FEDERAL COURT OF AUSTRALIA

Civil Air Operations Officers Association of Australia v Airservices Australia [2020] FCA 1665

ORDERS

THE COURT ORDERS THAT:

1.    The Respondent’s interlocutory application dated 8 July 2019 be dismissed.

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

REASONS FOR JUDGMENT

MURPHY J:

INTRODUCTION

1    The applicant, Civil Air Operations Officers’ Association of Australia (Civil Air), is a registered industrial association under the Fair Work Act 2009 (Cth) (the FWA), and represents the interests of civilian air traffic controllers and supporting staff. The respondent is Airservices Australia (Airservices), an Australian Government statutory authority and the national provider of civilian air traffic control services. These reasons concern Airservices’ interlocutory application dated 8 July 2019 which seeks that an originating application brought by Civil Air against Airservices be set aside pursuant to r 13.01 of the Federal Court Rules 2011 (Cth) (the Rules), on the basis of want of jurisdiction.

2    The background is that Civil Air notified a dispute to the Fair Work Commission (FWC) in 2018, regarding matters arising under the applicable enterprise agreement – Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017–2020 (the EA). In summary the dispute concerned the following claims: (a) a claimed failure by Airservices to consult with Civil Air as provided by cll 7 and 8 of the EA before it withdrew agreed guidelines in relation to standby or ‘Grey Day’ shifts (the Grey Day Guidelines); (b) a claimed failure by Airservices to consult with Civil Air as provided by cll 7 and 8 of the EA before introducing Grey Days in any particular location; (c) a claimed failure by Airservices to adhere to the Grey Day Guidelines as the status quo, after being notified of the dispute, as provided by cl 10 of the EA; and (d) a dispute as to the proper construction of cl 19.18 of the EA which concerns standby or ‘Grey Day’ shifts. The dispute was not resolved by conciliation and pursuant to the dispute settlement procedure in the EA it was determined by private arbitration by the FWC.

3    Civil Air was successful in relation to some of the issues arbitrated and not in relation to others. The FWC decided that:

(a)    Airservices had an obligation to comply with the consultation obligations in cll 8.3 and 8.10 of the EA before withdrawing the Grey Day Guidelines, but not those in cl 7.2, in respect of employees in a group named the Byron Group but not in respect of employees in a group named the BNE Tower, and had failed to comply;

(b)    Airservices had an obligation to comply with the consultation obligations in cll 8.3 and 8.10 of the EA before introducing Grey Days in any particular location, but not those in cl 7.2, and had failed to comply;

(c)    Airservices had an obligation to adhere to the status quo following being notified of the dispute as required by cl 10.1(g) in relation to the Byron Group but not the BNE Tower, and had failed to comply; and

(d)    Civil Air was unsuccessful in its argument as to the construction of cl 19.8 of the EA,

see: Civil Air Operations Officers’ Association of Australia v Airservices Australia [2019] FWC 2136 (the FWC Decision).

4    Following the FWC Decision, Civil Air commenced this proceeding by way of originating application and statement of claim seeking:

(a)    declarations pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) (the FCA) and s 545 of the FWA that Airservices, by contravening cll 7.2, 8.3, 8.10 and 10.1(g) of the EA, has contravened s 50 of the FWA; and

(b)    orders pursuant to ss 546(1) and (3) of the FWA that Airservices pay pecuniary penalties for those contraventions, and that such penalties be paid to Civil Air.

In its interlocutory application Airservices contends that the Court has no jurisdiction to hear this proceeding.

5    It is uncontentious that for the Court to have jurisdiction to hear the proceeding there must be a “matter” arising under the FWA, and that existence of a “matter” depends upon whether there is a justiciable controversy between the parties. It is common ground that the arbitration was validly conducted by the FWC and that the FWC Decision is finally and conclusively binding on the parties.

6    Airservices contends in summary that all of the parties’ rights and liabilities in relation to the dispute were extinguished by the arbitral award, and that as a result there is now no subsisting justiciable controversy and thus no “matter arising” under the FWA. In the alternative, Airservices argues that Civil Air having decided to notify the dispute to the FWC and having obtained resolution of the dispute through arbitration, it made a choice between alternative and inconsistent courses of conduct and it cannot now bring a proceeding seeking declarations of contravention and the imposition of penalties by the Court. Airservices says that Civil Air seeks to approbate and reprobate and must be held to its election.

7    For the reasons I explain I consider it appropriate to dismiss the interlocutory application. In summary, the FWC determined the issues in relation to whether in the circumstances of the case Airservices had an obligation to comply with cll 7.2, 8.3, 8.10 and 10.1(g) of the EA and whether it failed to comply with those clauses, and as to the construction of cl 19.18. The period for any appeal to the Full Bench of the FWC having expired, those findings are final and conclusive, and binding on the parties. Civil Air does not seek that the Court re-decide the issues determined by the FWC, nor does it seek findings that are inconsistent with the arbitral award. With one exception to which I will later turn, it seeks declarations of contravention and the imposition of pecuniary penalties only in relation to those failures to comply with the EA that were found by the FWC, and notes that Airservices is bound by an issue estoppel in relation to the findings by the FWC.

8    However, the FWC Decision is final and conclusive only in relation to the issues determined by the arbitration. The FWC had no power to make declarations of contravention[s] of s 50 of the FWA or to impose pecuniary penalties under s 546. It could not and did not decide any questions as to whether it is appropriate for declarations of contravention to be made or to impose pecuniary penalties as such questions could only be decided by a court of competent jurisdiction. Thus the arbitral award did not deal with or determine the entirety of the justiciable controversy between the parties and there remains a “matter” arising under the FWA. I do not consider that Civil Air’s right or entitlement under the FWA to seek declarations in relation to contraventions of s 50 of the FWA based in Airservices’ failures to comply with cll 8.3, 8.10 and 10.1(g) of the EA, as found by the FWC, and to seek the imposition of pecuniary penalties for such contraventions, was extinguished by the FWC Decision. Nor do I accept that in notifying the dispute to the FWC, or in subsequently asking that the dispute be arbitrated, Civil Air made an election between alternative and inconsistent courses of conduct with the effect that it is now impermissible for it to seek declarations and the imposition of pecuniary penalties by the Court.

THE FACTS

9    The facts are not in dispute. I have drawn the following largely from the affidavit of Abigail Cooper, an employed solicitor with Ashurst Australia, the solicitors for Airservices, sworn 8 July 2019 and the documents exhibited thereto.

10    The EA, which covers Airservices, its employees and Civil Air, was approved by the FWC on 23 March 2017 and came into effect on 30 March 2017. Relevantly, it provides:

Clause 7. Airservices Policies and Procedures

7.1     Airservices’ policies and procedures pertaining to employment matters do not form part of this agreement. To the extent that there is an inconsistency between any such policy and/or procedure, the terms of this Agreement prevail.

7.2    Airservices will consult with employees and employee representative(s) in the development and variation of such policies and will not unilaterally change them without such consultation.

Clause 8. Consultation on Change

8.1    The intent of this consultation provision is to ensure employees and any employee representatives are fully informed, consulted and provided with a genuine opportunity to express their views and provide comments and/or suggestions prior to any final decision being made about changes that are likely to have a significant impact on employees covered by this Agreement and/or changes to an employee’s regular roster or ordinary hours of work. Airservices will give genuine consideration and respond to matters raised and proposals and options put forward.

8.2    These consultation arrangements support Airservices in meeting legislative and Operating Certificate requirements.

 8.3    Airservices will consult employees and their employee representatives about:

(a)    the introduction of changes that are likely to have a significant impact on employees covered by this Agreement before a final decision is made to adopt a proposal and implement any change; and/or

   (b)    changes to an employee’s regular roster or ordinary hours of work.

Consultation on changes that are likely to have a significant impact on employees

8.4    Changes that will be regarded as likely to have a significant impact on employees covered by this Agreement will include changes of a structural or technological nature, changes in the deployment or methods of operation of employees covered by this Agreement and any changes that are likely to lead to the redundancy of positions held by employees covered by this Agreement.

8.5    Before making a decision to introduce change that is likely to have a significant effect on employees, Airservices will consult with affected employees by:

…

Clause 10. Disputes Avoidance and Settlement Process

10.1    In the event of a dispute about a matter arising under this Agreement or in relation to the National Employment Standards between Airservices and an employee or employees whose employment is subject to this Agreement, the procedure to be followed to resolve the matter will be as follows:

(a)    The parties to the dispute shall genuinely attempt to resolve the dispute at the workplace level. This will involve the relevant employee or employees meeting and conferring about the matter with their manager. All relevant information regarding the matter will be exchanged before, during, or on conclusion of such meeting/s.

(b)    If the matter is not resolved at such meeting/s, or the nature of the matter is such that it is appropriate to raise it immediately with more senior levels of management, then discussions will occur between the employee (or employees) and senior management as soon as practicable.

(c)    At any time during this process, an employee (or employees) who are party to the dispute may choose to be represented by an employee representative.

(d)    If the matter cannot be resolved by following the process outlined above, then any of the parties to the dispute may apply to the FWC to have the dispute subject to a process of conciliation, or such other alternative dispute resolution process which the parties agree is appropriate and which the FWC can conduct under the Act.

