FEDERAL COURT OF AUSTRALIA

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123

THE COURT ORDERS THAT:

1.    the application be dismissed;

2.    any application for costs be filed and served within 14 days, accompanied by submissions not exceeding two pages; and

3.    any response(s) be filed and served within 14 days thereafter, also accompanied by submissions not exceeding two pages.

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

REASONS FOR JUDGMENT

THE COURT

INTRODUCTION

1    The applicant (the “Union”) seeks:

    a writ of certiorari quashing a decision of the Full Bench of the Fair Work Commission (“FWC”), the second respondent, in an appeal brought by the first respondent (“ALS”); and

    a writ of mandamus directing FWC to hear and determine the appeal in accordance with law.

FWC has indicated that it will submit to any order which the Court may make in these proceedings, save that it reserves its right to be heard on any question of costs.

THE DISPUTE

2    The dispute between the Union and ALS concerns the proper construction and/or application of cl 15 of the ALS Industrial Australia (WA) Enterprise Agreement 2012 (the “2012 Agreement”). On 10 July 2013 FWC approved the 2012 Agreement in accordance with the Fair Work Act 2009 (Cth) (the “Fair Work Act”). It took effect seven days thereafter. Its nominal expiry date is 30 November 2016. Clause 15 provides as follows:

15.    TRAVEL PAYMENTS

15.1    Regardless of whether the Company provides transport or not, where an employee is required to attend at a location other than the employee's Company base, the employee will be paid for the agreed travel time from the base to the site up to a maximum of 1.5 hours and from the site back to the employee's Company base up to a maximum of 1.5 hours.

15.2    Where an employee lives closer to the site than the employee's Company base, the employee will be paid for the actual time travelled to attend work at the site and then to return home. The rate of pay will be the applicable overtime rate where this travelling time occurs outside the employee's ordinary hours of work.

15.3    Regardless of whether the Company provides transport or not, where an employee is required to attend work at a location other than the employee's Company base, the employee will be paid for the time spent in travelling where such time is in excess of that normally taken to travel from his or her normal residence to the employee's Company base (and from the employee’s Company base to his or her normal residence). The rate of pay will be the applicable overtime rates where this excess travelling time occurs outside the employee's ordinary hours of work.

15.4    No employee will be expected to drive or return to his or her normal place of work after twelve (12) hours work (inclusive of travel time) at a distant location or country site.

15.5    For the purpose of this clause, an employee’s Company base as at the day this Agreement is approved by FWC will be the employee’s Company base already nominated by the Company. From time to time, the Company may nominate an alternate Company base.

15.6    The travel payments specified in this clause have been calculated to compensate employees for all monetary allowances that might otherwise apply in relation to travel expenses incurred in the course of employment.

3    Substantially similar provisions appeared in two earlier enterprise agreements (the “2006 Agreement” and the “2009 Agreement”). Broadly similar arrangements may have been in place prior to 2006.

4    The dispute focusses upon the last sentence of cl 15.5. In the negotiations which preceded the making of the 2012 Agreement, matters in dispute included those now regulated by that clause. In the course of those negotiations, on 18 January 2013, ALS sought to have that aspect of the dispute resolved by FWC. At subpara  2(4) of part 3 of its application, it asserted:

Travel payments: Clause 15 of the Agreement provides for employees to be paid overtime rates for travel outside of ordinary hours to a location other than the employee’s company base. The actual company bases for approximately half of the Applicant’s workforce are on clients’ sites at Kwinana, Pinjarra and Wagerup. Their base for the purposes of this clause however is Canning Vale.

The Applicant has elected not to exercise clause 15.5 of the Agreement and change employees to their actual base as this would result in the loss of significant amounts of overtime ($30,000 p.a. or more for some employees). Instead it has proposed to “grandfather” current arrangements for existing employees (i.e. no disadvantage) and to introduce new arrangements for employees to be engaged under the terms of the new agreement. These terms would be substantially identical to those in agreements covering other companies operating at these sites … .

The Respondent has not agreed to the Applicant’s proposal. If this change is not made, the Applicant’s capacity to retain contracts at these sites will be seriously impacted due to the competitive disadvantage it is in relative to its competitors who do not incur this level of cost.

5    Notwithstanding the fact that the parties eventually entered into the 2012 Agreement, they continued to dispute the proper construction of cl 15, particularly the meaning of the term “employee’s Company base”. On 20 November 2013 the Union asked FWC to deal with it in accordance with the dispute settlement procedure contained in the 2012 Agreement and pursuant to “s 739 etc” of the Fair Work Act.

DISPUTE RESOLUTION

6    Section 739 provides:

(1)    This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2)    The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a)    the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b)    a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note:    This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3)    In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4)    If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note:    The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5)    Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6)    The FWC may deal with a dispute only on application by a party to the dispute.

Section 738 relevantly provides:

This Division applies if:

(a)    …

(b)    an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); …

Section 186 provides that FWC must approve an enterprise agreement if certain requirements are satisfied. Section 186(6) provides:

The FWC must be satisfied that the agreement includes a term:

(a)    that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:

(i)    about any matters arising under the agreement; and

(ii)    in relation to the National Employment Standards; and

(b)    that allows for the representation of employees covered by the agreement for the purposes of that procedure.

Note 1:    The FWC or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).

Note 2:    However, this does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).

7    Clause 37 of the 2012 Agreement is headed “Dispute Settlement Procedure” and provides as follows:

37.1    It is important that effective and quick action is taken to settle disputes about matters arising under this Agreement or in relation to the National Employment Standards.

37.2    Save where there is an imminent risk to the health and/or safety of employees, work will continue in accordance with this Agreement as required by the Company while the dispute is being processed.

37.3    The parties to the dispute must follow the following procedure should such a dispute arise:

Stage 1    The employee will contact his or her immediate supervisor and make all reasonable attempts to settle the dispute at that level;

Stage 2    If the dispute is not settled at Stage 1, or if it is inappropriate for the employee to meet with his or her immediate supervisor because of the nature of the dispute, the employee will meet with more senior management in his or her work area or location (and his or her immediate supervisor where appropriate). The employee may be represented by another person of his or her choice at this meeting and at any subsequent meeting.

While the above procedures are being followed, the status quo remains.

Stage 3    If the dispute is not settled at Stage 2, it may be referred to FWC for conciliation. Either party may have a person of their choice represent them in any such conciliation.

Stage 4    Where a dispute about the application of this Agreement or the National Employment Standards is not resolved at Stage 3, the matter in dispute may be determined by FWC exercising its arbitration powers.

PROCEEDINGS BEFORE THE DEPUTY PRESIDENT

8    The Union’s application was heard by Deputy President McCarthy who published his decision on 31 January 2014. (See sub nom Australian Manufacturing Workers’ Union (AMWU) v ALS Industrial Pty Ltd [2014] FWC 692.) The factual background to the dispute appears at [4] to [8] of the Deputy President’s reasons as follows:

[4]    [ALS] supplies Non Destructive Testing Services (NDT) to Alcoa of Australia Limited’s (Alcoa) three alumina refineries in Western Australia at Kwinana, Pinjarra and Wagerup (the Alcoa sites). NDT work is generally performed on the client’s plant and equipment at the client’s site.

[5]    The Kwinana Refinery is located 22 kilometres south of Perth and is part of the Kwinana Industrial area, Western Australia’s premier industrial estate. The Pinjarra Refinery is situated 10 minutes from the town of Pinjarra and 30 minutes from the coastal city of Mandurah. Pinjarra is a town in the Peel region of Western Australia along the South Western Highway, 86 kilometres from Perth and 21 kilometres south-east of the coastal city of Mandurah. The Wagerup Refinery has been a part of the Western Australian community since it began operations in 1984. Wagerup is about 130 kilometers south of Perth, on the border of Western Australia’s Peel and South West regions, and is four kilometres north of Yarloop and 13 kilometres south of Waroona.

[6]    Prior to 1995, the NDT functions at the Alcoa sites were performed by Wishaw Engineering Services (Wishaw), and though a series of sales of Wishaw and subsequent owning entities in 2010 ALS Global Pty Ltd acquired the operation which was then established as ALS Industrial Australia Pty Ltd (ALS).

[7]    There have been a number of industrial agreement instruments that have covered and applied to the operations. In 2006 a workplace agreement applied viz; the Metlabs WA Employee Collective Workplace Agreement 2006 - 2009 (the 2006 Agreement). It was evidenced that the 2006 Agreement put in place a set of conditions that were no different to the travel payments that applied prior to the 2006 Agreement. In 2009, the PearlStreet WA Enterprise Agreement 2009 (the 2009 Agreement) covered and applied to the operations. The 2012 Agreement was approved by [FWC] on 10 July 2013 and replaced the 2009 Agreement.

[8]    In or around April 2010, [ALS] established a new Company base at 109 Bannister Road (the Canning Vale Company base). The Canning Vale Company Base has always been described in the workplace as a “company base”. Much of the infrastructure that was at the Welshpool Company base, including the office administration (staff and facilities) and an xray bay was moved to the Canning Vale Company base. A ten tonne overhead crane was also installed in the workshop that is at the Canning Vale Company base.

9    The more immediate facts appear at [16] to [22] of the Deputy President’s reasons as follows:

[16]    The majority of the relevant facts are not in dispute although what transpired in the discussions leading to the making of the 2012 Agreement is contested.

[17]    The employees covered by the Agreement have been performing work at the Alcoa sites for about 15 years and many of the employees have worked at a particular site for most, if not all, of their periods of employment with [ALS].

[18]    [ALS] submitted that there are approximately 48 employees permanently based at one of the three Alcoa sites and that the nominated base for all employees has been Canning Vale, despite the fact the employees work every day at their designated Alcoa site, and never at Canning Vale. This has meant the employees have been paid as though they were working every day as if they were working for travelling to and from their home and their workplace.

[19]    In 2012, negotiations for an enterprise agreement to replace the 2009 Agreement commenced. On 10 July 2013, a new enterprise agreement was approved. The name of the new enterprise agreement was the ALS Industrial Australia (WA) Enterprise Agreement 2012.

[20]    [ALS] and the previous employers have applied the travel allowance clause using the Perth metropolitan office and facilities as the employees’ Company base. Thus the employees’ Company base has been either Booragoon, Welshpool or one of two locations in Canning Vale. At no time have any of the Alcoa sites been used as the employees' Company base for the purpose of calculating travel payments.

[21]    [ALS] does not deny that payments have been made in that way but argues that they have never conceded that the clause required it to be applied in the way it has been applied. [ALS] argues that it is a matter of their discretion that they applied it in the way it has been applied but not an obligation that they did.

[22]    In September 2013, [ALS] gave notification that it intended to stop the payment of the travel payment in the manner that it had previously applied it and proposed to introduce other forms of payment to minimise the impact on employees affected.

10    The Deputy President’s understanding of the matters in dispute appears at [10] to [15] as follows:

[10]    The dispute before the FWC is about whether the Alcoa sites fall within the meaning of the term “the employee’s Company base” as contained in sub-clause 15.5 of the Agreement. The [Union’s] case is that the Alcoa sites do not fall within the meaning of the words “Company base”. As such, the [Union] submits that [ALS] cannot nominate any of the Alcoa sites as a Company base for the purposes of the clause.

[11]    The [Union] says there are four questions that arise from its application:

1.    Is Alcoa’s Kwinana Site a site for the purpose of clause 15 of the Agreement?

2.    Is Alcoa’s Pinjarra Site a site for the purpose of clause 15 of the Agreement?

3.    Is Alcoa’s Wagerup Site a site for the purpose of clause 15 of the Agreement?

4.    If the answer to any of the above questions is yes, then can [ALS] nominate any of the above premises which are sites to instead be a “Company base” under sub-clause 15.5 of the Agreement?

[12]    The [Union] asserts that the employees’ Company base must be [ALS’s] office and Western Australia headquarters at Canning Vale, an industrial precinct on the outskirts of Perth.

[13]    [ALS] asserts that clause 15 of the Agreement provides that an employee’s Company base may be changed occasionally and that the discretion to nominate a different base rests with [ALS]. Therefore, they argue the term “Company base” can be the location at which an employee is usually required to perform work for [ALS]. [ALS] submits that notwithstanding payments have always been made on the basis that the employees’ Company base is Canning Vale or Welshpool; it does not detract from the meaning of the clause and the capacity of [ALS] to assign a different employee company base.

[14]    [ALS] says that they are under commercial pressure to reduce their costs and that they have the right to apply the Agreement by complying with what they are obliged to comply with and by reducing payments they are not obliged to make. [ALS] argues that the payments have been made for a long time but they have not been made as an entitlement under the Agreement but rather as an above agreement payment. They argue that making an above agreement payment does not create an entitlement to that payment under the Agreement.

[15]    The dispute has now arisen as a result of [ALS] giving notice that it was going to assign the relevant Alcoa site where an employee was working as the employee’s Company base for all employees for the purposes of calculating travel time payments.

11    At [23] to [31] the Deputy President set out evidence concerning the disadvantage to employees of the proposed changes to the existing arrangements and ALS’s reasons for wanting to make such changes.

THE DEPUTY PRESIDENT’S REASONS

12    The Deputy President referred to Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 (“Codelfa”) at 352 where Mason J (as his Honour then was) discussed the use, in construing a contract, of surrounding circumstances. (See [32].) The Deputy President then dismissed, as being of little assistance, various aspects of the evidence and submissions made by the parties and turned to the meaning of the term “the employee’s Company base”. (See [33] to [36].) He stressed the need to construe the phrase as a whole, noting that the base must be both that of ALS and of the employee. (See [37] to [42].)

13    At [42] to [47] the Deputy President considered whether the purpose of payments pursuant to cl 15 was to compensate an employee for expenses and allowances which would otherwise be payable in connection with travel, or was payment for time spent in travel. He concluded at [47] that:

It seems that what is intended by sub-clause 15.6 is there is to be a payment as part of the remuneration package as a whole that takes into account the fact that employees would ordinarily be expected to travel to and from their place of work.

14    At [49] and [50] the Deputy President concluded that prior to the commencement of the 2012 Agreement, it had been generally accepted that an employee’s Company base, for the purposes of similar clauses in prior employment arrangements was Canning Vale. However ALS contended that whilst it may have treated Canning Vale as being each employee’s Company base it did not follow that it was in fact, their base. It asserted that an alternative base could be assigned at its discretion. At [51] and [52] the Deputy President said:

[51]    However I do not think the approach of [ALS] is sustainable. By treating the Canning Vale site as the employee’s Company base for at least 10 years and then asserting that it has no effect on the factual situation is unrealistic. If practice and custom and conduct over an extended period of time treats a situation in a specific way then it influences and reinforces what a common understanding of the meaning of what a provision is. This is especially the case where replacement agreements keep the same provision and nothing else changes, I consider it has an effect of establishing the meaning by the practice of applying it in a particular way. Thus I consider that the employee’s Company base has been the Canning Vale location and that was not just the employee’s understanding of what that term meant but was the common understanding of what it meant. It appears to me that [ALS] has given a meaning to the phrase by nominating, even if by accepting past custom and practice, that an employee’s Company base is a base of the type that Canning Vale is, namely a headquarters or centre of operations and not a usual place of work such as an Alcoa site.

[52]    What [ALS] seems to rely on more is their capacity to nominate an alternate Company base. However again this must be taken in context of the clause as a whole, including the purpose of it which I have canvassed above. If the purpose was to treat travel time to and from a place where work is performed as time worked, or in the course of employment, then the approach [ALS] wishes to take is not available under Clause 15. What is available under Clause 15 is the capacity to nominate an alternative and by implication similar base to the Canning Vale site as the employee’s Company base. Thus if there were regional bases for example at Kalgoorlie there would be a capacity to nominate that location for the purposes of the clause.

The effect of this conclusion seems to be that any nominated employee’s Company base must be, in some way, similar to the Canning Vale site.

15    The Deputy President then compared the terms of the 2012 Agreement with those of the relevant award. (See [53].) The award provided for payment of “travelling time” for all reasonable time spent by an employee in reaching and returning to a “job” which was away from the employer’s usual workplace, to the extent that such time was in excess of time normally spent in travelling between the employee’s usual residence and the employee’s usual workplace, together with relevant fares. At [54] the Deputy President observed that:

The history and concept of travel payments normally found in Awards is that a person who attends work at a usual place does not get paid anything for getting to and from work. However if an attendance is required at some other location then either reimbursements or payments are often provided. For many years travel time has not been something generally provided even where an employee is required to travel to a workplace other than their usual workplace, rather allowances for travel are usually provided often with various distance bands.

16    The Deputy President then considered, at [55], the differences in language as between the 2012 Agreement and the award, concluding that the language of the 2012 Agreement, “displays such a contrast to the language of the award as to indicate an intention of achieving a different purpose”. Finally, the Deputy President observed at [56] to [58]:

[56]    The final matter which I view as appropriate to raise, although I do not rely on it, is the conduct of the parties in the negotiations for the Agreement. Clearly, [ALS] wished to apply the travel provision in a different way to the way that it had previously done so. It raised the intention and pursued it and then apparently abandoned it in the negotiations as it became clear that there would be no agreement to change the provisions. Indeed the evidence of Mr McCrea and Mr New was that they understood [ALS] had given an undertaking not to change the way in which the clause was applied. Whilst Mr McGinty disputed the accounts by the employee witnesses, I found their evidence in this regard to be more convincing.

