Federal Court of Australia

D&D Traffic Management Pty Ltd v The Australian Workers’ Union [2022] FCAFC 113

ORDERS

THE COURT ORDERS THAT:

1.    The application be dismissed.

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

REASONS FOR JUDGMENT

THE COURT:

INTRODUCTION

1    By an originating application seeking relief under ss 562 and 563 of the Fair Work Act 2009 (Cth) (FW Act), s 39B of the Judiciary Act 1903 (Cth) and ss 21 and 22 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the applicant (D&D) sought:

(1)    writs in the nature of certiorari quashing two decisions made by Deputy President Cross in the Fair Work Commission the effect of which were to dismiss D&D’s application for approval of the D&D Traffic Management & Other Work Enterprise Agreement 2020 (2020 Enterprise Agreement): D&D Traffic Management Pty Ltd [2021] FWC 1017 and D&D Traffic Management Pty Ltd [2021] FWC 1287 (hereafter “FWC1” and “FWC2”);

(2)    an order in the nature of mandamus requiring the Commission to hear and determine according to law the application for approval of the 2020 Enterprise Agreement;

(3)    various declarations as to the correct construction of the Building and Construction General On-Site Award 2010 (2010 Award) and the corresponding provisions of the Building and Construction General On-Site Award 2020; and

(4)    a declaration that cl 8(c) of the 2020 Enterprise Agreement meets the better off overall test under ss 186(2)(d) and 193(1) of the FW Act.

2    Through its employees, D&D provides traffic control services in the civil construction industry in New South Wales. It also provides certain crowd control services outside the construction industry. Most of D&D’s employees who are engaged in traffic control are casual employees.

3    The location of the work, and the precise duties performed, vary according to the requirements of D&D’s clients. Employees are assigned work on a permanent day shift or night shift. There is a regular five-day roster and employees are generally given at least 48 hours’ notice of when and where they are required to work a shift. Sometimes, but not always, the night shift employees will work at the same location as the preceding day shift employees. Typically, a roadworks project on a main road is only conducted at night and only requires the attendance of traffic controllers on night shift.

4    By decisions FWC1 and FWC2, the Commission dismissed D&D’s application for approval of the 2020 Enterprise Agreement. The statutory provisions of central relevance were ss 186 and 193 of the FW Act. Subsections (1) and (2) of s 186 of the FW Act include:

186 When the FWC must approve an enterprise agreement—general requirements

Basic rule

(1)      If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.

Note:    The FWC may approve an enterprise agreement under this section with undertakings (see section 190).

Requirements relating to the safety net etc.

(2)      The FWC must be satisfied that:

…

(d)      the agreement passes the better off overall test.

Note 1:    For when an enterprise agreement has been genuinely agreed to by employees, see section 188.

Note 2:     The FWC may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).

Note 3:     The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).

5    The better off overall test (BOOT) is set out in s 193 which relevantly includes:

193 Passing the better off overall test

When a non-greenfields agreement passes the better off overall test

(1)      An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

…

Award covered employee

(4)    An award covered employee for an enterprise agreement is an employee who:

(a)    is covered by the agreement; and

(b)    at the test time, is covered by a modern award (the relevant modern award) that:

(i)    is in operation; and

(ii)    covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii)    covers his or her employer.

Prospective award covered employee

(5)    A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a)    would be covered by the agreement; and

(b)    would be covered by a modern award (the relevant modern award ) that:

(i)    is in operation; and

(ii)    would cover the person in relation to the work that he or she would perform under the agreement; and

(iii)    covers the employer.

Test time

(6)    The test time is the time the application for approval of the agreement by the FWC was made under subsection 182(4) or section 185.

FWC may assume employee better off overall in certain circumstances

(7)    For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.

6    At the core of the dispute between the parties in the proceedings before the Commission was the meaning of the word “shiftwork” in cl 34.2(a) of the 2010 Award and how it interacted with cl 8(c) of the 2020 Enterprise Agreement. It was common ground that cl 34.2(a) of the 2010 Award applied to D&D’s casual employees.

7    Before the Commission, the Australian Workers’ Union (AWU) contended that “shiftwork” requires a specific system of shifts at a single project or site in which there is a rotation of workers: FWC1 at [11]. D&D contended for an “enterprise” approach. It accepted that employees had to be taking over or continuing work undertaken by other employees of the company. D&D argued, however, that the work did not have to be a continuation of work at the one site; the work could be continued anywhere throughout its enterprise. That argument was rejected.

8    Clause 8(c) of the 2020 Enterprise Agreement deals with night shifts, between 6pm and 6am, Monday to Saturday. Clause 8(c), read with Annexure A of the 2020 Enterprise Agreement, contemplated a 30% loading in respect of night shift work: FB[23]; Annexure A indicates a 25% to 30% loading. Deputy President Cross concluded that, under the 2010 Award, employees who were not shiftworkers within the “shiftwork” definition in cl 34.2(a) of the Award would be paid overtime rates. Deputy President Cross concluded that the employees and prospective employees to be covered by the 2020 Enterprise Agreement would not be better off overall, because – where the employees were not shiftworkers within the definition of “shiftwork” – the 2010 Award provided for the payment of overtime which would be more than being paid in accordance with a 30% loading as contemplated by the 2020 Enterprise Agreement.

9    Deputy President Cross considered that the term “shiftwork” in cl 34.2 had the meaning explained by Dethridge CJ in Metal Trades (Engineering) Board of Reference Appeal (1936) 36 CAR 534 at 535. In Metal Trades, Dethridge CJ stated:

Ordinarily the idea of shift work connotes men working in relays; that is to say one man or relay or squad of men does a spell of work upon a process and upon that same process is immediately followed by another man or relay or squad of men doing a spell of work for something like a similar number of hours, but not necessarily for the same number. Nothing like that existed here. There was no shift of work from one man or squad to another successive man or squad.

