FEDERAL COURT OF AUSTRALIA

Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union [2015] FCAFC 105

THE COURT ORDERS THAT:

1.    The originating application filed on 24 December 2014 and amended on 19 February 2015 be dismissed.

2.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT

1    This proceeding is the latest stage of a long-running dispute over the approval of an enterprise agreement.

2    The agreement in question is the Teys Australia Beenleigh Pty Ltd Production Department Enterprise Agreement 2013 (“2013 Agreement” or “Agreement”). At the heart of the dispute is a controversy about whether certain employees who might have voted for the 2013 Agreement were in fact eligible to vote. The resolution of the controversy turned on whether those employees would be covered by the Agreement. This was a matter of considerable importance because an enterprise agreement will not be valid unless it has been approved by the Fair Work Commission (“FWC”) and the FWC may only approve an enterprise agreement if, amongst other things, it is satisfied that a majority of the employees who will be covered by the agreement have genuinely agreed to it.

3    The employer, Teys Australia Beenleigh Pty Ltd (“Teys”), applied to the FWC for approval of the 2013 Agreement and, over the opposition of the Australasian Meat Industry Employees’ Union (“AMIEU”), a bargaining representative of the employees at the Beenleigh plant, Asbury DP found that a majority of the employees who will be covered by the Agreement had cast a valid vote to approve it. On 27 September 2013 the Deputy President approved the Agreement, with effect on and from 4 October 2013. But her decision was quashed on 25 March 2014, following a decision made by the Full Bench of the FWC (Ross J, Gooley DP and Johns C) on 4 March 2014 that she had erred in her construction of s 181(1) of the Fair Work Act 2009 (Cth) (“FW Act”) and the coverage clause of the Agreement. Teys applied to this Court to have the Full Bench decision and the consequential order set aside for jurisdictional error. That application was dismissed on 12 February 2015: Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union [2015] FCAFC 11 (“Teys No 1”).

4    In the meantime, on 10 April 2014 Asbury DP again approved the Agreement, this time with effect from 17 April 2014, with a nominal expiry date of 10 April 2018. On 18 September 2014, by a majority (Acton SDP and Simpson C, Richards SDP dissenting), a differently constituted Full Bench granted the AMIEU permission to appeal and quashed that decision, too (“the September decision”), giving Teys the opportunity, however, to provide undertakings to meet their concerns: The Australasian Meat Industry Employees Union v Teys Australia Beenleigh Pty Ltd [2014] FWCFB 5643. Teys offered two alternative undertakings but, on 19 December 2014, the majority said that their concerns were not alleviated by either of the undertakings. Consequently, the Full Bench dismissed Teys’ application for approval of the Agreement (“the December decision”): The Australasian Meat Industry Employees Union v Teys Australia Beenleigh Pty Ltd [2014] FWCFB 8589.

5    Teys now applies for relief against the FWC under s 39B of the Judiciary Act 1903 (Cth) in order to have both Full Bench decisions and the consequential orders quashed and to prohibit the FWC from proceeding any further on either decision or order. Its originating application was filed on Christmas Eve last year and amended on 19 February 2015. It was supported by an affidavit affirmed on 23 December 2014 by Toby Christopher Walthall, a lawyer in the firm of Minter Ellison, which acts for Teys.

6    On 20 February 2015 Buchanan J granted Teys a stay of the operation of the quashing order made in September, pending the determination of its substantive application: Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees’ Union [2015] FCA 109.

7    For the following reasons the application must be dismissed.

THE APPROVAL OF ENTERPRISE AGREEMENTS UNDER THE FW ACT

8    An “enterprise agreement” is defined in the Dictionary to the FW Act as either a single enterprise agreement or a multi-enterprise agreement and “enterprise” as “a business, activity, project or undertaking”: FW Act, s 12.

9    The making of an enterprise agreement is tightly regulated under the FW Act. The matters it may cover and the parties who may make it are described in Pt 2-4 Div 2 (s 172). Rights to representation during bargaining for an enterprise agreement are enshrined in Div 3 (ss 173-178A). Approval of enterprise agreements is the subject of Div 4 (ss 180-201).

10    Subsection 181(1) provides that “[a]n employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it”.

11    Subsection 182 prescribes when an enterprise agreement is made. It relevantly provides:

If the employees of the employer … that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.

(Original emphasis.)

12    The 2013 Agreement is a single-enterprise agreement that is not a greenfields agreement.

13    If an enterprise agreement is made, the bargaining representative for the agreement must apply to the FWC for approval of the agreement: FW Act, s 185(1). Subject to s 192, which is not presently relevant, the FWC is bound to approve an enterprise agreement if it is satisfied that certain conditions are met: FW Act, ss 186, 187. In the case of an agreement like the 2013 Agreement, one of those conditions is that “the agreement has been genuinely agreed to by the employees covered by the agreement”: FW Act, s 186(2)(a).

14    Employees will be taken to have genuinely agreed to an enterprise agreement if, amongst other things, the agreement was made in accordance with s 182(1): FW Act, s 188(b).

15    In other words, (s 192 aside) in the event that the other conditions for approval have been met, the FWC must approve an enterprise agreement if it is satisfied that a majority of the employees who will be covered by the agreement cast a valid vote to approve the agreement.

16    Where the FWC has a concern that the agreement does not meet the requirements set out in ss 186 and 187, s 190 provides that the FWC may still approve an agreement if it is satisfied that a written undertaking from the employer covered by the agreement meets its concern. It may only accept such an undertaking, however, if it is satisfied that the effect of doing so is not likely to cause financial detriment to any employee covered by the agreement or result in substantial changes to the agreement.

17    An enterprise agreement only applies to employees covered by the agreement. An enterprise agreement covers an employee if the agreement is expressed to cover (however described) the employee: FW Act, s 53. Employees may be specified by class or by name, including by reference to a particular kind of work, a particular type of employment, or a particular classification, job level or grade: FW Act, s 256A.