[57]    Here, there was notorious knowledge of both parties in the formation of the Agreement. That knowledge involved the way the clause had always been applied and a long held common understanding that the employee's Company base was Canning Vale for the purposes of the travel provisions of the Agreement. What [ALS] was actually endeavouring to achieve was a change to the common understanding but conceding that there existed a history of that notorious knowledge. It seems to me that the view [ALS] was putting was arrived at not by what the common understanding was but what they wanted it to be changed to be. That can only be achieved by changing the provisions in the Agreement. [ALS] endeavoured to change the terms and having not succeeded wants to apply the terms as if it had reached agreement with employees for a change.

[58]    I therefore find and determine that the approach the [Union] has taken here is the correct one. The employee's Company base is the Canning Vale premises of [ALS] and cannot be any of the three Alcoa sites, unless of course the Agreement is replaced or varied with different terms. …

THE APPEAL

17    On 21 February 2014 ALS appealed against the decision pursuant to s 604 of the Fair Work Act. That section provides:

(1)    A person who is aggrieved by a decision:

(a)    made by the FWC (other than a decision of a Full Bench or an Expert Panel); or

(b)    made by the General Manager (including a delegate of the General Manager) under the Registered Organisations Act;

may appeal the decision, with the permission of the FWC.

(2)    Without limiting when the FWC may grant permission, the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.

Note:    Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).

(3)    A person may appeal the decision by applying to the FWC.

18    Section 607 provides:

(1)    An appeal from, or a review of, a decision of the FWC or the General Manager may be heard or conducted without holding a hearing only if:

(a)    it appears to the FWC that the appeal or review can be adequately determined without persons making oral submissions for consideration in the appeal or review; and

(b)    the persons who would otherwise, or who will, make submissions (whether oral or written) for consideration in the appeal or review consent to the appeal or review being heard or conducted without a hearing.

(2)    The FWC may:

(a)    admit further evidence; and

(b)    take into account any other information or evidence.

(3)    The FWC may do any of the following in relation to the appeal or review:

(a)    confirm, quash or vary the decision;

(b)    make a further decision in relation to the matter that is the subject of the appeal or review;

(c)    refer the matter that is the subject of the appeal or review to an FWC Member (other than an Expert Panel Member) and:

(i)    require the FWC Member to deal with the subject matter of the decision; or

(ii)    require the FWC Member to act in accordance with the directions of the FWC.

THE NOTICE OF APPEAL

19    The notice of appeal contained 14 grounds. We need not include them in these reasons. Concerning the question of permission to appeal as required by s 604(1), ALS asserted that:

(1)    The Decision is attended with sufficient doubt to warrant its reconsideration.

(2)    To the extent that his Honour relied upon (a) clause 15.6 of the Agreement; and (b) differences between the wording of the Agreement and the Award, his Honour relied on matters not raised in the hearing.

(3)    Substantial injustice may result if leave is refused.

THE FULL BENCH’S DECISION ON APPEAL

20    The Full Bench set out the background facts of the case, as they appeared at [4] to [22] of the Deputy President’s reasons. (See sub nom ALS Industrial Pty Ltd v Australian Manufacturing Workers’ Union (AMWU) [2014] FWCFB 3491). Concerning the grounds of appeal the Full Bench said at [5] and [6]:

[5]    The grounds of appeal challenge the conclusions of the Deputy President in construing clause 15 of the Agreement. As the dispute involved the determination of the true meaning of the terms of the Agreement, the decision cannot be described as a discretionary decision. Hence in this appeal the questions to be determined are whether permission to appeal should be granted, and if so, whether the interpretation adopted by his Honour was correct. The conventional considerations in determining whether to grant permission to appeal are whether there is sufficient doubt in the decision at first instance to warrant its reconsideration or whether an injustice may result if permission is not granted. The Commission is required to grant permission to appeal if it considers that it is in the public interest to do so. We consider that there is sufficient doubt in the decision to warrant its consideration and we grant permission to appeal on that basis.

[6]    ALS contends that on a proper construction of the Agreement, the ordinary meaning of the words in clause 15.5 are not relevantly ambiguous and allow ALS to nominate the Alcoa Refinery as an employee’s home base. It further contends that in holding otherwise and having regard to the surrounding circumstances his Honour was in error. In the alternative, it submits that the evidence of the surrounding circumstances did not warrant a departure from the ordinary meaning.

21    The Full Bench then referred to various authorities concerning the construction of agreements, particularly the decisions of the High Court in Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179 and Codelfa (supra), and the decision in Kucks v CSR Ltd (1996) 66 IR 182. At [13] the Full Bench concluded that:

In our view it is necessary to interpret Clause 15 of the Agreement in the context of the surrounding circumstances including the history of making the Agreement. The clause provides an entitlement to a travel time payment when an employee is required to travel to work at a location other than “the employee’s Company base”. Importantly, the clause states that “from time to time, the Company may nominate an alternate Company base.” Such a concept connotes a variety of locations rather than one base for all employees. The normal situation implied by the clause is that employees will attend at their base to perform their work. Only if they are required to attend a different work location will they be entitled to a payment of travel time. The payment appears to be intended to compensate an employee who is disadvantaged by a departure from the normal position of travelling to their usual place of work at a Company facility.

22    It noted at [14] that the evidence established that:

    the employees in question performed most of their work at the Alcoa sites;

    most of the employees had worked continuously and exclusively at such sites for up to 15 years;

    ALS maintained facilities at the sites for the purpose of having its employees perform the contracted work including designated offices, crib rooms, dark rooms, storage areas, IT systems, office equipment, furniture and over $1 m worth of testing equipment; and

    some employees had never visited the Canning Vale headquarters.

23    At [15] and [16] the Full Bench observed:

[15]    The words do not, in our view, require the employee’s Company base to be a head or regional office. Indeed the clause implies that the employee’s Company base will be their usual place of work provided that workplace can legitimately be described as a “Company base”. Further, the right of ALS to nominate an alternate Company base appears unlimited provided also that the location concerned can legitimately be termed a “Company base”.

[16]    A location that has no connection with the company, such as a local landmark or petrol station would not fall within the description of a Company base. However, the ordinary meaning of the words “employee’s Company base” can comfortably accommodate the type of workplace at which the employees currently work where there are permanent Company facilities provided at that location for the performance of the work of employees.

24    At [17] the Full Bench observed that:

    it did not consider that it should depart from this view simply because ALS had previously nominated the Canning Vale headquarters as each employee’s Company base;

    on the proper construction of cl 15, ALS had the right to nominate actual work locations but had chosen not to do so; and

    this practice was generous to its employees but did not alter the meaning of the clause, or deprive ALS of, “the right to change the work location in accordance with the clause”.

25    The Full Bench observed at [18] that:

    no assistance was to be derived from evidence concerning the negotiations leading up to the making of the 2012 Agreement;

    “ … the correct analysis begins and ends with the interpretation of the words used in the clause, construed in their context”; and

    it would be of no assistance, “to endeavour to formulate a common understanding based on custom and practice … to consider whether travel is in the course of employment, or to interpret the clause by reference to provisions of other instruments of a different nature … ”.

26    Thus the Full Bench concluded that each of the four questions identified by the Deputy President should be answered “yes”. (See [19].) It granted permission to appeal and ordered that its answers be substituted for those of the Deputy President. (See [20].)

THE PRESENT APPLICATION

27    The Union seeks certiorari and mandamus on five grounds, four of which allege jurisdictional error. The other ground (ground 4) alleges error of law on the face of the record. In its written submissions, it states that:

2.    The [Union’s] case is the Full Bench:

a.    failed to consider context in the interpretation of the Agreement [Context ground]. It is submitted that this was an error on the face of the record. In the alternative, it is submitted that this was a jurisdictional error, as the Full Bench misunderstood the nature of its functions, and also failed to take into account relevant considerations;

b.    breached the obligation in s577 of the Act to perform its functions and exercise its powers in a manner that, among other things, promotes harmonious and co-operative workplace relations, and thereby falling into jurisdictional error [Obligation ground].

3.    The [Union’s] Statement of Claim sets out numerous grounds of review. The [Union] seeks to pursue only the grounds that raise the above errors, namely:

a.    In relation to the Context Ground, paragraph 10 (and see also paragraphs 9(a), and (c));

b.    In relation to the Obligation ground, paragraphs 13-18 (and see also paragraph 9(b)).

28    In effect, the Union seeks to have the Full Bench’s decision quashed for jurisdictional error or error on the face of the record. The pleaded jurisdictional errors are said to be that the Full Bench, in construing the agreement:

    failed to consider “context” and other relevant considerations; and

    breached its obligation pursuant to s 577 of the Fair Work Act to perform its functions, and exercise its powers in a manner which promoted harmonious and cooperative workplace relations.

The relevant paragraphs of the statement of claim also refer to s 578 of the Fair Work Act. However, in its final submissions, the Union placed no reliance upon that provision. The error of law on the face of the record is said to be, in effect, the first alleged jurisdictional error.

available relief

29    ALS submits that constitutional writs should not be issued, either for jurisdictional error or for error of law on the face of the record. This submission depends, fundamentally, upon the proposition that in the proceedings before both the Deputy President and the Full Bench, FWC was engaged in a private arbitration. The Union accepts that the proceedings before the Deputy President were of that nature. However it submits that proceedings before the Full Bench were by way of statutory appeal pursuant to s 604. ALS submits that in dealing with the appeal the Full Bench:

    in engaging in a private arbitration, did not exercise any public law function or government power, the arbitration being consensual; and

    was acting as a private arbitrator as part of the process to which the parties to the 2012 Agreement had committed themselves when choosing to have their dispute determined by FWC.

30    ALS further submits that:

    apart from statutory provisions which have no present relevance, a private arbitrator’s award may only be overturned for error of law on the face of the record;

    such remedy is not available where the award is as to a question of law proffered by the parties for the arbitrator’s determination;

    the four questions framed by the Union turned upon the construction of the 2012 Agreement, a question of law;

    subject to appeal, the decision of the Deputy President as to both the law and the facts was binding and not amenable to review by way of certiorari or mandamus; and

    the decision of the Full Bench was also binding and not amenable to review, subject to the possibility that it might be set aside for error of law on the face of the record, a remedy which should be distinguished from the relief by way of constitutional writs sought by the Union in this case.

DEALING WITH DISPUTES

31    The Fair Work Act provides that employment conditions may, in certain circumstances, be regulated by an enterprise agreement. Part 2–4 of the Fair Work Act deals with such agreements. Sections 185 and 186 effectively require that an enterprise agreement be approved by FWC. Pursuant to s 186(6) (which is set out above) FWC may not approve an enterprise agreement unless it is satisfied that it includes a term which prescribes a dispute resolution procedure. Section 739 (which is also set out above) is found in Div 2 of Pt 6-2. Section 738 provides that Div 2 of Pt 6-2 applies if:

…

(b)    an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6) … .

32    In common parlance, the word “arbitration” is frequently used in the industrial context to describe a statutory process for dispute resolution. The word is also widely used, other than in the industrial context, to describe a process by which disputes are settled by a third party, appointed for that purpose by the parties to the dispute. In Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2000) 203 CLR 645 (“Gordonstone”) the High Court held that provisions in earlier industrial legislation providing for the consensual resolution of disputes established systems of private arbitration. The High Court said at [30] and [31]:

[30]    There is, however, a significant difference between agreed and arbitrated dispute settlement procedures. As already indicated, the Commission cannot, by arbitrated award, require the parties to submit to binding procedures for the determination of legal rights and liabilities under an award because Ch III of the Constitution commits power to make determinations of that kind exclusively to the courts. However, different considerations apply if the parties have agreed to submit disputes as to their legal rights and liabilities for resolution by a particular person or body and to accept the decision of that person as binding on them.

[31]    Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator’s powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator’s award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it.

33    In TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia (2014) 251 CLR 533 the High Court considered the notion of private arbitration in a somewhat different context. At [28] and [29], French CJ and Gageler J said:

[28]    Underlying each of those dimensions of the judicial power of the Commonwealth is its fundamental character as a sovereign or governmental power exercisable, on application, independently of the consent of those whose legal rights or legal obligations are determined by its exercise. That fundamental character of the judicial power of the Commonwealth is implicit in the frequently cited description of judicial power as “the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects”, the exercise of which “does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action”. Judicial power “is conferred and exercised by law and coercively”, “its decisions are made against the will of at least one side, and are enforced upon that side in invitum”, and it “is not invoked by mutual agreement, but exists to be resorted to by any party considering himself aggrieved”.

[29]    Therein is the essential distinction between the judicial power of the Commonwealth and arbitral authority, of the kind governed by the Model Law, based on the voluntary agreement of the parties. …

Their Honours then set out part of the above extract from Gordonstone and continued at [29]:

    The context of that articulation puts its reference to “private arbitration” in appropriate perspective. The context was that of a challenge to the capacity of a statutory body consistently with Ch III of the Constitution to exercise a statutory function to settle a dispute where so empowered by an agreement entered into as a result of statutory processes. The reference to “private arbitration” was not to a private function, as distinct from a public function, but rather to a function the existence and scope of which is founded on agreement as distinct from coercion.

34    At [75] to [79] Hayne, Crennan, Kiefel and Bell JJ said:

[75]    The exercise of judicial power is an assertion of the sovereign, public authority of a polity. Whilst it is “both right and important to observe that the determination of rights and liabilities lies at the heart of the judicial function”, parties are free to agree to submit their differences or disputes as to their legal rights and liabilities for decision by an ascertained or ascertainable third party, whether a person or a body. As will be explained, where parties do so agree, “the decision maker does not exercise judicial power, but a power of private arbitration”.

[76]    An agreement to submit disputes to arbitration does not, apart from statute, take from a party the power to invoke the jurisdiction of the courts to enforce that party's rights by instituting an action to determine a dispute of a kind that the parties have agreed should be arbitrated. The jurisdiction of the courts is not and cannot be ousted by a private agreement.

[77]    However, if parties do go to arbitration and the arbitrator makes an award, the making of the award has legal significance in respect of the parties' dispute and their rights and liabilities. As the plurality in Dobbs said: "if, before the institution of an action, an award was made, it [the award] governed the rights of the parties and precluded them from asserting in the Courts the claims which the award determined" (emphasis added). In such a case, the arbitrator's award governs the rights of the parties because "[b]y submitting the claims to arbitration, the parties confer upon the arbitrator an authority conclusively to determine them”.

[78]    This gives rise to the general rule that an award made by an arbitrator pursuant to such authority is final and conclusive. Further, the arbitrator's making of an award in exercise of such authority both extinguishes the original cause of action and imposes new obligations on the parties in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. The former rights of the parties are discharged by an accord and satisfaction. The accord is the agreement to submit disputes to arbitration; the satisfaction is the making of an award in fulfilment of the agreement to arbitrate.

[79]    It follows that when an arbitral award is enforced by curial process, the obligations sought to be enforced are those which are created by the award in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. A party may sue on an award as a cause of action or, in some cases, as in this case, seek enforcement of the award pursuant to the IA Act.

35    Thus it is well settled that “arbitration” by FWC pursuant to a term in an enterprise agreement is a private arbitration, based upon the consent of the parties, and not upon the coercive authority of the Australian state. Subject to the Union’s submission that the proceedings before the Full Bench were by way of appeal pursuant to the Fair Work Act, this principle is not in dispute.

PRIVATE ARBITRATION

36    As appears from the decision in TCL, “[t]he general common law principle … was that ‘where a cause or matters in difference [were] referred to an arbitrator, whether a lawyer or a layman, [the arbitrator was] constituted the sole and final judge of all questions both of law and of fact’” (per French CJ and Gageler J at [37]). See also the joint judgment of Hayne, Crennan, Kiefel and Bell JJ at [77] and [78], set out above, and [81], [85], [92], [99], [107] and [108].

37    At common law, there was an exception to this general rule. An arbitrator’s award could be set aside for error of law on the face of the record. See TCL at [35]. In Max Cooper & Sons Pty Ltd v University of New South Wales [1979] 2 NSWLR 257 at 261, Lord Diplock, in delivering the judgment of the Privy Council, said:

Before the Common Law Procedure Act, 1854 (Imp.) the Court of King's Bench exercised over awards of arbitrators a supervisory jurisdiction to set aside the award for errors of law apparent upon its face, analogous to that which it asserted over inferior tribunals by use of the prerogative writ of certiorari. It treated the award itself as corresponding to the “record” of an inferior tribunal which alone was examinable for the purpose of detecting errors of law. This jurisdiction operated haphazardly, because the ability of the court to exercise it depended upon whether or not the arbitrator had chosen to set out in the award itself the legal reasoning on which he had based it. If he had not, the court was powerless to intervene but, if he had and his legal reasoning so set out in the award itself was erroneous, the court could quash the award.