10    Deputy President Cross considered that cl 34.2(a) operated in the manner explained by Deputy President Saunders in Re Altus Traffic (NSW & ACT) Enterprise Agreement 2019 [2019] FWCA 5941 at [26] to [30]: FWC1 at [30] and [31]. In particular, Deputy President Cross endorsed the example which had been given by Deputy President Saunders in Altus at [28]:

The point may be demonstrated by way of an example. If on any given day Altus had one group of traffic controllers working on a particular project for one of its clients in, say, Canberra on day work only and another group of traffic controllers working on a particular project for another client in, say, Byron Bay on afternoon or night shift only, then (assuming Altus did not have any other employees working different shifts on either the Canberra project or the Byron Bay project), would it be correct to say that the Altus traffic controllers working on the Byron Bay project were engaged on the same work as the Altus traffic controllers working on the Canberra project. I think not. If the work is undertaken on the same site, the same project, or possibly on different sites but for the same client under the same contract, then the definition of shiftwork may be satisfied, but work on different sites and projects, for different clients, could not, in my view, properly be regarded as the continuation of operations “by the employment of a group of employees upon work on which another group had been engaged previously.”

11    Deputy President Cross’s conclusions consequent upon this understanding of the meaning of cl 34.2(a) were expressed at FWC1 at [32] to [34] in the following way:

[32]     Ultimately, the question before the Commission now is a narrow one. Does the meaning of “work” in the clause 34.2(a) definition include any work within an enterprise, regardless of how remote, or whether it is required to be work within the same jobsite or project.

[33]     I do not consider that any of the submissions of the Applicant can support a different interpretation of the definition in Clause 34.2(a). The definition of shiftwork is clear and unambiguous. The text of clause 34.2 operates on an assumption that there will be a rotation of shifts unless agreed otherwise by employees. There cannot be a rotation of shifts across an entire enterprise that engages workers at various different worksites in different cities and regions.

[34]     For the reasons given above, I am not satisfied that the Agreement, as amended by the existing undertakings referred to above, would result in the employees being better off overall due to the interpretation of Clause 34(2)(a) of the Award relied upon by the Applicant. Accordingly, I invite the Applicant to provide an undertaking, in the form of Undertaking 5 identified in Altus, to resolve my concern about employees not being better off overall.

12    As the passage at FWC1[34] shows, the Deputy President provided an opportunity, as permitted by s 190 of the FW Act, for D&D to give a further undertaking, in the form of Undertaking 5 identified in Altus (appropriately modified), to address his concerns. Undertaking 5 was:

In respect of any work undertaken by employees in the civil construction sector as defined under the Building and Construction General On-site Award 2010 (BCG Award), the overtime provisions in clause 13.4 of the Agreement [relevant in Altus] will apply to work that is not Shift Work. For the purposes of this undertaking, ‘Shift Work’ has the meaning given by the definition in clause 34.2(a) of the BCG Award, namely, any system of work in which operations are being continued by the employment of a group of employees upon work on which another group had been engaged previously.

13    D&D declined to provide the undertaking and Deputy President Cross consequently dismissed the application: FWC2 at [2], [3].

14    D&D filed an appeal in respect of FWC1 and FWC2 under s 604(3) of the FW Act. Such an appeal only lies with “permission”: s 604(1). Without limiting when the Full Bench of the Commission may grant permission to appeal, it must grant permission if it satisfied that it is in the public interest to do so: s 604(2).

15    The basis of D&D’s proposed appeal was as follows. Deputy President Cross erred by following the reasoning in Altus and determining that cl 34.2(a) of the 2010 Award required work to be continued by a group of employees at the same jobsite or project and not across the totality of an employer’s operations in order to satisfy the definition of “shiftwork” – see: D&D Traffic Management Pty Ltd [2021] FWCFB 4197 (hereafter “FB”) at [1]. In support of its application for permission to appeal, D&D submitted that the appeal raised a question of general application concerning the proper construction of the definition of “shiftwork” in cl 34.2(a) of the 2010 Award: FB [22].

16    The Full Bench of the Commission refused permission to appeal because it did not consider that it would be in the public interest to do so or that it was otherwise justified on any discretionary ground.

17    At the hearing before the Full Bench, the Commission had raised a question as to whether cll 33.1 and 34.2(a) applied to casual employees and provided an opportunity for further written submissions on the issue. The parties both filed further submissions. The Full Bench recorded at FB [9]:

It was common ground between the parties that the span of hours specified in clause 33.1 applied to casual employees by virtue of clause 14.2, so that any work performed by casual employees after 6.00pm Monday to Friday would attract the overtime rates prescribed by clause 36.2 unless it fell within the “shiftwork” definition in clause 34.2(a).

18    At the hearing of its application for judicial review before this Court, Senior Counsel for D&D submitted that the Full Bench’s observation at FB [9] was incorrect and that it had disputed the application of cl 33.1 to its casual employees. In support of this submission, Senior Counsel referred the Court to [5] of its written submissions filed after the Full Bench hearing. For the following reasons, Senior Counsel’s submission must be rejected.

19    Paragraph 5 of D&D’s written submissions to the Full Bench stated:

[D&D] says that this subclause [cl 33.1] cannot directly apply or be applied to casual employees, on the basis that is specifies working hours of 38 per week and that those hours are averaged over a four week cycle. This is not compatible and indeed [D&D] says is incommensurable with casual employment, which by its very nature is for varying hours and days and not for a fixed 38 hours each week and not for a four week cycle. For this reason [D&D] said at hearing that the provisions at cl 33.1 for RDOs, for example, also don’t apply to casual employees.

