Federal Court of Australia

Qube Ports Pty Ltd v Construction, Forestry and Maritime Employees Union [2024] FCAFC 132

ORDERS

THE COURT ORDERS THAT:

1.    The application is dismissed.

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

REASONS FOR JUDGMENT

RANGIAH J:

1    I have had the advantage of reading the reasons of Wheelahan J in draft. I agree with those reasons and the order proposed by his Honour.

Associate:    

Dated:    17 October 2024

REASONS FOR JUDGMENT

WHEELAHAN J:

2    This application in the Court’s original jurisdiction concerns the construction of s 217 of the Fair Work Act 2009 (Cth) (FW Act), which empowers the Fair Work Commission to vary an enterprise agreement to remove an ambiguity or uncertainty on the application of an employee, employer, or employee organisation “covered by the agreement”. The question in issue is whether an employer seeking a variation under s 217 must be covered by the agreement at the time of the application for variation, or whether previous coverage is a sufficient basis for standing.

3    The applicant (Qube Ports) is an employer which applied to the Commission to vary several enterprise agreements which had ceased to operate, with the result that Qube Ports was no longer covered by the agreements. The respondent to this application (the Union) opposed the application to the Commission, claiming that because Qube Ports was not covered by the agreements at the time the applications to vary them were made, the applications were not competent.

4    Both at first instance and on appeal to the Full Bench, the Commission held that s 217 of the FW Act required that Qube Ports be covered by the enterprise agreements at the time of the variation applications, and that as a result of its construction of s 217, Qube Ports lacked standing: see the Full Bench decision, Qube Ports Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2023] FWCFB 102. In this proceeding, Qube Ports claims that the Commission erred in its construction of s 217, and thereby fell into jurisdictional error.

The statutory provisions

5    I will refer at the outset to the relevant provisions of the FW Act, because they assist in placing in context the Commission’s decisions, and the submissions made to the Court on behalf of the parties.

6    Under the FW Act, there are two principal types of industrial instruments that may operate in conjunction with the National Employment Standards that are provided for by the Act itself: (1) modern awards; and (2) enterprise agreements. Modern awards are made by the Commission. Enterprise agreements that are not greenfields agreements are made when approved by a majority of the validly voting employees who will be covered by the agreement. Enterprise agreements are then subject to approval by the Commission before they come into operation.

The coverage, application, and operation of an enterprise agreement

7    The provisions of the FW Act relating to the coverage and application of an enterprise agreement were considered in ALDI Foods Pty Ltd v Shop, Distributive and Allied Employees Association [2017] HCA 53; 262 CLR 593 (ALDI) at [17]–[55] (Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ). What follows is an account of the provisions so far as they are relevant to this application.

8    An enterprise agreement imposes obligations and confers entitlements on a person only if the agreement applies to the person: FW Act s 51.

9    Section 52(1) of the FW Act provides for when an enterprise agreement applies to an employer, employee, or employee organisation –

(1)    An enterprise agreement applies to an employee, employer or employee organisation if:

(a)    the agreement is in operation; and

(b)    the agreement covers the employee, employer or organisation; and

(c)    no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.

10    Section 53(1) addresses when an enterprise agreement covers an employer –

(1)    An enterprise agreement covers an employee or employer if the agreement is expressed to cover (however described) the employee or the employer.

11    But if an enterprise agreement ceases to operate, then s 53(5) provides that it does not cover the employee, employer, or employee organisation –

(5)    Despite subsections (1), (2) and (3), an enterprise agreement that has ceased to operate does not cover an employee, employer or employee organisation.

12    The operation of an enterprise agreement is the subject of s 54, which provides –

54    When an enterprise agreement is in operation

(1)    An enterprise agreement approved by the FWC operates from:

(a)    7 days after the agreement is approved; or

(b)    if a later day is specified in the agreement—that later day.

(2)    An enterprise agreement ceases to operate on the earlier of the following days:

(a)    the day on which a termination of the agreement comes into operation under section 224 or 227;

(b)    the day on which section 58 or subsection 278(1A) first has the effect that there is no employee to whom the agreement applies.

Note: Section 58 and subsection 278(1A) deal with when an enterprise agreement ceases to apply to an employee.

(3)    An enterprise agreement that has ceased to operate can never operate again.

13    Section 54(2)(b), set out at [11] above, refers to an enterprise agreement ceasing to operate on the day on which s 58 first has the effect that there is no employee to whom the agreement applies. It is desirable therefore to set out, relevantly, ss 58(1)–(2) –

58    Only one enterprise agreement can apply to an employee

Only one enterprise agreement can apply to an employee

(1)    Only one enterprise agreement can apply to an employee at a particular time.

General rule—later agreement does not apply until earlier agreement passes its nominal expiry date

(2)    If:

(a)    an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and

(b)    another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and

(c)    subsections (3), (4) and (5) do not apply;

then:

(d)    if the earlier agreement has not passed its nominal expiry date:

(i)    the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and

(ii)    the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or

(e)    if the earlier agreement has passed its nominal expiry date—the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.

The power to vary enterprise agreements

14    At the centre of this application is s 217 of the FW Act, which empowers the Commission to vary an enterprise agreement to remove an ambiguity or uncertainty –

217    Variation of an enterprise agreement to remove an ambiguity or uncertainty

(1)    The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:

(a)    one or more of the employers covered by the agreement;

(b)    an employee covered by the agreement;

(c)    an employee organisation covered by the agreement.

(2)    If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.

Conditions attaching to the exercise of the Commission’s powers

15    It is relevant to note that all the Commission’s powers, including the power to vary an enterprise agreement, are subject to the requirements in ss 577–8 of the FW Act. Section 577 requires the Commission to exercise its powers in a manner that is fair and just, and promotes harmonious and cooperative workplace relations. Section 578 requires the Commission to take into account the objects of the Act, and equity, good conscience and the merits of the matter.

16    The objects of the Act include those set out in s 3, which refers to the provision of a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion. The objects also include those in s 171 relating to the objects of Part 2-4 of the Act, which concerns enterprise agreements and contains s 217. Those objects include “to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits”.

Factual background

17    The following account of the factual background is not controversial, and is drawn from the reasons of Deputy President Colman in the Commission at first instance: Re Qube Ports Pty Ltd [2023] FWC 508 at [2]–[9].

18    In 2012 and 2013, the Commission approved 16 enterprise agreements that covered Qube Ports and employees engaged as waterside workers at ports around Australia. These agreements are referred to as the 2012 agreements.

19    From 2016 to 2018, the Commission approved 17 enterprise agreements that replaced the 2012 agreements (the replacement agreements). These instruments covered all of the employees who had been covered by the 2012 agreements. As a consequence, the 2012 agreements ceased to apply to those employees (see s 58(2)(e)). Further, from the day on which there were no employees to whom the 2012 agreements applied, they ceased to operate (see s 54(2)). In addition to the replacement agreements that were made from 2016 to 2018, new enterprise agreements were made at the ports of Esperance and Ashburton (the new port agreements). The replacement agreements and the new port agreements are referred to together as the 2016 agreements. All these enterprise agreements were non-greenfields, single enterprise agreements.

20    In 2021, the Commission approved enterprise agreements which replaced each of the 2016 agreements and covered all of the relevant employees (the 2021 agreements). The 2016 agreements ceased to apply to the employees, and ceased to operate, in the same manner as the 2012 agreements. Before the Commission, it was common ground between the parties that all of the 2012 agreements and 2016 agreements had ceased to operate because of the effect of s 54(2).

21    The 2012 and 2016 agreements had a similar structure. They comprised a Part A, which contained conditions applicable to all ports, and a Part B, which set out port-specific conditions. The Part A conditions of the 2012 and 2016 agreements made provision for several categories of employees whose hours of work would vary from fortnight to fortnight, depending on the volume of work required by the company. These employees were known as guaranteed wage employees (GWEs), variable salary employees (VSEs), and provisional variable salary employees (PVSEs). Such employees were entitled to receive either a minimum fortnightly salary or their actual earnings for the fortnight, whichever was greater. The minimum salary was payable even if the employees did not work sufficient hours to “earn” that salary in a particular fortnight. The minimum salary would cover the gap, and ensure that employees working variable hours received a consistent base level of remuneration. However, the agreements contained provisions that allowed Qube Ports to recover gap payments from employees’ earnings “in the next pay period”, if they earned more than the minimum salary. There were four such provisions, two in each of the 2012 agreements, which related to VSEs and GWEs, and two in each of the 2016 agreements, which concerned VSEs, PVSEs and GWEs (the disputed clauses). They were in very similar terms. By way of example, cl 9.2.4(b) of the 2012 agreements stated –

In the event that a VSE’s actual earnings do not meet the guarantee minimum in any fortnight, that amount will be deducted from actual earnings in the next pay period subject to earnings being in excess of the minimum salary.

