FEDERAL COURT OF AUSTRALIA
Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50
ORDERS
Applicant | ||
AND: | CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION First Respondent CRAIG GOULDING Second Respondent FAIR WORK COMMISSION Third Respondent | |
FLICK, WHITE AND PERRY JJ | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. A writ of certiorari issue to the Fair Work Commission removing into this Court and quashing:
(a) the decision of Anderson DP made on 17 September 2018 in [2018] FWC 5823;
(b) the order made by Anderson DP on 17 September 2018; and
(c) the decision and order of the Full Bench made on 11 January 2019 in [2019] FWCFB 161.
2. A writ of mandamus issue to compel the Fair Work Commission to exercise its jurisdiction to determine the Applicant’s application in proceeding AG2017/5792 in accordance with law.
3. The Applicant’s remaining claims are dismissed.
4. There be no order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
THE COURT:
Introduction
1 This judgment concerns an application for prerogative relief under s 39B of the Judiciary Act 1903 (Cth) and for declarations under s 21 of the Federal Court of Australia Act 1976 (Cth) in respect of decisions of the Fair Work Commission (FWC).
2 Section 217 of the Fair Work Act 2009 (Cth) (the FW Act) empowers the FWC to vary an enterprise agreement made under Pt 2-4 of that Act:
217 Variation of an enterprise agreement to remove an ambiguity or uncertainty
(1) The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
(2) If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.
3 As is apparent, the FWC may exercise the power of variation granted by s 217 only for the purpose of removing “an ambiguity or uncertainty”. Moreover, the FWC may exercise the power only on the application by identified persons, one of whom is the employer covered by the agreement.
4 On 27 November 2017, the present applicant, Bianco Walling Pty Ltd (Bianco) applied to the FWC under s 217(1) to vary an enterprise agreement, being the “Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2016 – Off Site” (the 2016 Agreement). Bianco is the “employer party” to the 2016 Agreement.
5 The 2016 Agreement had been approved by the FWC under Div 4 of Pt 2-4 of the FW Act on 31 October 2016 and came into operation on 7 November 2016. It was varied (in a manner which is presently immaterial) on 25 September 2017 on an application by Bianco pursuant to s 210 of the FW Act. The nominal expiry date of the 2016 Agreement is 30 October 2020.
6 Clause 1.2 of the 2016 Agreement identifies the persons to whom it applies:
1.2 This Agreement is between Bianco Walling Pty Ltd (Bianco) and all Bianco employees that are engaged in the classifications contained in this agreement who work in Bianco’s concrete manufacturing operations, including the erection of these products on-site and the installation of props and frames (employees).
7 By its application to the FWC, Bianco sought to have cl 1.2 varied by the deletion of the words “concrete manufacturing operations” and the insertion in their place of the words “Pre-cast Division”. Bianco sought the variation so as to make it plain that the 2016 Agreement applied only to the employees in its Pre-cast Division, to which we will refer shortly.
8 Bianco’s application for the variation was opposed by the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU). It is the first respondent to the present application by Bianco. The CFMMEU had not been involved in the negotiation of the 2016 Agreement or, for that matter, in the negotiation of any of the enterprise agreements preceding it.
9 It seems that it was a claim made in 2017 by the CFMMEU on behalf of the second respondent, Mr Goulding, which prompted Bianco’s application for variation. We will refer to the CFMMEU claim on behalf of Mr Goulding in more detail shortly.
10 At first instance, Anderson DP dismissed Bianco’s application for variation: Bianco Walling Pty Ltd T/A Bianco Precast [2018] FWC 5823. The Full Bench of the FWC granted Bianco permission to appeal under s 604 of the FW Act but, on 11 January 2019, dismissed the appeal: Bianco Walling Pty Ltd T/A Bianco Precast v Construction, Forestry, Maritime, Mining and Energy Union [2019] FWCFB 161.
11 Bianco’s response was to commence the present application in this Court. It did so using the form for an originating application for relief under s 39B of the Judiciary Act. However, Bianco makes claims for both prerogative and declaratory relief:
(a) prerogative relief by way of certiorari quashing the decisions of Anderson DP and of the Full Bench, together with orders in the nature of mandamus requiring both the Full Bench and Anderson DP to determine its applications in the FWC in accordance with law;
(b) a declaration that cl 1.2 of the 2016 Agreement has “the effect” for which it had contended (unsuccessfully) in the FWC;
(c) in the alternative to the prerogative relief claimed in (a), a declaration that the approval by the FWC of the 2016 Agreement on 31 October 2016 and its approval of the predecessor enterprise agreement (the 2011 agreement) under s 186 of the FW Act were void and of no effect;
(d) in the alternative to the claim for declaratory relief in respect of the approval by the FWC of the 2011 and 2016 Agreements, orders in the nature of certiorari quashing the approvals and orders in the nature of mandamus for the determination by the FWC of the approval applications.
12 At the hearing, the Court received into evidence four affidavits and a statement of agreed facts. The parties had also agreed upon the issues raised by the application for the Court’s determination.
13 We did not understand Bianco to pursue the claims for declaratory relief set out in (b) and (c) above, and ultimately it pursued the relief sought in (d) only faintly.
Factual setting
14 The circumstances on which Bianco relied for its application in the FWC and on the present application are of relatively narrow compass. They are described in a statement of Mr Corbo, Bianco’s chief financial officer, which was in evidence, and were summarised in the reasons of Anderson DP. No complaint was made about the Deputy President’s findings of fact. In addition, the parties provided a statement of agreed facts.
15 Bianco is engaged in the construction industry in South Australia. It commenced with bricklaying work in May 1994 but its business has changed and enlarged over the ensuing years. In about 2000, Bianco commenced manufacturing pre-cast concrete panels for use in the building industry and shortly afterwards ceased bricklaying. Bianco undertook its manufacture of pre-cast concrete panels at premises at Waldaree Street, Gepps Cross in suburban Adelaide. In 2004, Bianco acquired a business called Constress located on Grand Junction Road, Gepps Cross, which produced pre-cast concrete architectural panels.
16 In about mid-2005, Bianco closed its Waldaree Street factory and merged its operations there with the operations conducted at Grand Junction Road, Gepps Cross. From that time onwards, Bianco referred to the merged operations as its “Precast Division”. That Division has continued to manufacture pre-cast concrete panels (which Bianco had commenced manufacturing in about 2000) as well as the manufacture of pre-cast concrete architectural panels.
17 On 1 July 2006, Bianco acquired another company which produced civil construction products including T-beams and drainage products. This business was located on Pinda Street, Kilkenny, in suburban Adelaide.
18 In July 2011, Bianco closed the Kilkenny site and relocated the business conducted there to its Gepps Cross premises.
19 Within Bianco, the part of the business constructing the T-beams is known as the “Structural Division”. That part of the business constructing the civil construction products is known as the “Civil Division”. The effect is that, since July 2006, Bianco has had three divisions: the Pre-cast Division, the Structural Division and the Civil Division.
20 The Pre-cast Division manufactures and installs pre-cast concrete panels. Its products are typically designed by architects and engineers for a specific project and usually have a “finish” applied to them.
21 The Structural Division generally manufactures concrete T-beams for use on infrastructure projects. It does not, however, engage in any installation of those beams. Bianco manufactures the T-beams in a pit housed in a purpose built building on the same site at Gepps Cross at which the Pre-cast Division operates.
22 The Civil Division manufactures culverts, pipes, pits and other drainage products, for use on civil construction projects. These are predominantly concrete but may be comprised of other materials such as PVC, cast iron, galvanised iron and poly pipe. The Civil Division does not install any of the products which it produces.