20    The remainder of the written submissions, however, made it clear that D&D accepted that cll 33.1 and 34.2(a) applied to its casual employees by reason of cl 14.2. D&D’s written submissions to the Full Bench included (emphasis added):

6.     The span of hours provision in cl. 33.1 is not a separate provision, but built into the provision. At least very arguably then, the 38 hours specification, the four hour cycle specification, the RDO provisions and the span of hours provision are all part of a unified whole, and one applicable to full-time employees. On this basis, at least very arguably, the span of hours provision does not apply to casual employees.

…

8.     This subclause [cl 33.4] does not contain a provision for a span of hours. Again, very arguably, there is no span of hours prescribed for casual employees. The effect of this would be, if that was indeed the case, that casuals might be deployed on work at any hour, as ordinary time and at ordinary rates, provided that their daily ordinary hours do not exceed eight. As such, questions of shift rates in respect of casuals would be rendered moot.

9.     [D&D] does not take that point, and says that instead cl. 33.4 must be read in context of other relevant provisions. [D&D] does however point out the uncertainty created by the wording and structure of cl. 33.

…

17.    … While not perhaps as explicit as it might be, the implication is that there is a span and, in the absence of any other span provision, that the span at cl. 33.1 applies to casual employees.

18.    Following the same reasoning as set out above, [D&D] says that the shift work clause [cl 34.2(a)] is one which is “applicable” to casuals and therefore applies to them per cl 14.2 of the [2010] Award.

(Emphasis added.)

21    The Full Bench’s observation at FB [9] accurately reflects D&D’s written submissions.

22    The Full Bench considered that the Deputy President was correct in his reasoning concerning the construction of cl 34.2(a) of the Award but concluded that, in any event, “the appeal does not … properly give rise to the question concerning the construction of clause 34.2(a) in the way contended for by D&D such as to justify the grant of permission to appeal”: at FB [22]. It stated that it reached that conclusion for two related reasons.

23    The Full Bench explained the first reason at FB [23] in the following way:

(a)    D&D’s case focussed on whether the work rostering system which it alleged it then operated in practice falls within the definition of “shiftwork”;

(b)    the comparison required by s 193(1) is “between the application of the terms of the relevant enterprise agreement to current and prospective employees compared to the application of the relevant award to the same employees”;

(c)    cl 8(c) of the 2020 Enterprise Agreement allows work after 6.00pm to be paid on the basis of a 30 percent shift loading instead of the overtime penalty rates prescribed by cl 36.2 of the 2010 Award;

(d)    it necessarily followed that this was “a major detriment under the Agreement for night workers which would cause it to fail the BOOT”; and

(e)    it was not necessary to “to engage in any exercise in the construction of cl 34.2(a) in order to reach this conclusion”: at [24].

24    The Full Bench emphasised at [24] that “[t]he Agreement did not on any view pass the BOOT for this reason alone”.

25    The Full Bench explained the second reason at FB [25] in the following way:

Second, the Deputy President said in the first decision that he would approve the Agreement if D&D gave the “Undertaking 5” referred to in the Altus decision. That undertaking, which we have set out above, would simply displace the definition of shiftwork in clause 8(c) of the Agreement with that in clause 34.2(a) of the [2010] Award. Giving this undertaking would have rectified the identified BOOT deficiency and allowed D&D to have its Agreement approved. It would also have allowed D&D to operate a shift work system consistent with clause 34.2(a) of the [2010] Award. D&D refused to give the undertaking, thus indicating that it was not prepared to have in its Agreement a shiftwork definition which was consistent with that in the [2010] Award. In that circumstance, we see no call to grant permission to appeal to engage in the exercise of construing clause 34.2(a) of the [2010] Award.

CONSIDERATION

Jurisdictional error generally

26    It has been held, in relation to the Australian Industrial Relations Commission, that jurisdictional error may be established if that commission:

    misconceived its role or duty or misunderstood the nature of its jurisdiction;

    failed to apply itself to the question the statute required; or

    misunderstood the nature of the opinion it was required to form (or the state of satisfaction it was required to reach).

See Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; 203 CLR 194 at [31] (Gleeson CJ, Gaudron and Hayne JJ), citing Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 420 (Jordan CJ).

27    As will be explained, this is not an exhaustive list of how jurisdictional error might be established in the industrial context. Indeed, an attempt at classification into categories can obfuscate the real task.

28    The task on judicial review is to determine, on the grounds of judicial review advanced, whether the judicial review applicant has discharged the onus of showing that the decision under review was not made in accordance with the authority conferred by the relevant statute. In MZAPC v Minister for Immigration and Border Protection [2021] HCA 17; 95 ALJR 441 at [29] and [30], Kiefel CJ, Gageler, Keane and Gleeson JJ explained (footnotes omitted):

[29]    The constitutionally entrenched jurisdiction of a court to engage in judicial review of the decision, where that jurisdiction is regularly invoked, is no more and no less than to ensure that the decision-maker stays within the limits of the decision-making authority conferred by the statute through declaration and enforcement of the law that sets those limits. To say that the decision is affected by jurisdictional error is to say no more and no less than that the decision-maker exceeded the limits of the decision-making authority conferred by the statute in making the decision. The decision for that reason lacks statutory force. Because the decision lacks statutory force, the decision is invalid without need for any court to have determined that the decision is invalid.

[30]    The statutory limits of the decision-making authority conferred by a statute are determined as an exercise in statutory interpretation informed by evolving common law principles of statutory interpretation. Non-compliance with an express or implied statutory condition of a conferral of statutory decision-making authority can, but need not, result in a decision that exceeds the limits of the decision-making authority conferred by statute. Whether, and if so in what circumstances, non-compliance results in a decision that exceeds the limits of the decision-making authority conferred by the statute is itself a question of statutory interpretation.

29    It is convenient then to examine the Commission’s function in the present case and the particular decision-making authority conferred on it by the FW Act.