22    Qube Ports claimed that there had been a long-established and notorious practice at all ports of applying what it described as an ambulatory and ongoing approach to these provisions, whereby the company made deductions in respect of gap payments from earnings above the minimum salary in any subsequent fortnightly pay periods, rather than only in the next pay period. Qube Ports submitted to the Commission that this practice had existed since around 2007, when Qube Ports acquired certain stevedoring operations from P&O Ports Pty Ltd, which was covered by collective agreements with provisions analogous to those above.

23    In mid-2020, a dispute arose between Qube Ports and the Union about the practice. The Union contended that Qube Ports could not lawfully make deductions under the relevant provisions other than in the pay period that immediately followed the pay period in which the gap payment was made. Qube Ports maintained that the clauses permitted its ambulatory approach, such that deductions could be made in any subsequent pay period.

24    In July 2022, the Union commenced proceedings against Qube Ports in the Federal Court of Australia, seeking declarations of contraventions of s 50 of the FW Act in respect of claimed breaches of each of the 2012 and 2016 agreements, together with penalties and orders for statutory compensation to rectify claimed underpayments in respect of some 1000 employees over the six-year period from July 2016 to July 2022.

25    On 21 November 2022, after the agreements had ceased to operate, Qube Ports lodged its application under s 217(1) in the Commission. It claimed that the disputed clauses were ambiguous or uncertain, because the parties advanced competing interpretations of those clauses, each of which was arguable. Qube Ports claimed that the company, the Union, and the employees who voted to approve the 2012 and 2016 agreements had a mutual intention that the clauses would reflect the practice referred to above, and that the Commission should exercise its discretion to vary the disputed clauses to have the text of the agreements clearly reflect that intention. The proposed variations would replace references in the disputed clauses to “the next pay period” with the words “any subsequent pay periods”, with retroactive effect. Qube Ports claimed that, if its application were granted, the proceedings before the Court would not be maintainable, because the variations would remove the constructional premise on which the allegations of contravention rested.

26    The Union contended that the relevant provisions of the agreements were not ambiguous or uncertain. As a first step, however, it asked the Commission to dismiss the application by Qube Ports because it was not made by an “employer covered by the agreement”.

The decision of the Full Bench

27    I will summarise the reasons for decision of the Full Bench, which granted permission to appeal, but dismissed the appeal, for that is the decision of the Commission that is the subject of this application for judicial review.

28    The Full Bench held that Qube Ports did not have standing under s 217(1)(a) because it was not “covered by” the agreements at the time it made its application. The Full Bench rejected a construction that “covered by the agreement” is to be equated with “is or was covered”, or “covered at any relevant time when the agreement was in operation”.

29    The Full Bench referred to the modern approach to statutory construction, which requires that regard be had to text, context, and purpose. The Full Bench referred also to the requirement in s 15AA of the Acts Interpretation Act 1901 (Cth) as in force on 25 June 2009 (see FW Act s 40A), which requires that a construction that promotes the purpose or object underlying an Act be preferred.

30    The Full Bench accepted that there were at least two available constructions of the phrase “covered by the agreement” in s 217(1), being a construction that deploys the present tense, and a construction that is agnostic as to the temporal aspect of coverage. The Full Bench referred to other provisions of the FW Act, in which it considered that tense was made explicit by the use of the phrases “is covered” and “are covered” (see, for example, s 160 in relation to applications to vary a modern award).

31    The Full Bench addressed the grammatical form of the phrase “covered by” in s 217(1), stating that Deputy President Colman at first instance had been correct to point out that the word “covered” is a past participle, and that a functional use of a past participle is to form participial phrases. At [20], the Full Bench held that Deputy President Colman had been correct to conclude that, grammatically, the participial phrase “covered by the agreement” in s 217(1)(a) described employers covered by the agreement when making the application, and that there were no textual elements indicating past coverage –

As the Deputy President correctly pointed out (at [31] of the decision), the word “covered” is a past participle, a common grammatical function of which is to form the present perfect tense, connoting an action that began in the past and that has some significance for the present. However, another functional use of a past participle is to form participial phrases. And the phrase “covered by the agreement” may evidence such use in that it is adjectival in nature, describing “one or more of the employers” – only the employer or employers presently covered. Again, as the Deputy President correctly observed any dimension of time discernible from the use of the phrase is to be ascertained by reference to text, context (at [31] and [32] of the decision), and, we add, purpose. But as to the ordinary grammatical meaning of the phrase ‘covered by the agreement’, we agree with the Deputy President’s observation that the participial phrase is being used in s 217(1)(a) of the Act to describe the employer that may make an application and the relevant temporal context of the sentence is the time of the application – thus an employer covered by the agreement when making application. And like the Deputy President, we are unable to identify any textual elements – semantic or grammatical – suggesting a concern with past coverage of an employer by an agreement the subject of an application under s 217(1).

32    The Full Bench then deployed at [30] a metaphor by referring to the “life cycle” of an enterprise agreement. It referred at [31] to the birth, life, and death of an enterprise agreement, concluding that Part 2-4 of the Act in which s 217 is located regulated the birth, life, and death of an enterprise agreement, but not its “afterlife”, stating –

Application by persons not covered by an agreement, which is not in operation and can never operate again, is very much about an agreement’s afterlife and in that afterlife, seeking to rewrite its history by contending that while alive one or more of its terms was ambiguous or uncertain.

33    After identifying the place of enterprise agreements within the legislative scheme, the Full Bench at [35] held, in substance, that persons who were no longer covered by an enterprise agreement had no continuing interest in the integrity of the text of the agreement –

Together with the textual matters discussed, the nature of an enterprise agreement discloses the purpose of the variation and termination provisions of the Act and their limited engagement by persons “covered by the agreement”. The purpose or object is to enable persons that have an ongoing interest in an agreement that governs their relationship with others covered by the agreement, to apply to vary or terminate the agreement as the case requires or the circumstances permit. Persons presently covered by an enterprise agreement have a continuing interest in the integrity of the text of an agreement, and in removing any ambiguity or uncertainty that might affect it. Such persons have a continuing interest in the ongoing operation of an agreement. Persons who are no longer covered have no such interest. That this is the purpose or object is reinforced by the fact that all of the variation and termination of agreement provisions appear in a single division (Division 7) of Part 2-4.

34    The Full Bench identified other textual features of the FW Act that it considered supported the correctness of the construction adopted by the Deputy President at first instance. In summary, they were –

(a)    the terms of s 160 of the FW Act, which explicitly deploy the present tense in relation to the standing required to apply for a variation of a modern award, and the apparent anomaly that would arise if s 217 were not interpreted consistently;

(b)    the phrase “covered by”, which is used with reference to an enterprise agreement elsewhere in Division 7 of Part 2-4 on 21 occasions, 18 of which plainly denote present and not past coverage;

(c)    ss 225–6 in the form they took at the relevant times, which provided for the termination of an enterprise agreement and referred to employers, an employee, and an employer “covered by the agreement”, which the Full Bench stated were references to present coverage, and not past coverage;

(d)    that words and phrases in statutes should generally be given a consistent meaning, and therefore the phrase “covered by”, where used on three occasions in s 217, should be given the same meaning and be construed in the same tense as on the other 18 occasions on which it is used in Division 7 of Part 2-4 to denote present coverage; and

(e)    s 53(5), which provides that an enterprise agreement does not cover an employer, employee, or employee organisation if it has ceased to operate. The Full Bench considered that its construction was supported by [203] of the Explanatory Memorandum to the Fair Work Bill 2008 (Cth). Paragraph [203] was explanatory of those clauses of the Bill which deployed the concepts of coverage and application in relation to a modern award and an enterprise agreement, and relevantly provided –

Even though coverage of a modern award or enterprise agreement does not necessarily determine who has enforceable entitlements and obligations under those instruments, coverage of the instrument can be significant for a variety of other reasons. For example, coverage means that, from the time the award is made or the agreement is approved by FWA until the time the award or agreement ceases to operate:

•    persons covered by the award or agreement can apply to vary the instrument;

…

35    The Full Bench at [50] and [56] adopted and endorsed the rejection by Deputy President Colman at [38]–[49] of a number of arguments advanced on behalf of Qube Ports that relied on textual and contextual indicators in other provisions of the FW Act, including the standing provisions in items 4 and 14 of the table in s 539, to support its construction of s 217, which I will address later in these reasons.