23 Bianco operates each of its three divisions as separate business units. It is an agreed fact that each is organisationally and operationally distinct, including having:
(a) its own production workforce;
(b) separate management and supervision;
(c) separate estimating, project management and quality assurance processes;
(d) separate costing, key performance indicators (KPIs), profit and loss reports (only upper management and administration resources are shared among the groups);
(e) jobs have separate job codings and profit and loss centres. Those codings clearly differentiate between the divisions.
24 It is also an agreed fact that Bianco’s workforce is separately organised. Although there are employees of both the Pre-cast and Structural Divisions (as well as a small number of employees in the Civil Division) located at Bianco’s premises at Gepps Cross, they work in distinct areas on the site. Employees rarely move between the Divisions but may do so from time to time (eg, to avoid being laid off in times of work downturns). Employees in each division are classified by separate classification structures. Each workforce is paid according to that workgroup’s arrangements. The cost centre for the Division in which each employee works is shown on the employees’ payslips.
25 At the time of the hearing before Anderson DP, Bianco had approximately 122 employees in its Pre-cast Division, 24 in the Structural Division, and 22 in the Civil Division. Its labour costs relevant to each division are allocated to the KPIs and profit and loss accounts of that division.
Award and agreement coverage
26 Hitherto, Bianco has regarded only the employees in the Pre-cast Division as being covered by the 2016 Agreement. The Concrete Products Award 2010, a modern award of the FWC, applies to Bianco’s employees in the Structural Division. The evidence did not indicate the industrial instrument applicable to employees in the Civil Division.
27 There are four predecessor agreements to the 2016 Agreement. These are the Bianco Walling Pty Ltd Enterprise Agreement 2001 (the 2001 Agreement) made under the Workplace Relations Act 1996 (Cth) (the WR Act); the Bianco Walling Pty Ltd Enterprise Agreement 2004 (the 2004 Agreement) made under the WR Act; the Bianco Walling Pty Ltd (Gepps Cross Site) Employee Collective Agreement 2008 – Off Site (the 2008 Agreement) made under the WR Act; and the Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2011 – Off Site (the 2011 Agreement) made under the FW Act.
28 The scope clause in the 2001 Agreement (cl 1.6) provided:
This Agreement will apply in the State of South Australia to all employees of Bianco Walling Pty Ltd whilst they are performing on-site construction work as defined and covered by the National Building & Construction Industry Award 2000 and/or as defined and covered by the National Joinery and Building Trades Products Award 1993.
29 The scope clause in the 2004 Agreement (cl 1.6) provided:
This Agreement will apply in the State of South Australia to all employees of Bianco Walling Pty Ltd whilst they are performing work as defined and covered by the National Joinery and Building Trades Products Award 2002.
30 The scope clause in the 2008 Agreement (cl 1.2) provided:
This Agreement is between Bianco Walling Pty Ltd (Bianco) and employees that are engaged in work away from construction sites (ie, off-site) as labourers, panel makers, concrete finishers, crane drivers, riggers, carpenters and boiler makers at Bianco’s Gepps Cross facility (employees).
31 The scope clause in the 2011 agreement (cl 1.2) provided:
This Agreement is between Bianco Walling Pty Ltd (Bianco) and all employees that are engaged in the classifications contained in this agreement who work in Bianco’s concrete manufacturing operations, including the erection of these products on-site (employees).
32 The parties agreed that the 2001 Agreement covered the unit now referred to Bianco’s Pre-cast Division as well as its on-site bricklaying business. It is also agreed that the 2004 and 2008 Agreements covered only the unit now referred to as Bianco’s Pre-cast Division.
33 In relation to the predecessor Agreements and in relation to the 2016 Agreement, the parties agreed:
(a) only employees in the Pre-cast Division had been notified of, participated in negotiations for, and voted on, each of the 2004, 2008, 2011 and 2016 Agreements (including its 2017 variation);
(b) no employee from either the Structural Division or the Civil Division had sought to be included in the negotiations for, or voting for the approval of, any of the predecessor Agreements or the 2016 Agreement; and
(c) it was not until the CFMMEU claimed in 2017 that the 2016 Agreement also applied to Bianco’s Structural Division that the possibility of it so applying had become an issue for Bianco or its employees.
Making and approval of the 2016 Agreement
34 The parties also agreed on a number of matters concerning the making and approval of the 2016 Agreement. On 9 August 2016, Bianco provided to the employees in the Pre-cast Division:
(a) a Notice of Employee Representational Rights (NERR) under s 173 of the FW Act in relation to the making of the 2016 Agreement;
(b) access to a printed copy of the proposed 2016 Agreement and documents incorporated by reference;
(c) an explanation of the proposed Agreement;
(d) notice of the intended time and place of ballot and voting method.
35 Bianco provided these documents only to its employees in its Pre-cast Division. It did so at a meeting on 9 August 2016. Before the meeting, in the presence of the Pre-cast Division employees who were present, Bianco’s management asked the employees from the Structural Division to leave, telling them that there was to be a meeting about the Pre-cast Division employees’ enterprise agreement. There is evidence, which was accepted by Anderson DP in the FWC, that the Structural Division employees knew that discussions were occurring between Bianco and the Pre-cast employees about their Agreement in both 2016 and 2017 and had not been involved in those discussions.
36 On 2 September 2016, Bianco conducted a ballot of 85 employees in the Pre-cast Division. Seventy-two employees cast a valid vote and 70 voted to approve the 2016 Agreement.
37 The total number of Bianco’s employees in all three of its Divisions in September 2016 was approximately 130.
38 On 14 September 2016, Bianco applied to the FWC under s 185 of the FW Act for approval of the 2016 Agreement. The application was supported by a statutory declaration by Mr Corbo in which he declared (relevantly):
(i) the 2016 Agreement covers all persons engaged under the terms of the “Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2011 – Off Site”;
(ii) the primary activity of Bianco is “pre-cast concrete manufacture and installation”;
(iii) 85 employees would be covered by the 2016 Agreement.
39 As noted earlier, the FWC approved the 2016 Agreement under s 186 of the FW Act on 31 October 2016.
40 The 2011 Agreement and the variation of the 2017 Agreement to which we referred earlier were each made in a like manner.
The claim by Craig Goulding
41 Mr Goulding was employed by Bianco from 26 July 2017 to 10 October 2017 in its Structural Division. The CFMMEU informed Bianco in late 2017 that it considered that the 2016 Agreement had covered Mr Goulding during his employment by Bianco.
42 On 4 April 2019, the CFMMEU served Bianco with an application for underpayment of wages which it had filed in the South Australian Employment Tribunal (SAET). The underpayment is alleged to have arisen from the circumstance that Bianco did not apply the 2016 Agreement to Mr Goulding during his employment. Bianco has filed an answer in the SAET denying that the 2016 Agreement had any application. As is apparent, these events occurred after the decisions of the FWC which are in question in the present proceedings.
The decision of Anderson DP
43 Deputy President Anderson identified the issue for his determination as being:
[58] Is clause 1.2 either as a whole or in particular the phrase “Bianco’s concrete manufacturing operations” ambiguous or uncertain in the sense that it is susceptible to more than one meaning or that its meaning is not clear?
44 Deputy President Anderson was satisfied on the evidence, including the evidence of the circumstances surrounding the making of the 2016 Agreement, that the application of cl 1.2 of the 2016 Agreement to the employees in Bianco’s Structural Division and its Civil Division was not consistent with either the intention or understanding of Bianco or its employees when they entered into the Agreement or when they voted on and made the variation to it in 2017, at [53]. In this respect the Deputy President accepted that Bianco had established objectively the common intention of it and its employees that cl 1.2 apply only to employees in the Pre-cast Division, at [54].
