15 August, 2018
Australian Licensed Aircraft Engineers Association v Qantas Airways Ltd [2018] FCA 1065
What you need to know
A permit holder seeking to exercise a right of entry under s 481 of the Fair Work Act 2009 (Cth) must provide an entry notice that establishes the particulars of the facts, matters and circumstances said to give rise to a reasonable suspicion that the Act has been contravened. It is insufficient to merely identify an obligation suspected to have been contravened.
The right of a permit holder to enter premises to investigate a suspected contravention is conditional upon that suspicion being objectively reasonable. The onus of proving that a suspicion is reasonable is on the permit holder.
A request for documents, only some of which are 'directly relevant' to a notice, is a request made in excess of s 482 of the Act. For documents to be 'directly relevant', they must be capable of providing more than just indirect or circumstantial evidence of a suspected contravention.
Where there are multiple contraventions alleged in an entry notice, permit holders must identify the alleged contraventions to which each document relates.
What you need to do
Ensure that a right of entry notice under Part 3-4 of the Act specifies the facts, matters and circumstances said to give rise to an objectively reasonable suspicion under s 481 that the Act has been contravened.
Ensure that documents sought to be produced under s 482 of the Act are "directly relevant" to a suspected contravention, meaning that they are capable of providing more than just indirect or circumstantial evidence of a suspected contravention.
Why is this an issue now?
The Federal Court has provided much needed clarity about the interpretation of right of entry and access to documents provisions under Pt 3-4 of the Fair Work Act 2009.
This decision relates to a review undertaken by an employer in December 2015 of its complement of engineers. In January 2016, the employer notified the relevant union that it had a surplus of full time equivalent engineer positions in Sydney.
The Federal Secretary of the union took the view that the employer had contravened consultation requirements imposed by the relevant enterprise agreement.
In June 2016, the Federal Secretary sought to exercise his right of entry as a permit holder to the employer's premises under s 481 of the Act and seek access to documents relevant to the suspected contraventions under s 482 of the Act. The employer allowed the Federal Secretary entry to the premises but did not produce any documents.
The union commenced proceedings seeking declaratory relief and pecuniary penalties against the employer and two of its managers which, it was claimed, were "involved in" the contraventions within the meaning of s 550 of the Act.
A suspected contravention – the need for particulars
Justice Flick found that it is not sufficient for an entry notice to merely identify the clause of an enterprise agreement which the permit holder suspects has been contravened.
Section 518(2)(b) of the Act requires a permit holder to set out in the entry notice the facts, matters and circumstances said to give rise to a suspected contravention of the Act or enterprise agreement.
In this case, it was held that the union:
complied with s 518(2)(b) in respect of one clause of the enterprise agreement, by arguing the employer was "exercising clause 60 to order directed leave over and above the level they are entitled to"; but
did not comply in respect of another clause of the enterprise agreement, when it argued the employer "ha[d] not complied with consultation requirements in clause 47". This failed to identify the nature of the suspected contravention, for example, whether it was a failure to consult in respect of the introduction of changes, or their effects on employees.
Need for a reasonable suspicion
Justice Flick accepted that the Federal Secretary held a subjective suspicion that the employer had contravened clauses of the enterprise agreement. It found that the requirement imposed by s 481(3) of the Act was that the suspicion be objectively reasonable. In the present case it was found that an objectively reasonable suspicion:
- was satisfied with respect to the suspected contravention of cl 60, because the Federal Secretary had considered documents relating to the employer's undertaking to consult on surplus management, and he had also been told that staffing levels often fell below planned levels. So, this existing pool of information provided a sufficient objective basis to reasonably suspect a contravention of the clause;
- was not satisfied in relation to cl 47 because the Federal Secretary could not establish sufficient information to objectively and reasonably suspect a contravention.
Are documents sought directly relevant?
Justice Flick also found that the union failed to establish that any of the documents to which access was sought were 'directly relevant' to a suspected contravention of cl 47 of the enterprise agreement.
His Honour found that for documents to be 'relevant', they must be capable of providing more than just indirect or circumstantial evidence of a suspected contravention.
While some of the documents sought with respect to cl 60 were directly relevant, the employer was under no obligation to produce them. This was because where multiple contraventions are alleged, permit holders must identify the alleged contravention to which each document relates. So, the employer was under no obligation to make available any of the documents requested.
Consequences of findings
It was found that the rights of entry and to access documents sought to be exercised by the Federal Secretary were not authorised under the Act.
The rights sought were at all times in respect of both suspected contraventions of cl 47 and cl 60 of the enterprise agreement, and whilst there was a reasonable basis for the suspicion with respect to a breach of cl 60, the rights were at all times pursued in relation to suspicions held with respect to breaches of both clauses and, in such circumstances, the employer "was under no obligation to parse and analyse the right sought to be exercised… to determine the scope of the more limited rights authorised …."
The proceedings were dismissed.
For further information, please contact:
Stephen Woodbury, Partner, Ashurst
stephen.woodbury@ashurst.com