(e)    If conciliation (or such other alternative dispute resolution process as has been conducted by agreement of the parties) is not successful in resolving the dispute, or if the parties agree that they wish the FWC to settle the dispute without recourse to conciliation or another alternative dispute resolution process, the FWC can arbitrate the dispute and make a determination that is binding on the parties, subject to either party exercising a right of appeal against the decision to a Full Bench of the FWC.

(f)    Unless otherwise agreed by the parties to the dispute, the powers that the FWC can exercise under this clause 10.1 are those powers available to it under the Act as at the time that this Agreement commences to operate.

(g)    While a concern or dispute is being dealt with, work will continue as normal being the status quo save for any bona fide safety concerns.

(h)    The employer and employees will continue as usual in respect of work arrangements and work performed.

…

Clause 19. Hours of Work

19.18 Stand-by rosters (‘Grey Days’)

(a)    Where Airservices considers it appropriate to do so, rosters may be drawn so as to include provision for employees to be rostered on stand-by shifts. These ‘grey day’ stand-by shifts on which employees will be rostered on stand-by for relief in the event of absence of an employee who is rostered on duty.

(b)    When rostered on stand-by, an employee will be rostered for a specific shift on a specific day. This rostered stand-by shift will be called the “nominal shift”. Such shift will not commence before 0600 local time and will not be of more than of eight (8) hours duration.

(c)    When on stand-by an employee will not attend for the nominal shift unless called in. However, the employee must be available to be called in to perform duty for a period representing twice the length of the nominal shift and the employee shall be “on call”, for a period of nine (9) hours or such other period as agreed provided that the employee will be:

(i)    stood down (1) hour after the commencement of the last shift in the stand-by period.

(ii)    available to report for duty at the nominated start time or in any event not later than two (2) hours after notification.

(d)    When rostered on stand-by an employee will be paid at their ordinary rate of pay for a shift in respect of the nominal shift whether or not they are required to attend for duty.

(e)    Provisions of these principles relating to shift commencement, cessation and extension of time off apply to the time actually worked.

11    The genesis of the dispute between the parties is not central to my conclusion but it may assist to understand that the EA permits an Air Traffic Controller who is unavailable to work for an unforeseen reason, but otherwise scheduled to work, to be replaced by another person. To cover against the eventuality of an employee becoming unavailable to work, the EA provides that a replacement employee may be held away from work for up to the equivalent of double the relevant shift provided they are ready and fit for duty, in order to step in at short notice to cover a single shift if required. To achieve this, the standby employee is assigned to a nominal roster called a “Grey Day” roster but is not required to attend for work unless called to do so, and is paid whether or not he or she is called to work. It seems that the parties agreed that cl 19.18 of the EA provides for replacement by someone on the same roster, but disagreed as to whether a standby employee on some other roster could be brought in to replace the absent employee: FWC Decision at [6]-[7].

12    In early 2017, Airservices introduced standby or Grey Day rosters for employees under cl 19.18 of the EA. As part of that process, following discussions with representatives of Civil Air, the Byron Group Air Traffic Control Line Manager prepared a guidelines document regarding the operation of standby or Grey Day shifts, which I have called the Grey Day Guidelines.

13    In May 2018, Airservices formed the view that the Grey Day Guidelines were inconsistent with a decision of the FWC regarding the operation of the predecessor to cl. 19.18 in an earlier enterprise agreement between Airservices and Civil Air. It informed Civil Air that it was withdrawing the Grey Day Guidelines (the Withdrawal Decision). On 1 July 2018, Civil Air wrote to Airservices complaining about a lack of consultation regarding the Withdrawal Decision. On 2 July 2018, Airservices confirmed the Withdrawal Decision in an email of that date.

14    By letter dated 5 July 2018, Civil Air informed Airservices of its view that by the Withdrawal Decision, Airservices had “unilaterally” decided to withdraw the Grey Day Guidelines. On a fair reading of the letter, Civil Air said that it was in dispute with Airservices in relation to the Withdrawal Decision, and alleged that Airservices had failed to consult in relation to that decision. The letter noted that clause 10.1(g) of the EA, which appears under the heading Disputes Avoidance and Settlement Process, provides that: “[w]hile a concern or dispute is being dealt with, work will continue as normal being the status quo save for any bona fide safety concerns.” On that basis, Civil Air sought reinstatement of the Grey Day Guidelines until the dispute had been dealt with.

15    By letter dated 11 July 2018, Airservices informed Civil Air of its view that the Grey Day Guidelines only applied to employees in a group named the Byron Group. It said that no broader scope for the guidelines was ever intended and noted that they were not published in any Airservices manual. Thus, Airservices said there was no requirement for it to consult with Civil Air in relation to the Withdrawal Decision pursuant to either cll 7 or 8 of the EA. It said that the decision of the FWC in relation to the predecessor to cl 19.18 of the EA represented the “status quo” and rostering practices would continue in accordance with that FWC decision and the EA. But in the event that a formal policy or procedure was developed Airservices said it would ensure that “appropriate” consultation occurs in accordance with cl 7.1 of the EA.

16    On 13 July 2018, Civil Air notified the FWC of a dispute pursuant to cl 10.1(d) of the EA (Dispute Notification). The Dispute Notification said, among other things, that:

(a)    in January 2017, Airservices and a delegate of Civil Air had consulted and agreed the Grey Day Guidelines for the Byron Group in Brisbane;

(b)    the Grey Day Guidelines were subsequently applied to other groups in Brisbane;

(c)    on 13 May 2018, Airservices unilaterally decided to withdraw the Grey Day Guidelines;

(d)    the Withdrawal Decision was a decision which required consultation in accordance with cl 8 of the EA;

(e)    on 27 June 2018, a delegate of Civil Air in Brisbane met with a senior service manager of Airservices and it was agreed that the Grey Day Guidelines would be reinstated until a consultation process was undertaken;

(f)    on 2 July 2018, Airservices refused to reinstate the Grey Day Guidelines;

(g)    on 5 July 2018, Civil Air wrote to Airservices and advised that Civil Air and Airservices were in dispute, and therefore the status quo position in cl 10.1(g) of the EA applied;

(h)    on 11 July 2018, Airservices responded and said that the prior FWC decision in relation to the predecessor to cl 19.8 of the EA represented the status quo and rostering practices would continue in accordance with that decision and the EA; and

(i)    that Civil Air and Airservices “remain in dispute about the status quo. It is our [Civil Air’s] position that the Guidelines represent the status quo regarding the Stand by shifts as these were in existence before the dispute, ergo, were the ‘previous position of affairs’.”

The only dispute resolution mechanism mentioned in the Dispute Notification was conciliation by the FWC.

17    On 2 August 2018, a conciliation conference was held before Commissioner Wilson of the FWC. The dispute did not resolve at conciliation.

18    On 9 October 2018, in accordance with a request made by Commissioner Wilson on 2 August 2018, Civil Air sent to Airservices a document titled “Concise Summary of the Dispute to be Arbitrated” (the Concise Summary) which set out eight questions for determination (the Questions for Determination). As previously set out, cl 10.1(e) of the EA provides that if conciliation is unsuccessful in resolving a dispute the FWC can arbitrate the dispute. It provides that if the FWC arbitrates a dispute it can “make a determination that is binding on the parties, subject to either party exercising a right of appeal against the decision to a Full Bench of the FWC.”

19    On 25 October 2018, the FWC made orders for the filing of materials and listed the dispute for hearing on 4 and 5 February 2019.

20    On 23 November 2018, Civil Air filed and served its materials which included the following:

(a)    Civil Air’s Questions for Determination;

(b)    Civil Air’s Outline of Submissions; and

(c)    eight witness statements.

21    Civil Air’s Outline of Submissions described the dispute in the following terms:

On 12 July 2018, the applicant notified the Fair Work Commission that a dispute had arisen between it and Airservices in relation to:

(a)    the proper construction of the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017-2010 (sic) (the 2017 Agreement) as it relates to standby shifts (the Construction Question);

(b)    the revocation by Airservices Australia (Airservices) of certain guidelines relating to the use of standby shifts, without consultation as required by the 2017 Agreement (the Guidelines Question); and

(c)    the proposed national introduction of standby shifts into employee rosters, without consultation as required by the 2017 Agreement (the National Roll-out Question);

(the Dispute).

22    On 20 December 2018, Airservices filed and served its materials which included the following:

(a)    Airservices’ Outline of Submissions; and

(b)    two witness statements.

23    Airservices’ Outline of Submissions described what was being sought by Civil Air in the following terms:

The application by the Civil Air Operations Officers’ Association of Australia (Civil Air) seeks:

(a)    to confine the operation of standby shifts/grey days under clause 19.18 of the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017-2020 (the Agreement) (the Construction Question);

(b)    a determination that it is not open to Airservices Australia (Airservices) to withdraw the document entitled “Application of Grey Days” (the Guidelines) without consultation is (sic) required by clauses 7 or 8 of the Agreement (the Guidelines Question);

(c)    a determination that in refusing to apply the Guidelines, Airservices failed to comply with the status quo provision set out in clause 10(g) of the Agreement (the Status Quo Question);

(d)    a determination that it is not open to Airservices to “roll out” more generally rosters incorporating standby shifts/grey days (the Roll Out Question).

