Fair work; staying orders under appeal

This is a decision of the Fair Work Commission which sets out the legal issues involved when determining whether to stay the operation of a decision which has been appealed against.

“Appeal against decision PR749188 of Commissioner Riordan at Sydney on 22 December 2022 in matter number C2022/8414 – Application to stay an interim order – Dispute Resolution Procedure – Status Quo – arguable case with some reasonable prospects of success – balance of convenience does not favour granting a stay – application rejected.

[1] For the moment Mr Robert Campbell is an employee of Svitzer Australia Pty Limited. Mr Campbell is employed as a Rating in Sydney on a fixed-term basis. By the terms of a written contract of employment signed in March 2022, Mr Campbell’s “Contract Period” was due to end on Saturday 31 December 2022.

[2] Mr Campbell is one of six employees employed on fixed-term contracts in Sydney engaged to perform work under a contract between Svitzer and the Australian Navy. Apparently all six employment contracts were due to end on 31 December 2022.

[3] On 20 December 2022 Mr Campbell was told that the contracts for the other five employees would be “renewed” but that Mr Campbell’s employment would be “discontinued”.

[4] Representatives of the Construction, Forestry, Maritime, Mining and Energy Union (MUA) discussed the matter with management representatives on 21 December 2022. The dispute was not resolved in those discussions and late in the day on 21 December 2022 the MUA referred the matter to the Fair Work Commission in accordance with clause 10 of the Svitzer Australia Pty Limited National Towage Enterprise Agreement 2016 (the Agreement).

[5] The matter was listed for an “urgent conference” before Commissioner Riordan early in the morning of 22 December 2022.

[6] In full knowledge that Mr Campbell’s employment was due to finish on 31 December 2022 and of the substance of the dispute raised by the MUA, Svitzer chose not to attend the scheduled conference in the Commission.

[7] The conference itself lasted for 15 minutes. After the conference Commissioner Riordan listed the matter for further conference on 12 January 2023 and made an interim order that “Mr Campbell’s employment be continued until 20 January 2023.”

[8] Svitzer appealed the making of the interim order and sought an urgent stay.

[9] On Friday 30 December 2022 the application for a stay order was heard and I announced on that day that I would not make the order sought. I gave a short ex tempore summary of my reasons for declining the application and indicated that I would provide further written reasons.

[10] Later in the day on 30 December 2022 Svitzer indicated by email that it intended to discontinue its appeal and indicated that it still wanted written reasons for my decision.

The Decision

[11] The Commissioner’s decision is not lengthy and conveniently provides most of the background information:

“[1] The Construction, Forestry, Maritime, Mining and Energy Union – The Maritime Union of Australia Division (MUA) notified a dispute with Svitzer Australia Pty Ltd (Svitzer) on 21 December 2022 at 5:05 PM AEDT. A notice of listing was sent to the parties at 5:29 PM AEDT on 21 December 2022. The Managing Director was contacted by text message at 6:23 PM AEDT advising him of the notice of listing. The Managing Director responded at 9:00 PM AEDT. Svitzer failed to attend the conference. The conference proceeded in their absence due to the urgency of the application.

[2] The dispute concerns the pending termination of Mr Robert Campbell on 31 December 2022 as a result of the expiration of his fixed term contract.

[3] Mr Campbell’s employment is governed by the Svitzer Australia Pty Limited National Towage Enterprise Agreement 2016 (the Agreement) which incorporates the relevant Port Operating Procedures (POPs). The relevant POPs for Mr Campbell is the Sydney POPs.

[4] Relevantly, clause 1 of the Sydney POPs states:

“…As from the date of hiring to meet the operational requirement of the POPs; an additional 2 x 100% LIR crew (for a fixed term period of 6 months). Svitzer has the discretion as to whether it will extend the fixed term contracts beyond the 6-month period and the discretion to appoint any fixed term employees from time to time similar to casual employment.

(a) One month prior to the end of the term of the Fixed Term Contracts, Svitzer will conduct a review of its operational requirements to assess whether, based on those requirements, it needs to extend those contracts (including whether they would be extended on similar percentage or lower percentage) and the period of extension; or

(b) bring the Fixed Term Contracts to an end.”

