relief to McDonald’s, but more particularly to Australia’s largest and politically powerful union the socially conservative  Shop Distributive and Allied Employees’ Association (SDA).  One thing however is certain, that  after having digested this judgment one member of FWA will not be sitting down for a Happy Meal anytime soon.

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[2010] FWA 1347 at [118]



Construction, Forestry, Mining and Energy Union – Mining and Energy Division ats Tahmoor Coal Pty Limited [2010] FWAFB 3510.

This  decision deals with good faith bargaining requirements under the Fair Work Act ( the Act), which was on appeal from a decision of Commissioner Roberts of the 12 February 2010 (see [2010] FWA 942).  Permission was granted to appeal in the public interest, as the appeal was said to raise matters for consideration concerning important new statutory provisions, which had not been considered at a Full Bench level before [1].

The case below was one in which  the CFMEU, on behalf of its members working in this coal mine, had sought a number of bargaining orders.  The CFMEU was unsuccessful and on appeal, narrowed the nature of the orders it sought.  The making of bargaining orders, comes under Chapter 2, Division 8 of the Act.  That division is headed, “FWA’s General Role in Facilitating Bargaining”.  This case highlights the role that Fair Work Australia will have, and the circumstances in which that tribunal can be enlisted to assist parties to reach an agreement.  In order to make such bargaining orders, it must be found by Fair Work Australia that at least one of the bargaining representatives has not met, or is not meeting the good faith bargaining requirements. (See s 230, sub-section 3(a)(i)).  The meaning of “good faith bargaining requirements” are set out in s 228 of the Act.

On appeal, the CFMEU relied upon one sub-section of s 228, being  as follows:

“228(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:

(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining; –“

The Full Bench said of that provision:

“The terms of that provision require not only that conduct undermines freedom of association or collective bargaining but also that the conduct be capricious or unfair.  Of course whether conduct is capricious or unfair can only be ascertained by an examination of all the circumstances in a particular case.” [7]

What had invoked the ire of the CFMEU, in what had been long and complex negotiations, attended by a number of industrial stoppages, was the fact that Tahmoor Coal was directly providing to its employees, who were also members of the CFMEU, its offer in writing in the Enterprise Agreement negotiations.  It was asserted by the CFMEU that by the employer directly communicating to those employees, it would encourage different views amongst that group of employees, without the bargaining representatives being present (CFMEU).  This conduct, it was claimed had the natural effect of weakening or undermining collective bargaining.  Further, such conduct would diminish the authority of the employee’s bargaining representative in the collective bargaining process [19]. It was also asserted that the most recent representative of Tahmoor Coal, had conducted the negotiations “at a level of intimidation”, which drew some comment both from the Commissioner at first instance and from the Full Bench.  This latter submission in relation to the manner in which the Colliery’s representative had conducted the negotiations, were to make good the argument that the Colliery had acted “capriciously or unfairly”.  The Full Bench said,

“The Commissioner accepted that Mr Nicholls (on behalf of the Colliery) adopted a very aggressive approach in the employee meetings and that he “probably crossed the line of what is reasonable in the  circumstances”, but he commented that aggressive tactics appear to be the norm in the coal industry.  We take this to be a finding that whilst Mr Nicholls’ behaviour might have been unreasonable in most industries, it was not inconsistent with normal behaviour in coal industry negotiations.  Aggression is to be deprecated.  But given some of the evidence of employer responses to Tahmoor’s proposals, taken with the Commissioner’s familiarity with the industry, the finding was open to him. We do not regard the fact that Mr Nicholls had referred to the possibility of employees being locked out as significant.  It appears that this statement was made in the context of response to the taking of protected action by employees.” [31]

I never thought that it could be said that the CFMEU were “shrinking violets”

However, on the key matters raised in the appeal, the Full Bench found against the Appellant.  The Full Bench found that  Tahmoor Coal had attempted to influence employees views directly, and not through the filter of the Union, however  it did not necessarily follow that such conduct undermined freedom of association, or collective bargaining, or that it acted capriciously or unfairly  [29] . In relation to the argument regarding the conduct of the ballot of employees, the Full Bench found that there was no absolute requirement for the agreement of  bargaining agents to occur, prior to the conduct of a ballot, and this was particularly so when the parties had reached an impasse in the negotiations  [30]. Consequently, the decision below, which in effect permitted the ballot on the Enterprise Agreement proposals by the company, was not stopped from taking place.