The Commission’s function

30    The Commission’s statutory function in approving enterprise agreements is set out in Div 4 of Part 2-4 of the FW Act. The “basic rule” is that the Commission must approve an agreement if the requirements of ss 186 and 187 are met: s 186(1). Of particular relevance to this application:

(1)    s 186(2)(d) (set out at [4] above) includes a requirement that the Commission “must be satisfied that … the agreement passes the better off overall test”;

(2)    the “better off overall test” is defined in s 193 (set out at [5] above) which provides that a non-greenfields agreement passes the better off overall test if the Commission “is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee”.

31    It is significant that both s 186(2)(d) and s 193(1) require the Commission to be “satisfied” about the relevant matters. That language indicates that the matters identified are not jurisdictional facts, but are facts which need only be established to the satisfaction of the decision-maker: One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77; 262 FCR 527 at [103], referring to D’Amore v Independent Commission Against Corruption [2013] NSWCA 187; 303 ALR 242 at [241] (Basten JA).

Judicial review of states of satisfaction

32    States of satisfaction are judicially reviewable. In R v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42; 69 CLR 407 at 432, Latham CJ said:

It is therefore well settled that if a statute provides that a power may be exercised if a person is of a particular opinion, such a provision does not mean that the person may act upon such an opinion if it is shown that he has misunderstood the nature of the opinion which he is to form. Unless such a rule were applied legislation of this character would mean that the person concerned had an absolutely uncontrolled and unlimited discretion with respect to the extent of his jurisdiction and could make orders which had no relation to the matters with which he was authorized to deal. It should be emphasized that the application of the principle now under discussion does not mean that the court substitutes its opinion for the opinion of the person or authority in question. What the court does do is to inquire whether the opinion required by the relevant legislative provision has really been formed. If the opinion which was in fact formed was reached by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation, then it must be held that the opinion required has not been formed. In that event the basis for the exercise of power is absent, just as if it were shown that the opinion was arbitrary, capricious, irrational, or not bona fide.

33    In Ex parte Hebburn at 420, Jordan CJ stated:

… I quite agree that the mere fact that a tribunal has made a mistake of law, even as to the proper construction of a statute, does not necessarily constitute a constructive failure to exercise jurisdiction: R v Minister of Health. But there are mistakes and mistakes; and if a mistake of law as to the proper construction of a statute investing a tribunal with jurisdiction leads it to misunderstand the nature of the jurisdiction which it is to exercise, and to apply “a wrong and inadmissible test”: Estate and Trust Agencies (1927) Ltd v Singapore Improvement Trust; or to “misconceive its duty,” or “not to apply itself to the question which the law prescribes”; The King v War Pensions Entitlement Appeal Tribunal; or “to misunderstand the nature of the opinion which it is to form”: The King v Connell, in giving a decision in exercise of its jurisdiction or authority, a decision so given will be regarded as given in a purported and not a real exercise of jurisdiction, leaving the jurisdiction in law constructively unexercised, and the tribunal liable to the issue of a prerogative writ of mandamus to hear and determine the matter according to law: R v Board of Education.

34    In Avon Downs Pty Ltd v Commissioner of Taxation (1949) [1949] HCA 26; 78 CLR 353 at 360, Dixon J outlined the circumstances in which a state of satisfaction, being a pre-condition to the exercise of a power, might successfully be reviewed, stating:

But it is for the commissioner, not for me, to be satisfied of the state of the voting power at the end of the year of income. His decision, it is true, is not unexaminable. If he does not address himself to the question which the sub-section formulates, if his conclusion is affected by some mistake of law, if he takes some extraneous reason into consideration or excludes from consideration some factor which should affect his determination, on any of these grounds his conclusion is liable to review. Moreover, the fact that he has not made known the reasons why he was not satisfied will not prevent the review of his decision. The conclusion he has reached may, on a full consideration of the material that was before him, be found to be capable of explanation only on the ground of some such misconception. If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law.

35    It is, accordingly, often said that states of satisfactions may be vitiated on “Avon Downs grounds”, namely:

(1)    if the decision-maker:

(a)    did not address the question posed by the statute or misconstrued the statute;

(b)    made an error of law affecting the conclusion reached;

(c)    failed to take into account a relevant consideration;

(d)    took into account an irrelevant consideration;

(2)    if the result is so unreasonable that it is proper to infer that one of the foregoing errors must have occurred or that the result is so unreasonable that no reasonable decision-maker could have reached the decision in good faith. As to the latter proposition, see: Buck v Bavone [1976] HCA 24; 135 CLR 110 at 118–119 (Gibbs J). Gibbs J went on to say that:

[W]here the matter of which the [decision-maker] is required to be satisfied is a matter of opinion or policy or taste it may be very difficult to show that it has erred in one of these ways, or that its decision could not reasonably have been reached.

36    In Minister for Immigration & Multicultural & Indigenous Affairs v SGLB [2004] HCA 32; 78 ALJR 992 at [38], Gummow and Hayne JJ stated:

The satisfaction of the criterion that the applicant is a non-citizen to whom Australia has the relevant protection obligations may include consideration of factual matters but the critical question is whether the determination was irrational, illogical and not based on findings or inferences of fact supported by logical grounds. If the decision did display these defects, it will be no answer that the determination was reached in good faith.

37    These observations were approved in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 at [37]–[40] (Gummow ACJ and Kiefel J); at [102]–[105], see also [130], [135] (Crennan and Bell JJ).

38    Of importance to the present case, SGLB recognises that a state of satisfaction reached on the basis of findings or inferences of fact which are not logical, or on the basis of illogical reasoning, is capable of vitiating the state of satisfaction with the result that it might be shown that the power exercised consequent upon reaching the state of satisfaction (being a pre-condition to the exercise of the power) exceeded the decision-making authority conferred by the statute.

39    It might also be shown that the exercise of a power on the basis of a state of satisfaction formed unreasonably or in a manner vitiated on Avon Down grounds, might be an exercise of power in breach of an implied condition to exercise the statutory power reasonably in the sense described in Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332.

