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15 January 2020
On 18 February 2019 the Metropolitan Fire and Emergency Services Board (MFB) and the United Firefighters Union of Australia (UFU) Operational Staff Agreement 2016 was approved.(1)
The agreement survived a series of challenges – most recently, the minister for jobs and industrial relations' application for a review of its approval by a full bench of the Fair Work Commission.
The approval of the agreement raised issues around:
On 3 April 2018 the MFB applied to the commission for approval of the agreement.
The commonwealth minister for small and family business, the workplace and deregulation (now the minister for jobs and industrial relations) and the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) sought leave to be heard in relation to the MFB's application for approval of the agreement.
At the hearing, among other arguments, the minister and VEOHRC advanced an interpretation of Section 195 of the Fair Work Act that prohibited enterprise agreement terms that were indirectly discriminatory. The MFB opposed this interpretation. This submission picked up on the competing Federal Court authorities of Klein v Metropolitan Fire and Emergency Services Board(2) (regarding Section 351 of the Fair Work Act) and Shop, Distributive and Allied Employees Association v National Retail Association (No 2) (SDA)(3) (which considered an equivalent provision to Section 195, but in the context of discriminatory terms in modern awards (Section 153)).
Deputy President Gostencnik stated that if Section 195 of the Fair Work Act extended to indirect discrimination, he would have been unable to approve the agreement because he considered that it contained three categories of indirectly discriminatory terms. These were provisions that:
However, this was not Gostencnik's conclusion. Rather, he considered that he was bound to follow the decision in SDA, such that Section 195 of the Fair Work Act is limited to direct and not indirect discrimination.
On 15 January 2019 Gostencnik issued a decision (the first decision)(4) that the agreement:
The first decision found that apart from some clauses which Gostencnik considered would limit access to flexible working arrangements in contravention of the Fair Work Act, the agreement otherwise satisfied the requirements that must be met for the commission to approve an enterprise agreement.
To address the commission's concerns regarding flexible working arrangements, the MFB provided the commission with undertakings which would amend the relevant clauses.
On 18 February 2019 Gostencnik accepted the undertakings and approved the agreement (as amended by the undertakings) (the second decision).(5) The undertakings:
At the same time as the review applications, the MFB applied to vary the agreement to remove ambiguity or uncertainty in three clauses of the agreement, which it considered arose from the effect of the undertakings (the variation application).
On 4 June 2019 the review applications and the variation application were heard before a full bench of the commission composed of Hatcher, Deputy President Masson and Commissioner Lee.
The full bench dismissed the minister's review applications and granted the MFB's variation application (the full bench decision).(9)
The minister's review applications were based on two grounds under the first and second decision.
Review application regarding second decision – undertakings
The minister alleged that the undertakings should not have been accepted by Gostencnik as they were likely to result in substantial changes to the agreement as approved by MFB employees, such that they did not meet the requirements for acceptance of an undertaking under Section 190(3) of the Fair Work Act. The minister alleged that "the undertakings accepted by the Deputy President in the second decision radically recast the part-time employment provisions of the Agreement and resulted in a scheme inconsistent with that intended by the MFESB and the UFU".(10) The full bench held that that approach to determine whether undertakings result in a substantial change to the agreement is for "an assessment to be made as to the nature and effect of those changes in the context of the agreement as a whole".(11) The full bench noted that the agreement had "163 clauses and 20 schedules dealing in considerable detail with almost every conceivable feature of the employment of firefighters".(12) Further, the undertakings affected only a small number of clauses which applied to only a small number of employees covered by the agreement who worked part-time.
