Federal Court of Australia

United Firefighters’ Union of Australia v Fire Rescue Victoria [2024] FCAFC 84

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    These proceedings concern a dispute with respect to the establishment of a firefighters registration board and as to whether Fire Rescue Victoria (FRV) (the first respondent) could be compelled, by order of the Fair Work Commission (the second respondent), to enter into a service agreement with the United Firefighters’ Union of Australia (UFU) (the applicant) and the Victorian Professional Firefighters Registration Board Limited where the Board, for a fee per firefighter, would accredit and register firefighters.

2    The UFU applies for judicial review of two decisions of the Commission: a decision made by Commissioner Wilson in United Firefighters’ Union of Australia v Fire Rescue Victoria [2023] FWC 1235 (the Commissioner’s Decision or C) and the Full Bench decision dismissing an appeal from the Commissioner’s Decision in United Firefighters’ Union of Australia v Fire Rescue Victoria [2023] FWCFB 225 (the Full Bench Decision or FB). The Commissioner declined to make the order sought by the UFU. The reasoning underpinning this declination is the subject of this application. The UFU then appealed the Commissioner’s Decision to a Full Bench of the Commission under s 604 of the Fair Work Act 2009 (Cth) (FW Act) and in accordance with the right conferred by cl 21 of Div A and cl 26 of Div B (together, the Dispute Clause) of the Fire Rescue Victoria Operational Employees Interim Enterprise Agreement 2020 (2020 Agreement). The Full Bench dismissed the appeal on the basis that the Commissioner’s Decision was free of appealable error.

3    The UFU seeks declarations that the Commissioner’s Decision and the Full Bench Decision are each invalid and orders that they be set aside. In addition, it seeks an order that the dispute be remitted to the Commissioner to be arbitrated according to law.

4    The appeal concerns what was required of the Commission, when exercising its private arbitral powers under a dispute resolution clause in an industrial instrument, to settle the dispute. In essence, the UFU contended that the Commission had failed to exercise its jurisdiction by declining to make the order sought by: (a) failing to determine whether obstacles identified in an earlier decision to making an order requiring FRV to enter into a service agreement had been remedied by subsequent amendments to the service agreement (where it instead adjourned that matter for further consideration); and (b) failing to give an opinion as to the validity of a ministerial direction (or alternatively being distracted by it when it need not have been considered) and relying upon it to decline to order FRV to enter the service agreement.

5    For the reasons which follow, the application is refused. The Commissioner did not fail to exercise his private arbitral power, conferred by the dispute resolution clause under the relevant enterprise agreement. To “settle the dispute” included the discretion to defer an argument, regarding whether the proposed agreement fettered FRV’s powers, to a later time when dealing with a related application. It was also within the Commissioner’s power to conclude that giving any opinion as to the ministerial direction question would not “settle” but widen the dispute and, as a consequence, decline to order the relief sought by the UFU.

6    The determination of the bounds of the Commission’s private arbitral power and what it was required to do in order to fulfil its function in this case requires a consideration of the terms of the dispute resolution clause in the industrial instrument conferring that authority and the subject matter of the dispute.

Jurisdiction

7    The FW Act promotes the resolution of disputes at the enterprise level and emphasises enterprise bargaining. These objectives are, in part, facilitated by limiting the circumstances in which the Commission may exercise arbitral powers. Section 595 of the FW Act states that the Commission may only deal with a dispute if “the FWC is expressly authorised to do so under or in accordance with another provision of this Act”. Section 186(6) of the FW Act requires that an enterprise agreement contain a dispute resolution 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.

8    Part 6-2 prescribes how, if so authorised under the FW Act, the Commission may deal with disputes. Section 738(b) recognises that the Commission is authorised to deal with a dispute where an enterprise agreement includes a term of the kind referred to in s 186(6). Section 739 of the FW Act sets out the limited circumstances in which the Commission has arbitral powers and the limits of that private arbitral power in the following way:

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.

(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.

9    As is evident from the foregoing, s 739(4) expressly authorises the Commission to arbitrate a dispute, in accordance with a dispute resolution procedure, subject to subss (5) and (6).

10    The Commission exercises private arbitral powers when arbitrating disputes under a dispute resolution clause in an enterprise agreement: Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission [2001] HCA 16; 203 CLR 645 at [31] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123; 235 FCR 305 at [31]–[58] per Dowsett, Tracey and Katzmann JJ. The scope of powers it may exercise in the performance of its arbitral function are primarily defined by the terms of reference given to it (TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia [2013] HCA 5; 251 CLR 533 at [45] per Hayne, Crennan, Kiefel and Bell JJ), and supplemented by the powers conferred on it by Parliament (s 739 of the FW Act; see also ALS at [85]).

11    Courts generally adopt a “broad, liberal and flexible approach”, favouring a construction giving effect to the parties’ intention to submit disputes to an arbitral process and, in doing so, favour a construction that provides a single forum for adjudication: Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 1102 at [41]–[68] per Allsop J; Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66; 298 ALR 666 at [56] and [63] per Martin CJ, Buss JA agreeing; but compare Rinehart v Welker [2012] NSWCA 95; 95 NSWLR 221 at [115] per Bathurst CJ; and, Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; 267 CLR 514 at [19]–[21] per Kiefel CJ, Gageler, Nettle and Gordon JJ.

12    Past challenges to the Commission’s purportedly erroneous exercise of its private arbitral power have involved circumstances which include where it is alleged that a step in the dispute resolution procedure has not been followed (Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (No 2) [2020] FCA 1694); where the Commission had expressed an incorrect opinion about the meaning or operation of the applicable industrial instrument as a step in resolving the dispute (Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd [2012] FCAFC 87; 203 FCR 371); and where the Commission sought to decide an issue which it had no authority to decide (Glen Cameron Nominees Pty Ltd v Transport Workers’ Union of Australia [2017] FCA 1026).

13    Whilst the UFU relied in part upon s 562 of the FW Act to give this Court jurisdiction to determine the appeal, because the Commission’s exercise of private arbitral powers was said to be a matter arising under the FW Act, the private arbitral power exercised by the Commission falls outside the modern legislative scheme applying to commercial and international arbitrations. Therefore, the scope of the Court’s power to review decisions made in the exercise of the power falls to be determined by reference to common law principles. The parties approached matters on that basis in Duggan v Metropolitan Fire and Emergency Services Board [2017] FCAFC 112; 251 FCR 1 at [50] and [62] per Tracey, Wigney and O'Callaghan JJ. No contrary submission was put in the present proceedings.

14    Whilst the common law courts have asserted a jurisdiction to set aside arbitral awards on the basis of demonstrated error of law on the face of the award (see, for example, the statements in Hodgkinson v Fernie (1857) 3 CB (NS) 189 at 200 per Cockburn CJ and 202 per Williams J), it cannot now be said to be a general jurisdiction akin to error of law on the face of the record as a basis for review of administrative action: TCL at [35]–[39] per French CJ and Gageler J, [99] and [104] per Hayne, Crennan, Kiefel and Bell JJ. In any event, the error alleged in the present proceedings was not of that kind.

