FEDERAL COURT OF AUSTRALIA

Minister for Industrial Relations for the State of Victoria v Esso Australia Pty Ltd [2019] FCAFC 26

ORDERS

THE COURT ORDERS THAT:

1.    The application for judicial review is dismissed.

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

REASONS FOR JUDGMENT

THE COURT:

1    This application for judicial review of a decision of the Full Bench of the Fair Work Commission (the FWC) is a continuation of the substantial litigation which has occurred since the nominal expiry on 1 October 2014 of two enterprise agreements governing the employment of employees of the first respondent (Esso) and the commencement of bargaining for new enterprise agreements.

2    The application seeks to invoke the Court’s original jurisdiction under s 562 and s 563(b) of the Fair Work Act 2009 (Cth) (the FW Act) and s 23 of the Federal Court of Australia Act 1976 (Cth).

3    The question on the application is whether the decision of the Full Bench under s 603 of the FW Act made on 13 July 2018 to revoke an order made by Watson VP on 7 December 2016 is affected by jurisdictional error. By that order, made pursuant to s 424 of the FW Act (the s 424 Order), Watson VP had directed that protected industrial action in relation to the negotiation of two enterprise agreements be terminated.

4    The applicant is the Minister for Industrial Relations for the State of Victoria (the Minister). In the proceedings before the Full Bench, the Minister had opposed the revocation of the s 424 Order.

5    The second, third and fourth respondents are, respectively, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU), the Australian Workers’ Union (AWU), and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (collectively, “the Unions”). In the proceedings before the Full Bench, the Unions had also opposed the revocation of the s 424 Order and, in the proceedings before this Court, the Unions supported the Minister’s application and broadly supported the submissions made on behalf of the Minister.

6    The fifth respondent is the FWC. It filed a Submitting Notice and took no part in the hearing.

The factual circumstances

7    The circumstances giving rise to the application to this Court were not in dispute, and are set out in the affidavit of Mr Catanese, a Principal Solicitor in the Victorian Government Solicitor’s Office. Mr Catanese was not required to attend for cross-examination.

8    On 1 October 2014, the Esso Gippsland (Longford and Long Island Point) Enterprise Agreement 2011 (Longford and LIP Agreement) and the Esso Offshore Enterprise Agreement 2011 (Offshore Agreement) reached their nominal expiry date. Thereafter, the Unions, each of which had members covered by the Agreements, commenced negotiations for replacement agreements.

9    Commencing in early 2015, the AWU organised, and several of its members engaged in, industrial action in support of its claims. The other unions, namely, the CEPU and the AMWU also organised industrial action by their members at about this time. The AWU claimed that the industrial action was “protected industrial action”, within the meaning of s 408 of the FW Act, being “employee claim action” to which subpara (a) refers.

10    On 6 March 2015, on Esso’s application, the FWC made an order under s 418(1) of the FW Act (the s 418 Order) requiring the AWU and its members to cease certain forms of industrial action. The order came into effect at 6 pm on 6 March 2015 and ceased to operate at 6 pm on 20 March 2015. In contravention of that order, the AWU continued to organise some industrial action. That led to litigation in this Court and in the High Court to which we refer shortly. The industrial action continued from time to time during 2015 and 2016 and it seems that there have been periods of protracted negotiation and attempts at conciliation.

11    On 30 November 2016, each of the Unions gave Esso notice pursuant to s 414 of the FW Act of its intention to take industrial action in support of their claims for new agreements. The foreshadowed industrial action was to comprise 24 hour stoppages of work, commencing on 9 December 2016. In the reasons of the Full Bench, the notified actions were referred to as the AWU Notified Action, the AMWU Notified Action and the CEPU Notified Action, respectively.

12    On 1 December 2016, the Minister applied to the FWC for an order under s 424 terminating or suspending protected industrial action in support of the new enterprise agreements.

13    On 7 December 2016, Watson VP made an order pursuant (or at least purportedly pursuant) to s 424 of the FW Act. This is the order to which we have referred as the s 424 Order. The terms of the order were (relevantly) as follows:

1.    Pursuant to s.424 of the [FW Act] it is ordered that protected industrial action at [Esso] to be undertaken in accordance with notices dated 30 November 2016 served by [the AWU, CEPU and the AMWU] in relation to the proposed agreements set out in paragraph 2 be terminated.

2.    The proposed agreements are agreements to cover Esso and its employees covered by the Esso Offshore Enterprise Agreement 2011 and the Gippsland (Longford and Long Island Point) Enterprise Agreement 2011 and to replace those agreements.

3.    The Order is binding on:

  (a)    Esso;

  (b)    The AWU;

  (c)    The CEPU;

  (d)    The AMWU;

(e)    All employees who will be covered by the proposed agreements referred to in paragraph 2.

…

14    Watson VP published reasons for the s 424 Order: Minister for Industrial Relations for the State of Victoria v Australian Workers’ Union [2016] FWC 8826. Those reasons indicate that Watson VP made the order because he was satisfied that members of the Unions were proposing to engage in protected industrial action, that the industrial action threatened to endanger the welfare of the population in various regions of South Eastern Australia, and that the industrial action would cause significant damage to the economy of the State of Victoria and to other parts of South Eastern Australia, and, further, because the Minister and the Unions had submitted that the industrial action should be terminated, because Esso had not submitted to the contrary, and because termination of the industrial action would enable the parties to move from a protracted period of unsuccessful negotiation for new enterprise agreements to conciliation and arbitration under the framework of s 266 of the FW Act.

15    Section 424 provides (relevantly):

424    FWC must suspend or terminate protected industrial action—endangering life etc.

Suspension or termination of protected industrial action

(1)    The FWC must make an order suspending or terminating protected industrial action for a proposed enterprise agreement that:

  (a)    is being engaged in; or

  (b)    is threatened, impending or probable;

  if the FWC is satisfied that the protected industrial action has threatened, is threatening, or would threaten:

(c)    to endanger the life, the personal safety or health, or the welfare, of the population or of part of it; or

(d)    to cause significant damage to the Australian economy or an important part of it.

…

Application must be determined within 5 days

(3)    If an application for an order under this section is made, the FWC must, as far as practicable, determine the application within 5 days after it is made.

Interim orders

(4)    If the FWC is unable to determine the application within that period, the FWC must, within that period, make an interim order suspending the protected industrial action to which the application relates until the application is determined.

 (5)    An interim order continues in operation until the application is determined.

16    Section 424(2) provides that the FWC may make an order under subs (1) on its own initiative or on the application of specified persons. The Minister is one such person. As is apparent, s 424(1) refers only to the suspension or termination of protected industrial action.

17    Before Watson VP made the s 424 Order, there had been litigation in this Court in relation to the industrial action of the AWU in March 2015 to which we referred earlier. That litigation concerned, amongst other things, the question whether s 413(5) of the FW Act had the effect that, by reason of the industrial action by its members in contravention of the FWC orders of 6 March 2015, the AWU Notified Action could not be regarded as protected industrial action. The resolution of that question had turned on the proper construction of s 413(5) of the FW Act. Section 413 specifies the “common requirements” for industrial action to be protected industrial action for a proposed enterprise agreement. Subsection (5) provides:

Compliance with orders

(5)    The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:

(a)    if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b)    if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the employee and the bargaining representative of the employee.

18    The question was considered by Jessup J in Esso Australia Pty Ltd v Australian Workers’ Union [2015] FCA 758; (2015) 253 IR 304 (Esso v AWU). His Honour considered two alternative constructions of s 413(5). Did it mean that once a bargaining representative had contravened an order made by the FWC under s 418 (that is, an order that industrial action stop or not occur), no later industrial action organised by the bargaining representative which would otherwise fall within the definition of “employee claim action” in s 409(1) of the FW Act would be protected? That is, did s 413(5) mean that, by reason of its contravention of the FWC orders of 6 March 2015, any further industrial action the AWU organised in support of bargaining for the proposed enterprise agreements could not be protected industrial action? Alternatively, did s 413(5) refer only to industrial action which was in contravention of an order of the FWC in force at the time it was taken? That is to say, did s 413(5) cease to apply to industrial action of the AWU on the order of the FWC ceasing to be operative?