45 However, Anderson DP held that he could have regard to that evidence in interpreting the 2016 Agreement only if “the ordinary or plain meaning of the words used in the Agreement [is] uncertain or ambiguous”, at [56]. He reached that view having regard to principles concerning the interpretation of enterprise agreements stated by the Full Bench of the FWC at [114] in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005 (Berri). The Deputy President considered that cl 1.2 is not ambiguous or uncertain, saying:
[61] The phrase “concrete manufacturing operations” is not uncertain or ambiguous. It means what it says; business operations in which concrete products are manufactured.
46 The Deputy President considered that neither the possessive noun “Bianco’s” nor the concluding words “including the erection of these products on-site” warranted a different conclusion.
47 The Deputy President’s conclusion appears in the following passages:
[73] … we agree with both Kirby J and Callinan J in Amcor Limited v CFMEU who each noted that a construction should “contribute to a sensible industrial outcome” and one “that will operate fairly towards both parties”. That course, however, is only open if permitted by an examination of the language of the instrument in question. To add the words sought by Bianco in the context of an interpretation case would be to rewrite the provision in order to give effect to an externally derived conception of intention or purpose. That is impermissible in the absence of finding ambiguity or uncertainty. It may be a legitimate outcome sought in an industrial relations negotiation for variation or for a new agreement, but not in an interpretation case.
[74] I appreciate that an application of the 2016 Agreement to operations other than the Pre-cast division would not be consistent with the industrial relations practice or intention of Bianco or its employees, and that the issue has arisen only recently by virtue of a trade union not covered by the Agreement advancing that proposition.
[75] Be that as it may, on current authority, in an interpretation case those industrial relations considerations, however real, are not matters that the Commission can take into account …
(Citations omitted and emphasis added)
48 We will defer until later in these reasons reference to the decision of the Full Bench.
The FWC’s power under s 217
49 Bianco’s application under s 217 raised two issues for the FWC. First, whether there was ambiguity or uncertainty in the 2016 Agreement which could be removed by variation and secondly, if so, should the FWC exercise the power vested by s 217 to remove the ambiguity or uncertainty: Re Australian and International Pilots Association [2007] AIRC 303; (2007) 162 IR 121 at [16]-[17] (Watson VP). The existence of an ambiguity or uncertainty has been described as “a necessary statutory prerequisite to any variation being made”: CoInvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43 at [46]. It is not necessary for the purposes of this decision to discuss the precise nature of the jurisdictional fact involved.
50 Although Commonwealth legislation governing industrial relations has from its inception vested arbitral bodies with the power to vary registered industrial agreements, it has generally confined the circumstances in which that power may be exercised. There has been an evident legislative intention that intervention by the arbitral body into matters on which the parties themselves have agreed in the manner for which the legislation provides should be limited. It also reflects a legislative intention that the circumstances in which industrial agreements may be varied during their currency should be confined. The expression of the constraints on the power has varied over the years, but with the exception of the period between 2006 and 2009, the arbitral body (the Industrial Relations Commission (the IRC), the Australian Industrial Relations Commission (the AIRC) and the FWC have been empowered to vary an enterprise agreement or its cognate to remove ambiguity or uncertainty.
51 Under the first enactment of the Conciliation and Arbitration Act 1904 (Cth) (the CA Act), an industrial agreement could be rescinded or varied by the parties themselves or their representatives by making another industrial agreement in accordance with the CA Act (s 79). The Court of Conciliation and Arbitration could vary an industrial agreement only on the application of an organisation and only to the extent necessary to bring it into conformity with any common rule declared by the Court (s 80). Apart from the change from the Court to the Commission and the relocation of these provisions within the CA Act, this power remained in substantially the same form until the enactment of the Industrial Relations Act 1988 (Cth) (the IR Act).
52 By ss 116 and 117 of the IR Act, the terms of a certified agreement prevailed over those in any award which would otherwise be applicable and the IRC could set aside or vary a certified agreement only in limited circumstances, one of which was to remove ambiguity or uncertainty (s 116(1)(d)(i)) or if satisfied that its continued operation was contrary to the public interest (s 117(3) and (6)).
53 Part VIB, which was inserted into the IR Act by the Industrial Relations Reform Act 1993 (Cth), contained an extensive suite of provisions directed to promoting the entry into certified agreements. The powers of the IRC with respect to variation of certified agreements were limited but, by s 170MK, did include a power to do so to remove ambiguity or uncertainty.
54 The counterpart of s 170MK in the WR Act was s 170MD. Section 170MD(6), which was in force until 27 March 2006, provided with respect to the power of the AIRC:
(6) The Commission may, on application by any person bound by a certified agreement, by order vary a certified agreement:
(a) for the purpose of removing ambiguity or uncertainty; or
(b) for the purpose of including, omitting or varying a term (however expressed) that authorises an employer to stand-down an employee.
55 Following the repeal of s 170MD by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth), Div 8 of the WR Act constrained significantly the circumstances in which a workplace agreement could be varied and, apart from some exceptions which are not presently material, did not empower the AIRC to vary such an agreement.
56 Section 217 was enacted as part of the FW Act in 2009. The Explanatory Memorandum for the Fair Work Bill 2008 stated in relation to cl 217:
Clause 217 – Variation of an enterprise agreement to remove ambiguity or uncertainty.
916. This clause provides for variations of enterprise agreements to remove ambiguity or uncertainty.
FWA can vary an enterprise agreement to remove an ambiguity or uncertainty in the agreement. An application may be made by one or more of the employers covered by the agreement, an employee covered by the agreement or an employee organisation covered by the agreement (subclause 217(1)).
917. FWA would need to be satisfied that the agreement contains an ambiguity or uncertainty and then decide whether the ambiguity or uncertainty should be removed and, if so, how.
918. If FWA varies the agreement, the variation operates from the day specified in the decision to approve the variation (subclause 217(2)).
Is there error in the decision of the Deputy President?
57 It is convenient to commence by considering an aspect of the fourth issue agreed by the parties, namely, whether the Deputy President erred in concluding that he could not have recourse to evidence of surrounding circumstances unless he had first found that there was ambiguity in cl 1.2 of the 2016 Agreement based only on the language of the Agreement.
58 As noted earlier, the Deputy President referred to the principles concerning the interpretation of enterprise agreements stated in Berri, saying that they could be “usefully applied”, at [39]. Berri was an appeal from a decision of a Commissioner in the discharge of the dispute resolution function of the FWC. The dispute concerned the entitlement of employees to an allowance under an enterprise agreement. The Full Bench recognised that the resolution of the dispute involved the construction of the enterprise agreement and reviewed and revised the principles stated by an earlier Full Bench in Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd [2014] FWCFB 7447; (2014) 245 IR 394 to be applied in the interpretation of enterprise agreements. Many of them have been stated by this and other courts and are uncontroversial.
59 For the purposes of this decision, it is sufficient to recite only some of the 15 principles as stated by Berri, at [114]:
1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose …
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or if it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
…
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
…
(Emphasis in the original)
60 This appeal does not provide the occasion for a review of the principles concerning the construction of enterprise agreements stated in Berri. It is, however, necessary to keep in mind that enterprise agreements made under Pt 2-4 of the FW Act are sui generis. In particular, they are not simply one form of a commercial contract in the conventional sense. In this respect, the statements of the Full Court in Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84 are pertinent:
[88] … Under the FW Act, an enterprise agreement is an agreement in name only. Those who, by s 172(2), are empowered to “make” an enterprise agreement are the employer and “the employees who are employed at the time the agreement is made and who will be covered by the agreement”. A contract lawyer would assume that those persons would be parties to the agreement, and that the assent of all of them would be necessary for the agreement to be “made”. But the lawyer would be wrong on both counts. The FW Act does not identify the employer, or any employee, as a “party” to an enterprise agreement. Further, notwithstanding the specific empowering terms of s 172, it is not necessary for all the employees who are employed at the time an agreement is made and who will be covered by the agreement to assent to the terms of the agreement. Once a majority of those employees have agreed by voting, the agreement must be sent to the Commission for approval and, if approved, thenceforth applies to all the employees in the relevant group, even those who did not agree, and even those, subsequently taken into employment, who were not part of the relevant group at the time the vote was taken under s 182.