15    In considering the scope of available review of an arbitral award by the Commission in the exercise of private arbitral power, there may need to be regard to the fact that the private arbitral power is entrusted to a public official in the form of the Commission: see ALS at [81] per Dowsett, Tracey and Katzmann JJ. However, because the power being exercised is private and not governmental or public in nature it is not susceptible to the issue of constitutional writs: ALS at [85]–[86] and Transit Systems West Services Pty Ltd v Australian Rail, Tram and Bus Industry Union [2020] FCAFC 193; 281 FCR 309 at [32] per Katzmann, Kerr and O'Callaghan JJ.

16    In the present case, the complaint is of an alleged failure by the Commission to complete its arbitral function. Arbitral awards have been reviewed on such a basis. In the English decision of Tomlin v Forwich Corpn (1836) 5 Ad & E 147 an award was held to be invalid on the basis that the arbitrator did not dispose of all the issues personally and instead referred a matter to a third party. The award in question included a direction that the defendant was to repair the premises “to the satisfaction of” a third party: at 149. The award was found to be void in its entirety due to the delegation: at 152 per Lord Denman CJ, Littledale and Patteson JJ agreeing. See also Bradford v Bryan (1741) Willes 268 where the arbitrator’s failure to determine all matters before it also vitiated the award: at 270–1 per Lord Willes CJ. Similarly in Johnson v Latham (1850) 19 LJQB 329, the award was held not to be valid, again on the basis of being incomplete, due to a delegation of the arbitrator’s authority to a third party: at 333–4 per Coleridge J. See also the following cases where the award was held to be void in its entirety for lack of finality: Re Marshall and Dresser (1842) 3 QB 878; Dresser v Finnis (1855) 25 LTOS 81; Richardson v Worseley (1850) Exch 613; Wilkinson v Page (1842) 1 Hare 276; Hewitt v Hewitt (1841) 1 QB 110. In Re Goddard & Mansfield (1850) 19 LJQB 305 it was held that the delegation to a third party did not affect the validity of the award as a whole; the delegation direction in the award was separable from the rest of the award and as a result, the direction was simply “inoperative”: at 308 per Erle J.

The Dispute Clause

17    The Dispute Clause is contained in two parts of the 2020 Agreement covering different cohorts of employees (cl 21 of Div A and cl 26 of Div B). Whilst not in identical terms, the clauses are relevantly the same, and cl 21 is as follows:

21. DISPUTE RESOLUTION

21.1.     This dispute resolution process applies to:

21.1.1. all matters arising under this Division; and 21.1.2. all matters relating to the application of, or for which express provision is made in this Division; and

21.1.3. all matters pertaining to the employment relationship, whether or not express provision for any such matter is made in this Division; and

21.1.4. all matters pertaining to the relationship between FRV and UFU, whether or not express provision for any such matter is made in this Division; and

21.1.5. all matters arising under the National Employment Standards.

The parties agree that disputes about any such matters may be dealt with by using the provisions in this clause.

21.2.     To ensure effective consultation between the employer, its employee(s) and the union on all matters, the following procedure shall be followed in an effort to achieve a satisfactory resolution of any dispute or grievance:

21.2.1.     Step 1 The dispute shall be submitted by the union and/or employee(s) to the employee's immediate supervisor.

21.2.2.     Step 2 If not settled at Step 1, the matter shall be submitted to the appropriate senior officer.

21.2.3.     Step 3 If not settled at Step 2, the matter shall be recorded. The matter shall be submitted to the appropriate delegated Industrial Representative of the employer for consultation.

21.2.4.     Steps 1 - 3 Must be concluded within a period of ten (10) consecutive days. Disputes are to be resolved at a local level wherever possible. Where in the circumstances, it is not practical for the dispute to be submitted to a position named within these steps, then the dispute will be submitted to an employer representative at the same level.

21.2.5.     Step 4 If the matter is not settled at Step 3, the dispute shall be formally submitted in writing to the Manager Employee Relations, setting out details of the dispute and, where appropriate, with supporting documentation. The Manager Employee Relations shall convene a meeting of the employer, employee(s) and the union within a period of one week (7 days) of receipt of such submissions and endeavour to reach a satisfactory settlement.

21.2.6.     Step 5 If the matter is not settled following progression through the disputes procedure it may be referred by the union or the employer to FWC. The FWC may utilise all its powers in conciliation and arbitration to settle the dispute.

21.3.     Notwithstanding the words contained in the above sub-clause, the steps of the procedure apply equally to a dispute raised by an employee, the union or FRV.

21.4.     While the procedures and steps under this clause, and any appeal, are being followed or pursued work must continue and the status quo must apply in accordance with the existing situation or practice that existed immediately prior to the subject matter of the grievance or dispute occurring. No party shall be prejudiced as to the final settlement by the continuance of work in accordance with this subclause.

21.5.     A dispute may be submitted, notified or referred under this clause by the UFU, an employee or the employer.

21.6.     This dispute resolution process may be applied to disputes regarding matters of a health and safety nature, provided that a dispute may not be submitted by a party under this clause if that party already required a VWA Inspector to attend the workplace arising from the issue resolution procedure from clause 3 of schedule 1.

21.7.     A decision of FWC under this clause may be appealed as of right to a Full Bench. Any decision of the FWC may be appealed. A dispute is not resolved until any such appeal is determined.

21.8.     Employees may choose to be represented under this clause.

18    Provided the Commission undertakes its arbitral task by reference to the terms of the industrial instrument, and conforms with the limits of what is required to discharge that arbitral function, then it acts in accordance with what is required under s 739(5): Maersk at [147] per Colvin J. Section 739(5) does not alter the character of the arbitration that the Commission undertakes under an enterprise agreement in the terms of the agreement: Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82; 244 FCR 178 at [33] per North, Jessup and Reeves JJ. Where the Commission at first instance or the Full Bench reached the wrong conclusion that does not mean that the Commission overstepped the limitations in s 739(5): Endeavour at [34].

The dispute before the Commission

19    The present controversy arises under the 2020 Agreement. Clause 42 of Div A and cl 49 of Div B of the 2020 Agreement provide that “FRV endorses the establishment of a firefighters registration board” and that it would “demonstrate this by letter of endorsement to the UFU Secretary”. FRV sent the UFU a letter of endorsement on 23 April 2021. The parties then discussed the establishment of a registration board but, by early 2022, one had still not been established: at FB[3]. The UFU lodged an application on 29 March 2022 (2022 Dispute Application), seeking the Commission’s assistance in reaching an agreement on the establishment of a registration board. The Commissioner understood that the UFU was seeking for the FRV to enter into a service agreement with the Board (an entity formed by the UFU for the purposes of firefighter registration) and the UFU. The relief sought in the 2022 Dispute Application was as follows:

    The Applicant seeks the following:

a.     For FRV to establish a Registration Board in accordance with the FRV IO Agreement 2020;

b.     The Assistance of the Commission to conciliate the dispute; and

c.     The Assistance of the Commission to resolve issues between the parties associated with the establishment of the Registration Board.

20    Therefore, the original application to the Commission encompassed the whole of the dispute in relation to the establishment of the Board.