24    On 30 January 2019, Civil Air filed its evidence in reply, comprising five further witness statements.

25    The arbitration hearing took place before Commissioner Wilson in the FWC on 4 and 5 February 2019.

26    On 11 April 2019, Commissioner Wilson handed down the FWC Decision. The decision dealt with the dispute by reference to the Questions for Determination set out in Civil Air’s Concise Statement. Those Questions for Determination and the applicable findings were as follows:

27    In summary, the effect of the FWC Decision was that Civil Air succeeded on Issues A1, A2 and B as they related to employees in the Byron Group, save to the extent that it relied on cl. 7.2 of the EA. It failed on Issues A1, A2, and B as they related to employees in the BNE Tower. It failed on issue C in respect of both the Byron Group and the BNE Tower.

28    On 2 May 2019, the 21 day period for an application for permission to appeal to the Full Bench of the FWC in relation to the FWC Decision expired: see s 604 of the FWA and r 56 of the Fair Work Commission Rules 2013. Neither party sought permission to appeal or appealed.

29    With one exception, the application for declarations and penalties in this proceeding relate to issues on which Civil Air was successful in the arbitration, and to the extent that it was unsuccessful in the arbitration Civil Air does not seek declarations and penalties. The exception relates to the part of Issues A1 and A2 which concern whether in the circumstances of the case Airservices was required to comply with the consultation obligations in cl 7.2 of the EA and whether it failed to do so. I will deal with this exception later.

IS IT APPROPRIATE TO DECIDE THE JURISDICTIONAL CHALLENGE FIRST

30    Airservices seeks that the jurisdictional challenge be dealt with before the Court hears the substantive application. Civil Air does not oppose that course.

31    In Federated Engine-Drivers and Firemen’s Association of Australasia v Broken Hill Pty Co Limited (1911) 12 CLR 398 at 415 Griffith CJ said that the first duty of a court or tribunal is to satisfy itself that it has jurisdiction to hear a proceeding. In the usual case the issue of jurisdiction should be determined as a preliminary matter: Zhang v Zemin (2010) 79 NSWLR 513 at [33] per Spigelman CJ, with Allsop P and McClellan CJ at CL agreeing. The Court is not, however, under an unqualified duty to satisfy itself that it has jurisdiction in the proceeding as a preliminary issue. Ultimately, it is for the Court to determine, in the interests of justice, the time at which and the manner in which a jurisdictional issue is to be determined: Bray v F Hoffman-La Roche Ltd [2002] FCA 243; (2002) 118 FCR 1 at [185]-[187], Merkel J following Katz J in Khatri v Price [1999] FCA 1289; (1999) 95 FCR 287 at [14].

32    In the present case, if the question was decided in Airservices’ favour, it would have meant that the parties avoided the wasted time and expense of a hearing on the merits of the substantive application. Having regard to that, and to the position taken by the parties, I was satisfied it was in the interests of justice to determine the jurisdictional challenge first.

GENERAL PRINCIPLES

Jurisdiction

33    There is no difference between the parties in relation to the principles regarding jurisdiction. They differ only in relation to their application in the circumstances of the case.

34    Section 19(1) of the FCA provides that the Federal Court has “such original jurisdiction as is vested in it by laws made by the Parliament.” Section 562 of the FWA provides that the Federal Court has jurisdiction “in relation to any matter (whether civil or criminal) arising under this Act.” Thus, two conditions must be satisfied for the Court to have jurisdiction pursuant to the FWA. First, there must be a “matter”. Second, that matter must “arise under” the FWA.

35    Airservices’ submits that in the circumstances of the present case there is no “matter”. If, contrary to Airservices’ submissions, the Court concludes that there is a “matter” Airservices does not contend that any such “matter” does not “arise under” the FWA.

36    The word “matter” in s 562 of the FWA must be construed consistently with s 76(ii) of the Constitution and it adopts the meaning and content of “matter” in Chapter III: Duggan v Metropolitan Fire and Emergency Services Board [2017] FCAFC 112; (2017) 251 FCR 1 at [45] (Tracey, Wigney and O’Callaghan JJ); Re Wakim [1999] HCA 27; (1999) 198 CLR 511 at 585-86 [139]-[142] (Gummow and Hayne JJ); Palmer v Ayres [2017] HCA 5; (2017) 259 CLR 478 at [26]-[27] (Kiefel, Keane, Nettle and Gordon JJ).

37    The meaning of “matter” was well-expressed by Allsop J (as his Honour then was), writing extra-judicially in 2007 where his Honour said:

The “matter” is the justiciable controversy between the actors to it comprised of the substratum of facts and claims representing or amounting to the dispute or controversy between or amongst them. It is not the cause or causes of action brought by the plaintiff. A justiciable controversy is identifiable independently of proceedings brought for its determination. It is the whole controversy in respect of which it is the function of the court or courts (the one controversy may be fought in different places) exercising the judicial power of the Commonwealth to quell. It is the “subject matter for determination in a legal proceeding.

Allsop, Justice James “An Introduction to the Jurisdiction of the Federal Court of Australia” [2007] FedJSchol 15

The legal consequences of arbitration

38    There is no difference between the parties regarding the relevant principles as to the legal consequences of a decision by arbitration. Again, their differences arise in relation to the application of the principles in the circumstances of the case.

39    In determining the dispute by private arbitration pursuant to cl 10.1 of the EA, the FWC was not exercising public power; it was acting as a private arbitrator. In Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission [2001] HCA 16; (2001) 203 CLR 645 the High Court considered the operation of s 170MH of the former Industrial Relations Act 1988 (Cth). That section provided that procedures in an industrial agreement which were designed to prevent and settle disputes between employers and employees covered by the agreement could, if the former Industrial Relations Commission so approved, empower the Commission to settle disputes over the application of the agreement. The Court said (at [31]-[32]):

Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator’s powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator’s award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it.

To the extent that s 170MH of the IR Act operates in conjunction with an agreed dispute resolution procedure to authorise the Commission to make decisions as to the legal rights and liabilities of the parties to the Agreement, it merely authorises the Commission to exercise a power of private arbitration. And procedures for the resolution of disputes over the application of an agreement made by parties to an industrial situation to prevent that situation from developing into an industrial dispute are clearly procedures for maintaining that agreement. Parliament may legislate to authorise the Commission to participate in procedures of that kind. Accordingly, s 170MH of the IR Act is valid.

(Emphasis added).

40    In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (2015) 235 FCR 305 at [35] (Dowsett, Tracey and Katzmann J), the Full Court said, after referring to the relevant authorities, “it is well settled that “arbitration” by the FWC pursuant to a term in an enterprise agreement is a private arbitration, based upon the consent of the parties, and not upon the coercive authority of the Australian state.”

41    In TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia [2013] HCA 5; (2013) 251 CLR 533 at [77] to [79] (Hayne, Crennan, Kiefel and Bell JJ) the High Court said the following:

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

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

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

42    Similarly, in a separate judgment French CJ and Gageler J said (at [9]):

…the conception that has for centuries underpinned the understanding of an arbitral award at common law as “a satisfaction pursuant to [the parties’] prior accord of the causes of action awarded upon” and as thereby “precluding recourse to the original rights the determination of which had been referred to arbitration”. That conception, in short, is that “the foundation of arbitration is the determination of the parties’ rights by the agreed arbitrators pursuant to the authority given to them by the parties”.

43    The plurality in TCL (at [77]) referred with approval to the decision in Dobbs v National Bank of Australasia Ltd [1935] HCA 49; (1935) 53 CLR 643 at 653 (Rich, Dixon, Evatt and McTiernan JJ), where their Honours said:

But if, before the institution of an action, an award was made, it governed the rights of the parties and precluded them from asserting in the Courts the claims which the award determined. By submitting the claims to arbitration, the parties confer upon the arbitrator an authority conclusively to determine them. That authority enables him to extinguish an original cause of action. His award will do so if it negatives the existence of liability. It will do so if it operates, not merely to ascertain the existence and measure of the original liability, but to impose a new obligation as a substitute, whether the obligation results from the tenor of the award or from an antecedent undertaking of the parties to give effect to the determination it embodies… The award given under authority of the parties operates as a satisfaction pursuant to their prior accord of the causes of action awarded upon …

(Citations omitted. Emphasis added.)

AIRSERVICES’ SUBMISSIONS

44    Airservices relies on the principles in TCL and Dobbs and argues that, once the arbitration by the FWC was seen through to completion and the dispute determined through the FWC Decision, the arbitral award extinguished the original dispute. It contends that it is to that decision that the parties must now look to determine their rights and obligations, not to the original dispute. It says that the former rights of the parties in relation to the dispute resolved through the FWC Decision having been extinguished by operation of accord and satisfaction, there is no subsisting justiciable controversy between them, and thus no “matter” within the meaning of s 562 of the FWA.