THE APPELLATE JURISDICTION OF THE FWC

18    A person who is aggrieved by a decision of the FWC at first instance may appeal the decision with the permission of a Full Bench: FW Act, s 604(1) read with s 613. If the Full Bench grants permission to appeal, it must hear the appeal in accordance with s 607: FW Act, s 613(1)(b). Section 607(1) refers to the circumstances in which an appeal may be conducted without a hearing. Section 607(2) permits the Full Bench to admit further evidence and take into account any other information or evidence. Section 607(3) contains the powers which may be exercised on appeal. Relevantly, they include: (a) the power to confirm, quash or vary the decision under appeal; and (b) the power to make a further decision in relation to the matter the subject of the appeal.

BACKGROUND

19    Of the 702 employees who cast a valid vote in a ballot to approve the 2013 Agreement, 359 approved, and 343 did not approve, the Agreement: a margin of 16 in favour. Teys then applied to the FWC for approval of the Agreement but the AMIEU opposed the application, claiming that there were irregularities with the ballot. In particular, the AMIEU contended that 21 employees included on the roll of voters, 17 of whom were working as trainee supervisors at the time of the ballot, were not entitled to vote. According to the AMIEU, the employees were not entitled to vote because they were not covered by the Agreement and, because they may have voted, the FWC could not be satisfied that the Agreement was genuinely agreed to by the employees covered by it.

20    Asbury DP rejected the AMIEU’s contentions. She was satisfied that the Agreement was genuinely agreed to by the employees covered by it. As she was also satisfied of the other statutory requirements, she approved the Agreement.

21    In the appeal, the AMIEU submitted that Asbury DP had erred in concluding that the 21 employees in question were covered by the Agreement at the time of the ballot. The focus of the argument in this Court, however, as in Teys No 1, was on the 17 trainee supervisors.

22    The 17 trainee supervisors had been engaged as production employees in classifications which, subject to approval, would be covered by the 2013 Agreement. Had they remained so employed, there appears to be no dispute about their entitlement to vote on the 2013 Agreement. At the time of the ballot, however, they were working under a training scheme designed to identify production employees with the potential to be engaged as supervisors. Of the remaining four employees whose eligibility to vote was in question, one was a trainee Workplace Health and Safety Officer, one a Vietnamese translator, one an employee acting in a human relations role and the final one was a production sample collector.

23    The coverage clause in the 2013 Agreement (cl 1.3) is in the following terms:

1.3    Coverage & Scope

This Agreement shall apply to all Employees employed by Teys Australia Beenleigh Pty Ltd who are engaged in stock receival and preparation, production, and cleaning operations at the Beenleigh plant whose work is covered by the classifications contained in this agreement.

This Agreement does not seek to, nor does it cover, Employees engaged in repair and maintenance, administrative and clerical, laboratory, first aid, managerial and/or supervisory work.

(Emphasis added.)

24    The classifications appeared in section 3 of the Agreement, principally cl 3.1. In most cases they are based on tasks performed (slaughterers, boners, graders, slicers, packers, stockpersons and others), but they also include “[a]ll other [e]mployees with greater than 12 months service”.

25    Clause 3.4 is also relevant. It states:

3.4    Training and Training Rates of Pay

All training shall be carried out in accordance with Teys Aust structured training programme and all Employees commit to, and will actively participate in the training program, as required by Teys Aust and when in training, Employees shall be paid at either the Level 2A rate of pay or the ordinary rate of pay for the classification in which the Employee was employed prior to commencing the training, whichever is the greater. Provided that an Employee cannot be classified at Level 2A for longer than twelve (12) months unless the failure to gain the required competencies for progression to Level 1 or Level 2 is clearly the fault of the Employee…

Provided that Teys Aust shall be entitled to pay an Employee during any period of an approved traineeship, at no less than 75% of the Employees minimum classification rate as prescribed by subclause 3.1 of this Agreement when undertaking off-the job training during normal working hours and at base ordinary rates of pay when such training is conducted outside of normal working hours, in respect only to the first twenty-four (24) hours of off the job training for each trainee.

26    Clause 3.7 provides:

3.7    Mixed Functions

Employees shall perform such tasks or combination of tasks and/or parts of tasks whether of the same or different classifications, as Teys Aust may require and any Employee, who is employed to perform tasks or combinations of tasks in a higher classification on any day or shift, shall be paid at the higher classification rate for the actual time worked in performing the tasks of the higher classification.

27    The crux of the Deputy President’s reasoning was that:

    the employees in question were “engaged as production employees”, although they might not have been doing the work of production employees at a particular time (presumably including the time of the ballot) (at [66]);

    the employees in question were employed under contracts of employment as production workers (at [66]);

    the employees in question were entitled to be classified as production workers under the Agreement and to be paid no less than the rates for the classification levels at which they were engaged (at [66]);

    the amount of time spent actually engaged in production work was not determinative (at [74]);

    the determinative considerations were the circumstances in which the employees were employed and the principal purpose of their employment (at [74]); and

    the principal purpose of their employment and the basis of their engagement were that “they [were] at all times principally engaged as production workers”. That was “the basis of their engagement” and it did not change because they undertook roles as trainee supervisors (at [77]).

THE MAJORITY’S DECISION

The September decision

28    The majority of the Full Bench concluded that the Deputy President had erred by failing to correctly apply the terms of the coverage clause and by failing to appreciate the force of some of the evidence concerning the 21 employees. Upon coming to this conclusion, they granted the AMIEU permission to appeal and then proceeded to consider for themselves whether or not the 21 employees in question were employees who “will be covered” by the 2013 Agreement and were therefore entitled to vote on its approval.

29    The majority’s reasons for concluding that the Deputy President had fallen into error were as follows:

62    The Deputy President does not deal with the criteria or all of the criteria in clause 1.3 of the 2013 Agreement in considering whether the employees in question were employees who “will be covered” by the 2013 Agreement. The criteria in clause 1.3 include that the employees “are engaged in stock receival and preparation, production, and cleaning operations” and their “work is covered by the classifications contained in [the 2013 Agreement]”. The Deputy President, however, found that the employees in question fell within the coverage of the 2013 Agreement at the time of the vote by reference to other criteria not found in clause 1.3, such as that they are “engaged as production workers” and “have contracts of employment as production workers and are entitled to be classified as such under the [2013] Agreement”.