38    There was, however, an exception to this exception. In TCL at [36] French CJ and Gageler J said:

The common law rule that an arbitral award could be set aside for error of law on the face of the award had no application where the parties to an arbitration agreement specifically agreed to submit a question of law for the determination of an arbitral tribunal: the arbitral award determining such a question of law bound the parties and was enforceable by action in a common law court whether or not an error of law appeared on the face of the arbitral award.

39    The law relating to private arbitration has, since 1854, been the subject of substantial legislative change, including changes in the extent to which judicial intervention may detract from the finality of an arbitrator's award. In Australia, such legislation has largely been that of the State parliaments. Neither party has suggested, in this case, that any legislation applies for present purposes. Both parties have proceeded on the basis that an award by a private arbitrator is liable to be set aside for error of law on the face of the record. ALS denies any such error but also seeks to rely on the exception, submitting that in this case, if there was an error of law on the face of the record, the issue referred to FWC was a question of law. In this, and other respects, the case raises numerous questions concerning the extent to which consensual arbitration under the Fair Work Act is subject to the law otherwise applicable to private arbitrations, and as to the availability of the constitutional writs in connection with such private arbitrations.

THE NATURE OF THE FWC PROCEEDINGS

40    By cl 37.3 of the 2012 Agreement, the parties agreed to refer any dispute to FWC. Hence it is necessary that we consider the meaning of the term “FWC”. That the letters stand for “Fair Work Commission” is clear enough. However what is meant by the use of that title in the 2012 Agreement?

41    Section 575(2) of the Fair Work Act provides that FWC, “consists of” the President, two Vice-Presidents, any number of Deputy Presidents and Commissioners, and six Expert Panel Members. Its functions are set out in s 576. They include, in subs (2), “promoting cooperative and productive workplace relations and preventing disputes”, and, “dealing with disputes as referred to in section 595”. Section 595 provides:

(1)    The FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.

(2)    The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:

(a)    by mediation or conciliation;

(b)    by making a recommendation or expressing an opinion.

(3)    The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.

Example:    Parties may consent to the FWC arbitrating a bargaining dispute (see subsection 240(4)).

(4)    In dealing with a dispute, the FWC may exercise any powers it has under this Subdivision.

Example:    The FWC could direct a person to attend a conference under section 592.

(5)    To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section.

Although it is not entirely clear, the references to “arbitration” seem to include an arbitration pursuant to s 739(4).

42    The President is responsible for ensuring that FWC performs efficiently, and adequately serves the needs of employers and employees (s 581). Pursuant to s 582 he or she may give directions not related to any FWC “decision”. Section 589(1) provides that FWC may decide “how, when and where a matter is to be dealt with”. Sections 590 and 595 confer various powers upon FWC, including the power to compel the attendance of witnesses.

43    Part 5-1, Div 4 deals with organizational matters. Section 612(1) provides that a function or power may be exercised by an FWC Member, other than an Expert Panel Member, as directed by the President, but subject to certain exceptions. The term “FWC Member” is defined in s 12 to mean the President, a Vice-President, a Deputy President, a Commissioner or an Expert Panel Member. Section 613 provides:

(1)    A Full Bench must (except as provided by subsection (2)):

(a)    decide under section 604 whether to grant permission to appeal a decision; and

(b)    if the Full Bench decides to grant the permission—hear the appeal in accordance with section 607.

Note:    For the constitution of a Full Bench, see section 618.

(2)    The President, a Vice President or a Deputy President directed by the President, may:

(a)    decide under section 604 whether to grant permission to appeal:

(i)    a decision of a delegate under subsection 625(2); or

(ii)    a decision of the General Manager (including a delegate of the General Manager) under the Registered Organisations Act; and

(b)    if the President, the Vice President or the Deputy President (as the case may be) grants the permission—hear the appeal in accordance with section 607.

Note:    The President gives directions under section 582.

Appeals are dealt with in s 604, the text of which appears above at [17].

44    Sections 615 to 615C confer power on the President to:

    direct that a function or power be exercised by a Full Bench;

    transfer a matter to a Full Bench from a Member; or

    transfer a matter to the President from a Full Bench or a Member.

Section 616 provides that certain matters must be dealt with by a Full Bench.

45    It is common ground that the Deputy President was properly seized of the matter, and that he acted by virtue of the 2012 Agreement and therefore as a private arbitrator. Neither party suggests that in hearing and determining ALS’s appeal, the Full Bench acted without authority. However the Union submits that in so doing, the Full Bench was exercising only the powers conferred upon it by the Fair Work Act. ALS submits that it was exercising the powers conferred upon it by the 2012 Agreement which powers may have included some or all of its statutory powers.

46    Similar questions have arisen, directly or indirectly, in other cases. In Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd (2012) 203 FCR 371, the Full Court of this Court considered an application in which it was alleged that the Full Bench had exceeded its jurisdiction in hearing an appeal from a decision of a Member. The relevant term pursuant to which FWC acted does not appear from the report of the case, but the Court proceeded upon the basis that the Full Bench was acting as a private arbitrator. We shall, in another context, return to this decision.

47    In Linfox Australia Pty Ltd v Transport Workers’ Union of Australia (2013) 213 FCR 479, Rares J was concerned with an enterprise agreement which contained the following provisions:

…

22.1    Any dispute or grievance that arises at the workplace between an Employee and Linfox and/or Linfox and the TWU about the Agreement or the employment relationship (including, for the avoidance of doubt, in relation to the NES) shall be dealt with in the following manner:

…

(e)    If the matter is not resolved in conciliation conducted by FWA, the parties agree that FWA may proceed to arbitrate the dispute and/or otherwise determine the rights and/or obligations of the parties to the dispute. In relation to such arbitration, the parties agree that:

(i)    FWA may give all such directions and do all such things as are necessary for the just resolution of the dispute, including but not limited to those things set out in section 595 of the Act;

(ii)    before making a determination FWA will give the parties an opportunity to be heard formally on the matter(s) in dispute;

(iii)    in making its determination FWA will only have regard to the materials, including witness evidence, and submissions put before it at the hearing and will disregard any admissions, concessions, offers or claims made in conciliation.

(f)    The decision of FWA will be binding on the parties subject to the following agreed matters:

(i)    There shall be a right of appeal to a Full Bench of FWA against the decision, which must be exercised within 21 days of the decision being issued or within such further time as the Full Bench may allow;

(ii)    The appeal will be conducted in accordance with the legal principles applying to an appeal;

(iii)    The Full Bench shall have the power to stay the decision pending the hearing and determination of the appeal.

22.2    The decision of the Full Bench in the appeal will be binding upon the parties.”

(Emphasis removed.)

48    His Honour referred to the decisions in Gordonstone and TCL and said at [27]:

The function that the Full Bench of the Commission exercised was the agreed appellate mechanism under cl 22.1(f) of the enterprise agreement. That function of the Commission was not an exercise of its public law functions under the Act. Rather the Full Bench performed a function in which it acted as a private arbitrator, appointed by consent of Linfox and the Union, as parties to the enterprise agreement, in the manner provided under the Act for the conduct of appeals within their agreed private arbitral process and the making of a final decision in consequence.

In Linfox, the reference to arbitration clearly provided for an appeal to the Full Bench. The Union submits that the decision should, on that basis, be distinguished from the present case.

49    Finally, and perhaps most helpfully, a Full Bench of FWC considered the question in DP World Brisbane Pty Ltd v Maritime Union of Australia (2013) 237 IR 180. In that case the Full Bench was concerned with an agreement to refer a dispute to Fair Work Australia (now FWC), “for arbitration if necessary in which case the decision will be accepted by the parties subject to any appeal rights”. (See [24].) However the agreement did not confer any appeal rights. The Full Bench referred to the reasons of Rares J in Linfox at [27] (set out above), noting that in that case, the relevant agreement had conferred a right of appeal, and continued at [43] to [48]:

[43]    By conferring a right of appeal the parties to the enterprise agreements in Silcar and Linfox may be taken to be modifying the requirements of s 604(1) such that permission to appeal is not required.

[44]    As to the judgment of Rares J in Linfox, we are not persuaded that his Honour’s observations at [27] of the judgment assist DP World. Linfox is authority for the proposition that in dealing with an appeal from a decision of the Commission under a dispute settlement term in an enterprise agreement the Full Bench is acting as a private arbitrator. The Commission’s private arbitral function is to resolve the dispute that has arisen between the parties and this has implications for the Commission’s powers and the scope of subsequent judicial review. On appeal the Full Bench had authority, by force of the parties’ agreement, to resolve all matters of fact and law (Linfox at [33]).

[45]    The Full Bench’s task as a private arbitrator is clearly different from, and broader than, the exercise of its public appeal functions under s 604 of the Act. But it is apparent from his Honour’s judgment that he was not dealing with the matter which is before us, namely whether s 604 has any work to do in circumstances where the parties to an enterprise agreement do not expressly provide for an appeal from a decision of the Commission, as private arbitrator, under the dispute settlement term. The emphasised words in the passage from his Honour’s judgment [Rares J in Linfox at [27]] suggest that the power of private arbitration conferred in an enterprise agreement can operate in conjunction with the manner in s 604 for the conduct of appeals.

[46]    Subject to two observations, we have concluded that absent a provision to the contrary in the enterprise agreement the appeal procedure in s 604 of the Act applies to decisions made by Commission members exercising a power of private arbitration authorised by the dispute settlement term. We deal first with our reasons for that conclusion before turning to the two observations.

[47]    As a matter of general principle when jurisdiction is conferred on an established court or tribunal it may be assumed that the legislature intended to take the court as it finds it, with all its incidents including any liability to appeal. This presumption is clearly stated by the High Court in Electric Light & Power Supply Corp Ltd v Electricity Commission (NSW) [(1956) 94 CLR 554 at 560]:

“When the [legislature] finds that a specific question of judicial nature arises but that there is at hand an established court to the determination of which the question may be appropriately submitted, it may be supposed that if the [legislature] does not mean to take the court as it finds it with all its incidents including the liability to appeal, it will say so. In the absence of express words to the contrary or of reasonably plain intendment the inference may be made that it takes it as it finds it with all its incidents...”

[48]    The above proposition also applies to tribunals. When the parties to an enterprise agreement choose to confer a power of private arbitration on the Commission then, absent any contrary intention, they take the Commission as they find it, including the liability to appeal. On appeal the Commission exercises a power of private arbitration conferred by the implied agreement of the parties (s 739(4)). Such a conclusion is also consistent with Full Bench authority.

(Footnote references have been omitted.)

50    The Full Bench pointed out that the High Court has held that the decision in Electric Light & Power Supply Corporation Ltd v Electricity Commission of New South Wales (1956) 94 CLR 554 applies to a tribunal. See Houssein v Under Secretary of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 95 - 96. At [52] and [53], the Full Bench then continued:

[52]    As we mentioned earlier, our conclusion on this issue is subject to two observations. The first is that while the appeal procedure in s 604 applies, the role of the Full Bench in such circumstances is quite different from the exercise of its public law functions under the Act. As held in Linfox, in dealing with an appeal from a decision of the Commission under a dispute settlement term in an enterprise agreement the Full Bench is acting as a private arbitrator and this has implications for the Commission’s powers and the scope of subsequent judicial review.

[53]    The second observation is that while the appeal procedure in s 604 may be regarded as the default position that position is clearly subject to any contrary intention in the enterprise agreement. The parties may agree to modify s 604 (for example by providing for a right of appeal and thereby removing the requirement to seek permission to appeal) or may agree to expressly exclude any appeal from a decision of a single Member. Section 739(3) is relevant in this regard. It provides that in dealing with a dispute the Commission must not exercise any powers limited by the dispute settlement term. We now turn to s 604.

51    Clause 37 of the 2012 Agreement makes no mention of appeals. In DP World, the Full Bench considered that the words “subject to any appeal rights” invited the inference that s 604 was to operate, given the absence of any other available appeal mechanism. For present purposes any such inference must depend upon the meaning of the reference in cl 37 to FWC “exercising its arbitration powers”. Those words must be construed in light of s 595(3) and s 739(4) of the Fair Work Act. Clause 37 and those statutory provisions all refer to “FWC”, and not to individual components of it. It is a feature of FWC that some aspects of its jurisdiction may be dealt with by individual Members or a Full Bench. Another feature is that Members’ decisions may be subject to appeal to the Full Bench. There is much to be said for the proposition that where the parties elect to refer a dispute to FWC, they take that body as they find it.

52    The Union advances four reasons for concluding that the appeal process is not by way of private arbitration. They are:

    the absence from the 2012 Agreement of a provision such as that in s 170EC(1) of the earlier legislation (considered in Flight West Airlines Pty Ltd v Australian Industrial Commission (1999) 59 ALD 379) which expressly provided for an appeal to the Full Bench;

    the absence of any express provision in the 2012 Agreement for such an appeal, as in Linfox;

    that the Fair Work Act treats some appeals differently from others; and

    the possibility that the matter might, in some cases, be referred to a private arbitrator pursuant to s 740 of the Fair Work Act.

53    As to the first two matters, an arbitration is constituted by the parties’ consensual reference of their dispute to a third party for binding resolution. No particular language is necessary. In this case there can be no doubt that the parties referred their dispute for resolution by FWC. The only questions are:

    whether, in that reference, the term “FWC” describes the whole of that body or only a Member to whom is assigned the task in question; and

    whether the reference to FWC’s arbitration powers includes the s 604 appeals process.

We have already discussed the decision in Linfox. We shall shortly say something about the decision in Flight West.

54    As to the third point, the Union submits that ss 375A, 400 and 779 of the Fair Work Act all purport to modify the operation of s 604(2). In the matters to which they respectively apply, FWC is not to grant permission to appeal unless it considers that it is in the public interest to do so. Each section further modifies s 604(1) by providing that any appeal on a question of fact must be on the ground that the decision involved a significant error of fact.

55    Section 375A relates to s 369(2), which deals with the arbitration of dismissal disputes. Section 400 relates to decisions under Pt 3, which deals with “general protections” in the workplace. Section 779 relates to matters under s 777(2), dealing with the arbitration of disputes concerning termination of employment. The Union submits that such “special treatment” suggests that those appeals may be part of the arbitration process with which they deal, whilst other appeals are not part of that process. We see no merit in this submission. It involves nothing more than the arbitrary attribution of a purpose to the provisions in question, without any attempt to justify such attribution. The provisions identify quite specific differences in the availability of appeals but say nothing which might suggest that some appeals are to be by way of private arbitration whilst others are not.

56    Finally, the Union submits that a relevant inference may be drawn from the fact that s 740 provides for arbitration by persons other than FWC, and that there is no provision for appeal from an award made by such an arbitrator. Whilst it may seem odd that there should be an appeal in the case of an arbitration by FWC, but no appeal in the case of a private arbitrator, it would be equally odd if parties who had chosen private arbitration were, in the event of an appeal, to be deprived of the perceived benefits of their choice. In any event, this distinction says nothing about the nature or availability of the appeal process prescribed by s 604. It is likely that the appeal process was thought to be appropriate for virtually all decisions of individual Members, albeit with leave, simply because FWC is a public body with an important public role. As FWC is the regulator charged with enforcing and administering the Fair Work Act, there is a special public interest in maintaining public confidence in it. That consideration is not so important in the case of private arbitrators.

57    We have previously suggested that there is much in the proposition that parties who choose to go to arbitration with FWC take that body as they find it. Such choice will be made with knowledge of the structure of that body and of the appellate function performed by the Full Bench. The reference of a dispute for resolution by FWC is for resolution by that body, and not by one part of it. It follows that if the parties intend that there be no appeal pursuant to s 604, they should say so. Similarly, if it is intended that any appeal be other than by way of private arbitration, the parties should say so.

58    We conclude that the reference to arbitration contained in cl 37.3 ‘Stage 4’ of the 2012 Agreement should be construed as including the appellate process identified in s 604. However, as was observed in DP World at [52], the Full Bench’s powers on appeal will reflect the fact that the appeal is from a consent arbitration and is, itself, in the nature of an arbitration. Further, as the Full Bench also observed, any judicial review of the Full Bench’s decision will reflect that characteristic.

CERTIORARI AND MANDAMUS

59    The Union submits that in this case the Court may send writs of certiorari and mandamus to the Full Bench. It submits that ALS’s submissions to the contrary are based on:

    a misunderstanding of the decision in Gordonstone (supra);

    the incorrect assumption that the Full Bench’s decision was part of the “arbitration process”; and

    failure to take into account the decision of the Full Court in Flight West (supra) at [46] to [51], [58] and [59].