Qube Ports’ submissions

36    Qube Ports submitted that the Commission’s decisions at first instance and on appeal to the Full Bench were affected by the same jurisdictional error — namely, a refusal to exercise the jurisdiction conferred by s 217(1), which resulted from an incorrect conclusion as to a jurisdictional fact. Qube Ports submitted that the Commission erred in construing s 217(1)(a) as permitting an application by an employer only if that employer was “covered by” the agreement at the time it filed the s 217 application.

37    Now, the true construction of s 217(1), along with the question whether any jurisdictional facts necessary to enliven that power have been satisfied, are questions for this Court to decide for itself: see City of Enfield v Development Assessment Commission [2000] HCA 5; 199 CLR 135 at [38] (Gleeson CJ, Gummow, Kirby and Hayne JJ). For that reason, in the course of this summary I will address Qube Ports’ criticisms of the Commission’s reasoning only in so far as those criticisms shed light on the ultimate constructional question, which is determinative of this application for judicial review.

38    Qube Ports submitted that the text of s 217(1) was grammatically consistent with that provision permitting applications from employers covered by the agreement at the time of the application, as well as from employers covered by the agreement at some earlier time. Thus, it was submitted that the provision was agnostic as to tense. Qube Ports submitted that the Commission erred in its construction of s 217(1) by placing weight upon erroneous or unpersuasive contextual and purposive indicators, and by dismissing other, relevant indicators.

39    Qube Ports submitted that s 217(1) is a “standing provision”, designed to identify the persons who may invoke the Commission’s power to vary an enterprise agreement by reference to the connection between the enterprise agreement and their rights and liabilities. Any temporal limitation should, on Qube Ports’ submission, be discerned by reference to this connection. Qube Ports submitted that s 217(1) should be construed so that standing to apply for a variation subsists for as long as this “relevant interest” remains extant. Since, on Qube Ports’ case, the power to vary an enterprise agreement can work retroactively, s 217(1) should be construed to permit applications by persons who are no longer covered by the agreement, but who were covered by the agreement at a time that is relevant to the variation that is sought.

40    In this way, Qube Ports did not submit that s 217(1) grants standing to seek a variation to anyone who has ever been covered by the agreement. Rather, Qube Ports’ position was that s 217(1) only grants standing to a person who was covered by the agreement at the time that coincides with the operation of the variation order sought. In support of this construction, Qube Ports also pointed to various other features of the Act.

41    First, Qube Ports submitted that s 217(1) authorises the Commission to vary an enterprise agreement with retroactive effect. Senior counsel for Qube Ports described this as “an essential premise” of its proposed construction. Qube Ports drew attention to s 217(2), which provides that any variation made “operates from the day specified in the decision to vary the agreement”. Qube Ports submitted that s 217(2) is, on its face, capable of authorising variations that operate from a specified past day, and that there is no reason to imply any limitation on the power.

42    Secondly, Qube Ports submitted that the construction favoured by the Commission did not achieve the purported result of ensuring that only persons with an “ongoing interest” in the terms of the enterprise agreement have standing to seek a variation. Qube Ports pointed out that enterprise agreements can cover employers, employees and employee organisations in circumstances where those entities have no ongoing interest in the continuing operation of the agreement, because a new agreement applies to them. Further, the Commission’s construction was said to lead to an arbitrary distinction being drawn between two classes of person with an identical interest in the enterprise agreement, in so far as it previously applied to them. These two classes comprise persons whom the agreement still happens to cover (but to whom it no longer applies), and persons whom it no longer covers at all, perhaps because they are no longer employees. These classes could still have an identical interest in the application of the enterprise agreement in respect of its past application to them, but only the former could seek a variation. Qube Ports submitted that these points, taken together, indicate that no overarching legislative purpose can be discerned to distinguish between persons who have an ongoing interest in the integrity of the agreement, and persons who do not, by reference to the single criterion of coverage as at the date of the application.

43    Thirdly, Qube Ports submitted that construing s 217(1) as the Commission did leads to “a lack of balance in the statutory scheme”. It was submitted that this lack of balance arises because a person can bring an enforcement proceeding for alleged contraventions that only have past ramifications, but the person whose conduct is impugned is not able to have the agreement varied to remove an ambiguity upon which the enforcement proceeding relies. In this respect, Qube Ports referred to s 539(2) and the items it contains concerning standing to bring proceedings in respect of contraventions of ss 50 and 417(1) of the Act. It was submitted that on the Full Bench’s construction of s 217, there was an asymmetry between the enforcement regime and the standing given to seek a variation of an enterprise agreement to remove an ambiguity or uncertainty.

44    Fourthly, and in addition to the claimed asymmetry referred to above, Qube Ports submitted that if the Full Bench’s reasoning were applied to items 4(c) and 14(c) of the table under s 539(2) of the FW Act, anomalies would arise. Relevantly, those items give standing to apply for orders in relation to contraventions of civil remedy provisions to “an employee organisation to which the enterprise agreement concerned applies”, and “an employee organisation covered by the enterprise agreement or workplace determination concerned” (emphasis added). It was submitted that on the Full Bench’s reasoning, once an enterprise agreement had ceased to operate, an employee organisation would no longer have standing under those provisions.

45    Fifthly, Qube Ports submitted that the expressions “employers covered by” and “an employee covered by” in s 217(1) mean an employer or employee relevantly covered by the enterprise agreement, so that in the case of a proposed variation having retroactive effect, persons who were covered by the agreement for some or all of the period during which the variation would operate have standing. This submission was advanced in part to meet an argument of the Union, to which I refer below, that the reference to “an employee” in s 217(1)(b) can only be to a person who is employed or usually employed, and did not extend to former employees, thereby providing context to the construction of the expression “covered by” in s 217(1).

46    Sixthly, Qube Ports advanced a hypothetical illustration to support an argument that the construction of s 217 adopted by the Full Bench would not achieve the object of confining standing to those persons who have an ongoing interest in the integrity or operation of an enterprise agreement. The illustration given was a situation where 90% of a workforce of a particular employer became subject to a replacement enterprise agreement with the consequence that the old agreement continued to apply to the remaining 10% of employees, but would continue to cover all the employees. It was submitted that on that scenario the 90% whom the replacement agreement merely covered would still have standing to apply under s 217 to vary the original agreement notwithstanding that they had no continuing interest in its application to them.

The Union’s submissions

47    The Union submitted that s 217(1) should be construed to authorise the Commission to vary an enterprise agreement only on an application made by a person who is covered by the agreement at the time the application is made. The Union based this submission on several features of the text, context, and purpose of the provision.

48    Textually, the Union submitted that, in the Commission, Deputy President Colman and the Full Bench correctly analysed the grammatical structure of s 217(1). The Union submitted that s 217(1) identifies a relevant temporal element, being the time of application. In that sense, the Union submitted, s 217(1) is not “agnostic” as to tense.

49    The Union also identified a range of contextual factors in support of its construction. These included the fact that the phrase “covered by the agreement” is used in other provisions in the Act in ways that should be read as referring to coverage as at the relevant time in those other provisions. The Union also submitted that s 217 mirrors the standing provisions in s 225, which provides for the persons who may apply for the termination of an enterprise agreement. The Union submitted that the scope of the standing granted by each provision should be construed in the same way, and that s 226(3)(b) (as in force at the time of Qube Ports’ application) could only be sensibly understood as referring to present coverage.

50    The Union further submitted that the reference to “an employee” in s 217(1)(b) is a reference to a current employee. Section 170 of the FW Act provides that in Part 2-4 “employee” means a “national system employee”, which in turn is defined by s 13 as –

A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.

