CASENOTE: ResMed Ltd v Australian Manufacturing Workers Union [2016] FWCFB 22 (18 January 2016)

  • Author : Tim Donaghey - 16-02-2016

The Australian Manufacturing Workers’ Union (also ‘AMWU’ and ‘Union’) sought to alter its eligibility rules to enable it to represent “an unlimited number of employees employed by ResMed” (‘ResMed’ or ‘Employer’) plus employees of other employers supplied to ResMed. I refer to this as the ‘AMWU rules application’. ResMed sought in a cross application (the ‘AMWU representation application’) an order under legislation related to the Fair Work Act 2009 (Cth) (‘FW Act’) that the AMWU be prohibited from suchrepresentation.

The applications were brought pursuant to section 158 of the Fair Work (Registered Organisations) Act 2009 (‘RO Act’) in the Fair Work Commission (‘Commission’) by a full bench consisting of Hatcher VP, Lawrence DP and Johns C. There were other applications and appeals (including one application for prerogative relief to the Federal Court) between ResMed and AMWU. This casenote deals with the rules dispute, and not the application pursuant to section 236 of the FWAct.

  1. Overview; allegations andsubmissions

ResMed performs research, design and manufacture of medical devices for the treatment of sleep-disordered breathing and cardio-respiratory disorders. It is an Australian subsidiary of a US basedcorporation.

The Union alleged that ResMed was connected to manufacturing in its activities and that such activities were in relation to broadly mechanical and engineering devices. ResMed alleged that it operated in the medical devices‘industry’.

The Commission considered the major activities of ResMed which was the subject of a report prepared by Dr Peter Spencer, who has experience in the making of medical devices. Whilst finding the distinction between the parties’ submissions elusive, the full bench of the Commission found that ResMed designed and made medical devices, within the wider manufacturingindustry.

  1. AMWU rulesapplication

The AMWU concentrated upon its industrial interest, and matters relating to its history coverage, membership and capacity to represent ResMed’s employees. ResMed countered these arguments by identifying eight AMWU-distributed leaflets which, contained “information that is incorrect” and had caused unnecessary confusion between employees’ rights and entitlements. There were eight leaflets identified from January 2011, and ResMed made complaints about the contents of each ofthem.

The full bench of the Commission considered the AMWU rules application in light of the AMWU rules application and the opposition to it from the Employer. This involved exercising a discretion, considering these twoquestions:

  • first, whether the nature of the AMWU eligibility rules should motivate the Commission to refuse the AMWU rules application altogether;and
  • if no to the first question, whether the AMWU rules application should be granted in whole or inpart.

The proper characterisation of the AMWU rules application is the coalescing of several discretions. The full bench found on balance that there was no discretionary basis to entirely refuse the rule alteration sought in the AMWU rulesapplication.

The AMWU rules application was allowed in part. The attempt in the AMWU rules application to ‘rope in’ contractors was denied; and the full bench modified the rule change, allowing AMWU representation of employees at a particular location who were not managers. The AMWU rules application, having been allowed in part, was otherwisedismissed.

  1. AMWU representationapplication

The full bench considered sections 137A and 137B of the RO Act and ResMed’s application to exclude the AMWU from representation rights of employees of ResMed. These sections are prescriptive, given they would restrict the ability of employees who would otherwise be entitled to join or be represented by aunion.

Due to the effect of the sections, the full bench found that there would have to be a ‘strong case’ to enable the making of a 137A or 137B order. They found that such events as disruptive demarcation disputes, repeated unlawful industrial action or systematic abuse of rights of entry might qualify for such a ‘strong case’ -- but in the present case evidence was lacking. The Commission dismissed the AMWU representationapplication.

Rationale of the decision

This case highlights that the rules of an industrial organisation play a central role in setting the scope of some parts of the industrial system. Even though the rules of an organisation are seldom examined in detail, these are the founding documents for organisations registered under the RO Act. They are integral to both their foundation and the extent to which an organisation like the AMWU canbargain.

ResMed’s application in this case was ambitious: there is no warrant for the conclusion that the Commission will lightly interfere with the rights of representation otherwise established by law. To this extent the application for sections 137A and 137B orders under the RO Act will remain a rarity.

About the Author

Tim Donaghey

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