60    As to the second proposition, we have given our reasons for concluding that the proceedings before the Full Bench were by way of private arbitration. We turn to the decision in Flight West. In that case the Full Bench of the Australian Industrial Relations Commission had allowed an appeal from the decision of a Commissioner in a private arbitration. The unsuccessful party sought writs of prohibition and certiorari against the Commission, alleging error vitiating the decision. Section 150(1) of the Industrial Relations Act 1988 (Cth) (the “Industrial Relations Act”) provided:

Subject to this Act, an award (including an award made on appeal):

(a)    is final and conclusive;

(b)    shall not be challenged, appealed against, reviewed, quashed or called in question in any court; and

(c)    is not subject to prohibition, mandamus or injunction in any court on any account.

The term “award” was defined in s 4 of the Industrial Relations Act as follows:

"award" means:

(a)    an award or order that has been reduced to writing under subsection 143(1); or

(b)    a certified agreement; or

(c)    an enterprise flexibility agreement;

but does not include an award made in a consent arbitration conducted under Subdivision C of Division 3 of Part VIA.

61    It was submitted that the proviso to the definition applied only to the decision at “first instance”, so that whilst that decision would not be protected from error by s 150(1), a decision of the Full Bench on appeal would be so protected. At [47], Kiefel J said (O’Connor and Dowsett JJ concurring):

An intention to restrict the proviso in this way is not apparent. Further, the argument would seem to require the conclusion that once the appeal process was invoked, the consent arbitration ceased to be just that. The section providing for the process of consent arbitration, s 170EC(1), specifies the contrary. It provides that once an election is made by the parties to undertake the process, they are taken to agree to comply not only with the award made by the commission “for the purpose of that arbitration” but also to comply with the award of the full bench of the commission “as confirmed, varied or substituted on that appeal”.

62    In the present case, the Union submits that this reasoning depends upon the presence in the Industrial Relations Act of s 170EC(1) which provided:

An election under subsection 170EB(2) or (3) by the parties to a conciliation to have the matter to which the conciliation relates dealt with by consent arbitration constitutes an agreement between the parties:

(a)    to submit the matter to the process of consent arbitration; and

(b)    to comply with any requirement of the Commission for the purpose of that arbitration; and

(c)    to comply with any award made by the Commission on that arbitration; and

(d)    if that award is taken on appeal to a Full Bench of the Commission – to comply with the award as confirmed, varied or substituted on that appeal.

63    There is no such provision in the Fair Work Act. We accept that such absence offers a basis for distinguishing the decision in Flight West for present purposes. However, as we have previously pointed out, it does not exclude the possibility that the parties have, by their agreement, included the appeal process in their reference to arbitration.

64    The Union submits that in Flight West, the Full Court proceeded on the basis that the constitutional writs would go, notwithstanding that the proceedings were by way of private arbitration. It submits that such acceptance offers positive support for its submission that certiorari may go in this case, even if the Full Bench were performing a private arbitration. However the decision in Flight West preceded the High Court’s decision in Gordonstone. In fact, the decision of the Full Federal Court in Gordonstone (reported sub nom Gordonstone Coal Management Pty Ltd v Australian Industrial Relations Commission (1999) 93 FLR 153) was handed down on 25 March 1999, between the hearing in Flight West and the date upon which judgment was delivered. The report of the Full Court’s decision in Gordonstone discloses no reference to the significance of the distinction between private arbitration and the exercise of statutory functions. The point seems to have been raised for the first time in the appellant’s submissions in the High Court. In that context, it is hardly surprising that in Flight West, neither the Court nor (apparently) the parties addressed the availability of the constitutional writs in connection with such arbitration. We should add, however, that in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (1999) 93 FCR 317 at [74] Wilcox and Madgwick JJ seem to have anticipated the point which was addressed by the High Court in Gordonstone. We also note that in Flight West at [46] and [47] Kiefel J observed that proceedings under s 170EC(1) were by way of private arbitration. Nonetheless, the decision in Gordonstone appears to have identified the importance of the characterization of such dispute resolution procedures as being private arbitrations, perhaps for the first time.

65    The Union concedes that the decision of the Full Court in Wagstaff (supra) indicates that in a private arbitration under the Fair Work Act, writs of certiorari and mandamus will not go to correct an error of law. In that case, at [41] Buchanan and Katzmann JJ said:

There is another way of looking at this issue from a procedural perspective. If it was open to the Commissioner and the Full Bench of FWA to do no more than express an opinion about the proper construction of the agreement, as the parties seemed to accept (although we have considerable reservations about that, in light of the reference in clause 10 to the exercise of conciliation and/or arbitration powers), the better view is that any opinion given on that question had no legal effect of any kind and hence no jurisdictional consequence either. Rather, the parties had agreed to submit that question to the AIRC (later FWA) for its opinion. The procedure was in the nature of a private arbitration. If the agreement entitled the parties to seek a legal opinion from the AIRC (later FWA) then, subject to any right of appeal, they committed themselves to the possibility that any such opinion might be wrong. In short, the participation by FWA in the dispute resolution process erected by the agreement was not open to any challenge of the kind mounted in the present proceeding. No constitutional writ could issue. FWA did not make an order based on its opinion either at first instance or on appeal. It could not be subjected to an order from this Court requiring it to state a correct opinion.

At [68] and [69] Flick J said:

[68]    Nor is it self-evident that any error on the part of Fair Work Australia – assuming there to be error – would attract either certiorari or mandamus. Certiorari “is a process by which a superior court, in the exercise of its original jurisdiction, supervises the acts of an inferior court or other tribunal”: Craig v South Australia (1995) 184 CLR 163 at 175 - 176 per Brennan, Deane, Toohey, Gaudron and McHugh JJ. The “principal grounds for grant of relief in the nature of certiorari are usually described as ‘error of law on the face of the record’ and ‘jurisdictional error’”: Kirk v Industrial Court of New South Wales 239 CLR 531 at [56] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. And mandamus “will issue to compel the performance of a public duty when there has been a refusal or failure to perform that duty”: Re Australian Bank Employees’ Union; Ex parte Citicorp Australia Ltd (1989) 167 CLR 513 at 515 per Mason CJ, Deane, Dawson, Gaudron and McHugh JJ. “Mandamus and prohibition are remedies which are granted in cases of jurisdictional error – refusal to exercise jurisdiction, in the case of mandamus, and excess of jurisdiction, in the case of prohibition”: Darling Casino Ltd v New South Wales Casino Control Authority (1997) 191 CLR 602 at 633 per Gaudron and Gummow JJ. Even if it be assumed in favour of the CFMEU that the Full Bench were in error, it is not at all apparent that mandamus would issue to compel the performance by the Full Bench of any “duty”. On the facts presented, the Full Bench has done that which it was requested to do – it has answered the question posed for consideration and it has done so according to law. It is difficult to see what duty Fair Work Australia “fail[ed] to perform”.

[69]    How, moreover, “jurisdictional error” is said to be committed by the Full Bench by resolving the very question jointly entrusted to it for resolution was not satisfactorily explained. Any error on the part of the Full Bench could well be characterised – not as jurisdictional error – but rather as an error within jurisdiction. Not every error, or even every error of law, constitutes jurisdictional error: cf Craig v South Australia at 177 - 180 per Brennan, Deane, Toohey, Gaudron, and McHugh JJ. Although it may be accepted that jurisdictional error may separately be exposed by failing to take into account a relevant consideration (cf WAFP v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 319 at [21] per Lee, Carr and Tamberlin JJ; VAAD v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 117 at [69] - [71]) or by taking into account an irrelevant consideration (Craig at 175 - 176) no such error was made by the Full Bench in the present case.

66    The Union submits that in Flight West, the Full Court accepted that the writs would go, and that this was an answer to the “suggestion” in Wagstaff that they would not. We have explained why, in our view, the decision in Flight West should not be treated as establishing that the constitutional writs will go when the decision in question is made in a private arbitration. In any event, we do not accept that, in Wagstaff at [41], Buchanan and Katzmann JJ merely “suggested” that the constitutional writs would not go to a statutory body engaged in a private arbitration. Their Honours unequivocally said so. It may fairly be said that Flick J was not quite as positive in his language, but his Honour’s view was to similar effect.

67    The Union submits that ALS’s submission concerning the constitutional writs is based upon a misunderstanding of the High Court’s decision in Gordonstone. In justifying this assertion, the Union refers to the reasons of Brennan J (as his Honour then was) in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564. Although his Honour concurred in the orders proposed by the other members of the Court, his reasoning differed from theirs. The case concerned the relevance of the risk of reputational damage to the requirements of procedural fairness. However Brennan J stated a broader principle at 584 to 586 as follows:

The answer to this question depends at base on the principle that any person who purports to exercise an authority conferred by statute must act within the limits and in the manner which the statute prescribes and it is the duty of the court, so far as it can, to enforce the statutory prescription. I see no reason to confine the jurisdiction in judicial review more narrowly than this principle would acknowledge, though the armoury of remedies available to the court in particular cases may impose some limitations and judicial discretion in exercising the jurisdiction may further restrict the use of the available remedies. But the broad purpose of judicial review is to ensure that statutory authority, which carries with it the weight of State-approved action and the supremacy of the law, is not claimed for or attributed to decisions or acts that lie outside the statute. The conduct of a person or body of persons acting without colour of statutory authority is not amenable to judicial review, but conduct in which a person or body of persons engages in purported exercise of statutory authority must be amenable to judicial review if effect is to be given to the limits of the authority and the manner of its performance as prescribed by the statute. It is immaterial that the statute defines a mere function that requires no grant of power to enable its performance: what is material to jurisdiction in judicial review is that the function is conferred by the statute. Richard Roe cannot obtain relief in judicial review against John Doe, but he is entitled to whatever remedy the court can appropriately award in judicial review against the statutory authority.

…

Although statutory powers which are capable of exercise to affect legal rights and liabilities can be distinguished from statutory functions which are performed in exercise of the capacities possessed by all, there is no reason to restrict judicial review to the purported exercise of powers, though the major remedies of judicial review – the prerogative writs – are designed to constrain the exercise of powers rather than the performance of functions. However, statutory functions, like statutory powers, are amenable to constraint by judicial review the remedies of which, with varying effectiveness, ensure that statutory functions are performed within the limits and in the manner prescribed by the statute conferring the function. It is no obstacle to the jurisdiction in judicial review that, in producing and furnishing a report adverse to the appellants' reputations, the Commission was doing no more than any individual might have done without a grant of statutory power and that the production and furnishing of the Report enlivened no power for exercise either by the Commission or by any other person. (The furnishing of the Report in fact enlivened a power in the Speaker – an incident of the Speaker's duty – to invest the Report with the immunities and privileges of a report tabled in and printed by order of the Legislative Assembly, but that is immaterial.) To attract jurisdiction in judicial review, it is sufficient that the Commission purported to perform statutory functions in producing and furnishing the Report. The appellants' entitlement to relief thus depends on the function which the Commission purported to perform, the requirements prescribed by the Act governing the performance of the function, the establishment of a breach of those requirements and, importantly, on the remedy appropriate to a review of the production and furnishing of a report damaging to reputation. I shall consider these points seriatim.

(Footnote references have been omitted.)

68    The particular significance of this passage is his Honour’s view that the obligation to afford procedural fairness is derived from statute rather than the common law. In the course of oral submissions, senior counsel for the Union suggested that his Honour’s reasoning had been “picked up” in other cases including “Grogan at paragraph 137” (according to the transcript at ts 14 l 28). At ts 14 ll 16 – 17 it was suggested that “Grogan” was a decision of this Court. The case in question seems to be the decision of Vickery J of the Supreme Court of Victoria in Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture (No 2) (2009) 26 VR 172 at [137]. His Honour there set out a short passage from the reasoning of Brennan J in Ainsworth. However that extract dealt with the narrower proposition concerning the obligation to afford procedural fairness to a person whose reputation may be damaged by the report of an “official entity”.

69    The Union submits that the observations by Brennan J in Ainsworth support the proposition that, “judicial review may be granted in respect of statutory functions as well as statutory powers”. Without necessarily disputing the correctness of that proposition, it is worth noting that the Court of Appeal of New South Wales and the Appeal Division of the Victorian Supreme Court have treated the views expressed by Brennan J in Ainsworth as being inconsistent with authority. See Stewart v Ronalds (2009) 76 NSWLR 99 at [67] to [70]. See also Victoria v Master Builders’ Association of Victoria [1995] 2 VR 121 at 138 - 139. The contrary view is that the obligation to provide procedural fairness is a creature of the common law. It is not necessary, for present purposes, that we further consider that aspect.

70    The Union refers to various provisions of the Fair Work Act which deal with the performance by FWC of its functions, particularly ss 739 (to which we have already referred in detail), 577, 578, 590, 593, 595, 677 and 678. The Union seems to assume, probably correctly, that the powers and functions identified in those sections are, or may be available to FWC in the performance of private arbitrations. Sections 577 and 578 provide as follows:

577    Performance of functions etc. by the FWC

The FWC must perform its functions and exercise its powers in a manner that:

(a)    is fair and just; and

(b)    is quick, informal and avoids unnecessary technicalities; and

(c)    is open and transparent; and

(d)    promotes harmonious and cooperative workplace relations.

Note:    The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581).

578    Matters the FWC must take into account in performing functions etc.

In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:

(a)    the objects of this Act, and any objects of the part of this Act; and

(b)    equity, good conscience and the merits of the matter; and

(c)    the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

71    Pursuant to ss 590 and 593 FWC may inform itself as to matters which are before it, including by taking evidence under oath or otherwise by holding hearings. Section 595 provides that FWC may deal with disputes in prescribed circumstances. Sections 677 and 678 of the Fair Work Act provide that failure to attend and/or give evidence as required, and giving false or misleading evidence are offences. The Union submits that in an arbitration, this suite of powers and functions will not be derived from the agreement to arbitrate, but from the Fair Work Act. Thus it submits that the exercise of such powers and functions may be reviewed using the constitutional writs. The opposing argument is that the exercise of such powers in resolving a dispute which has been referred to them for that purpose is, at least as between the parties to the dispute, part of their private arbitration. In any event, it does not follow that the arbitrator’s award, itself, will be subject to such review.

72    Concerning Gordonstone (supra) the Union submits that the distinction drawn between private arbitration and the exercise of judicial power did not lead the Court to the conclusion that the relevant decision was not subject to judicial review. That case concerned s 89A of the Workplace Relations Act 1996 (Cth) (the “Workplace Relations Act”) and s 170MH of its predecessor, the Industrial Relations Act. Although s 170MH had, at the relevant time, been repealed, transitional provisions continued its operation with respect to agreements previously certified under the Industrial Relations Act. Section 170MH provided:

Procedures in an agreement for preventing and settling disputes between employers and employees covered by the agreement may, if the Commission so approves, empower the Commission to do either or both of the following:

(a)    to settle disputes over the application of the agreement;

(b)    to appoint a board of reference as described in section 131 for the purpose of     settling such disputes.

Section 89A of the Workplace Relations Act provided:

Industrial dispute normally limited to allowable award matters

(1)    For the following purposes, an industrial dispute is taken to include only matters covered by subsections (2) and (3);

(a)    dealing with an industrial dispute by arbitration;

(b)    preventing or settling an industrial dispute by making an award or order;

(c)    maintaining the settlement of an industrial dispute by varying an award or order.

It was common ground that some of the matters in dispute were not matters covered by subss 89A(2) and (3).

73    Before the Full Bench the employer had submitted that:

    the relevant agreement had not been validly certified;

    clauses in the agreement providing for dispute resolution were invalid; and

    s 89A limited the powers of the Commission in a relevant way.

74    The Full Bench held that the agreement was validly certified, that the clauses were valid to the extent that they dealt with, “disputes over the application of the agreement”, and that s 89A did not limit the relevant powers. (See sub nom Construction, Forestry, Mining and Energy Union v Gordonstone Coal Management Pty Ltd (1997) 75 IR 249 at 258 - 260). The Full Court of this Court subsequently issued prohibition, preventing the Commission from proceeding other than on the basis that s 89A applied, apparently on the basis that it limited the exercise of the relevant powers.

75    The High Court disposed of the first point (concerning certification) on the facts, and the second point (concerning the validity of the dispute resolution clauses and s 170MH) primarily on the basis that they were concerned with private arbitration and did not involve arbitral power (ie exercise of the judicial power of the Commonwealth). As to the third point, the Court held that s 89A was only engaged for the specified purposes of:

    dealing with an industrial dispute by arbitration;

    preventing or settling an industrial dispute by making an award or order; and

    maintaining the settlement of an industrial dispute by varying an award or order.

By definition, the term “industrial dispute” incorporated “the need for an interstate element”. There was no such element in the proceedings before the Commission. Hence neither the first nor the second purpose was relevant. As to the third, the Commission was not asked to vary an award or order. Thus s 89A was not engaged.