[89] In his reasons, the primary Judge said that “Toyota contended and it was not disputed, that an enterprise agreement made under the FW Act is a form of delegated legislation”. It appears that that contention was made in the context of Toyota’s submission based on s 46 of the AI Act to which we have referred. However, although the FW Act provides that an enterprise agreement is “made” otherwise than by the Commission, the Act does more than merely impose conditions upon, and give additional legal effect to, an agreement made between private parties. The effect of the legislation is to empower the employer and the relevant majority of its employees to specify terms which will apply to the employment of all employees in the area of work concerned. The legal efficacy of those terms will arise under statute, not contract, and, as mentioned above, will be felt also by those who did not agree to them. Someone, such as an employee subsequently taken on, who had nothing to do with the choice of the terms or the making of the agreement, will be exposed to penal consequences under s 50 if he or she should happen to contravene one of the terms. When viewed in this way, it is not difficult to share in the perception that an enterprise agreement approved under the FW Act has a legislative character.
(Emphasis added)
61 It is evident that, despite his articulation of the issue for his determination in [58] of his reasons (set out above), the Deputy President regarded Bianco’s application as requiring interpretation of the 2016 Agreement. This is evident by his resort to, and application of, the principles summarised in Berri concerning the interpretation and construction of enterprise agreements, in particular his reliance on principles (7) and (10); his quotation at [41] of a passage in DP World Brisbane Pty Ltd v Maritime Union of Australia [2013] FWCFB 8557; (2013) 237 IR 180 at [31] concerning the “task of interpreting an enterprise agreement”, and by his description of the application before him as “an interpretation case”, at [73] and [75].
62 It is also evident in [60] of the Deputy President’s reasons:
… However, the mere existence of a disputed interpretation is not sufficient to render words in an industrial agreement uncertain or ambiguous in a legal sense. That conclusion can only be drawn from an examination of the language of the relevant clause in the context of the instrument as a whole.
(Citation omitted and emphasis added)
63 In support of the proposition in the second sentence in this passage, the Deputy President referred to a passage in the reasons of Gleeson CJ and McHugh J in Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 in which it was said, at [2], that the resolution of the entitlement of employees to a redundancy payment under an industrial agreement turned on the “language of the particular agreement, understood in the light of its industrial context and purpose, and the nature of the particular reorganisation”. Plainly, their Honours were then referring to process of construing the industrial agreement so as to determine the existence of the claimed entitlement. The passage in Amcor to which the Deputy President referred cannot reasonably be understood as directed to the matters to which the FWC may have regard in determining for the purposes of s 217, the existence of ambiguity or uncertainty.
64 Finally, it is pertinent that, while making extensive reference to authorities concerning the interpretation of enterprise agreements, the Deputy President did not refer to any of the several decisions of the AIRC concerning the application of predecessors of s 217 and referred to only one decision of the FWC in which the s 217 power had been exercised by it: Construction, Forestry, Maritime, Mining and Energy Union v Macmahon Contractors Pty Ltd [2018] FWCFB 4429.
65 In our respectful opinion, a number of errors are evident in the decision of the Deputy President.
The characterisation of the application as an interpretation case
66 First, the Deputy President discharged his task under s 217 as though it required him to interpret cl 2.1 in the context of the 2016 Agreement. This involved a misunderstanding. The interpretation of a statute or contract is directed to the ascertainment of the document’s actual and true meaning. When the document is properly construed, there is only one correct meaning: Industry Research and Development Board v Bridgestone Australia Ltd [2001] FCA 954, (2001) 109 FCR 564 at [54]; Chief Executive Officer of Customs v Adelaide Brighton Cement Ltd [2004] FCAFC 183, (2004) 139 FCR 147 at [118]. It is for this reason that the proper construction of a statute is a question of law: Adelaide Brighton Cement at [118], [139].
67 However, the identification of the true meaning of a provision is distinct from the question of whether it is ambiguous or uncertain. Ambiguity exists when a provision in an enterprise agreement is capable of more than one meaning. See in this respect the discussion by Gray J of the concept of ambiguity in Printing & Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 at 449. The ambiguity may be apparent on the face of the document or may become apparent only when extrinsic evidence is adduced. A provision may be ambiguous even though it is capable of interpretation: Cannon Hill Services Pty Ltd v Australasian Meat Industry Employees Union [2016] FWC 7256 at [8]. This means that it was not necessary for the FWC to interpret the 2016 Agreement in order to reach a conclusion concerning the presence of ambiguity or uncertainty. It also means that the Deputy President was wrong in thinking that he was dealing with “an interpretation case”.
68 There are practical consequences for the FWC’s ascertainment of ambiguity or uncertainty for the purpose of s 217 being different in character from the interpretation of an enterprise agreement. One is that there was no need for the FWC to feel constrained in the matters to which it may have regard by the principles developed for the interpretation of enterprise agreements. Moreover, the FWC is obliged, in performing its functions or in exercising its powers in relation to a matter under the FW Act, to take into account, amongst other things, “equity, good conscience and the merits of the matter” – see s 578 of the FW Act. Furthermore, the FWC is not bound by the rules of evidence and procedure in relation to a matter – see s 591 of the FW Act. Each of those provisions applies to the discharge by the FWC of its functions under s 217(1). The consequence is that, far from being precluded from having regard to evidence of the parties’ common intention and to the history of cl 1.2, the Deputy President was permitted to have regard to them as part of the “equity, good conscience and the merits” of the matter.
69 The constraint to which the Deputy President erroneously felt he was subject had the potential to be material in another way. In relation to s 170MD(6) of the WR Act, the AIRC held that a “significant factor” for the Commission’s consideration in determining whether to exercise its discretion to vary an enterprise agreement is “the objectively ascertained mutual intention of the parties at the time the agreement was made”: Re Australian and International Pilots Association at [17] (Watson VP).
70 It may well be the case that the mere existence of rival contentions as to the meaning or application of a provision or provisions in an enterprise agreement is not sufficient to indicate ambiguity or uncertainty for the purposes of s 217: Tenix Defence Systems Pty Limited Certified Agreement 2001-2004 [2002] AIRC 531 at [49]. Instead, the FWC is to consider the matter objectively: Beltana No. 1 Salaried Staff Certified Agreement 2001 [2003] AIRC 608 at [23]. In that objective consideration, an assessment of the matters relied upon for the competing contentions will be important, including evidence that the parties to the agreement had a common understanding as to the meaning of the terms they used in their agreement. A reading of the enterprise agreement as a whole may indicate ambiguity or uncertainty in one or more of its clauses. And, as was noted by the Full Bench in Tenix, “the [FWC] will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention”, at [31].
71 In this case, the circumstance that the CFMMEU (which had not been involved in the negotiation of the 2016 Agreement) was contending for a construction of cl 1.2 which the Deputy President was satisfied was not that which the parties to the 2016 Agreement had intended was, of itself, a strong indicator that the 2016 Agreement may be ambiguous or uncertain.
72 It is understandable that the FWC applies the principles developed by the Courts for the interpretation of enterprise agreements when engaged in that task as an incident of its other functions. That is because it is not to be expected that an enterprise agreement would have one meaning when construed by a tribunal, bound to exercise equity and good conscience, but another meaning when construed by a court, which is not so bound. However, for the reasons explained, the discharge of the FWC’s function under s 217 does not require it to interpret the enterprise agreement in question.