40    The AWU submitted that any error in construction of the 2010 Award would be an error made within jurisdiction. More specifically, the AWU submitted:

(1)    a federal industrial tribunal may legitimately form and act upon opinions about legal rights and obligations as a step in the exercise of its own functions and powers, referring to: Re Cram; Ex parte Newcastle Wallsend Coal Company Pty Ltd [1987] HCA 29; 163 CLR 140 at 149; Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd [2012] FCA 87; 203 FCR 371 at [21]; ResMed Ltd v Australian Manufacturing Workers' Union [2015] FCA 379; 243 FCR 349 at [48];

(2)    the valid exercise of the functions and powers of a federal industrial tribunal do not necessarily depend upon it reaching legally correct opinions, citing Wagstaff Piling at [25] (Buchanan and Katzmann JJ).

41    Both of these propositions are strictly correct. But they are narrow propositions. Neither proposition, alone or in combination, means that an exercise of power on the basis of legally incorrect opinions about legal rights and obligations is protected from judicial review by reason of it necessarily being an error within jurisdiction. More specifically, neither proposition asserts that the exercise of a power on the basis of an opinion vitiated on Avon Downs or other grounds is not susceptible to judicial review. Nor do the propositions have anything to say about the implication of a condition that a statutory power be exercised reasonably. There is nothing about the present statutory context which would deny the implication of that condition to the exercise of the power in the present case. The propositions do not deny that a power might be shown to have been exercised unreasonably by reason of incorrect opinions about legal rights or obligations.

42    The importance of this to the present case is that an error in construction of the 2010 Award is capable of giving rise to jurisdictional error even though such an error would not necessarily have that result. It depends on an analysis of the circumstances, in particular precisely what the error was and how that error affected the decision-making process or the decision. The submission made by the AWU that any error in construction of the 2010 Award would be an error made within jurisdiction must be rejected.

The grounds of judicial review advanced

43    D&D’s originating application claimed relief on the grounds stated in an accompanying “Statement of Contentions”. D&D’s contentions were summarised in its written submissions as being that the Commission:

(1)    misconceived the statutory task required by ss 186 and 193;

(2)    failed to carry out the statutory task required by ss 186 and 193;

(3)    breached an implied condition to exercise the power in ss 186 and 193 reasonably in the sense described in Li.

44    In support of these contentions, D&D submitted that the Commission “was required to properly construe and apply the relevant provisions of the 2010 Award in assessing the BOOT”, but that the “Commission misconstrued certain provisions of the 2010 Award in a number of respects”. The asserted misconstructions revolve around three essential contentions:

(1)    First, that the “spread of hours” clause, being cl 33.1 of the 2010 Award, does not apply to casual employees. D&D contended that the ordinary hours of work for D&D’s employees is determined by reference solely to cl 33.4 of the Award, namely to the exclusion of cl 33.1. The result, according to D&D’s argument, is that there is no limitation upon the time of day, or day of the week, upon which casual employees can work their ordinary hours, subject to there being a maximum of eight hours a day; a casual employee could be required to work 8 hours from 7pm on a Sunday night and this would fall within that employee’s ordinary hours of work.

(2)    Secondly, that the definition of “shiftwork” in cl 34.2(a) is not operative in the sense of limiting the various categories of shift work. More specifically, D&D contended that it was an error to construe cl 34 as only applicable to “night shift” work where that “night shift” work also fell within the definition of “shiftwork”.

(3)    Thirdly, that the proper construction of the definition of “shiftwork” in cl 34.2(a) was such that it includes a system of work where operations are continued by a group of employees upon work undertaken by other employees anywhere throughout an enterprise whether or not it is substantially the same work (including where those employees take over from employees of a different employing enterprise).

45    Apart from part of the third contention, D&D did not put any of the arguments now advanced about the operation of the 2010 Award to Deputy President Cross or to the Full Bench. A substantial part of the arguments advanced on this application for judicial review were directed to the ultimate proposition that cll 33.1 and 34.2(a) of the 2010 Award did not apply to D&D’s casual employees, a position directly inconsistent with the position D&D had adopted before the Commission and the Full Bench.

46    Although the case was formulated by D&D in the way identified at [43] above, the real issue is whether there was a misconstruction of the 2010 Award of such a nature that the state of satisfaction was vitiated or the consequent exercise of power exceeded the decision-making authority conferred by the statute.

47    Because D&D’s case is founded upon asserted misconstructions of the Award, it is relevant to observe that the interpretation of an award requires consideration of the natural and ordinary meaning of its words, read as a whole and in context. The history and subject matter of the award may be relevant. The words are not to be interpreted in a vacuum divorced from industry realities. As Street J said in George A Bond & Co Ltd (in liq) v McKenzie [1929] AR(NSW) 498 at 503:

[I]t must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result … from an agreement between the parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award.

48    See also: King v Melbourne Vicentre Swimming Club Inc [2021] FCAFC 123; 308 IR 171 at [40]-[42]; (Collier, Katzmann and Jackson JJ); Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 at [2] (Gleeson CJ and McHugh J); City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362 at 378-379 (French J).

Has jurisdictional error been established?

49    As to D&D’s first contention, recorded at [43] above, D&D submitted that the Commission’s misconstruction of the 2010 Award meant that it misconceived its function or the statutory task required by ss 186 and 193 of the FW Act. It was not made clear how, if such errors occurred, that would have the result that the Commission misconceived its function or the statutory task. There is nothing in the reasoning of Deputy President Cross which indicates a misunderstanding of the statutory function or task and everything to show that the Deputy President well understood what the statute required. This ground of judicial review is not made out.