63     This erroneous approach flows throughout the Deputy President’s reasoning, also being evidenced at paragraphs [68], [70], [73], [74], [77], [78], [81] and [82] of the conclusion to her decision.

64    Further, the Deputy President fails to recognise the extent of the change to the work of the employees in question on them becoming a “Trainee Supervisor”, the “Trainee Workplace Health and Safety Officer”, the “Vietnamese translator” or “the employee acting in a ‘HR’ role”.

65    For example, the Deputy President says that she “does not accept that the Trainee Supervisor roles are so substantially different that the effect was to terminate the contracts of employment of those employees and replace it with a new contact”. However, the evidence of Mr Salter, the General Manager Workplace and External Relations for Teys, was that an employee’s undertaking of the role of the “Trainee Supervisor” involves a consent variation to the employee’s employment agreement with Teys.

66    The Deputy President also says that “employees ... classified as production workers at various levels of the [2013] Agreement can be temporarily assigned to perform incidental tasks such as assisting co-workers from non-English speaking backgrounds, at the behest of Teys, by interpreting for those co-workers, or to perform office work.” However, we do not think that on the evidence before her it was open to the Deputy President to regard the tasks as incidental. The evidence included that the tasks involved at least a month of full-time employment away from “stock receival and preparation, production, and cleaning operations”.

67    The errors in the Deputy President’s reasoning were critical to her finding that the 21 employees in question fell within the coverage of the 2013 Agreement at the time of the vote on its approval and her satisfaction that the 2013 Agreement was genuinely agreed to by the employees covered by it. The errors were, therefore, critical to her decision to approve the 2013 Agreement.

30    The majority noted that cl 1.3 of the 2013 Agreement provides that employees will be covered by the 2013 Agreement if they meet all the criteria in that clause, including that their “work is covered by the classification contained in [the] agreement”. The majority proceeded to discuss those classifications.

31    The majority then turned to cll 3.1, 3.2, 3.4 and 3.7 of the Agreement.

32    In relation to cl 3.4 the majority expressed the opinion that the structured training program was only concerned with training in the tasks at Level 1 or 2, namely, slaughterers, slicers, boners, graders and AAOs (Aquis Authorised Officers), and did not extend to training in the tasks in the other classification levels listed in the Agreement or, for that matter, in classifications not listed in the Agreement. They drew this conclusion by a process of construction of the Agreement.

33    In relation to cl 3.7, the majority considered that it was only concerned with the tasks in the classifications in cl 3.1 because cl 3.7 refers to the employees being paid at the rate for the tasks in the higher classification and only the tasks in the classifications in cl 3.1 have a rate of pay specified in the Agreement.

34    At this point the majority turned their attention to the 21 employees. Having regard to the argument in this Court, however, it is only necessary to refer to the discussion concerning the trainee supervisors.

35    Noting that cl 1.3 provided that, for the Agreement to apply to an employee, their work must be covered by the classifications contained in the Agreement, the majority said it was self-evident that the 2013 Agreement does not include a classification entitled “Trainee Supervisor” or a classification with tasks entitled “Trainee Supervisor”. They acknowledged that the matter did not end there. They continued:

80    On the evidence, which we have earlier set out, it is apparent that the work of an employee of Teys who was a “Trainee Supervisor” at the time of the vote on the approval of the 2013 Agreement involved work performed in supervisory tasks, albeit under the direction and supervision of a salaried staff position and without the authority and responsibility that attaches to a salaried staff supervisor position, and work performed in the then equivalent of the tasks at classifications Levels 1 to 4 of the 2013 Agreement.

81    However, when the totality of the relevant evidence is considered, including the evidence of the three employees who are a “Trainee Supervisor” and who were called as witnesses, it is apparent that the work such an employee performed in the then equivalent of the tasks at classifications Levels 1 to 4 of the 2013 Agreement was quite limited, compared to the work they performed in the supervisory tasks.

82    This is a product of the training they were doing as a “Trainee Supervisor”. They were trained to become a “Supervisor” by doing supervisory tasks, albeit under direction and supervision and without the authority and responsibility attaching to a “Supervisor”. As Mr Gee said, Teys carries out their training over a relatively extended period of time because it takes the employees time to adjust to thinking and acting in a “supervisory way” and if they appointed someone directly to a supervisor role and they completed their training afterwards it would not be likely to succeed as they “would not have had time to adjust to the experience of carrying out supervisory tasks”.

83    We note that a salaried staff supervisor is also required to do other work as directed by their manager.

36    The majority said that, in determining whether the work of an employee at the time of the ballot is covered by the classifications in the Agreement, it is necessary to look at “more than part” of their work. They cited the Full Bench decision in Brand v APIR Systems Ltd PR 938031 (“Brand”) (and the decision in Carpenter v Corona Manufacturing Pty Ltd PR 925731 cited in Brand) in which there is a discussion of the various tests that have been applied by industrial courts and tribunals at various times to determine whether the work of an employee or group of employees is within a particular occupational classification. In the present case, the majority said, regardless of which test is deployed (whether it be “principal purpose”, “major and substantial” or “engaged substantially”), “it is the work of the employee that is considered relevant”. The majority concluded that on any of the tests the work of the trainee supervisors at the time of the ballot was not work covered by the classifications contained in the 2013 Agreement because “the major and substantial part” of that work at the relevant time or “the principal purpose” of the work or work on which the employees were substantially engaged was supervisory and not the tasks at the classifications in the Agreement.

37    The majority considered that the absence in the Agreement of pay rates for trainee supervisors supported this conclusion. They also noted that there was no evidence that any employee who was a trainee supervisor at the time of the ballot had a date on which he or she would return to performing only the tasks at classifications 1 to 4 in the Agreement. They then reiterated their opinion concerning the construction of cll 3.2 and 3.7. Finally, they expressed the view that the specific exclusion from cl 1.3 of employees engaged in “supervisory work” supported their conclusion.