21    The 2022 Dispute Application was the subject of a decision of Commissioner Wilson delivered on 2 December 2022 in United Firefighters’ Union of Australia v Fire Rescue Victoria [2022] FWC 3170 (the Fettering Decision or FD) in which the Commissioner found that the Board could not be the subject of an order of the Commission because it would impermissibly fetter the powers and functions of FRV under applicable state legislation, being the Fire Rescue Victoria Act 1958 (Vic) (FRV Act): FD at [74]–[80] and [94]. Notably the Commissioner stated, at [80]:

This is not the say that either the Corporate Board or the Service Contract cannot be drafted in such a way as not to fetter the FRV’s legislative right in relation to whom it employs.

22    By reason of the Commissioner’s finding that the terms of the then-drafted service agreement impermissibly fettered FRV’s powers, he dismissed the application and did not form a view with respect to other issues which had been raised, including a contention by the Minister for Emergency Services that ministerial consent was required, which the Minister had not given.

23    After the Fettering Decision, the UFU made two applications to the Commission.

24    On 23 December 2022, the UFU applied, pursuant to s 603 of the FW Act, for the Commission to revoke the Fettering Decision or parts of the Fettering Decision (the Revocation Application), which was amended on 13 February 2023 (extracted at [31] below).

25    In that application, the UFU sought:

1)    An order that the Decision of Commissioner Wilson on 2 December 2022 to dismiss the application in Matter Number 2022/2043, be revoked pursuant to s 603 of the Fair Work Act 2009.

2)    An order that Matter Number 2022/20434 [sic] be listed for hearing, not before 1 February 2023, for the parties to address the Commission on the appropriate form of orders arising from the findings in the decision of Commissioner Wilson dated 2 December 2023.

26    The Revocation Application was premised on a purported denial of procedural fairness with respect to the basis for the Commission’s reasoning at [73] to [78] of the Fettering Decision, which was dispositive of the fettering issue, and which had led to the dismissal of the UFU’s application.

27    In addition, in the period after the Fettering Decision, the UFU redrafted aspects of the service agreement to cure what it understood were the fettering obstacles identified by the Commission in the Fettering Decision.

28    On 8 February 2023, prior to anything having been done with the Revocation Application, the UFU filed a further application for the Commission to deal with a dispute (the 2023 Dispute Application). In its description of the dispute it stated, inter alia:

5.     At [80] of the Decision, the Commissioner noted that the service agreement could be drafted in such a way as not to fetter FRV’s functions as above.

6.     On 14 December 2022, the UFU wrote to Mr Starinskas (Acting Deputy Commissioner, Operational Training) in relation to the Decision. In that letter the UFU proposed an amendment to both Schedule 2, paragraph 5 and Schedule 4, paragraph 3 of the Supply Contract that could resolve the issue (Attachment E).

7.     On 10 January 2023 representatives if [sic] UFU and FRV met to discuss the amendments proposed by UFU in Attachment E. At that meeting, UFU and FRV both confirmed that it was not intended that the Registration Board would be able to impose standards or qualifications higher than those prescribed in FRV IO Agreement 2020. FRV also indicated to UFU that it would not oppose the proposed amendments.

8.     After the meeting on 10 January 2023, UFU sent a minute of the discussions at the meeting and asked for confirmation of the minute.

9.     On 11 January 2023, Mr Starinskas replied: “I can confirm that the attached minutes and correspondence you have provided is an accurate reflection of yesterday's meeting.” However, FRV did not confirm its agreement to the amendments.

29    It sought one order as part of this application, which was in the following terms:

Order that FRV enter into a contract with the Victorian Professional Firefighters Registration Board Limited ACN 659 177 992 and the UFU in the form and to the effect of the proposed service contract, subject to completion of the details in Schedules 1 and 3 (which is attached as Attachment A to these orders), for the provision by the company of the services of registering qualified firefighters for FRV and such other services as are provided for in the contract. (Copy attached).

30    Accordingly, the 2023 Dispute Application was brought on the basis that the UFU claimed that the circumstances which led to the Fettering Decision had since been remedied.

31    On 13 February 2023, the UFU filed an amended Revocation Application, and sought the following relief:

1)    An order that paragraph [102] of the Decision of Commissioner Wilson (UFU v Fire Rescue Victoria [2022] FWC 3170) on 2 December 2022 to dismiss the application in Matter Number 2022/2043, be revoked pursuant to s 603 of the Fair Work Act 2009.

2)     In the alternative, an order that paragraphs [102] and [73] to [79] of the Decision of Commissioner Wilson (UFU v Fire Rescue Victoria [2022] FWC 3170) on 2 December 2022 to dismiss the application in Matter Number 2022/2043, be revoked pursuant to s 603 of the Fair Work Act 2009.

3)     An order that Matter Number 2022/2043 be listed for hearing, not before 1 February 2023, for the parties to address the Commission on the issue of whether the Service Contract permits the Corporate Board to apply qualifications for registration of firefighters which are greater than the qualifications in the 2020 Agreement or are inappropriately or unlawfully discriminatory. on the appropriate form of orders arising from the findings in the decision of Commissioner Wilson dated 2 December 2022.

32    It was then agreed that both matters would be heard together.

33    Of some significance in the proceedings before the Commissioner, and as part of this review, is the fact that the Minister issued a Ministerial Direction to FRV on 19 September 2022, directing FRV not to enter into the service agreement in its proposed form.

34    To put the Ministerial Direction in context, in correspondence of 17 August 2022, the Minister stated that she was not in a position to provide consent under s 25A of the FRV Act because of, inter alia, deficiencies said to remain as to the transparency and oversight of the Board’s functions under the service agreement and because the service agreement could impermissibly fetter FRV’s employment powers. In this regard, the Minister stated:

4.     The Services Agreement could impermissibly fetter FRV’s employment powers contained in section 25B of the Act. Even if the fettering were lawful, it would be inappropriate for a body that sits outside the public sector to maintain a Register of FRV employees in circumstances where the Register might be used to limit the manner in which FRV exercises its power of employment.

35    It is this concern, repeated before the Commissioner, which ultimately became the basis for the Commissioner’s dismissal of the application in the Fettering Decision.

36    In the August 2022 letter, the Minister stated that ministerial consent was required, under s 25A of the FRV Act, by reason of the following considerations:

•    FRV’s proposed entry into the Services Agreement is inextricably connected with the series of steps taken by FRV and the UFU since February 2021 to facilitate the establishment of the Corporate Board. By taking these steps, FRV is participating in the formation of a body corporate for the purposes of s 25A(3)(b) of the Act. Ministerial consent was therefore required before FRV took these steps, but I have not previously consented to the taking of those steps; and

•    further and separately, the requirement for FRV to routinely provide information to the Corporate Board, including details of FRV recruits and other FRV firefighters, such as those who have completed a promotional course, constitutes the provision of a service by FRV for the purposes of s 25A(3)(a).

37    In the penultimate paragraph to that letter, the Minister stated:

As a model litigant, FRV must ensure that the Fair Work Commission and parties to proceedings that may be affected by my decision are advised in a timely manner that Ministerial consent has not been provided. As you are aware, the position that consent would be required has remained consistent and the subject of privileged correspondence, since 4 May 2022.

38    Then on 19 September 2022, the Minister again wrote to the Acting Fire Rescue Commissioner and provided the following account of what she described had occurred since her August 2022 correspondence, which included, inter alia:

4.     The dispute was listed for an arbitration hearing before Commissioner Wilson on 29 and 30 August 2022. Ahead of that hearing, the parties filed their submissions and evidence.

