Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82

File number:

NSD 1455 of 2015



Date of judgment:

10 June 2016


INDUSTRIAL LAW – where dispute about payment of allowance under enterprise agreement referred to Fair Work Commission for arbitration – applicant sought certiorari to quash Full Bench decision and mandamus to remit dispute for decision according to law – respondent sought summary judgment arguing public law remedies not available for private arbitration decision

INDUSTRIAL LAW – where previous Full Court decision dealt with private arbitration and public law remedies – principle of stare decisis – Full Court decision to be departed from only if ‘plainly wrong’ – whether Full Court decision plainly wrong by failure to address s 739(5) of Fair Work Act 2009 (Cth) in consideration of private arbitration powers – Full Court’s decision on characterisation of Commission’s arbitration power followed

INDUSTRIAL LAW – consideration of legislated dispute resolution provisions under Commonwealth legislation – development of arbitration powers exercised by Commission (and predecessor bodies) – distinction made by legislature between arbitration and other powers – relationship between s 180 and s 739 of Fair Work Act 2009 (Cth) – latter section concerns involvement of Commission in dispute resolution procedures under enterprise agreement – Commission only exercises arbitration powers by parties’ mutual consent and not inconsistently with Act or fair work instrument


Fair Work Act 2009 (Cth) ss 186, 562, 604, 738, 739, 740

Industrial Relations Act 1988 (Cth) ss 134E, 134H, 170MC, 170MH

Workplace Relations Act 1996 (Cth) ss 89A, 170LT, 170LW, 353, 701

Federal Court Rules 2011 (Cth) r 26.01

Cases cited:

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (2015) 235 FCR 305

Australian Agricultural Co v Federated Engine-Drivers and Firemen’s Association of Australasia (1913) 17 CLR 261

Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission (2001) 203 CLR 645

Gordonstone Coal Management Pty Ltd v Australian Industrial Relations Commission (1999) 93 FCR 153

NATB v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 133 FCR 506

New Zealand v Moloney (2006) 154 FCR 250

Saeed v Minister for Immigration and Citizenship (2009) 176 FCR 53

Selim v Lele (2008) 167 FCR 61

SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 150 FCR 214

Telstra Corp Ltd v Treloar (2000) 102 FCR 595

Date of hearing:

16 and 17 May 2016


New South Wales


Fair Work Division

National Practice Area:

Employment & Industrial Relations



Number of paragraphs:


Counsel for the Applicant:

Ms K Nomchong SC

Solicitor for the Applicant:

K&L Gates

Counsel for the First Respondent:

Mr I Taylor SC with Mr O Fagir

Solicitor for the First Respondent:

NEW Law Solicitors

Counsel for the Second Respondent:

The second respondent filed a submitting notice


NSD 1455 of 2015






First Respondent


Second Respondent




10 JUNE 2016


1.    Pursuant to r 26.01(1)(a) of the Federal Court Rules 2011 (Cth), the Originating Application herein be dismissed.

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



1    In this proceeding, the applicant, Endeavour Energy, seeks certiorari to quash the decision of a Full Bench of the Second Respondent, the Fair Work Commission (“the Commission”), made on 29 October 2015, in which an appeal from an earlier decision by Hamberger SDP was upheld. Conditionally upon securing certiorari, the applicant also seeks mandamus to require a differently constituted Full Bench of the Commission to hear and determine the appeal according to law. By an interlocutory application filed on 23 December 2015, the first respondent, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“the Union”) applies for judgment pursuant to r 26.01(1)(a) of the Federal Court Rules 2011 (Cth). The ground of that application is that the public law remedies sought by the applicant are not available in respect of a decision by way of private arbitration.

2    For reasons which follow, the interlocutory application must succeed. The point which the Union agitates on that application has recently been decided, favourably to the Union’s position in this case, by a Full Court in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (2015) 235 FCR 305.

3    The present controversy arises under the Endeavour Energy Enterprise Agreement 2012 (“the Agreement”), approved on 21 May 2013 pursuant to s 186 of the Fair Work Act 2009 (Cth) (“the FW Act”). Clause 29 of the agreement provides a procedure for the resolution of “all disputes arising out of the employer-employee relationship”. Clause 29.2 is concerned with “local matters”, while cl 29.3 is concerned with “corporate-wide issues”. Each provides for a multi-level process for the resolution of disputes of the kind referred to. In the facts which led to the proceeding in the Commission in the present case, recourse was had to the third tier under cl 29.3, which provides as follows:

Tier 3: If the issues remain unresolved the matter may be referred to the Fair Work Commission for conciliation and/or arbitration with the rights of the parties to appeal being reserved. If both parties agree, a person other than the Fair Work Commission can be asked to deal with the issue or dispute, as provided for under s. 740 of the Fair Work Act 2009.