38    Consequently, the majority held that the employees of Teys who were trainee supervisors at the time of the ballot to approve the 2013 Agreement were not entitled to vote on the question. For reasons which it is unnecessary to mention the majority also found that (save for the production sample collector about whom there was insufficient evidence to come to any conclusion) the other employees were not covered by the 2013 Agreement).

39    At [120] of their reasons the majority said:

We appreciate that some Teys’ employees believe a “Trainee Supervisor” is and has been covered by the 2013 Agreement and its predecessors. We also appreciate that employees of Teys who were a “Trainee Supervisor” and some of the other employees in question at the time of the vote were included in ballots in respect of the 2013 Agreement and/or its predecessors, and that some of the employees of Teys who were a “Trainee Supervisor” at the time of the vote took part in industrial action in support of reaching those enterprise agreements. However, there was also evidence from others involved in the negotiation of the enterprise agreements to the effect that until after the conclusion of the ballot in respect of the 2013 Agreement there was inadvertence as to whether a “Trainee Supervisor” is covered by the enterprise agreements or was involved in the processes leading to them, and evidence that a “Trainee Supervisor” does not come under any of the classifications contained in the 2013 Agreement.

40    As it was not in dispute that some of the 17 trainee supervisors actually voted in the ballot and that all of them may have voted, the majority held that the FWC could not have been satisfied, in accordance with ss 188(2)(b) or 182(2)(c) of the FW Act, that the 2013 Agreement was made in accordance with s 182(1) or that the 2013 Agreement had been genuinely agreed to by the employees covered by the Agreement as required by s 186(2)(a) of the Act.

41    Finally, the majority noted the power given to the FWC by s 190 of the FW Act to approve an enterprise agreement with undertakings if it has a concern that the agreement does not meet the requirements of ss 186 and 187 and said at [128]:

Our concern that the 2013 Agreement does not meet the requirement in s.186(2)(a) of the FW Act may not be amenable to be met by an undertaking. Nonetheless, we will give Teys until 25 September 2014 to provide a relevant undertaking.

42    They foreshadowed that in the event that Teys did not provide an undertaking that met their concern they would dismiss the application for approval of the 2013 Agreement.

The December decision

43    Teys subsequently provided an undertaking and also an alternative undertaking in the event that its first undertaking was not accepted. The first, which Teys described as its “preferred” undertaking, was in the following terms:

Teys Australia Beenleigh Pty Ltd (Teys Australia) gives the following undertaking in respect of the proposed Teys Australia Beenleigh Pty Ltd Production Departments Enterprise Agreement 2013 (Agreement):

Clause 1.3

Add to clause 1.3 the following:

For the avoidance of doubt, this Agreement shall apply to Employees employed by Teys Australia:

(a)     who are participating in supervised training programs, including but not limited to the Trainee Supervisor or Trainee Work Health and Safety Officer programs; or

(b)     whose work is covered by the classifications contained in this agreement and who are directed by Teys Australia to engage in temporary assignments to assist with administrative or clerical work at the Teys Australia Beenleigh plant.

Clause 3.1

Add to clause 3.1 the following:

3.1.1    The following classifications of employees are contained within the Agreement:

(a)    Trainee Supervisors; and

(b)    Trainee Work Health and Safety Officers.

3.1.2 Trainee Supervisors and Trainee Work Health and Safety Officers can be classified in Level 1, Level 2, Level 2A or Level 3 depending on their experience and skill-set, but in no case will they be classified below the classification held immediately prior to appointment as a trainee.

3.1.3 Employees engaged in temporary assignments to assist with administrative or clerical work will in no case be classified at a level below their classification immediately prior to accepting the engagement.

No reduction in remuneration

No employee will have his or her remuneration reduced as a result of this undertaking.

44    The alternative undertaking was in the following terms:

Teys Australia Beenleigh Pty Ltd (Teys Australia) gives the following undertaking in respect of the proposed Teys Australia Beenleigh Pty Ltd Production Departments Enterprise Agreement 2013 (Agreement):

1.     For a period of at least 3 months from the date of approval of the Agreement, during which Teys Australia will consult with its Trainee Supervisors and Trainee Workplace Health and Safety Officers in relation to their industrial arrangements, Teys Australia will not require or permit employees who are appointed to these roles to undertake supervisory tasks or responsibilities or workplace health and safety officer tasks or responsibilities, and will instead only require and permit them to undertake tasks required of them in the role they were in immediately prior to their appointment as a Trainee Supervisor or Trainee Workplace Health and Safety Officer.

2.     No employee will have his or her remuneration reduced as a result of this undertaking.

45    In the December decision, Acton SDP and Simpson C (again constituting the majority of the Full Bench) referred to the provisions of the FW Act that were relevant when an undertaking was offered under s 190, and identified the “concern” they had, at the time of the September decision, as to whether the 2013 Agreement had been genuinely agreed to by the employees it covered. They said:

The concern of the majority of the FWC Full Bench arose from:

•    the work of the Teys’ employees who were a “Trainee Supervisor”, the “Trainee Workplace Health and Safety Officer”, the “Vietnamese translator” or the “employee acting in a ‘HR’ role” at the time of the employee vote on the approval of the 2013 Agreement, which was 1 and 2 August 2013, not being covered by the classifications contained in the 2013 Agreement, and

•    the Teys’ employees who were a “Trainee Supervisor”, the “Trainee Workplace Health and Safety Officer”, the “Vietnamese translator” or the “employee acting in a ‘HR’ role” at the time of the employee vote on the approval of the 2013 Agreement therefore not being employees who “will be covered” by the 2013 Agreement at the time of the vote, and

•    those Teys’ employees thereby not being entitled to vote on the approval of the 2013 Agreement, and

•    those Teys’ employees nonetheless being included on the roll of voters who could vote on the approval of the 2013 Agreement, and

•    some of the 17 Teys’ employees who were a “Trainee Supervisor” at the time of the vote having voted on the approval of the 2013 Agreement, with all of them perhaps having voted, and

•    the outcome of the approval ballot on the 2013 Agreement perhaps having been different if they had not voted, and

•    the FWC therefore not being satisfied in respect of the matters in ss.188(b) or (c) of the FW Act.