76    In the present case, the Union submits that in Gordonstone, the High Court could have disposed of the matter on the basis that the proceedings in the Commission were by way of private arbitration but did not do so. The Union invites us to conclude that the High Court proceeded on the basis that the constitutional writs would go to the Commission, notwithstanding the fact that the relevant proceedings were by way of private arbitration. We consider that such a conclusion cannot, safely or properly, be drawn. There are three reasons for this view. First, as we have previously observed, the private nature of the relevant dispute resolution procedure appears to have been raised for the first time on appeal. The question was one of constitutional validity. The writs would have gone only if the constitutional challenge was successful. Because the challenge failed, no question concerning the availability of the writs arose. We do not see how the High Court could have allowed the appeal without considering the constitutional question. Secondly, the question of the application of s 89A was squarely raised and argued. Had it been held to apply, the decision would have affected subsequent proceedings between the parties, regardless of whether the current proceedings were, or were not, by way of private arbitration. Finally, as we shall attempt to demonstrate, it is not necessarily clear that the characterization of the process as being by way of private arbitration leads to the conclusion that the courts will not issue constitutional writs. The reasoning of Brennan J in Ainsworth may suggest otherwise. The decision of the High Court in Re Cram; Ex parte NSW Colliery Proprietors’ Association Ltd (1987) 163 CLR 117 is to similar effect. We shall return to Cram.

77    In connection with the availability of the constitutional writs, the Union also referred to the decision of the High Court in Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239. Although that decision may be of assistance in identifying the “record” for the purpose of identifying an error on the face of the record, it says nothing about the availability of the constitutional writs. Nor do we derive any assistance from the decisions in Australian Capital Territory Health Authority v Berkeley Cleaning Group Pty Ltd (1985) 7 FCR 575 and Australian National University v Burns (1982) 64 FLR 166. Both decisions address the meaning of the term, “a decision of an administrative character made … under an enactment”, pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth).

78    The decision in Cram is of some importance. In that case, the High Court considered Commonwealth and New South Wales legislation concerning the coal industry. The purpose of the legislation was both to establish authorities vested with power to secure and maintain adequate supplies of coal within Australia and in trade with other countries, and to regulate and improve the coal industry in New South Wales. As a result, the two parliaments established the Joint Coal Board, the Coal Industry Tribunal and Local Coal Authorities. The High Court held at [127] that the Coal Industry Tribunal and the Local Coal Authorities:

    were joint Commonwealth and State authorities; and

    exercised State powers because they were authorized to do so by Commonwealth legislation.

79    At 127 – 128, the High Court said:

The necessity for authorization under the Commonwealth Act for the Tribunal's exercise of powers conferred by the State Act was explained by Brennan J. in Reg. v. Duncan; Ex parte Australian Iron & Steel Pty. Ltd. [(1983) 158 CLR 535 at 579]:

"If the [Commonwealth] Act had merely constituted or authorized the constitution of a tribunal and had vested federal powers of conciliation and arbitration in it without reference to State powers, an attempt by a State Act to vest similar State powers in the same tribunal would fail – not because of a constitutional incapacity in a Commonwealth tribunal to have and to exercise State power, but because the Commonwealth Act would be construed as requiring the tribunal to have and to exercise only such powers as the Commonwealth Parliament had chosen to vest in it."

While it is unnecessary to investigate the matter here, it may well be, of course, that precisely the same comments could be made, mutatis mutandis, in relation to an attempt by a Commonwealth Act to confer federal duties upon a State-constituted non-judicial tribunal, which was not expressly or impliedly authorized to exercise them by State law.

Given then that the authorities derive their existence from the Commonwealth Act, although not exclusively so, and that the Commonwealth Act either confers or authorizes the conferral on the authorities of all or any of their powers and functions, the persons constituting the authorities are necessarily officers of the Commonwealth and remain so in respect of the exercise of all their powers unless, perhaps, the Commonwealth Act evinces an intention that in the exercise of powers derived from the State Act the authorities function in some different capacity.

At 130 – 131, the Court said:

In Reg. v. Duncan Gibbs C.J., with whose reasons Murphy J. stated his general agreement and Wilson and Dawson JJ. stated their substantial agreement, Mason J., Brennan J. and Deane J. expressed the view that the joint operation of the Commonwealth and State Acts created a single tribunal rather than separate Commonwealth and State tribunals, although Gibbs C.J. expressly refrained from so deciding. In our view that conclusion is inescapable. Section 30(1) of the Commonwealth Act and s. 36(1) of the State Act, each speak of the constitution of "a Coal Industry Tribunal" and of "appointment of a person to constitute that Tribunal" (emphasis added). Subsequent references within the Acts are to the Tribunal.

More importantly, once it is accepted that the powers derived from the Commonwealth and State Acts are not required to be exercised in isolation from each other, but may be exercised concurrently or in combination in the one matter, then the concept of separate Commonwealth and State tribunals exercising separate powers becomes untenable. As there is no relevant distinction between the Tribunal and the Local Coal Authorities, there is no basis on which it can be held that they lack the same single nature possessed by the Tribunal.

In our view the persons who constitute the Tribunal and the Local Coal Authorities are officers of the Commonwealth and remain so notwithstanding that they exercise or purport to exercise power conferred … .

(Footnote references have been omitted; emphasis in original.)

80    Thus it seems that discrete powers, derived under Commonwealth and State legislation, may be exercised concurrently, or in combination by officers of the Commonwealth who are amenable to the constitutional writs. It follows that the writs would go in circumstances in which such officers were exercising powers conferred by State legislation, provided that the exercise of such powers has been sanctioned by Commonwealth legislation. If that be so, then it may also follow that, the Commonwealth Parliament having authorized the performance of private arbitrations by Commonwealth officers, such officers are similarly amenable to the writs when they so act.

81    The proposition is inconsistent with the well-established proposition that the award of a private arbitrator is to be final, save where there is error of law on the face of the record. However that principle of finality may not be maintainable in the case of a public official, exercising statutory powers in performing the function of a private arbitrator, given that the availability of such writs is prescribed by the Constitution. The decision of the Court of Appeal in Racecourse Betting Control Board v Secretary for Air [1944] 1 Ch 114 at 121 suggests that where a public official is required to act as a private arbitrator, the decision will be reviewable on motion for error of law on the face of the record. As we have observed that remedy is to be distinguished from the issue of a writ of certiorari on the same ground. However there will generally be little practical difference between sending certiorari to quash a decision for error of law on the face of the record and setting aside an award on that ground. We will return to that decision. It is clear that, pursuant to the Constitution, the writs will go to Commonwealth officers. The question is whether a particular decision is amenable to quashing in that way.

82    It may be arguable that the decision in Cram is distinguishable from the present case by virtue of the fact that in that case, the relevant action was pursuant to State law and not, as is the case of a private arbitration, the general law. However it is difficult to see that the Commonwealth has any greater interest in enforcing the law of a State, where it intersects with the law of the Commonwealth, than in enforcing the general law in similar circumstances.

83    The Union refers to the decision of the Court of Appeal in R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw [1952] 1 KB 338 where Denning LJ (as his Lordship then was) observed at 350 that since “very early times”, “it has never been doubted that certiorari will lie to any statutory tribunal”. His Lordship observed that in many cases, it had gone for error of law on the face of the record. The case under consideration in Northumberland seems not to have been a case in which the statutory tribunal was performing a private arbitration. The Union also submits that at 351, Denning LJ differentiated between arbitrations and statutory tribunals, noting that although an arbitrator’s award could be set aside on motion, such relief was not available in the case of statutory tribunals. Again, his Lordship was not discussing the position of a statutory tribunal performing a private arbitration. Denning LJ referred to the decision of the Court of Appeal in Racecourse Betting Control Board v Secretary for Air (supra). In that case, at 121 Lord Greene MR observed that if the legislature established a statutory tribunal as an arbitrator, any award would be liable to be set aside on motion for error of law on the face of the record. The other members of the Court accepted that proposition. However all three of their Lordships also accepted that Parliament could establish a tribunal which was neither a court nor subject to the “incidents of arbitration”.

84    Difficult issues arise out of the interaction of the law relating to the constitutional writs and the consensual nature of the private arbitration process when it is conducted by a statutory body. In Craig v South Australia (1995) 184 CLR 163 the High Court said at 174 – 175:

It is common ground between the parties that the substantive content of the Full Court’s jurisdiction under r 98 to make an “order in the nature of … certiorari” corresponds, for all relevant purposes, with that of the Supreme Court’s previous inherent jurisdiction to order the issue of the prerogative writ of certiorari. That writ went only to an inferior court or to certain tribunals exercising governmental powers. That means that an order in the nature of certiorari pursuant to r 98 is properly made only if it be directed to such a court or tribunal.

(Footnote references have been omitted, emphasis added.)

85    The effect of the High Court’s decision in Gordonstone, and that in TCL, is that an arbitrator’s power to resolve a dispute arises out of the agreement to arbitrate. It follows that to the extent that FWC exercises power derived from such an agreement, it is not exercising government powers and so is not susceptible to the issue of the constitutional writs. However, as the Union has submitted, in carrying out the arbitrator’s function FWC may exercise a power conferred upon it by statute. Section 739(3) assumes such a possibility. We have previously referred to the powers conferred upon FWC by ss 590 and 595 of the Fair Work Act. Section 595(4) seems to permit FWC to exercise statutory powers in the course of a private arbitration. There may be room to argue that such exercise is pursuant to the statutory conferment of power. However it might also be argued that the availability of the power is a function of the agreement to arbitrate. It is possible that review by way of the constitutional writs may be available to third parties (eg persons summoned as witnesses) but not against parties to the arbitration agreement. We need not take this matter further. We do not understand the Union to challenge any exercise by FWC of a specific statutory power.

86    There is then the question of the award itself. We are inclined to the view that it should generally be treated as the contractually binding outcome of the agreed dispute resolution process, not involving any exercise of government powers, and therefore not susceptible of review by way of the constitutional writs. If that view is incorrect, then any such review would be available only for error of law on the face of the record, that being the only acknowledged basis for review of an arbitrator’s decision, and therefore the only limit upon the finality of the award. As we have observed, this was the point dealt with in Wagstaff.

ERROR OF LAW ON THE FACE OF THE RECORD

87    Identification of error of law on the face of the record necessarily involves identification of the record. The matter was addressed in both Craig and in Kirk v Industrial Court of New South Wales (2010) 239 CLR 531. In Craig, at 176, the High Court held that in considering error of law on the face of the record, the Court is restricted to the “record” of the inferior court “or tribunal”. The content of the record is considered in detail at 180 – 183. At 180, the Court observed that “nineteenth century legislative reforms” had the practical effect of confirming the content of the record of an inferior court, “for the purposes of certiorari to the documents initiating and defining the matter in the inferior court and the impugned order or determination”. As far as we can see, in this part of its reasons, the High Court did not distinguish between inferior courts and other tribunals, not being courts.

88    The High Court referred at 180 to an emerging, “expansive approach to certiorari which would include both the reasons for decision and the complete transcript of proceedings in the ‘modern record’ of an inferior court”. Their Honours rejected that approach, observing at 181:

For one thing, it is inconsistent with the weight of authority in this Court which supports the conclusion that, in the absence of some statutory provision to the contrary, the record of an inferior court for the purposes of certiorari does not ordinarily include the transcript, the exhibits or the reasons for decision. More importantly, the approach that the transcript of proceedings and the reasons for decision constitute part of “the record” would, if accepted, go a long way towards transforming certiorari into a discretionary general appeal for error of law upon which the transcript of proceedings and the reasons for decision could be scoured and analysed in a search for some internal error. It is far from clear that policy considerations favour such an increase in the availability of certiorari to correct non-jurisdictional error of law. In particular, a situation in which any proceeding in an inferior court which involved a disputed question of law could be transformed into superior court proceedings notwithstanding immunity from ordinary appellate procedures would represent a significant increase in the financial hazards to which those involved in even minor litigation in this country are already exposed. On balance, it appears to us that the question whether there should be such an increase in the availability of certiorari, or of orders in the nature of certiorari, is one that is best left to the responsible legislature.

The fact that the transcript of proceedings and reasons for decision do not, of themselves, constitute part of “the record” does not preclude incorporation of them by reference. That was recognised in Public Service Board (NSW) v Osmond [(1986) 159 CLR 656 at 667] where Gibbs CJ, in a judgment which represented the judgment of the Court, referred to “the rule, well established at common law ... that reasons do not form part of the record, for the purposes of certiorari”, and added the qualification “unless the tribunal chooses to incorporate them”. As Gibbs CJ indicated, that qualification can be traced to the judgment of Denning LJ in R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw [[1952] 1 KB 338 at 352]. It has also been accepted in other judgments in this Court. As so accepted, however, it should not be understood as having the effect that a merely introductory or incidental reference to the reasons for decision produces the consequence that the whole or part of the reasons somehow become part of both the formal order and “the record” of the particular court. As Mahoney JA has pointed out, such a result would mean the question of what constitutes “the record” would “be determined by accidents of whether particular words were used in the judgment of the body concerned”. The qualification should be understood as referring only to so much of the reasons or transcript of proceedings as is referred to in the formal order in a way which brings about its incorporation as an integral part of that order and “the record”. If, for example, the formal order incorporates undertakings given by a party “as set out in” a particular designated document or is said to be made “in terms of proposed orders set out in the reasons for judgment”, the order and the record will incorporate only those parts of the particular document or the reasons for judgment which set out, qualify or otherwise affect the content of those undertakings or proposed orders. Conversely, a merely introductory or incidental reference will not suffice to incorporate, in either the formal order or the record, reasons given for making the formal order which do not in fact constitute part of it. Thus, for example, an introductory remark such as the phrase “for the reasons given” or the word “accordingly” will not, of itself, have the effect of incorporating the whole or any part of the reasons for decision in either the formal order or “the record”.

The determination of the precise documents which constitute “the record” of the inferior court for the purposes of a particular application for certiorari is ultimately a matter for the court hearing the application. The effect of the foregoing is that “[o]rdinarily, in the absence of statutory prescription, the record will comprise no more than the documentation which initiates the proceedings and thereby grounds the jurisdiction of the tribunal, the pleadings (if any) and the adjudication”. Where the inferior court or tribunal has prepared a formal record, the court hearing the application may amend it by discarding material which should not have been included. Where the inferior court or tribunal has not prepared a formal record or the formal record prepared is incomplete, the court hearing the application can, if the material placed before it is adequate for the purpose, construct or complete the record.

(Footnote references have been omitted.)

89    In Kriticos v New South Wales (1996) 40 NSWLR 297 Kirby P applied the decision in Craig, but with obvious reluctance. Priestley JA distinguished the decision. Powell JA considered it to be binding. In Kirk the High Court effectively reiterated its position in Craig. The majority referred to the decision of the Privy Council in R v Nat Bell Liquors Ltd [1922] 2 AC 128. That case concerned proceedings by way of certiorari in connection with a criminal conviction. At [82] to [87] the majority in Kirk said:

[82]    Whether the particular conclusion reached in Nat Bell Liquors was right is not now important. What is, is that the decision was understood as requiring confinement of the record of an inferior court to the initiating process (including any pleadings) and the certified order.

[83]    Whether, or when, the reasons given for a decision formed a part of the record remained controversial. As Gibbs J noted in R v Cook; Ex parte Twigg [(1980) 147 CLR 15 at 27-28], the question had been treated in this Court as an open question. However, thereafter in Public Service Board (NSW) v Osmond [(1986) 159 CLR 656 at 667], Gibbs CJ referred to the “well established” rule that reasons do not form part of the record for the purposes of certiorari unless the tribunal giving them chooses to incorporate its reasons. But in at least some cases the failure to give reasons may constitute a failure to exercise jurisdiction.

[84]    In Craig, the Court rejected a more expansive approach to certiorari which would include both the reasons for decision and the complete transcript of proceedings in the “modern record” of an inferior court. To accept that more expansive approach was seen as going “a long way towards transforming certiorari into a discretionary general appeal for error of law upon which the transcript of proceedings and the reasons for decision could be scoured and analysed in a search for some internal error”. Because this would represent “a significant increase in the financial hazards to which those involved in even minor litigation in this country are already exposed” it was held to be a step best left to legislation.

[85]    No application in the present proceedings was made to reconsider the decision in Craig. However, the conclusion that the record of a court does not include its reasons certainly confines the availability of certiorari. Some but not all errors of law made by a court will found the grant of relief. And the availability of certiorari is confined for the stated purpose of not providing a “discretionary general appeal for error of law”. But the need for and the desirability of effecting that purpose depend first upon there not being any other process for correction of error of law, and secondly, upon the conclusion that primacy should be given to finality rather than compelling inferior tribunals to observe the law.

[86]    Whether and when the decision of an inferior court or other decision-maker should be treated as “final” (in the sense of immune from review for error of law) cannot be determined without regard to a wider statutory and constitutional context.

[87]    The most immediately relevant statutory context is found in the provisions that establish the inferior court, and regulate appeals from, or review of, its decisions. The decisions of many inferior courts are open to appeal or review for error of law. (The availability of appeal or review would ordinarily be a powerful discretionary reason not to grant certiorari even if it were otherwise available.) If appeal or review for error of law is provided by statute, the availability of certiorari would not greatly alter the extent of the financial hazards to which those involved in litigation in the inferior court are exposed. To the extent to which appeal or review for error of law is available, the first of the premises for the conclusion reached in Craig is denied.