It was that referral which led to the decision of Hamberger SDP to which we have referred.

4    In his Honour’s decision of 9 March 2015, he explained the nature of the dispute, and of the matters with which he had been asked to deal, as follows:

[3]    The dispute turns largely on the proper interpretation of a clause in the 2012 enterprise agreement contained in Appendix B Allowances. The clause in question states:

‘Electrician’s Licence Allowance

An employee who holds a current Qualified Supervisors Certificate/Electrical Licence or its equivalent and the position requires the incumbent to hold the above qualification to fulfil their duties and the incumbent in the position has received it in accordance with past practice will be paid $31.94 per week from 25 December 2012 and $32.80 from 24 December 2013. This allowance is paid as an all purpose allowance.’

[4]    The parties have agreed on the questions that the Commission has been asked to determine. These are:

‘Are employees in the following categories who hold a Qualified Supervisor’s Certificate entitled to payment of the electrician’s licence allowance provided for in the Endeavour Energy Enterprise Agreement 2012?

1.    Employees who were appointed to positions which were advertised as requiring a Qualified Supervisor’s Certificate and/or whose letters of appointment and/or position description at the time of appointment nominate the possession of a Qualified Supervisor’s Certificate/Electrical Licence as a requirement of the position.

2.    Employees who hold a Certificate who principally perform work on consumer installations and wiring, including but not limited to those positions specified in Annexure A.

3.    Employees who are ordinarily engaged in positions with duties the adequate discharge of any portion of which requires employees to have the qualifications and experience necessary to obtain a Qualified Supervisor’s Certificate, including but not limited to those positions in Annexure B.’

[5]    The two annexures contain a series of roles. The case involves a two-step process which is first to identify the correct interpretation of the relevant clause and secondly to apply based on the evidence how that interpretation affects various roles.

5    His Honour answered the questions referred to as follows:

[36]    The answers to the three questions posed by the parties are as follows:

1.    If Endeavour Energy currently requires the holder of a position to have a Qualified Supervisor’s Certificate/Electrical Licence (for example, by means of a current position description) then the employee is entitled to payment of the allowance (assuming they have a current licence and the person in that position has received the allowance in accordance with past practice). However, previous advertisements, letters of appointment and superseded position descriptions are not relevant for the purpose of determining whether the employee is currently entitled to the allowance.

2.    Employees who hold a licence, are required to do so by the regulatory regime, and who occupy positions in which the incumbent has received the allowance in accordance with past practice, are entitled to be paid the allowance. Based on the evidence presented during the proceedings, only employees who perform one of the following eight roles fit within this category:

    Customer Safety Officer;

    EFM Customer Installations;

    Electrical Fitter Mechanic (Metering);

    Emergency Services Officer;

    Field Officer - Licensed;

    Installation Inspector;

    Meter Technician; and

    Senior Meter Technician.

3.    The only employees who are entitled to the allowance are those set out in response to questions 1 and 2 above.

6    The Union appealed from that decision, pursuant to s 604 of the FW Act. As earlier stated, that appeal was upheld in the Full Bench’s decision of 29 October 2015. The Full Bench granted leave to appeal on public interest grounds, and expressed its conclusion in the following terms:

[32]    It clear that persons employed principally for work on electrical equipment owned or used by an electricity supply authority are not required to have a licence, but there is no agreement between the parties as to the meaning of “employed principally”. Unfortunately, this is a matter that will probably have to be determined position by position and we have determined that this issue is best determined by a member of the relevant panel at first instance. We are satisfied that this is a grandfathering provision and the question of identifying to which employees that grandfathering provision applies will also have to be determined.

[33]    It is clear that the requirements of the respondent as to the licensing or otherwise of its employees have changed. Negotiations should take place regarding the future operation of the agreement classifications and the future needs of Endeavour Energy.