51    The Union relied on the present tense “is employed … or usually employed” in s 13 of the Act as having a temporal element that had the result that, in the case of employees, s 217 gives standing only to current employees or persons who are usually employed and who are covered by the enterprise agreement at the time of the application to vary the agreement, and not past employees. The Union also drew attention to the extended meanings given to “national system employee” in ss 30C and 30M of the Act as reinforcing that current or usual employment is necessary in order for a person to be “an employee” for the purposes of s 217. The Union submitted that these features supported its overall submission that “covered by” in s 217 also has a temporal element that does not include enterprise agreements that have ceased to cover an employer or employee because they have ceased to operate.

52    The Union also advanced an argument based on the statement in s 54(3) that once an enterprise agreement has ceased to operate, it “can never operate again”. This argument was primarily directed against Qube Ports’ submission that a variation under s 217(1) can operate retroactively. The Union submitted that retroactively varying an agreement that has ceased to operate — as the relevant agreements have in this case — would undermine s 54(3). This would occur, so the argument went, because “it is only things that are operative and therefore apply that create obligations”. And, the Union submitted, an enterprise agreement that has ceased to operate does not impose obligations. Any retroactive variation could not alter the rights and obligations of any person, since achieving this result would require the agreement to apply (and, therefore, to operate). The Union submitted further that s 217(2), which provides that a variation operates from the day specified in the decision to vary the agreement, cannot be applied to an enterprise agreement that itself has ceased to operate.

53    The Union also advanced other arguments concerning the ability of the Commission to vary an agreement under s 217(1) with retroactive effect. Among these arguments was a submission that there were themes that ran through the history of the powers to vary industrial agreements, including that these powers have been confined. The Union submitted that, since 1904, employers have not been permitted to apply to vary instruments that have expired or that otherwise no longer bind the employer, and that there is nothing in the text of s 217 or its context that suggests Parliament intended to depart from that position. Further, the Union submitted that Parliament must be presumed not to intend to interfere with accrued rights, which provides another reason not to construe s 217 as extending to retroactive variations.

54    As to retroactivity more generally, the Union submitted that s 217(2), which provides that a variation operates from the day specified in the decision to vary the agreement, authorised only a current or prospective day, and not an antecedent day, citing a decision of the Commission in Re McDonald’s Australia Enterprise Agreement [2019] FWCA 8563; 291 IR 395 at [37]–[47] (Deputy President Colman). The Union also relied on several emanations of the principle of legality to support its submission that the Commission was not authorised to make variations to enterprise agreements with retroactive effect: (1) it is to be presumed that Parliament did not intend that accrued rights would be interfered with; (2) it is to be presumed that Parliament did not intend to interfere with rights arising from past compliance with the law; and (3) relatedly, it is to be presumed that Parliament did not intend to authorise laws imposing civil penalties to have a retroactive operation.

55    The Union submitted that the purpose of s 217 is to enable persons who have an ongoing interest in an enterprise agreement that governs their relationship with others covered by the agreement to apply to vary the agreement. It was submitted that those persons have a continuing interest in the integrity of the agreement. The Union submitted that its construction achieved this purpose, and so should be preferred.

56    In response to the submissions of Qube Ports relating to the claimed asymmetry between s 217 and the enforcement regime, including the standing provisions in items 4(c) and 14(c) in the table under s 539(2), the Union submitted that s 539 is set in a different context, and that its temporal focus is the time at which a claimed contravention occurred, as indicated by s 544, which provides for a limitation period of six years after the day on which the contravention occurred. Likewise, the Union submitted that the many references to “an employee” in the table under s 539 are to be understood as referring to a person who was an employee at the time of the claimed contravention, and that if it were otherwise, employees who were dismissed would lack standing to bring an application claiming a breach of a civil remedy provision. As to the claimed asymmetry, the Union submitted that the scheme contemplates asymmetry, which is illustrated by the fact that while an inspector has standing to bring an application claiming a contravention of a civil remedy provision involving a claimed failure to comply with an enterprise agreement, an inspector has no standing to apply under s 217 to vary an agreement for the purpose of removing an ambiguity or uncertainty.

57    Finally, the Union made submissions in response to Qube Ports’ hypothetical scenario, which I have summarised at [45] above. The Union submitted first that the remaining 10% to whom the enterprise agreement applies could use the variation procedure in s 207 to circumvent any unwanted s 217 application. Secondly, the Union submitted that s 217 does not authorise any retroactive variations. Thirdly, the Union queried why Parliament would grant a right to seek a variation in 2024 under s 217 to a person employed for one day in 2015 under an enterprise agreement that ceased to operate in 2018, in circumstances where the enterprise agreement applies to no one.

Consideration

Framing the issue

58    The sole issue for this Court is whether the Full Bench adopted an incorrect construction of s 217(1)(a) of the FW Act. Three constructions have been ventilated before the Full Bench and this Court. Those constructions are to the following effect –

(a)    s 217(1)(a) permits applications to be made by an employer who is covered by the enterprise agreement at the time the application is made — the construction favoured by the Full Bench, and supported by the Union on this application;

(b)    s 217(1)(a) permits applications to be made by an employer who was covered by the enterprise agreement at any time — a construction considered by the Full Bench, but not supported by any party to this application; and

(c)    s 217(1)(a) permits applications to be made by an employer who was covered by the enterprise agreement at the time in respect of which the variation is sought — the construction supported by Qube Ports on this application.

Qube Ports’ construction must be rejected

59    There are several reasons why the construction for which Qube Ports argued must be rejected. The summary points that follow should be read in light of my further analysis as to the proper construction of s 217. That further analysis provides additional reasons why Qube Ports’ construction cannot be accepted.

60    First, Qube Ports’ submissions begin from an a priori assumption that any temporal dimension in the words “covered by” would “logically inhere to the relevant interest of the applicant”. The proper approach to statutory construction does not commence from a preconceived notion as to what the requirements for standing under s 217 should be: see Certain Lloyd’s Underwriters v Cross [2012] HCA 56; 248 CLR 378 at [26] (French CJ and Hayne J).

61    Secondly, Qube Ports’ submissions seek to read a complex qualification into the unadorned language of s 217. To achieve Qube Ports’ desired result of granting standing only to those with a “relevant interest”, it would be necessary to restrict standing to those who would be affected by the results of a variation. But this requirement does not just involve a dimension of time.

62    A person can fail to be “relevantly” affected by a variation either because the variation in question relates to a time when the person was not covered, or because the variation relates to a term that did not govern the person’s obligations or entitlements. For example, a variation may be sought to remove an uncertainty as to the entitlements of a sub-set of employees that arose in a given year. An employee who was covered by the agreement in that year and remains covered, but who did not fall within the relevant sub-set of employees, would lack a “relevant interest” in the variation. No obligation or entitlement of that employee would be affected by the variation. To hold that such a person lacks standing would have nothing to do with any temporal feature inherent in s 217.

63    This serves to illustrate that Qube Ports’ submission that “[t]he words ‘covered by’ mean covered by the enterprise agreement at the relevant time” in fact fails to achieve its purported result. To achieve the result for which Qube Ports advocated, a more complex qualification would need to be adopted. That qualification would need to discriminate not just on the basis of time, but also by reference to whether the term to be varied affected the applicant. No persuasive arguments were advanced as to how such a qualification could be supported by the text of s 217.

64    Thirdly, and relatedly, the criterion that is taken up in s 217 is coverage by the enterprise agreement. It is reasonably clear that the connection chosen by Parliament as the basis for conferring standing is a connection between a person and the enterprise agreement that is sought to be varied. But, as I have explained, to achieve the result of granting standing only to those with a “relevant interest” in the variation, it would be necessary to restrict standing to those affected by the relevant term, not just the agreement as a whole.

65    Fourthly, the construction favoured by Qube Ports causes the question of standing to turn on questions that are both fact-sensitive and liable to change. Whether a particular employee’s obligations or entitlements would be affected by a proposed variation may turn on contested and contestable questions of fact. Examples could include the proper classification of a particular employee under the agreement. Adopting such a criterion for standing could commonly make it necessary for the Commission to conduct full-scale hearings on contested questions of fact just to decide whether it is seized of an application that engages s 217 in the first place.

66    Further, issues that are raised before the Commission are liable to evolve over the course of the proceeding: see Monash University v Murthi [2024] FCA 663 at [55]. The precise variation that an applicant seeks may likewise evolve. A consequence of Qube Ports’ proposed construction is that the question whether a person has standing to apply under s 217 can fluctuate depending on the precise nature of the variation that is sought, and ultimately made. It is improbable that Parliament intended that the threshold question of standing under s 217 should depend in this way on the vicissitudes occurring over the course of a variation application before the Commission.