Treating “ambiguity” and “uncertainty” as synonyms
73 Secondly, the Deputy President appears to have treated the words “ambiguity” and “uncertainty” in s 217 as though they are synonyms. Earlier, we referred to the legislative history of s 217. The repeated usage of the two terms in the predecessors of s 217 and in s 217 suggests by itself that the two terms are used with different meanings.
74 The Macquarie Dictionary defines the word “ambiguity” as:
1. doubtfulness or uncertainty of meaning … 2. an equivocal or ambiguous word or expression …
It defines the term “uncertain” as (relevantly):
1. not definitely or surely known; doubtful. 2. not confident, assured or decided. 3. not fixed or determined. 4. doubtful; vague; distinct …
75 Although there is some relationship between these meanings, the definitions indicate that the two terms are not synonymous. There may, for example, be uncertainty in an enterprise agreement even when its terms are not ambiguous. The uncertainty may arise from the application of the unambiguous terms to a given set of circumstances. The distinction between patent ambiguity (linguistic ambiguity) and latent ambiguity (ambiguity in application) provides an illustration by analogy: see JW Carter, The Construction of Commercial Contracts, 2013, Hart Publishing at [18-27].
76 Further, treating the two terms as having different meanings gives effect to the principle that a court construing a statutory provision should strive to give meaning to every word in the provision: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [71].
77 In the context of whether a common law contract is void for uncertainty, it has been said that it is only if the Court is unable to put any definite meaning on the contract that it can be said to be uncertain: Meehan v Jones (1982) 149 CLR 571 at 578. That may be one form of uncertainty, but there is no reason why s 217 should be construed as using the term in that confined sense. The presence of the indefinite article “an” in s 217 is a contraindicator of the uncertainty to which it refers as being uncertainty of the enterprise agreement as a whole.
78 The Deputy President’s understanding that he was engaged in the interpretation of the 2016 Agreement led naturally to his application of the Berri principles. But that understanding resulted in the Deputy President not addressing the second issue raised by Bianco’s application, namely, whether there was uncertainty in cl 1.2 of the 2016 Agreement. Further, it contributed to his erroneous view about the matters to which he could have regard.
79 The CFMMEU submitted that Bianco should not be heard on the present application to contend that the Deputy President had failed to consider the “uncertainty” limb in s 217 because it had not itself drawn a distinction between the two terms in the proceedings before him. The submission was that the Deputy President could not be said to have erred in relation to a matter which he had not been asked to address.
80 We agree that, in general, Bianco did not distinguish between the two terms in its submissions to the FWC. However, Bianco did, on some occasions, indicate that it relied on both limbs of s 217.
81 For example, Bianco’s advocate contended that the classifications contained in the 2016 Agreement, to which reference is made in cl 1.2, gave rise to uncertainty, as the following passage indicates:
Mr Earls: … We understand that that in itself might create some level of ambiguity or uncertainty as to how the agreement …
The Deputy President: You’d have to be classified under the agreement to be covered by the scope clause as well. That’s a circular proposition.
Mr Earls: It is entirely circular. And that’s why we say that to the extent that you head down that path it really highlights there to be an ambiguity or an uncertainty which we say gives us the jurisdiction to make a variation.
The Deputy President: Why does that necessarily follow that there’s an ambiguity and …
Mr Earls: It’s an uncertainty in that case if there’s a circularity, so it’s more of an uncertainty than an ambiguity.
The Deputy President: Yes, but if the classification structures are clear then where’s the ambiguity or uncertainty?
Mr Earls: Correct. And that’s what I’m getting to, that the classification structure is not clear. There is no way, in our submission, that the Tribunal could find that the words used in that classification structure are so notorious as to be only susceptible to the one meaning.
(Emphasis added)
82 Moreover, in several passages in its outline of argument before the FWC, Bianco made it plain that it alleged both ambiguity or uncertainty, for example, at [6], [9], [18], [45.1] and [45.2].
83 In these circumstances, it cannot be concluded that Bianco had not sought to rely on the element of uncertainty in the case it presented before the Deputy President and this particular submission of the CFMMEU cannot be accepted.
The use of a term with a special meaning
84 Thirdly, it is apparent the Deputy President did not consider, other than in one limited respect, the character or import of the phrase “Bianco’s concrete manufacturing operations” before concluding that the meaning of cl 1.2 was plain. His reasons proceed on the unstated assumption that the character of the phrase is descriptive, in the sense that it describes the particular operations of Bianco which are within the scope of the agreement. The Deputy President concluded that, as a description, there was no ambiguity in cl 1.2, at [58]-[68], with the consequence that any activity which answered that description was within the operations to which the clause referred. This meant that the 2016 Agreement applied to all of Bianco’s concrete manufacturing operations, and not just its Pre-cast Division.
85 However, the Deputy President did not consider an alternative, namely, that the phrase was used in the agreement with a special meaning or at least a particular meaning understood by the parties to it. The latter was an obvious possibility given the Deputy President’s acceptance that it was the common intention of Bianco and its employees that cl 1.2 apply to the Pre-cast Division only. Despite this, the Deputy President considered only whether the addition of the possessive noun “Bianco’s” meant that the phrase “Bianco’s concrete manufacturing operations” had “some special meaning” at [68].
Regard to the history and context of the 2016 Agreement
86 Fourthly, by reason of his understanding that his task was one of interpretation, and thereby constrained by the Berri principles, the Deputy President did not have regard to a relevant part of the history of cl 1.2 on which Bianco had relied. Bianco had sought to attach significance to the words “all Bianco employees that are engaged in the classifications contained in this agreement”. It noted that those classifications (namely, labourers, panel makers, concrete finishers, crane drivers, riggers, carpenters and boilermakers) are, with one readily understandable exception, the same as those listed in cl 1.2 of the 2008 Agreement. That Agreement had been made at a time when the Structural Division had not been located at the Bianco’s Gepps Cross premises. That history was capable of supporting the inference that, despite its apparent width, the term “Bianco’s concrete manufacturing operations” did not apply to employees in Bianco’s Structural Division.
87 Related to that consideration is another. Clause 2.1(b) of the 2016 Agreement (to which the Deputy President did not refer) provides:
2.1 All employees are expected to:
(a) …
(b) Be prepared to travel to the various worksites where Bianco is building
(c) …
88 This subclause was significant because it was an agreed fact that it is only employees in the Pre-cast Division who are engaged in on-site installation of products manufactured by Bianco and, accordingly, who have to travel to worksites at which Bianco is undertaking building work. Furthermore, cl 2.1(b) had a counterpart in each of the 2008 and 2011 Agreements. This was capable of supporting the inference that the 2016 Agreement, being the successor of the 2008 and 2011 Agreements, did not apply to employees in the Structural Division.
Were the Deputy President’s errors jurisdictional?
89 Not every error by a tribunal such as the FWC in the discharge of its functions is jurisdictional.
90 A tribunal commits jurisdictional error if it misunderstands the nature of its jurisdiction, misconceives its duty, fails to apply itself to the question the statute requires it to address, or misunderstands the nature of the opinion which it is to form: Ex parte Hebburn Limited; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 420; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47, (2000) 203 CLR 194 at [31]; Re Patterson;Ex parte Taylor [2001] HCA 51, (2001) 207 CLR 391 at [196]; Graham v Minister for Immigration and Border Protection [2017] HCA 33, (2017) 263 CLR 1 at [57].
91 Reference may also be made to Craig v State of South Australia [1995] HCA 58, (1995) 184 CLR 163 at 179 in which the High Court said:
If … an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal’s exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it.