45    It says that the decisions in Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245 (Bromberg J); upheld on appeal in Energy Australia Yallourn Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union [2018] FCAFC 146; (2018) 363 ALR 60 (Rares and Barker JJ (Flick J agreeing)) (Energy Australia appeal), and Prados v Chief Commissioner of Police for the State of Victoria [2018] FCCA 3274 (Kelly J) are relevantly on all fours. I will later deal with those decisions in more detail. For the present it suffices to note that in Energy Australia the Full Bench of the FWC determined, by private arbitration, a dispute between the employer and five unions regarding the proper construction of a clause of the applicable enterprise agreement. The Full Bench did not accept the construction advanced by Energy Australia, and preferred that advanced by the unions. Energy Australia subsequently filed an originating application in this Court seeking a declaration as to its preferred construction of the clause. Bromberg J set aside the originating application for want of jurisdiction, doing so on the basis that the justiciable controversy between the parties had been extinguished by the arbitral award and there was no longer any subsisting “matter”. Similarly, in Prados Kelly J held that the determination of an arbitral panel extinguished the dispute between the parties as to the construction of the relevant clauses in an enterprise agreement and there was therefore no “matter”.

46    In response to Civil Air’s contention that the rights and entitlements it seeks to be vindicated through the originating application are not the same rights and entitlements as were determined by the FWC Decision, Airservices submits Civil Air’s contention: (a) fails to recognise the breadth of the dispute before the FWC; and (b) pays insufficient regard to the scheme of the FWA and the scheme for dispute settlement in the EA, including the escalating procedures for dispute resolution set out in cl 10.1 of the EA.

47    Airservices says that the purported distinction drawn by Civil Air between the claims or “causes of action” determined through the FWC Decision and the claims which Civil Air makes through the originating application clouds the issue and seeks to erect an “artificial limitation or constraint on the efficacy of the dispute resolution mechanism”. It argues that this purported distinction suggests that a mere re-description of the dispute or matter and/or the seeking of a different remedy in subsequent court proceedings would enable the original dispute to be re-agitated. It submits that it is of “no moment” that in the present proceeding Civil Air is seeking declarations of contravention of s 50 of the FWA and pecuniary penalties under s 546 of the FWA, whereas before the FWC it did not make such claims, because the underlying factual substratum or matter of the claim made by Civil Air has been determined and the dispute is extinguished and no longer extant.

48    Airservices argues that the originating application will require the Court to exercise jurisdiction in relation to the same facts and legal assertions as in the dispute determined by the FWC. It notes that in Energy Australia, notwithstanding that declaratory relief was not available in the arbitration before the Full Bench of the FWC, Bromberg J nevertheless held that the Court did not have jurisdiction to grant the relief sought in the originating application.

49    Airservices argues that the statutory scheme relevantly includes:

(a)    in order to approve an enterprise agreement, the FWC “must be satisfied”, amongst other things, that “the agreement includes a term…that provides a procedure that requires or allows the FWC, or another person who is independent…to settle disputes…about any matters arising under the agreement…”: s 186(6)(a)(i) of the FWA;

(b)    if such a dispute settling term requires or allows the FWC to deal with a dispute, and, in accordance with the term, the parties have agreed that the FWC may arbitrate the dispute, the FWC may arbitrate on application by a party to the dispute: ss 738(b); 739(1), 739(4) and 739(6);

(c)    in dealing with a dispute, the FWC may exercise any powers it has under Subdivision B of Division 3 of Part 5-1 of the FWA (s 595(4)) including that the FWC may “inform itself…in such manner as it considers appropriate” (s 590(1)), “is not bound by the rules of evidence and procedure…” (s 591), and “is not required to hold a hearing…”(s 593(1)); and

(d)    separate to utilising a dispute settlement procedure required by s 186(6) the persons listed in s 539(2) item (4) can file proceedings in the Federal Court, Federal Circuit Court and/or an eligible State or Territory court, seeking orders under s 545 and/or s 546 of the FWA in respect of an alleged contravention of enterprise agreement.

50    In relation to the escalating procedures for dispute settlement in cl 10 of the EA, Airservices notes that the clause includes the following provisions:

(a)    clause 10.1 of the EA relevantly provides that “[i]n the event of a dispute about a matter arising under this Agreement…the procedure to be followed to resolve the matter will be…” as set out in cll 10.1(a)-(b) and (d)-(e);

(b)    clause 10.1(a) provides for the parties to the dispute to first “genuinely attempt to resolve the dispute at the workplace level”, then escalating to more senior levels of management: cl 10.1(b);

(c)    “If the matter cannot be resolved by following the process outlined above, then any of the parties to the dispute may apply to the FWC to have the dispute subject to a process of conciliation”, as set out in cl 10.1(d);

(d)    “If conciliation…is not successful in resolving the dispute… the FWC can arbitrate the dispute and make a determination that is binding on the parties, subject to either party exercising a right of appeal against the decision to a Full Bench of the FWC”, as provided in cl 10.1(e); and

(e)    “Unless otherwise agreed by the parties to the dispute, the powers that the FWC can exercise under this clause 10.1 are those available to it under the Act…”: cl 10.1(f).

51    On Airservices’ argument, every step taken under clause 10.1 of the EA was part of the procedure to resolve “the dispute” or “the matter”, and it says that the clause uses the words “matter” and “dispute” interchangeably. It also notes that for a dispute to proceed to arbitration under cl 10.1(e) it must necessarily have first progressed through the procedures outlined in cll 10.1(a), (b) and (d) which include a genuine attempt to resolve the dispute at a workplace level, then a referral to more senior levels of management, then a referral of the dispute to the FWC for conciliation or through another alternative agreed dispute resolution process.

52    Airservices submits that the “dispute” that was resolved by arbitration by the FWC under cl 10.1(e) was the same “matter” that had been through the earlier steps in the dispute settlement procedure and that, once arbitrated, that determination of the dispute is binding on the parties, thus resolving the “matter”. It says that the accord and satisfaction achieved through the FWC Decision is in relation to whatever “dispute” was resolved in accordance with cl 10.1 of the Agreement which is the whole of the dispute referred to arbitration. On its argument that had the effect of extinguishing the entire controversy or “matter”.

53    It says that the dispute referred to the FWC and resolved through the FWC Decision was broader than the Questions for Determination set out by Civil Air. It argues that taking a narrow view of the dispute or of cl 10.1 of the EA – the purpose of which is to effect the resolution of disputes – would defeat the purpose of cl. 10.1. It also argues that construing cl 10.1 as allowing a dispute to be resolved by arbitration but then permitting a party to later face adjudication through the courts constitutes “double jeopardy” and the clause may not be compliant with s 186(6) of the FWA. Airservices says that the dispute concerned the issues described in the Dispute Notification, which, under the heading “What is the dispute about?” set out the following relevant matters:

(a)    the application of the Grey Day Guidelines to Airservices’ Byron Group and other groups of employees in Brisbane;

(b)    what Civil Air described as Airservices’ decision to “unilaterally withdraw” the application of the Grey Day Guidelines;

(c)    the requirement to consult pursuant to cl 8 of the EA;

(d)    the requirement that work “continue as normal being the status quo” under cl 10.1(g) of the EA; and

(e)    the effect of the earlier decision of the FWC in relation to a predecessor provision to cl 19.8 of the EA.

It says that through the Questions for Determination Civil Air then added a further related element to the dispute, being the alleged requirement for Airservices to consult pursuant to cl 7.2 of the EA. Having regard to the breadth of the dispute which was resolved through arbitration, Airservices contends that there no longer was, nor is there now capable of being, any dispute as between Airservices and Civil Air as to the issues referred to in the Dispute Notification and in the Concise Summary.

54    On Airservices’ submissions the principles of accord and satisfaction described in Dobbs and TCL are not confined to preventing a party who has been unsuccessful in an arbitration seeking to re-agitate or re-litigate their rights in the courts. It argues that what is settled by the outcome of the arbitration is the respective rights and liabilities of the parties, and it is the arbitrated outcome, not the parties’ pre-existing rights or liabilities that is determinative of whether or not there remains a “matter”. On its argument, acceptance of Civil Air’s approach would mean an employer is subject to the “double jeopardy” of having a matter agitated in the FWC pursuant to the applicable dispute resolution procedure and then, once the FWC has arbitrated the dispute, being forced to defend further proceedings in a court directed to declarations, penalties and perhaps compensation. It says that is inconsistent with the statutory scheme.

55    Against Civil Air’s submission that the decision in Dobbs does not assist it, Airservices’ submits that, unlike in Dobbs where the question referred to private arbitration was an element of a broader dispute, in the present case there was no suggestion that the dispute referred to the FWC was part of a broader proceeding which would be ultimately determined by the Courts. It contends that to submit, as Civil Air does, that the dispute between the parties could have parts subjected to private arbitration and parts subjected to adjudication by the courts is inconsistent with the statutory scheme and with the terms and procedures set out in the EA for dispute resolution.

56    It argues that it is inconsistent with the statutory scheme for resolution of disputes that a dispute may be resolved through mechanisms that include arbitration by the FWC (which it notes is not bound by the rules of evidence and may proceed to determine the dispute in such manner as it considers appropriate and without a hearing) and then for that arbitral award to be taken up by the successful party and used to re-agitate the matter through a claim in the courts for a pecuniary penalty. It says that, just as it is not open for Civil Air to re-agitate the issues in respect of which it was unsuccessful in the arbitration, it is not open for it to re-agitate the issues in respect of which it succeeded in part or in whole.