[5] I note that Svitzer was required to undertake a review of this fixed term contract one month prior to its expiration. It would appear that this review only occurred on Tuesday, 20 December 2022. At this point, Mr Campbell was advised that, out of the six employees who were working on these fixed term contracts (one Master, one Engineer, and one Rating on each tug), he was the only employee to not have his fixed term contract renewed for a further period. It would appear that the work which Mr Campbell had been performing is ongoing.

[6] Prima facie, Svitzer has not complied with clause 1(a) of the POP.

[7] The Dispute Resolution Procedure at clause 10 of the Agreement states that:

“Pending the completion of the procedure set out in this clause, work shall continue without interruption. No party shall engage in unlawful action and pending the resolution of the dispute the status quo shall apply. The rights of individuals or parties under the Act shall not be prejudiced by the fact that work has continued under this process normally and without interruption.”

[8] I note that the status quo continues to apply until this matter is resolved. On the basis that Svitzer did not conduct this review one month prior to the expiration of the contract, I am satisfied, on a preliminary basis, that Mr Campbell has not received his entitlement under the Agreement.

[9] I hereby order, on an interim basis, that Mr Campbell’s employment be continued until 20 January 2023.

[10] The matter is listed for further conference on 12 January 2023 at 9am AEDT.

[11] I so Order.”

(source formatting)

The Grounds of Appeal

[12] The grounds of appeal can be summarised as follows:

(a) the interim Order misconstrues the “Status Quo” provision of the Agreement (at clause 10) because the status quo is that Mr Campbell’s employment would end on 31 December 2022 by the terms of the contract he signed in March 2022;
(b) Svitzer did not breach the Sydney POPs;
(c) Svitzer was not provided procedural fairness insofar as it was not given notice that a binding order was about to be made against it or the terms of the orders sought;
(d) the orders were made in the absence of Svitzer and without Svitzer having an opportunity to be heard; and
(e) “to the extent that there has been a contravention of clause 1(a) of the POP and thereby the Enterprise Agreement, the enforcement of that obligation is a judicial function.”

[13] Despite the Christmas period both parties prepared extensive and helpful written submissions, supplemented by oral submission at hearing, that enabled the matter to be dealt with efficiently.

[14] In support of its stay application Svitzer relied on two statements by its Chief Strategy and People Officer, Ms Vivian Faraj.

[15] Ms Faraj’s statements add the following salient points:

(a) Ms Faraj is an admitted lawyer with a current practicing certificate;
(b) Ms Faraj participated in discussions on 21 December 2022 at Svitzer’s offices in relation to Mr Campbell wherein, by Ms Faraj’s account of the discussion, the MUA demanded that Mr Campbell’s contract be extended;
(c) Ms Faraj took exception to the tone adopted by Mr Paul Keating, an MUA organiser, and said she felt “uncomfortable as a result of Mr Keating’s behaviour” and that she was “concerned for the safety of myself and my team and wanted Mr Keating to leave the premises as soon as possible”;
(d) in the afternoon of 21 December 2022 Ms Faraj was told by Mr Paul Garrett that the MUA had “filed in the Commission” and that the matter had been listed for the next morning;
(e) Ms Faraj received an email from the Commission at 5:26pm but did not open it until around 9:00pm and then noticed that the matter was listed for 8:15am the next day;
(f) Ms Faraj chose not to attend the Urgent Conference herself and does not appear to have made any attempt to arrange for another representative of Svitzer to attend;
(g) Ms Faraj is engaged in a full-time capacity and is also responsible for providing care to her five-month-old daughter. Ms Faraj does not always work ‘traditional’ office hours and often works part days on Thursdays and Fridays. In the morning on Thursday 22 December 2022 Ms Faraj was providing care to her daughter; and
(h) despite these child-care arrangements Ms Faraj does not say in her evidence (and Svitzer does not otherwise submit) that she was unavailable to attend the Urgent Conference before Commissioner Riordan.

[16] Ms Faraj’s reasons for not attending the Commission and apparently not making any arrangements for anyone else to attend the Commission are as follows:

“Throughout my career, I have taken part in many matters before the Commission where the opposing side does not attend.

In my experience, the Commission will ordinarily stand over the matter or, if urgent, will make an attempt to contact the absent party.