(Emphasis added)
92 We consider, with respect, that the decision of Anderson DP is affected by misunderstandings of this kind. For the reasons already given, Anderson DP proceeded under the misapprehension that:
(a) he was required to interpret cl 1.2 in the 2016 Agreement rather than addressing the separate (albeit related) question of whether the clause contained ambiguity or uncertainty;
(b) he was required to determine the single correct meaning of cl 1.2; and
(c) he was required to do so by applying the principles developed in the authorities concerning the construction of enterprise agreements.
93 Moreover, Anderson DP’s belief that the terms “ambiguity” and “uncertainty” did not have a different meaning meant that he misunderstood the jurisdiction he was exercising. It meant that Anderson DP did not ask himself the correct question. In contrast are those cases in which the Commission has asked itself the correct question and thereafter exercised an evaluative judgment in respect of the matter within its jurisdiction: cf One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77; (2018) 262 FCR 527 at [97]-[109].
94 We accept, however, that the third and fourth of the errors identified earlier in these reasons are not jurisdictional, being errors committed in the exercise of the FWC’s jurisdiction.
95 Given our conclusion concerning the jurisdictional nature of the Deputy President’s errors, it is unnecessary to consider the alternative submission of Bianco that the decision of the Deputy President was illogical or irrational in the legal sense: Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 at [66]-[67] (Hayne, Kiefel and Bell JJ) and at [90] (Gageler J). We note in any event that this was not one of the issues agreed by the parties as raised by Bianco’s application for this Court’s determination.
The decision of the Full Bench
96 The Full Bench noted at [35] of its reasons that the first task of the Commission under s 217 is to:
… make an objective judgment as to whether properly construed the wording of a provision(s) is susceptible to more than one meaning – this requires the determination of a jurisdictional fact.
(Emphasis added)
The Full Bench then noted that, if that question is answered in the affirmative, the Commission has a “discretion” with respect to the variation of the agreement to remove the ambiguity or uncertainty.
97 The statement by the Full Bench in [35] indicates immediately its misconception of the task required under s 217. The FWC was not required to “properly construe” the 2016 Agreement before determining whether there was ambiguity or uncertainty. As already noted, a provision may be ambiguous or uncertain even though, by the application of techniques of construction, its true meaning can be ascertained.
98 The Full Bench considered that the issue at the heart of the appeal was whether the Deputy President had been in error in concluding that he could not, in accordance with the Berri principles, have recourse to evidence of surrounding circumstances unless he had first found that there was ambiguity in cl 1.2 of the 2016 Agreement. This is evident in [22] and [37] of its reasons:
[22] At the heart of the appeal is whether the Deputy President was in error in concluding that he could not have recourse to evidence of surrounding circumstances unless he had first found that there was ambiguity in clause 1.2 of the 2016 Agreement.
…
[37] The purported controversy in this appeal however is whether the Deputy President was in error in concluding that he could not have recourse to evidence of surrounding circumstances unless he had first found that there was ambiguity in clause 1.2 of the 2016 Agreement. In our view, the Deputy President did not fall into such error.
(Emphasis in the original)
99 On this issue, the Full Bench concluded:
[39] We see no error in the Deputy President’s findings, approach and conclusion.
[40] As noted in Berri, regard may be had to evidence of surrounding circumstances to assist in determining whether ambiguity exists. However it does not follow that regard must be had to evidence of surrounding circumstances. Recourse to surrounding circumstances in determining whether ambiguity exists depends on the circumstances of each particular case. Here the ordinary meaning of the words in the 2016 Agreement are plainly clear and therefore the Deputy President’s decision not to have recourse to evidence of surrounding circumstances, does not disclose error.
[41] Additionally, even if the 2016 Agreement can be construed to have a commercial purpose, such as in the interpretation of contracts, this is not a relevant consideration in this particular case where the ordinary meaning of the language does not disclose any ambiguity.
[42] Following Berri, the construction of an agreement begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. The task of interpreting an agreement does not involve rewriting the Agreement. The task is always one of interpreting the agreement produced. The common intention is to be identified objectively, that is by reference to that which a reasonable person would understand by the language expressed in the Agreement, without regard to the subjective intentions or expectations. Primacy must be given to the text and language of the Agreement, and this is what the Deputy President has done.
[43] Ambiguity does not simply arise because there are rival contentions advanced. Particularly in circumstances where a clause is said to have a plain meaning, evidence of surrounding circumstances will not be admitted to contradict the plain language of the agreement in any event. The term in clause 1.2 of the 2016 Agreement says what it means, and should not be strained by a narrow or pedantic approach to interpretation as it has been urged by the Appellant at first instance and now on appeal.
(Citations omitted and emphasis in the original)
Is the decision of the Full Bench affected by jurisdictional error?
100 The resolution of this question requires regard to be had to the jurisdiction being exercised by the Full Bench.
101 Section 604(1) of the FW Act entitles a person aggrieved by a decision of the FWC to appeal the decision, with the permission of the FWC. Section 607 contains provisions concerning the hearing of the appeal:
607 Process for appealing or reviewing decisions
…
(2) The FWC may:
(a) admit further evidence; and
(b) take into account any other information or evidence.
(3) The FWC may do any of the following in relation to the appeal or review:
(a) confirm, quash or vary the decision;
(b) make a further decision in relation to the matter that is the subject of the appeal or review;
(c) refer the matter that is the subject of the appeal or review to an FWC Member (other than an Expert Panel Member) and:
(i) require the FWC Member to deal with the subject matter of the decision; or
(ii) require the FWC Member to act in accordance with the directions of the FWC.
102 As already noted, the Full Bench granted Bianco permission to appeal.
103 The appeal contemplated by ss 604 and 607 is an appeal by way of re-hearing: Coal and Allied at [13]. This meant, amongst other things, that it was necessary for Bianco to demonstrate error in the decision of Anderson DP: ibid at [14].
104 The decision of the Full Bench is, with respect, affected by error. That is so for the reasons already mentioned and because it failed to recognise the errors of Anderson DP identified earlier in these reasons.
105 While disputing that the Deputy President had made any error, the CFMMEU also contended that the error of the Full Bench identified in the parties’ statement of agreed issues was not jurisdictional. The parties’ identification of the issue concerning error by the Full Bench was as follows:
[3] Whether the Full Bench of the Fair Work Commission made a jurisdictional error in not finding error in Deputy President Anderson’s conclusion that he could not have recourse to evidence of surrounding circumstances unless he first found there was ambiguity in clause 1.2 of the 2016 Agreement based only on the language of the agreement.
106 The CFMMEU submitted that ss 604 and 607 of the FW Act require the Full Bench, when it grants leave to appeal, to consider whether there was error in the decision at first instance. When the Full Bench discharges that task by applying conventional tests for the identification of appealable error and concludes that there was no error, any error in that conclusion is not jurisdictional. The CFMMEU submitted, accordingly, that even if the Full Bench had been wrong in the present case in failing to identify the errors in the Deputy President’s decision, that was an error within jurisdiction only, and not amenable to prerogative relief.
107 Counsel for the CFMMEU referred to Coal and Allied in which, at [31]-[32], the plurality held that an erroneous finding (if made) by the Full Bench of error by a Deputy President sitting at first instance was “an error within jurisdiction [and] not an error as to the nature of the jurisdiction which the Full Bench was required to exercise under s 45 of the [WR] Act”. Section 45 was, in substance, a counterpart of ss 604 and 607 of the FW Act.