57    Airservices accepts that a consequence of its argument that the entire dispute was resolved by the FWC is that there is now no vehicle for Civil Air to seek or the Court to grant declarations or to order pecuniary penalties in relation to the dispute. But it contends that is a consequence of Civil Air’s election to have the dispute resolved by the FWC, a body which it knew was incapable of granting such remedies. It says that is an outcome consistent with the scheme of the FWA, including the object in s 3(e) of the FWA of “providing accessible and effective procedures to resolve grievances and disputes”.

58    In the alternative, Airservices argues that Civil Air exercised its right under the EA to have the dispute determined by the FWC, which dispute relevantly concerned Airservices’ alleged non-compliance with cll 7.2, 8.3, 8.10 and 10.1(g) of the EA, and it knew that the FWC did not have power to make declarations of right or to order the imposition of a pecuniary penalty. It says that in taking that course Civil Air chose between two alternative and inconsistent courses of conduct and to allow Civil Air to now proceed with the originating application would be to permit it to approbate and reprobate. It contends that Civil Air must be held to its election and says that Civil Air is bound by its decision to refer the dispute to the FWC and by the way in which the FWC determined it, and that it is now not open to Civil Air to seek to re-agitate those issues through this proceeding.

59    It relies on Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 at 421, where Brennan J (as his Honour then was) explained:

Election consists in a choice between rights which the person making the election knows he possesses and which are alternative and inconsistent rights. A doctrine closely related to election, and sometimes treated as a species of election, is the doctrine of approbation and reprobation. This doctrine precludes a person who has exercised a right from exercising another right which is alternative to and inconsistent with the right he exercised as, for example, where a person ‘having accepted a benefit given him by a judgment, cannot allege the invalidity of the judgment which conferred the benefit’. An election is binding on the party who makes it once it is made overtly - or, at all events, not later than on the communication of the election to the party or parties affected thereby. It is binding whether or not others who are affected by the election have acted in reliance on it. In this respect, election is to be distinguished from estoppel.

(Citation omitted. Emphasis added.)

60    Airservices again argues that the scheme of the FWA emphasises the resolution of disputes, and says that it is axiomatic that, if a party to a dispute resolution process can subsequently bring a proceeding before a court seeking declarations and penalties in respect of the matters that were the subject of the dispute, then the FWC will not have resolved the dispute. Rather, the dispute resolution process will simply have facilitated the further agitation of the dispute. It argues that if Parliament had intended that the procedure for resolution of industrial disputes by private arbitration should be some form of “stalking horse”, “dry run” or part determination of matters that could then be agitated in the courts that would have been made clear. Further, had that been intended, Parliament would have put in place mechanisms for preventing the abuse of such a process including by requiring the application of the rules of evidence.

CONSIDERATION

Airservices’ primary submission

61    Airservices accepts that the existence of an accord and satisfaction is at the heart of whether or not a justiciable controversy remains, and that as the moving party it has the onus of establishing that there has been an accord and satisfaction such that any relevant justiciable controversy has been extinguished, and there is no “matter”. I am not persuaded that there is no “matter” arising under the FWA.

62    First, in my view, Airservices’ submissions misapply the principles applicable to the legal consequences of the determination of rights and liabilities by arbitration.

63    An arbitral award operates “as a satisfaction, pursuant to [the parties] prior accord of the causes of action awarded upon” (emphasis added): Dobbs at 653. In TCL (at [77]) the plurality endorsed the statement in Dobbs (at 653) that, “if, before the institution of an action, an award was made, it [the award] governed the rights of the parties and precluded them from asserting in the Courts the claims which the award determined” (emphasis added). As the plurality said in TCL (at [78]) “the making of the award…both extinguishes the original cause of action and imposes new obligations on the parties in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. The former rights and liabilities of the parties are discharged by an accord and satisfaction” (emphasis added). In my view, while an arbitral award extinguishes the parties’ rights and liabilities in relation to “the claims which the award determined” it does not operate to extinguish their rights and liabilities in relation to claims which were not determined. Yet that is the result of Airservices’ argument. In my view it is the parties’ rights and liabilities in relation to the “original” cause of action or claim “awarded upon” which are extinguished by an arbitral award, and not the parties’ rights and liabilities in relation to any cause of action or claim which was not “awarded upon”. Any such cause of action or claim was not the subject of the arbitration.

64    In Letang v Cooper [1965] 1 QB 232 at 242-3 Lord Diplock explained that a cause of action is “simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person”. To assert a cause of action is to assert that facts exist which, if proven, would constitute a contravention of a legal norm by another person. Such facts may, of course, constitute contraventions of more than one recognised legal norm, and there may exist more than one cause of action in respect of the same facts. That is significant in the present case because it is plain that not all of the causes of action or claims that Civil Air asserts were capable of being arbitrated by the FWC, and in my view it is plain from the FWC Decision that they were not all the subject of the arbitration.

65    It is trite that the FWC had no power to make declarations of contravention of s 50 of the FWA in relation to any failures to comply with any terms of the EA which it found, nor any power to order the imposition of a pecuniary penalty, nor (although not claimed in this proceeding) any power to order compensation to Civil Air or its members.

66    Section 545 of the FWA and s 21 of the FCA are the relevant sources of power to make declarations of contravention of s 50. Section 545 is headed “Orders that can be made by particular courts”. Subsection (1) empowers the Federal Court or the Federal Circuit Court to make any order the court considers appropriate if the court is satisfied that the person has contravened or proposes to contravene a civil remedy provision. Section 50 of the FWA is a civil remedy provision. It provides that “a person must not contravene a term of an enterprise agreement”. Section 545(2) of the FWA provides, without limiting s 545(1), that the available orders include: injunctive relief (s 545(2)(a)); orders requiring compensation to be paid by the contravening party for loss suffered (s 545(2)(b)); an order for reinstatement of a person (s 545(2)(c)). The FWA does not provide corresponding powers to the FWC.

67    Section 546 of the FWA is headed “Pecuniary penalty orders”. Subsection (1) provides that the Federal Court, the Federal Circuit Court or an eligible State or Territory court may order a person to pay a pecuniary penalty if the Court is satisfied that the person has contravened a civil remedy provision. The FWC is not so empowered.

68    In my view the FWC could only determine that part of the justiciable controversy between the parties that went to arbitration, and not any part or parts which did not. By the making of the FWC Decision the parties’ rights and liabilities in relation to the causes of action or claims “awarded upon” were extinguished and replaced by the arbitral award, but any other rights or liabilities beyond those were not extinguished. Thus, there remains a “matter” and the Court has jurisdiction.

69    At least in part, Airservices’ argument that the entirety of the justiciable controversy between the parties was extinguished by a determination of what was, necessarily, only part of the controversy, seems to be based in a misconception as to the breadth of what may constitute a “matter”. In Palmer at [26]-[27] the plurality explained:

A “matter”, as a justiciable controversy, is not co-extensive with a legal proceeding, but rather means the subject matter for determination in a legal proceeding – “controversies which might come before a Court of Justice”. It is identifiable independently of proceedings brought for its determination and encompasses all claims made within the scope of the controversy. What comprises a “single justiciable controversy” must be capable of identification, but it is not capable of exhaustive definition. “What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships”.

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

(Emphasis in original. Citations omitted.)

70    A “matter” in the sense of a justiciable controversy is identifiable independently of a proceeding brought in relation to it, and it includes all controversies between the parties which might come before a court or courts. Different parts of the one justiciable controversy may be fought in different places. Thus a proceeding in one court might advance claims only in respect to a part of the justiciable controversy and another proceeding might advance claims in respect to another part. For there to be a “matter” there must be “an immediate right, duty or liability to be established by the determination of the Court” and only a claim is necessary.

71    To determine what comprises the justiciable controversy or “matter” in the present case it is necessary to consider what justiciable controversies exist between the parties which might come before a court. In the present case the immediate rights and liabilities to be established by a court are Civil Air’s claim for, and Airservices’ liability for, declarations of contravention of s 50 of the FWA Act and the imposition of pecuniary penalties. Those claims could not be brought before the FWC and could only be brought before a court of competent jurisdiction. The error in Airservices’ argument is that it seeks to bundle up the parties’ rights and liabilities in relation to the entirety of the claims Civil Air might make and say that they were all determined by the FWC Decision, and thereby extinguished, when some parts of the justiciable controversy could not be and were not determined by the FWC.

72    Nor do I accept Airservices’ argument that the dispute decided by the FWC was relevantly broader than the Questions for Determination in Civil Air’s Concise Summary. In asserting that the dispute was broader Airservices relied on the issues referred to in the Dispute Notification (see [53] above) and noted that the FWC Decision said (at [12]) that “[i]n characterising the nature of a dispute the Commission is not confined to the application filed to deal with the dispute”. It also noted the FWC Decision (at [12]) which said that “[t]he character of the dispute is distinguishable from any relief which may be sought, or granted, following an arbitration of the dispute.”