50    As to D&D’s second and third contentions at [43] above, D&D’s case that the Commission failed to carry out the statutory task, or breached an implied condition to exercise the power in ss 186 and 193 reasonably in the sense described in Li, depends (at the least) on making good the proposition that the Deputy President misconstrued the 2010 Award in one of the ways advanced. For present purposes, it may be assumed that a material misconstruction of the 2010 Award is capable of resulting in jurisdictional error by reason of its vitiating effect on the attainment of the state of satisfaction under either ss 186 or 193.

Does cl 33.1 not apply to causal employees?

51    As noted earlier, the argument put to this Court – inconsistently with what had been argued before the Commission and the Full Bench – was that there was no limitation upon the time of day, or day of the week, upon which casual employees could work their ordinary hours, subject to there being a maximum of eight hours a day, because cl 33.1 did not apply to casual employees. If that be correct:

(1)    no matter when a casual worker performed the work, that casual employee would not be entitled to overtime under cl 36.2 (unless the employee worked over 8 hours);

(2)    contrary to the conclusion reached by the Commission, employees to be covered by cl 8(c) of the 2020 Enterprise Agreement would not lose an entitlement under cl 36.2 of the 2010 Award.

52    It is convenient to set out various clauses of the 2010 Award relevant to this and later arguments. Clause 14 included:

14.    Casual employment

14.1    A casual employee is one engaged and paid in accordance with the provisions of this clause.

14.2    A casual employee is entitled to all of the applicable rates and conditions of employment prescribed by this award except annual leave, paid personal/carer’s leave, paid community service leave, notice of termination and redundancy benefits.

…

14.5    A casual employee must be paid a casual loading of 25% for ordinary hours as provided for in this award. The casual loading is paid as compensation for annual leave, personal/carer’s leave, community service leave, notice of termination and redundancy benefits and public holidays not worked.

14.6    A casual employee required to work overtime or weekend work will be entitled to the relevant penalty rates prescribed by clauses 36—Overtime, and 37— Penalty rates, provided that:

(a)    where the relevant penalty rate is time and a half, the employee must be paid 175% of the ordinary time hourly rate prescribed for the employee’s classification; and

(b)    where the relevant penalty rate is double time, the employee must be paid 225% of the ordinary time hourly rate prescribed for the employee’s classification.

NOTE: The overtime and weekend work penalty rates for casual employees have been calculated by adding the casual loading prescribed by clause 14.5 to the overtime and weekend work penalty rates prescribed by clauses 36.2 and 37—Penalty rates.

53    Clause 33 included:

Part 5—Hours of Work and Related Matters

33.     Ordinary hours of work

33.1    Except as provided in clause 34—Shiftwork, the ordinary working hours will be 38 per week (averaged over a 20 day four week cycle to allow for the accrual and taking of rostered days off (RDO)), worked between 7.00am and 6.00pm Monday to Friday in accordance with the following procedures:

(a)    Hours of work and accrual towards rostered days off

Ordinary working hours will be eight hours in duration each day, of which 0.4 of one hour of each day worked will accrue towards a RDO and 7.6 hours will be paid. An employee will therefore accrue 7.6 hours towards a RDO each 19 days of ordinary hours worked.

…

…

33.3    Hours of work—part-time employees

(a)    The daily ordinary hours of work of a part-time employee shall not exceed 8 hours.

(b)    Notwithstanding the provisions of this clause and clause 34—Shiftwork, an employee working on a part-time basis may be paid for actual hours worked and in such instances the employee will not be entitled to accrue time towards an RDO.

(c)    An employer and employee may agree that the part-time employee accrues time towards an RDO as provided by this clause and clause 34—Shiftwork. In such instances, the part-time employee will accrue pro rata entitlements to rostered days off in accordance with subclause 33.1(a).

33.4    Hours of work—casual employees

The daily ordinary hours of work of a casual employee shall not exceed 8 hours.

54    Clause 36 included:

36.    Overtime

36.1    Reasonable overtime

…

36.2     All time worked beyond an employee’s ordinary time of work (inclusive of time worked for accrual purposes as prescribed in clauses 33—Ordinary hours of work and 34—Shiftwork), Monday to Friday, must be paid for at the rate of time and a half for the first two hours and at double time thereafter.

36.3     A casual employee must be paid in accordance with the overtime rates prescribed by clause 14.6.

…

55    Clause 37 included:

37.    Penalty rates

…

37.10    A casual employee must be paid for overtime or weekend work in accordance with clause 14.6.

56    Contrary to D&D’s contention, cl 33.1 does apply to casual employees; cl 33.4 does not apply to the exclusion of cl 33.1. There are a number features of the 2010 Award which reveal that this construction of the 2010 Award is correct.

57    First, if D&D’s construction were correct, it would also mean that cl 33.1 did not apply to part-time employees, having regard to the terms of cl 33.3(a), which are identical to cl 33.4. This would mean that part-time employees would not have any limitation on the time of day or the days of the week that those employees could be required to work without overtime or penalty. Such an employee could be required to work 10pm to 6am at ordinary rates, whilst a full-time employee (not working shiftwork) would be paid overtime in accordance with cl 36.2 or, if working shiftwork would get the shiftwork loading in cl 34.2(j). The 2010 Award read as a whole indicates this was not the intended operation. Clause 13.2, for example, contemplates that part-time employees are entitled to the ordinary rates “and pro rata entitlements”. Clause 13.2 provides:

13.2    For each ordinary hour worked, a part-time employee will be paid no less than the ordinary time hourly rate for the relevant classification and pro rata entitlements for those hours. An employer must inform a part-time employee of the ordinary hours of work and the starting and finishing times.

58    It is relevant also to note that cl 33.3(b) and (c) assume that cl 33.1 applies to part-time employees. Both paragraphs (b) and (c) of cl 33.1 deal with RDOs which are addressed by cl 33.1. Clause 33.3(c) expressly refers to cl 33.1(a).