46    The majority then referred to passages in their reasons in the September decision, and to submissions made on behalf of Teys in support of its case that one of the undertakings should be accepted, and held that the preferred undertaking did not overcome the foundation of their concern, which had been that the work of the trainee supervisors, and others, was not, at the time of the vote on the approval of the 2013 Agreement, covered by the classifications therein. Thus the consequences of that foundation of concern remained. The undertaking, if accepted, would not change the fact that some employees who would not be covered by the Agreement may have voted, nor the fact that the outcome of the ballot may have been different if they had not voted.

47    Further, the majority held that, since the effect of accepting the undertaking would be that the terms of the 2013 Agreement were changed so that it would now cover the trainee supervisors and others, they could not be satisfied that this would not be likely to result in substantial changes to the 2013 Agreement. Indeed, the majority were satisfied the effect of accepting that undertaking would be likely to result in substantial changes to the 2013 Agreement within the meaning of s 190(3) of the FW Act.

48    The majority next referred to s 191(1) of the FW Act, by which, if the FWC accepts an undertaking provided under s 190 and approves the enterprise agreement concerned, the undertaking “is taken to be a term of the agreement”. The majority said that, under this provision, the undertaking, if accepted, would become a term of the 2013 Agreement only upon approval by the FWC. That is to say, it would not affect the position which obtained when the employees voted to approve the Agreement. Thus, acceptance of the undertaking would not overcome the fact that the trainee supervisors, and others, may have voted in the approval ballot at a time when they were not covered by the 2013 Agreement.

49    The majority then turned to Teys’ alternative undertaking. They rehearsed Teys’ submissions, and noted that this undertaking would operate from the date of approval of the 2013 Agreement. That would, necessarily, be after the time of the employee vote on the approval of the Agreement. They also made the same point as to the timing of the operation of s 191(1) of the FW Act that they had made in relation to the preferred undertaking. They held that the alternative undertaking did not overcome the fact that the trainee supervisors and others were offered a vote, and some did vote, on the approval of the Agreement.

50    The majority added that, in any event, they were not persuaded to exercise their discretion under s 190(3) of the FW Act to accept either of Teys’ proposed undertakings or, under s 190(2), to approve the 2013 Agreement with either of those undertakings. They noted that the AMIEU, the only employee bargaining representative for the Agreement, opposed the FWC accepting either undertaking. This provided “a non-employer view”. Further, the majority noted that the preferred undertaking would have changed the terms of the 2013 Agreement, while the alternative undertaking would have had consequences for some of the relevant employees, not all of which would necessarily be regarded as advantageous to them. Moreover, in the majority’s opinion, some of them may be regarded as disadvantageous, such as not being permitted to undertake supervisory tasks or responsibilities or workplace health and safety officer tasks or responsibilities for at least three months. The majority said:

In the circumstances we think the balance of the considerations relevant to the exercise of our discretion under either s.190(3) or s.190(2), including the FW Act’s provisions allowing for the making of other enterprise agreements, is against us exercising our discretion under s.190(3) of the FW Act to accept either of Teys’ proposed undertakings or under s.190(2) of the FW Act to approve the 2013 Agreement with either of Teys’ proposed undertakings.

51    In the result, the 2013 Agreement was not approved.

THE GROUNDS OF REVIEW

52    According to Mr Walthall, Teys’ contention was that the September decision and order were affected by jurisdictional error because the Full Bench erred in four respects:

(a)    in its construction of cl 1.3 and s 3 of the 2013 Agreement, “such that it held” that the positions of Trainee Supervisors and Trainee Workplace Health and Safety Officer were not covered by the 2013 Agreement;

(b)    in finding that employees temporarily redeployed by Teys into administrative or clerical roles were not entitled to vote for the 2013 Agreement in circumstances where the objective evidence was that the temporarily redeployed employees would return to their substantive classifications covered by the 2013 Agreement;

(c)    in finding that the requirements of ss 186–188 of the FW Act were not met in relation to the 2013 Agreement in circumstances where they were; and

(d)    in finding that Asbury DP had committed error when none existed.

53    In its written submissions Teys went further, identifying an additional “jurisdictional error” in the majority’s “finding that the requirements of ss 186–188 of the FW Act were not met in relation to the Agreement in circumstances where they were”. Teys characterised the jurisdictional error as “misunderst[anding] and misapply[ying] s 182(1) and (thus s 186) of the FW Act and quash[ing] the approval of an enterprise agreement when the statutory prerequisites were met”.

54    Teys also contended that the December decision and order were affected by jurisdictional error in that the Full Bench erred:

(a)    in finding that neither of the “preferred undertaking” or “alternative undertaking” offered by Teys could overcome the stated concerns of the majority;

(b)    in finding that the “preferred undertaking” could not meet the requirements of s 190 of the FW Act;

(c)    in finding that the “alternative undertaking” could not meet those requirements;

(d)    in dismissing the application for approval of the 2013 Agreement in circumstances where all of the prerequisites for approval by the FWC under the FW Act were met; and

(e)    in dismissing the application for approval of the 2013 Agreement in circumstances where Teys had sought an adjournment pending the outcome of the earlier Full Court decision.

THE SEPTEMBER DECISION

Finding error when none existed (ground d)

55    As this was Teys’ principal contention, it is convenient to deal with it first.

56    Teys argued that the powers of a Full Bench on appeal are exercisable only if the primary decision maker was wrong and therefore the Full Bench will commit jurisdictional error if it makes a quashing order on appeal when there was no error in the first place. The proposition was put in two ways in its written submissions. The first conforms to ground (d) set out in Mr Walthall’s affidavit. The second — “exercising appellant powers under s.607 of the FW Act … where there was no jurisdiction to do so” — is another way of saying the same thing.

57    Whichever way the argument is put, it is without merit. It should be rejected for the same reasons that a like argument was rejected in Teys No 1.