73    On a fair reading the Dispute Notification, the Concise Summary, Civil Air’s Outline of Submissions and Airservices’ Outline of Submissions all show that the dispute before the FWC for arbitration was not relevantly broader than the Questions for Determination. But even if Airservices’ contention as to the breadth of the dispute be accepted, there is nothing in the Dispute Notification (or any of the other documents referred to) to indicate that the dispute before the FWC included a claim for contravention of s 50 of the FWA, for a declaration in that regard, or for the imposition of pecuniary penalties under s 546 of the FWA.

74    As the Full Court said in Duggan (at [63]) the extent of any material which constitutes an “award” is to be determined on a case-by-case basis. The Court should examine all of the circumstances with a view to determining whether the arbitrator intended that all or some of his or her reasons form part of the award, and other documents may also be incorporated by reference. In the present case, I consider the issues decided by arbitration were the Questions for Determination and not other issues. The FWC Decision is replete with examples where it decided the dispute only by reference to the Questions for Determination: e.g. at [8]-[9] and [150].

75    The focus in TCL and in Dobbs is not on the breadth of the justiciable controversy between the parties but on the claims made and the arbitral award made to determine those claims; that is, upon the causes of action “awarded upon”. In that sense Dobbs, while distinguishable from the present case, is of assistance. In Dobbs the High Court was concerned with a deed of guarantee which included a term that a certificate issued by an officer of the respondent bank stating the balance of principal and interest due from the customer was conclusive evidence of the customer’s indebtedness to the bank. The Bank sued the guarantor, relying on the certificate as proof of the customer’s indebtedness. The guarantor denied that the customer was indebted. In seeking to avoid the operation of the certificate, the guarantor submitted that the term was void as it attempted to oust the jurisdiction of the courts upon an issue essential to the guarantor’s liability.

76    The High Court rejected the guarantor’s argument and held that parties could agree that “any issue might be submitted to arbitration, and upon that issue the award would be as conclusive upon the parties as an award upon the whole cause of action if that had been submitted” (emphasis added): Dobbs at 654. The reference to that issue is significant in my view. The High Court accepted that the certificate was binding in respect of the amount of the customer’s indebtedness, but that did not resolve the entire dispute. The remaining elements of the bank’s cause of action fell to be determined by the Court.

77    Similarly, in the present case the questions as to whether Airservices failed to comply with cll 7.2, 8.3, 8.10 and 10.1(g) of the EA were arbitrated by the FWC and it finally and conclusively determined those issues. They were the causes of action or claims “awarded upon”. The parties’ rights and liabilities in relation to the remaining parts of the justiciable controversy, Civil Air’s claims for declarations of contravention of s 50 and for pecuniary penalties, fall to be determined by this Court.

78    It should also be kept in mind that while the claims in the originating application are based in the same substratum of facts as the Questions for Determination arbitrated by the FWC, the originating application does not seek that the Court decide precisely the same issues. The central questions raised by the originating application are:

(a)    whether it is appropriate to make declarations pursuant to s 21 of the FCA and/or s 545 of the FWA that Airservices, by contravening cll 7.2, 8.3, 8.10 and 10.1(g) of the EA, has contravened s 50 of the FWA; and/or

(b)    whether it is appropriate to order pursuant to s 546(1) and (3) of the FWA that Airservices pay pecuniary penalties for those contraventions, and if so, in what quantum and whether they should be paid to Civil Air.

Those issues are related to but different to the issues decided by arbitration in which, relevantly, the FWC determined whether in the circumstances of the case Airservices had an obligation to comply with cll 7.2, 8.3, 8.10 and 10.1(g) and whether it failed to do so.

79    I do not accept Airservices’ contention that to decide the originating application the Court will necessarily be required to re-decide the issues determined by the arbitral award. Civil Air does not seek that the Court enter into a consideration of, or re-decide, whether in the circumstances of the case Airservices had an obligation to comply with cll 7.2, 8.3, 8.10 and 10.1(g) of the EA and failed to do so. Nor does it seek findings inconsistent with the FWC Decision. With one exception, Civil Air accepts that those issues were finally and conclusively determined by the FWC Decision, and at the hearing of the originating application it proposes to rely on the FWC’s findings as to Airservices’ failures to comply with those clauses.

80    Civil Air accepts that the Court will need to be satisfied that there has been a contravention of s 50 by reason of Airservices’ failure to comply with those clauses before it may make the declarations sought, but notes that the parties are bound by the FWC Decision in respect to the findings of failure to comply and Airservices is prevented from responding to the originating application in a manner inconsistent with the FWC Decision. While the Court will not be required to re-decide whether or not Airservices in fact complied with the relevant clauses, before declarations of contravention could be made Civil Air must satisfy the Court as to any remaining elements of the alleged contraventions and show that it is appropriate in the circumstances to make the declarations. Then, if the Court finds that there has been a contravention of s 50, Civil Air must satisfy the Court that in the circumstances it is appropriate to impose a pecuniary penalty.

81    The exception (noted above) concerns Civil Air’s claim for declarations and the imposition of pecuniary penalties in relation to the claim that, in withdrawing the Grey Day Guidelines, Airservices had an obligation to comply with the consultation obligation in cl 7.2 of the EA and failed to do so. Civil Air submits that the FWC did not decide this issue and relies on the following statements in the FWC Decision:

(a)    (at [78]) that because of the finding the FWC made that consultation was required pursuant to cl 8.3(b) “it is not necessary to determine the status of the [Grey Day Guidelines] as either a policy or procedure pertaining to employment matters”; and

(b)    at [86]:

There is insufficient evidence to make a finding that the [Grey Day Guidelines] had application beyond the Byron Group and particularly to other groups in Brisbane...

On that basis it argues that there has been no arbitral decision in relation to whether, by withdrawing the Grey Day Guidelines, Airservices had an obligation to comply with cl 7.2 and failed to do so. It therefore contends that it is not seeking that the Court re-decide an issue which has been finally and conclusively determined through the FWC Decision.

82    I do not accept Civil Air’s submissions in this regard. At [78] the FWC Decision said the following:

Clause 7 stipulates that “Airservices’ policies and procedures pertaining to employment matters” are not part of the Agreement but that there will be consultation about changes to “such policies”. The Agreement does not particularly define those things which are policies and procedures. Having regard both to the whole of the 2017-2020 Agreement, as well as the [Grey Day Guidelines], it is doubtful that the [Grey Day Guidelines) could be regarded as a policy or procedure. At best, it appears to be a local practice. However, because of the finding I make below in respect of the consultation required by clause 8.3(b) in relation to Question for Determination A2, it is not necessary to determine the status of the [Grey Day Guidelines] as either a policy or procedure pertaining to employment matters.

(Emphasis added.)

83    At [89] the FWC Decision said:

In summary, my findings in relation to the first of Civil Air’s questions for determination are that the second iteration of the 2017 [Grey Day Guidelines] has application only to the Byron Group and that changes or withdrawal to it were subject to the requirement for employees to be consulted about changes to their regular roster or ordinary hours of work.

That was a finding that Airservices had an obligation to consult in relation to the Withdrawal Decision pursuant to cl 8 of the EA. The FWC did not hold that Airservices was also required to consult pursuant to cl 7.2.

84    Importantly, at [90] the FWC Decision expressly held, in answer to Questions for Determination 1 and 2 in Issue A1, that Airservices was required to comply with cll 8.3(b) and 8.10 of the EA but not cl 7. 2, and had failed to comply with cll 8.3(b) and 8.10, but not cl 7.2. Those findings are central to my view that the FWC decided the issue.

85    Further, at [95], in relation to Questions for Determination 3 and 4 in Issue A2, which concerned the related but separate issue as to whether Airservices had an obligation to consult before rolling-out Grey Days in any particular location, the FWC Decision said:

For Civil Air to succeed in respect of its contentions about clause 7.2 it would first be necessary for the Commission to accept that indeed there was a policy or procedure pertaining to employment matters proposed for development or variation on the part of Airservices Australia… The context of this particular dispute appears to be an argument that the national use of Grey Day shifts fits within such a description with the roll-out being a policy or procedure pertaining to employment matters and that the development or later variation of such a policy would require the consultation set out within clause 7. The evidence does not support that the greater use of Grey Days is such a policy or procedure. The highest that the evidence leads in this respect is a finding that the 2017– 2020 Agreement permits the use of Grey Day shifts and that Airservices Australia proposes to use such shifts when it deems it necessary or desirable. In itself, a finding of such a nature does not advance Civil Air’s case. An intentional greater use of Grey Days would not likely be a “policy” within the way the word is used in Clause 7, which suggests something altogether more formal than greater utilisation of an employment practice permitted elsewhere by the Agreement. Accordingly there is no finding to be made that Airservices Australia failed to comply with the provisions of clause 7.2 in relation to the second of the Questions for Determination.

(Emphasis added.)

86    In summary, the FWC Decision said (at [78]) that it was “doubtful” that the Grey Day Guidelines were a “policy and procedure pertaining to employment matters” and they were “at best” a practice which was local to the Byron Group. It said (at [86]) that the evidence was insufficient to find that the Grey Day Guidelines had operation beyond the Byron Group. Then, the FWC expressly held (at [90]) that in withdrawing the Grey Day Guidelines Airservices did not have an obligation to comply with cl 7.2 and did not fail to comply with that clause. In relation to the related question as to whether the FWC had an obligation to consult before any national rollout of Grey Days the FWC said (at [95]) that a decision to introduce a “greater use of Grey Days” would not likely be a “policy” within the meaning of cl 7.