59    Secondly, cl 14.2 (set out above at [52]), states that casual employees are “entitled to all of the applicable rates and conditions of employment prescribed by this award except annual leave, paid personal/carer’s leave, paid community service leave, notice of termination and redundancy benefits”. Clause 14.5 makes clear that the 25% casual loading is paid “as compensation for annual leave, personal/carer’s leave, community service leave, notice of termination and redundancy benefits and public holidays not worked”. The 25% loading is not compensation for the absence of overtime or penalty rates for night or weekend work. This indicates that cl 33.1 was intended to apply to causal employees.

60    Even if cl 33.1 was not intended to apply to casual employees “directly”, cl 33.1 operates with respect to casual employees “indirectly” by reason of cl 14.2. As mentioned earlier, although D&D submitted that the application of cl 33.1 to casual employees was very much in issue before the Full Bench, the true position is that D&D expressly conceded, in clear terms, that cl 33.1 applied to casual employees “indirectly” by reason of cl 14.2 as correctly recorded by the Full Bench at FB [9].

61    Thirdly, cl 14.6 (set out above at [52]) states that a “casual employee required to work overtime or weekend work will be entitled to the relevant penalty rates prescribed by clauses 36 – Overtime, and 37 – Penalty rates”, each of which is premised on work outside the ordinary spread of hours in clause 33.1. The evident intention is that overtime and penalty rates apply to casuals and that those provisions assume the spread of hours applies to casuals. In particular, cl 14.6 assumes that cl 36.2 – which provides for work outside the relevant ordinary hours worked Monday to Friday to be paid at overtime rates – applies to casual employees.

62    Clause 33.4 limits a casual employee’s “ordinary hours” to 8 hours a day within the spread of hours of 7am to 6pm. This is confirmed by the 4 yearly review of modern awards – Construction awards [2019] FWCFB 8564 at [26], in which the Full Bench’s explanation of the role of cl 33.4 (by reference to an earlier decision) assumes that cl 33.1 applied to all employees including casuals (citations omitted):

Ordinary hours of work

[26]    In the September 2018 Decision we dealt with a range of claims and submissions concerning clause 33, Ordinary hours of work of the Building Award. We stated the following overall conclusions:

[410]     Consistent with the general approach contained in the August 2017 Statement, we consider that clause 33 should be varied in the following major respects in order for it to achieve the modern awards objective:

…

[411]     There are some additional changes we will make to clause 33 which were not addressed in the proposed variation contained in the August 2017 Statement. We also propose to alter aspects of that proposed variation, specifically:

…

(2)     We will add a daily maximum number of ordinary hours for casual employees, consistent with the submissions of the CFMMEU, and also for part-time employees. Our provisional view is that this daily maximum should be set at eight hours consistent with the position applying to full-time employees.

…

[29]    The HIA’s submission opposed clause 33.4, which sets maximum daily ordinary hours for casual employees at 8 hours. It submitted that the current position should be retained which, it contended, was that casuals received overtime rates only if they worked in excess of 38 hours per week or outside the spread of ordinary hours. The HIA expressed concern that the new provision was at odds with the 2013 decision in Master Builders Australia Limited, where an application made by HIA to vary clause 14.2 of the Building Award to include RDOs as one of the modern award matters which does not apply to casual employees due to the casual loading was rejected.

…

[31]    MBA also expressed opposition to the establishment of a maximum number of daily ordinary hours for casual and part-time employees in clauses 33.3 and 33.4. It submitted that there is no current ambiguity with reference to ordinary hours of work for casual employees, and that such a clarification is unnecessary. It submitted that the current position is that casual employees work a maximum of 38 ordinary hours per week within the span of hours under clause 33.1, and this satisfied s 134(1)(a) and (d)(i) of the FW Act as it sets out circumstances in which overtime is triggered …

[34]    We have decided that we should not depart from the provisional views concerning clause 33 expressed in the September 2018 Decision, and the Building Award shall be varied to include the new clause proposed in that decision which we have earlier reproduced. We reject the submissions advanced by MBA and the Ai Group against that position. In respect of the proposed clauses 33.3 and 33.4, we confirm the view we expressed in the September 2018 Decision as follows:

“[407] … clause 33 in its current form does not provide for any maximum number of daily ordinary hours for casual employees (after which overtime penalty rates would be payable). Nor does it do so for part-time employees. In this respect also, the clause is not a fair and relevant standard, having regard in particular to the needs of the low paid (s.134(1)(a)) and the need to provide additional remuneration for employees working overtime (s.134(1)(da)(i) of the Act).”

[35]    There is no dispute that, under clause 33.1 as it currently stands, the maximum daily ordinary hours for full-time employees is eight, notwithstanding a daily span of hours of 7.00am to 6.00pm. No evidence or persuasive submission has been advanced to justify a different position with respect to part-time or casual employees.

(Emphasis added.)

63    This decision confirms an assumption on the part of the Full Bench, consistent with an objective construction of the relevant provisions of the 2010 Award, that cl 33 applies to casual and part-time employees.

The interrelationship of the definitions in cl 34.2

64    Clause 34 of the 2010 Award included:

34.    Shiftwork

34.1    General building and construction and metal and engineering construction sectors

...

34.2    Civil construction sector

(a)    Definitions

For the purpose of this clause:

shiftwork means any system of work in which operations are being continued by the employment of a group of employees upon work on which another group had been engaged previously

day shift means any shift starting on or after 6.00 am and before 10.00 am

afternoon shift means any shift starting at or after 10.00 am and before 8.00 pm

night shift means any shift starting at or after 8.00 pm and before 6.00 am

rostered shift means a shift of which the employee concerned has had at least 48 hours notice.