5.     FRV’s submissions dealt only with my refusal to provide consent to its entry into the Services Agreement. FRV’s submissions did not raise important and cogent arguments about the FWC’s jurisdiction to arbitrate the dispute, or its power to grant the relief sought by the UFU.

6.     Given FRV’s failure to put these matters before the FWC, on 29 August 2022, I sought and was granted leave by the FWC to make submissions in the proceedings.

7.     On 30 August 2022, FRV indicated to the FWC that it did not oppose the UFU’s proposed orders and that, further, the questions posed by the UFU in the arbitration (relating to whether the UFU should be a party to the Services Agreement and whether the Services Agreement should reflect the terms of the corporation’s Constitution) should be answered in the affirmative.

8.     Commissioner Wilson has afforded FRV and the UFU the opportunity to file further submissions with the FWC by 23 September 2022.

It is critical that FRV, as a model litigant, ensures that the FWC has all relevant material before it in the current proceeding. This includes that FRV is not authorised to enter into the proposed Services Agreement.

I therefore consider it necessary to issue a direction under section 8 of the Fire Rescue Victoria Act 1958 (Vic) to FRV and to you, as Acting Fire Rescue Commissioner, regarding these matters. My direction is at Attachment A to this letter.

(Emphasis added.)

39    The Ministerial Direction (which was attached to the 19 September 2022 letter) was in the following terms:

I, Jaclyn Symes, Minister for Emergency Services, direct Fire Rescue Victoria (FRV) and the Acting Fire Rescue Commissioner (FRC) under section 8 of the Fire Rescue Victoria Act 1958 (Vic) (the Act):

1.    not to enter into the proposed agreement with the Victorian Professional Career Firefighters Registration Board Limited (ABN 24 659 177 992) for the provision of firefighter registration and related services to FRV (Services Agreement), which is the subject of Fair Work Commission proceedings numbered 2022/2043; and

2.    to advise the Fair Work Commission (in the proceedings numbered 2022/2043) by 4pm on 19 September 2022:

a.    of the terms of this direction and my letter of today’s date relating to the direction; and

b.    that the effect of this direction is that FRV is not authorised to enter into the Services Agreement.

Did the Commission “settle” the dispute?

40    The UFU submitted that the Commission did not in fact settle the dispute and has failed to perform its function and has fallen into error. That error, in the UFU’s contention, could be described in four different ways (all of which would amount to jurisdictional error): first, the Commission’s alleged failure to settle the dispute meant that it made no binding decision and, in doing so, exceeded the authority conferred on it, citing Maersk at [146] per Colvin J; secondly, by failing to settle the dispute, the Commission misunderstood the nature of its jurisdiction or misconceived its duty under the Dispute Clause in the manner recognised in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; 203 CLR 194 at [31] per Gleeson CJ, Gaudron and Hayne JJ; thirdly, the purported error was a failure to consider a “substantial, clearly articulated argument” in the sense described in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088 at [24] per Gummow and Callinan JJ; and fourth, the error could be described as a failure by the Commission to reach an accord and satisfaction (consistent with Hayne, Crennan, Kiefel and Bell JJ’s position in TCL at [78]–[80]), such that the award is no award at all.

41    To some extent, these formulations of alleged error borrow from the field of administrative law. For reasons that have been given, the principles that apply where there is a challenge to the validity of an arbitral award are not the same. However, as presented orally, the complaint by the UFU reduced to the proposition that the Commissioner did not complete his responsibility to “settle” the dispute. That is to say, he did not complete the arbitral task.

42    The UFU contended that the Dispute Clause of the 2020 Agreement required the Commission to settle the dispute referred to it for arbitration and, by refusing or failing to do so, it failed to perform its function under the Dispute Clause. The UFU further submitted that the refusal or failure to settle the dispute is a decision by the Commission that is inconsistent with the requirements of the Dispute Clause and, consequently, is also contrary to the Commission’s statutory duty under s 739(5) of the FW Act.

43    The UFU submits that the Commissioner’s failure to settle the dispute is evident from the conclusion of the Commissioner’s Decision, at C[91], which is extracted as follows:

I am also unable to see a pathway to resolution of the dispute now before the Commission: any such pathway would require the Ministerial Direction to be set aside, either by consent or by a court. The fact of the Ministerial Direction and the consequential impasse it creates for FRV in taking any steps to finalise the Service Agreement together with me not yet being persuaded that the Service Agreement does not impermissibly fetter FRV leads me to conclude that I should not at this time determine the dispute.

(Emphasis added.)

44    The UFU submits that the Commissioner declined to make “orders” because of two issues: (1) the fettering issue; and (2) the issue of the validity of the Ministerial Direction. The UFU claimed that the resolution of those issues was required in order to determine the outcome of the arbitration.

45    For the reasons which follow, we are of the view that the Commissioner undertook the arbitral task required of him by reference to the terms of the 2020 Agreement and discharged that function, as required under s 739(5). He did so by considering whether it was appropriate to settle the dispute by making the orders sought by the UFU and then determining the application for those orders by declining to make the orders sought by the UFU.

46    The resolution of whether the Commissioner performed the arbitral task conferred upon him by the agreement of the parties requires consideration of what the Dispute Clause required him to do, what he was being asked by the parties to do and the wider procedural history of the dispute.

The arbitral task under the Dispute Clause

47    The Dispute Clause provides that any dispute pertaining to the 2020 Agreement, the employment relationship, the relationship between FRV and the UFU and all matters arising under the National Employment Standards are to be dealt with according to a five-step procedure. The chapeau to that procedure is instructive: The procedure is to be followed “in an effort to achieve a satisfactory resolution of any dispute or grievance”. Steps one to four of the Dispute Clause provide mechanisms for the parties to attempt to resolve any dispute or grievance.

48    Step five of the Dispute Clause is in almost identical terms to the clause considered in Duggan. Step five of the Dispute Clause provides:

Step 5 If the matter is not settled following progression through the disputes procedure it may be referred by the union or the employer to FWC. The FWC may utilise all its powers in conciliation and arbitration to settle the dispute.

49    By reason of the inclusion of step five, the Full Bench proceeded, as it was able to, on the basis that it was undertaking an appeal which formed part of the private arbitral process, consistent with authority: see Duggan at [56] per Tracey, Wigney and O'Callaghan JJ.

50    As previously recognised by the Full Bench of the Commission in United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board [2019] FWCFB 184 at [59] (UFU v MFESB), the Dispute Clause is both permissive and discretionary. It is permissive in the sense that it confers powers on the Commission. It is also discretionary in the sense that it leaves for the Commission to determine which of its powers, in conciliation and arbitration, it will exercise to settle the dispute. However, the Commission’s discretion was not at large, as the Full Bench of the Commission recognised in UFU v MFESB at [59]. It is required by the Dispute Clause “to settle the dispute”.

51    As correctly conceded by the UFU, to “settle” the dispute did not require the Commission to make the orders sought by one or other of the parties; rather, the gravamen of its submission was that it did require the Commission to do what the parties asked it to do: To determine the issues which the parties have not themselves been able to resolve and which are therefore in dispute. It contended that, by the Commission’s failure or refusal to determine those issues, it failed to “settle the dispute” in accordance with, and as required by, the Dispute Clause.