The full bench stated that the undertakings did not affect pay or other employment benefits and noted the recent comments of a full bench in CFMMEU v Specialist People Pty Ltd,(13) which stated that it is unlikely that employees will object to "modifications that fundamentally protect their interests".(14)
The full bench stated that:
The Minister does not in truth identify any appealable error in the Deputy President's consideration under s 190(3)(b), but in substance merely advances submissions contending for a different conclusion. This does not constitute a proper basis for the conduct of a review.(17)
Review application regarding first decision – discriminatory terms
The minister alleged that the first decision was incorrect in treating Section 195 of the Fair Work Act and discriminatory terms as limited only to direct discrimination, and argued that because of Gostencnik's finding that the agreement contained terms that were indirectly discriminatory, it could not be approved.
This review application was also rejected by the full bench.
In doing so, the full bench found that the effect of the undertakings was to remove any indirectly discriminatory effect that clauses of the agreement may have had:
we consider that the modifications to the Agreement effected by the undertakings accepted in the second decision together with variations made as a result of our grant of the MFESB application have entirely removed the basis upon which those findings were made.(18)
Accordingly, the full bench found that this review application lacked a "practical purpose".(19)
Further, although it was ultimately unnecessary for it to do so (given its conclusion regarding the effect of the undertakings), the full bench agreed with the MFB's submissions (and the approach adopted by Gostencnik in the first decision), that Section 195 of the Fair Work Act does not extend to indirect discrimination. In doing so, the full bench considered that there were real difficulties with the minister's arguments that Section 195 extended to indirect discrimination.
One of the undertakings had the effect of removing the requirement for the UFU to agree to any part-time work arrangements. The minister submitted that under Section 191(1) of the Fair Work Act, an undertaking that is accepted by the commission is taken to be a term of the agreement only "as the agreement applies to the employer" such that "the undertakings could not validly affect any right of the UFU under the Agreement".(20)
The full bench identified that the words of the section relied on by the minister reflected that Sections 191(1) and 191(2) were intended to apply to single-employer agreements and multi-employer agreements and "are not to be read as meaning that undertakings are incapable of effecting any alteration to the rights of persons bound by an agreement other than the employer".(21) In rejecting the minister's argument, the full bench noted that undertakings usually impose obligations on both the employer and employee and expressed its surprise that it was even advanced.(22) The full bench stated that if:
undertakings could only operate as a term of an agreement applying to the employer [it] would render untenable the whole mechanism of undertakings as a means by which the approval of agreements may be facilitated.(23)
The MFB's variation application was granted. In doing so, the full bench rejected the minister's argument that approving the variation application would fundamentally change the part-time employment provisions of the agreement.
The full bench found that the amendments sought by the MFB in the variation application "merely perfect what was plain[ly] intended by the undertakings proposed by the MFESB and accepted by the Deputy President in the second decision".
Employers should remember that:
For further information on this topic please contact Kaitlyn Gulle or Alice Alexander at Lander & Rogers by telephone (+61 2 8020 7700) or email (firstname.lastname@example.org or email@example.com). The Lander & Rogers website can be accessed at www.landers.com.au.
(1) Re Metropolitan Fire and Emergency Services Board  FWC 1023.
(2) (2012) 208 FCR 178.
(3) (2012) 205 FCR 227.
(4) Application by Metropolitan Fire and Emergency Services Board  FWC 106.
(5) Re Metropolitan Fire and Emergency Services Board  FWC 1023.
(6) Full Bench Decision .
(7) Minister for jobs and industrial relations; Minister for women – application for review of a decision  FWC 1228.
(8) Application by the minister for jobs and industrial relations; Minister for women  FWC 1922.
(9) Christian Porter, attorney general and minister for industrial relations v Metropolitan Fire and Emergency Services Board  FWCFB 6255.
(10) Full Bench Decision .
(11) Full Bench Decision .
(12) Full Bench Decision .
(13)  FWCFB 6307.
(14) Full Bench Decision .
(15) Full Bench Decision .
(16) Full Bench Decision .
(17) Full Bench Decision .
(18) Full Bench Decision .
(19) Full Bench Decision .
(20) Full Bench Decision .
(21) Full Bench Decision .
(22) Full Bench Decision .
(23) Full Bench Decision .
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