Given my discussions with Mr Garrett on 21 December 2022, my understanding was that the matter listed for 22 December 2022 was no more than a mention, and my attendance was not essential.

I also assumed that, if this was not correct, the Commission would attempt to contact me, particularly given that Mr Garrett was aware that I was unable to attend.

On the basis of the experiences and understandings set out in the above four paragraphs, I made the decision not to attend the Urgent Conference but did make sure my phone was on and I was contactable should there be and urgent need for my participation.

I did not receive a phone call from either the Commission or the CFMMEU and until receiving the Order, I assumed that the matter had not proceeded.

Had I known that the matter was one that could resulted in an order or determination of the kind made, I would have instructed our lawyers to attend.”

[17] In opposition to the stay order the MUA provided a witness statement from Mr Paul Garrett, Deputy Secretary of the Sydney Divisional Branch of the MUA. Mr Garrett provided evidence of the amendments made to the Sydney Port Operating Procedures (POPs) in August 2021 to allow for additional crews to be engaged on fixed-term contracts after Svitzer had acquired new business supporting the Royal Australian Navy tugboat contract and of his understanding of the particular provisions in dispute.

[18] Mr Garrett denied that any threats were made during the meeting at Svitzer’s site on 21 December 2022, or that there was any intimidatory conduct at all. Mr Garrett did say that near the commencement of the meeting, Ms Faraj took exception to Mr Keating stating words to the effect “You’ve sacked a MUA Sydney Branch Committee member.”

[19] Mr Garrett said that during the meeting he and Mr Keating made several positive statements about Mr Campbell’s work history, his work performance and the fact that Mr Campbell has not ever been performance managed. Mr Garrett says that Svitzer’s officers at the meeting did not reject or take issue with any of these matters raised on Mr Campbell’s behalf. Mr Garrett also said of the meeting on 21 December 2022:

“I had formed the view during my discussion with Ms Faraj that this matter had been timed just before the Christmas break to limit the opportunity for the MUA to respond. I was deeply disappointed that Mr Campbell was notified by Svitzer Australia in the days before Christmas that his work was ceasing whilst his crew mates would continue employment.”

[20] Mr Garrett also gave evidence of Mr Campbell’s circumstances and the financial difficulties that would follow for him if a stay order was granted.

Stay Principles

[21] The principles applying to stay applications are well settled. As the Full Bench in Leon Wolff v Queensland University of Technology [2021] FWCFB 6033 at [14]-[15] observed 1:

“The principles applying to the determination of stay applications which are usually applied by the Commission are stated in the decision of the Australian Industrial Relations Commission in Edghill v Kellow-Falkiner Motors Pty Ltd. Paragraph [5] of that decision states:

“[5] In determining whether to grant a stay application the Commission must be satisfied that there is an arguable case, with some reasonable prospects of success, in respect of both the question of leave to appeal and the substantive merits of the appeal. In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed. Each of the two elements referred to must be established before a stay order will be granted.”

In assessing for the purpose of a stay application whether an appeal has the requisite prospects of success, the Commission necessarily engages in an assessment of the merits that is preliminary in nature, since the Commission will not have had the benefit of hearing the Appellant’s full argument and usually will not have had the opportunity to properly peruse the case materials.”

[22] In this matter I am satisfied that there is an arguable case with some reasonable prospects of success in respect of both the question of leave to appeal and the substantive merits of the appeal, but I am not satisfied that the balance of convenience weighs in favour of a stay order.

Balance of convenience

[23] Svitzer’s written submissions on the prejudice it says it will suffer if the stay is not granted were as follows:

“The appellant has proposed a course that will provide no prejudice to the employee. His wages will be paid into trust and released to the employee should a finding ultimately be made that his employment should continue.

On the other hand, if the Order is not stayed, and the employment continues beyond 31 December 2022 and the Commission ultimately finds that the appellant was empowered to end the employment on 31 December 2022, there will be no capacity for the appellant to bring a cause of action against the employee (or any other person) to seek recovery of the salary paid. Given that the employment was extended by Order of the Commission, there is simply no basis for any recovery action to be commenced by the appellant in relation to monies paid to the employee on and from 1 January 2023.

The appellant also faces the probability of the extension of the interim order should a stay not be granted particularly in circumstances where the determination of the appeal is unlikely to take place before at least the end of January. On the basis of the Commissioner’s reasoning; there would be similar logic in the Commissioner extending the current interim order until the determination of the appeal.