[34]    We are satisfied that the conclusion of his Honour was wrong and amounted to an appealable error regarding the construction of the clause. The appeal is allowed. The decision of his Honour Senior Deputy President Hamberger is set aside. The industrial situation between these parties may well be amenable to the assistance of the Fair Work Commission in interest based bargaining. We return the application to the relevant Panel Head.

7    In the present proceeding, the applicant advanced a jurisdictional challenge to the Full Bench decision upon the grounds that the Full Bench –

(a)    … asked itself the wrong question by misapprehending the construction of the ELA as determined by Senior Deputy President Hamberger and then proceeded to determine whether there was error based on that mistaken formulation;

(b)    … took into account an irrelevant factor in construing the ELA, being the conduct of the parties subsequent to the making of the 2012 EA;

(c)    … failed to take into account that an Electrical Licence is created by the legislative scheme which regulates the occasions on which a person performing electrical wiring work is required to have a licence and placed an unjustified temporal qualification on when the licence was required.

It was also contended that the Full Bench misapplied and misconstrued s 604 of the FW Act by the determining that permission to appeal was required, and should not be granted unless it was in the public interest to do so. It was also said that the Full Bench made a decision inconsistent with the agreement, contrary to s 739(5) of the FW Act.

8    In its Originating Application, the applicant relies on s 39B of the Judiciary Act 1903 (Cth) and s 562 of the FW Act as sources of the jurisdiction to grant the constitutional writs which it seeks. In the Interlocutory Application before the court, the Union moves under r 26.01(1)(a), which provides for summary judgment to be given against an applicant if he or she “has no reasonable prospect of successfully prosecuting the proceeding .…” The Union contends that the public law remedies of certiorari and mandamus, sought by the applicant, are not available where the decision challenged was in the nature of a private arbitration, and that the decision of Hamberger SDP, and subsequently of the Full Bench, were of that nature.

9    In ALS, the Full Court identified the terms of the dispute resolution clause with which their Honours were concerned as follows:

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.

10    Stage 3 and Stage 4 of the procedure mandated by cl 37 of the agreement in the ALS case are, in point of substance if not form, indistinguishable from the terms in which the third tier of the procedure in the present case is laid out. Factually, ALS is not to be distinguished from the case now before the court.

11    Likewise, in ALS, the dispute had proceeded from the point of a decision of a single member of the Commission, and had been dealt with on appeal by a Full Bench. It was the judgment of the Full Bench which was challenged in ALS. In this respect also, the present case is on all fours with ALS.

12    The Full Court expressed its conclusion in ALS as follows (235 FCR at 338 [85]):

The effect of the High Court’s decision in [Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645], and that in [TCL Air Conditioner (Zhongshan) Company Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533], 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.

ALS is, therefore, Full Court authority for the proposition that the constitutional writs sought by the applicant in the present case are not available.

13    Unless persuaded that the judgment in ALS was plainly wrong, we should follow it: Telstra Corp Ltd v Treloar (2000) 102 FCR 595, 602 [26]; NATB v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 133 FCR 506, 519 [61]; SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 150 FCR 214, 222 [8]-[9], 250-251 [146]-[149]; New Zealand v Moloney (2006) 154 FCR 250, 275-276 [135]-[138]; Selim v Lele (2008) 167 FCR 61, 82 [54]; Saeed v Minister for Immigration and Citizenship (2009) 176 FCR 53, 63-64 [38]-[41] (reversed on appeal, but not on this point). It is true that the principle for which ALS stands does not involve statutory construction in the narrow sense, but it does involve the legal characterisation of proceedings in which members of a tribunal, established under a particular statute, are permitted to participate. The authorities referred to in this paragraph govern the resolution of the present problem.

14    It was submitted on behalf of the applicant that ALS was plainly wrong because their Honours omitted to deal with, or even to refer to, the potential impact of s 739(5) of the FW Act upon the conclusion that the dispute-settling process with which they were concerned was in the nature of a private arbitration. The terms of s 739 are as follows:

(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 refers to a term (amongst others) which “provides a procedure for dealing with disputes, including a term referred to in subsection 186(6)”. That subsection will be mentioned further below.

15    The applicant’s submission was not that the judgment in ALS was per incuriam in the sense that s 739(5) was not referred to the Full Court by counsel: to the contrary, it is clear from a consideration of the transcript of the argument in that proceeding (to which reference was made during the course of the hearing in the present case) that this subsection was a conspicuous element in the argument advanced on behalf of the then applicant for the constitutional writs. Rather, it was said that the Full Court erred in failing to address that aspect of that argument, with the result that its decision was plainly wrong.