108 The CFMMEU also referred to two other authorities. The first was the judgment of Buchanan J in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; (2011) 192 FCR 78 in which Coal & Allied sought prerogative relief in respect of a decision of the Full Bench of Fair Work Australia (FWA) granting leave to appeal (and allowing the appeal) in respect of a termination of employment. Buchanan J held:
[54] A further point may, nevertheless, be made about this issue. Had any error been made by the Full Bench in its evaluation of those questions, it would not have been a jurisdictional error, but an error within jurisdiction.
[55] A distinction between jurisdictional and non-jurisdictional error remains an important one in Australia where the courts have not followed the approach taken in England in Anisminic Limited v Foreign Compensation Commission [1969] 2 AC 147 at 171 (see for example Re Heerey; Ex parte Heinrich (2001) 185 ALR 106 at [19]–[20]; Re Minister for Immigration and Multicultural Affairs; Ex parte Holland (2001) 185 ALR 504 at [22]). The distinction was emphasised in Coal and Allied at [32]. It is a distinction that has a long history of application to the work of federal industrial authorities. In R v Gray; Ex parte Marsh (1985) 157 CLR 351 Gibbs CJ said (at 371) that “[t]here is a well recognized distinction between an error made by a tribunal in the course of deciding a matter, on the one hand, and an absence or excess of jurisdiction on the other”.
[56] The principle also provides examples of applications for prerogative relief being refused at the order nisi stage. In Re Operative Plasterers Workers Federation of Australia; Ex parte Brown (1992) 67 ALJR 179 Gaudron J said, in relation to one such challenge against the AIRC (at 180):
It is not every error that will ground prerogative relief. So far as mandamus, which is sought in this case, is concerned, there must be an error amounting to a refusal to exercise jurisdiction. Such an error, it is well established, may be constituted by what is said to be a constructive failure to exercise jurisdiction, that is, a mistake of some kind, the effect of which is that the Commission has failed to do that which it is obliged to do, whether pursuant to constitutional requirement or pursuant to statute.
There is, of course, a clear distinction between an error of that kind and an error within jurisdiction where the tribunal concerned simply fails to apply some principle or to discharge some legal obligation which does not, however, affect jurisdiction as such. An example of an error of the latter kind would be one in which the tribunal failed to have regard to matters which should be taken into account in the exercise of a discretion.
[57] Similarly, in Re Commonwealth of Australia; Ex parte Marks (2000) 75 ALJR 470 McHugh J dismissed an application for an extension of time in which to apply for an order nisi directed to the AIRC. His Honour observed (at [18]) that the High Court “should not burden the Federal Court [on remitter] with cases when, as a result of a recent decision of this Court, it is clear that they do not enjoy any prospects of success”. His Honour was referring to the decision in Coal and Allied. His Honour said (at [23]–[24]):
The Full Bench understood its role on appeal
[23] The Full Bench’s role in the applicant’s s 45 appeal was to ascertain whether or not Jones C had made an error in dismissing the applicant’s application under s 170CE. As Gleeson CJ, Gaudron and Hayne JJ noted in Coal and Allied, an appeal under s 45 “is properly described as an appeal by way of rehearing”, and the powers under s 45(7) “are exercisable only if there is error on the part of the primary decision-maker”. This is so “regardless of the different decisions that may be the subject of an appeal under s 45”.
[24] In my view, there can be no doubt that the Full Bench understood that its function was to ascertain whether or not Jones C had made a relevant error. The Full Bench considered the applicant’s grounds of appeal, and concluded that, in respect of each of them, Jones C did not relevantly err. If the Full Bench was wrong to reach this conclusion, then that was an error within jurisdiction.
(Footnotes omitted)
[58] It follows, in my view, from the well established distinction between jurisdictional and non-jurisdictional error as it applies to the work of a statutory body such as FWA, that if the Full Bench was wrong in either of its conclusions, that would represent error within its jurisdiction.
(Emphasis in the original)
109 Next, the CFMMEU referred to Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees’ Union [2015] FCAFC 11; (2015) 230 FCR 565 in which prerogative relief was sought in respect of a decision of the Full Bench that a Deputy President had erred in finding that certain employees were eligible to vote for the approval of an enterprise agreement under s 186 of the FW Act. Buchanan J, with whom Katzmann J agreed, said:
[86] The Full Bench was exercising a supervisory role contemplated by the FW Act. It was entitled to form its own view of the requirements and operation of s 181 for the purpose of carrying out its own functions, even though its opinion would not be legally conclusive … More importantly, assessment by the Full Bench of whether the reasons of Deputy President Asbury constituted a sufficient foundation for her conclusions involved questions of judgment. In my view, it was open to the Full Bench in the performance of its own role on appeal to conclude, even incorrectly, that an adequate foundation for approval had not been established and to remit that question for further consideration. we can see no jurisdictional imperative requiring the Full Bench to take a different course or to dismiss the appeal.
[87] Despite my disagreement with the Full Bench’s analysis, therefore, we am not able to conclude, as Teys argued, that the Full Bench made a jurisdictional error in the performance of its own functions. If it made an error, then that was an error within jurisdiction in my view.
(Emphasis in the original and citation omitted)
110 Reference may also be made to Toms v Harbour City Ferries Pty Ltd [2015] FCAFC 35, (2015) 229 FCR 537 at [47]-[59]; Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [121]; and ALDI Foods Pty Limited as General Partner of ALDI Stores v Shop, Distributive and Allied Employees’ Association [2019] FCAFC 35, (2019) 367 ALR 195 at [48].
111 The submission now made by the CFMMEU is indistinguishable from the submission which it made by way of a preliminary point in Australian Mines and Metals Association Inc v Construction, Forestry, Maritime, Mining and Energy Union [2018] FCAFC 223; (2018) 363 ALR 343 (AMMAI v CFMMEU), and which was unsuccessful – see [66]-[75].
112 In AMMAI v CFMMEU, the CFMMEU had submitted that prerogative relief was available only when the Full Bench misunderstood its appellate function and was not available in respect of misunderstandings by the Full Bench in the discharge of that appellate function. In support of that submission, the CFMMEU had relied upon Coal and Allied and Toms and, in addition, Re Commonwealth; Ex parte Marks [2000] HCA 67; (2000) 177 ALR 491.
113 In respect of the preliminary point, the Full Court (Allsop CJ, Griffiths and O’Callaghan JJ) said:
[70] None of those authorities supports the CFMMEU’s preliminary point which is to the effect that, for the Full Bench to fall into jurisdictional error, the relevant error had to relate in some way to a misunderstanding of the nature and scope of its appellate jurisdiction and not, for example, a misconstruction by the Full Bench of a relevant statutory provision in the performance of that appellate function. The CFMMEU’s contention is based on a narrow and selective reading of what the plurality said in Coal and Allied at [31] (the full terms of which are set out in [68] above). The emphasised words in that passage demonstrate that the Full Bench can commit jurisdictional error, not only if it misunderstands the nature and scope of its appellate role (which is now set out in s 604 of the FW Act), but also if it misunderstands (or misconstrues) the nature of an opinion which it has to form in discharging that appellate function. This is borne out by reference to the full statement of principle enunciated by Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 420 (footnotes omitted):
…I quite agree that the mere fact that a tribunal has made a mistake of law, even as to the proper construction of a statute, does not necessarily constitute a constructive failure to exercise jurisdiction: R. v. Minister of Health. But there are mistakes and mistakes; and if a mistake of law as to the proper construction of a statute investing a tribunal with jurisdiction leads it to misunderstand the nature of the jurisdiction which it is to exercise, and to apply “a wrong and inadmissible test”: Estate and Trust Agencies (1927) Ltd. v. Singapore Improvement Trust; or to “misconceive its duty,” or “not to apply itself to the question which the law prescribes”; The King v. War Pensions Entitlement Appeal Tribunal; or “to misunderstand the nature of the opinion which it is to form”: The King v. Connell, in giving a decision in exercise of its jurisdiction or authority, a decision so given will be regarded as given in a purported and not a real exercise of jurisdiction, leaving the jurisdiction in law constructively unexercised, and the tribunal liable to the issue of a prerogative writ of mandamus to hear and determine the matter according to law: R. v. Board of Education.