(Footnote references have been omitted.)

90    Although senior counsel for the Union suggested that in Kirk the High Court had invited a challenge to the correctness of the decision in Craig, we are bound by that decision.

91    In Craig, at 182, the High Court observed that although the relevant tribunal may “choose” to include its reasons in the record, that proposition should be understood, “as referring only to so much of the reasons or transcript of proceedings as is referred to in the formal order in a way which brings about its incorporation as an integral part of that order and ‘the record’”. The examples offered in the balance of the paragraph are instructive. Further, the court hearing the application for certiorari must determine the content of the record. In the absence of statutory prescription, the record will comprise no more than the documentation which initiates the proceedings, and thereby grounds the jurisdiction of the tribunal, the pleadings (if any) and the adjudication. The Union submits that the ultimate basis for identifying the content of the record is the “choice” of the tribunal making the decision. Clearly, that proposition is not correct. The court hearing the application for certiorari must decide on the content of the record, “discarding material which should not have been included” and, if there is no formal record or if it is incomplete, constructing or completing the record so that it is “adequate for the purpose”. We understand the words “adequate for the purpose” to refer to the purposes of the application for certiorari. See the first sentence in the last paragraph on 182.

92    In its submissions the Union placed reliance on the decision of the High Court in Council of the City of Gold Coast v Canterbury Pipe Lines (Aust.) Pty Ltd (1968) 118 CLR 58 (“Canterbury”). The Union asserted that the decision established that:

a document can be incorporated into a record simply by being delivered with – at the same time as the order. That’s all you need. … Ultimately, it depends on the court’s assessment: did the tribunal intend – did it choose to incorporate?

See ts 25 l 38 – ts 26 l 11.

93    We make two comments concerning this proposition. First, such a liberal approach to incorporation is inconsistent with the approach taken in Craig. Second, the reference to “the court’s assessment” must be taken to be to the view of the reviewing court and not the “intention” or “choice” of the tribunal, the decision of which is subject to review. Between the decision in Canterbury and that in Craig, the High Court considered the question in Hockey v Yelland (1984) 157 CLR 124 where at 131 Gibbs CJ said:

Certiorari was therefore available to correct an error of law on the face of the record. Some aspects of the law as to what constitutes the record for this purpose remain open to debate, but in this case I have no doubt that the determination, the reference and the documents attached to the reference (the medical certificates and the application) constitute the record. A reference initiates, and is necessarily the basis of, a determination under s. 14c, and the coincidence of the numbers on the two documents identifies the reference of 23 February 1983 as that on which the determination is based. The determination is meaningless unless it is known what were the matters alleged by the appellant, and that appears from the reference. The documents which were not merely specifically referred to in, but also were attached to, the reference, form part of it. … However, I do not accept that the fact that the determination states that the Neurology Board made its determination “after hearing evidence and examining the claimant”, and the reference in the determination to “the matters alleged by the claimant”, incorporated into the record all the material which was before the Neurology Board or so much of it as revealed the nature of the appellant's allegations. Assuming that an adjudication incorporates every document referred to in it (see Reg. v. Medical Appeal Tribunal; Ex parte Gilmore [[1957] 1 QB 574 at 582]), a precise reference to a specific document is required to bring about its incorporation.

(Footnote references have been omitted.)

At 143 Wilson J said:

In my opinion, the members of the Full Court were correct in confining the record to the letter from the general manager to the Board making the reference, the documents accompanying that letter and the determination of the Board. Counsel for the appellant submitted that the record should also include all the medical reports tendered by the claimant and the notes of his oral examination by the Board. The basis of the submission was the Board's use of the expression “the matters alleged” in its determination. The use of that expression, so it is said, reflected an intention to incorporate all that material in the determination. I am unable to construe the determination in that way. The expression merely repeats the way in which both the general manager's reference and s. 14c(6) of the Act stated the issue which the Board was required to determine. In any event, even if the concept of the record was expanded to embrace this additional material it does not advance the appellant's case. The material merely repeats or confirms the information which may be gleaned from the documents accompanying the reference. It does not enable the conclusion to be drawn from the face of the record that there was no evidence in opposition to the claim.

The other members of the Court agreed with the observations of Gibbs CJ. Dawson J also agreed with the reasons of Wilson J.

94    The limitation of the availability of review to cases in which error appears on the face of the record is, at least in part, designed to limit the frequency of such reviews. Identification of the content of the record should not be guided by the desire to find error. Rather, the focus should be upon identification of the issues raised for determination and the outcome of the process. As we have observed, Craig establishes that the starting point is that the record comprises “no more than”:

    the documentation which initiates the proceedings and thereby grounds the tribunal’s jurisdiction;

    the pleadings (if any); and

    the adjudication.

The reasons and transcript will only be incorporated by reference into the formal order (and therefore the record) to the extent that the reference brings about its incorporation as an integral part of the order (and record).

95    In this case, the whole of the Full Bench’s disposition of the appeal is headed “Decision”. However it does not follow that the whole of the document is part of the “formal order” or “adjudication”. The formal order is, in our view:

… it is appropriate that we grant permission to appeal, allow the appeal, and substitute our answers to the questions posed by the parties upon the determination of the dispute.

(See [20].)

96    However two other aspects of the documents are incorporated by reference. The formal order cannot be understood without reference to them. The Full Bench at [3] set out the questions, found at [11] of the Deputy President’s reasons, which it subsequently answered at [19]. Those paragraphs should be taken to be incorporated into the formal order. We see no basis for incorporation into the record of any other part of the document. As it is the initiating document, the notice of appeal must be part of the record. The grounds of appeal contained in the notice are, in effect, the pleading. They effectively incorporate the 2012 Agreement. The FWC derived jurisdiction from the initial application dated 20 November 2013. To include the notice of appeal, without also including the application might create a misleading impression as to the jurisdiction exercised by the Full Bench. It would not be apparent that the Full Bench was exercising a power conferred by consent of the parties. The application also performs the function of a pleading, incorporating the 2012 Agreement.

97    The only other question is whether the Deputy President’s reasons should be included. Generally, the Full Bench may intervene only in the event of error. See Allesch v Maunz (2000) 203 CLR 172 at [22] and [23] and Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [13] and [14]. FWC has power to receive further evidence on appeal. See the Fair Work Act at s 607(2). However, in this case, it was acting as a private arbitrator. The parties did not, by cl 15, seek to modify the operation of s 604 and its supporting provisions. In those circumstances, the order made by the Deputy President and his reasons impose a limit upon the Full Bench’s powers on appeal. There must be a demonstrated error in order that it may substitute its views for his. Were the question solely as to a question of construction of a written document, the record might be limited to the inclusion of the Deputy President’s final order. Where, as here, the original decision-maker took into account factual matters, the capacity to find error may be limited by the way in which he or she has treated the facts. The power of the Full Bench on appeal may be limited by such treatment. We conclude that the Deputy President’s award and reasons are part of the record on appeal. It does not follow that the record includes the evidence before the Deputy President or the Full Bench. Nor does it follow that the Full Bench’s reasons should be included.

98    In any event we doubt the utility of the Union’s reliance upon error of law on the face of the record. The Union submitted that such error would justify issue of certiorari, whether or not the error was a jurisdictional error. In Craig, the High Court held that in the case of inferior courts, the distinction between jurisdictional error and other errors of law continues to be significant. Generally speaking, however, in the case of administrative tribunals, the range of vitiating errors is much wider. The High 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 [[1981] AC 374 at 383]:

“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.

In contrast, the ordinary jurisdiction of a court of law encompasses authority to decide questions of law, as well as questions of fact, involved in matters which it has jurisdiction to determine. The identification of relevant issues, the formulation of relevant questions and the determination of what is and what is not relevant evidence are all routine steps in the discharge of that ordinary jurisdiction. Demonstrable mistake in the identification of such issues or the formulation of such questions will commonly involve error of law which may, if an appeal is available and is pursued, be corrected by an appellate court and, depending on the circumstances, found an order setting aside the order or decision of the inferior court. Such a mistake on the part of an inferior court entrusted with authority to identify, formulate and determine such issues and questions will not, however, ordinarily constitute jurisdictional error. Similarly, a failure by an inferior court to take into account some matter which it was, as a matter of law, required to take into account in determining a question within jurisdiction or reliance by such a court upon some irrelevant matter upon which it was, as a matter of law, not entitled to rely in determining such a question will not ordinarily involve jurisdictional error.

99    The alleged error of law on the face of the record is the so-called “Context ground”. We will deal with that ground after we have dealt with jurisdictional error.

jurisdictional error

100    Since the decision in Craig the High Court has again considered the nature of jurisdictional error. In Kirk French CJ, Gummow, Hayne, Kiefel and Bell JJ said at [61] to [68]:

[61]    The view of “jurisdiction” stated in R v Bolton (which Sir William Wade later called the “‘original jurisdiction’ fallacy”) encouraged attempts to distinguish between errors within jurisdiction and those that were not. Thus, in R v Nat Bell Liquors Ltd, Lord Sumner said, of a magistrate:

“[I]f his jurisdiction to entertain the charge is not open to impeachment, his subsequent error, however grave, is a wrong exercise of a jurisdiction which he has, and not a usurpation of a jurisdiction which he has not”.

And, many years later, in R v Governor of Brixton Prison; Ex parte Armah [[1968] AC 192 at 234], Lord Reid said:

“If a magistrate or any other tribunal has jurisdiction to enter on the inquiry and to decide a particular issue, and there is no irregularity in the procedure, he does not destroy his jurisdiction by reaching a wrong decision. If he has jurisdiction to go right he has jurisdiction to go wrong. Neither an error in fact nor an error in law will destroy his jurisdiction.” (emphasis added)

[62]    The “theory” or “concept” of jurisdiction as sufficiently identified as “authority to decide” is often traced to the judgment of Lord Denman CJ in R v Bolton. It is a view that has attracted much academic debate. Its chief proponent … pointed to the logical coherence of principles that confined jurisdictional errors to those which went to the decision maker’s authority to decide a question. Other authors, notably Sawer, in the article quoted earlier in these reasons, Sir William Wade and de Smith in Britain, and Jaffe in the United States, have contended that the logical coherence of such a theory or concept of jurisdiction takes insufficient account of the public policy necessity to compel inferior tribunals to observe the law, a public policy that has informed both the development and the application of the law relating to judicial review by the remedies of certiorari, prohibition and mandamus.

[63]    The work of each of Wade, de Smith and Jaffe would support the observation of Diplock LJ that “‘[j]urisdiction’ is an expression which is used in a variety of senses and takes its colour from its context”. It is a “generic” termor, as Frankfurter J wrote in United States v L A Tucker Truck Lines Inc [(1952) 344 US 33 at 29] in the Supreme Court of the United States, “‘jurisdiction’ ... is a verbal coat of too many colors”.

[64]    As Jaffe rightly pointed out, it is important to recognise the use to which the principles expressed in terms of “jurisdictional error” and its related concept of “jurisdictional fact” are put. The principles are used in connection with the control of tribunals of limited jurisdiction on the basis that a “tribunal of limited jurisdiction should not be the final judge of its exercise of power; it should be subject to the control of the courts of more general jurisdiction”. Jaffe expressed the danger, against which the principles guarded, as being that “a tribunal preoccupied with special problems or staffed by individuals of lesser ability is likely to develop distorted positions. In its concern for its administrative task it may strain just those limits with which the legislature was most concerned”. It is not useful to examine whether Jaffe’s explanation of why distorted positions may develop is right. What is important is that the development of distorted positions is to be avoided. And because that is so, it followed, in that author’s opinion, that denominating some questions as “jurisdictional”

“is almost entirely functional: it is used to validate review when review is felt to be necessary ... If it is understood that the word ‘jurisdiction’ is not a metaphysical absolute but simply expresses the gravity of the error, it would seem that this is a concept for which we must have a word and for which use of the hallowed word is justified.”

[65]    In England, the difficulties presented by classification of some errors as jurisdictional and others as not were ultimately understood as requiring the conclusion that any error of law by a decision-maker (whether an inferior court or a tribunal) rendered the decision ultra vires. But that is a step which this Court has not taken.

Jurisdictional error in Australia

[66]    In Craig v South Australia, this Court recognised the difficulty of distinguishing between jurisdictional and non-jurisdictional errors, but maintained the distinction. As was pointed out in Re Refugee Review Tribunal; Ex parte Aala [(2000) 204 CLR 82 at [163]]:

“The difficulty of drawing a bright line between jurisdictional error and error in the exercise of jurisdiction should not be permitted, however, to obscure the difference that is illustrated by considering clear cases of each species of error. 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.”

As was also pointed out in Aala, there can be no automatic transposition to Australia of the principles that developed in England in relation to the availability of certiorari and prohibition. The constitutional context is too different to permit such a transposition. At the federal level, allowance must be made for the evident constitutional purposes of s 75(v) of the Constitution; at a State level, other constitutional considerations are engaged. As was pointed out by Gummow J in Gould v Brown, “[w]hen viewed against the Constitution in its entirety, Ch III presents a distinct appearance. Upon what had been the judicial structures of the Australian colonies and, upon federation, became the judicial structures of the States, the Constitution by its own force imposed significant changes.”

[67]    The drawing of a distinction between errors within jurisdiction and errors outside jurisdiction was held, in Craig, to require different application as between “on the one hand, the inferior courts which are amenable to certiorari and, on the other, those other tribunals exercising governmental powers which are also amenable to the writ”. The Court said that:

“If ... 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.”

By contrast, demonstrable error on the part of an inferior court “entrusted with authority to identify, formulate and determine” relevant issues, relevant questions, and what is and what is not relevant evidence was held, in Craig, not ordinarily to constitute jurisdictional error. The Court held that:

“a failure by an inferior court to take into account some matter which it was, as a matter of law, required to take into account in determining a question within jurisdiction or reliance by such a court upon some irrelevant matter upon which it was, as a matter of law, not entitled to rely in determining such a question will not ordinarily involve jurisdictional error”.

[68]    The basis for the distinction thus drawn between courts and administrative tribunals was identified in the lack of authority of an administrative tribunal (at least in the absence of contrary intent in the statute or other instrument establishing it) “either to authoritatively determine questions of law or to make an order or decision otherwise than in accordance with the law”. By contrast, it was said that “the ordinary jurisdiction of a court of law encompasses authority to decide questions of law, as well as questions of fact, involved in matters which it has jurisdiction to determine”.

(Footnote references have been omitted.)

101    As we have previously observed, the Union now relies on only the “Context ground” and the “Obligation ground” as demonstrating jurisdictional error. It also relies on the Context ground in seeking to quash the Full Bench’s decision for error of law on the face of the record.

The Context ground

102    The “Context ground” is said to be that the Full Bench, “failed to consider context in the interpretation of the Agreement”. This ground focusses upon a line of cases in the High Court commencing with Codelfa (supra). At 352 – 353 Mason J (as his Honour then was) said:

The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.

It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.

Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.

There may perhaps be one situation in which evidence of the actual intention of the parties should be allowed to prevail over their presumed intention. If it transpires that the parties have refused to include in the contract a provision which would give effect to the presumed intention of persons in their position it may be proper to receive evidence of that refusal. After all, the court is interpreting the contract which the parties have made and in that exercise the court takes into account what reasonable men in that situation would have intended to convey by the words chosen. But is it right to carry that exercise to the point of placing on the words of the contract a meaning which the parties have united in rejecting? It is possible that evidence of mutual intention, if amounting to concurrence, is receivable so as to negative an inference sought to be drawn from surrounding circumstances. See Heimann [(1938) 38 SR (NSW) at 695].

The importance of this evolution of the law as it affects the construction of contracts is that it centres upon the presumed, rather than the actual, intention of the parties.

(Footnote references have been omitted.)

103    In Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, the High Court was concerned with the question of intention to enter into contractual relations. However the majority considered that the word “intention” in that context had the same meaning as in other contractual contexts. At [25] their Honours said:

Because the inquiry about this last aspect may take account of the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the “intention to create contractual relations” requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word "intention" is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.

(Footnote references have been omitted.)

104    The facts in Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, are summarized in the headnote as follows:

Letters of indemnity to facilitate the delivery of cargo without the production of a bill of lading were provided by the seller of that cargo to a sea carrier. The letters were executed by the seller and its bank. The bank officer who signed the letters and attached the bank’s stamp was authorised to verify customers’ signatures on letters of indemnity but not to bind the bank as an indemnifying party. The carrier suffered loss in connection with the delivery of the cargo and sought to recover its loss from the bank.

At [20] to [22] the Court said:

[20]    The nature of the obligations undertaken by BNP in consequence of the signature and transmission to Pacific of the letters of indemnity depends upon the meaning of the documents, the particular problem being the capacity in which, on the true construction of the documents, the bank was involved in the transaction. That question has a factual relationship to the question of Ms Dhiri’s authority, in that both she, and her superior, Mr Kavanagh, gave evidence that it was their understanding that all that BNP was doing was authenticating NEAT’s execution of the letters of indemnity.