87    The findings (at [90]) are in conflict with the statement (at [78]) that it is unnecessary to determine whether the Grey Day Guidelines were a “policy and procedure” within cl 7 of the EA, and as a result the FWC Decision is not entirely clear. But Civil Air’s case before the FWC was that the Grey Day Guidelines were a “policy and procedure pertaining to employment matters” within that clause. There could be no failure to comply with cl 7.2 unless the FWC was satisfied, on the evidence, that the Grey Day Guidelines were such a policy or procedure. On a fair reading, and giving appropriate weight to the express findings at [90], it is tolerably clear that the FWC found that Civil Air failed, on the evidence, to make good its contention that the Grey Day Guidelines were a “policy and procedure” and on that basis that Airservices did not have an obligation to comply with cl 7.2 and had not failed to comply with that clause. The FWC having finally and conclusively determined that issue, the parties’ rights and liabilities in relation to that issue were extinguished. In my view Civil Air is precluded from bringing a claim for declarations of contravention and pecuniary penalties in relation to the alleged non-compliance with cl 7.2 before the Court.

88    For completeness I also note that at the conclusion of the hearing, at the Court’s invitation, Civil Air indicated that it proposed to withdraw the application for declarations and pecuniary penalties in relation to the claimed failure to comply with cl 7.2. I granted leave for it to do so, and subsequently Civil Air filed an Amended Statement of Claim abandoning those claims.

89    Contrary to Airservices’ submissions, the present case is not on all fours with the decisions in Energy Australia or Prados. The facts in Energy Australia are that the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and other unions (together, the Unions) were in dispute with Energy Australia in relation to the proper construction of cl 5.3 of the Energy Australia Yallourn Enterprise Agreement 2013 (the Yallourn EA). The dispute concerned whether cl. 5.3 provided for the casual loading of 25% for a casual employee be used as the base figure for calculating overtime when overtime was performed. The AMWU filed an application with the FWC for the dispute to be dealt with in accordance with the dispute settlement procedure in the Yallourn EA. Similarly to cl 10.1(e) in the present case, the dispute resolution procedure in cl 28 of the Yallourn EA provided for escalating procedures aimed at resolution of any dispute, and if such procedures were unsuccessful it then provided for referral to the FWC for conciliation or arbitration. It provided that where the FWC made a decision following arbitration it was final and binding on the parties subject to their right to appeal.

90    Following a private arbitration, Commissioner Gregory of the FWC was not satisfied that cl 5.3 intended that casual loading was to be included in the calculation of overtime and found in favour of Energy Australia’s construction of the clause. The AMWU appealed to the Full Bench of the FWC. The Full Bench found in favour of the AMWU, determining that casual employees who worked overtime were entitled pursuant to cl 5.3 to be paid double time in addition to the casual loading: Energy Australia at [39]. Subsequently Energy Australia brought an originating application in this Court seeking a declaration that on its proper construction cl 5.3 has the effect that a casual employee who works overtime “is to be paid per hour two thirty-sixths of the weekly rate prescribed for the classification of work performed (double time) exclusive of any casual loading”: Energy Australia at [1].

91    The AMWU and the other unions then brought an interlocutory application under rule 13.01 of the Rules seeking an order to set aside the originating application for want of jurisdiction. The Unions contended that there was no justiciable controversy in relation to the meaning and application of cl 5.3 because, although such a dispute previously existed, it was resolved by the private arbitration by the Full Bench of the FWC, the outcome of which bound each of the parties to the proceeding.

92    Bromberg J held (at [104]-[106]) that Energy Australia and the Unions were parties to a valid arbitration by the FWC and were bound by its outcome. That led his Honour to conclude that there was an accord and satisfaction between Energy Australia and the Unions such that the arbitral award by the FWC extinguished the justiciable controversy between them, with the result that the Court did not have jurisdiction to entertain the originating application. His Honour ordered that the originating application be set aside pursuant to r 13.01 of the Rules.

93    In Energy Australia appeal the Full Court upheld Bromberg J’s decision to dismiss the proceeding for want of jurisdiction. The plurality described his Honour’s decision in the following terms (at [46]):

…his Honour held that the decision of the Full Bench extinguished the justiciable controversy between Energy Australia and the five unions. That was a finding on the merits that Energy Australia could not re-agitate, in any forum, the controversy that the Full Bench’s decision had quelled because, it no longer existed.

(Emphasis added.)

94    Their Honours said (at [70]-[71]):

Energy Australia’s submission, that it and the five unions would not be bound by any decision of the Commission in an arbitration under cl 28, and that each of it and they were free to commence proceedings in the original jurisdiction of this Court to seek declarations inconsistent with the arbitration decision, is self-evidently untenable and must be rejected. It would be recipe for industrial chaos if none of the five unions was bound by a resolution arrived at in the dispute resolution process even though cl 28 appeared, in its terms, to seek to achieve such a resolution.

The consequence of Energy Australia’s argument would be that, although the Commission had resolved a dispute between it and its employees in a binding decision given under s 739(4), somehow both it and any of the five unions could evade the result of that statutorily mandated dispute resolution process. Such an absurd outcome would represent the antithesis of a dispute resolution process of the kind required by s 186(6) of the Fair Work Act. Indeed, if Energy Australia’s argument were correct, then the Yallourn agreement could not comply with s 186(6) because it would not:

provide a procedure that requires or allows the [Commission], or another person who is independent of the employers, employees or employee organisations covered by [it] to settle disputes … about any matters arising under the agreement.

(Emphasis in original.)

95    Their Honours held (at [92]) that Bromberg J was correct to find that:

…the Full Bench’s arbitral decision extinguished the controversy between Energy Australia, its employees and the five unions as to the dispute on the interpretation and application of cl 5.3 of the Yallourn Agreement.

96    The essential difference between the facts in Energy Australia and those in the present case is that Energy Australia’s originating application sought that the Court decide precisely the same question of construction of cl 5.3 as had been finally and conclusively decided by the FWC, and it sought a declaration that was inconsistent with the arbitral award. It asked the Court to decide afresh the proper construction of cl 5.3 and to set aside the construction found by the Full Bench of the FWC as if the arbitration decision had not been made. The Court concluded that it had no jurisdiction because the controversy between the parties as to the construction of cl 5.3 had been resolved by a final and conclusive determination, and there was thus no subsisting “matter”.

97    That stands in contrast to the position in the present case. Putting to one side the exception in relation to cl 7.2, Civil Air accepts that the FWC Decision finally and conclusively determined whether Airservices failed to comply with cll 8.3, 8.10 and 10.1(g) of the EA. As I have said, it accepts that those questions were finally and conclusively determined by the FWC Decision, and does not seek that the Court enter into consideration of them. Rather it says that it will rely on the FWC’s findings as to Airservices’ failure to comply with those clauses and that Airservices will be bound by an issue estoppel which will prevent it from responding to the application in a manner inconsistent with the FWC Decision. The present case is not one where a party dissatisfied by an arbitral determination comes before a court seeking a declaration inconsistent with the arbitral award, and it is readily distinguishable.

98    The same can be said of the decision in Prados. In that case the applicant, together with other members of Victoria Police, had sought determination of their claims for payment of a Commuted Overtime Allowance (COT) based upon the terms of the applicable enterprise agreement. After negotiations, an agreed arbitral panel, designated as the Commuted Overtime Allowance Panel (the Panel), was established. The procedure expressly agreed in relation to the conduct of the arbitral process was that the Panel’s decision was final and binding and that no appeal was open from its decision. The applicant was an active participant in the private arbitration. The Panel made a determination which partially vindicated the claims of the applicants and others but the applicant was dissatisfied with that outcome. He filed an application in the Federal Circuit Court alleging that non-payment of the COT Allowance contravened the applicable enterprise agreement and the respondent had therefore contravened s 50 of the FWA.

99    The Chief Commissioner of Police submitted, in substance, that by reason of the Panel’s decision there was no justiciable controversy between the parties; for that reason there was no “matter” arising under the Act; and that the court therefore had no jurisdiction. Kelly J accepted that submission and said the following (at [150]-[151], [155]):

[150] The effect of the Panel’s determination was to conclusively determine that the applicant has: (1) no entitlement to a COT Allowance for the period prior to 1 July 2012; (2) an entitlement to that allowance for the period prior from 1 July 2012 until the completion of his service with the Task Force. The entitlement so established is in substitution of the asserted causes of action which were extinguished by that determination.

[151] Once the Panel had delivered its decision, this extinguished the asserted causes of action for payment of a COT Allowance under the Enterprise Agreements. Such extinguishment necessarily denies the existence of any entitlement to payment of such allowance under those agreements. From this it must follow that there is nothing upon which an alleged breach of s 50 could be grounded. As a consequence, there is no civil matter capable of attracting the operation of s 566. There is no justiciable ‘matter’ upon which s 566 can operate to confer jurisdiction on this court. I conclude that the court has no jurisdiction under s 566 in respect of an alleged contravention of s 50 of the Act.