The balance of convenience weighs in favour of the appellant.”

[24] The MUA says that if a stay is not granted and Mr Campbell remains employed then Svitzer can ameliorate its risk by requiring Mr Campbell to work.

[25] Of the six employees engaged under fixed-term contracts of employment to perform work under Svitzer’s contract with the Australian Navy Mr Campbell was the only one whose employment was not extended. The six employees are deployed in two crews of three. Svitzer confirmed at hearing that the other two employees in Mr Campbell’s crew will continue working past 31 December 2022 with somebody replacing Mr Campbell.

[26] Svitzer indicated at the hearing that if the stay is not granted it will not allow Mr Campbell to perform work. That is a matter for Svitzer. There is no suggestion that allowing Mr Campbell to continue performing work will cause Svitzer any damage or prejudice at all. Svitzer has differentiated between Mr Campbell and the other five employees on the same fixed-term arrangement. Svitzer has declined to provide any indication as to why it has decided not to extend Mr Campbell’s contract of employment.

[27] For these reasons I am not satisfied that Svitzer will suffer any substantive prejudice if the stay is not granted.

[28] By contrast if Mr Campbell’s employment is not continued until Commissioner Riordan can deal with the underpinning dispute, he is at risk of possibly having no avenue to challenge Svitzer’s decision not to extend his contract.

[29] There is a possibility that Mr Campbell would not be able to make an application under s.394 of the Act because of the fixed-term nature of his contract. For present purposes Svitzer does not concede that Mr Campbell is entitled to make such an application.

[30] It is also not exactly clear that the Commission would have the power in the dispute proceedings to order Svitzer to reinstate Mr Campbell. In an unusual reversal of roles the MUA argues (for present purposes at least) that it is possible that the Commission might not have this power. Svitzer submits that the Commission does have the power to reinstate, relying on the observations of DP Asbury in Construction, Forestry, Maritime, Mining and Energy Union v BIS Industries Limited [2021] FWC 2352 at [124]:

“I turn now to consider the objection advanced by BIS on the ground that the Fair Work Commission has no jurisdiction to order reinstatement in dispute resolution proceedings. I do not accept that this is a universally applicable proposition and whether it is correct, will depend on the circumstances of a given case and the dispute settlement term in question.”

[31] For present purposes I do not need to form a conclude view on each of Mr Campbell’s possible legal options. I am satisfied that there is a potential prejudice to Mr Campbell that if the stay order is granted he could be without an avenue to dispute Svitzer’s decision not to extend his contract.

[32] To be clear, ultimately Mr Campbell might not have any practical legal recourse to challenge the cessation of his employment, and it is not the role of the Commission to manufacture a new legal cause of action for him. The dispute proceedings commenced, and the Commissioner made his interim order, while Mr Campbell was still employed. There is a distinct possibility that if Mr Campbell’s employment was to end then he would suffer prejudice because legal avenues that are currently open to him will be closed.

[33] The timeframes within which the matter was listed, the interim order was made, the appeal was lodged and the stay application was determined were dramatically condensed because of Svitzer’s decision to break the news to Mr Campbell so close to the Christmas period. It does not really matter whether Svitzer was strategic, capricious or just slow in deciding not to extend Mr Campbell’s employment, the key consideration is the potential prejudice to Mr Campbell’s legal position if his employment ceases on 31 December 2022 compared to his legal position if his employment continues until the appeal and/or the dispute proceedings are resolved.

[34] In weighing up the relative interests and risks of the parties the balance of convenience does not favour the granting of a stay order and therefore Svitzer’s application must fail.

Consideration: Reasonable prospects of success

[35] Because of my finding on the balance of convenience I need only briefly canvas my findings on whether there are some reasonable prospects of success, in respect of both the question of leave to appeal and the substantive merits of the appeal.

Procedural fairness

[36] The relief sought by the MUA, as stated in the Form F10 – Application was as follows:

“1. In the first instance, we seek the Fair Work Commission to chair a compulsory conference between the parties in attempt to resolve the matters in dispute.”

[37] There is no reference to the union seeking an urgent interim order in the material filed by the MUA.