[21]    Ms Dhiri gave evidence that she told NEAT that execution by BNP was only for verification of the signatures. That evidence was denied. Hunter J said he had great difficulty in deciding where the truth lay. He accepted that “something must have been said by [Ms Dhiri] at one time or another to a NEAT representative that, in her mind, conveyed the message that she was signing the NEAT LOIs merely for verification of signatures”, but he did not accept that any such limitation was effectively communicated to NEAT. More significantly, it was never communicated to Pacific.

[22]    What is important is not Ms Dhiri’s subjective intention, or even what she might have conveyed, or attempted to convey, to NEAT about her understanding of what she was doing. The letters of indemnity were, and were intended by NEAT and BNP to be, furnished to Pacific. Pacific did not know what was going on in Ms Dhiri’s mind, or what she might have communicated to NEAT as to her understanding or intention. The case provides a good example of the reason why the meaning of commercial documents is determined objectively: it was only the documents that spoke to Pacific. The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction. In Codelfa … , Mason J set out with evident approval the statement by Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen [[1976] 3 ALL ER 570 at 574]:

“In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.”

105    In Toll (supra), the High Court said at [29]:

Each of the four parties to the case is a substantial commercial organisation, capable of looking after its own interests. This hardly seems an auspicious setting for an argument that a party who signs a contractual document is not bound by its terms because its representative did not read the document.

At [35] their Honours continued:

A striking feature of the evidence at trial, and of the reasoning of the learned primary judge, is the attention that was given to largely irrelevant information about the subjective understanding of the individual participants in the dealings between the parties. Written statements of witnesses, no doubt prepared by lawyers, were received as evidence in chief. Those statements contained a deal of inadmissible material that was received without objection. The uncritical reception of inadmissible evidence, often in written form and prepared in advance of the hearing is to be strongly discouraged. It tends to distract attention from the real issues, give rise to pointless cross-examination and cause problems on appeal where it may be difficult to know the extent to which the inadmissible material influenced the judgment at first instance.

After referring to Codelfa and Ermogenous, the Court continued at [40]:

This Court, in Pacific Carriers Ltd v BNP Paribas [(2004) 218 CLR 451], has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.

(Footnote references have been omitted.)

106    Finally, in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 the majority (French CJ, Hayne, Crennan and Kiefel JJ) said at [35]:

Both Verve and the Sellers recognised that this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding “of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. As Arden LJ observed in Re Golden Key Ltd [[2009] EWCA Civ 636 at [28]], unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption “that the parties … intended to produce a commercial result”. A commercial contract is to be construed so as to avoid it “making commercial nonsense or working commercial inconvenience”.

(Footnote references have been omitted.)

107    The Union’s original application to FWC identified the matter in dispute at para 4 as follows:

4.1    The dispute concerns the travel allowance provided for in Clause 15 of the Agreement.

4.2    In October 2013, the Company started discussions with the Union with regards to changing the travel allowance for ALS employees contracted to work at the various Alcoa sites at Kwinana, Pinjarra and Wagerup (“ALS strategic site employees”).

4.3    The Union made it clear from the outset that it disputes the proposed changes to the travel allowance for ALS strategic site employees.

4.4    The discussions culminated in the Company issuing a letter on 28 October 2013 to ALS strategic site employees informing them that the proposed changes would take effect from Monday 2 December 2013 (letter attached as "C").

4.5    It is submitted by the Union that the Company’s proposed changes go against the nature and letter of Clause 15 of the Agreement.

Proposed changes

4.6    As seen in the letter sent by the Company to ALS strategic site employees on 28 October 2013, the Company wishes to implement the following changes to the travel allowance:

A.    Changing the Company base from the Company’s office in Canning Vale to “the relevant Alcoa site at Kwinana, Pinjarra or Wagerup”;

B.    A travel allowance based on radial banding if the Company does not provide the employee with transport; and

C.    Introduction of a site allowance of $3.20 for each hour worked at a strategic site.

A. Changing the Company base

4.7    The Union does not dispute that the Company can change an employee’s Company base. However, the Union does dispute that the Company can change the Company base for the ALS strategic site employees from the ALS office in Canning Vale to the various Alcoa sites.

4.8    The Union contends that in the Agreement there is a clear distinction between ‘Company base’ and ‘site’, and that ‘Company base’ specifically refers to the Company’s business offices, whilst ‘site’ refers to any location other than the employee’s Company base.

4.9    ALS has five WA business offices, as follows:

•    ALS Asset Care Canning Vale (1 09 Bannister Road)

•    ALS Asset Care Kalgoorlie (2 Roberts Street)

•    ALS Asset Care Davenport Bunbury (Unit 4 16 Campbell Way Davenport)

•    ALS Minesite- MARC Technologies (11 Efficiency Way, Bibra Lake)

•    ALS Coal - Collie (Lot 2073 Collins Street, Collie)

4.10    ALS does not have Company Bases at the Alcoa refineries, it is merely provided with a site office by their client to carry out contracted work specific to Alcoa.

4.11    Therefore, the Company cannot nominate the Alcoa sites as new Company bases.

108    The application then addressed other related aspects of the dispute. The point in issue seems to have been whether each of ALS’s establishments at Alcoa sites was an “employee’s Company base” or a “Company base” for the purposes of cl 15.5 of the 2012 Agreement. In assessing the Full Bench’s approach, it is necessary that we keep in mind the fact that it was conducting a private arbitration. No legislation or other legal requirement directed it to take into account any of these matters, subject only to the requirements of good faith and procedural fairness. As we have observed, that point was made in Wagstaff at [32], [41], [62] and [63]. It may follow that for this reason alone, the allegation of jurisdictional error must fail. However we will say something about the alleged errors.

109    The Union submits that the Full Bench fell into jurisdictional error by rejecting the “assistance” to be derived from:

    evidence concerning negotiations leading up to approval of the 2012 Agreement;

    common understanding based on custom and practice in relation to the way in which both parties had previously applied the clause in the calculation of the travel payments to (ALS’s) employees;

    “a consideration of whether travel was in the course of employment”; and

    evidence as to the provision of other instruments of a different nature to the Agreement.

110    The Union concedes that the Full Bench had regard to:

    its “assertions” as to the evidence concerning the locations at which most of the relevant employees performed their work; and

    its “assertions” that ALS had nominated Canning Vale as the employee’s Company base for each of the relevant employees for many years, a practice which was generous to employees.

111    As we understand the Context ground, it is that the Full Bench fell into jurisdictional error in that although it, “acknowledged that it was necessary to interpret clause 15 in the context of surrounding circumstances including the history of making the Agreement”, it did not do so. The Union submits that in the course of the negotiations leading up to the making of the 2012 Agreement, ALS had initially taken a position which suggested that it understood the existing arrangement under the 2009 Agreement to have been in accordance with the construction of cl 15 now advanced by the Union. The Union submits that at some stage in the negotiations, ALS changed its position. It is said to follow that the Court should construe cl 15 in the 2012 Agreement on the basis that the parties had both so understood the analogous provisions in the 2009 Agreement.

112    The evidence concerning the negotiations leading up to the approval of the 2012 Agreement is by no means unequivocal as to any such shared understanding. As we have demonstrated, as early as 18 January 2013, ALS had asserted in its application to FWC, that it had “elected” not to exercise its power to change the employees’ Company bases pursuant to cl 15.5. Nonetheless, at that time, it proposed to allow existing employees to continue to receive the benefit of the existing arrangements, whilst making different arrangements for future employees. It is difficult to see how the Union could, thereafter, have believed that ALS considered that it could not appoint the Alcoa sites as employees’ Company bases, either pursuant to the 2009 Agreement or the proposed cl 15.

113    The Union submits that two earlier documents suggest that ALS was taking a different view. One of those documents was dated 6 September 2012 and the other, 7 September 2012. The document dated 6 September 2012 is headed “Company Agenda”. It states that:

One current provision that places ALS at a disadvantage against its competitors is Travel Payments. The Company seeks to negotiate a change in how this term is applied.

In other words, it was proposing to apply the existing clause in a different way, presumably by changing the employees’ Company bases. This statement clearly assumes that the existing clause is capable of achieving ALS’s objectives.

114    The other document is headed “Meeting Minutes” for a meeting held on 6 September 2012. The document states that:

Aim for the new agreement is to become more competitive in the WA marketplace as ALS has been unsuccessful in bidding for a number of projects and contracts for reasons based on cost. This includes negotiating a change in the travel payments clause.

115    The Union submits that the perceived need to change the clause indicated that ALS’s understanding of it was that it did not permit it to appoint the Alcoa sites as employees’ Company bases. That submission assumes that the desired change was only to confer such a right. However ALS’s application of 18 January 2013 and its letter to “strategic employees” dated 27 September 2013 make it clear that the proposed amendments would, to the extent that they applied to future employees, be much more substantial.

116    We are unable to discern any clear indication by ALS that it understood that the analogous clauses in the 2009 Agreement did not allow the appointment of the Alcoa sites as employee Company bases. We should add that no significance can be attached to ALS’s desire to negotiate, rather than impose any change in the way in which the clause was applied. Negotiation is good managerial practice.

117    A further aspect of the negotiations was that, according to the Deputy President, two witnesses called by the Union, Mr McCrea and Mr New, understood that Mr McGinty, the ALS manager who was involved in the negotiations leading up to the Agreement, “had given an undertaking not to change the way in which the clause was applied”. Mr McGinty disputed this version of events. The Deputy President found the evidence of Mr McCrea and Mr New to be more convincing in this respect. (See [56].) Such a view seems to fall short of a finding that the undertaking was given, but there are, in any event, other problems with this evidence. First, Mr McCrea gave no evidence of any such statement by Mr McGinty. It is impossible to know how the Deputy President would have resolved the difference between Mr New’s evidence and that of Mr McGinty, had he not understood that the former’s evidence was supported by that of Mr McCrea. Second, Mr New did not refer to the matter in his affidavit. The allegation was made for the first time in supplementary oral evidence at the hearing. Third, the Deputy President’s understanding of Mr New’s evidence is incorrect. The relevant passage appears at pp 43/102 and 44/102 of the transcript of proceedings as follows:

What’s your memory of those discussions?---Well, travel as an entitlement is very important to the technicians, and we made it clear in the beginning that travel is a sacred car [sic]. In fact, I used those words.

Yes?---They [sic] company said they were looking for opportunities to make some changes and to cut costs, et cetera, and that travel was one of those possibilities. And they said they believed they could change our bases - that's their interpretation as according to clause 15.5.

Yes. And what was your response to that?---We asked them to remove the clause because we saw it as something of a threat. Obviously, (indistinct) a higher level than us, general managers, et cetera. However, toward the end of negotiations one of us - in fact, I can say it was our AMWU representative, asked very pointedly of the general manager as to whether he would invoke this clause to change what he interpreted as company base.

We [sic] you there at the time?---I was there at the time.

Yes. Sorry, go on?---And he said very pointedly, that he had no intention of doing so.

And who said that?---This is Mr McGinty, the general manager.

Yes. And so what did you take away from that discussion?---I took him at his word and then went to the people that I represent and explained what had happened, and I took comfort from that assurance as did the guys who I was representing. And my understanding is that that is the reason the document got up.

Right?---Because we were confident that we would retain the travel entitlements that we've had for - in fact, it goes longer than the time that I’ve been there. It’s more like 30 years, that’s always been the entitlement.

Yes. And the agreement was put to a vote?---It was.

And how did you vote in relation to the agreement?---I voted it up.

If you thought the term “company base” could be interpreted to mean a strategic site such as Alcoa Pinjarra, would you have voted for it?---If I thought that the company was going to invoke it with that interpretation I wouldn’t have voted for it, no. Absolutely not.

118    The following passage from Mr McGinty’s cross-examination appears at pp 80/102 and 81/102:

Did Mr Van de Hoef tell you about Mr New's evidence in terms of the conversation that he had with you about the assurance you gave him about keeping the travel time payment?---There was a conversation. I wasn't - yes, I think I was briefed on that.

I put it to you, Mr McGinty, that you gave these workers an assurance that you would not fiddle with the travel payments clause in order to reduce their allowances. You told them that explicitly. Do you agree with that?---No.

I'd suggest to you that you did tell them that, because what we see in the agreement is a preservation of the status quo in relation to the treatment of allowances with reference to a company base?---Is that a question?

Yes?---Sorry, it didn't sound like a question.

I'd suggest to you - I'll ask you to agree with me or disagree with me, that that is precisely what you said, because the evidence is that clause is completely unaltered. Do you agree with that?---The clause is completely unaltered, yes.

The reality was, wasn't it, Mr McGinty, that the travel allowance issue was really just something that was in the too hard basket in terms of getting this EBA up. Would you agree with that?--Yes.

Do you accept that the employees of these sites would not have voted for this EBA if they knew the company would take steps to reclassify the term ''company base" to mean these strategic sites?

MR VAN DE HOEF: Deputy President, I object to calling for speculation on Mr McGinty's behalf:

THE DEPUTY PRESIDENT: Answer the question.

MR HAMMOND: Well, it's a proposition that I'm putting?---Could you repeat that one, please?

Sure. Do you accept that the workers would not have voted for this EBA if they had known ALS would take steps to reclassify the term "company base" to mean strategic sites?---Throughout the negotiation I continually discussed with the AMWU and the delegates the company’s right to change company base from what it currently is to a strategic site. That was acknowledged. When we got to the end of the negotiation - and I’m just going to just jump back to one of your previous questions, if that's okay ---

By all means?---Where you asked did I give an unconditional guarantee that we wouldn't change their company base and I said no to that. What I did say to the question that was asked, “'Will you give us a guarantee that you won’t change the company base?” my answer was, “It’s not our intention to change the company base, but if there’s an imperative put upon us then we will.”

119    Hence Mr New says only that Mr McGinty said that he had no intention of invoking the clause, a statement which falls well short of being a guarantee, particularly in view of the fact that ALS was seeking to make different arrangements for future employees. Mr McGinty denies giving an unconditional guarantee. There is no evidence that he did so. Nor is there evidence that this denial was false.

120    In assessing the evidence concerning negotiations, sparse as it is, we must keep in mind the points made by Mason J in Codelfa at 352 – 353 concerning the use of negotiations in construing the resulting contract. First, evidence of negotiations may be used to determine the “background facts”, known to both parties. However such evidence may not be adduced if it goes only to intentions or expectations. Second, where the parties were united in refusing to include a term which would give effect to the presumed intention of persons in their position, evidence of such refusal may be used to rebut any inference that they shared such presumed intention.

121    In the present case, at least after 18 January 2013, ALS was clearly asserting that the clause, as it stood in the 2009 agreement and as proposed, permitted it to change an employee’s Company base by appointing an Alcoa site as such a base. The Union was disputing its right to do so. Both parties were seeking to achieve a benefit from negotiation, but they could not agree. They resolved the matter by leaving the clause as it was. The only inference that can be drawn is that the parties agreed to leave the question for resolution on another day. In our view such evidence as there was of the negotiations between the parties is far from complete and of no assistance in construing cl 15. The Full Bench correctly concluded that “in this case” the evidence concerning the negotiations was of no assistance. In this regard, no jurisdictional error is demonstrated.

122    We turn to the question of “common understanding”. The Union submits that there were “common understandings”, based on “custom and practice” concerning the way in which clauses which were analogous to cl 15 had been applied in the past. Use of the expression “custom and practice” may be a little misleading. We do not understand the Union to submit that in this case, the relevant employees had any prescriptive rights arising out of custom and practice. Rather it submits that cl 15 should be construed upon the basis of some pre-existing common understanding as to the meaning of earlier analogous clauses. In particular, as the argument has been presented before us, it seems to be that the term “employee’s Company base” was commonly understood (ie by ALS and the Union or, perhaps, the relevant employees) as incorporating certain locations, but not the Alcoa sites.

123    The term “common understanding” also has the capacity to mislead. Codelfa and subsequent cases establish that a contract should be construed against objective background facts known to both parties. For present purposes, the question is whether the parties had a shared understanding of the meaning of the term “employee’s Company base”. Although the Union seeks support from the documents dated 6 and 7 September 2012, neither suggests any shared understanding of the meaning of the previous analogous clauses or any proposed clause.

124    We have, above, set out the Deputy President’s reasons at [4] to [8]. Those paragraphs identify the factual matters lying at the heart of this dispute. The only possible dispute concerning those facts is as to the proposition that Canning Vale has always been described in the workplace as a “Company base”. Other factual allegations emerge from the evidence of Mr McCrea, Mr New and Mr McGinty. Mr McCrea says in his affidavit:

23.    …

a.    The Canning Vale Company base has always been described in the workplace as a “company base”.

b.    Much of the infrastructure that was at the Welshpool Company base including the office administration (staff and facilities), an x-ray bay, was moved to the Canning Vale company base. A ten tonne overhead crane was also installed in the workshop that is at the Canning Vale company base.