19    Although favouring the former view, Jessup J considered that the principle of comity obliged him to follow the decision of Barker J in Australian Mines and Metals Association Inc v Maritime Union Australia [2015] FCA 677; (2015) 251 IR 75 (AMMA v MUA). The consequence was that the industrial action of the AWU which had continued after the “stop period” specified in the FWC’s order of 6 March 2015 prohibiting industrial action did not engage s 413(5). Nor did the industrial action in which it had engaged for a short time in breach of the FWC’s orders during the stop period.

20    Appeals from the decisions of Barker J in AMMA v MUA and of Jessup J in Esso v AWU were heard by the same Full Court (Siopis, Buchanan and Bromberg JJ) and judgment in each was delivered on the same day, 25 May 2016, that is, before the decision and order of Watson VP of 7 December 2016. In Australian Mines and Metals Association Inc v Maritime Union of Australia [2016] FCAFC 71; (2016) 242 FCR 210 (AMMA v MUA (Full Court)), Buchanan J (with whom Siopis and Bromberg JJ agreed) endorsed the construction of Barker J in AMMA v MUA. Buchanan J held:

[94]    In my view, therefore, the effect of s 413(5) is that the identified persons must not have contravened any such orders when organising or engaging in the particular industrial action which is being assessed to see whether it is, or will be, protected (i.e. the orders must have ongoing significance with respect to, or have an operation in relation to, the industrial action under assessment). On the view which I take of s 413(5) it is concerned with orders which might bear directly upon organising or engaging in the industrial action under assessment for the purpose of ss 415, 418, 420 and 421. It is not concerned with matters more remote from that industrial action or with matters of history. …

(Emphasis in the original)

21    The same reasoning was applied in Esso Australia Pty Ltd v Australian Workers’ Union [2016] FCAFC 72; (2016) 245 FCR 39 (Esso v AWU (Full Court)).

22    Esso’s appeal to the High Court succeeded: Esso Australia Pty Ltd v Australian Workers’ Union [2017] HCA 54; (2017) 350 ALR 404 (Esso v AWU (HCA)). The majority (Kiefel CJ, Keane, Nettle and Edelman JJ) held that s 413(5) encompassed past contraventions of orders. That is, s 413(5) applies to a person who has at any time contravened an order relating to industrial action in relation to the enterprise agreement and this is so even though the order may have since ceased to operate. By the formal orders giving effect to the reasons of the majority, the High Court set aside the orders of the Full Court, and substituted an order setting aside the declarations made by Jessup J and, in their place, declared that:

By operation of s 413(5) of the Fair Work Act 2009 (Cth), the industrial action organised by the respondent in relation to a replacement enterprise agreement or agreements for the Esso Gippsland (Longford and Long Island Point) Enterprise Agreement 2011, the Esso Offshore Enterprise Agreement 2011 and the Esso Gippsland (Barry Beach Marine Terminal) Enterprise Agreement 2011, subsequent to the respondent’s contravention on 6 March 2015 of the order made by the Fair Work Commission on that date was not protected industrial action.

This meant that the declaration of the Federal Court was now that the industrial action organised by the AWU subsequent to its contravention on 6 March 2015 was not protected industrial action.

23    The High Court judgment was delivered on 6 December 2017, 12 months after the decision of Watson VP on 7 December 2016. It was the different view as to the proper construction of s 413(5) taken by the High Court which led Esso to apply for revocation of the s 424 Order.

24    Watson VP had been told of Esso’s application for special leave to appeal to the High Court against the decision in Esso v AWU (Full Court). However, consistently with the Full Court’s decision, Watson VP dealt with the Minister’s application under s 424 on the basis that the AWU Notified Action was protected action, as was that of the AMWU and CEPU. As indicated earlier, Watson VP acceded to the Minister’s application and made the s 424 Order.

25    Section 266 of the FW Act, to which we will refer in more detail shortly, provides for one of the consequences of the making of an order under s 424. After a further negotiating period of 21 days, it requires the Full Bench of the FWC to proceed “as quickly as possible” to make “an industrial action related workplace determination” (Workplace Determination). In doing so, the FWC exercises powers of conciliation and arbitration.

26    During 2017, and in accordance with s 266, the Full Bench of the FWC conducted substantial hearings involving the Unions and Esso in relation to the making of a Workplace Determination. However, it had not made the Workplace Determination by the time of delivery of the judgment in Esso v AWU (HCA).

The decision of the Full Bench

27    Following the judgment of the High Court, Esso applied to the FWC for an order under s 603 of the FW Act revoking the s 424 Order. That application was heard by the Full Bench on 21 March 2018 and the Full Bench delivered its decision, allowing the application, on 13 July 2018: Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) [2018] FWCFB 4120. The reasoning of the Full Bench may be summarised as follows:

(a)    section 603 of the FW Act vests in the FWC a discretionary power to vary or revoke one of its previous decisions, including an order under s 424, at [33], [60];

(b)    when making the s 424 Order, Watson VP had proceeded on the basis that the AWU Notified Action which was the subject of the Minister’s application was “protected” industrial action, as defined in s 413, at [58];

(c)    Watson VP had been correct to proceed on that basis because of the construction of s 413(5) adopted in AMMA v MUA (Full Court) and in Esso v AWU (Full Court), at [58];

(d)    the decision in Esso v AWU (HCA) 12 months later meant that, contrary to the basis on which Watson VP had proceeded, the AWU Notified Action was not protected action, at [59];

(e)    contrary to the submissions of Esso, this did not mean that the decision of Watson VP was affected by jurisdictional error, only an error within jurisdiction, at [58], [68];

(f)    the fact that it was now apparent that Watson VP had been wrong in concluding that the proposed action was protected action and that, in the event of a new application, no order under s 424 would be made, weighed in favour of an exercise of the s 603 discretion to revoke, at [68];

(g)    other aspects of the statutory scheme also pointed in favour of the exercise of the discretion. In particular, the prospect that a workplace determination may be made pursuant to s 266(1) when the statutory scheme contemplates that this should occur only on the termination of protected industrial action was pertinent, at [69], [73]; and

(h)    these factors outweighed matters pointing against an exercise of the discretion to revoke, namely, the fact that the s 424 Order was not affected by jurisdictional error ([68]), the prejudice resulting to the parties by reason of the wasted time and costs incurred in the Workplace Determination proceedings ([70]), and the prejudice to employees who had negotiated a new Longford and LIP Agreement at a time when they had not, by reason of the s 424 Order, been able to exert legitimate industrial pressure through a continuation of protected industrial action, at [71].

28    The Full Bench concluded, at [74]:

… [W]e cannot countenance an outcome which has the result that a workplace determination should be made on the basis of an order which, though not affected by jurisdictional error, nonetheless terminated industrial action in the AWU Notified Action, which according to the decision in Esso HCA was plainly not protected industrial action at the time the Order was made. Whether or not a workplace determination, made consequent on the Order, is susceptible to subsequent challenge is in our view beside the point. We are in a position to determine whether the foundation upon which a workplace determination would be built should be removed. We consider that the discretionary matters which we discuss[ed] above, which point in favour of the exercise of our discretion, outweigh those going the other way. For these reasons we therefore propose to revoke the Order pursuant to s 603(1) of the Act.

The power of the FWC to vary or revoke

29    The FW Act confers express powers on the FWC to vary or revoke one of its own decisions (s 603) and to correct or amend any obvious error, defect or irregularity in relation to a decision (s 602). These sections provide (relevantly):

602    Correcting obvious errors etc. in relation to the FWC’s decisions

(1)    The FWC may correct or amend any obvious error, defect or irregularity (whether in substance or form) in relation to a decision of the FWC (other than an error, defect or irregularity in a modern award or national minimum wage order).