16    Two things should be said about this submission at the outset. First, if there was a difference between the submission and a case conventionally made in appellate proceedings that the court appealed from had erred, it was one of some subtlety. It is not our function to consider whether an earlier Full Court erred. Secondly, if we were entitled to hold that it had been an error for the Full Court not to have addressed the potential impact of s 739(5), that would not have had the corollary that the judgment in the case was plainly wrong. That is to say, we are concerned with the judgment of the Full Court, not with errors possibly made along the way.

17    The applicant accepted that there were two available explanations for the Full Court’s omission to refer to s 739(5) in its reasons in ALS: that it had overlooked it, or that it had considered it inconsequential. In either situation, as we understand the applicant’s now case, the resulting judgment was plainly wrong for the reason that, as a matter of law, the subsection was, of itself, so impactful in the analysis of the question whether the Commission was acting as a private arbitrator as necessarily (and obviously) to compel the court now to reach a different conclusion. We must, therefore, address the applicant’s argument about s 739(5) on the merits.

18    Under the Conciliation and Arbitration Act 1904 (Cth), it was common for members of the Conciliation and Arbitration Commission to be asked by the parties to an award or certified agreement to resolve a dispute which had arisen between them. If the subject of the dispute fell within the ambit of the interstate dispute for the prevention or settlement of which the award had been made or the agreement had been certified, such an activity would probably have been both valid and regular. It was not always thus, of course, but such jurisdictional objections as may have been formally available were often ignored because of the value, to the parties concerned, of the participation of someone with the experience and the authority of a member of that Commission in the dispute-settling process. The practice continued after the enactment of the Industrial Relations Act 1988 (Cth) (“the IR Act”).

19    Although the IR Act itself did not change the traditional emphasis upon institutionalised conciliation and arbitration which had existed over many years, in the late 1980s and early 1990s, reform was in the air. The first tentative steps towards the creation of a legislated framework for collective bargaining were taken by the Industrial Relations Legislation Amendment Act 1992 (Cth). After that amendment, s 134E(1)(b) of the IR Act now set out, as one of the criteria for the certification of an agreement made in part settlement of an industrial dispute (ie in the constitutional sense), that the agreement include “procedures for preventing and settling further disputes between the employers and employees covered by the agreement about matters arising under the agreement”. Because a certified agreement would necessarily have been made in prevention or settlement of an industrial dispute as defined in the IR Act, the requirement that the disputes referred to in s 134E(1)(b) be “about matters arising under the agreement” was, no doubt, considered sufficient to provide a valid statutory (and therefore constitutional) basis for this provision.

20    The new s 134E(1)(b) said nothing about the participation of members of the Industrial Relations Commission (“the IR Commission”) in the procedures referred to. But s 134H, introduced at the same time, did so:

Procedures in an agreement for preventing and settling further 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.

That it was thought necessary for the IR Commission to be “empowered” to settle disputes of the kind referred to suggests that the view was taken by the legislature that that Commission did not, or at least might not, otherwise have that power. It is also of passing interest that s 134H did not echo the formula in s 134E(1)(b) in limiting the range of disputes which that Commission would be empowered to settle.

21    On the commencement of the Industrial Relations Reform Act 1993 (Cth), s 134E(1)(b) was replaced (in slightly different terms) by s 170MC(1)(c) and s 134H was replaced by s 170MH. Then, on the commencement of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth), s 170MC(1)(c) was, again as slightly modified, replaced by s 170LT(8) of what was renamed the Workplace Relations Act 1996 (Cth) (“the WR Act”) and s 170MH was replaced by s 170LW of that Act. There were no presently material differences between the original and the replacement versions of these provisions.

22    A further significant change introduced by the amendment of 1996 was the circumscription of the IR Commission’s arbitration powers by s 89A of the WR Act. Now, for the purposes of dealing with an industrial dispute by arbitration, of preventing or settling an industrial dispute by making an award or order, and of maintaining the settlement of an industrial dispute by varying an award or order, the dispute was “taken to include only matters covered by” subss (2) and (3) of s 89A. There is no present need to set out what those matters were, it being sufficient to note that the arbitration powers available to the IR Commission were now narrower, in point of subject-matter, than its conciliation powers.