...

25.    All of the work that I have performed at Alcoa’s Kwinana site is from a transportable office that is located north of Alcoa’s jetty that is known as the Site Office (“the Site Office”).

a.    The Site Office was a “crib hut” that was used by Alcoa Shift Maintenance employees that has been converted into a small office.

b.    I have attached to this affidavit, and marked “MM-5”, aerial images of the Site Office that show its location inside the Alcoa site.

c.    To the best of my knowledge, the Site Office is owned by Alcoa.

d.    There is also a small sized shipping container on site near the Site Office that we use to store equipment.

26.    I cannot enter Alcoa’s Kwinana Site without a current Alcoa access card. The Site Office is not publically accessible in the same way the Canning Vale Company base is.

a.    To obtain an Alcoa access card, I had to complete an induction by Alcoa.

b.    Every time my Alcoa access card expires, I need to redo the Alcoa induction before I can be issued with a new Alcoa access card.

c.    Alcoa requires vehicle passes for any vehicles that ALS employees may be required to drive into the Alcoa Kwinana site.

27.    To get to the Site Office, I have to swipe my Alcoa access card at the front gates of Alcoa’s Kwinana site.

28.    While at Alcoa’s Kwinana site I work under the direction, control and supervision of Alcoa managers and supervisors. Alcoa controls everything that I do at the Kwinana site.

a.    I have to report to the Alcoa Site Manager about all of the work that I perform at Alcoa’s Kwinana site.

29.    I cannot access any of the Respondent’s information systems while I am working at Alcoa’s Kwinana site.

a.    The Respondent has an intranet site called “ALS Sharepoint”. I cannot access the Respondent’s intranet site from Alcoa’s Kwinana site.

b.    I cannot access any of the Respondent’s work procedures or policies while at Alcoa’s Kwinana site.

c.    I am required to follow Alcoa’s policies and procedures while I am at and performing work at the Alcoa Kwinana site.

30.    Throughout my employment, the Alcoa Kwinana site has never been described as “a company base”. The only change in terminology that I have heard and seen used, is to describe the Alcoa Kwinana site as a “strategic site”.

31.    ALS is the only company in the entire time that I have been employed as an NDT Technician to use the “strategic site” terminology.

125    In cross-examination, Mr McCrea described the former establishment at Welshpool as “the main company base in Western Australia”. It was the head office, with accounting, reporting and administration functions. Technical equipment was located there, as were some technicians. He said that, at p 13/102  to  p 14/102, “We all took it for granted the ‘company base’ was at the company base”. At p 14/102 the passage appears:

Why didn’t you think Kwinana was your company base?---Because the premises we have there are owned by Alcoa; they owned all the furniture; they owned the computers; they owned the IT system. We do all our reporting, et cetera, on the Alcoa system, in various drives such as U-drive, which they own and maintain. They pay the power bills; they maintain the building. To access the office, we need to have an Alcoa pass. We had to do an induction.

Yes?---Also, to use the phone, we have to get an annual permit to use your phone, to use a camera which we could use for work, we also have to get annual authorisation to use the camera. Day-to-day work we have to get signed off by the relevant Alcoa business centre we’re working for and adhere to all their safety standards. Basically they control everything. To bring the vehicles on site, we can’t just drive in at the moment. We have to sign in and give a reason for bringing the vehicle on site.

Yes?---No-one else - no other client can access that office. We’re there purely to service Alcoa and we’re given from them what we need to carry out their work and nothing more.

At p 16/102, this passage appears:

Can you describe for the Deputy President the Bannister Road, Canning Vale premises: what was the size of it; what happened there?---The Canning Vale premises were significantly bigger than the Welshpool premises. The change really came about because they needed a bigger place. So it basically is a large office, double storey, with a large workshop at the back, and the workshop contains x-ray bays, a 10-tonne overhead crane, it’s set up for metallurgic people in there, and quite a lot of infrastructure, and mechanical testing as well. There’s a large crew of technicians work out of that workshop.

126    Mr McCrea was cross-examined about the size of the establishment at Kwinana, the equipment kept there and movement by ALS personnel around the Alcoa site. He said that he had been to Canning Vale on three or four occasions in the last 12 months. At Kwinana, he reported to a site manager employed by ALS but generally received jobs directly from Alcoa. In re-examination he said that, at the time of the relocation to Canning Vale, other bases were at Bunbury and Kalgoorlie. Mr McCrea seems to have understood that a company base would be a site which ALS owned or leased where, “general clients can come and go”.

127    Much of the above evidence goes only to Mr McCrea’s knowledge, understanding and assumptions. However, to the extent that it describes the various locations at which ALS conducts its business, it may be relevant. The evidence says nothing concerning ALS’s understanding of the term “employee’s Company base”.

128    Mr New, at paras 35 to 46 of his affidavit, says:

35.    For as long as I have been working in the business of the Respondent (and its predecessors), there has always been a distinction between what was a Company base and a site.

    …

36.    A Company base has always been regarded as premises that are under the direct control of the employer.

a.    In all my time with the Respondent (and its predecessors), the Respondent has always had some sort of proprietary right to the premises of a Company base.

b.    What constitutes a Company base has always been well known and accepted in the workplace by the employees, managers, and the Respondent (including its predecessors).

37.    The Respondent's Company bases in Western Australia can be seen on their webpage.

a.    Annexed to this affidavit, and labelled "TGN-4" is a print out of the Company bases shown Respondent's webpage at 20 December 2013 [sic].

b.    The Company bases in Western Australia are:

i.    ALS Asset Care - Canning Vale (which is the New CV Company Base);

ii.    ALS Asset Care - Davenport (which I believe to now be shut down); and,

iii.    ALS Asset Care - Kalgoorlie.

…

38.    A site, on the other hand, is under the direct control of the client. The Respondent and its employees are generally considered as visitors on the premises of a client's site.

39.    Alcoa's Pinjarra Site and Alcoa's Wagerup Site (the Sites) have always been known in the workplace as sites. They have never been called Company bases.

40.    In order to access the Sites, all employees of the Respondent need to hold an access card which is issued by Alcoa. The access cards are issued and controlled by Alcoa. We need to swipe the access card at the front gates of the Sites in order to enter and leave the Sites.

a.    In order to get and maintain an access card all employees of the Respondent are required to:

i.    Engage in Alcoa’s induction refresher training every two years;

ii.    Take part in different mandatory training packages approximately every five weeks

1.    The mandatory training packages include: working at heights, working in confined spaces, hydration, hearing, dangerous substances

41.    While on the Sites, I need to follow all the rules and procedures of Alcoa. This includes carrying the PPE required by Alcoa.

42.    While working on the Sites, I have to constantly report to Alcoa’s different operational areas in regards to where I am performing work and what work I am performing.

43.    Every time I perform a job I need to sign a work planning form and a JSA and supply a copy of those forms to Alcoa.

a.    The forms I fill out are on the Alcoa letterhead;

44.    Alcoa can stop me from performing any work on site if they do not approve of that work.

45.    Alcoa can remove and/or ban me from accessing the Sites.

46.    The facilities at the Sites are provided by and controlled by Alcoa.

a.    The facilities include conference rooms, kitchens, and toilets.

b.    The facilities are normally portable, and are moved around by Alcoa.

c.    The Respondent cannot prevent Alcoa from moving or restricting access to the facilities at the Sites.

129    In para 36(b) Mr New asserts that employees, managers and ALS knew and accepted, “[w]hat constitutes a Company base”. Paragraph 36 seems to suggest that such a base must be within the direct control of the “employer”. Mr New says that during his time, ALS has always had “some sort of proprietary right” in the premises constituting a Company base. At para 37 he refers to an ALS website as identifying bases at Canning Vale, Davenport and Kalgoorlie. However it is not clear that the term “Company base” is used in the exhibit to which he refers. At para 38, he says that “sites” are under the direct control of the client, and that ALS and its employees are generally considered to be visitors. Mr New then addresses movement around Alcoa sites and security matters. In his oral evidence he asserted that the Company base is the, “proprietary office of the company, the headquarters, if you like”. (See p 38/102.) He was asked the reason for this understanding. At p 38/102, he replied:

Well, because historically, we’ve always been – had trouble from that place. That’s where the hierarchy, if you like, of the company resided, the administration staff, the general manager. They’ve always been in that location so that’s my understanding.

130    An interesting passage appears at p 40/102 as follows:

Up until recently have any of the Alcoa sites been referred to as company bases?---I think the managers might have referred to them as company bases, yes.

Sorry, I’ll put that in another way. Leaving aside what’s been discussed late last year - - - ?---Yes, that’s what my reference is - - -

Yes?---In relation to the negotiations, yes.

If we put that to one side?---Yes.

Have they ever been referred to as company bases in the past?---No, they’ve always been work sites.

Right?---Or strategic sites, is what they’re currently named.

And in your opinion, what’s the difference---Well, the difference is that a base is where the company is located, where they have jurisdiction, they have administration, they have the managers.

Yes?---Whereas the work site – the particular client, in this case, Alcoa, obviously, has jurisdiction over those work sites – complete jurisdiction over those work sites, so that’s the distinction as I understand it.

It is difficult to avoid the conclusion that Counsel for the Union was seeking to escape an unexpected and unfavourable answer. In cross-examination, Mr New stressed the need for a Company base to be owned or leased by ALS and under its control.

131    Mr McGinty said at paras 30 and 31 of his affidavit:

30.    ALS (or its previous entities) has maintained bases at each of the three Alcoa sites for over 15 years. At these locations ALS has:

1)    designated offices, vehicles, crib rooms and dark rooms;

2)    over $1M of test equipment permanently located;

3)    site managers permanently based;

4)    IT systems, office equipment and furniture; and

5)    other facilities typically associated with operating a business.

31.    Employees start work and finish work every day at their site.

132    In Mr McGinty’s oral evidence at p 62/102 this passage appears:

If I could refer you to paragraph 30, Mr McGinty and invite you to elaborate on the facilities that ALS has on the Alcoa sites? If you could paint a picture for the commission, please?--Okay, we have three bases. One at Kwinana, one at Pinjarra and one at Wagerup. Of each of the three sites there are designated officers, crib rooms, storage areas. Typically we have a dark room which is used for processing of radiography films. We have vehicles dedicated to those sites. We have a very significant amount of test equipment dedicated to those sites. We have permanently-based site managers. We have IT systems. We also use the client’s IT systems. We have our own office equipment and furniture and we have everything effectively we need there to execute our work on those sites.

If I could specifically direct you to the Alcoa Pinjarra site, can you describe the buildings that ALS occupies at that site?---Yes. There’s a significant building that Alcoa have provided us with which houses a reasonable amount of our workforce with offices and other facilities. There are also three other temporary buildings on that site that ALS either owns or leases.

So the three other buildings you’re referring to are either owned or leased by ALS?---Correct.

133    In cross-examination Mr McGinty agreed that Alcoa sites had not previously been treated as employees’ Company bases for the purpose of calculating travel allowances.

134    All of this evidence can only be relevant to the question of shared knowledge of background circumstances. Save for Mr New’s bare assertion that employees, managers and ALS knew and accepted his view as to the meaning of the term “Company base”, there is no evidence as to any shared knowledge concerning that matter. Mr McGinty’s evidence is to the contrary. In the circumstances it is hardly surprising that the Full Bench concluded that it would not assist to seek to formulate a “common understanding” based on “custom and practice”. Again, no jurisdictional error is shown.

135    The Union then submits that the Full Bench erred in not considering, as part of the construction exercise, whether travel was in the course of employment. The Union submits that time taken in travelling to and from Alcoa sites has always been regarded as “time worked”. However, as we have observed, the Union’s case is not based on prescriptive rights. Rather, it seeks to establish a basis for construing the cl 15 agreement in the context of facts and understandings shared by it and ALS. The point seems to be that discussed by the Deputy President at [42] to [47] of his reasons. He there identified the “crux of this dispute” as being whether, “travel to and from the place where work is performed [is] ‘in the course of employment’”. (See [43].) This approach was apparently based upon a distinction which the Deputy President drew, but did not explain, between an “allowance” and a “payment”, a matter to which he returned at [53] to [55]. No doubt such distinction has some relevance in the specialized sphere of industrial relations, but it is difficult to see how it can be relevant to the construction of the power conferred upon ALS to vary an employee’s Company base. The matter would only be relevant to the construction of cl 15 if it were part of the surrounding circumstances in which the 2012 Agreement was made. No attempt has been made to explain its relevance in that respect. As we have previously observed, by agreeing to the inclusion of cl 15 in the 2012 Agreement, both sides implicitly accepted that they held conflicting views concerning its meaning, which dispute would have to be resolved using available dispute resolution procedures. Again, we consider that the Full Bench committed no jurisdictional error in dismissing that matter as being of no assistance in the task which it had to perform.

136    Finally, it is said that the Full Bench committed jurisdictional error in treating as irrelevant the terms of the award which would otherwise have regulated the employment of the relevant employees. The Deputy President concluded at [55] that:

There are a number of substantial differences between the Agreement and the relevant Award. The Award clause title refers to “transfers, travelling and working away from usual place of work”. The Award clause then refers to “the employer’s usual workplace”. The operative noun is “workplace” and not “base”. Secondly, it is the “employer’s workplace” and not “the employee’s workplace”. Thirdly, it is the employer’s usual workplace. Thus, the condition precedent for the entitlements to be payable under the Award are that work is performed at a place different to the usual place. The language of the 2012 Agreement displays such a contrast to the language of the Award is indicative that these differences are aimed at achieving a different purpose than the travel provisions in the Award. Whilst there is some capacity to have differences as to the meaning of the terms of the Agreement itself, there can be no doubt from the contrasting language, terminology and express conditions that something different to usual workplace was intended to create the entitlement.

(Emphasis in original.)

The Union has not demonstrated any useful purpose to be served by a consideration of the award. We are unable to identify any such purpose. The Full Bench did not fall into jurisdictional error in concluding that it would gain no assistance from such consideration.

137    Finally the Union makes the broader submission that the Full Bench merely concluded that the wording of cl 15 did not compel acceptance of the Union’s construction of it in that the ordinary meaning of the words could accommodate the ALS’s construction. The Union submits that the Full Bench then decided that none of these “extrinsic” matters should lead it to the adoption of a different construction.

138    Codelfa suggests that evidence of surrounding circumstances cannot be used to contradict the plain meaning of the words used in a contract. However it is true that Codelfa also asserts that context may only be used to assist in construction if the language is ambiguous or susceptible of more than one meaning. As we have demonstrated, later decisions suggest that context is, in all circumstances, relevant in determining the meaning of a contract. This will especially be the case where it is said that words are used with a special meaning. Assuming for present purposes that reference to context may lead to a construction which does not reflect the plain meaning of the words used, we do not accept that the Full Bench took an approach which was inconsistent with authority. At [13] of its reasons the Full Bench directed itself as to the law and then sought to construe the clause, having regard to context. Context is discussed at [14] and [15]. At [16] the Full Bench explained how the clause might work, having regard to the context. The Union appears to rely upon the statement at [17] as to construction without reference to [18].

139    It follows that, subject to the submissions concerning s 577 of the Fair Work Act, no jurisdictional error has been demonstrated.

The Obligation ground

140    Section 577 of the Fair Work Act provides:

577    Performance of functions etc. by the FWC

The FWC must perform its functions and exercise its powers in a manner that:

(a)    is fair and just; and

(b)    is quick, informal and avoids unnecessary technicalities; and

(c)    is open and transparent; and

(d)    promotes harmonious and cooperative workplace relations.

Note:    The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581).

141    The Union submits that FWC fell into jurisdictional error in that it failed to perform its functions and exercise its powers in a fair and just manner which, “promote[d] harmonious and cooperative workplace relations”. Particulars of FWC’s alleged failure are to be found in paras 17 and 18 of the statement of claim as follows:

17.    This is because:

(a)    the meaning of the words of “employee’s Company Base” clause 15.5 of the Agreement was notoriously understood by the Applicant and the First Respondent as not being intended to include the Alcoa sites;

(b)    the words “employee’s Company Base” in clause 15 of the Agreement was a reference to a head or regional office of the First Respondent which was of the same type as the Canning Vale Company Base;

(c)    the travel to and from the Alcoa sites has always been treated by the Applicant and the First Respondent as being work in the course of employment;

(d)    By varying the arbitrated decision of Deputy President McCarthy, the Full Bench of the Second Respondent reduced the remuneration of a significant number of employees of the First Respondent by anywhere up to, and possibly in excess of, $30,000 per annum;

18.    [B]y finding that the First Respondent could nominate the Alcoa sites to be an employee’s Company Base, the Second Respondent ignored the conduct of the Applicant and the First Respondent over an extended period which dates back as far as 1991.

142    The Union submits at para 62 of its principal submissions that FWC breached the obligation imposed by s 577(d) having regard to:

…

a.    the evidence of the length of time in which the Travel Payments clause had been applied without change, with the company headquarters being nominated as the employee’s company base;

b.    the evidence of common understanding;