Note 1:    If the FWC makes a decision to make an instrument, the FWC may correct etc. the instrument under this section (see subsection 598(2)).

Note 2:    The FWC corrects modern awards and national minimum wage orders under sections 160 and 296.

(2)    The FWC may correct or amend the error, defect or irregularity:

(a)    on its own initiative; or

(b)    on application.

603    Varying and revoking the FWC’s decisions

(1)    The FWC may vary or revoke a decision of the FWC that is made under this Act (other than a decision referred to in subsection (3)).

Note:    If the FWC makes a decision to make an instrument, the FWC may vary or revoke the instrument under this subsection (see subsection 598(2)).

(2)    The FWC may vary or revoke a decision under this section:

(a)    on its own initiative; or

(b)    on application by:

   (i)    a person who is affected by the decision; or

(ii)    if the kind of decision is prescribed by the regulations—a person prescribed by the regulations in relation to that kind of decision.

…

30    Section 603(3) specifies eight types of decisions which cannot be varied or revoked. None is applicable presently.

31    In addition, the FW Act provides in ss 604-608 means for appeal and review of decision of the FWC, and for the reference of questions of law for the opinion of the Federal Court, to which it will be necessary to return.

32    The power vested by s 603 in the FWC is of a broad discretionary kind. It is not, in terms, subject to any limitations, save that it may not be exercised with respect to decisions of the kind specified in subs (3). The breadth of the power was emphasised by the majority in Esso v AWU (HCA):

[49]    The AWU's contention that to construe s 413(5) in the manner contended for by Esso would be productive of capricious, unjust results is also unpersuasive. The Fair Work Commission has broad powers under s 603 of the Fair Work Act to vary or revoke orders, including power to vary or revoke orders retrospectively. The very considerable breadth of the power accorded by s 603 stands in contrast to the more limited power accorded by s 602 to correct “obvious errors”. Thus, although it has been said that courts should eschew the exercise of inherent power to vary an order nunc pro tunc where the variation would have the effect of altering the substantive rights of the parties, the statutory power accorded by s 603 is different. As was observed in George Hudson Ltd v Australian Timber Workers’ Union in relation to the retrospective operation of the Conciliation and Arbitration Act, the provisions of that Act were not to be read down as if confined to a prospective operation at the expense of the “great public policy” which the Act embodied, namely, that of encouraging and maintaining “industrial peace in the Commonwealth”. So also, in Australian Tramway and Motor Omnibus Employees Association v Commissioner for Road Transport and Tramways (NSW), the Court held that the Conciliation Commissioner had power to vary the terms of an award that had expired (but continued in force by operation of statute). As Murphy J stated in R v Gough; Ex parte Key Meats Pty Ltd, it was clear that the Australian Conciliation and Arbitration Commission was entitled to vary or set aside an award provision in accordance with the Act even if its new provision operated “locally, temporarily, prospectively or retrospectively, provided the provision would have been within the scope or ambit of the original dispute”. The same considerations informed this Court's decision in Re Dingjan; Ex parte Wagner that the power to set aside or vary the terms of a harsh or unfair contract under ss 127A and 127B of the Industrial Relations Act could be exercised in relation to a contract that had been discharged. And the same is surely true of the Fair Work Commission's statutory power under s 603 of the Fair Work Act to vary or revoke orders relating to a proposed agreement or matters arising during the bargaining for such an agreement. To adopt and adapt the language of Kirby J in Emanuele v Australian Securities Commission, it may be inferred that Parliament contemplated that oversight and inadvertence would sometimes occur for which the Fair Work Commission's powers of variation and revocation under s 603 would be available.

(Citations omitted and emphasis added)

33    It is also to be remembered that s 603 is applicable to the whole of the broad range of decisions which may be made by the FWC, other than those specified in s 603(3). Any doubt in this respect is removed by s 598(1) of the FW Act which provides that a reference in Pt 5-1 (which includes ss 602-604) to a “decision” of the FWC includes “any” decision of the FWC however described.

34    This circumstance together with provisions in the FW Act concerning the establishment of the FWC and the discharge of its functions suggest that the power in s 603(1) should not be narrowly confined. The functions of the FWC include “promoting cooperative and productive workplace relations and preventing disputes” (s 576(2)); the FWC is to perform its functions and exercise its powers (including the powers in s 603) in a manner which is fair and just and which is quick, informal and without unnecessary technicality (s 577); in performing its functions and exercising its powers (which would include s 603), the FWC must take into account equity, good conscience and the merits of the matter (s 578(b)), and many of the FWC’s powers may be exercised without it having assistance from legal representatives or paid agents of the parties (s 596(1)). In our view, this is consistent with a statutory intention that s 603 should have a broad flexible operation.

35    It is also to be remembered that the analogous power of courts to reopen their judgments and orders before they are passed and entered may be exercised when a court is satisfied, amongst a number of possibilities, that it has proceeded on a misapprehension of the facts or the law: De L v Director-General, New South Wales Department of Community Services (No 2) [1997] HCA 14; (1997) 190 CLR 207 at 215.

36    The history of s 603 and its antecedents, to which the majority in Esso v AWU (HCA) adverted in paragraph [49] of their reasons set out above, supports s 603 being interpreted broadly.

37    As to the antecedents of s 603 of the FW Act, s 38 of the Commonwealth Conciliation and Arbitration Act 1904 (Cth), as enacted, provided:

38.    The [Commonwealth Court of Conciliation and Arbitration] shall, as regards every industrial dispute of which it has cognizance, have power –

…

(o)    to vary its orders and awards and to re-open any question;

38    In R v Commonwealth Court of Conciliation and Arbitration; Ex parte North Melbourne Electric Tramways and Lighting Co Ltd [1920] HCA 82; (1920) 29 CLR 106 the High Court held that the power in s 38(o) had been validly invoked to vary an agreement to provide for higher rates of pay, and with retrospective effect. In rejecting an argument that s 38(o) did not authorise the variation of the agreement retrospectively, Knox CJ, Gavan Duffy and Starke JJ stated at 110:

… the power to vary is given by sec. 38(o) in terms not restricted by any qualification or condition, and we can see nothing to justify the insertion, by way of construction, of a limitation to the effect that no such variation shall have any effect before the date of the order by which it is made.

39    Likewise, in Australian Tramway and Motor Omnibus Employees Association v Commissioner for Road Transport and Tramways (NSW) [1935] HCA 77; (1935) 54 CLR 470, the High Court held that the power in s 28(3) of the Commonwealth Conciliation and Arbitration Act to vary an award after the expiration of its fixed period was to be construed as permitting a variation to take away rights accruing to employees under an existing award.

Ground 1 – failure to consider or apply a material consideration

40    By the first ground, the Minister contended that the Full Bench had been in error in deciding to revoke the s 424 Order because, in light of the decision of the High Court, it was “wrong”. The Minister submitted that the Full Bench had thereby identified the wrong issue, asked itself the wrong question or ignored relevant material in a matter affecting the exercise of its jurisdiction under s 603 by failing to consider or apply a material consideration. This was that the orders in Esso v AWU (Full Court), being orders made by a superior Court, were valid until set aside.

41    The Minister is correct in submitting that the orders of a superior Court of record are valid until set aside, even if the orders are made in excess of jurisdiction: State of New South Wales v Kable [2013] HCA 26, (2013) 252 CLR 118 at [32]-[33], [38]-[39], [41]; Re Macks; Ex parte Saint [2000] HCA 62, (2000) 204 CLR 158 at [18]-[23] (Gleeson CJ), at [43], [56]-[57] (Gaudron J), at [217]-[218] (Gummow J), at [257] (Kirby J), at [344] (Hayne and Callinan JJ).

42    The submission of the Minister was made in various ways. First, that the Full Bench had not applied the principle stated in Kable; secondly, that the exercise of the discretion under s 603 had proceeded on a misunderstanding of the law; and thirdly, that the exercise of the discretion under s 603 could not “subvert the doctrine of judicial power”.