52    We do not consider it helpful in a hypothetical, exhaustive way to define the parameters of what “settle the dispute” requires or does not require under the Dispute Clause. The term “settle” is often used in arbitration clauses. The standard clause promulgated by the International Chamber of Commerce states: “[a]ll disputes arising out of or in connection with the present contract shall be finally settled under the Rules of the International Chamber of Commerce…”. Likewise, the UNCITRAL arbitration clause provides for any dispute, controversy or claim arising out of or relating to the contract to be “settled by arbitration” in accordance with the UNCITRAL Arbitration Rules. Consistently with the authorities to which we referred at the outset, the term “settle” should be construed as conferring broad authority to determine the appropriate outcome.

53    As the arbitral authority is entrusted to the Commission it comes with the procedure of the Commission and, in the absence of express provision that any appeal is to be by way of statutory oversight, encompasses the prospect of an appeal to be conducted as part of the arbitral process: ALS at [57] per Dowsett, Tracey and Katzmann JJ. In consequence, the referral to arbitration may include a requirement that the Commission hear an appeal from an award made by a Commissioner in the exercise of private arbitral authority: Glen Cameron Nominees Pty Ltd v Transport Workers' Union of Australia (No 2) [2017] FCA 1515 at [2], [4]–[5] per Perram J. Here, cl 21.7 of the Dispute Clause (in Div A and cl 26.7 in Div B) provides that a decision under the Dispute Clause may be appealed as of right to a Full Bench of the Commission.

54    In the present case there was an appeal. It resulted in a decision by the Full Bench that there was no demonstrated error in the decision made by the Commissioner. The appeal was dismissed on that basis. Therefore, the operative award in the present case is that of the Full Bench.

55    The parties approached the application on the basis that the relevant issue concerned whether the Commissioner failed to undertake the arbitral task. As the foundation for the arbitral award by the Full Bench was a rejection of any error by the Commissioner then that approach has practical logic. However, properly viewed, the UFU challenged the arbitral award of the Full Bench and did so on the basis that the Full Bench had failed to undertake its arbitral task by declining to correct the error of the Commissioner in not undertaking that task. In circumstances where we find no error in the approach of the Commissioner, we also find no error in the approach of the Full Bench, regardless of how the Full Bench error might be characterised.

56    We now turn to the two ways in which it is said that the Commissioner failed to undertake the arbitral task: (1) by not resolving the fettering issue; and (2) by not reaching a view as to the validity of the Ministerial Direction (or being distracted by it).

The fettering issue

57    The UFU contended that, despite having had the fettering issue fully argued before the Commissioner, and despite having set those submissions out in his decision, the Commissioner did not resolve the issue. It was evident, in their submission, from C[41], [87] and [91]–[92], that the Commissioner did not resolve the fettering issue, either by assessing whether the amended service agreement resolved the issues raised in the Fettering Decision, or by assessing anew whether that agreement resulted in an impermissible fetter of FRV’s powers.

58    By contrast, the Minister submitted that the Commissioner had in fact “settled the dispute” by first, determining that he was not satisfied that the UFU cured the fettering concerns, identified previously, in its redrafted service agreement and secondly, regardless of his views about the fettering issue, identifying an independent reason for refusing to grant the orders that the UFU sought, namely concerns about the utility of making the orders given the existence of the Ministerial Direction. FRV did not seek to be heard on the fettering issue.

59    For the following reasons, we reject the UFU’s contention that, by the manner in which the Commissioner dealt with the fettering issue, he failed to carry out the arbitral task.

60    As can be seen from the context described above, whether the service agreement would impermissibly fetter the powers of FRV was at issue in both arbitrations before the Commissioner. The Commissioner had held, in the Fettering Decision, that the service agreement would impose an impermissible fetter, which was the determinative finding in the Fettering Decision: at FD[73]–[79]. However, in the Fettering Decision, the Commissioner did not foreclose the possibility that the service agreement could be redrafted in a way that removed the fetter: at FD[80].

61    The UFU thereafter took four relevant steps. First, on 23 December 2022, it made an application to revoke the Fettering Decision (where relevant parts of that application are extracted at [25]). Secondly, the UFU amended the proposed service agreement and filed the 2023 Dispute Application (referred to at [27]–[29]). Thirdly, the UFU amended its Revocation Application on 13 February 2023 seeking a further hearing as to whether the initial version of the service agreement permitted the Corporate Board to apply greater qualifications for firefighters than required under the 2020 Agreement referred to at [31] above. Fourthly, the UFU sought (and was granted) at the 2023 Dispute Application hearing for its Revocation Application to be “adjourned” until after the determination of the dispute application, and did so in reliance on two paragraphs in its submissions made in reply, namely:

4.     The Minister has in her submissions raised a number of complex legal arguments against the Revocation Application and, in common with the respondent, has questioned the utility of that application in view of the Second Dispute Application.

5.     The UFU has responded below to the submissions opposing the Revocation Application, but submits and proposes that in the circumstances, the most efficient way forward is for the Commission to hear and determine the Registration Board Dispute [the 2023 Dispute Application] before the Revocation Application, and that may obviate the need to deal at all with the Revocation Application and the complexities which the opposing parties have raised. The UFU proposes that the Revocation Application should be adjourned to a date to be fixed after the determination of the Registration Board Dispute and that the latter should be heard on 30 March 2023.

(Emphasis added.)

62    The application to adjourn the Revocation Application was not opposed, but the Minister submitted that the appropriate course would have been for the UFU to withdraw the Revocation Application given it was, in its view, an abuse of process. The UFU submitted that there was:

… utility in preserving the revocation application to await the outcome of the dispute because one of the arguments that the Minister raises in relation to the dispute matter is that it is an abuse of process, not for the reasons that Mr O’Grady mentions this morning, but for other reasons which we will address. And if you were to find that the dispute process is an abuse of process and should be struck down for that reason, then that would give utility to dealing with the revocation application.

63    The Commissioner then granted that application on the following basis:

… I am content to adopt the position that [the UFU] puts forward this morning. I think that will assist me, at least, in understanding or simplifying the issues that need to be determined initially in respect of the revocation decision. I will accept the submission that it should be adjourned until a date or time to be fixed.

64    It is against the backdrop of the adjournment application that the Commissioner went on to hear the 2023 Dispute Application. It is worthwhile noting that the UFU sought, in the 2023 Dispute Application, for the Commission to order that FRV enter into the amended service agreement.

65    The UFU submitted that the Commissioner erred at C[41] and C[87] by proceeding on the basis that the “fettering issue” was an issue only in the Revocation Application and did not need to be determined in relation to the 2023 Dispute Application. That was, the UFU contended, inconsistent with the basis for adjourning the Revocation Application, and with the way in which the parties addressed the Commission in relation to the 2023 Dispute Application (citing the Minister’s and the UFU’s submissions before the Commissioner and the transcript of the hearing of the 2023 Dispute Application).

66    We do not accept this characterisation of the Commissioner’s reasoning at C[41] (extracted at [72] below). It is clear that the Commission understood what was being sought in the Revocation Application (which had been adjourned) and the subject matter of the 2023 Dispute Application. The Commissioner specifically referred, at C[5]–[8], to the two applications and extracted from the 2023 Dispute Application how that dispute “was characterised by the UFU” at C[9] and the relief that was being sought at C[10].