67    Fifthly, to the extent that Qube Ports’ construction does not require a “relevant interest” in the specific variation sought, and just an interest in the enterprise agreement itself, there is no reason to prefer that construction to the construction adopted by the Full Bench. If all that is required is a connection to the enterprise agreement itself, then even Qube Ports’ construction does not ensure that only those with an “ongoing interest” in the subject matter of the variation have standing. In any event, senior counsel for Qube Ports confirmed that Qube Ports’ construction was that “covered by” in s 217(1)(a) was directed to “the relevant interest of the applicant in the variation order sought”, not the agreement as a whole.

The Full Bench’s construction is correct

68    Given that the construction supported by Qube Ports must be rejected for reasons including those given above, it remains to consider whether the words “employers covered by the agreement” in s 217(1)(a) direct attention only to employers who in fact are covered by the agreement at the time the application is made, or whether that expression includes no such requirement of contemporaneous coverage. If the expression includes no such requirement, then the Full Bench erred in its construction of s 217(1)(a).

69    The reasons of Gaudron J in Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 362–3 help to illustrate the point in issue. Although Gaudron J dissented in the result, her Honour’s reasoning on the following point was shared by a majority of the Justices, and is of persuasive value. The case concerned a power vested in the Australian Industrial Relations Commission to review a “contract” — and to set it aside or vary it — on certain grounds. The word “contract” was defined to mean “a contract … that … is binding”: see Industrial Relations Act 1988 (Cth) (1988 Act) s 127A(1). One issue before the High Court was whether the power extended to contracts that had come to an end because they had been discharged. An apparent obstacle to construing the power in this way was that s 127A(1) employed the present tense. But Gaudron J explained at 362 that the present tense could be used “descriptively” or “to signify contemporaneity”. After referring to considerations that were specific to the case at hand, at 363 Gaudron J said that –

the use of the present tense … is merely discriptive [sic] of the nature of the contracts which may be the subject of the Commission’s powers, namely, contracts enforceable against an independent contractor and whose terms or operation may be described as unfair, harsh or against the public interest.

70    Her Honour contrasted this understanding of the statutory text with the position that the relevant powers were “confined to contracts that [were] current when [the Australian Industrial Relations Commission came] to exercise those powers”.

71    In an analogous way, a question on this application is whether the words “employers covered by the agreement” in s 217(1)(a) should be read descriptively, or to signify contemporaneity. If read descriptively, those words would confer standing on employers by reference to whether they fall within the scope of the clauses that determine the coverage of the relevant agreements. If read to signify contemporaneity, those words would confer standing on employers who could be described as “covered by” the agreement at the time the application identified in s 217 is made. This is a question of statutory construction.

Grammar and the modern approach to statutory construction

72    The modern approach to statutory construction acknowledges that the task involves ascertaining the legal meaning of a provision by reference to “its text, while at the same time regard is … had to its context and purpose”: ENT19 v Minister for Home Affairs [2023] HCA 18; 410 ALR 1 at [86] (Gordon, Edelman, Steward and Gleeson JJ). And, as the High Court has stated, that legal meaning will “[o]rdinarily … correspond with the grammatical meaning of the provision” in question –

[b]ut not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78] (McHugh, Gummow, Kirby and Hayne JJ).

73    Just as the task of construction requires more than sitting with the words of the Act in one hand and a dictionary in the other, so it requires more than matching up statutory text against pronouncements made in books on grammar or English usage: see Cunard SS Co Ltd v Mellon (1922) 284 F 890 at 894 (Judge Learned Hand), cited in Weiss v The Queen [2005] HCA 81; 224 CLR 300 at [10] (Gleeson CJ, Gummow, Kirby, Hayne, Callinan and Heydon JJ), Re Refugee Tribunal; Ex parte Aala [2000] HCA 57; 204 CLR 82 at [25] (Gaudron and Gummow JJ), and APLA Ltd v Legal Services Commissioner (NSW) [2005] HCA 44; 224 CLR 322 at [423] (Hayne J).

74    To varying extents, points of grammar featured in the parties’ submissions to this Court, and in the decisions of the Deputy President and the Full Bench in the Commission. These points addressed the grammatical form of the phrase “one or more of the employers covered by the agreement” in s 217(1)(a). Ultimately, they were directed to the question whether the language of s 217(1)(a) imposes a temporal limitation, such that an effective application may only be made by someone who is one of “the employers covered by the agreement” at the time the application is made. Sometimes, this was put on the basis that the phrase “the employers covered by” carries a particular “tense”.

75    As Deputy President Colman recognised at [31], the word “covered” in this context is a past participle, forming part of a participial phrase that is adjectival in nature. For that reason, it may be clearer to speak, as the Deputy President did at [31], of the phrase as having a “dimension of time”, rather than a “tense”.

76    Viewed in isolation, the phrase “the employers covered by the agreement” is not inherently marked by any temporal limitation or dimension of time. Even as a matter of its ordinary, grammatical meaning, what temporal aspect the phrase does have must be discerned in the light of the provision’s full text and context. In that sense, I accept that the ordinary meaning of these words is, viewed in isolation, agnostic as to time. But given that the Court is concerned to construe the legal meaning of s 217(1)(a) as a whole, it is essential not to fix on particular words in isolation. The existence of any temporal limitation on s 217(1)(a) falls to be determined by considering the whole of s 217 within the broader scheme of the Act, and in light of the purpose and objects to which I have referred.

77    Of course, the statutory text that immediately surrounds the words “covered by” remains significant. Section 217(1)(a) essentially provides that “[t]he FWC may vary an enterprise agreement … on application by any of the following: … one or more of the employers covered by the agreement”. I agree with the analysis of Deputy President Colman at [32] that the “temporal context” of this statutory text is the time of the application. The provision directs attention to the time that an application is made, and in that context asks whether a given employer is “covered by the agreement”. This supports a construction of s 217(1)(a) that requires an employer to be capable of being described as “covered by” the agreement at a time contemporaneous with the application contemplated by the provision.

Construing s 217 in light of its context and purpose

78    As the modern approach to statutory construction requires, however, the text of s 217(1)(a) must at all times be considered in its context, and in light of its purpose.

79    As I have noted, a threshold element of Qube Ports’ case was that s 217 authorises the Commission to vary an enterprise agreement with retroactive effect. For this reason, the analysis that follows pays close attention to the question of retroactivity. But it is important to keep in mind that different provisions may authorise retroactive variations in different ways, and to different extents. Even if s 217 does authorise the Commission to vary an enterprise agreement with retroactive effect, it does not necessarily follow that the provision also contemplates that the Commission may vary an enterprise agreement after the agreement has ceased to operate. Therefore, showing that s 217 authorises retroactive variations does not, without more, entail that the Full Bench’s construction of s 217(1)(a) was incorrect.

The purpose of s 217

80    Section 217 serves a dual function. In one instant, it both empowers the Commission to vary an enterprise agreement to remove an ambiguity and uncertainty, and defines the class of those who may, by application, invoke the Commission’s jurisdiction to exercise that power.

81    As its terms reveal, the purpose of s 217 is to empower the Commission to remove ambiguities and uncertainties from enterprise agreements. It is an example of a power to vary industrial instruments and decisions of industrial tribunals. Such powers have been a longstanding feature of Commonwealth industrial legislation, and may be traced to s 38(o) of the Commonwealth Conciliation and Arbitration Act 1904 (Cth), as originally enacted. Provisions such as these have been characterised as remedial powers in remedial legislation, the purpose of which is to quell industrial disputes: see the observations of Isaacs J in George Hudson Ltd v Australian Timber Workers’ Union (1923) 32 CLR 413 at 435–6.

82    Describing the purpose of s 217 at this high level of generality does not determine the question before the Court. It is true that the purpose of s 217 is removing ambiguities and uncertainties from enterprise agreements. It could be argued, on this basis, that Qube Ports’ construction should be preferred — since, in expanding the scope of standing under s 217(1)(a) to include those who were at any time “relevantly” covered, it would mean that more ambiguities and uncertainties can be removed from enterprise agreements. But s 217 does not purport to achieve this object in any wholesale way, regardless of other considerations: compare the well-known observations of Gleeson CJ in Carr v Western Australia [2007] HCA 47; 232 CLR 138 at [6].