43    Strictly speaking, the principle that an order of a superior Court is to be treated as valid and binding until set aside is not applicable in the present context. The occasion for Watson VP to apply, let alone consider, the order of the Full Court did not arise. The order of the Full Court made on 25 May 2016 containing a new declaration was (relevantly) as follows:

4.    By operation of s 413(5) of the FW Act, from 6.01 pm on 6 March 2015 until 6.00 pm on 20 March 2015, all industrial action organised by the respondent and taken by the Esso employees in support of claims in relation to bargaining for a replacement enterprise agreement or enterprises agreements for the Esso Gippsland (Barry Beach Marine Terminal) Enterprise Agreement 2011, the Esso Gippsland (Longford and Long Island Point) Enterprise Agreement 2011 and the Esso Offshore Enterprise Agreement 2011 was unprotected industrial action.

44    As is apparent, the Full Court’s declaration concerned the AWU’s conduct for a two week period in March 2015. The Vice-President was concerned instead with proposed conduct in December 2016.

45    However, Watson VP was bound to follow the ratio decidendi of the Full Court’s reasons: Federal Commissioner of Taxation v Indooroopilly Children Services (Qld) Pty Ltd [2007] FCAFC 16, (2007) 158 FCR 325 at [3]-[6], [45]-[48]; Commissioner of Taxation v Salenger (1988) 19 FCR 378 at 387-8. As already noted, Watson VP made the s 424 Order on the basis that the Notified Action by each of the Unions, including that of the AWU, would be protected industrial action. Although Watson VP was correct to apply the construction of s 413(5) adopted in Esso v AWU (Full Court) at the time he did, the decision and order in Esso v AWU (HCA) means that that construction is now to be regarded as wrong. Furthermore, s 413(5) is to be regarded as having the construction found by the High Court from the time it was first enacted, because that construction does not operate only with prospective effect: Ha v State of New South Wales [1997] HCA 34; (1997) 189 CLR 465 at 503-4, 515. Section 413(5) has always had the meaning found by the High Court.

46    The Full Bench considered that Watson VP was wrong in his conclusion that the AWU Notified Action was protected industrial action because (at [68]), “it is now patently clear that the AWU Notified Action was not protected industrial action”, and that “[f]aced with an application under s 424 now made in relation to the same action, the Commission could not properly form the requisite satisfaction so as to enliven the jurisdiction under s 424”. It was correct to so hold. It was that changed circumstance, in combination with the other factors that the Full Bench identified, that informed the Full Bench’s decision to exercise the discretionary power under s 603 of the FW Act to revoke the order of Watson VP. In doing so, the Full Bench was not looking to the past but to how the FWC should proceed thereafter.

47    Accordingly, there was no error in the Full Bench proceeding on the basis that Watson VP had been wrong in concluding that the AWU Notified Action was protected action, even though at the time of making the s 424 Order, and having regard to binding authorities then existing, Watson VP had made no error in accepting that the proposed action was protected industrial action.

48    Contrary to the submissions of the Minister and of the Unions, the Full Bench decision did not involve any undermining of the principle stated in Kable and the exercise of the s 603 discretion was not made on a misunderstanding of the law.

49    Accordingly, Ground 1 fails.

Ground 2 – misapprehension as to the effect of s 266 of the FW Act

50    By Ground 2, the Minister contended that the Full Bench committed jurisdictional error because it had considered that a workplace determination under s 266 of the FW Act should not be made following from the taking of unprotected industrial action. The Minister contended that each of the conditions in s 266(1)(a), (b) and (c) had been satisfied, and that the authority and duty of the FWC to make a determination had thus been engaged.

51    As noted earlier, s 266 provides for one of the consequences of the termination of a period of protected industrial action. It provides (relevantly):

266 When the FWC must make an industrial action related workplace determination

Industrial action related workplace determination

(1)    If:

(a)    a termination of industrial action instrument has been made in relation to a proposed enterprise agreement; and

    (b)    the post-industrial action negotiating period ends; and

(c)    the bargaining representatives for the agreement have not settled all of the matters that were at issue during bargaining for the agreement;

the FWC must make a determination (an industrial action related workplace determination) as quickly as possible after the end of that period.

Note:    The FWC must be constituted by a Full Bench to make an industrial action related workplace determination (see subsection 616(4)).

Termination of industrial action instrument

(2)    A termination of industrial action instrument in relation to a proposed enterprise agreement is:

(a)    an order under section 423 or 424 terminating protected industrial action for the agreement; or

(b)    a declaration under section 431 terminating protected industrial action for the agreement.

Post-industrial action negotiating period

(3)    The post-industrial action negotiating period is the period that:

(a)    starts on the day on which the termination of industrial action instrument is made; and

   (b)    ends:

   (i)    21 days after that day; or

(ii)    if the FWC extends that period under subsection (4)—42 days after that day.

…

52    The Minister submitted that s 266(1) is not expressly or impliedly conditioned upon a person having engaged in, or having proposed to engage in, protected industrial action. Rather, s 266(1) is conditioned upon the making of a termination of industrial action instrument; that is, it is conditioned upon the fact of an order having been made under s 424. The Minister submitted that it is the fact of that order (and the fact, therefore, of termination) which, if the other conditions in s 266(1)(b) and (c) are met, triggers the operation of s 266.

53    In considering Ground 2, it is necessary to refer to what the Full Bench said in its reasons for its decision in relation to the operation of s 266. At paragraphs [68] to [74] of its reasons the Full Bench identified and evaluated the matters it considered relevant to the exercise of the discretionary power under s 603 to revoke the order of Watson VP. At paragraph [73] the Full Bench stated:

… As we have already indicated, the taking of unprotected industrial action should not, under the legislative scheme, result in the making of a workplace determination.

54    The earlier indication that is referred in this sentence is in paragraph [69] of the reasons of the Full Bench, in which reference is made to the statutory scheme as a matter relevant to assessing whether the order of Watson VP should be revoked –

Thirdly there is the statutory scheme. The power in s 424 is exercisable in respect of a particular species of industrial action, namely protected industrial action. An order under s 424 is not available in respect of unprotected industrial action. Mechanisms for stopping unprotected industrial action are found in s 418. The consequence of an order terminating protected industrial action are those set out earlier and in particular the prospect that a workplace determination will be made. …

…The taking of unprotected industrial action in support of an enterprise agreement is not given any legitimacy under the Act. …

… It does not appear to us that the statutory scheme should be understood as having intended unprotected industrial action to result in the making of a workplace determination. It seems to us therefore that this factor also weighs in favour of the exercise of our discretion.

55    We do not consider that by these observations the Full Bench made any error of the type alleged by the Minister. The Full Bench was doing no more than describing material features of the statutory scheme. The Full Bench’s description of the scheme is supported by the text of s 266(1)(a) and (2) of the FW Act. The requirement under s 266(1) to make a determination is engaged by the existence (inter alia) of a “termination of industrial action instrument”, which in turn is defined by s 266(2) to be an order of the FWC under s 423 or 424, or a declaration by the Minister under s 431 of the FW Act. The only orders contemplated by s 423(1) and s 424(1) are orders suspending or terminating protected industrial action for a proposed enterprise agreement, and the only declaration of the Minister contemplated by s 431(1) is a declaration terminating protected industrial action for a proposed enterprise agreement. Sections 423, 424 and 431 have no application in respect of unprotected industrial action.

56    It may be accepted, as the Minister submitted, that the requirement under s 266 to make the determination is conditioned upon the existence of a “termination of industrial action instrument” rather than protected industrial action itself. However, sections 423, 424 and 431 which are referred to in the s 266(2) definition, are engaged only in respect of protected industrial action.

57    Accordingly, contrary to the Minister’s submission, s 266(1) is necessarily conditioned upon a person having engaged in protected industrial action in respect of which an order or declaration has been made terminating that action. There was no error by the Full Bench in observing that the statutory scheme did not contemplate that unprotected industrial action should result in the making of a workplace determination under s 266, and in taking that consideration into account in deciding in the exercise of its discretion to revoke the order of Watson VP.