This case provides more explanation of the detailed technical provisions under the Fair Work Act with this one concerning bargaining for new industrial instruments.  It also shows that such negotiations can be extensive, and like this case, can go for many months and comprise up to fifty negotiating meetings, without agreement or the prospect of having the disputed matters arbitrated . Such negotiations are not easy and may lead to agreement  by exhaustion.

Jones ats Queensland Tertiary Admissions Centre Limited (No.2), [2010] FCA 399 (29^th April 2010).

Justice Collier of the Federal Court of Australia, sitting at Brisbane, had earlier issued interlocutory orders restraining QTAC from taking any action against the Applicant, Ms Jones until the hearing of the substantive Application filed in these proceedings.  See Jones ats Queensland Tertiary Admissions Centre Limited (2009) FCA 1382, and also the comment published on this website on the 3 December 2009.

After having heard the substantive application, Justice Collier dismissed Ms Jones’ application.  Ms Jones, who was the Chief Executive Officer of QTAC, had been the subject of serious bullying allegations by individual employees of QTAC and the Australian Services Union (“ASU”) [1].  Ms Jones had claimed that the ASU had orchestrated a campaign against her, relevant to her conduct in the 2009 enterprise bargaining negotiations as spokesperson for QTAC. Further, that in taking adverse action against her, it was alleged that QTAC had yielded and continues to yield to this campaign by the ASU, in contravention of the Fair Work Act 2009.  Ms Jones had sought many orders in her application, amongst which was that her employer not act upon any investigation report received concerning her alleged behaviour.  Rejecting all these claims, Justice Collier said,

“[200] Further, I consider that QTAC’s actions were in no way related to any workplace rights of Ms Jones.  I consider that Ms Jones’ role as bargaining representative, and her participation in enterprise agreement negotiations, were completely irrelevant to QTAC’s reasons for the actions it took.

[201] It follows from this consideration that Ms Jones has not substantiated her claims against QTAC pursuant to s 340 of the Act.

In dealing whether there was any claim, Justice Collier made the following observations,

“ [9] It was common ground between the parties that Ms Jones bears the onus of proving she has a workplace right under the Act.  However, once an employee has established that he or she has a workplace right, and has been the subject of adverse action by the employer, the onus of proof shifts to the employer in respect to the reason for the adverse action by the employer.  At this point the onus is on the employer to demonstrate that the adverse action taken against the employee was not for a reason prohibited by the Act.

[10] That the employee is required to first prove the existence of objective facts which are said to provide a basis for the alleged adverse action before the onus shifts to the employer in respect of the prohibited reason was explained by Branson J in Construction, Forestry, Mining and Energy Union against Coal & Allied Operations Pty Limited (1999) 140 IR 131 at [161] – [162]. …….. It is not sufficient for Ms Jones to simply allege that she has a workplace right and that she has been the subject of adverse action – rather on the assumption that Ms Jones is able to prove these allegations, the burden is then cast on QTAC to prove that adverse action was not taken against Ms Jones because of her workplace rights for the purposes of s 340 and s 361 of the Act.”

In order to determine for what reason adverse action may have been taken against an employee , it is relevant to consider the subjective reason or  reasons for the taking of the impugned action by the employer, and if the employer is a corporation, of its directors [128].  Despite what was found in General Motors Holden Pty Limited  v  Bowling (1976)  12 ALR 605, even if all the directors who made the decision are not called, there can be sufficient evidence accepted of the motivation of the board of directors in acting as it did [167].  Her Honour found that the only reasons motivating the key directors of QTAC in taking adverse action against Ms Jones, was a concern for the organisation, that Ms Jones had been mistreating staff members, a belief that it was essential that action be taken by QTAC to investigate such allegations, and a wish to ensure that any investigation be conducted with proper procedure, including Ms Jones being given a reasonable opportunity to present her side of the story [168].  Her Honour also dismissed allegations that there had been a breach of contract and a failure to provide natural justice to Ms Jones.

Adverse action claims such as this under the Fair Work Act, will very much depend upon the finding of facts made by the trial judge and are a more problematic alternative remedy compared to bringing unfair dismissal proceedings before Fair Work Australia. If one’s advisers believe that an adverse action claim under the Fair Work Act is arguable  in the Federal Court  using the Court’s  accrued jurisdiction one might also consider pleading the economic torts of conspiracy, interference with contractual relations or intimidation ( see Latham v Singleton ( [1981] 2 NSWLR) 843 per Nagle CJ at CL)

McDonald’s Australia Enterprise Agreement 2009 [2010] FWA 1347. ( 23 rd April 2010)

Commissioner Donna “Big Mac” McKenna, formerly of the Industrial Relations Commission of New South Wales, now a Commissioner of Fair Work Australia, has rejected an Application filed by Mc Donald’s, for an Enterprise Agreement to cover its 80,000 employees, employed in all McDonald’s outlets in Australia. The Application under s 185 of the Fair Work Act filed by McDonald’s was supported by the union, the Shop Distributive and Allied Employees Association (SDA) which was closely involved in the making of the Agreement and supported its approval . The Commissioner handed down a 102 page judgment of 383 paragraphs, setting out many reasons why the approval of the proposed Agreement would be declined .