83    The main way in which s 217 circumscribes its pursuit of its high-level purpose is by requiring the Commission to exercise its power to vary only on the application of specified persons. Once again, the purpose of this requirement can be identified at a high level as restricting the ability to invoke the Commission’s power to persons with a particular relationship with the enterprise agreement.

84    Counsel for Qube Ports likened the power under s 217 to the equitable remedy of rectification. The equitable remedy of rectification is concerned with the rectification of documents so as to correct mistakes. But an ambiguity or uncertainty in an enterprise agreement may exist without any mistake being involved. Correspondingly, there may be an obvious mistake in an enterprise agreement, but without any resulting ambiguity or uncertainty. A mistake of this character might then attract the operation of s 218A, which is directed to the correction or amendment of an obvious error, defect or irregularity. For these reasons, while there is overlap between the operation of s 217 and rectification, s 217 cannot be described as a form of statutory rectification.

Retroactive variation

85    The question whether any given power authorises retroactive variation of an industrial instrument is a question of the construction of the particular power. Still, previous decisions concerning powers to vary with retroactive effect form part of the legal context in which s 217 was enacted.

86    In R v Commonwealth Court of Conciliation and Arbitration; Ex parte The North Melbourne Electric Tramways & Lighting Co Ltd (1920) 29 CLR 106, the High Court was concerned with a challenge to an order of the Commonwealth Court of Conciliation and Arbitration, which varied a certified agreement to provide for higher rates of pay with effect from a date that was antecedent to the order providing for the variation. Under the legislation, a certified agreement had the same effect as, and was deemed to be, an award. The High Court held that the power in s 38(o) of the Act to vary orders and awards had been validly invoked to vary the agreement with retroactive effect, that is, to a date that was anterior to the order giving effect to the variation.

87    Likewise, in Australian Tramway and Motor Omnibus Employees Association v Commissioner for Road Transport and Tramways (NSW) (1935) 54 CLR 470, the High Court by majority held that the power in s 28(3) of the Commonwealth Conciliation and Arbitration Act to set aside or vary the terms of an award was to be construed as authorising a variation that took away rights that had accrued to employees under an award, the initial term of which had expired but which had continuing force by operation of the statute: see Latham CJ at 490–1, Rich, Evatt and McTiernan JJ at 494. Notably, Dixon J at 501–3 held that the power under s 38(o) to vary orders and awards and to re-open any question did not apply to the original terms of an award after its fixed period had expired, but did apply to orders made under s 28(3). And to that extent, Dixon J held that this power of variation extended to the discharge and variation of rights and liabilities which had accrued from the past operation of an award or order, at any rate if they were not spent or satisfied.

88    More recently, in Esso Australia Pty Ltd v Australian Workers’ Union [2017] HCA 54; 263 CLR 551 at [49], Kiefel CJ, Keane, Nettle and Edelman JJ referred to the Commission’s broad powers under s 603 of the FW Act to vary or revoke its decisions, stating that the power included the power to do so retrospectively. Their Honours expressly based this conclusion, in part, on the “great public policy” that the FW Act embodied, which supplied a reason not to read down the Act’s provisions so as to authorise only prospective variation.

89    The exercise of the statutory power given to the Commission to remove an ambiguity or uncertainty from an enterprise agreement has some similarities to legislation enacted to remove an ambiguity or uncertainty. In Pearce DC, Statutory Interpretation in Australia (10th ed, LexisNexis, 2024), the author refers at [10.22] to a principle that legislation which clarifies the meaning of an earlier Act is usually treated as having retroactive operation, because “such Acts are not altering the law in any way but are only making its meaning clearer”. See also Hooker v Gilling [2007] NSWCA 99; 48 MVR 136 at [40] (McColl JA, Ipp JA and Basten JA agreeing); Scrymgour v Moore [2006] NTSC 98; 206 FLR 347 at [36] (Olsson AJ); Herzfeld P and Prince T, Interpretation (3rd ed, Thomson Reuters, 2024) at [9.630].

90    In an analogous way, the fact that s 217 is directed to the object of removing ambiguities and uncertainties tells in favour of a construction that authorises the Commission to vary an enterprise agreement with retroactive effect.

91    Further, s 217(2) expressly provides that the variation made by the Commission “operates from the day specified in the decision to vary the agreement”. Unless some contextual feature requires a different conclusion, this subsection appears to envisage that the Commission may specify a day — past, present, or future — on which the variation takes effect.

92    Given the text of s 217, its purpose within the scheme of the FW Act, and the history of the constructions given to powers to vary industrial instruments in Australian industrial legislation, no narrow construction should be given to the remedial power in s 217 so as to confine its operation to prospective variations. To confine the power in that way could strip it of much of its utility, and would not be consistent with the text, context, and purpose of the provision. For instance, were the exercise of the remedial power to remove an ambiguity or uncertainty in an enterprise agreement confined to a variation having prospective operation only, any order of the Commission would leave ambiguous or uncertain, and therefore unresolved, the operation of the agreement for any relevant period prior to the making of an order.

93    For these reasons, I accept Qube Ports’ submission that s 217 empowers the Commission to make an order varying an agreement to remove an ambiguity or uncertainty with retroactive effect.

Variation after the enterprise agreement has ceased to operate

94    As I have explained, “coverage” is a statutory concept that is controlled, in part, by the statutory concept of “operation”. Relevantly, the effect of ss 53(5) and 54(3) is that an enterprise agreement that has ceased to operate does not cover any employee, employer, or employee organisation.

95    One consequence of construing s 217(1)(a) as permitting an employer to make a valid application only if that employer is covered when the application is made is that the power under s 217 could never be invoked after an enterprise agreement has ceased to operate. By contrast, if Qube Ports’ construction were adopted, that power could be invoked even after the agreement has ceased to operate. There is nothing in the text of s 217 that in terms addresses these consequences. It can fairly be said, therefore, that these consequences turn on whether “covered by” is construed to require coverage contemporaneous with the application made to the Commission. It is therefore relevant to see whether the scheme of the Act and other contextual factors favour one or other of the parties’ proposed constructions by reference to these consequences.

96    The operation of an enterprise agreement is a statutory construct. An enterprise agreement operates from seven days after the agreement is approved by the Commission, or from a later day specified in the agreement: s 54(1). Upon an enterprise agreement coming into operation, it applies to an employee, employer, or employee organisation covered by the agreement with the consequence that those persons must not contravene its terms: ss 50–1 and 52(1). An enterprise agreement may cease to operate in the circumstances specified in s 54(2). Upon an agreement ceasing to operate it no longer applies to any person, and so no longer imposes new obligations nor confers new entitlements for the purposes of s 51.

97    However, the cessation of operation of an enterprise agreement does not extinguish rights and obligations that accrued while the agreement was in operation. As with a contract that has been discharged, the cessation of operation of an enterprise agreement by operation of s 54(2) is not some sort of rescission ab initio: compare, in relation to contracts, Mann v Paterson Constructions Pty Ltd [2019] HCA 32; 267 CLR 560 at [10] (Kiefel CJ, Bell and Keane JJ), [72] (Gageler J), [165] (Nettle, Gordon and Edelman JJ). For example, a right to be paid wages or other entitlements that accrues under an enterprise agreement does not itself evaporate when the agreement later ceases to operate.

98    The Full Bench approached the question of construction of s 217 by reference to the metaphor of the life cycle of an enterprise agreement. This metaphor was employed to support the proposition that it is inconsistent with the statutory scheme for s 217 to authorise the Commission to vary an enterprise agreement after it has ceased to operate. In turn, this proposition was relied upon to inform the proper construction of s 217(1)(a). While metaphors are sometimes useful in explaining a legal concept, they can also mask the true nature of the underlying issues, especially when what is required is attention to the terms of a statutory scheme. A vague metaphor cannot take the place of the statute, or any relevant principles involved. Recourse to the metaphor of a “life cycle” can obscure the enduring relevance of an enterprise agreement as a source of accrued rights and obligations even after it ceases to operate.