58    Accordingly, Ground 2 fails.

Ground 3 – s 603 of the FW Act may not be deployed for the correction of error

59    The Minister’s third contention was that the Full Bench had misunderstood the limits of the power of revocation in s 603 of the FW Act in applying it to correct the error which it perceived in the s 424 Order. The Minister submitted that s 603 was not available for this purpose because correction of error is to be achieved by an appeal under s 604 of the FW Act.

60    There is at least some tension between this ground, and the first ground by which the Minister contended that the Full Bench was in error in finding that the s 424 Order was “wrong” in light of Esso v AWU (HCA). However, counsel submitted during the course of argument that, while the Minister’s position was that there was no error by Watson VP in making the s 424 Order, if Esso wished to contend that there was error, then an appeal under s 604 was the procedure by which it should have sought the correction of the error.

61    The Minister submitted that ss 602, 603 and 604 of the FW Act should be read together, and that each should be seen to have a discreet purpose. The Minister submitted that s 602 is an emanation of the “slip rule” and that s 603 may be invoked in the event of changed circumstances, but not in the event of a change in the law, or to correct error of the type found to exist in the present case.

62    The Minister submitted that it is s 604 which, by providing for an appeal by way of rehearing, provides the means for the correction of error. The Minister referred in this respect to Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47, (2000) 203 CLR 194 (Coal and Allied Operations v AIRC) at 204 [17] in which Gleeson CJ, Gaudron and Hayne JJ referred to the powers under s 45(7) of the former Workplace Relations Act 1996 (Cth) being exercisable only in the event of error by the primary decision-maker.

63    We note that sections 602 and 603 are within Part 5-1, Division 3, Subdivision D of the FW Act which is titled, “Decisions of the FWC”, whereas s 604 is within Subdivision E which is titled, “Appeals, reviews and referring questions of law”. Headings to the subdivisions are deemed to be part of the Act: Acts Interpretation Act 1901 (Cth), s 13(1) (as in force on 25 June 2009 – FW Act, s 40A).

64    Section 604 of the FW as in force at the time of the Full Bench decision provides:

604 Appeal of decisions

(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 under the Registered Organisations Act by:

(i)    the General Manager (including a delegate of the General Manager); or

(ii)    the Registered Organisations Commissioner (including a delegate of the Commissioner);

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.

65    Under the Fair Work Commission Rules 2013 (Cth), r 56(2), a notice of appeal under s 604 of the FW Act must be lodged within 21 days of the decision or order, or within such further time allowed by the FWC on application by the appellant.

66    The Minister submitted, correctly, that s 603 is to be construed in the context of the FW Act as a whole: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3, (2018) 262 CLR 157 at [103] (Keane, Nettle and Gordon JJ). Counsel for the Unions made a like submission by reference to the statement of French CJ in Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 at [23]:

…

Every statutory discretion is confined by the subject matter, scope and purpose of the legislation under which it is conferred. Where the discretion is conferred on a judicial or administrative officer without definition of the grounds upon which it is to be exercised then:

“the real object of the legislature in such cases is to leave scope for the judicial or other officer who is investigating the facts and considering the general purpose of the enactment to give effect to his view of the justice of the case.”

That view, however, must be reached by a process of reasoning.

(Citations omitted)

67    This meant, the Minister submitted, that s 603 should not be construed so as to “achieve the precise same effect as an appeal under s 604 but free from the principles of law that have been established about the conditions for and limits of an appeal”. In this respect, the Minister sought to invoke the Anthony Hordern principle (Anthony Hordern and Sons Limited v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9, (1932) 47 CLR 1), that is, the principle, at 7, that:

When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power.

68    The Minister further submitted that a determination under s 266 of the FW Act is a separate process. First, a determination under s 266 can be made only by a Full Bench: s 616(4). Second, no appeal lies under s 604 from a decision of a Full Bench: s 604(1)(a). Further, a determination under s 266 is excluded from the power to vary or revoke by s 603(3)(c). The Minister submitted that the process of determination under s 266 was therefore to be regarded as separate, because the determination cannot be the subject of an appeal, and cannot be revoked, and by the terms of s 266(1) must be made as quickly as possible. The Minister submitted that once the process of determination commenced, the order made under s 424 cannot be revoked under s 603(1). Counsel for the Unions drew attention to the inconvenience which could be occasioned in a particular case if s 603 is construed so as to encompass the revocation of an order made pursuant to s 424.

69    In our opinion, there are four reasons why the submissions advanced in support of the third ground should not be accepted.

70    First, the Full Bench did not in terms invoke s 603 for the purpose of correcting error. It considered only that a persuasive consideration in the exercise of the s 603 discretion was that it was now clear that the AWU Notified Action was not protected industrial action, and that it should not allow the continuation of a process by which a workplace determination would be made pursuant to s 266 on the basis of an order made on an erroneous understanding of the effect of s 413(5).

71    Secondly, the Anthony Hordern principle does not preclude altogether the same subject matter being dealt with, in different ways in the one statute. As was observed by Gummow and Hayne JJ in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 228 CLR 566 at [59], the cases applying the Anthony Hordern principle indicate that it must be possible to say that the statute in question “confers only one power to take the relevant action, necessitating the confinement of the generality of another apparently applicable power by reference to the restrictions in the former power”. Their Honours observed that, in all the cases that they had considered, “the ambit of the restricted power was ostensibly wholly within the ambit of a power which itself was not expressly subject to restrictions”. See also Gleeson CJ at [2] and Heydon and Crennan JJ at [162]-[168]; Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32, (2011) 244 CLR 144 at [50] (French CJ).

72    Plainly, the FW Act does contemplate that the FWC should have both the power to vary and revoke pursuant to s 603, and the power to determine matters on appeal pursuant to s 604. In addition, the President of the FWC has power to refer questions of law for the opinion of the Federal Court under s 608(1) and the FWC has a consequential obligation under s 608(5) to vary a decision so as to make it consistent with the opinion of the Court. In these circumstances, there is no discernible basis upon which it could be concluded that the correction of error is solely within the preserve of s 604. On the contrary, it would be inconsistent with the relatively broad powers available under s 603 for the correction of error somehow to be carved out from its purview. The fact that there might be a degree of overlap between the provisions so that there might be scope to deploy each to achieve the same practical result does not alter the position: Nystrom at [2] (Gleeson CJ); R v Gee [2003] HCA 12, (2003) 212 CLR 230 at [13] (Gleeson CJ).

73    Thirdly, the Minister’s submission is inconsistent with the broad nature of the power contained in s 603 as indicated by the text of the provision, and as elaborated by the majority of the High Court in Esso v AWU (HCA) in the passage set out earlier and in the other authorities concerning it and its cognates. The discretionary power in s 603(1) to vary or revoke a decision is not cast in terms of a power to be exercised only in particular stated events or circumstances and, apart from the decisions that are excluded by s 603(3), the power is not subject to any other express limitations. As was said in the oft-cited passage from Owners of “Shin Kobe Maru” v Empire Shipping Co Inc [1994] HCA 54; (1994) 181 CLR 404 at 421:

It is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words.

74    In our view, the broad discretionary power conferred on the FWC by s 603(1) is not subject to any implied limitation of the type alleged by the Minister. There may of course be circumstances in which the discretionary power under s 603 properly should not be exercised because the applicant for the order is a person who is aggrieved by the decision and should pursue an appeal under s 604. However, the fact that one can contemplate the existence of a range of potential circumstances in which the discretionary power under s 603 might properly not be exercised does not warrant the implication of arbitrary limits on the power itself: FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268 at 283-4 (Wilson J).

75    Fourthly, it follows that we reject the Minister’s submission that, once the process of determination under s 266 of the FW Act has commenced, the s 424 Order cannot be revoked under s 603(1). There is no textual, contextual, or other support for the implication of such a limitation. On the contrary s 603(3), which in some detail identifies expressly those decisions that are excluded from s 603(1), does not refer to a decision under s 424: see Asmar v Fair Work Commission [2015] FCA 16; (2015) 247 IR 31 at [68] (Beach J).