67    The Commission then, at C[12], extracted portions of the Fettering Decision which provided the relevant background, including the bases on which the Commissioner had determined that there was a fettering issue. The Commission then summarised the Minister’s submissions opposing the relief sought. The Commission rejected the Minister’s first basis (namely, that the dispute was the same as the original dispute): at C[23]. The Commission then considered what it described as the “2023 Fettering Objection” and the parties’ submissions: at C[25]–[41]. This aspect of the Commission’s reasons illuminated the obvious.

68    In order for the Commission to determine whether to grant the order sought in the 2023 Dispute Application, the Commission was required to reconsider the statutory framework underpinning FRV, the extent of its powers and whether they remained fettered by the proposed amended service agreement. There was an overlap between the submissions made with respect to both applications. Not all submissions advanced before the Commission at the hearing of the 2022 Dispute Application, had been exhausted and decided by the Fettering Decision.

69    The Commission was aware, having read the submissions of the parties regarding the Revocation Application, that part of that application called for the Commission to revisit whether there was any basis for it finding that FRV’s powers were fettered. That consideration again included a consideration of the statutory and factual context, which overlapped with the 2023 Dispute Application.

70    In its Revocation Application submissions, the UFU submitted, as part of what the UFU sought as relief, that:

46.     Following upon making the order for revocation of paragraph [102], the applicant asks the Commission to make appropriate orders and directions for the hearing and determination of the extant dispute but confined to the issue of whether the Service Contract permits the Corporate Board to apply qualifications for registration for firefighters which are greater than the qualifications in the 2020 Agreement or are inappropriately or unlawfully discriminatory, as discussed in paragraphs [73]–[79] of the Decision.

71    The amended Revocation Application and the accompanying submissions post-dated the making of the 2023 Dispute Application and arose after the UFU had made amendments to the service agreement. However, we accept, as counsel for the UFU submitted, that the Revocation Application was with respect to the reconsidering of the agreement as it existed prior to amendment.

72    The Commissioner then found at C[41]:

The Revocation Application identifies and objects to findings made by me in relation to aspects of the Fettering Decision. Because those objections have been made and the Revocation Application is only adjourned and not withdrawn, I do not determine at this time whether the Amendments remove the concerns identified by me of impermissible fettering. The Revocation Application provides responses to the identified concerns, however having not heard the UFU or FRV or the Minister on the subject it would not be appropriate through this decision to either confirm the concerns or accept they have been addressed by the Amendments. Critically, examination needs to be given to whether the Amendments are sufficient to overcome the concerns of impermissible fettering.

73    Similarly, at C[87], the Commissioner stated:

I accept there may be a need to hear from the parties on these matters before finalising my reasoning with respect to the 2023 Fettering Objection.

74    The UFU submitted that the Commissioner had a dispute before him, in the form of the 2023 Dispute Application. The Revocation Application had been filed but was not before him because it had been adjourned. According to the UFU, the Commissioner was asked by the parties to rule on the 2023 Dispute Application. The UFU then contended that his decision not to decide that dispute, on the basis that he would address the fettering question in another dispute that was not presently before him, was tantamount to a refusal to discharge his arbitral function in relation to the 2023 Dispute Application. We reject this submission.

75    It is apparent from the Commissioner’s reasoning that the Commissioner formed the view that it was more appropriate to deal with the 2023 fettering issue at the same time as the Revocation Application. The formation of this view cannot be characterised as the Commissioner failing to deal with this issue. It rather indicates the adoption of a different procedural course deferring its resolution to what he considered to be a more appropriate time, with the benefit of ventilating what he perceived to be overlapping issues and the opportunity for further submissions. The Revocation Application remained extant. The matter had been adjourned by consent. We do not accept that this constituted a failure on the part of the Commission to exercise its arbitral authority, when the Commission had two pending matters before it and took the view that it would receive further submissions before exercising its authority. The scope of the conferral under the Dispute Clause is broad and included the ability for the Commission to determine, in this case, that deferral was appropriate.

76    The foundation for the Commission’s view was apparently fortified by other aspects of the Commissioner’s reasons. The Commissioner referred to the fact that there was further work required to be done in order to bring the service agreement into a finalised form, capable of being signed (at C[75] and C[88]), and recognised that “there may be a need to hear from the parties on these matters before finalising [his] reasoning with respect to the 2023 Fettering Objection” (at C[87]). Ultimately, he determined, at C[92], that he was “not yet” satisfied that the service agreement did not impermissibly fetter FRV.

77    It is for these reasons also, the first of the Minister’s contentions, that the Commissioner determined he was not satisfied that the UFU had cured the previous fettering concerns, is rejected. The Commissioner did not determine but deferred any determination of whether the UFU’s draft amended service agreement cured the previous fettering concerns. After considering the parameters of the present application and the relief sought as against the backdrop of the previous Fettering Decision, the Commission considered and addressed each of the Minister’s three objections to the granting of relief, identified at C[14], in sequence. The first objection concerned whether the 2023 Dispute Application was in essence the same dispute as that which was the subject of the Fettering Decision. The Commissioner determined that the dispute was not the same, at C[23], and went on to summarise the parties’ competing submissions regarding the “2023 Fettering Objection”, at C[25]–[39], regarding the second objection. An aspect of the disputed positions included the scope and operation of s 25B of the FRV Act. At the end of that portion of the reasoning concerning the “2023 Fettering Objection”, the Commissioner stated, at C[41] (extracted at [72] above) that he would not determine this issue at this time but would determine it when considering the Revocation Application.

78    This deferral is also evident from the Commissioner’s subsequent reference, at C[85], to the fact that the Fettering Decision identified concerns regarding the operations of the Board fettering FRV’s powers and that the matters in “the UFU’s Revocation Application show that at the least the UFU regards those concerns as not having been fully argued” before him. The Commissioner then noted, at C[86], the UFU’s submission as part of that application that it had been denied procedural fairness and then stated at C[87], that he “accept[ed] there may be a need to hear from the parties on these matters before finalising [his] reasoning with respect to the 2023 Fettering Objection”. This reading is then fortified by the Commissioner’s acceptance, at C[88], that further amendments to the service agreement (even if relatively minor and consequential in nature) would be required in order for it to be finalised, which may be resolved by assistance from the Commission in the form of conciliation.

79    In the peculiar circumstances that confronted the Commissioner, it was not necessary for him to finally determine the fettering question in order to finally determine that no relief should be granted to the UFU on the 2023 Dispute Application; that is, to settle the dispute. As the Revocation Application had not been withdrawn and that application also required the consideration of the fettering question in a context that could reinstate the 2022 Dispute Application, it was open to the Commissioner to decline to grant relief on the basis that the fettering question would be addressed on the Revocation Application. The issue was addressed. It was found to be an issue that was more appropriately addressed in the context of the Revocation Application. The UFU may not have intended to invite that possibility when it proposed that the hearing of the Revocation Application be deferred. However, that does not mean that the dispute, the subject of the 2023 Dispute Application, was not settled. A final and operative decision was made on the 2023 Dispute Application. It was made on the basis that it was not necessary to reach a final view on the fettering question.