58    There was no dispute that the Full Bench was only entitled to exercise its powers under s 607(3) if Asbury DP was in error. As Gleeson CJ, Gaudron and Hayne JJ observed in Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 (“Coal and Allied”) at [17] of similar provisions in the Workplace Relations Act 1996 (Cth) (“WR Act”):

Because a Full Bench of the Commission has power under s 45(6) to receive further evidence on appeal, an appeal under that section is properly described as an appeal by way of rehearing. And because there is nothing to suggest otherwise, its powers under sub-s (7) are exercisable only if there is error on the part of the primary decision-maker. And that is so regardless of the different decisions that may be the subject of an appeal under s 45.

59    Callinan J’s opinion was to the same effect (at [132]).

60    But it does not follow that, if the Full Bench erred in concluding that Asbury DP was wrong, it committed a jurisdictional error. If that were so, it would convert all applications for judicial review into appeals. What the Full Bench was required to do before it could exercise any of its powers under s 607(3) was to find error. Having done so in this case, it exercised the jurisdiction conferred upon it by the FW Act. If it was wrong to find error, that was an error within jurisdiction. As Hayne J explained in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at [163]:

There is a jurisdictional error if the decision maker makes a decision outside the limits of the functions and powers conferred on him or her, or does something which he or she lacks power to do. By contrast, incorrectly deciding something which the decision maker is authorised to decide is an error within jurisdiction. (This is sometimes described as authority to go wrong, that is, to decide matters within jurisdiction incorrectly.) The former kind of error concerns departures from limits upon the exercise of power. The latter does not.

61    The vice in Teys’ argument is that it erroneously treats the correct determination of error as a jurisdictional fact, that is to say “a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question”: Gedeon v Commissioner of the New South Wales Crime Commission (2008) 236 CLR 120 at [43].

62    The correct determination of error is not a jurisdictional fact. The determination of error is not a criterion for the exercise of the appellate power; it is the exercise of the power (see for example, The Pilbara Infrastructure Pty Ltd v Economic Regulation Authority [2014] WASC 346 at [118]).

63    Besides, as Buchanan J pointed out in Teys No 1 at [70], Teys’ contention is contrary to the majority’s decision in Coal and Allied. In the face of the revival of the argument, it is perhaps necessary to say something more about Coal and Allied.

64    In Coal and Allied industrial action had been taken by a number of trade unions and union members who were employed by Coal and Allied. In March 1997 the unions initiated bargaining periods under s 170MW of the WR Act. Industrial action during a bargaining period was immune from civil suit. During the course of the industrial action the unions applied to the Australian Industrial Relations Commission (“AIRC”) to terminate the bargaining periods. Boulton J acceded to their applications, ordering that the bargaining periods be terminated. The power to make the order was contained in s 170MW. Coal and Allied appealed to a Full Bench, Giudice P presiding. The Full Bench allowed the appeal and quashed the orders of Boulton J. The unions applied to the High Court for writs of mandamus and prohibition and ancillary relief in the nature of certiorari to have the decision and orders of the Full Bench quashed. With the exception of mandamus, this is the same relief Teys seeks in the present proceeding. The High Court ordered that the matter be remitted to this Court where a Full Court granted writs of certiorari and mandamus. The Full Court concluded that the Full Bench had fallen into jurisdictional error because it proceeded on the basis that the decision of Boulton J was attended by appealable error when it was not. It did so because it took the view that the Full Bench had a fundamental misconception of the AIRC’s role arising from the combined operation of ss 170MW(1) and 170MW(3).

65    Coal and Allied appealed to the High Court which, by a majority (Kirby J dissenting), set aside the Full Court’s decision. In the High Court, Gleeson CJ, Gaudron and Hayne JJ held that, assuming the Full Bench did misconceive the role of the AIRC under s 170MW, that would not have been a jurisdictional error. At [30]-[31], their Honours said:

30    The Full Court concluded that the Full Bench of the Commission fell into jurisdictional error because it proceeded on the basis that the decision of Boulton J was attended by appealable error when it was not. And it did so, in the view of the Full Court, because of its “fundamental misconception … of the Commission’s role arising from the combined operation of s 170MW(1) and (3)”. To misconceive the role of the Commission under s 170MW (assuming that is what the Full Bench did) does not constitute jurisdictional error on the part of the Full Bench.

31    There would only have been jurisdictional error on the part of the Full Bench if it had misconceived its role or if, in terms used by Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council [(1947) 47 SR (NSW) 416 at 420], it “misunder[stood] the nature of [its] jurisdiction … or ‘misconceive[d] its duty’ or ‘[failed] to apply itself to the question which [s 45 of the Act] prescribes … or ‘[misunderstood] the nature of the opinion which it [was] to form’. The Full Bench did none of these things.

(Footnotes omitted.)

66    We interpolate that s 45 of the WR Act is in relevantly similar terms to s 607 of the FW Act, read with s 613.

67    Their Honours continued at [32]:

32    In his reasons for decision, Giudice J proceeded on the basis that the Full Bench could intervene only if there was error on the part of Boulton J. In this his Honour was correct. Giudice J held that there was error on the part of Boulton J. If he was wrong in that view (a matter upon which it is unnecessary to express an opinion), that was an error within jurisdiction not an error as to the nature of the jurisdiction which the Full Bench was required to exercise under s 45 of the Act. Accordingly, it was not an error in respect of which relief could be granted by way of prohibition or mandamus under s 75(v) of the Constitution.

See also Callinan J at [133].

68    After referring to the same passages in Coal and Allied, in Re Commonwealth; Ex parte Marks [2000] HCA 67, 177 ALR 491 at [24] McHugh J held that the Full Bench understood that its role was to ascertain whether the Commissioner had made an error in dismissing the application (an application for relief against termination of employment under s 170CE of the WR Act), considered the applicant’s grounds of appeal, and concluded that there was no relevant error. In those circumstances, his Honour said, if the Full Bench was wrong to reach this conclusion, that was an error within jurisdiction.