[38] Similarly, there is no indication on the Notice of Listing issued by the Commission that the matter could immediately proceed to arbitration or that interim orders might be made.

[39] The Commission is a statutory tribunal that is bound to act in a judicial manner and to observe procedural fairness in carrying out its functions.2 Procedural fairness requires the Commission to give each party a reasonable opportunity to present their case, however the Commission does not have to ensure that parties take the best advantage of that opportunity. 3

[40] Svitzer was not squarely on notice of the MUA’s intention to apply for an interim order, or for that matter the possibility that the Commissioner would entertain such an order at the first conference. Even though the matter was listed very late in the year and very close to the Christmas period, it does not appear to me that the matter was so urgent that it could not have been relisted on another day prior to 31 December 2022 in order to give Svitzer a reasonable opportunity to prepare and present a case in opposition to the interim order sought. As such there is a reasonable prospect that Svitzer might be successful on appeal if Svitzer establishes that it was not afforded procedural fairness.

[41] That said, there is also an argument available to the MUA on appeal that any deficiency in procedural fairness was not material because it would not have made any difference if Svitzer had been on notice that orders might be made.

[42] Central to this argument is the fact that Svitzer was available (or at least not unavailable) but, for whatever reason, deliberately chose not to attend the Commission proceedings.

[43] There is absolutely no doubt that Svitzer was on notice of the substance of the dispute – the matter had been the subject of an agitated discussion the day before and in that discussion the MUA had specifically asked that Mr Campbell’s contract of employment be extended. The same subject matter was described in sufficient detail in the Form F10 referral.

[44] The MUA submit that Svitzer’s decision not to attend the Commission was cavalier, disrespectful to the Commission, a decision by Svitzer to thumb its nose at the Commission and at the dispute proceedings, and a decision to treat the proceedings before the Commission and the Commission in a contemptuous and dismissive way. The MUA also submitted:

“[Svitzer] has proffered no adequate or acceptable explanation for its non-attendance. That a significant employer with substantial economic resources and the capacity to call on internal and external legal representation determines to not attend proceedings before the Commission is industrially unpalatable and should not be rewarded. Its failure to proffer an appropriate explanation for its election not to attend the proceedings before the Commissioner is a factor which militates against rewarding Svitzer with the grant of a stay.”

[45] I do not need to make any findings about Svitzer’s motivations, be they good bad or indifferent. Svitzer knew that there was very little time available before the end of the year to deal with the dispute because of Svitzer’s decision to tell Mr Campbell of his fate so late. If the MUA’s conjecture is right, the urgency of the situation in the face of a looming deadline was part of Svitzer’s plan.

[46] Svitzer’s CEO was aware that an urgent conference had been listed. Ms Faraj’s explanation for her decision not to attend the urgent conference, reproduced in full above, is not satisfactory. Somebody at Svitzer decided that Svitzer’s interests were best served if no-one attended the Commission proceedings on its behalf.

[47] These matters of conjecture lend weight to the possibility that a Full Bench might find on appeal that there was no material procedural unfairness because even if Svitzer was on notice that an order might be made, it would have made the same strategic decision not to attend the Commission proceedings.

Misinterpretation of the POPs and the status quo provisions
[48] For present purposes there appears to be a reasonable possibility that Svitzer would be able to establish that the Commissioner erred in his understanding of the relevant port operating procedure. At the hearing for the stay application Svitzer presented a plausible argument that it was only required under the POPs to conduct a review one month before the end of the first six-month fixed term of employment.

[49] Similarly, Svitzer presented a plausible argument that the Commissioner misapplied the status quo provisions.

[50] By the terms of Mr Campbell’s written contract of employment signed in March 2022, Mr Campbell’s employment would automatically cease on 31 December 2022. The MUA’s complaint in the present dispute is that Svitzer has failed to, or declined to, take action to avoid the operation of those relevant terms of the contract of employment. In these circumstances it is arguable that the relevant “status quo” is that Mr Campbell’s employment would end on 31 December 2022 by operation of his contract of employment.

Conclusion

[51] For the above reasons, particularly my finding that the balance of convenience does not favour the granting of a stay order, Svitzer’s application was refused.”

Appeal by Svitzer Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2023) FWC 3 delivered 3 January 2023 per Easton DP