23    It was s 89A that lay at the centre of the reasons of the Full Court in Gordonstone Coal Management Pty Ltd v Australian Industrial Relations Commission (1999) 93 FCR 153. In the facts of that case, a certified agreement contained a provision which, in somewhat ambiguous terms it must be said, at least contemplated, and on one view required, that a dispute which had not been settled as between the parties would be referred to the IR Commission. The question which arose was whether the IR Commission was limited by s 89A in any non-consensual determination which it made in relation to such a dispute. The Full Court held that it was. Their Honours said (93 FCR at 164 [43]):

The fact that the parties have agreed, by a certified agreement and through the enabling provisions of s 170MH of the Act, to give the Commission powers to settle disputes does not deny those powers their arbitral character when what is involved is a binding decision in settlement of a dispute, not consensual in its nature, but made in the exercise of an independent judgment after the consideration of the differences between the parties.

24    On appeal, the High Court rejected the premise by reference to which the reasoning set out above proceeded: Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission (2001) 203 CLR 645. Their Honours held that the disputes which the IR Commission was charged with settling were not industrial disputes in the statutory and constitutional senses. Rather, they were “disputes over the application of the agreement” and “local disputes to which [s 89A] … can have no application” (203 CLR at 659 [38]). The authority which the IR Commission had to undertake functions given to it by the agreement derived from s 170MH (203 CLR at 659 [39]). But the High Court could so hold only if s 170MH were itself valid, and it had been submitted in the case that, to the extent that the section purported to invest the IR Commission with power to settle purely local disputes, it was not valid. (Although the litigation in Gordonstone, at both levels, was conducted after the repeal of s 170MH, the agreement had been certified under that section and it was, therefore, by reference to that section that the challenge to the validity of the certification of the agreement proceeded.)

25    Dealing with an argument that s 170MH could not, and did not, validly operate so as to empower the IR Commission to settle disputes that fell outside the ambit of the (constitutional) dispute in part settlement of which the agreement in question had been made and certified (ie even if the parties ostensibly empowered that Commission to do so), the High Court said (203 CLR at 657-658 [30]-[32]):

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.

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.

To the extent that s 170MH of the lR Act operates in conjunction with an agreed dispute resolution procedure to authorise the Commission to make decisions as to the legal rights and liabilities of the parties to the Agreement, it merely authorises the Commission to exercise a power of private arbitration. And procedures for the resolution of disputes over the application of an agreement made by parties to an industrial situation to prevent that situation from developing into an industrial dispute are clearly procedures for maintaining that agreement. Parliament may legislate to authorise the Commission to participate in procedures of that kind. Accordingly, s 170MH of the IR Act is valid.

26    Their Honours went further, holding that, to the extent that provisions in a certified agreement extended beyond anything that might have been justified by the underlying industrial (ie constitutional) dispute, those provisions were effective as a matter of “general law” (not referring in this respect, it may be noted in passing, to Australian Agricultural Co v Federated Engine-Drivers and Firemen’s Association of Australasia (1913) 17 CLR 261). Their Honours said (203 CLR at 658 [34]):

The parties to an industrial situation are free to agree between themselves as to the terms on which they will conduct their affairs. Their agreement has effect according to the general law. If their agreement is certified, it also has effect as an award. To the extent that an agreement provides in a manner that exceeds what is permitted either by the Constitution or by the legislation which gives the agreement effect as an award, it cannot operate with that effect. But the underlying agreement remains and the validity of that agreement depends on the general law, not the legislative provisions which give it effect as an award.

27    With the wholesale changes made to the WR Act by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth), ss 170LT and 170LW were repealed. The former was replaced, in effectively the same terms, by the provision which became (after re-numbering) s 353(1) of the WR Act (albeit that the agreement concerned would now be known as a “workplace agreement” and the provisions referred to now relied, at least in the normal case, on para (xx), rather than para (xxxv), of s 51 of The Constitution for their validity). What had been s 170LW of the WR Act was not, however, re-enacted. Where an agreement did not include dispute-settlement procedures, the agreement was “taken to include the model dispute resolution process” in Pt 13 of the WR Act (s 353(2)). By s 701(4)(b), within Pt 13, the permitted role of the IR Commission in settling disputes under the model process did not include the arbitration of the matter in dispute, but it seems from the terms of subs (5), which dealt with certain other paragraphs in subs (4) differently, that this prohibition may not have applied where the parties agreed to the IR Commission arbitrating. It also seems that Pt 13 did not apply at all where the dispute-settling procedures had been agreed by the parties to the agreement concerned. The relevance of these provisions to the matter presently under discussion is not what they amounted to when properly construed, but the fact that the legislature did make a distinction between arbitration powers and other (eg mediation) powers invested in the IR Commission.