[71] The emphasised words in [31] of Coal and Allied are derived from what Latham CJ said in R v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42; 69 CLR 407 at 432 (to which Jordan CJ also referred) (emphasis added):
It is therefore well settled that if a statute provides that a power may be exercised if a person is of a particular opinion, such a provision does not mean that the person may act upon such an opinion if it is shown that he has misunderstood the nature of the opinion which he is to form. Unless such a rule were applied legislation of this character would mean that the person concerned had an absolutely uncontrolled and unlimited discretion with respect to the extent of his jurisdiction and could make orders which had no relation to the matters with which he was authorized to deal. It should be emphasized that the application of the principle now under discussion does not mean that the court substitutes its opinion for the opinion of the person or authority in question. What the court does do is to inquire whether the opinion required by the relevant legislative provision has really been formed. If the opinion which was in fact formed was reached by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation, then it must be held that the opinion required has not been formed. In that event the basis for the exercise of power is absent, just as if it were shown that the opinion was arbitrary, capricious, irrational, or not bona fide.
…
[73] Toms does not assist the CFMMEU’s preliminary point. Reference was made in Toms at [48] to the “basic test” for jurisdictional error by an administrative tribunal being that stated by the High Court in Craig v South Australia [1995] HCA 58; 184 CLR 163 (Craig) at 179. An administrative tribunal commits jurisdictional error when it “falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question… and the tribunal’s exercise or purported exercise of power is thereby affected”. Nothing was said by Buchanan J in Toms with reference to Coal and Allied and the cases referred to therein which casts any doubt on the continuing relevance and authority of that basic test in Craig. It is inconsistent with the CFMMEU’s preliminary point.
[74] Applying those principles to the circumstances here, the relevant issue for the Full Bench was whether the Deputy President had misconstrued s 73(2)(c) in finding that, for the purposes of that provision, he was satisfied that there were no proceedings (other than civil proceedings) pending against any of the entities concerned in the proposed amalgamation. This required the Full Bench, in discharging its appellate function, to construe the meaning of the carve out expression in the provision in order to ensure that the requisite state of satisfaction (or opinion) was not based on a misconstruction of that provision. If the Full Bench’s decision to dismiss the appeal was predicated on a misconstruction of that provision, this would give rise to jurisdictional error. That is because the misconstruction would involve a misunderstanding of the nature of the opinion which it had to form, as referred to in the emphasised part of [31] of Coal and Allied.
(Bold emphasis in the original and italicised emphasis added)
114 In our respectful opinion, that reasoning is apposite in the present case. Like the Full Bench in AMMAI v CFMMEU, we consider that the CFMMEU’s contention is based on a narrow and selective reading of the plurality’s reasoning in [31] of Coal & Allied. Amongst other things, the submission overlooked that in Coal & Allied the error imputed to the Deputy President at first instance concerned an evaluative decision made in the discharge of the task of FWA which was properly understood by the Deputy President. That is very different from a case like the present in which both the Deputy President and the Full Bench misunderstood the nature of the FWC’s jurisdiction under s 217 and therefore the very task required of the FWC.
115 It is, with respect, plain that the Full Bench in the present case did “identify a wrong issue” and “ask itself the wrong question” in a way which affected its purported exercise of its appellate function. That is so because:
(a) the Full Bench failed to recognise that the hearing and determination of an application for variation under s 217 does not require the FWC to interpret the enterprise agreement in question, that is, to determine by a process of construction the true meaning of the enterprise agreement. That meant that the discharge by the Full Bench of its appellate function did not require it to determine whether or not the interpretation which the Deputy President had given to the 2016 Agreement was correct or otherwise. In taking a contrary view, the Full Bench misunderstood the nature of the opinion it had to form in the discharge of its appellate function;
(b) by applying the Berri principles as to the interpretation of enterprise agreements, the Full Bench made the same mistake as to the nature of the task required under s 217 as did the Deputy President;
(c) the endorsement of the Deputy President’s belief that he was unable to take into account “the evidence and findings of surrounding circumstances, including common intention and objectively established past or current practice” likewise involved the misunderstanding of the jurisdiction exercised by the Deputy President which was to be reviewed on appeal; and
(d) the Full Bench failed to recognise that the discharge of the FWC’s function under s 217 attracted the application of s 578 and did not require the application of the rules of evidence.
116 By these errors, the Full Bench did not, in the discharge of its function under s 607, address the question required for its determination on the appeal. That affected the very discharge of the appellate function. Accordingly, the error of the Full Bench was jurisdictional.
117 This conclusion makes it unnecessary to consider the alternative ways by which Bianco contended that the Full Bench’s decision should be regarded as affected by jurisdictional error, including counsel’s submissions concerning irrationality and legal unreasonableness.
118 In our view, Bianco has established an entitlement to prerogative relief. It is, however, unnecessary to order the issue of a writ of mandamus directed to the Full Bench. Both its decision and the decision of the Deputy President will be quashed and Bianco’s application for variation will have to be considered afresh.
Bianco’s alternative claim: quashing the approvals of the 2011 and 2016 Agreements
119 As indicated, we did not understand Bianco to pursue its claim for declarations by this Court that the 2016 Agreement does, as a matter of law and fact, have the effect for which it contended in the FWC.
120 Bianco did make some submissions in support of its claim, made in the alternative in the event that its claim for prerogative relief failed, that the approvals by the FWC of each of the 2011 and 2016 Agreements under s 186 of the FW Act should be quashed or declared invalid. Bianco contended that this relief was appropriate because, if contrary to its contention, the 2016 Agreement did apply to its Structural Division as well as to its Pre-cast Division, it had not been entered into in accordance with the provisions of the FW Act. This was so because its Structural Division employees had not been involved in its formation of the 2016 Agreement and, in particular, had not “genuinely agreed” to it in the manner contemplated by s 188 of the FW Act.
121 Ultimately, Bianco pressed this alternative submission only faintly as it recognised the formidable obstacles in the way of the Court exercising the discretion to grant the relief. Those obstacles include:
(a) the fact that Bianco has not served the employees covered by the 2011 and 2016 Agreements with the proceedings or otherwise given them notice that the Enterprise Agreements on which they have relied hitherto for several of the terms and conditions of their employment may be held invalid;
(b) the inconvenience which such a declaration may have on the orderly regulation of the industrial affairs of Bianco and the employees given that the employees may then become award or industrial instrument free; and
(c) the difficulties which it would create for the employees in enforcing entitlements which have accrued to date under the Enterprise Agreements.
122 To the extent that Bianco did pursue this alternative claim, it is dismissed for these discretionary reasons.
Summary
123 For the reasons given above, we make the following orders:
(1) A writ of certiorari issue to the Fair Work Commission removing into this Court and quashing:
(a) the decision of Anderson DP made on 17 September 2018 in [2018] FWC 5823;
(b) the order made by Anderson DP on 17 September 2018; and
(c) the decision and order of the Full Bench made on 11 January 2019 in [2019] FWCFB 161.
(2) A writ of mandamus issue to compel the Fair Work Commission to exercise its jurisdiction to determine the applicant’s application in proceeding AG2017/5792 in accordance with law.
(3) The applicant’s remaining claims are dismissed.
(4) There be no order as to costs.
I certify that the preceding one hundred and twenty-three (123) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Flick, White and Perry. |
Associate:
