Federal Court of Australia

Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCAFC 231

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

2.    The matter is remitted to the primary judge for consideration of the relief, if any, to which the first respondent is entitled on the cross-claim.

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

REASONS FOR JUDGMENT

WHITE J:

Introduction

1    The question on this appeal is whether the Fair Work Commission (FWC) had jurisdiction under the Fair Work Act 2009 (Cth) (the FW Act) to arbitrate, pursuant to a dispute resolution clause in an enterprise agreement, a dispute between the first respondent (the CFMMEU) and the appellant (Maersk) as to whether vessels of the latter “should be manned with an extra steward”. More particularly, the question is whether an agreement made between Maersk and the CFMMEU in July 2018 as to the crewing of the vessels had the consequence that there could be no “dispute” within the meaning of ss 595 and 739(4) of the FW Act which the FWC had power to arbitrate.

2    In the proceedings at first instance, Maersk impugned the validity of the arbitral award (the Arbitral Award) made by Binet DP in the FWC on 31 May 2019: Construction, Forestry, Maritime, Mining and Energy Union v Maersk Crewing Australia Pty Ltd [2019] FWC 1745. By that Award, the Deputy President had determined, at [135], that, having regard to the criteria concerning crewing in the Maersk Crewing Australia Pty Ltd Maritime Offshore Oil and Gas Industry (Integrated Ratings, Cooks, Caterers and Seafarers) Enterprise Agreement 2018 (the EA), Maersk should employ a steward on each of two vessels, the Maersk Mariner and the Maersk Master, in addition to their existing crews. It was common ground that the EA, which had commenced to operate on 24 May 2018, covered the employment of the crews on the two vessels.

3    Maersk commenced an appeal to the Full Bench of the FWC against the decision of Binet DP. On 1 November 2019, the Full Bench (Hatcher VP, Colman DP and McKenna C) determined unanimously that Maersk required leave to appeal and, by majority (Colman DP dissenting), refused that leave: Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2019] FWCFB 7163.

4    Maersk then sought in this Court declarations that the FWC had lacked jurisdiction to make the Arbitral Award and that it was of no effect. It advanced two grounds in support of that claim. The first was that the initial step in the procedure required by the EA for the resolution of the dispute, had not been followed and that that, by itself, had precluded the FWC from having jurisdiction to arbitrate the dispute. The second was that an agreement made between the CFMMEU and it in July 2018 (the July Agreement) had resolved disputes about the crewing of the vessels, with the consequence that there was no “valid” or “legally cognisable” dispute which could found the FWC’s jurisdiction.

5    The CFMMEU commenced a cross-claim by which it sought a declaration that Maersk had breached cl 10 of the EA by refusing to implement the Arbitral Award, an order that Maersk comply with the Arbitral Award, and the imposition of pecuniary penalties on Maersk.

6    The primary Judge rejected both grounds relied upon by Maersk and dismissed its application for declarations: Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (No 2) [2020] FCA 1694. His Honour reserved for further hearing the relief to which the CFMMEU is entitled on the cross-claim.

7    It is from that judgment that Maersk brings the present appeal. Its Notice of Appeal contains three grounds. However, Maersk does not challenge the correctness of the Judge’s finding that the first step in the dispute resolution procedure had been completed.

8    For the reasons which follow, I consider that the July Agreement did not have the effect for which Maersk contends, that the FWC did have jurisdiction to make the Arbitral Award, and that the appeal should be dismissed.

The jurisdiction of the FWC – statutory provisions

9    Reflecting its emphasis on enterprise bargaining and the resolution of disputes at the enterprise level, the FW Act limits the circumstances in which the FWC may exercise arbitral powers. Section 595 of the FW Act makes the limitation explicit:

595 FWC’s power to deal with disputes

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

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

(a)    by mediation or conciliation;

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

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

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

…

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

10    Thus, the FWC may exercise a power of arbitration with respect to a “dispute” only if expressly authorised to do so by a provision in the FW Act. Relevantly for present purposes, that power is found in the provisions in the FW Act concerning dispute resolution provisions in enterprise agreements.

11    Section 186(6), in relation to the approval by the FWC of an enterprise agreement, provides (relevantly):

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

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

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

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

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

  …

12    By s 738(b) of the FW Act, Div 2 of Pt 6-2 applies (relevantly) if an enterprise agreement includes a term providing a procedure for dealing with disputes, including a term of the kind to which s 186(6) refers. When an enterprise agreement includes a term contemplated by s 738 which requires or allows the FWC to deal with a dispute, s 739 provides:

739 Disputes dealt with by the FWC

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

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

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

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

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

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

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

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

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

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

(Emphasis added)

13    Thus, s 739(4) is an express authority to the FWC to arbitrate a dispute if the parties have agreed, in accordance with the dispute resolution procedure contained in the enterprise agreement, that it may do so and at least one of the parties to the dispute makes application for it to do so. No issues were raised on the appeal concerning the term “agreed” in s 739(4) and the term “parties” in subss (2), (4) and (5).

The Enterprise Agreement

14    The EA was approved by the FWC on 17 May 2018 and came into operation on 24 May 2018 – Re Maersk Crewing Australia Pty Ltd [2018] FWCA 2782. When approving the EA, the FWC noted, pursuant to s 201(2) of the FW Act, that the EA covers the CFMMEU.

15    The EA contains 10 Schedules containing provisions (including provisions concerning the crewing) for 10 categories of vessels. The Maersk Mariner and the Maersk Master are in the first category and, accordingly, Schedule 1 applies to them.

16    Clause 27.5 in the EA contains benchmarks for the numbers of catering crew on all vessels (other than in the fourth category). The benchmarks increase as the number of persons on board increase.

17    Clause 27.5(b) provides for the way in which disagreements about the catering crewing should be determined. It provides:

(b)    Should there be disagreement, the numbers will be determined according to the criteria below:

(i)    Size and configuration/layout of the accommodation and deck levels;

(ii)    Public areas;

(iii)    Number of cabins/berths to service;

(iv)    POB at any given time;

(v)    Laundry service and equipment;

(vi)    Galley layout and equipment;

(vii)    12 or 24-hour operations;

(viii)    Duties and STCW 95.

18    Thus, the scheme of cl 27.5 is to establish benchmarks, in the nature of a standard position, for the number of catering and cleaning personnel on board which vary according to the number of persons on board but to allow for adjustments to be made to the benchmark numbers in a given case by reference to the specified criteria. The prospect of there being disagreement about the appropriate number of catering crew is indicated by the opening words in cl 27.5(b).

19    Clause 10 of the EA contains a dispute resolution procedure. It was common ground that this is of the kind contemplated by s 186(6) and s 738 of the FW Act. Clause 10 provides:

[10.1]    When an industrial dispute arises, including a matter arising under this Agreement or the NES, this clause sets out the procedure to resolve the dispute.

Step 1:

Where a matter arises when the Employee(s) are on board a Vessel, the matter will in the first instance be discussed between the Employee(s) and the Master.

Where a matter arises when the Employee(s) are not on board a Vessel, the matter will in the first instance be discussed between the Employee(s) and the Employer's nominated representative.

If the matter remains unresolved:

Step 2:

The matter will be referred for discussion between the Employee, the Employee's Union delegate or other nominated representative and the Master and/or Employer.

If the matter remains unresolved:

Step 3:

The matter will be referred for discussion between the appropriate Federal or Branch Union Official or other nominated representative and the Employer's Human Resources or Industrial Relations Manager.

If the matter remains unresolved:

Step 4:

In the event that the preceding steps have failed to resolve the matter and/or dispute, any person bound/covered by this Agreement or nominated other representative may refer the dispute to the FWC for conciliation and/or arbitration pursuant to Section 739 and Section 595 of the Fair Work Act.

20    As is apparent, cl 10.1 provides a procedure for the resolution of “industrial disputes” and of “matters” arising under the EA itself or concerning the National Employment Standards (NES). The latter are the kind of disputes to which s 186(6) refers. Each successive step in the procedure may be taken only if the dispute or matter remains unresolved at the completion of the preceding step. This means that a dispute may be referred to the FWC only when the dispute or matter has not been resolved by the first three steps in the process.

21    Clause 10.2 provides for the action which the FWC may take in relation to a dispute referred to it under the procedure:

[10.2]    Where the matter remains unresolved, the FWC may deal with the dispute in two stages:

(a)    The FWC will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and

(b)    If the FWC is unable to resolve the dispute at the first stage, the FWC may then:

(i)    Arbitrate the dispute; and

(ii)    Make a determination that is binding on both of the parties.

22    Clause 10.3 requires work to continue normally while the dispute is moving through the resolution process. Clauses 10.4 and 10.5 provide:

[10.4]    The parties to the dispute agree to be bound by a decision made by the FWC in accordance with this clause, but note that a decision of a single member of the FWC can be appealed to a Full Bench of the FWC.

[10.5]    An Employee who is party to the dispute or the Employer may appoint another person, organisation or association to accompany and/or represent them for the purposes of the procedures in this clause.

23    As is apparent, cl 10.4 provides that it is the parties to the dispute who agree to be bound by an arbitral award of the FWC. Persons who were not parties to the dispute are not expressed to be bound by the award, even if their circumstances are indistinguishable from those which were the subject of that award.

24    Clause 10 appears to be based on, but does not replicate, the Model Term For Dealing with Disputes For Enterprise Agreements contained in Sch 6.1 of the Fair Work Regulations 2009 (Cth).

25    It was common ground that a dispute concerning the catering crewing on the vessels is of a kind which may be dealt with in accordance with the stepped procedure contained in cl 10 and that, subject to the issue raised by Maersk concerning the effect of the July Agreement, cl 10, in conjunction with s 595 and Div 2 of Pt 6 of the FW Act, otherwise authorised the FWC to arbitrate the dispute which was the subject of the CFMMEU application lodged on 7 November 2018.

Factual setting

26    Although some of the matters which I record in this section of the reasons relate to the issue of whether the first step in the dispute resolution procedure had been followed, they are also relevant to the grounds which Maersk pursues on the appeal.

27    The Judge found that the issue of a steward in the crews of the two vessels had first been raised with their respective Masters by their crews in March 2018, at [32]. His Honour accepted the evidence of Mr Knight, a cook who had worked on both vessels, that between March and July 2018 he had raised the issue of the additional steward with the Master of each vessel and that, in about July 2018, he had asked Mr Gakis, the CFMMEU organiser to place the issue on the Agenda for the forthcoming Consultative Committee meeting with Maersk, at [32]-[35]. The establishment of the Consultative Committee was required by cl 8.1 of the EA. It required the Consultative Committee to meet at least once every six months, and provided that it should consider, amongst other things, “the size and composition of the workforce”.

28    On 16 July 2018, Mr Kearney, the Managing Director of Maersk, met Mr Cain, the Assistant Branch Secretary of the CFMMEU. It is unclear whether that was before or after Mr Knight made his request to Mr Gakis. At the time of that meeting, there were three applications before the FWC concerning disputes which had arisen between Maersk and the CFMMEU: one commenced by Maersk and two commenced by the CFMMEU. The application commenced by Maersk concerned right of entry issues. The applications of the CFMMEU concerned a crewing issue (specifically the number of integrated ratings required on the two vessels) and “an income protection issue”. In addition, there were other issues between the CFMMEU and Maersk at the time which had not been made the subject of any application to the FWC. None of the applications before the FWC concerned the steward issue. In this respect, the Judge noted Mr Kearney’s acknowledgement that the application concerning the integrated ratings was a different dispute from that concerning whether cl 27.5(b) of the EA required an additional steward, at [55].

29    The Judge recorded that it was common ground between the parties that, at the time of the discussions in July 2018, there was a part-time steward deployed from time to time on the two vessels; that the discussion at the meeting on 16 July 2018 had been to the effect that, if an integrated rating was added to each vessel, there should be no continuation of the part-time steward, at [38]; and that the agreement which was discussed between Mr Kearney and Mr Cain to resolve the disputes was that “the manning for the vessels going forward would be five integrated ratings and a cook”, at [38]. His Honour also accepted that Mr Cain had told Mr Kearney in the course of the meeting that he did not “give a stuff” about the claim for a steward, at [40], [45].

30    The Judge found that, in an exchange of emails shortly after the meeting on 16 July 2018 concerning the resolution of the disputes, Mr Kearney had sent an email to Mr Cain on 19 July 2018 in the following terms:

Thanks for your email. I appreciate the commitment shown by you this week on behalf of the CFMMEU to a more positive, cooperative and professional relationship and I provide you the same commitment on behalf of Maersk Supply Service.

We believe that workplace issues and disputes that may arise are best resolved at a local level, through the agreed processes, and without publishing comments or materials that disparage either party or their representatives. Please confirm that moving forward from today CFMMEU agrees, and will follow the agreed disputes procedure in the current 2018 enterprise agreement in respect of any issue falling under the agreement and, for any other issues, deal with local Maersk management, and in a professional way, ensuring that communications are consistent with behaviours expected in applicable policies.

To start afresh, based on your email and our discussion, I confirm by reply the following commitments:

1.    Maersk will discontinue Fair Work Commission dispute application RE2018/763 in the next few days and implement the following manning arrangements with no further retrospective claims to arise:

a)    During any period in which the vessel is contracted to perform work in Australia under the current EA, Maersk Supply Service will implement the following minimum manning levels on our M Class Vessels:

a.    Five Integrated Ratings and one Cook (one of the Integrated Ratings may be a Junior Integrated Rating or Provisional Integrated Rating).

b.    This being effected today on Maersk Master (Full Crew Change) and planned for Maersk Mariner Tuesday 24th July (Full Crew Change).

2.    The CFMMEU will discontinue the Fair Work Commission dispute applications C2018/3287 and C2018/3836 in the next few days and take no further action (e.g. applications/prosecutions) on those issues or the issues referred to in the CFMMEU's correspondence to Maersk dated 4 July 2018 regarding right of entry during the week of 2 July 2018.

Please confirm that my understanding of our agreement is correct, and I confirm myself and Melaine [Nottle] are available Monday afternoon for the meeting with yourself and George, if we can firm up a suitable time before weeks close here.

(Emphasis added)

31    Although Mr Kearney had sought in the final paragraph confirmation from the CFMMEU that his understanding was correct, the Judge did not make a finding as to whether that confirmation had been provided. However, it is implicit that the CFMMEU had provided the confirmation because the Judge found that the application commenced by the CFMMEU, by which it had sought the inclusion of an additional integrated rating in the crews of the vessels, was discontinued.

32    Despite the agreement, a few weeks later (on 9 August 2018), Mr Gakis helped prepare an agenda for a Consultative Committee meeting in which he included the following item:

Manning for vessels

Employees feel that the vessel is undermanned with not having a Steward on board full time. There is more than enough work to justify the position considering the size and layout of the vessels.

33    Over the ensuing weeks, there was a telephone discussion between Mr Gakis and Ms Nottle, the Human Resources Manager for Maersk, and an exchange of emails. Amongst other things, there was discussion as to why the issue was being raised only a month after the July Agreement had been concluded and whether it was a separate issue from that concerning the inclusion of an additional integrated rating.

34    On 27 August 2018, Mr Gakis and Mr Cain from the CFMMEU met Mr Kearney and Ms Nottle at a coffee shop. Although the Judge did not making a finding to this effect, it seems that this was the Consultative Committee meeting. The Judge found, at [70], that Mr Gakis raised the claim for a steward; that he had said that he had been “appointed” by the crews of the vessels to raise the issue of the steward; and that he had said that the July Agreement had concerned the additional integrated rating and not the steward. His Honour also found that, while Mr Kearney and Ms Nottle had disputed that the July Agreement had not concerned the steward claim, they had not in July 2018 been “consciously aware” of the emails in March 2018 concerning that claim, at [70]. The Judge found that Mr Gakis had said that Maersk should go away and consider its position in relation to the steward, at [70].

35    Mr Gakis sent follow up emails on 12 and 26 September and on 3 October 2018, at [71]-[73].

36    On 9 October 2018, Ms Nottle notified Mr Gakis (relevantly):

Manning claim/Steward at all times: this claim is not accepted. An additional IR was recently added to the manning and the company considers this sufficient. Yes M-class size and layout is different, but these vessels also have added technology to make tasks more efficient. If the crew find an issue with the distribution of their tasks they are reminded to raise their concerns with their captain.

37    Mr Gakis responded immediately stating “We are not happy with the response regarding the Steward and will be considering our options. Will revert back once we discuss amongst ourselves”.

38    Mr Gakis sent a long email to Ms Nottle on 30 October 2018 which commenced:

Further to our discussions about the need to engage a steward on the Maersk anchor handlers, I have set out below the extenuating circumstances which warrant manning levels that exceed the minimum prescribed in the Enterprise Agreement.

Mr Gakis then set out reasons for the position adopted by the CFMMEU.

39    Mr Cain sent a reminder email to Ms Nottle on 5 November 2018 stating that, if the CFMMEU did not receive a response, it would take it as the final step in the dispute resolution process and would lodge “the appropriate paperwork” to have the matter heard in the FWC.

40    Ms Nottle responded by email the same day, saying:

The short answer is the Company does not accept your claim to add a Steward. The agreed manning is described already by the EA, this is what the employees and Union agreed to as part of the bargaining. We appreciate you[r] list of reasons, but don't accept there is operational requirement for the position to be added.

Would suggest if employees are concerned about OHS risk, fatigue management and rest hour deviation they raise this immediately with their Captain for re-distribution, re-prioritisation and management of job tasks.

41    The CFMMEU then lodged its application in the FWC, on 7 November 2018.

The application to the FWC

42    In its application to the FWC, the CFMMEU described the dispute in the following terms:

1.    The Respondent [Maersk] employs employees pursuant to the terms of the [EA] ('the Agreement');

2.    The Applicant is covered by the terms of the Agreement;

3.    The Respondent currently operates two vessels, the Maersk Mariner and the Maersk Master which have been and are currently engaged to support Quadrant Energy's Phoenix South and Van Gogh drilling campaign;

4.    The vessels are manned pursuant to Schedule 2 and clause 27.5 of the Agreement;

5.    Given the nature of the vessels above, and considering the factors set out at clause 27.5(b) of the Agreement, the Applicant contends that the vessel should be manned with an extra steward;

6.    The Respondent rejects this claim by the Applicant and, as a result, the parties are in dispute over the matter.

(Emphasis added)

43    As is apparent, in [6] of its application, the CFMMEU asserted that Maersk and it were in dispute over “the matter” which, as indicated by [5], concerned the claim of the CFMMEU that the vessels be crewed with an extra steward.

44    In its responsive document, Maersk said, correctly, that it was Schedule 1 in the EA, and not Schedule 2, which applied to the two vessels. In relation to Items 5 and 6 Maersk said:

[5]    This is disputed by the Respondent.

The Respondent notes that there was no claim made for a Steward during bargaining this year of the current enterprise agreement (approved on 17 May 2018).

The Steward role was a trial on the M class vessels when the vessels were new to Australia to assist the crew for the first two weeks of each swing. It was removed as part of an agreement reached with the Applicant to add a fifth Integrated Rating position earlier this year.

[6]    This is not disputed by the Respondent.

45    As is apparent, Maersk accepted that the parties were in dispute about the claim for the additional steward. It did not raise any claim that the dispute was not “valid” or “legally cognisable”.

The proceedings in the FWC

46    The FWC attempted to resolve the dispute by conciliation, as required by cl 10.2(a) of the EA, but was unsuccessful. The CFMMEU then sought arbitration.

47    In the hearing at first instance in the FWC, Maersk raised two preliminary objections to the application. First, it sought the dismissal, pursuant to s 587(1)(b) of the FW Act, of the CFMMEU application on the grounds that it was vexatious because it had been part of the previous dispute resolved by the July Agreement. It is to be noted that this was not an objection to the jurisdiction of the FWC but the seeking of an order in the exercise of its jurisdictions. Again, Maersk did not contend that the FWC lacked jurisdiction because the dispute was not “valid” or “legally cognisable”. To the contrary, as just noted, the responsive document which it filed accepted that the parties were in dispute over the steward issue. Moreover, the parties provided to the FWC an Agreed Statement of Facts, one of which was that “the dispute relates to clause 27.5(b) of the Agreement”. The Statement then continued under the headings “Facts in disputes”:

The Applicant asserts that, taking into account the criteria outlined at clause 27.5(b) an additional Steward position is needed aboard the Vessels. The Respondent does not agree.

(Emphasis added)

48    Maersk’s second preliminary objection was that, if the application concerned a new dispute, then the CFMMEU had not complied with Step 1 in the dispute resolution procedure in cl 10 of the EA, with the consequence that the FWC lacked jurisdiction to determine the application.

49    Deputy President Binet rejected both those objections and determined in the arbitration that a steward should be engaged on each of the two vessels. The Deputy President does not seem to have made a formal order to that effect. Her reasons indicate that she regarded the parties to the dispute as the CFMMEU and Maersk.

50    As noted, the Full Bench refused to grant leave to Maersk to appeal against that decision.

The reasons of the primary Judge

51    The reasons of the Judge are extensive and detailed but those concerning factual findings can be distilled, for present purposes, to the following:

(a)    there had been compliance with Step 1 in the dispute resolution procedure in relation to the claim for a steward on each vessel, constituted by the actions of the crew of the Maersk Mariner on 9 March 2018 in sending an email to Maersk, by actions of members of the crew on the Maersk Master in raising the same issue with the Master of that vessel in March 2018, and by the actions of Mr Knight who, while working as a cook on both vessels at different times, had raised the issues with the Master of each, at [33];

(b)    the claim for a steward on the vessels had not been the subject of any of the applications before the FWC at the time of the July meeting, at [36];

(c)    the agreement discussed at the July meeting was that the crewing of the vessels going forward (for those covered by the EA) would be five integrated ratings and a cook, at [38];

(d)    the agreement recorded in the exchange of emails in July 2018 had been to the effect that the minimum crewing would comprise the five integrated ratings and a cook and no other employee, at [38], [53], [159];

(e)    the word “minimum” did not, in context, admit the possibility that there may be some future attempt to insist on the addition of another employee, being a steward, at [53];

(f)    the written terms of the July Agreement should be understood as having addressed the minimum crewing on the vessels in the circumstances that then pertained; as having covered all claims relating to previous circumstances; and as containing agreement on the crewing on the vessels on an ongoing basis, at [161]; and

(g)    the CFMMEU claim for a steward pressed from 9 August 2018 was not based upon any claim that there had been a material change in circumstances, at [161].

52    The Judge addressed separately the Maersk claim that the July Agreement had resolved finally the dispute between it and the CFMMEU as to the crewing levels on the two vessels (so that the FWC did not have jurisdiction with respect to the dispute about a steward). His Honour considered that this claim of Maersk involved two elements:

(i)    that it was the July Agreement and not the EA which governed crewing levels; and

(ii)    the arbitral jurisdiction of the FWC was confined to the adjudication of a dispute under the EA itself and it was not enabled to determine the rights of the parties under the July Agreement.

53    The Judge concluded that the arbitral jurisdiction of the FWC under the EA was not affected by the July Agreement, at [115]. It is evident that in so concluding the Judge proceeded on the basis that the matter in dispute between the CFMMEU and Maersk was whether cl 27.5(b) of the EA required the inclusion of a steward in the crew. His Honour reasoned:

(a)    Maersk was subject to a statutory obligation imposed by the FW Act to give effect to the EA, at [115];

(b)    the dispute as to whether an additional steward was required on each of the vessels was a dispute about what the EA itself required. It was not a dispute about what the July Agreement required or about what had been resolved by that Agreement, at [118];

(c)    an enterprise agreement, being a creature of statute, is different from a private contract, at [115]. It is a statutory artefact by which employers and employees become bound to the observance of the terms of an instrument by force of legislation: Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84; (2014) 222 FCR 152 at [88]-[90]. Effect must be given to the requirements of an enterprise agreement unless and until its terms are varied in accordance with the statutory procedures in Div 7 in Pt 2-4 of the FW Act, at [120];

(d)    accordingly, while it is possible for parties to an enterprise agreement to create by way of contract or deed rights touching or concerning the rights of particular persons conferred by an enterprise agreement, such an agreement cannot by itself alter the terms of the enterprise agreement or their statutory effect, at [116];

(e)    in particular, agreement between Maersk and the CFMMEU would not alter the provisions in the EA bearing on whether a steward is required on a particular vessel; could not alter the provisions conferring on the FWC arbitral authority to resolve any industrial dispute arising under the EA or the NES; and could not “deprive” the FWC of the full extent of its arbitral jurisdiction, at [116], [119], [151], [157];

(f)    provided that the steps required under the dispute resolution procedure had been followed and an industrial dispute had arisen which had not been resolved, the dispute as to that matter could be referred to the FWC for arbitration, at [117]; and

(g)    accordingly, regardless of any private agreement made by the CFMMEU and Maersk in July 2018, the FWC retained its statutorily conferred private arbitral authority to arbitrate the dispute about what cl 27.5(b) required with respect to catering crewing.

54    The Judge concluded:

[129]    Therefore, the FWC could validly enter upon the arbitration of a dispute raised by the Union as to whether there should be an additional steward on each of the two vessels. The manning levels that were to be considered and adjudicated by the FWC were those provided for in the EA. Irrespective of the terms of any agreement enforceable as a matter of contract, the EA continued to have statutory force as to the terms and conditions of employment. A party was entitled to bring a claim based upon those entitlements and to do so by the statutory mechanism provided for the determination of that claim.

Ground 1: the submissions of Maersk

55    By Ground 1 in the Notice of Appeal, Maersk contends that the Judge should have found that the July Agreement had had the effect that the FWC lacked jurisdiction to arbitrate the CFMMEU’s steward claim.

56    Maersk contended, first, that the Judge had erred by characterising the issue as being whether the July Agreement could “deprive” the FWC of “the full extent of its arbitral jurisdiction”, as it contended his Honour had done in [14], [119], [151] and [157]. It contended that the question was not whether the FWC had been deprived of jurisdiction but whether the effect of the FW Act and the dispute resolution procedure in the EA had been such as to confer jurisdiction on the FWC.

57    Maersk submitted that the Judge should have concluded that requirement for the FWC to have jurisdiction in respect of a dispute is that the dispute be “valid” or “legally cognisable”. It advanced five contentions in support of the submission that such a dispute did not exist in the present case.

58    First, the FWC had jurisdiction to arbitrate the claim for the inclusion of a steward in the vessels’ crews if, and only if, Maersk’s rejection of that claim gave rise to a “dispute” within the meaning of ss 595 and 739 of the FW Act and an “industrial dispute” or “a matter” arising under the EA. This was not contentious.

59    Secondly, in order that a dispute have the character required by ss 595 and 739, it must be a “legally cognisable dispute or disagreement – a dispute that the law recognises as a valid controversy”, and not simply any claim which has been made and rejected. A dispute will not be legally cognisable if its subject matter has been dealt with in an arbitral award or agreement which binds the parties. In support of this contention, Maersk referred to Energy Australia Yallourn Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union [2017] FCA 1245 (Energy Australia FCA) and on appeal ([2018] FCAFC 146; (2018) 264 FCR 342 (Energy Australia Full Court)) in which it was held that an arbitral award made by the FWC in accordance with the dispute resolution procedure in an enterprise agreement had extinguished the controversy between the employer, its employees and five unions as to the interpretation and application of a clause in the enterprise agreement. Maersk then submitted that an accord and satisfaction extinguishing a controversy could also arise by the parties’ own agreement on the resolution of the dispute. This submission was central to the case of Maersk on the appeal. Maersk referred to Skaines v Kovac Enterprises Pty Ltd [2006] QSC 120, [2007] 1 Qd R 98 at 100-101 and to Chimimport PLC v G D’Alesio SAS (The Paloa D’Alesio) [1994] 2 Lloyd’s Rep 366 at 370 as examples of circumstances in which the parties’ antecedent settlement agreement concerning the matters in dispute had brought to an end the exercise of arbitral or tribunal powers in respect of that dispute. As part of this contention, Maersk also submitted that Parliament must have intended the word “dispute” in ss 595(3) and 739(4) of the FW Act to exclude settled or resolved disputes, even if the resolution of the dispute had not resulted in a variation of the enterprise agreement so as to give legal and binding effect to that resolution, and the Judge had been wrong to conclude otherwise.

60    Thirdly, the stepped structure of the dispute resolution procedure in the EA has the effect, in any event, that arbitration is available only if the matter in dispute “remains unresolved” after progression through each of the preceding steps.

61    Fourthly, the July Agreement had resolved the dispute about the crewing of the vessels by the provision that each vessel be crewed with five integrated ratings and one cook but no steward. Maersk relied on the Judge’s findings to that effect at [53] and [161]. The consequence was that, at least in the absence of a material change in circumstances, the CFMMEU could not generate a “legally cognisable” dispute about the crewing of the vessels.

62    Fifthly, the resolution of the dispute contained in the July Agreement had not required a variation to the EA in order to be efficacious.

63    Sixthly, to the extent that the Judge had regarded as relevant its participation in the arbitration without objection, it had raised the July Agreement as soon as the CFMMEU had referred the matter for arbitration.

Ground 1: the submissions of the CFMMEU

64    The CFMMEU supported the Judge’s approach. In particular, it contended that:

(a)    it had not been open to the parties to resolve the steward claim in a way which conflicted with the manner in which crewing levels are to be determined under the EA;

(b)    the requirements of the EA with respect to crewing continued to apply after the July 2018 agreement was made;

(c)    the reliance of Maersk upon the decision in Energy Australia FCA was misplaced as that case had involved the effect of an arbitral determination with binding effect, and the July Agreement did not have that status; and

(d)    the steps in the EA dispute resolution procedure had been followed before it made its application to the FWC.

Consideration of Ground 1

65    It is convenient to address first some aspects of s 186(6) and the dispute resolution procedure in cl 10 of the EA.

Section 186(6)

66    The evident intention of s 186(6) of the FW Act is to require the persons negotiating enterprise agreements to address the means, suitable to the enterprise in question, by which the FWC or an independent third party can settle disputes about matters arising under the agreement itself or in relation to the NES. It is a recognition that, despite the negotiation of the matters recorded in the enterprise agreement, disputes may arise from time to time which will not be resolved consensually and, in respect of which, it is in the interests of those covered by the agreement, and the public interest, that there be a means of settlement by an independent body. By this means the orderly conduct of industrial relations or, using the expression of Rares and Barker JJ in Energy Australia Full Court at [30], the “restoration and maintenance of industrial harmony” is facilitated.

67    Subject to those negotiating an enterprise agreement providing as a minimum for the matters to which s 186(6) refers, they have considerable flexibility in the procedure which they adopt for themselves for the resolution of disputes.

68    The particular disputes for which s 186(6) requires provision are disputes about “any matter” arising under the enterprise agreement itself or relating to the NES. However, the dispute resolution procedure in an enterprise agreement need not be confined to disputes about matters of this kind. Nor are the disputes to which ss 738 and 739 refer so confined. This is made evident by s 738(b) which indicates, in effect, that s 739 has application if an enterprise agreement includes a term providing a procedure for dealing with disputes, including a term referred to in s 186(6). See also United Firefighters’ Union of Australia v Country Fire Authority [2015] FCAFC 1; (2015) 228 FCR 497 at [247]-[248]. Thus, depending upon the terms of the enterprise agreement, the matters which may be the subject of disputes may be diverse, although probably subject to the qualification that they pertain to the relationship between the employer(s) and employee(s) covered by the agreement or the relationship between employer(s) and union(s) covered by the agreement – see s 172(1) of the FW Act.

69    As the Judge noted, at [87], the chapeau to cl 10 of the EA indicates that the clause is not confined to the matters to which s 186(6) refers.

70    It is also pertinent to note that it is inherent in the nature of a dispute that there are parties to it. That is in any event made express in s 739(6) (and probably also in s 739(5)) and in cll 10.2, 10.3, 10.4, 10.5 and 10.6. A dispute does not exist independently of the parties to it.

Sections 595, 738 and 739 and justiciable controversies

71    Maersk submitted that the term “matters” is used in s 186(6)(a)(i) and in cl 10 of the EA in the constitutional sense, by which I understood it to refer to the terms “matter” and “matters” appearing in Ch III of the Constitution in the conferral of the judicial power of the Commonwealth. The Judge had alluded to this possibility at [88] of his reasons.

72    It can be inferred that the term “matter” is used in cl 10 of the EA with the same meaning as it is used in s 186(6) of the FW Act. That is evident from its use of the phrase “a matter arising under this Agreement or the NES” and the evident intention thereby to satisfy the obligation imposed by s 186(6). At the same time, the persons drafting cl 10 intended that the dispute resolution procedure should encompass industrial disputes more generally.

73    The term “matter” appearing in Ch III of the Constitution has the meaning of a “justiciable controversy”: Re Wakim; Ex parte McNally [1999] HCA 27, (1999) 198 CLR 511 at [140]; Palmer v Ayres [2017] HCA 5, (2017) 259 CLR 478 at [26]. The plurality in Palmer v Ayres continued:

[27]    The requirement that, for there to be a "matter", there must be an "immediate right, duty or liability to be established by the determination of the Court" reinforces that the controversy that the court is being asked to determine is genuine, and not an advisory opinion divorced from a controversy, and, further, that only a claim is necessary. A matter can exist even though a right, duty or liability has not been, and may never be, established.

(Emphasis in the original and citations omitted)

74    In my view, it should not be concluded that the term “matter” in s 186(6)(a) is used in the Ch III sense. The Parliament was not purporting in s 186(6) to confer judicial power and there is no reason to suppose that s 186(6) is intended to be confined to a claim for an “immediate right, duty or liability to be established by a determination of [a] court”. It is more likely that s 186(6) and cl 10 use the term “matter” with a non-technical meaning, i.e, as simply referring to an issue or a concern. That is to say, the term is capable of encompassing matters about which no claim has been made but which are of concern in the workplace.

75    The concepts of “valid disputes” or “legally cognisable disputes” for which Maersk contends are not without their difficulties, but those difficulties can be put to one side. Section 186(6) and cl 10, and in turn ss 738 and 739, seem to be concerned with the reality of a dispute rather than its legal characterisation. In this context, the introduction of concepts such as “valid disputes” and “legally cognisable disputes” has the potential to introduce formality and technicality into procedures which are intended to be fundamentally practical. It is to be remembered that disputes at workplaces can give rise to forms of industrial action of the kind to which s 19 of the FW Act refers and that, in many cases, it is resort to the FWC which brings about the cessation of the industrial action while the subject matter of the dispute is addressed in an orderly way. It is not to be expected that, despite the adverse consequences for the particular workplace and the community more generally of the continuation of industrial action, the FWC could discharge its important function when disputes are categorised as “valid” or “legally cognisable” but not otherwise. It is more natural to understand s 739 as concerned with the reality of the situation, i.e, the existence in fact of a dispute, whatever abstract labels may be attached to it.

76    However, in the view I take, it is not necessary to determine whether the concepts of “valid dispute” and “legally cognisable dispute” in the context of ss 595, 738 and 739 do themselves have validity.

The Energy Australia decisions

77    It is important to note that the question in Energy Australia Yallourn was whether there was justiciable controversy of the kind necessary to found the jurisdiction of this Court under s 39B(1)(c) of the Judiciary Act 1903 (Cth), and not the question of whether there was a “dispute” which could, pursuant to ss 595 and 739, be arbitrated by the FWC.

78    In Energy Australia FCA, the primary Judge (Bromberg J) held that this Court did not have jurisdiction to hear and determine a claim for declarations concerning the manner of remuneration of casual employees because there was no justiciable controversy between the parties concerning that question. That was so because the issue had been resolved by an arbitral decision of the FWC pursuant to s 739(4) of the FW Act following the referral by a Union of a dispute pursuant to a dispute resolution procedure which had some, but by no means complete, similarity to cl 10 of the present EA. The dispute concerned the manner of payment of casuals. Energy Australia was a party to the dispute and, in accordance with a provision in the dispute resolution procedure, had agreed to be bound by the arbitral award.

79    Energy Australia later sought to agitate the same issue in its claim for the declarations. Although it had participated without protest in the arbitration, it contended that the FWC had lacked jurisdiction to make the award and thereby sought to avoid the conclusion that, after its making, there could not be a justiciable controversy with respect to the claim. The lack of jurisdiction arose, it contended, because the dispute resolution procedure pursuant to which the FWC had purported to act could be invoked only by employees covered by the enterprise agreement and not by any one of the unions covered by it. This issue was resolved against Energy Australia.

80    In determining that the FWC award precluded a justiciable controversy founding the jurisdiction of the Court from arising, Bromberg J relied on the explanation of the legal consequences of private arbitrations given by Hayne, Crennan, Kiefel and Bell JJ in TCL Air Conditioner (Zhonghan) Co Ltd v The Judges of the Federal Court of Australia (2014) 251 CLR 533:

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

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

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

(Emphasis added and citations omitted)

81    Bromberg J noted that this understanding of the consequences of a private arbitration had been applied to an arbitration conducted pursuant to ss 595 and 739(4) of the FW Act in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123; (2015) 235 FCR 305 (AFMEPKIU v ALS):

[35]    Thus it is well settled that “arbitration” by FWC pursuant to a term in an enterprise agreement is a private arbitration, based upon the consent of the parties, and not upon the coercive authority of the Australian state …

Later, at [86], the Full Court in AFMEPKIU v ALS had said that it was “inclined to the view that [the arbitral award of the FWC] should generally be treated as the contractually binding outcome of the agreed dispute resolution process”.

82    Energy Australia’s appeal against the judgment of Bromberg J was unsuccessful: Energy Australia Full Court. The appeal seems to have been argued on the basis that, if contrary to Energy Australia’s contention, it had been open to the Union to initiate and pursue the dispute resolution procedure which led to the arbitral award of the FWC (and therefore that the award had been made within jurisdiction), there was no justiciable controversy. Rares and Barker JJ held that Bromberg J had been correct to find that the arbitral decision of the FWC had extinguished the controversy between the employer, its employees and the five unions as to the dispute on the interpretation and application of the clause concerning the payment of casual employees. In his separate judgment, Flick J reached the same conclusion.

83    The circumstances of the present case are plainly distinguishable from those considered in Energy Australia FCA and in Energy Australia Full Court.

84    Maersk sought to rely on Energy Australia FCA and Energy Australia Full Court in two ways. First, by reference to the elements of a justiciable controversy, Maersk submitted that the rejection of a claim does not give rise to a “legally cognisable dispute” if the matter is foreclosed by an agreement made in the settlement of an earlier dispute. It submitted that the Energy Australia litigation was an example of such a situation.

85    Secondly, Energy Australia relied on the principles of accord and satisfaction to which Bromberg J had referred in Energy Australia FCA. It submitted that, just as the arbitral award then under consideration constituted an accord and satisfaction of the claim concerning the payment of casuals, so did the July Agreement constitute an accord and satisfaction of the steward claim. The consequence was that there could be no “legally cognisable dispute” with respect to that claim.

86    So far as I am aware, Maersk’s invocation of the principles concerning accord and satisfaction with respect to the resolution, other than by arbitration of a dispute or matter under a dispute resolution procedure such as that contained in cl 10 of the EA, is novel.

87    As will become apparent, the submission faces some difficulties. They arise from the very nature of an accord and satisfaction, from the nature of an enterprise agreement, and from the nature of the July Agreement.

Accord and satisfaction – principles

88    As explained by Dixon J in McDermott v Black [1940] HCA 4; (1940) 63 CLR 161 at 183-4:

The essence of accord and satisfaction is the acceptance by the plaintiff of something in place of his cause of action. What he takes is a matter depending on his own consent or agreement. It may be a promise or contract or it may be the act or thing promised. But, whatever it is, until it is provided and accepted the cause of action remains alive and unimpaired. The accord is the agreement or consent to accept the satisfaction. Until the satisfaction is given the accord remains executory and cannot bar the claim.

See also Tallerman & Co Pty Ltd v Nathan’s Merchandise (Victoria) Pty Ltd [1957] HCA 10; (1957) 98 CLR 93 at 114 (Dixon CJ and Fullagar J).

89    To similar effect, Scrutton LJ said in British Russian Gazette & Trade Outlook Ltd v Associated Newspapers Ltd [1933] 2 KB 616 at 643-4:

Accord and satisfaction is the purchase of a release from an obligation whether arising under contract or tort by means of any valuable consideration, not being the actual performance of the obligation itself. The accord is the agreement by which the obligation is discharged. The satisfaction is the consideration which makes the agreement operative.

90    Counsel for Maersk also referred to El-Mir v Risk [2005] NSWCA 215 at [48]-[68] in which the Court of Appeal (McColl JA, with Handley and Ipp JJA agreeing), reviewed a number of authorities bearing upon an accord and satisfaction and to Clarence City Council v Commonwealth [2020] FCAFC 134; (2020) 280 FCR 265 at [156].

91    Fundamentally, an accord and satisfaction involves a consensual act by which a party accepts something in place of the full remedy to which it is entitled: Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; (1996) 186 CLR 574 at 610. If, as Maersk contends has occurred in the present case, the party accepts a promise of some different performance, the party’s remedy is to sue for breach of that promise, and not to enforce the original entitlement: El-Mir at [52].

Accord and satisfaction and rights under an enterprise agreement

92    In the present case, the rights said by Maersk to have been forgone by the CFMMEU are rights under the EA. Relevantly, these are rights to have the catering crewing on the Maersk Master and the Maersk Mariner determined in accordance with cl 27.5 of the EA and to invoke the cl 10 dispute resolution procedure in the event of disagreement about the application of the benchmark with respect to that crewing.

93    An initial difficulty for Maersk arises from the fact that enterprise agreements are not like ordinary contracts and in fact are not contracts at all. The rights and liabilities of persons covered by enterprise agreements derive from the FW Act and not from the status of the enterprise agreement as a contract. This was confirmed by the Full Court in Toyota v Marmara at [88]-[89]:

[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]    … 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.

[90]    An enterprise agreement is a statutory artefact made by persons specifically empowered in that regard, and under conditions specifically set down, by the FW Act. It is enforceable under that Act, and not otherwise. There is, in the circumstances, no reason to approach the question of legislative intent with a predisposition informed by notions of freedom of contract.

(Emphasis added)

94    As is apparent, the Full Court in Toyota v Marmara concluded that enterprise agreements are agreements in name only; have no named parties; bind persons who had no say in their making, as well as those who may have objected to their being made; and are enforceable under the FW Act, and not under the law of contract. Instead of being contractual, enterprise agreements have a legislative character.

95    One consequence of the legislative character of an enterprise agreement is that it is not open to the persons covered by the agreement to contract out of its terms. Section 50 of the FW Act provides expressly that “[a] person must not contravene a term of an enterprise agreement” and the FW Act does not otherwise authorise any contracting out of compliance with an EA. The limitation on contracting out has been a feature of industrial legislation for over 100 years: Josephson v Walker [1914] HCA 68, (1914) 18 CLR 691 at 700; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 421; Metropolitan Health Service Board v Australian Nursing Federation [2000] FCA 784, (2000) 99 FCR 95 at [17]-[25]; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406 at [23]-[35]; and Atkins v Freight Services Pty Ltd v Fair Work Ombudsman [2017] FCA 1134 at [49].

96    Maersk sought to overcome this difficulty by contending that “statutes and statutory instruments, including those establishing legal entitlements (such as an EA) are to be construed as permitting parties to effectively settle disputes derived from them”. The unstated premise in the submission was that the principle extended to disputes of any kind and to the settlement of disputes by modification of the rights and entitlements established by the statute or statutory instrument.

97    Maersk made no attempt to reconcile the principle for which it contended with the authorities to which reference has just been made. Instead Maersk submitted that two authorities supported its conclusion.

98    The first was Kowalski v Trustee, Mitsubishi Motors Australia Limited Staff Superannuation Pty Ltd [2003] FCAFC 18 in which the question was whether an agreement into which Mr Kowalski had entered with his employer in settlement of claims arising from the termination of his employment was conclusive of his later claim to entitlements under an enterprise bargaining agreement (EBA) with respect to remuneration during that employment. Mr Kowalski contended that that could not be so because it was not possible to contract out of an EBA. The Full Court rejected that contention and held:

[17]    [T]o view the Heads of Agreement as simply involving some diminution of the appellant’s statutory rights is to misunderstand the agreement reached. Plainly the appellant and the second respondent had litigation outstanding. Plainly enough each party was putting a particular position in that litigation. There were risks to each. True it is that statutory public rights cannot be waived or compromised. However, this does not prevent the parties from compromising litigation on foot and in contemplation, having regard to the various risks to the parties in that litigation. See e.g. Lieberman v Morris (1944) 69 CLR 69 at 80.

(Emphasis added)

99    Thus, Kowalski stands for the unsurprising proposition that it is open to parties to litigation, or presently contemplated litigation, to compromise the litigation in a binding way even when the subject matter of the litigation is the enforcement of claimed statutory entitlements. It does not stand as authority for some principle of construction of statutes and statutory instruments. The principle in Kowalski has no application in the present case.

100    The second case cited by Maersk was The Great Fingall Consolidated Ltd v Sheehan [1906] HCA 43; (1906) 3 CLR 176. Griffiths CJ, with whom Barton J agreed, held that the provision in the Workers’ Compensation Act 1902 (WA) that the Act apply “notwithstanding any contract to the contrary” referred only to the contract of employment and not to a contract made after the worker had suffered an injury, at 185-6. O’Connor J expressed a similar view at 193-4. Whether this understanding of a statutory provision in those terms would be adopted in contemporary times is not for this Court to say. It is sufficient to say that the decision on the construction of the particular statutory provision under consideration in Great Fingall cannot reasonably be regarded as qualifying the prohibition, expressed in quite different terms, contained in s 50 of the FW Act.

101    As noted earlier, Maersk made no attempt to reconcile the principle for which it contended with the authorities referred to above. Perhaps more fundamentally, the submissions of Maersk did not indicate how the principle of construction for which it contended could be applied conformably with s 50 of the FW Act. I note that, were the principle accepted, the legislative requirement for compliance with the terms of an enterprise agreement could easily be subverted.

102    I also note that Maersk did not contend that either Pt 2-4 of the FW Act or cl 10 itself authorised the making of agreements in the resolution of a dispute which varied the terms of an enterprise agreement without such a variation having to be approved by the FWC pursuant to Div 7 of Pt 2-4.

103    Accordingly, Maersk’s submission faces the difficulty that the entitlements said by it to have been compromised by the July Agreement, namely, the right to have the catering crewing on the two vessels determined in accordance with cl 27.5 and the right to invoke the cl 10 dispute resolution procedure in the event of disagreement about the application of the benchmark, are not matters which are able, lawfully, to be compromised, at least by that Agreement. The Judge was correct to so hold, at [116], [119]-[120], [128]. This is sufficient by itself to warrant the rejection of Ground 1 in the Notice of Appeal.

Accord and satisfaction – the July Agreement

104    Another set of difficulties for the Maersk submission concerning accord and satisfaction arises from the nature of the July Agreement.

105    As already noted, an accord and satisfaction based on the substitution of one promise for the original promise involves necessarily the discharge of the original cause of action and its replacement with a new entitlement, so that the remedy of the promisee in the event of failure of performance by the promisor, is to sue for breach of the promise: El-Mir at [52].

106    This raises issues as to the enforceability of the July Agreement. As pointed out by Hayne JA (with whom Tadgell JA agreed) in Ryan v Textile, Clothing & Footwear Union of Australia [1996] 2 VR 235 at 257-8, not every “industrial agreement” reached between a union and an employer amounts to a contract. Even when it be clear that a union and an employer intended to make a binding agreement in respect of employment entitlements, a number of questions arise concerning the enforceability of the agreement. Hayne JA referred to some of the issues which can arise in Ryan v Textile Union at 264:

In those circumstances it is clear that the unions concerned and the employer intended to make an arrangement that would be binding. But binding in what sense and upon whom? Although it is clear that the parties intended by their signature to the documents to record something that was serious and significant, as opposed to something trifling, are they to be taken in the circumstances of this case as intending to reach an agreement enforceable at law or intended to reach an agreement that would or might have significance in the future industrial relations between the parties but not be enforceable by resort to the courts?

107    Hayne JA went on to note that the question of whether an employer and a union intend to be legally bound by their arrangement involves a number of issues which cannot be addressed in isolation: Ryan v Textile Union at 266. In particular, it requires identification of the parties to the arrangement and a precise identification of the arrangement. With respect to the issue of parties, there is a question of whether the union entered into the agreement as agent of the employees involved or as a party in its own right.

108    On the Judge’s findings, the parties to the July Agreement were Maersk and the CFMMEU and no one else. The crews of the Maersk Master and the Maersk Mariner were not direct parties to the July Agreement and there is no indication that the CFMMEU was acting as agent on their behalf, or even on behalf of some number of those crews: cf Ryan v Textile Union at 266-7. There are in fact contrary indications. In his email of 19 July 2018, Mr Kearney sought commitments only from the CFMMEU and not from the crew members. If regard may be had to Mr Cain’s statement in his meeting with Mr Kearney that he “did not give a stuff” about the steward claim, that is an indication that he was not purporting to act as agent of the CFMMEU members. Quite apart from these considerations, it was not in any event open to the CFMMEU to bind persons who became crew members on the vessels only after the July Agreement had been reached. In this respect, it is pertinent that the agreement asserted by Maersk was to operate not only with respect to the state of affairs in July 2018, but “during any period in which the vessel is contracted to perform work in Australia under the current EA”.

109    That is enough to indicate that the July Agreement did not constitute an agreement by the crews themselves. However, this may not matter in the present case because the identified parties to the dispute which was in fact referred to the FWC were Maersk and the CFMMEU, and it is the CFMMEU which Maersk contends was bound by the July Agreement.

110    If, contrary to that view, the individual crew members were parties to the July Agreement and so otherwise capable of being bound by it, it is not readily apparent that they provided consideration to support the Agreement. All of the consideration on the “employee” side seems to have been provided by the CFMMEU.

111    Let it be assumed that these difficulties could be overcome. Maersk would next need to establish that the parties to the July Agreement intended to create a binding legal contract – it did not contend that the July Agreement substituted non-binding obligations for those which were binding. Instead, counsel for Maersk submitted that the Judge had found that the CFMMEU and Maersk had entered into a “binding” settlement agreement in July 2018. Counsel identified [53] and [161] as the places in the judgment at which the Judge had made this finding. However, with respect to counsel, while the Judge did in each paragraph refer to the agreement between the CFMMEU and Maersk, in neither paragraph did he characterise the agreement as “binding”.

112    An intention to create contractual relations is a necessary element for the existence of a binding contract. The plurality in Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 stated the relevant principle:

[24]    "It is of the essence of contract, regarded as a class of obligations, that there is a voluntary assumption of a legally enforceable duty." To be a legally enforceable duty there must, of course, be identifiable parties to the arrangement, the terms of the arrangement must be certain, and, unless recorded as a deed, there must generally be real consideration for the agreement. Yet "[t]he circumstances may show that [the parties] did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts".

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

(Emphasis added and citations omitted)

113    Maersk would need to establish the relevant intention with respect to the whole of the terms of the July Agreement and not just the single term concerning the ongoing crewing on the two vessels.

114    A consideration of the terms of Mr Kearney’s email of 19 July 2018 suggests that the parties had agreed on the following matters:

(a)    workplace issues and disputes are best resolved at a local level, through the agreed processes and without publishing comments or materials that disparage the other or their representatives;

(b)    both parties would follow the dispute resolution procedure in the EA;

(c)    in respect of issues not encompassed by the dispute resolution procedure, the CFMMEU would deal with local Maersk management in a professional way, using communications which were “consistent with behaviours expected in applicable policies”;

(d)    Maersk would discontinue its application to the FWC;

(e)    Maersk would implement a crewing arrangement in the two vessels consisting of five integrated ratings and one cook;

(f)    the CFMMEU would not make any further retrospective claims; and

(g)    the CFMMEU would discontinue its two applications to the FWC and would make no further applications or prosecutions with respect to the subject matter of those applications or with respect to the subject matter of the CFMMEU correspondence of 4 July 2018 to Maersk.

115    It also appears pertinent that Mr Kearney used the term “commitments” and not one of the terms more conventionally used in the making of contracts.

116    Perhaps some of the matters upon which Maersk and the CFMMEU agreed, for example, the commitments with respect to discontinuance of applications to the FWC and the commitment of Maersk with respect to the crewing of the two vessels could, considered by themselves, be terms in a binding agreement. However, the first three matters upon which Maersk and the CFMMEU agreed could not reasonably be regarded as of that character. They are more in the nature of commitments which, while to be regarded seriously, were of the non-legally binding kind. Objectively considered, neither the CFMMEU nor Maersk could have intended those commitments to be enforceable in a court of law. This counts against there having been an intention to create a binding contract.

117    As the Judge noted, many of these kinds of difficulties in the enforcement of agreements made between an employer and a union were considered in Ryan v Textile Union in which the question was whether retrenched employees were entitled to redundancy payments determined in accordance with unregistered and uncertified agreements reached between their union and their employer, rather than the inferior entitlements payable under the applicable awards. The resolution to that question turned upon whether the unregistered and uncertified agreements were legally enforceable. All members of the Court found the agreements to be unenforceable.

118    The Judge noted, at [126], that Ryan v Textile Union has been applied in a number of subsequent cases in which it has been held that the terms of an agreement which has not been registered or approved in accordance with the statutory requirements to be met, in order for it to affect the terms of employment of employees more generally, do not affect those rights unless it can be shown that individual terms of employment of particular employees incorporated the agreed terms – see Hanlon v Refined Sugar Services Pty Ltd [2002] FCA 1395 at [24] (Emmett J); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Corke Instrument Engineering (Australia) Pty Ltd [2005] FCA 799 at [9] (Finkelstein J); and Riverwood International Australia Pty Ltd v McCormick [2000] FCA 889 at [7] (Lindgren J), [127] (Mansfield J).

119    In the present case, Maersk did not contend that the terms of the July Agreement had become terms of the individual contracts of employment.

120    Although the Judge referred to and relied on Ryan v Textile Union, he did not make any specific findings concerning the intention to create legal relations by the July Agreement. Nor did the parties make submissions concerning it. Accordingly, it would be inappropriate to base the decision on the appeal on that consideration.

Accord and satisfaction - conclusion

121    In my view, the inability for compromise by private agreement of the entitlement to have the crewing on the vessels determined in accordance with cl 27.5, including by resort to the cl 10 dispute resolution procedure, indicates that the July Agreement cannot be regarded as an “accord” for the purposes of the application of the principles of accord and satisfaction. The evident absence of an intention to create legal relations supports that conclusion. At least with respect to the crew members themselves, there are other difficulties in the way of the July Agreement being characterised as an accord: the employees were not parties to the July Agreement; the CFMMEU was not acting as their agent; and the employees do not appear to have provided consideration. Thus, Maersk does not establish a key element of its submission that there was no “legally cognisable dispute” which could be arbitrated by the FWC.

122    If Maersk had wished cl 27.5 to cease to operate with respect to the crewing arrangements on the Maersk Master and the Maersk Mariner, then a variation of the EA to that effect was required. Maersk could have sought such a variation using the procedure contained in Div 7 of Pt 2-4 of the FW Act. However, it did not do so.

Was the dispute unresolved?

123    Maersk is correct, in my view, in submitting that it is necessarily implicit that the dispute to which s 739 refers must be current, in the sense of unresolved. It is not to be supposed that the FW Act contemplates the FWC exercising its powers of recommendation, conciliation and arbitration with respect to disputes which are moot. However, whether that be right or wrong is immaterial because cl 10 permits only unresolved disputes to be referred to the FWC.

124    On the Judge’s findings of fact, the dispute between the CFMMEU and Maersk in relation to the provision of a steward had been resolved by the July Agreement. That was not because the steward claim had been the subject of any of the applications then before the FWC or even part of the dispute concerning the provision of an extra integrated rating. It was because, in the resolution of the dispute concerning the claim for an extra integrated rating, the CFMMEU and Maersk reached agreement on the crewing of the two vessels during the periods in which they were contracted to perform work in Australia under the current EA which agreement, objectively considered, encompassed the claim for a steward.

125    However, whatever the position was when the July Agreement was made, there was a dispute after its making about the catering crewing on the Maersk Master and the Maersk Mariner. It was that dispute which was the subject of the CFMMEU application to the FWC on 7 November 2018.

126    Counsel for the CFMMEU submitted that each of the steps in the cl 10 dispute resolution procedure had been followed in relation to that dispute. Step 1 had been satisfied, he submitted, by the actions of the crew in discussing the claim for the steward with the Master of each vessel, by the discussions which Mr Knight had had with the Masters of the two vessels while a member of their crews, and by Mr Knight’s request that Mr Gakis make the claim an agenda item for the forthcoming Consultative Committee meeting. The absence of appeal by Maersk against the Judge’s finding that this was so means that this Court is not called upon to consider the correctness of that submission and, in particular, the ability of the conduct of the crew to constitute Step 1 if it had wholly occurred before the July Agreement was made. If that had been the case, it would have been arguable that the dispute initiated by their discussions had been resolved by the July Agreement, and any new dispute concerning the same subject matter would then have to follow all the steps in the dispute resolution procedure by starting again.

127    Counsel submitted that Step 2 had been satisfied when, on 9 August 2018, Mr Gakis acted in accordance with the request of Mr Knight by placing the issue on the agenda for the upcoming Consultative Committee meeting and by the discussion of the issue at the Consultative Committee meeting on 27 August 2018.

128    Next, counsel submitted that Step 3 was satisfied by the exchange of emails between Mr Gakis and Ms Nottle in September, October and early November 2018, culminating in Mr Cain’s email to Ms Nottle on 5 November 2018. In the trial at first instance, Maersk did not challenge this characterisation of those events. As previously noted, its only challenge was as to whether Step 1 had been satisfied.

129    Prima facie, it does seem anomalous that, having entered into the July Agreement on or about 19 July 2018, the CFMMEU should, within a matter of only weeks, be pursuing a further claim with respect to the crewing of the two vessels. However, two matters are to be noted in this respect.

130    The first is that, not being parties to the July Agreement, the crew members were not bound by it. As such, they could not be precluded from pursuing a dispute with respect to the catering crewing on the two vessels. There is some indication that that is what in fact was occurring, given the Judge’s acceptance of Mr Gakis’ evidence that he had been “appointed” by the crews to pursue the issue. I accept, however, that it appears that thereafter the CFMMEU pursued the claim in its own right, rather than as agent for the crews.

131    The second is that, even if the July Agreement was not legally binding, it was not without significance. The honouring by participants in industrial relations of agreements concerning workplace disputes is just as important as the honouring of agreements in other spheres of human activity. A person’s word should be their bond. It is to be expected that the FWC would recognise that that is so and that, other than in unusual circumstances (perhaps some material change in the circumstances which existed at the time the agreement was made or some circumstance vitiating the settlement agreement), it would not, in an arbitration at the end of the dispute resolution process, readily allow a departure from a previously agreed position. To do so would be likely to undermine the efficacy of agreements reached in the dispute resolution process. However, that is a matter going to the exercise by the FWC of its jurisdiction, rather than to the very existence of the jurisdiction.

132    It is true that the FWC does not seem to have adopted this approach in the present case. However, the correctness or otherwise of the FWC decision on the merits of the claim is not a matter for this Court.

“Depriving” the FWC of jurisdiction

133    The Judge did, as Maersk contended, frame the question for his determination as being whether the July Agreement could deprive the FWC of its arbitral authority – see [14], [119], [151] and [157] of the reasons. Maersk submitted that this understanding of the Judge involved error because the true question was whether or not jurisdiction had been conferred on the FWC.

134    In my opinion, this submission of Maersk involved a misunderstanding of the effect of ss 595, 738 and 739. The effect of those provisions was to confer jurisdiction on the FWC in the event that the specified conditions were satisfied. The question which Maersk was agitating was whether those conditions had been satisfied. In that circumstance, the Judge’s reference to “whether an agreement could deprive the FWC of arbitral authority” is more naturally to be understood as a manner of expression or turn of phrase describing the issue for his consideration. That is especially so given Maersk’s contention (in this Court) that the July Agreement meant that the FWC did not have jurisdiction to arbitrate the CFMMEU application. In such a context, it is not unnatural for the issue to have been framed as one of whether the July Agreement did deprive the FWC of jurisdiction.

135    In any event, the Maersk submissions did not otherwise indicate how this error attributed to the Judge had affected his determination of the application.

Conclusion on Ground 1

136    For these reasons, Ground 1 is not made out.

Grounds 2 and 3

137    Grounds 2 and 3 concern findings made by the Judge in the alternative. His Honour considered whether, irrespective of the issue which is the subject of Ground 1, the FWC nevertheless had jurisdiction to arbitrate the existence, effect, and nature of the July Agreement.

138    Counsel for Maersk acknowledged, correctly, that Grounds 2 and 3 arise for consideration by this Court only if Maersk is successful on Ground 1. Accordingly, it is not necessary for the disposition of the appeal that the Court consider Grounds 2 and 3 and, having regard to their hypothetical nature, I consider it undesirable to do so.

Conclusion

139    For the reasons set out above, I would dismiss the appeal. The matter should be remitted to the Judge for consideration of the relief, if any, to which the CFMMEU is entitled on its counterclaim.

Associate:

Dated:    17 December 2021

REASONS FOR JUDGMENT

BANKS-SMITH AND JACKSON JJ:

140    We have had the considerable benefit of reading White J's reasons for decision in draft. We write separately in order to deal with two matters. The first is to emphasise that, in our respectful view, the appeal should be dismissed because of the particular way in which Maersk described the effect of the July Agreement (we adopt all of White J's defined terms). The second is that we consider it appropriate also to express a firm view on Maersk's submissions that the July Agreement (assuming it was legally effective) meant that there was no 'dispute' for the purposes of s 595(3) and s 739(4) of the FW Act which the FWC had authority to arbitrate, and that the matter of full time stewards on the vessels did not remain 'unresolved' for the purposes of the dispute resolution procedure in cl 10 of the EA. White J's comprehensive exposition of the background, legal framework and issues permits us to move directly to dealing with those two matters.

The July Agreement could not vary the EA or circumvent the FWC's arbitral authority

141    The primary judge, after determining that Step 1 of the dispute resolution procedure in cl 10 of the EA (set out at [19] above) had been completed, went on to consider Maersk's claim that the terms of the July Agreement finally determined the manning levels on the two vessels. His Honour said that this claim combined two distinct propositions: firstly, that it was the July Agreement and not the EA that governed manning levels; and secondly, that the arbitral jurisdiction of the FWC was confined to disputes under the EA, so that it did not have jurisdiction to determine the rights of the parties under the July Agreement: Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (No 2) [2020] FCA 1694 (PJ) at [114]. In other words, his Honour described Maersk's case as one in which the July Agreement supplanted the requirements of the EA as to manning levels, with the result that the FWC's arbitral jurisdiction did not extend to disputes about those manning levels.

142    In both written and oral submissions on appeal, Maersk disavowed any case that there was a variation or alteration of the EA or a removal or alteration of the FWC's arbitral jurisdiction. But it was not clear whether Maersk was disputing the primary judge's description of its case, or was simply refusing to confront implications of the case that it had made. In any event, Maersk did not demonstrate on appeal that the primary judge's description was wrong.

143    Maersk did make the point on appeal that the issue was not whether the July Agreement could deprive the FWC of its arbitral jurisdiction, but whether the FWC and cl 10 of the EA conferred that jurisdiction in the first place. However we agree with White J that to speak of depriving the FWC of jurisdiction was simply the turn of phrase the primary judge used to frame the question of whether the FWC had jurisdiction, and a natural one to use given the way in which Maersk had put it. So that particular point made by Maersk on appeal was a semantic one. If it hid a more substantive complaint that the primary judge had mischaracterised Maersk's case, then the complaint was hidden indeed.

144    We therefore respectfully agree with White J that it is appropriate to resolve the appeal on the basis that Maersk's case was that in making the July Agreement, the CFMMEU relinquished the right to have the catering crewing on the two vessels determined in accordance with the EA and the right to invoke the dispute resolution procedure under the EA if there was disagreement about that crewing. For the reasons White J gives, those were not rights that Maersk or the CFMMEU could lawfully relinquish, at least not without a variation to the EA that had been approved by the FWC: see in particular [92] and [103] above.

145    We would not want to be taken to be making any broader point, however, about whether employers, unions and employees may compromise in a binding way disputes that arise under enterprise agreements or other industrial instruments. The primary judge observed (PJ at [116]) that it was possible to create rights by private agreement that touched or concerned rights that were conferred by the EA, and to do so without varying the EA. His Honour considered that it might have been open to read the July Agreement as conferring private rights on Maersk to restrain the CFMMEU from proceeding to arbitrate in the FWC, and that this could be done without altering either the provisions of the EA as to whether a steward was required on a particular vessel, or the FWC's arbitral authority: see PJ at [116], [128], [156]. But the correctness of that approach was not fully argued, and this appeal is not an appropriate vehicle to determine whether it is correct.

Maersk's case as to no 'dispute' and the 'matter' arising under the EA being resolved

146    Although Maersk did not demonstrate that the primary judge's characterisation of its case was wrong, as we have said it did disavow any contention that the EA had been amended or the FWC's arbitral jurisdiction ousted. It put as its central contentions, first, that the July Agreement had the effect that there was no 'dispute' for the purposes of s 595(3) and s 739(4) of the FW Act, and second, that the July Agreement also meant that for the purposes of the stepped dispute resolution procedure in cl 10.1 of the EA, the matter had been resolved before it came to arbitration by the FWC. Given the time that Maersk devoted to these contentions in its submissions, in our view it is appropriate to address them. They proceed, as does this part of these reasons, on the assumption that the July Agreement was legally effective.

Proper construction of the FW Act

147    Maersk's first contention depends, of course, on the proper construction of the term 'dispute' in s 739(4) of the FW Act (the wording of which is excerpted by White J above at [12]). It will be recalled that this is the provision that confers power on the FWC to arbitrate a dispute. In the context of the section as a whole, and read with s 595(3) and s 738(b), s 739(4) confers that power in limited circumstances. The FWC has the power if, and only if, the parties to the dispute have agreed that the FWC may arbitrate the dispute, and have done so in accordance with a term in an enterprise agreement providing a procedure for dealing with disputes. A term of that kind may be a term of the kind required under s 186(6). That is a requirement that must be satisfied before the FWC may approve an EA so as to give it statutory force. The requirement is that the EA contain, relevantly, 'a term … that provides a procedure that requires or allows the FWC … to settle disputes … about any matters arising under the agreement'.

148    Although s 186(6) uses the term 'settle disputes', that is not limited to facilitating resolution by consent of the parties. That is confirmed by the fact that s 739(4) and s 740(3) contemplate that the procedure set out in the EA may provide for the disputes to be resolved by arbitration and by s 595(3), which empowers the FWC to deal with a dispute by way of arbitration including by making any orders it considers appropriate. The provisions do not explicitly require that other steps, such as negotiations between specified representatives of the parties, should precede any such arbitral step. Preceding steps of that kind do appear in the model term in Schedule 6.1 to the Fair Work Regulations 2009 (Cth), but the regulations cannot control the interpretation of the FW Act. Nevertheless, structured negotiation steps preceding arbitration would be consistent with the scheme contemplated by the FW Act. The express conferral on the FWC of the ability to deal with a dispute in ways that include mediation or conciliation confirms that: FW Act s 595(2). The evident intent of these interlocking provisions is to ensure that disputes under enterprise agreements can be resolved without recourse to the courts.

149    Importantly for present purposes, s 186(6) requires the dispute resolution term to have wide application; it must provide for the settlement of disputes 'about any matters arising under the agreement' (emphasis added). The words emphasised show that the intended scope of the dispute resolution procedure is broad. It can be a dispute about 'any matter' and the words 'arising under' which connect that matter are an elastic relational phrase: see Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170; (2017) 257 FCR 442 at [205]. The discussion of connecting phrases of that kind in Hancock Prospecting was undertaken in the context of a commercial arbitration clause, and emphasised that context is important to determining the scope of the phrase in any given instance: see Hancock Prospecting at [193], [195]. But nothing in the present context dictates that the phrase should be given a narrow meaning; quite the contrary. It is the nature of an enterprise agreement that a potentially broad range of disputes may arise under it. Some may be highly significant to the parties and to the operation of the enterprise and the agreement, others may be minor. Some may merit the involvement of lawyers. Others may only arise at the workplace level between on-site employer representatives and individual employees. They may not be well defined legal controversies that would be justiciable in a court of law. The procedure will need to operate in a pragmatic way that is flexible enough to cater for such a variety of disputes.

150    That understanding of the scope of the dispute resolution process for which s 186, s 595, s 738 and s 739 provide is inconsistent with Maersk's submission that 'dispute' means 'non-colourable, legally cognisable dispute'. Maersk's submissions did not specifically explain the meaning to be given to the terms 'non-colourable' or 'legally cognisable'. They merely drew a contrast between 'a dispute that the law recognises as a valid controversy' and 'any situation where a claimant makes a claim that the respondent rejects'. But the reference to a 'non-colourable' dispute suggests that the distinction made by Maersk is linked to the notion of a 'matter' of the kind that can attract the jurisdiction of the federal courts, that is, a matter within the meaning of Chapter III of the Constitution.

151    In that context, a colourable claim is one where the claim is so obviously untenable that it can be inferred that it was brought for the improper purpose of fabricating jurisdiction. That is not the same thing as just being untenable; it requires that the untenability be obvious and must have been obvious to those who propounded the claim: see Ahmed v Harbour Radio Pty Ltd [2009] FCA 1113; (2009) 180 FCR 313 at [57]-[64] (Foster J). A 'non-colourable dispute' would, therefore, presumably be one involving a claim that is not so obviously untenable that it may be inferred that it was brought for the improper purpose of fabricating jurisdiction. Maersk did not explain how such a strong conclusion was warranted in relation to the CFMMEU's claim that there be a full time steward on the vessels, or how it was even possible to 'fabricate' arbitral jurisdiction under the FW Act. As for 'legally cognisable', it would appear that it too, was linked to the concept of a federal 'matter' and so required the existence of a real controversy that was justiciable in a court of law.

152    Whatever their precise meanings, both terms involve a gloss that finds no foothold in the text of s 739 of the FW Act or the other relevant provisions. We agree with White J for the reasons his Honour gives at [74] that 'matter' in s 186(6)(a)(i) is not used in the sense in which it is employed in Chapter III of the Constitution, and that it simply refers in a non-technical way to an issue or concern. The FWC's power of dispute resolution for which the FW Act provides is one where the FWC does not exercise the judicial power of the Commonwealth which Chapter III commits exclusively to the courts: see Construction, Forestry, Mining, and Energy Union v Australian Industrial Relations Commission [2001] HCA 16; (2001) 203 CLR 645 at [30]-[31] (a decision about a previous version of the legislation). We also respectfully adopt White J's reasons for saying that it is more natural to understand s 186(6), s 738 and s 739 as concerned with the existence of a dispute in fact. What the legislature can be taken to have thought undesirable was the existence of such a dispute, if there were no way of resolving it independently of the parties other than in the courts.

153    Maersk's gloss would introduce uncertainty and complexity to a dispute resolution procedure that should be capable of operating in a simple, flexible and efficient way. It would be likely to lead to curial litigation over the contestable issue of whether there was a 'legally cognisable dispute'. That litigation could be brought in order to prevent the FWC from dealing with the matter. It would encourage 'a chaotic decision-making process', involving collateral challenge to the FWC's awards, of the kind that Rares and Barker JJ deprecated in Energy Australia Full Court at [73]. The parties would then be embroiled in litigation when the intention behind the dispute resolution procedure is to facilitate resolution of disputes outside the courts. That would be inconsistent with one of the objects of the FW Act stated in s 3(e), of 'providing accessible and effective procedures to resolve grievances and disputes'. We reject Maersk's submission about the meaning of 'dispute' in s 595(3) and s 739(4).

154    Maersk also submitted that 'dispute' in s 595(3) and s 739(4) of the FW Act should be read as excluding settled or resolved disputes, because varying an enterprise agreement would be an unworkable way of settling most disputes. This was premised on a submission that the primary judge's approach did not admit of parties settling the disputes without resort to that unworkable method. But that is not so; it was only settlement of disputes on terms that purport to vary the EA or to exclude the FWC's jurisdiction that his Honour rejected. Unsurprisingly given the main thrust of its case, Maersk did not try to demonstrate that there was no other way to settle disputes under the EA, so that excluding matters that are the subject of settled or resolved disputes from the FWC's jurisdiction would be the only way of avoiding an allegedly unworkable situation.

Proper construction of the EA

155    Turning to the EA, Maersk submitted that the terms 'industrial dispute' and 'matter' in cl 10 should also be construed to mean a non-colourable, legally cognisable dispute. It was common ground that cl 10 was the dispute resolution procedure term that the EA was required to contain under s 186(6) of the FW Act. So the term must be read in the context of the legislative provisions discussed above. It will be recalled that the clause provides for a four-step dispute resolution process, where a reference to the FWC for conciliation and/or arbitration is the final step. The parties were agreed that the dispute could only progress from one step to the next if, in the words of the clause, 'the matter remains unresolved'. Maersk's second contention was about the meaning to be given to that phrase.

156    Clause 10 says that it sets out a procedure to resolve an 'industrial dispute'. Its opening words expand on the meaning of that term to include a 'matter arising under this Agreement or the NES'. The four steps all apply to a 'matter', with progress from step to step depending on whether 'the matter remains unresolved'. The closing words of cl 10.1, which provide for Step 4 (i.e. the referral to the FWC), refer to the event that 'the preceding steps have failed to resolve the matter and/or dispute'. We agree with the primary judge that the clause contemplates that there may not be a fully-fledged dispute until it is crystallised at or before referral to the FWC under Step 4: PJ at [91]. In all this context, the term 'matter' appears to be used in the same broad, pragmatic way in which it is used in s 186(6), to mean an issue or concern. After all, the matter may be raised at Step 1 and be satisfactorily resolved between the parties without any disagreement arising.

157    It is unlikely that the parties to the EA, or the FWC when it approved it, intended to give 'matter' a meaning informed by putatively legalistic concepts such as a 'legally cognisable' or 'non-colourable' dispute. We agree with the primary judge's statement of principle (PJ at [86]):

The terms of a procedure for resolving disputes should not themselves be construed in a manner that turns them into an instrument for generating disputes as to whether the procedure itself has been followed. Such provisions must be construed having regard to their evident purpose as providing a mechanism by which to encourage discussion and resolution. They should be interpreted 'practically and with an eye to common sense' having regard to the context in which they will be applied so that they can be implemented 'in a clear way on a day-to-day basis at work sites': Ramsay v Menso [2018] FCAFC 55; (2018) 260 FCR 506 at [39] (Dowsett and Collier JJ), applying Australian Building and Construction Commissioner v Powell [2017] FCAFC 89; (2017) 251 FCR 470 at [15].

158    Consistently with this, cl 10 of the EA contemplates that the 'matter' can and should be raised by employees while on board a vessel and that it will in the first instance be discussed between the employees and the Master of the vessel. It can be expected that none of those persons is legally qualified or has legal representation at that stage. The subsequent steps require discussion between the employees, union delegates or other nominated representatives (not necessarily a lawyer) and the Master and/or employer, and between union officials and the employer's human resources and industrial relations manager. After each of these discussions, the 'matter' may or may not remain 'unresolved'. While those persons may have legal advice along the way, the evident intent of the procedure is to facilitate resolution between them with or without the assistance of lawyers. It is unlikely, then, that at each step it would be necessary to assess whether the dispute remained 'legally cognisable' and 'non-colourable'. That would be likely to give rise to disputes about the application of the dispute resolution procedure itself.

159    Further, in view of the pragmatic way in which cl 10 must be read, the concept of resolution of a matter involves, as the primary judge said, common ground or a common understanding of the matter: PJ at [91]. That understanding must, at least, be common to the party or parties bound by the EA who raised the matter and the party or parties with whom it has been raised. The intent of cl 10 in its legislative context is to reduce the incidence of disagreements that are unresolved in fact. A disagreement can disrupt the harmonious running of the workplace if there is no way of resolving it independently of the parties. That is so whether or not it is 'legally cognisable' or 'colourable'. Clause 10 can be taken to provide against that eventuality. Maersk's construction of it is inconsistent with that.

The Energy Australia Yallourn decisions

160    The Energy Australia Yallourn decisions do not support Maersk's construction of the FW Act or the EA. It is important to appreciate that Bromberg J's decision in Energy Australia FCA proceeded on the basis of the common position of the parties that his Honour recorded at [5]:

Both parties accept that for the Court to have jurisdiction there must be a 'matter' (s 562) arising under the Fair Work Act 2009 (Cth) ('FW Act'), and that the existence of a 'matter' depends, in this case, on the existence of a justiciable controversy between the parties about the meaning and application of cl 5.3 of the EA. They also accept that an arbitration validly conducted under cl 28 of the EBA is properly to be characterised as a private arbitration and that the arbitrator's determination has the effect of extinguishing the dispute or controversy the subject of the determination, at least insofar as the controversy relates to the parties to the arbitration.

161    That agreed position followed from the fact that under s 562 of the FW Act, the court's jurisdiction required there to be a 'matter' in the constitutional sense: see Energy Australia FCA at [60]-[62]. Accordingly, the dispute between the parties concerned whether the FWC's arbitration had extinguished the dispute or controversy, which depended on Energy Australia's contention that there had been no such extinguishment, because the FWC itself lacked jurisdiction to do so: see [6]. That contention in turn depended on whether the dispute resolution clause in question only permitted an arbitration between Energy Australia and employees, not Energy Australia and the unions. In the circumstances, Bromberg J thought it was preferable to decide whether the determination of the FWC did effect an accord and satisfaction, and so extinguish the controversy: see [52]. There was no issue before his Honour as to whether, even if it did, the court still had jurisdiction because there was a disagreement in fact. In light of the parties' agreed position, it is unsurprising that Bromberg J rejected a contention (not strongly pressed) that whether an accord and satisfaction existed as between Energy Australia and the unions went to the merits of Energy Australia's originating application before the court, rather than the jurisdiction of the court: see [69].

162    Consistently with that, in Energy Australia Full Court the court confined itself to the question of whether the FWC had jurisdiction to arbitrate between the employer and the unions, and consequential issues. Ultimately, this approach too was founded on the need for a 'matter' as a justiciable controversy in the Chapter III sense in order to found the jurisdiction of the court. In the present case, that is not a necessary condition for the FWC to have jurisdiction under s 739(4) or cl 10. Neither of the Energy Australia Yallourn decisions is relevant to the construction of s 739(4) of the FW Act or to the particular issue of construction of cl 10 of the EA that arises here.

The application of the correct construction of the FW Act and the EA

163    We would resolve the issues of construction adversely to Maersk. The questions that then arise on the application of our preferred construction are:

(a)    whether the referral to arbitration that the CFMMEU made on 7 November 2018 was the referral of a 'dispute' within the meaning of s 739(4) of the FW Act;

(b)    whether that referral, being Step 4 of the dispute resolution procedure in cl 10 of the EA, had been preceded by the three previous steps required under that procedure; and

(c)    whether, at any point before that referral, the matter ceased to be 'unresolved', within the meaning of cl 10.

164    Given the meaning we have ascribed to 'dispute' in s 739(4), the first question must be answered adversely to Maersk. There was a dispute in fact between the CFMMEU and Maersk at the time at which the union referred the dispute to arbitration. That is so whether or not the July Agreement was legally effective and whether or not the agreement meant that the dispute was colourable or not legally cognisable. While the primary judge approached the question in a somewhat different way, his Honour was correct to conclude that even if there was a legally binding agreement of the kind alleged by Maersk, there could still be a dispute about how the EA should be applied over which the FWC had arbitral jurisdiction: see PJ at [153].

165    The second question was not contentious on appeal. The primary judge found that in March 2018 the crew of each of the two relevant vessels raised the issue of a full time steward with the Master of each vessel by email: PJ at [32]. Maersk did not communicate with the CFMMEU or the crew members about the issue or its resolution: PJ at [32]. The first step in the dispute resolution procedure in cl 10 of the EA was complete when the Master of each of the two vessels chose not to reply to the emails: PJ at [103]-[104]. The primary judge also found that Step 1 was fulfilled by discussions on board each vessel which a cook working on them, Mr Knight, had with the Masters: PJ at [33], [35], [104]. Maersk does not appeal against those findings.

166    Nor did Maersk dispute that Steps 2, 3 and 4 took place subsequently (assuming that the matter remained unresolved). It did make oral submissions that the meeting in July 2018 which led to the email embodying the July Agreement could have been a meeting under Step 2 or Step 3 of the dispute resolution procedure. But that was premised on a statement that the application to the FWC was lodged in August 2018, which is simply incorrect; the application was lodged on 7 November 2018.

167    That being so, as submitted by the CFMMEU's counsel, the coffee shop meeting between CFMMEU and Maersk representatives which took place on 27 August 2018 answers the description of Step 2: 'discussion between the Employee, the Employee's Union delegate or other nominated representative and the Master and/or Employer'. And given the primary judge's unchallenged finding that 'discussion' under cl 10 could take place by way of email, the subsequent email exchange between Mr Gakis of the CFMMEU and Maersk's Human Resources Manager Ms Nottle beginning in September 2018, as summarised by White J at [128], was capable of constituting Step 3.

Did the matter remain unresolved?

168    But in this appeal nothing turns on any precise description of the various steps. The real question is the third one, of whether at any point before the referral to the FWC, the matter ceased to be 'unresolved', within the meaning of cl 10. The dispute about that question means that in our view it is necessary to determine the correctness of the CFMMEU's submission that the matters the primary judge found constituted compliance with Step 1, constituted Step 1 for the purposes of the referral to the FWC for arbitration which took place in November 2018, even if they had wholly occurred before the July Agreement was made. That is so even though Maersk did not appeal the primary judge's findings about Step 1. Maersk did, nevertheless, base its appeal on a contention that due to the July Agreement, the matter that arose in that Step 1 was resolved before the referral to arbitration. So it remains in dispute on appeal whether the necessary connection between Step 1 and, ultimately, Step 4 was severed because the matter was resolved in the July Agreement. It is common ground that if it was, Step 1 would have needed to have been performed afresh after the July Agreement was formed, and there was no suggestion that this occurred.

169    The position might have been different if the primary judge's finding was that Step 1 had been completed after the July Agreement was formed. The timing of the relevant events is not clear, no doubt because the evidence was not clear. The fulfilment of Step 1 by the emails from the crew members to the Masters, and the lack of any reply from Maersk, must have been complete by late March or April 2018. It is less certain when it was completed by way of the on board discussions between Mr Knight and the Masters. Mr Knight asked an organiser for the CFMMEU, Mr Gakis, to place the issue on the agenda for upcoming Consultative Committee meetings, and did so 'in about July 2018': PJ at [35]. The July Agreement was made in an email of 19 July 2018 which contained the terms of that agreement: PJ at [159]. On the evidence described above, whether Mr Knight's discussions had terminated before that date is simply unknown. It seems that from his point of view, as at 'about July 2018' discussions on board the vessels had been taken as far as they would go. But even if that is accepted, it is not possible to say when, before then, the discussions reached that point.

170    While it is likely that the onus of proving that matter rested on Maersk, the CFMMEU did not take that point. On appeal, Maersk produced a chronology which suggested that Step 1 was completed by the end of June 2018 at the latest, so that, on its case, the July Agreement resolved the matter after the step was completed. The CFMMEU did not dispute that chronology and it may well be correct. So we will proceed on the basis that Step 1 was complete before the July Agreement was made.

171    It is, then, necessary to determine whether the July Agreement meant that the matter that was the subject of Step 1 was resolved for the purposes of cl 10 of the EA. For reasons given above, this does not depend on whether there was a non-colourable legally cognisable dispute after the July Agreement was made. It depends on whether the matter, in the sense of issue or concern about the need for a full time steward on each vessel, remained unresolved in fact. Resolution in that context would require, at least, that an understanding was reached about the matter that was common to the parties bound by the EA who raised the matter and the party with whom it had been raised.

172    Once the issue is understood that way, it is apparent that the July Agreement did not resolve the matter of whether there should be full time stewards on the vessels. The primary judge's finding about the effect of that agreement is that 'it stated in full the relevant manning for the vessels for employees represented by the Union, namely five integrated ratings and one cook': PJ at [161]. It is true that it would be inconsistent with that for each of the vessels to also be manned by a steward. So, if the July Agreement were legally binding and effective (because it was not inconsistent with the EA) then it could be pleaded in bar to, or a release of, any claim by the CFMMEU (see El-Mir v Risk [2005] NSWCA 215; (2006) 22 BCL 16 at [53]). Or, as the primary judge said, it could perhaps be relied on in order to obtain an injunction against the CFMMEU proceeding with the claim.

173    But the existence of an agreement with that (assumed) legal effect is not the same thing as the resolution of an issue or concern in fact. On the primary judge's findings, it is clear that the issue of the full time steward had not been resolved as between Maersk and the people who raised the concern, the crew members on board the vessels. Crew aboard one of the vessels, the Maersk Mariner, raised the issue by an email to the Master on 9 March 2018: PJ at [18]. The issue was not resolved at that time and was the subject of ongoing discussions between crew members: PJ at [20]-[21]. The cook on board the other vessel, the Maersk Master, raised the issue with the Master of the vessel on or before 13 March 2018: PJ at [25], [27]. There was no communication with the CFMMEU or the crew members about the issue or its resolution after it was initially raised with the Master of each vessel: PJ at [32]. The issue remained unresolved with employees on the two vessels: PJ at [32]. As referred to above, in about July 2018 Mr Knight asked Mr Gakis to place the issue on the agenda for the upcoming Consultative Committee meetings: PJ at [35].

174    The full time steward claim was not raised at the meeting between Mr Kearney and Mr Cain on 16 July 2018 that led to the July Agreement: PJ at [36]-[40], [45]. What was discussed was that if there was an additional integrated rating then there would be no need for the continuation of the part time steward: PJ at [38]. Mr Kearney described the discussions as being 'around the final crewing for the vessel and an agreement on where the manning was to sit going forward': PJ at [37]. But that was not agreed in the context of any issue raised at the meeting about the crew members' requests commencing in March 2018 for a full time steward. Whatever the representatives of the CFMMEU or Maersk agreed, it did not amount to an understanding common to those crew members. After all, there had been no communication with them, and as late as about July 2018, Mr Knight had asked Mr Gakis to put it on the agenda for discussion between the representatives of the union and the company. It is true that Mr Cain said at the meeting that he did not 'give a stuff' about the steward (PJ at [40], [45]), but that cannot be construed as an expression of willingness to forego the full time steward claim (and Maersk did not submit that it could). It was said in the context of a proposal to replace the part time steward with an integrated rating.

175    The emails subsequent to that meeting which culminated in the July Agreement also did not raise the full time steward claim: PJ at [47]-[51]. The proceedings in the FWC that were discontinued as a result of the July Agreement did not concern that claim: see PJ at [55]. Mr Gakis did not put the full time steward issue on the agenda for a meeting between the CFMMEU and Maersk until on or about 9 August 2018: PJ at [56].

176    In short, the negotiations that led to the July Agreement were conducted separately from such limited discussions as followed on from the crew members' request for a steward. The negotiations in July did not address that request. Whatever the legal effect of the July Agreement, there was in fact no common ground or common understanding between the crew members who made the request and Maersk as to whether the vessels should have a full time steward. The 'matter', that is, the issue or concern about full time stewards, that was the subject of Step 1 of the dispute resolution procedure was not resolved by the July Agreement. So the necessary link between the two alternative ways in which Step 1 was fulfilled before July 2018, and the ultimate referral to the FWC for arbitration in November 2018, was unbroken by any resolution of the matter.

177    None of that robs legally binding settlement agreements of their effect. It is not to condone a party reneging (Maersk's term) on agreements. Perhaps the FWC should have concluded that the July Agreement did stand in the way of the full time steward claim. But if the FWC was in error about that, it was an error within jurisdiction. On the facts of this case, the FWC had jurisdiction to arbitrate that claim, including jurisdiction to dismiss it because of the July Agreement. It had that jurisdiction because the dispute resolution procedure in cl 10 of the EA had been followed in relation to the matter, and the matter remained unresolved at all relevant times.

Disposition

178    In our view, ground 1 of the appeal should be dismissed for each of the two reasons we have canvassed: the inability of the parties lawfully to vary the EA; and the conclusion that there was an unresolved matter which, on referral to the FWC, answered the description of a dispute so as to engage the FWC’s arbitral jurisdiction.

179    It was common ground that if ground 1 was dismissed, there would be no need to deal with grounds 2 and 3.

Associate:

Dated:    17 December 2021