28    In 2009, all of the presently relevant provisions of the WR Act were repealed, and the FW Act was enacted. In place of what had been s 353(1) of the WR Act, s 186(6) of the FW Act was introduced, in the following terms:

(6)    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.

It will be noted that s 186(6) goes further than its predecessors had, in that it is not confined to a requirement that the agreement include procedures for preventing and settling disputes which arise: it requires the inclusion of a procedure by which either the Commission or some other independent person is required or allowed to settle disputes of the kind referred to. The express facility to nominate a dispute-settling intermediary other than the Commission is also new in the FW Act.

29    Turning to s 739 of the FW Act, it would be a mistake to seek to identify its purpose solely through the prism of s 186(6): the section applies to other situations as well. But s 739 is concerned with the role of the Commission under a dispute-settling term in an enterprise agreement. Although the grammatical reading of subs (3) presents difficulties, the Explanatory Memorandum to the relevant Bill makes the meaning clear:

Where such a term requires or allows [the Commission] to deal with a dispute, it can exercise all of its powers under Subdivision B of Division 3 of Part 5-1 (see subclause 595(4)), unless those powers are limited by the term (subclause 739(3)).

That is to say, if the term places limits on the powers that may be exercised by the Commission in settling disputes, the Commission must remain within those limits.

30    Critical to the significance of subs (3) and (4) of s 739 is the circumstance that, under the FW Act, the Commission has no general power of arbitration. By s 595(1), the Commission may deal with a dispute only if it is expressly authorised to do so under or in accordance with another provision of the FW Act. Then s 595(2) does provide such an express authorisation in relation to disputes, but arbitration is excluded. To put the matter completely beyond doubt, s 595(3) provides that the Commission may deal with a dispute by arbitration only if it is expressly authorised to do so under or in accordance with another provision of the FW Act.

31    Section 739(4) is such a provision. But it is limited in two ways. First, the parties must, by the relevant term in the agreement, have agreed that the Commission may arbitrate. And secondly, by subs (5), in the arbitration the Commission must not make a decision that is inconsistent with the FW Act or a fair work instrument that applies to the parties.

32    In the light of this understanding of the relevant provisions of the FW Act in the context of the history of broadly corresponding provisions since 1992, does the introduction of s 739(5) into the analysis warrant the conclusion that the Full Court in ALS was plainly wrong in its characterisation of the Commission’s relevant role as that of private arbitration?

33    We would hold not. Section 739(5) does not alter the character of the arbitration which the Commission undertakes under an enterprise agreement in the terms of the Agreement. It merely places a limit on the range of arbitrated (but not conciliated, it may be noted) outcomes available to the Commission in those cases in which the parties have agreed that the Commission may arbitrate (using, in this respect, the same formula as appears as subs (4) of s 740, on any view a private arbitration provision). In our view, the more likely explanation of the absence of any reference to s 739(5) in the reasoning of the Full Court in ALS is that their Honours considered it to make no more than an inconsequential contribution to the disposition of the issue on which they ruled. With respect, we would agree with that assessment of the situation.

34    There may be a question as to how a party to an arbitrated outcome in a dispute-setting process of the kind contemplated in s 739 of the FW Act might go about alleging that the Commission had overstepped the limitations for which subs (5) provides. In the present case, the applicant does allege that the Full Bench decision was inconsistent with a fair work instrument, namely, the Agreement. But the inconsistency is said to reside wholly in the circumstance that the decision was wrong; that is to say, the Full Bench reached the wrong conclusion on the very matter which was given to it for arbitration. Whatever else s 739(5) means, it does not, in our view, produce an outcome of the kind sought by the applicant. Otherwise, we had the benefit of no more than the most tangential of references to the matter in the submissions made in the present case.

35    For the above reasons, we hold, consistently with ALS, that the public law remedies upon which the applicant relies are not available in the circumstances of the case. The Union’s application for summary judgment must be granted.

I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices North, Jessup and Reeves.


Dated:    10 June 2016