80    In any event, for reasons which follow, we accept the Minister’s alternative submission that, for the reasons set out below, regardless of his views about the fettering issue, the Commissioner had an independent reason for refusing to grant the orders that the UFU sought, namely concerns about the utility of making the orders given the existence of the Ministerial Direction (encompassed by the third of the Minister’s objections identified at C[14]). Accordingly, even if there were any error in relation to the Commissioner’s consideration of the fettering issue, there would have been no utility in granting any relief in respect of that error because the error would not have changed the outcome of the Commissioner’s Decision.

The Ministerial Direction

81    The UFU also submitted that the Commissioner erred by failing to resolve the question of the validity of the Ministerial Direction or alternatively by being distracted by the fact of the Ministerial Direction and failing to grant the relief sought and by doing so failed to discharge his private arbitral authority.

82    The UFU’s primary position before the Commissioner was that the Ministerial Direction was made beyond power and is therefore invalid and of no effect. The UFU also submitted that the Ministerial Direction was not a matter with which the Commissioner need concern himself, because the Ministerial Direction did not preclude the Commissioner from granting the relief sought by the UFU in the resolution of the 2023 Dispute Application.

83    By contrast the Minister submitted that the Commissioner had determined the validity question, at C[62], where he stated that, “[o]n its face the Ministerial Direction has been given and FRV is compelled to comply with it. I am not satisfied there is a proper basis for the Commission to find the direction is invalid”. This, she contended, meant that it could not be said that the Commissioner had failed to determine the second dispute by failing to determine the validity of the Ministerial Direction.

84    Further, the Minister submitted that it would not have amounted to an error even if the Commissioner had failed to determine the validity of the Ministerial Direction, on the basis that it was a legitimate discretionary consideration for the Commission to refuse to grant the relief sought. The relief sought by the UFU would, in the Minister’s submission, place FRV in an invidious position in which it would have been ordered by the Commission to enter into an agreement that it considered itself to be prohibited from entering into due to the Ministerial Direction. It was therefore not a necessary step in the exercise of its power for the Commission to determine the validity of the Ministerial Direction. Its existence alone (regardless of its validity) was reason enough for the Commissioner to decline to grant the relief sought.

85    FRV submitted that the Commissioner had settled the dispute before him. It submitted that the Commissioner knew he could form an opinion about the validity of the Ministerial Direction, but he chose not to do so because his opinion would not, in and of itself, alter the legal position of FRV. Therefore, it was said, the Commissioner concluded that providing his opinion would not assist in settling the dispute. FRV said that in declining to provide the relief sought by the UFU, the Commissioner had addressed and settled the dispute before him.

86    The UFU contended that it had made detailed submissions before the Commissioner on the validity question to the effect that the Minister was trying to do indirectly what she was unable to do directly by making the Ministerial Direction. The UFU relied on the terms of s 8 of the FRV Act which contained various provisions said to make clear that the Minister must not concern herself with the day-to-day operations of FRV. The UFU also called attention to s 25A of the FRV Act and submitted that, because s 25A specifically identifies those contracts which do and do not require ministerial consent, use of the general power in s 8 is not available in relation to those contracts which do not require consent under s 25A because such exercises of the s 8 power would render s 25A otiose.

87    We are of the view that the Commissioner was empowered, as a private arbitrator, to express a view as to the validity of the Ministerial Direction (noting that any such view would not be determinative of the question). As observed by Buchanan and Katzmann JJ in Wagstaff Piling at [21]:

Although FWA [the formerly named Commission] cannot exercise the judicial power of the Commonwealth, it is well established that a federal industrial tribunal, exercising powers of conciliation and arbitration, may legitimately form and act upon opinions about legal rights and obligations as a step in the exercise of its own functions and powers (see Re Cram; Ex parte Newcastle Wallsend Coal Company Pty Ltd (1987) 163 CLR 140 at 149).

88    However, we are of the view, for the reasons which follow, that the Commissioner was not required, within the context of the subject matter of the dispute before it, the nature of the power conferred upon the Commission by the Dispute Clause and the operation of the FW Act, to express a view as to the validity of the Ministerial Direction in the circumstances.

89    The Commissioner had determined, as a matter of fact, that the Ministerial Direction had been made, and, unless and until it was withdrawn or declared invalid, there was an obvious difficulty with placing FRV in the position of being required to comply with the Commissioner’s order to enter the service agreement (the relief sought by the UFU) and, at the same time, being required to comply with the Ministerial Direction not to. At C[59], the Commissioner referred to FRV’s submission:

…that it must follow the Ministerial Direction leaving it with no capacity to advance toward execution of the Service Agreement with it being prohibited from entering into the agreement even were the Commission to order such to be done. It submitted that an order of the Commission would not settle the dispute presently before the Commission.

90    It is evident from the Commissioner’s Decision that he understood that it was open to him to express a view regarding the validity of the Ministerial Direction. However, his view was that expressing that view took him “nowhere” for the reasons set out at C[62]:

On its face the Ministerial Direction has been given and FRV is compelled to comply with it. I am not satisfied there is a proper basis for the Commission to find the direction invalid. As a result, consideration of the effect of the Ministerial Direction takes me nowhere, with me accepting that the direction has been made and that FRV is compelled to follow it unless and until it is either withdrawn or declared invalid. The UFU though is correct to argue that the status of the direction is a matter arising after any order of the Commission is made. However for different reasons, set out below, I am not satisfied an order should be issued in this case.

91    The different reasons included, at C[73], that “the effect of the Ministerial Direction is to prevent FRV from finalising the service agreement while the direction remains”, at C[75], there was further work required to be done by the UFU and FRV in order to bring the service agreement into a finalised form, and at C[76], relatedly:

… if an order were to be issued by the Commission to sign the Service Agreement such would most likely place FRV officer(s) involved in an impossible situation. Do they risk the consequences of not complying with an order of the Fair Work Commission? Or do they risk the consequence of not complying with a Ministerial Direction? I cannot see a pathway in which both requirements might be simultaneously complied with.

92    In arriving at this conclusion, the Commissioner referred to the earlier Full Bench decision of Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCWFB 2019, which had in turn drawn on the judgment of Buchanan and Katzmann JJ in Wagstaff Piling. The UFU relied on those authorities, and also referred to Flick J’s decision in Wagstaff Piling at [65], where his Honour quoted from Re Cram; Ex parte Newcastle Wallsend Coal Company Pty Ltd (1987) 163 CLR 140 at 148–9 as follows:

What this principle relevantly denies to the Authority is the power of judicial determination which includes, to use the words of Kitto J. in Aberdare Collieries: “the giving of decisions in the nature of adjudications upon disputes as to rights or obligations arising from the operation of the law upon past events or conduct.” The making of a binding declaration of right is an instance of the exercise of judicial power. It stands outside the arbitral function. But there is no substance in the suggestion that an industrial tribunal cannot interpret laws, awards and other legal instruments. A tribunal could not discharge its arbitral functions if it were unable to form an opinion on a matter of interpretation. The formation of views and opinions on matters of interpretation in arbitral proceedings does not in itself amount to a usurpation of judicial power: Cessnock Collieries; Reg v Commonwealth Industrial Court; Ex parte Australian Coal & Shale Employees’ Federation; Key Meats. Indeed, a tribunal may find it necessary to form an opinion as to the existing legal rights of the parties as a step in arriving at the ultimate conclusions on which the tribunal bases the making of an award intended to regulate the future rights of the parties: Aberdare Collieries [at 44]. Of course, the formation of such an opinion does not bind the parties and cannot operate as a binding declaration of rights.