99    For this reason, I do not accept the Union’s argument that to vary an enterprise agreement under s 217 after it has ceased to operate would be contrary to s 54(3) which provides that, “[a]n enterprise agreement that has ceased to operate can never operate again”. As I have explained, an enterprise agreement that has ceased to operate may remain a source of accrued rights and obligations. The variation of an agreement for the limited purposes specified by s 217 to remove an ambiguity or uncertainty, or for that matter under s 218A to correct or amend an obvious error, defect, or irregularity, does not revive the operation of an agreement in the sense proscribed by s 54(3). The variation would simply alter, with retroactive force, the legal effects that the enterprise agreement created while it was in operation.

100    Qube Ports pointed out that accrued rights and obligations may be enforced by a court on the application of parties whom s 539 of the FW Act authorises to seek orders in relation to a contravention of a civil remedy provision. Qube Ports submitted that construing s 217(1)(a) as requiring coverage contemporaneous with an application would thus lead to an “asymmetry of treatment of comparably worded standing provisions”. Qube Ports drew attention to s 539(2) items 4(c) and 14(c), which respectively confer standing on –

an employee organisation to which the enterprise agreement concerned applies [in relation to contraventions of s 50]

… [and]

an employee organisation covered by the enterprise agreement or workplace determination concerned [in relation to contraventions of s 417(1)] …

101    Qube Ports submitted that these provisions should be construed as permitting an employee organisation to bring an enforcement action even after the underlying enterprise agreement has ceased to operate. Qube Ports based this submission on the premise that such a construction was demanded so that employee organisations would be in the same position as employers and employees under items 4 and 14, noting that employees and employers have standing under those items without any express requirement as to coverage or application.

102    I am not persuaded by this argument for several reasons.

103    First, Qube Ports’ submission starts from an assumption that items 4 and 14 must apply to employee organisations precisely as they do to employees and employers. But this assumption is inconsistent with the fact that the items discriminate textually between employee organisations on the one hand, and employees and employers on the other. In the absence of detailed argument on the question, I am not prepared to assume that employee organisations must necessarily be treated identically to employees and employers. There may be intelligible reasons of policy to distinguish between these classes when it comes to standing to bring an enforcement action. Therefore, I am not prepared to assume without full argument that items 4(c) and 14(c) necessarily encompass employee organisations to whom an enterprise agreement no longer applies, or whom it no longer covers.

104    Secondly, I am not persuaded that the scheme established under the FW Act necessarily aims to align the conditions for standing under s 217 and s 539(2) items 4(c) and 14(c). For one thing, there are clear textual differences between the conditions. Whereas items 4 and 14, together with s 540(1), additionally confer standing on “an employee” and “an employer” to the extent that they are or will be “affected by” a relevant contravention, s 217 has a different requirement that the employee and employer be “covered by” the relevant agreement.

105    Thirdly, s 538 provides that Part 4-1 (which includes s 539) uses “employee” and “employer” in their ordinary meanings. By contrast, s 170 provides that Part 2-4 (which includes s 217) takes those terms as they are defined in ss 13–14. Section 13 relevantly defines a “national system employee” as “an individual so far as he or she is employed” (emphasis added), and thereby uses the present tense. Section 14 defines “national system employer” analogously. Senior counsel for the Union accepted that s 539(2) item 4 conferred standing on persons who were employees at the time of an alleged contravention, irrespective of whether they remained employees when an action was commenced. Now, regardless of whether the effect of the definitions in ss 13–14 is that former employees have no such standing under s 217, the point remains that the architecture of Part 2-4 is not obviously aligned with that of Part 4-1. Those parts deploy crucial terms, such as “employee” and “employer”, in different senses. For these reasons, I do not accept that the scope of the standing conferred by s 217 should necessarily align with that conferred by s 539.

106    The analysis may be somewhat advanced by a consideration of the legislative precursors of s 217. Essentially, the legislative history reveals that the precursors of s 217 took divergent approaches to the question whether industrial instruments may be varied after they have ceased to be in force or operative. For example, ss 113(2) and 116(1)(d) of the 1988 Act created a power to vary a certified agreement to remove an ambiguity or uncertainty that was exercisable “[w]hile a certified agreement is in force”. A similar qualification applied to the variation of certified agreements made under Division 3A of Part VI of the 1988 Act that was inserted by the Industrial Relations Legislation Amendment Act 1992 (Cth). Sections 134L(1)(d)–(e) provided that “[d]uring the period of operation of a certified agreement”, the agreement could only be varied for specified reasons, including to remove an ambiguity or uncertainty. The terms of ss 170MK(1)(e) and (g), which were inserted into the 1988 Act by the Industrial Relations Reform Act 1993 (Cth), were to the same effect.

107    Subsequently, a power to vary a certified agreement for the purpose of removing ambiguity or uncertainty on application “by any person bound by a certified agreement” was conferred on the Industrial Relations Commission by s 170MD(6)(a) of the Workplace Relations Act 1996 (Cth) (1996 Act, noting that the 1988 Act was re-titled as the 1996 Act). The operation of a certified agreement was dealt with under s 170LX. Section 170M(1)(b) then provided that a certified agreement bound “all persons whose employment is, at any time when the agreement is in operation, subject to the agreement”. In this way, a certified agreement could conceivably “bind” someone within the meaning of s 170MD(6)(a) regardless of whether the agreement remained operative. Thus, although the proper construction of s 170MD(6)(a) does not arise in this application, it stands as an example of a legislative precursor to s 217 that might have permitted applications to vary a certified agreement after the agreement had ceased to operate.

108    Of course, s 217 must be construed in light of its text, context and purpose, though it must be acknowledged that these legislative precursors form part of the background against which s 217 was enacted. One proposition that emerges from the legislative precursors is that there is nothing inherent in a power to vary an industrial instrument to remove an ambiguity or uncertainty that requires the power to be capable of being exercised when the underlying instrument has ceased to operate. To the extent that Qube Ports submitted that the ability to vary an enterprise agreement after it has ceased to operate is necessary to give effect to the purpose of s 217, I do not accept that submission.

109    Qube Ports also relied on Miller v University of New South Wales [2000] FCA 1563 (Branson J) as an example of a purposive approach being taken to the construction of the temporal dimension of a standing provision. That case concerned the construction of s 178(5A) of the 1996 Act, which provided, inter alia –

A penalty for a breach of a term of a certified agreement may be sued for and recovered by:

…

(b)    an employee whose employment is subject to the agreement …

(Emphasis added.)

110    At issue was whether the applicant lacked standing to sue for and recover a penalty for breach of a certified agreement on the ground that he was not an employee whose employment was subject to the agreement when he instituted the proceeding. A corresponding provision relating to the recovery of a penalty for breach of an award, s 178(5)(ca)(i), referred to a person “whose employment is, or at the time of the breach was, subject to the award” (emphasis added).

111    Branson J did not accept an argument that the failure of the legislature to include in s 178(5A) any reference to a person whose employment was, at the time of the breach, subject to the certified agreement demonstrated that an employee was intended by the legislature to be able to sue for and recover a penalty for a breach of a term of a certified agreement only where he or she was at the time of bringing the proceeding “an employee whose employment is subject to the agreement”. Instead, her Honour considered that the relevant phrase was open to different interpretations and addressed the purpose or objects underlying the Act, and the different legislative contexts of ss 178(5) and (5A), referring in particular to s 170M which provided relevantly that a certified agreement bound the employer and “all persons whose employment is, at any time when the agreement is in operation, subject to the agreement” (emphasis added by Branson J).

112    Having regard to this context, Branson J at [24]–[26] preferred a construction of s 178(5A) that involved construing “an employee whose employment is subject to the agreement” as referring to a person whose employment was, at any relevant time when the agreement was in operation, subject to the agreement.

113    I am not persuaded that Miller supports Qube Ports’ claim that the Full Bench erred in this case. First, Branson J was dealing with a different statutory power, cast in different terms, in pursuit of a different end. The mere fact that the result aligns with a result favourable to Qube Ports does not constitute a persuasive reason why s 217 should not be construed as it was by the Full Bench. Secondly, Miller was a case dealing with a claimed breach of a certified agreement. Different considerations can influence the constructional task in that context. Thirdly, construing s 178(5)(ca)(i) of the 1996 Act as concerned only with present employment would open up the possibility of an employer terminating employment to frustrate the enforcement processes under the Act. This is an example of a consideration that is specific to the enforcement context, which was relevant to the task of construction in that context. And further, to adapt what Gaudron J said in Re Dingjan, the exercise of the power to “terminate … may well be the very matter” which constitutes the breach of a certified agreement. For these reasons, I consider that Miller does not assist in the construction of s 217.