69    And so it is here. The majority of the Full Bench did not misunderstand the nature of the jurisdiction. Nor did they misconceive their duty. They recognised that permission to appeal was required and that the Full Bench could only intervene for error. They considered the grounds of appeal and the arguments for both parties.

70    Neither did the majority fail to apply themselves to any of the questions they were required to answer nor misunderstand the nature of the opinions they had to form. Having concluded that Asbury DP was in error, they conducted a rehearing and addressed the questions raised by the statute. If the majority were wrong to conclude that Asbury DP fell into error, that was an error within jurisdiction, not an error as to the nature of the jurisdiction the Full Bench was required to exercise under s 607 of the FW Act.

71    Teys eschewed the notion that Coal and Allied was incorrectly decided and did not formally submit that the Full Court was wrong in its analysis of the same point in Teys No 1.

72    That should have been the end of the argument but Teys also invoked the High Court’s earlier decision in Craig v South Australia (1995) 184 CLR 163 at 179 (“Craig”). It submitted:

…Craig supports the proposition that an administrative tribunal commits a jurisdictional error where it identifies a wrong issue or in some circumstances makes an erroneous finding or reaches a mistaken conclusion.

73    The submission is not supported by what was said in Craig.

74    In Craig the Court said at 179:

At least in the absence of a contrary intent in the statute or other instrument which established it, an administrative tribunal lacks authority either to authoritatively determine questions of law or to make an order or decision otherwise than in accordance with the law. That point was made by Lord Diplock in In re Racal Communications Ltd:

“Parliament can, of course, if it so desires, confer upon administrative tribunals or authorities power to decide questions of law as well as questions of fact or of administrative policy; but this requires clear words, for the presumption is that where a decision-making power is conferred on a tribunal or authority that is not a court of law, Parliament did not intend to do so.”

The position is, of course, a fortiori in this country where constitutional limitations arising from the doctrine of the separation of judicial and executive powers may preclude legislative competence to confer judicial power upon an administrative tribunal. If such an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal’s exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it.

(Footnote omitted, emphasis added.)

75    Teys’ submission disregards the requirements in the Craig formulation that an administrative tribunal must first fall into an error of law and that the error of law is the cause of the identification of the wrong issue, the making of the erroneous finding or the reaching of the mistaken conclusion. Furthermore, it fails to recognise that the error of law which causes the tribunal to go wrong in the relevant respects must affect the tribunal’s exercise or purported exercise of power. Craig is not authority for the proposition that any error of law by an administrative tribunal will invariably be jurisdictional. In contrast to the position in England and Wales, in Australia the distinction between jurisdictional and non-jurisdictional errors of law has been maintained: see, for example, Kirk v Industrial Court of New South Wales (2010) 239 CLR 531 at [66].

76    On the hearing of the application, Teys advanced an argument that had not been foreshadowed in its written outline, nor, at least visibly, in the grounds set out in Mr Walthall’s affidavit. Teys sought to deal with it as an aspect of the ground presently under discussion, and we are prepared to do likewise.

77    In their reasons, the majority set out extensive passages from the decision of Asbury DP. They did this in the course of demonstrating how the Deputy President had fallen into error. But they did not set out the entirety of her reasoning on the subjects concerned. A number of passages were omitted, the omissions denoted by ellipses. In Teys’ submission those passages were the very ones that provided the most compelling support for the conclusion, favourable to itself, which the Deputy President had reached. Its complaint about these omissions is not one of procedural unfairness and, despite some of the language used in argument, Teys eschewed any suggestion of bad faith. Rather, as we understood it, it is a complaint that the majority ignored relevant material. That was said to amount to jurisdictional error.

78    Teys derived the “ignoring relevant material” formula from the passage in Craig referred to at [74] above. Collapsing the sentence in Craig to its presently essential elements, however, the proposition to be taken from that judgment is that, if an administrative tribunal falls into an error of law which causes it to ignore relevant material, and the tribunal’s exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. That is to say, there must be an error of law, and it must have affected the exercise or purported exercise of power on the part of the tribunal. Save in the question-begging sense that ignoring relevant material was itself an error of law, no such error was identified in this part of Teys’ case. Furthermore, what their Honours meant in Craig by an effect on “the exercise or purported exercise of power” must be understood in the administrative law sense of impairing the lawful discharge of the tribunal’s statutory functions, rather than in the purely meritorious sense of making a particular outcome more or less likely on the facts of the case.

79    We also take the view that, whatever their Honours meant in Craig by “[ignoring] relevant material”, it would not encompass treatment of the reasons of a first-instance tribunal by an appellate tribunal of the kind now complained about by Teys. Senior Counsel for Teys accused the majority of “deliberately” excluding from consideration the passages from Asbury DP’s reasons that were omitted. To proceed in this way, however, would not be to ignore something. The reasons of the majority give every indication that they turned their minds to what ought, and what ought not, to be set out in their reasons as demonstrative of error on the part of the Deputy President. That the omitted passages would have substantially weakened the force of the majority’s reasoning is a conclusion which could only be reached by engaging with the merits of that reasoning, a process which is beyond the function of the Court on an application of the present kind.

80    Teys’ invocation of Craig in support of this particular complaint about the reasons of the majority is misplaced.

Error in the construction of cl 1.3 and section 3 of the 2013 Agreement (ground a)

81    This ground does not raise a jurisdictional error.

82    Having found that Asbury DP’s construction of cl 1.3 was wrong, the majority was entitled to decide the controversy for itself. In that event, they were required to approve the 2013 Agreement if, amongst other things, they were satisfied that a majority of the employees who will be covered by it had voted to approve it. In this case that task involved determining whether the 21 employees whose eligibility to vote had been called into question were employees who will be covered by the 2013 Agreement. To that end, the majority was required to construe the Agreement. If their construction was wrong that was an error within jurisdiction.