76    Accordingly, Ground 3 fails.

Ground 5 – denial of procedural fairness

77    It is convenient to deal with Ground 5 before returning to Ground 4. The Minister contended that the Full Bench had denied her procedural fairness in two respects, and had thereby committed jurisdictional error.

78    First, the Minister submitted that the Full Bench had not considered her submissions about the status of the Full Court’s orders, namely, the submission that those orders were valid until set aside, and not void ab initio, with the consequence that the s 424 Order, being consistent with the orders of the Full Bench, could not be said to be wrong. Secondly, the Minister submitted that the Full Bench had not considered her submissions that the power vested in the Commission by s 266, and the duty to make a workplace determination as soon possible was predicated upon the historical fact that an order had been made under s 424.

79    In support of its application to the FWC for revocation of the s 424 Order, Esso had advanced a submission with the following elements:

(a)    a requirement for the making of a s 424 order is the objective fact that the industrial action in question be protected industrial action;

(b)    following the decision of the High Court, the AWU Notified Action was not protected action; and

(c)    accordingly, the s 424 Order was made when an essential ground for its making did not exist, and it was thereby affected by jurisdictional error.

80    Esso submitted in the FWC, alternatively, that if s 424 is understood as requiring the FWC to make an order on it being satisfied that the industrial action in question was protected action, Watson VP had, in forming that state of mind, proceeded on a misconception about the effect of s 413(5). That was so even though Watson VP had applied, as he was required to do, the reasons in Esso v AWU (Full Court). This too was jurisdictional error: Coal and Allied Operations v AIRC at [31]. This meant that the s 424 Order should be treated as though it had never been made: Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 204 CLR 597 at [51].

81    In the FWC, the Minister had advanced four matters in response:

(a)    in Australian and International Pilots Association v Fair Work Australia [2012] FCAFC 65; (2012) 202 FCR 200 (AIPA v FWA), the majority (Buchanan and Perram JJ) had held that s 424 does not require the existence of protected industrial action as an objective fact, only that the FWC be satisfied that the industrial action was protected industrial action;

(b)    the AWU had in any event been proposing to engage in industrial action which, in light of the decision in Esso v AWU (Full Court), was protected industrial action;

(c)    in accordance with the authorities to which reference has been made earlier, the decision and orders in Esso v AWU (Full Court) were to be regarded as valid until set aside, and accordingly had been binding upon Watson VP at 7 December 2016; and

(d)    if Watson VP had made an error of law, it was an error within jurisdiction, not amounting to jurisdictional error. No error of law amounting to jurisdictional error is committed by the FWC relying on a binding decision of this Court.

82    It is not necessary for present purposes to refer to the reply and rejoinder submissions of Esso and the Minister respectively.

83    The Minister submitted that the Full Bench had not addressed her submission concerning the significance of orders of a superior court being valid until set aside. She submitted that this constituted a denial of procedural fairness of the kind discussed in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 197 ALR 389 at [24], namely, a failure “to respond to a substantial, clearly articulated argument relying upon established facts”. See also NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263; (2004) 144 FCR 1 at [55].

84    The Full Bench addressed at some length the submission of Esso that s 424 required the existence of protected industrial action as an objective fact, at [41]-[52]. Relying on the decision in AIPA v FWA, the Full Bench rejected Esso’s submission. Further, the Full Bench rejected Esso’s submission that Watson VP had not given consideration to the effect of s 413(5). It noted that Esso had told Watson VP that, given the Full Court judgment in Esso v AWU (Full Court), the FWC could be satisfied that there was protected industrial action, while at the same time telling him that that position could change if its application for special leave and a subsequent appeal to the High Court succeeded, at [57]. That is to say, the Full Bench rejected the contentions of Esso to which the Minister’s submissions were responding.

85    That being so, there was no denial of procedural fairness to the Minister in the respect alleged.

86    The Minister’s second complaint under this ground was that the Full Bench had denied her procedural fairness by not considering her submission that s 266 depended only upon the historical fact of an order under s 424 having been made. In its written submissions in support of its application to the Full Bench, Esso had, in addition to seeking an order that the s 424 Order be revoked, sought an order that the Commission cease dealing with the workplace determination proceeding. In response to Esso’s application for that order, the Minister submitted to the Full Bench that, even if the s 424 Order was invalid and revoked, it did not follow that the FWC did not have jurisdiction to make the determination in the workplace determination proceeding because s 266 looks to whether there is, in fact, “a termination of industrial action instrument”, and not to whether any such instrument is valid or invalid. The Minister submitted that the fact that the s 424 Order had been made was enough to support the jurisdiction of the FWC under s 266.

87    The Minister is correct in submitting that the Full Bench did not advert, at least expressly, to this submission. However, it is evident that the Full Bench necessarily rejected the submission. One of the primary discretionary considerations that informed the Full Bench’s decision was that it could not countenance a determination under s 266 which, according to the decision in Esso v AWU (HCA), was premised upon an order under s 424 that terminated industrial action that plainly was not protected industrial action. In relation to Ground 2, we have found that there was no error by the Full Bench in that approach. It is tolerably clear from the reasons of the Full Bench, and in particular [74], that the Full Bench took the view that a revocation of the s 424 Order would remove the foundation for the pending workplace determination under s 266 and that it thereby rejected the Minister’s submission. This is confirmed by the terms of the order made by the Full Bench, by which the s 424 Order was “revoked with effect on and from the date on which it was made (7 December 2016)”.

88    Accordingly, Ground 5 therefore fails.

Ground 4 – the Full Bench decision was legally unreasonable

89    By the fourth ground of review, the Minister contended that the decision of the Full Bench was legally unreasonable. There were seven sub-grounds advanced by the Minister in support of this contention which we set out largely verbatim -

(a)    the Full Bench rejected the sole basis propounded by Esso for revocation of the s 424 Order, namely that “the logical consequence of the HCA Decision is that the s 424 Order is invalid” because it was “affected by jurisdictional error” …;

(b)    the s 424 Order was consistent with the law as it stood at the time, as reflected in the reasons of the Full Court and as embodied as between Esso and the AWU in the orders of the Full Court;

(c)    the onshore employees agreed to a replacement for the Onshore Agreement after the s 424 Order was made, and can be inferred to have relied upon it;

(d)    the workplace determination proceedings were well advanced;

(e)    the revocation adversely affects the interests of the CEPU and the AMWU, whose members complied with the s 424 Order by ceasing their protected industrial action;

(f)    revocation of the s 424 Order so as to pull the rug out from under the workplace determination proceeding under s 266 is inconsistent with the statutory regime, which required that determination to be made as soon as possible; and

(g)    revocation of the s 424 Order on the basis that the law had changed, and/or that an error was made at first instance, subverts the regime of the FW Act, which already makes provision for the correction of error through appeals with permission of the FWC pursuant to s 604.

90    The decision of the Full Bench to revoke the s 424 Order in the exercise of power under s 603(1) of the FW Act was a discretionary decision in the sense identified in Coal and Allied Operations v AIRC at [19], namely, that it was a decision in which no single consideration and no combination of considerations was necessarily determinative of the result. The Full Bench had some latitude as to the choice of the decision to be made. However, although the Full Bench had some latitude, the discretionary power had to be exercised bona fide, and within the objects and purposes for which the power was conferred: Shrimpton v Commonwealth [1945] HCA 4, (1945) 69 CLR 613 at 620; Water Conservation and Irrigation Commission (NSW) v Browning [1947] HCA 21, (1947) 74 CLR 492 at 505; Klein v Domus Pty Ltd [1963] HCA 54, (1963) 109 CLR 467 at 473. And because there is no contrary indication in the FW Act, the legislature is taken to have intended that the power under s 603(1) should be exercised reasonably: Li at [24], [63], [88]; Minister for Immigration and Border Protection v SZVFW [2018] HCA 30, (2018) 357 ALR 408 at [4], [53], [80], [89], [131], [134]. But within the bounds of the statute, which are shaped by its terms, scope, purpose, and objects, lay an area of discretion for the FWC to exercise: Klein at 473; Li at [28], [66]; SZVFW at [11]-[12], [97], [144].