The place of s 217 within the scheme of the FW Act

114    I have already identified the textual features of s 217(1)(a) that militate in favour of the Union’s construction. Further, I have identified the purpose of s 217 as being to enable the Commission to remove ambiguities and uncertainties from enterprise agreements, in furtherance of the great public policy that underpins industrial legislation. I have also concluded, however, that s 217 works to achieve this purpose by limiting standing to invoke the Commission’s power to certain specified persons only. I have explained that the legislative precursors to s 217, which pursued similar purposes, were not univocal on the question whether the power to vary an instrument so as to remove an ambiguity or uncertainty should be capable of being exercised even when the instrument in question is no longer “in operation” or “in force”. In this way, I have explained that the purpose pursued by s 217 does not require Qube Ports’ construction to be preferred.

115    It remains to consider the scheme of the FW Act. Because I have set out the relevant provisions earlier, at [6]–[15], this analysis can take a summary form.

116    Chapter 2 of the Act is titled “Terms and conditions of employment”. It contains Part 2-1, which sets out the “[c]ore provisions for this Chapter”. Within Division 2 of Part 2-1 are four subdivisions, three of which correspond to the primary sources of the “main terms and conditions of employment of an employee” under the Act, being the National Employment Standards, modern awards, and enterprise agreements: see s 43(1).

117    Subdivision D sets out the statutory machinery pursuant to which enterprise agreements govern the rights and obligations of persons to whom they apply. The central provision is s 50, which provides that a person must not contravene a term of an enterprise agreement. Section 51 then explains that an enterprise agreement does not impose obligations or confer entitlements on a person, and cannot be contravened by a person, unless the agreement applies to the person.

118    Section 52 gives content to the statement that an enterprise agreement “applies” to a person. Subject to other provisions of the FW Act, s 52(1) provides that an enterprise agreement applies to an employee, employer or employee organisation if the agreement both “is in operation” and “covers the employee, employer or organisation”.

119    Section 54 deals with the operation of enterprise agreements. It provides that an enterprise agreement “operates” (by default) from seven days after the Commission approves the agreement, and ceases to operate when (amongst other things) there is no employee to whom the agreement applies. Section 54(3) provides that an agreement that has ceased to operate can never operate again.

120    Section 53 deals with the coverage of enterprise agreements. It provides that an agreement covers an employee or employer if the agreement is “expressed to cover” the employee or employer. Section 53(5) then provides that an enterprise agreement that has ceased to operate does not cover an employee, employer or employee organisation.

121    Subdivision C of Division 3 of Part 2-1 is titled “Interaction between one or more enterprise agreements”. Within that subdivision, s 58(2) essentially provides that when a later enterprise agreement that covers an employee in relation to their employment comes into operation, an earlier enterprise agreement that applied to that employee in relation to that employment ceases to apply to the employee.

122    In this way, ss 52–54 and 58 establish a coherent scheme for identifying the enterprise agreement that imposes obligations and confers entitlements on a person in respect of a particular employment relationship. At the heart of that scheme are the concepts of “operation”, “coverage”, and “application”. And an essential feature of that scheme is that, by virtue of their interaction with the remaining concepts, each of these concepts begins to be engaged at an identified time, has a duration that lasts as long as the statutory criteria remain satisfied, and then ceases. In the case of coverage, it commences when the enterprise agreement is made under s 182, and it continues to exist until the enterprise agreement ceases to operate.

123    The statutory scheme established by these machinery provisions therefore inherently directs attention to questions of timing. Despite what initially may appear from s 53(1), the concept of coverage is likewise directed towards coverage at a particular time. Without understanding the time in relation to which the question is asked, it is impossible to answer the question whether a person is covered by an enterprise agreement. To put it another way, the interlocking provisions of the FW Act disclose that all coverage is coverage at a particular time.

124    In this respect, the question before the Court must be distinguished from that posed by Gaudron J in Re Dingjan. Of course, there are several features of that case (including the possible power of a principal to terminate a contract unilaterally) that differ from the present context. But even with respect to the distinction between a “descriptive” and “contemporaneous” use of the expression “is binding”, Re Dingjan sits in a different category. Gaudron J considered at 363 that “binding” is often used to mean “enforceable”, such that the provision in question should be read as picking out the “nature of the contracts” which may be the subject of the powers in question.

125    In the present case, whether a person is “covered by” an agreement is a markedly different question. It is a question that immediately directs attention to ss 52–54. Those provisions convey the idea that, subject to any contrary legislative intention, coverage is a concept that cannot be taken in a purely descriptive sense. In the context of the provisions I have identified, the expression “covered by” in s 217 is not apt simply to describe a class of persons who fall within the relevant clause of an agreement. Rather, the expression ties the question of coverage to a particular time. For the reasons I have already explained, the time that is relevant to s 217 is not the time identified by Qube Ports, which is the time in respect of which any variation would operate. It is the time that an application is made, invoking the Commission’s power to vary an agreement.

Some aspects of the Full Bench’s path of reasoning

126    For completeness, I note that my reasons for rejecting Qube Ports’ construction of s 217 differ in some respects from those of the Full Bench. For instance, the Full Bench considered that the correct construction of s 217 was supported by an analysis of surrounding provisions in Division 7 of Part 2-4 of the FW Act that used the expression “covered by”. For my part, I consider this to be an infirm basis on which to rest the correct construction of s 217. The Full Bench stated that the expression “covered by” was used elsewhere in Division 7 on 21 occasions, 18 of which plainly denoted present and not past coverage. Not all of the instances appear to have been specifically identified, but it may be assumed that they include s 207, which, together with its surrounding provisions, concerns the making of a variation to an enterprise agreement by employers and “the employees employed at the time who are covered by the agreement”. The text and context of s 207 dictate the temporal dimensions of the phrase “covered by” for the purposes of that section, and do not provide any foundation for a universal construction of the expression. The same point can be made in relation to the Full Bench’s reliance on the use of the expression “covered by” in ss 219, 220, 221, 222, 223, and 225 of the FW Act, where the temporal dimensions of the expression “covered by” are necessarily dictated by the text and purpose of those provisions.

127    The Full Bench also considered that its preferred construction was supported by [203] of the Explanatory Memorandum to the Fair Work Bill, which is extracted at [33(e)] above. In submissions, the Union supported this reliance. However, little assistance is given by [203] of the Explanatory Memorandum in resolving the construction issue that arises in relation to s 217. The passages referred to are no more than a high-level summary of the provisions to which they relate. They do not take the place of the text of the legislation: Saeed v Minister for Immigration and Citizenship [2010] HCA 23; 241 CLR 252 at [31] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ). Further, [203] is an unreliable source of legislative intent for the additional reason that it mistakes the time from which coverage of an enterprise agreement commences by assuming that coverage commences at the time of approval by the Commission: see ALDI at [25]–[26] and [48], and FW Act ss 183(2), 185(1A), 186(2), 186(3). Therefore, I do not consider the statement in the Explanatory Memorandum that variation applications may be made “until the … agreement ceases to operate” to be a sure guide to the proper construction of s 217(1)(a).

Conclusion

128    For the above reasons, the Full Bench did not err in its construction of s 217(1)(a). Qube Ports’ application should be dismissed. In accordance with the position of both Qube Ports and the Union, there should be no order as to costs: see FW Act s 570.

Associate:

Dated:    17 October 2024

REASONS FOR JUDGMENT

SNADEN J:

129    I have been fortunate to review a draft of Wheelahan’s J reasons for judgment in this matter. Although the question is not without its complexity, I respectfully agree with his Honour that the requirement that an applicant for an order under s 217(1) of the Fair Work Act 2009 (Cth) to vary an enterprise agreement must be “covered by the agreement” in question is a requirement that envisages coverage when the application is made. A construction consistent with that proposition should be favoured having regard to the nature of the power that the provision confers, its context within the broader statutory regime of bargaining (and the regulation of employment terms) at an enterprise level, and the constituent, temporal concepts of coverage, operation and application that that regime features. Having so construed the provision, the Fair Work Commission did not err in a way that enlivens any entitlement to prerogative relief. I agree with the orders that Wheelahan J proposes and the reasons for which he proposes them.

Associate:

Dated:    17 October 2024