Error in finding that the requirements of ss 186-188 of the Act were not met (ground c)

83    Teys tried from time to time to elevate the alleged construction error to a constructive failure to exercise the jurisdiction conferred by the FW Act based (apparently) on the presence of the words “will be covered” in the legislation. Correctly understood, Teys was not quarrelling with the majority’s interpretation of the legislation. It pointed to no error in that regard. The majority’s decision that the requirements in the relevant sections of the FW Act were met was based on its factual findings and their construction of the Agreement, not on any erroneous interpretation of the legislation or any failure to carry out or complete the statutory task.

Error in finding that employees temporarily redeployed to administrative or clerical roles were not entitled to vote when there was “objective evidence” that the employees would return to their substantive roles (ground b)

84    This ground is no more than an attack on the majority’s factual findings. Teys did not contend that there was no evidence before the FWC to support the majority’s construction. We interpolate that there is a divergence of opinion in the authorities as to whether this would amount to a jurisdictional error: see the discussion of this question in Australian Postal Corporation v D’Rozario (2014) 222 FCR 303 and Allars M, “The Distinction between Jurisdictional and Non-jurisdictional Errors: Its Significance and Rationale” in Mortimer D (ed), Administrative Justice and Its Availability (Federation Press, 2015). The majority was cognisant of evidence that employees temporarily working in non-production roles might be required to return at any time to their permanent positions. Based on their construction of cl 1.3 of the Agreement, however, the majority considered that circumstance to be immaterial because the principle purpose of the work those employees were performing at the time of the ballot did not fall within the classifications in the Agreement. If the majority erred in this respect, that was an error within jurisdiction. Right or wrong, it was a conclusion open to the Full Bench on the evidence.

THE DECEMBER DECISION

Finding that neither of the undertakings could overcome the concerns of the majority (ground a)

85    In Teys’ submission, the majority misapprehended the task in which the FWC was involved under s 190 of the FW Act because of an erroneously narrow reading of para (b) of subs (1) and of subs (2). It was submitted that subs (1)(b) comprehended a concern which arose under s 186 or s 187 in any of their aspects, including s 186(2)(a), and therefore, necessarily, including a concern which arose from allowing persons to vote on the approval ballot who did not meet the description in s 181(1).

86    It may be accepted that s 190 has potential application to the full range of requirements which are laid down by ss 186 and 187. Likewise, it might be accepted that, for the FWC to refuse even to consider an undertaking which sought to address concerns which had arisen in connection with s 186(2)(a) would amount to jurisdictional error. But that is not what the majority did in the present case. They did not decide the point by reference to the unavailability of s 190 in such a situation. To the contrary, they specifically gave Teys the opportunity to proffer an undertaking which might address the concerns which they expressed in the September decision. And, when Teys did proffer its undertakings, they were considered on their merits under s 190(2). It was the terms of those undertakings, not any reluctance to have recourse to the process in relation to issues of the kind that had arisen, which led to the majority not being satisfied that their concerns had been met.

87    Teys’ submission effectively amounts to the proposition that, once these undertakings were proffered, the FWC had no choice, consistently with the terms of s 190, but to be satisfied that the concerns which they had earlier expressed had been met. We cannot accept that. Generally expressed, the concern which the majority of the Full Bench had in September was that persons who ought not to have been requested to approve the 2013 Agreement were so requested, that some of them voted, and that the outcome of the ballot may have been affected thereby. Against those facts, the majority were working entirely within the scheme of s 190 when they concluded that undertakings of the kind proffered would not meet a concern of that kind.

Finding that the preferred undertaking could not meet the requirements of s 190 (ground b)

88    As argued, this ground related to the question which arose under s 190(3)(b) of the FW Act, namely, whether acceptance of the preferred undertaking would result in substantial changes to the 2013 Agreement. Teys submitted that the effect of the undertaking was to “clarify” that the trainee supervisors and others were carrying out work in a classification contained within the Agreement at the time of the vote. This was, with respect, both a tendentious and an inadequate characterisation of that undertaking.

89    The majority, having held that the trainee supervisors and others were not covered by the Agreement, were proceeding conformably with the FWC’s statutory remit in treating the undertaking as involving a variation of the 2013 Agreement in point of substance. It was not a matter of “clarification” at all. Further, the undertaking would have brought the employees to whom it related within the coverage of the Agreement for all purposes and at all future times. It was not confined to the situation obtaining “at the time of the vote”. Indeed, as the majority found and as we would confirm, the one time when these employees would not have been covered by the Agreement had the undertaking been accepted was the “time of the vote”.

90    Under cover of its characterisation of the undertaking, Teys submitted that the effect of the undertaking was not a “substantial change”. It was, rather, a “minor change”. Distinctions at this level are not the stuff of mandamus and prohibition. Whether a change in an agreement is a substantial one is the very matter committed to the FWC under s 190(3). Further, it is a question to be resolved to its satisfaction. It does not involve a jurisdictional fact and is not otherwise justiciable in this Court.

Finding that the alternative undertaking could not meet the requirements of s 190 (ground c)

91    In relation to this ground, nothing was put that is not adequately covered by what we have said above in relation to the first ground of jurisdictional challenge to the December decision.

Dismissing the application for approval of the 2013 Agreement in circumstances where all of the prerequisites for approval by the FWC under the FW Act were met (ground d)

Dismissing the application for approval of the 2013 Agreement in circumstances where Teys had sought an adjournment pending the outcome of the earlier Full Court decision (ground e)

92    No submissions were advanced in support of either of these grounds.

CONCLUSION

93    Teys resorted to the language of judicial review but this was a chimera. Teys was unable to point to any misunderstanding on the part of the majority as to the jurisdiction of the Full Bench or the nature of the opinions they had to form, to any misconception they had of their duty, or to any failure to apply themselves to the relevant statutory questions. Nor was Teys able to show that the majority had made any other error of law causing them to fall into jurisdictional error. As the grounds of review recognised, their decisions were based on their construction of the Agreement and their analysis of the evidence. If the majority did err in these respects, their errors were within jurisdiction.

94    The application should therefore be dismissed. The Court’s powers in relation to costs are limited (see FW Act, s 570) and both parties indicated that, regardless of the outcome, they would not be seeking costs. In these circumstances there will be no order as to costs.

Associate:

Dated:    31 July 2015