91    The Minister’s contentions under Ground 4 require that attention be directed to the terms, scope and purpose of s 603(1), within the context of the FW Act as a whole, because the question whether the Full Bench’s exercise of power under s 603(1) was unreasonable amounts to determining whether the statutory power was abused, that is, whether the decision was beyond power: Li at [67]; SZVFW at [54], [58], [80].

92    One of the stated objects in s 3 of the FW Act is to provide a balanced framework for cooperative and productive workplace relations which promotes national economic prosperity and social inclusion for all Australians by:

(f)    achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;

93    Part 2-4 of Ch 2 of the FW Act contains provisions concerning the negotiation and making of enterprise agreements. One of the consequences of the making of an enterprise agreement is that industrial action during its currency until its nominal expiry date is prohibited (s 417(1)). However, once the nominal term of an enterprise agreement has expired, industrial action is not prohibited. Further, the FW Act provides that some industrial action will be “protected industrial action” (s 413). Subject to other conditions being met, industrial action will be protected industrial action if the persons engaging in it are genuinely trying to reach agreement on an enterprise agreement. Section 415(1) provides that no action lies under any law (written or unwritten) in relation to industrial action which is protected industrial action unless it has particular characteristics which are not presently relevant.

94    Section 408(a) provides (relevantly) that industrial action will be protected industrial action if it is “employee claim action” for a proposed enterprise agreement satisfying the requirements of s 409 and if it meets the “common requirements” in s 413.

95    Section 414 contains requirements for notice to be given of employee claim action. Division 8 in Pt 3-3 of Ch 3 provides for the conduct of a ballot by which a bargaining representative may determine whether employees wish to engage in particular protected industrial action for the purposes on a proposed enterprise agreement.

96    The powers of the FWC with respect to industrial action differ, according to whether the industrial action is protected or unprotected. In the case of industrial action that is not, or would not be, protected industrial action, the FWC must make an order that it stop, not occur or not be organised (as the case may be) for a period (the stop period) specified in the order (s 418). However, in the case of protected industrial action, the FWC may make an order suspending or terminating protected industrial action if satisfied that it is causing or is threatening to cause significant economic harm (s 423(1)), and must make an order suspending or terminating protected industrial action if satisfied that the industrial action has threatened, is threatening or would threaten to endanger the life, the personal safety or health, or the welfare, of the population or part of it or to cause significant damage to the Australian economy or an important part of it (s 424(1)).

97    The termination of a period of protected action may lead to a determination by the FWC itself of the matters in dispute. Section 266, quoted earlier, requires the FWC to make an industrial action related workplace determination as quickly as possible after the lapse of 21 days from the date of the termination of the period of protected action. Otherwise, the FWC has limited powers by which to arbitrate the disputed content of an enterprise agreement. In essence, those powers arise only when one or other party to the negotiation process commits a serious breach of its obligations with respect to the process (Division 4 of Pt 2-5 of Ch 2).

98    As we have identified in our reasons for rejecting Ground 2, that context supports the correctness of the view adopted by the Full Bench, namely, that the statutory scheme contemplates a workplace determination being made under s 266 only following the termination of protected industrial action.

99    We also note another aspect of the statutory scheme. On the revocation of an order made pursuant to s 424, the entitlement of employees to engage again in protected industrial action (subject to giving proper notice pursuant to s 414 of the FW Act) is revived. This means that since the decision of the Full Bench, it has been open to the AMWU and the CEPU (but not the AWU) to engage in further protected industrial action in support of the negotiation of a replacement enterprise agreement.

100    We have referred already to the breadth of the power in s 603(1), as emphasised by the majority in Esso v AWU (HCA). There is one further matter which we mention by way of context in order to evaluate the legal reasonableness of the Full Bench’s decision. Section 608 of the FW Act, to which we have already referred, empowers the President of the FWC to refer a question of law arising in a matter before the FWC for the opinion of the Federal Court. Sub-sections 608(3)-(5) then provide:

(3)    The FWC may make a decision in relation to the matter even if the Federal Court is determining the question of law, except if the question is whether the FWC may exercise powers in relation to the matter.

(4)    Once the Federal Court has determined the question, the FWC may only make a decision in relation to the matter that is not inconsistent with the opinion of the Federal Court (if the FWC has not already done so).

(5)    However, if the FWC has made a decision in relation to the matter that is inconsistent with the opinion of the Federal Court, the FWC must vary the decision in such a way as to make it consistent with the opinion of the Federal Court.

101    Sub-section 608(5) therefore makes express provision, in the circumstances contemplated by s 608, mandating that the FWC vary any decision that is inconsistent with the opinion of the Federal Court given in a matter, so as to make the FWC decision consistent with the opinion. In a practical sense, the same result occurred here. At the time Watson VP made the s 424 Order, Esso had foreshadowed its application for special leave to appeal to the High Court from the decision in Esso v AWU (Full Court). Upon the determination of the appeal in Esso v AWU (HCA) the Full Bench exercised the broad power in s 603(1) to revoke the s 424 Order so that the negotiation and making of the proposed enterprise agreement would be undertaken consistently with the declaration of the High Court. That declaration had the consequence that the proposed industrial action which was the premise for the s 424 Order was not protected industrial action.

102    We now turn to consider the sub-grounds advanced by the Minister, and the submissions in support. Some of the sub-grounds, such as (a) and (b), which we have set out above, suggest unreasonableness amounting to specific error: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 229; Li at [69], [72]. On the other hand, sub-grounds (c) to (g) suggest that the result was legally unreasonable: Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26, (1949) 78 CLR 353 at 360; Li at [76], [85]; SZVFW at [83].

103    The Minister advanced five submissions in support of Ground 4. Each of these submissions involved a critique of the reasoning process adopted by the Full Bench, rather than being based on the reasonableness of the outcome. That is to say, the Minister’s submissions (and those of the Unions) concentrated on the Full Bench’s reasoning process rather than on the outcome resulting from its exercise of the s 603 discretion: cf Minister for Immigration and Border Protection v Singh [2014] FCAFC 1; (2014) 231 FCR 437 at [47].

First submission

104    The Minister submitted that sole basis propounded by Esso for revocation had been that the s 424 Order was void ab initio because it was affected by jurisdictional error, and that argument had been rejected by the Full Bench. That being so, and because it was for Esso to persuade the Full Bench to exercise its discretion in its favour, the Full Bench ought not to have revoked the order.

105    We do not accept the Minister’s first submission. The application by Esso to the Full Bench was, relevantly, that the s 424 Order be revoked. That was the ultimate matter in respect of which the Full Bench had to be persuaded. Section 603(2) authorises the FWC to vary or revoke a decision on its own initiative, or upon application. Further, s 599 of the FW Act provides:

599    FWC not required to decide an application in terms applied for

Except as provided by this Act, the FWC is not required to make a decision in relation to an application in the terms applied for

106    The premise of the Minister’s first submission, namely, that in order to revoke the s 424 Order, the Full Bench had to accept the submissions in the terms presented by Esso and therefore to accept that there was jurisdictional error before it could set aside the s 424 Order is not supported by the terms of the legislation.

107    Further, within Esso’s submission to the Full Bench that there had been jurisdictional error in making the s 424 Order was necessarily a submission that the effect of the decision in Esso v AWU (HCA) was that the AWU Notified Action that was the foundation for the s 424 Order was not protected industrial action. The Full Bench acted on that submission in forming the view (at [74]) that it would not countenance a workplace determination being made under s 266 on the basis of an order for the termination of industrial action which was plainly not protected industrial action. That was one of the primary bases on which the Full Bench decided to revoke the s 424 Order.