(Citations omitted.)

93    The UFU submitted, in reliance on this holding, that forming a view about the validity of the Ministerial Direction was a necessary step in conducting the arbitration in circumstances where the Commissioner had identified that direction as an impediment to settling the dispute. According to this view, if the arbitrator identifies a matter that prevents them from discharging the function of settling a dispute, they must form a view about it. It was therefore a requirement for the Commissioner to do so in order to settle the dispute. In addition, the UFU analogised between this case and Perram J’s decision in Glen Cameron.

94    The UFU submitted that there were other options open to the Commissioner in relation to the Ministerial Direction. He could have dismissed the application on the basis that there was a valid ministerial direction. Instead, the UFU contended what the Commissioner did here was to conclude that he could not engage with the question about the validity of the Ministerial Direction and so he refused to resolve the dispute.

95    It is our view that none of the authorities relied upon by the UFU either compelled the Commissioner to decide the validity question nor required him to ignore the practical implications for FRV of the existence of the Ministerial Direction. The Commission was being asked to make an order requiring FRV to enter the amended service agreement. The Commission’s arbitral authority was to attend to “settl[ing] the dispute” and to determine whether or not to make that order. The Commission determined that the resolution of the validity of the Ministerial Direction question was, in effect, not a step along the way, because regardless of its resolution, the dispute would not be resolved (because of FRV’s invidious position if the order was made and the Ministerial Direction in operation). Accordingly, it was open for the Commission to reject the UFU’s submission that the question of whether or not FRV would or would not comply with any orders was “not a matter that [the Commission] needed to be concerned about in making the order”. To “settle the dispute” includes a consideration of whether the resolution of an issue or the relief sought would resolve or widen and inflame the dispute. A reason of that kind may be brought to bear as a basis for not adopting a course being pressed for by one of the parties. To reason in that way is not to fail to settle the dispute. It is to reach a conclusion as to the way in which the dispute should be settled in the particular circumstances.

96    The language of the Commissioner (at C[91] of his reasons) that “I should not at this time determine the dispute” is explicable by what follows (at C[92]–[93]), namely:

I therefore decline to make the order sought by the UFU for two essential reasons; I am not yet satisfied that the Service Agreement does not impermissibly fetter FRV, and I am not satisfied that the Commission should make the order as sought given the Ministerial Direction as I am concerned there would either be no utility in doing so or that issuing the order would not settle the dispute.

The dispute is determined accordingly.

97    The first reason given is that the Commissioner is “not yet satisfied” as to the fettering issue. This is an issue that is still before the Commissioner on the Revocation Application. It is an issue about which the Commissioner may be affirmatively satisfied in the context of that application or some other future application. Considered in the context of what immediately follows, in substance, the Commissioner is stating that as matters presently stand he is not affirmatively satisfied that the order sought should be made and for that reason he declines to make the order sought. His view is that further steps should be taken to establish with sufficient certainty the foundation for establishing the Board. That is not to fail to decide whether to make the order or put off making a decision. It is to make a final decision on the 2023 Dispute Application that, in the circumstances then pertaining, the order sought should not be made. It recognises that it leaves an underlying dispute as to when and how the Board is to be established. That is a matter to be addressed in the context of the Revocation Application (or some other future application) where the position may be different. However, it is not the case that the 2023 Dispute Application (as distinct from the underlying dispute) is not determined.

The Full Bench Decision

98    As has been mentioned, the Full Bench dismissed an appeal against a decision of the Commissioner on the basis that the decision was free of appealable error. There was a separate challenge to that decision, but it was approached by the parties on the basis that the challenge to the Full Bench decision depended upon success by the UFU in demonstrating that there had been a failure by the Commissioner to complete the arbitral task. Having regard to the conclusion we have reached in relation to the decision of the Commissioner and to the way in which the case was put by the UFU, it must follow from the reasons we have given that the application to set aside the Full Bench decision must also be dismissed.

Some concluding observations about relief

99    If we had been of the view that there had been a basis to conclude that the arbitral task had not been completed then an issue would have arisen as to the appropriate relief. The case was presented for the UFU on the basis that the relief should take a similar form to that which would be granted if there was a determination that there had been an excess in the exercise of statutory decision-making authority, namely an order setting aside the decision and an order remitting the matter back, presumably to the Full Bench of the Commission as the body who made the operative arbitral award.

100    It is by no means clear that the Court can go beyond a determination of invalidity of the award. Simpson v The Commissioners of Inland Revenue [1914] 2 KB 842 is authority for the proposition that the Court has no power at common law to remit an award back to an arbitrator for further consideration: at 846 per Scrutton J cited in Walton A, Russell on the Law of Arbitration (17th ed, Stevens & Sons Limited, 1963) at 305; see also Mustill MJ and Boyd SC, The Law and Practice of Commercial Arbitration in England (2nd edition, Butterworths, 1989) at 557. In Johnson, the Court remitted the award to the arbitrator to reconsider but that was in circumstances where the Court had earlier ordered by consent that all matters arising were to be referred to the award of the arbitrator: at 330.

101    Further, since the decision in this matter has been reserved, this Court has affirmed the validity of the Ministerial Direction: United Firefighters’ Union of Australia v Honourable Jaclyn Symes (No 2) [2024] FCA 510 at [114]–[118] per Snaden J. That event was a matter that may have had a bearing on any relief. If we had reached a contrary view, we would have been inclined to invite further submissions on relief before making final orders.

The Minister’s application to intervene

102    Lastly, on 12 February 2024, the Minister filed an interlocutory application seeking leave to intervene in the proceeding. The Minister’s application to intervene was heard together with the substantive application at the hearing on 7 May 2024. The Court granted leave for the Minister to intervene at the hearing. The reasons for that grant are as follows.

103    Under r 9.12(2) of the Federal Court Rules 2011 (Cth), in determining whether to grant leave to a party to intervene:

(2)    The Court may have regard to:

(a)    whether the intervener's contribution will be useful and different from the contribution of the parties to the proceeding; and

(b)    whether the intervention might unreasonably interfere with the ability of the parties to conduct the proceeding as the parties wish; and

(c)    any other matter that the Court considers relevant.

104    As evident from these reasons, the Ministerial Direction and the Minister’s position regarding the extent of FRV’s powers were integral to the matters which were dispositive in the Commissioner’s Decision. The Minister was the main contradictor in the Commission proceedings and as a consequence her contribution is useful and different from those of the parties. We do not accept that her submissions were and are the same as those of FRV nor that such intervention would be inappropriate in the context of proceedings relating to a private arbitration. We are of the view that her interests may be directly affected by the outcome of the proceedings: An order requiring FRV to enter into the service agreement could have financial and operational effects on FRV, an entity for which the Minister has responsibility. Her interests are also affected by the fact that the UFU seeks to impugn the Ministerial Direction. There was no apparent basis nor evidence to suggest her intervention would unreasonably interfere with the parties’ ability to conduct the appeal proceedings as they wished, or that it would cause any increased cost or delay.

Conclusion

105    For the reasons above, the application is dismissed.

Associate:

Dated:    20 June 2024