65    As noted above, D&D contended that it was an error to construe cl 34 as only applicable to “night shift” work where that work also answered the defined term “shiftwork”. Put another way, even if an employee is not performing “shiftwork”— namely “work in which operations are being continued by the employment of a group of employees upon work on which another group had been engaged previously” — the employee is nevertheless a shiftworker if the employee works a period of time being a “day shift”, “afternoon shift” or “night shift”. This argument was not put to, nor considered, either by Deputy President Cross or the Full Bench.

66    This construction of cl 34.2(a) must be rejected. The definition of “shiftwork” in cl 34.2(a) identifies what “shiftwork” is for the purposes of the civil construction sector and for the balance of cl 34.2. The remaining definitions in cl 34.2(a) – “day shift”, “afternoon shift”, “night shift” and “rostered shift” – are subcategories of what is otherwise “shiftwork”. On D&D’s construction, most if not all employees are likely to be captured by cl 34.2 (irrespective of whether their work falls within the definition of “shiftwork”) because the remaining definitions cover 24 hours a day. The absurd result of this construction is that no employee would fall outside of cl 34.2, notwithstanding that the clause was evidently only intended to apply to “shiftwork”.

67    Clause 34.2 applies for the purpose of exempting, where it applies, an employee from the operation of cl 33. A shiftworker will be paid in accordance with the less beneficial entitlements afforded by cl 34 rather than the more beneficial entitlements under cl 33.

The correct construction of the definition of “shiftwork”

68    As mentioned, this was the only issue raised before the Commission and the Full Bench. D&D has failed to demonstrate any error in the Commission’s construction. The definition requires: (a) that there be “system of work in which operations are being continued”; and (b) that the operations in the system of work are continued “by the employment of a group of employees upon work on which another group had been engaged previously” (emphasis added). The construction advanced by D&D is not within the ordinary meaning of the definition. Contrary to D&D’s submission, the definition does not capture the situation where employees carry out work at location A and other workers then carry out work at location B. Such work is not carried on “upon work” on which another group had been previously engaged.

69    It is not necessary to determine whether the definition is apt to cover a system of work in which operations are being continued by the employment of a group of employees of employer X upon work on which another group of employees of employer Y had been previously engaged. This construction was advanced before this Court but not before Deputy President Cross or the Full Bench and the answer to it was not shown to be material to the Commission’s decisions.

Conclusion in relation to jurisdictional error

70    D&D has failed to establish that Deputy President misconstrued the 2010 Award. It follows that, even if such an error could have been one which established jurisdictional error, the application must be dismissed.

Discretionary matters

71    Two further matters should be mentioned.

72    First, a matter militating against relief being granted even if error had been established, is the fact that the case put to this Court was, in nearly all respects, not put to the Commission or the Full Bench. Further, although not frankly acknowledged, the case put to this Court was in one central respect inconsistent with the way the matter was argued before Deputy President Cross and contrary to an express concession which had been made to the Full Bench.

73    It is not in the interests of the administration of justice for this Court to entertain an application for judicial review of a decision of the Commission on a basis which is inconsistent with the way in which an applicant conducted the case before the Commission. Judicial review involves an examination of the decision challenged and the process pursuant to which that decision was made. Judicial review is not the occasion to advance a new case. To a large extent, that is what the applicant has done here. Except in one respect, D&D’s case on this application was either not argued before the Commission or the Full Bench or inconsistent with the case put. That is both unsatisfactory and would be a discretionary reason for refusing relief.

74    Senior Counsel for D&D submitted that, even if it did make the concession that cl 34.2 applied to its casual employees (which it plainly did), the Full Bench was bound to consider the question and address it. He submitted that the “Commission acts as a statutory gatekeeper to an agreement as between the parties; it is not performing an arbitral function”. According to D&D, neither the Commission nor the Full Bench was entitled to act upon what was common ground between the parties or a concession about the scope of a clause in an award. In all cases, D&D argued, it had to put the concession to one side and determine the matter for itself. This broad submission was made without reference to any authority. The effect of the submission is that the Commission is required to go behind each and every matter it is told is not an issue. The submission must be rejected.

75    Secondly, D&D did not seek judicial review of the decision of the Full Bench. It is not in the interests of the administration of justice for this Court on judicial review to call up and quash the decision of a Commissioner and in doing so reach conclusions which are in substance contrary to the decision-making of the Full Bench in its appellate jurisdiction under the FW Act, unless this Court has also formed the view that the decision of the Full Bench is itself affected by error or there is some other compelling reason to do so: Dafallah v Fair Work Commission [2014] FCA 328; 225 FCR 559 at [54] to [56] (Mortimer J); Cook v Australian Postal Corporation [2017] FCA 509 at [67] (Katzmann J); Toma v Workforce Recruitment and Labour Services Pty Ltd [2020] FCA 1102 at [67] (Wigney J); Pal v Commonwealth of Australia [2020] FCA 1483 at [52] (Anderson J). As Mortimer J noted in Dafallah at [56] permitting an applicant to challenge decisions of a Commissioner on a basis which ignores a decision of the Full Bench would be to “permit an applicant in effect to circumvent the statutory appeal provisions and the limits Parliament has imposed by them”.

76    Senior Counsel for D&D submitted that D&D was unable to challenge the Full Bench’s decision because the Full Bench had not made any orders. Senior Counsel contended that this was the effect of the decision of the Full Court in Teekay Shipping (Australia) Pty Ltd v Auld [2020] FCAFC 206, referring in particular to Teekay at [30]. Teekay at [30] is not authority for the proposition that, where a Full Bench decides to refuse permission to appeal but makes no order, a disappointed applicant for permission to appeal is unable to seek judicial review of the decision. D&D’s submission only needs be stated to be rejected. If the submission were correct, a decision refusing permission to appeal would not be judicially reviewable on the simple basis that the Full Bench made no order giving effect to its decision. No principled or other basis was identified as to why judicial review of the decision would not be available.

CONCLUSION

77    The application should be dismissed.

Associate:

Dated:    8 July 2022