Second submission

108    The Minister submitted that the Full Bench ignored the contentions put to it, and the significance of the principle that orders of a superior Court are valid until set aside. In making this submission to the Full Bench the Minister relied upon Kable at [32]. We have addressed this submission at paragraphs [41] to [47] above in rejecting Ground 1.

109    Although the Full Bench did not in terms consider the Minister’s submission that orders of a superior Court are valid until set aside, there was no occasion to do so. The Full Bench did not accept that Watson VP committed jurisdictional error in making the s 424 Order. However, the Full Bench held that the decision was “wrong” in the sense that the Full Bench explained (at [68]), namely, that after the decision in Esso v AWU (HCA) it was now patently clear that the AWU Notified Action was not protected action, and that this weighed in favour of the exercise of the discretion to revoke the s 424 Order.

Third submission

110    The Minister’s third submission was that the Full Bench ignored, and failed to appreciate, the contentions put to it about the preconditions for jurisdiction under s 266 of the FW Act. We have already considered and rejected the Minister’s submissions concerning s 266 in paragraphs [50] to [57] above in rejecting Ground 2, and in [86] to [87] above in rejecting Ground 5.

Fourth submission

111    The Minister’s fourth submission was that the Full Bench exercised power under s 603 on the footing that it could use that power to correct error, when that was properly to be achieved under s 604 in accordance with the principles that have developed in respect of appeals. We have considered and rejected this submission at paragraphs [59] to [75] above in rejecting Ground 3.

Fifth submission

112    The Minister submitted that the Full Bench unreasonably and irrationally tempered the significance of the reliance placed on Watson VP’s order by third parties.

113    Before the Full Bench the Minister and the Unions submitted that there would be prejudice should the s 424 Order be revoked. In particular, the Minister and the Unions relied on the fact that onshore employees had, subsequent to the s 424 Order, agreed to a replacement of the Longford and LIP Agreement in circumstances in which the CEPU and the AMWU were deprived of the opportunity to continue protected industrial action while negotiating that Agreement and had been required to participate in the workplace determination process.

114    It is desirable to set out the relevant passages from the reasons of the Full Bench which addressed the submissions as to prejudice so as to place the Minister’s submissions to this Court in context:

[70]    A further discretionary consideration is that it is apparent that Esso, the Unions and their respective members took steps in reliance on the Order and as a consequence may suffer some prejudice if the Order is revoked. Prejudice is ultimately a matter for those parties to demonstrate, but some prejudice is self-evident in the circumstances of this longstanding matter. The proceedings concerning the making of a workplace determination consequent upon the Order were lengthy and complex. They involved a great deal of evidence gathering and preparation and doubtless, a great deal of expense. Those proceedings have concluded and the decision is reserved. A revocation of the Order will have the result that the time, cost and expenditure incurred by the parties’ participation in the proceedings will have been wasted. Moreover, the underlying bargaining dispute that is between the parties will remain unresolved. These matters are not insignificant and tend to weigh against the exercise of our discretion to revoke the Order.

[71]    There is also the position of employees who are not the subject of the workplace determination, but who are represented by the unions. During the post-industrial action negotiating period following the making of the Order, and in reliance on the Order, an agreement was reached in relation to an enterprise agreement to cover onshore employees. Subsequently, an agreement to replace the Longford & LIP Agreement was made and then approved by the Commission. The Order denied the Unions and their members the capacity to exert legitimate industrial pressure through a continuation of protected industrial action in respect of the proposed replacement for the Longford & LIP Agreement. This is also a matter that weighs against the exercise of our discretion.

[72]    However, the ultimate weight that is to be attributed to the matters discussed in the preceding two paragraphs is to be assessed in the context of and tempered by the fact that the prejudice sustained in the circumstances with which we are now faced are ultimately the product of conduct which was within the AWU’s power to control.

(Emphasis added)

115    At paragraph [74] of its reasons the Full Bench concluded by stating that the discretionary matters which pointed in favour of the exercise of the discretion to revoke the s 424 Order outweighed those going the other way.

116    As is apparent from the quoted paragraphs, two forms of prejudice had been urged on the Full Bench. The first was the lengthy and complex proceedings pursuant to s 266 which had been heard and in respect of which the Full Bench was reserved. The Full Bench stated at [70] of its reasons that the time, cost and expenditure incurred by the parties’ participation in those proceedings would be wasted if the s 424 Order was revoked, and that this tended to weigh against the exercise of discretion to revoke the order. The second type of prejudice was that the onshore employees had reached agreement following the s 424 Order in circumstances in which the order denied the Unions and their members the capacity to exert legitimate industrial pressure by engaging in protected industrial action. At paragraph [71] of its reasons, the Full Bench took this consideration into account as weighing against the exercise of discretion.

117    In paragraph [72] of its reasons as set out above, the Full Bench stated that the weight to be attached to both types of prejudice was to be “tempered by the fact that the prejudice sustained in the circumstances with which we are now faced are ultimately the product of conduct which was within the AWU’s power to control”.

118    There appears to have been little, if any, evidence before the Full Bench as to the detriment said to have been occasioned by the conclusion of the Longford and LIP Agreement shortly after the making of the s 424 Order and at a time when the employees could not impose pressure on Esso by engaging in protected industrial action. Nevertheless, as we understand [71] of the reasons of the Full Bench, it accepted that there was some prejudice. The Full Bench did not make findings as to the extent of the prejudice of this kind and, given the state of the evidence, it may have been difficult for it to do so.

119    The submission of the Minister, supported by the Unions, was to the effect that it was unreasonable of the Full Bench, in the legal sense, to assess that prejudice, and the prejudice resulting from the wasted time and money expended in the s 266 proceedings by reference to the circumstance that the situation was one of the AWU’s own making.

120    The Minister submitted that this reasoning of the Full Bench lacked an “evident and intelligible justification”: Li at [76]; SZVFW at [10], [82]. Counsel noted that s 266 of the FW Act imposed strict timelines and had required the FWC to proceed “as quickly as possible”, that the AWU had acted in accordance with the evident legislative intention as to what was to occur in the aftermath of an order under s 424, and that it was “unreasonable or plainly unjust” (House v R [1936] HCA 40; (1936) 55 CLR 499 at 505) for the Full Bench to “attribute blame” to the AWU in the way that it did.

121    The submission assumed that the conduct of the AWU to which the Full Bench referred in [72] of the reasons was the conduct occurring after the making of the s 424 Order, consisting of the entry into the Longford and LIP Agreement and the participation in the s 266 process.

122    In our view, this assumption is misplaced. Instead the Full Bench’s reference at [72] to conduct which was within the AWU’s power to control is a reference to the conduct of the AWU and its members in March 2015 which involved a breach of the FWC’s order and, or in the alternative, the conduct comprising the industrial action which led to the making of the s 424 Order. It is more natural to understand the Full Bench to be referring to conduct of this kind than to the conduct of entering into the Longford and LIP Agreement and the conduct in the s 266 proceedings which was not conduct of the AWU alone.

123    We do not accept that, in its evaluation of the discretionary considerations, the Full Bench was not justified in tempering the weight to be given to the claimed prejudice by the observation that it made. That was really another way of saying that the grounds for the revocation of the s 424 Order rested on the fact that the AWU had organised unprotected action, and, that being so, the prejudice had to be seen in the light that it was of the AWU’s making. That was a consideration that was reasonably open for the Full Bench to take into account in evaluating the factors that favoured, and did not favour, the exercise of its discretionary power to revoke the s 424 Order. We note that it was not suggested in this respect that the Full Bench should have differentiated the position of the AWU, on the one hand, and that of the AMWU and CEPU, on the other.

Other matters

124    The Minister did not advance separate submissions in relation to sub-grounds (f) and (g) of the fourth ground of review which we have set out under paragraph [89] above, as they picked up other grounds that the Minister advanced. It follows from our rejection of the other grounds of review that we do not accept that the revocation of the s 424 Order was inconsistent with or subverted the statutory regime.

Conclusion

125    We are not satisfied that any of the Minister’s grounds is established. The application will therefore be dismissed.

Associate:

Dated:    19 February 2019

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