The length of the judgment is more telling, in that there was no contradictor in the case. The application for approval had been filed last December. The matter had been listed for hearing at various times earlier this year when the Commissioner had raised a number of preliminary concerns about the Application. In February this year, she made a Statement expressing further concerns about the proposed Agreement. The parties provided statutory declarations in addition to the material originally filed, in order to allay the concerns of the Commissioner.

The Commissioner’s judgment noted that a number of the declarations made by the Applicant were either insufficient or incorrect, which observation was admitted by the Applicant [6]. Notwithstanding the additional declarations, the Commissioner still found the Application deficient with respect to the provision of information required in support of such an application for approval [10]. The Commissioner considered the pre-approval requirements for an Enterprise Agreement found at s 180 of the Act. The deficiencies and failures individually identified by her would have been sufficient for her to reject the application let alone cumulatively. Of great concern to the Commissioner was that she found the pre-approval requirements under s 180 were not met. These requirements provide that employees need to have a free vote, in possession of all relevant information and explanation of the Agreement with special emphasis on McDonald’s employees, subject to some kind of disability such as their comparative youth, See sub-section 180(6). She could not find that the Agreement was one which the employees in question could have genuinely agreed (s 188),[84[ to [97] inclusive .

In dealing with the issue of whether the Agreement could pass “the better off overall test” (s 186(2)(d)), the Commissioner found that she could not be so satisfied. In considering this test, the Commissioner had regard to the previous industrial regulation applicable to employees at McDonald’s, which had largely been based on discreet industrial instruments in the States and Territories which regulated the minimum pay and conditions of employment for certain classes of employees [1]. The Commissioner had regard to what are called reference instruments, being the industrial instruments currently applicable to McDonald’s throughout the States and Territories in Australia [21] and [22].

Having regard to those pre-existing documents, she stated,

“I am not satisfied the multitude of disadvantages presented by the Agreement is, in a form of overall industrial equilibrium, offset by its marginal advantages. I do not consider the Agreement satisfies the no disadvantage test.” [357]

The depth of the Commissioner’s feelings in relation to the failure of the Agreement to pass this test also known as the no disadvantage test can be gleaned from some of the pejorative descriptors she used regarding aspects of the proposed Agreement. She said,“… the Agreement allows potentially quite exploitative arrangements for rostering of employees—“ [118]; “— the Agreement would provide only flat hourly rates for casual employees in the Territories. This would represent a significant financial disadvantage of around 20% on the hourly rate as against the reference instruments.” [141]; “— wages would be decreased for certain classes of employees.” [155]; “— the Agreement appeared to displace, remove, omit or reduce conditions that would have applied under the reference instruments.” [296]; “An examination of the wage rates shows that in the case of Queensland employees, the starting wage rate for level 1 employees is said to compensate, in an overall sense, for the loss of a range of conditions under the reference instrument is no more than the standard national minimum of $543.78 a week.” [299]; “However, if the adjustments are considered over the life of the Agreement, the adjustments are, in some instances, less than the national minimum adjustment.” [306]; “While I accept the Agreement contains a mix of advantages and disadvantages, I have concluded the Agreement would represent an emphatic diminution in overall terms and conditions for the employees who would be subject to its proposed operation.” [379].

As a parting shot at McDonald’s, in the final paragraph of the judgment, the Commissioner referred a copy of the decision to be sent to the Fair Work Ombudsman to investigate evidence which would suggest that the Applicant or its licensees, or both, may have been underpaying some employees. [383].

The cheapest item for sale at McDonald’s restaurants is the 50c soft serve cone. Commissioner McKenna gave the parties, particularly the bargaining agent the SDA, a serve but certainly not a soft one. This rebuke , a particularly embarrassing one to the SDA, is a reminder that tribunals such as Fair Work Australia will not rubber stamp Agreements. Over twenty years ago during the days of the Wages Accord the Federal Commission investigated wage deals in industrial instruments, which were suspected to have provided wage increases in excess of those permitted under the wage fixation principles . It appears now that a not insignificant part of Fair Work Australia’s duty is to investigate the converse .