…

[155] Upon the principles considered above [from TCL], the applicant’s claim to a COT Allowance ceased to exist upon the Panel giving is decision. The extinguishment of that claim meant that the applicant could not thereafter assert a breach of the Enterprise Agreements in respect of his claim for that allowance. The absence of any breach of those Enterprise Agreements necessarily meant that there was no basis on which to allege a contravention of s 50 and that being so there was no civil matter arising under the Act in relation to the erstwhile claim for a COT Allowance.

(Emphasis added.)

100    Again, the present case is not one where a party dissatisfied by an arbitral determination comes before a court seeking a declaration inconsistent with the arbitral award, and it is readily distinguishable.

101    It is noteworthy that his Honour said (at [150]) that it is the “asserted causes of action” which are extinguished by an arbitral award. At [151] his Honour however said:

From this it must follow that there is nothing upon which an alleged breach of s 50 could be grounded. As a consequence, there is no civil matter capable of attracting the operation of s 566. There is no justiciable ‘matter’ upon which s 566 can operate to confer jurisdiction on this court.

I do not understand his Honour to say that the parties’ rights and liabilities in relation to causes of action or claims which were not capable of being determined by arbitration, and were not in fact determined, are extinguished by the arbitral award. But if the decision in Prados does stand for that proposition I would respectfully disagree for the reasons previously set out.

102    Second, I do not accept Airservices’ submission that having regard to the scheme of the FWA it is not open for Civil Air to:

(a)    notify a dispute to the FWC regarding whether Airservices was obliged to and had failed to comply with certain clauses of the EA;

(b)    obtain a decision from the FWC by arbitration that in the circumstances Airservices was obliged to comply with some of the clauses but not others, and had failed to comply with those clauses;

and then subsequently;

(c)    make an application to the Court for declarations of contravention of s 50 of the FWA in relation to the failures to comply found by the FWC and for the imposition of pecuniary penalties, in reliance on the findings in the FWC Decision.

103    The statutory scheme is as follows. Part 2-4 of the FWA provides for the making of enterprise agreements. Section 185(1) requires that if an enterprise agreement is made a bargaining representative must apply to the FWC for approval of the agreement. Section 186(1) provides that the FWC must approve an enterprise agreement if the requirements set out in ss 186 and 187 are met. Section 186(6)(a)(i) provides that before approving an enterprise agreement the FWC must be satisfied that an enterprise agreement includes:

…a term 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…about any matters arising under the agreement.

104    It is uncontentious that cl 10.1 of the EA is a term that provides a procedure for the FWC to settle disputes about any matters arising under the EA. It empowers the FWC to conciliate and arbitrate in relation to disputes “arising under this EA or in relation to the National Employment Standards between Airservices and an employee or employees whose employment is subject to the EA.” Clause 10.1(e) authorises the FWC to arbitrate the dispute and provides that if it does so the FWC it can “make a determination that is binding on the parties, subject to either party exercising a right of appeal against the decision to a Full Bench of the FWC.”

105    Sections 595 in Division 3 – Subdivision B – of Part 5-1 (which concerns “Conduct of matters before the FWC”) is headed “FWC’s power to deal with disputes”. It relevantly provides:

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

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

(a)    by mediation or conciliation;

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

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

(4)    In dealing with a dispute, the FWC may exercise any powers it has under this Subdivision.

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

(Emphasis added.)

106    Division 2 of Part 6-2 of the FWA is headed “Dealing with disputes”. It includes s 738(b) which provides that the Division applies if “an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6).” Section 739(3) provides that “[i]n dealing with a dispute, the FWC must not exercise any powers limited by the term”, meaning the dispute settlement procedure term in the enterprise agreement. Section 739(4) in Division 2 provides that if in accordance with such a dispute resolution term the parties have agreed that the FWC may arbitrate the dispute, it may do so. If such a dispute resolution term requires or allows the FWC to deal with a dispute arising under the enterprise agreement, and in accordance with the term, then the FWC may arbitrate the dispute on application by a party to the dispute: ss 738(b), 739(1), 739(4) and 739(6).

107    The combined effect of ss 186(6), 595, 738 and 739 of the FWA, read together with cl 10.1 of the EA, is to confer power on the FWC to deal with a dispute between Civil Air and AirServices about any matter arising under the EA by means of mediation, recommendation, conciliation or another alternative dispute resolution process conducted by agreement of the parties, or arbitration. Consistently with cl 10.1 of the EA and s 595 of the FWA, the dispute resolution powers of the FWC are confined to those conferred upon it by the FWA.

108    Chapter 4 of the FWA is titled “Compliance and Enforcement”. Part 4-1 is headed “Civil Remedies”. In Division 2 of that Part:

(a)    Subdivision A deals with, among other matters, applications for orders in relation to contraventions of civil remedy provisions: s 539. Relevantly, Item 4 of s 539, read together with s 540, provides that an employee, an employer or an employee organisation affected by the contravention or proposed contravention of s 50 (which concerns contravention of a term of an enterprise agreement) may apply to this Court, the Federal Circuit Court or an eligible State and Territory court for an order for the imposition of a pecuniary penalty. The Act does not provide for such applications to be made to the FWC.

(b)    Subdivision B sets out the orders that can be made by the Federal Court, the Federal Circuit Court or an eligible State or Territory court in relation to a contravention of a civil remedy provision. Section 545(1) provides that the Federal Court or the Federal Circuit Court may make any order the Court considers appropriate if the Court is satisfied that a person has contravened a civil remedy provision (which includes s 50). This Court may therefore make a declaration of a contravention if it considers it appropriate. As set out above, s 545(2) provides that this includes power to order injunctive relief on an interim or final basis (s 545(2)(a)); that compensation be paid for loss caused by the contravening party (s 545(2)(b)); or reinstatement of a person (s 545(2)(c)). Section 546(1) of the FWA provides that the Federal Court, the Federal Circuit Court or an eligible State or Territory court may order a person to pay a pecuniary penalty if the Court is satisfied that the person has contravened a civil remedy provision. Section 546(3)(b) and (c) provide that the court may order that any such pecuniary penalty be paid to a particular organisation or person. The Act does not so empower the FWC.

109    Part 6-1 is headed “Multiple Actions”. Division 2 imposes restrictions on the FWC where alternative action can be taken. Division 3 is headed “Preventing multiple actions”. Section 724 deals with multiple actions in respect of equal remuneration applications, ss 725-733 deal with multiple applications in relation to dismissals, s 734 deals with multiple actions in respect of general protections claims. Using s 727 as an example, by reference to the “general rule” in s 725, it relevantly provides that a person who has elected to have the FWC arbitrate a general protections application cannot make an application to a court in relation to the same matter. As a result the court could not impose a civil penalty where the FWC had determined a general protections claim by arbitration. I accept that these provisions deal with different issues to the dispute resolution powers of the FWC that may, or may not, involve issues of non-compliance with an enterprise agreement and the enforcement mechanisms that the Court puts in place. Even so they tend to show that where the legislature intended to require a person seeking a remedy under the FWA to make an election between different processes the Act expressly provides for that choice.

110    Parts 2-4, 4-1, and 6-2 of the FWA must be read together, and harmoniously. Taken together, they show a statutory scheme that provides both for the resolution of disputes between parties in relation to matters arising under an enterprise agreement by conciliation, mediation, recommendation and by arbitration by third party arbitrators (including the FWC), and also for the determination and enforcement of the parties’ rights and liabilities by the courts. The scheme recognises and gives effect to the distinction between the exercise of arbitral functions and the exercise of judicial power. There is nothing in the FWA which expressly provides, or otherwise shows, that when dealing with a dispute the FWC must be dealing with the entirety of the justiciable controversy between the parties. In my view the statutory scheme allows for the entirety of a dispute to be determined through the dispute settlement procedure in an enterprise agreement, or only part of it. The extent of what is determined may depend upon matters including the nature of the dispute, what is referred for arbitration, and the nature of the claims as there may be some claims that the FWC or another arbitrator is not empowered to determine. Where particular causes of action or claims are made by a party (such as, for example, claims for compensation under s 545 or for the imposition of a pecuniary penalty under s 546), those parts of the dispute can only be determined by a court of competent jurisdiction. In my view the statutory scheme recognises that such parts of a dispute will not be determined by the FWC.

111    On Airservices’ argument, where a party to an enterprise agreement notifies a dispute regarding an alleged breach of a term of the agreement to the FWC and the dispute is determined by arbitration, it is impermissible for employees, employee organisations or employers affected by the alleged breach to apply to the courts seeking compensation under s 545 or for the imposition of a pecuniary penalty under s 546 of the FWA. Had Parliament intended to restrict the right or entitlement of such persons to assert their statutory entitlements only to those who had not earlier been party to a dispute resolution procedure before the FWC (as provided by an enterprise agreement) or to deprive the courts of jurisdiction to order pecuniary penalties or compensation where an arbitral award as to non-compliance with the enterprise agreement has been made, it would have done so expressly and in clear terms. There is little in the text, context and purpose of the FWA to show that the statutory scheme operates in the way Airservices’ contends.

112    It is necessary also to understand that the corollary of Airservices’ argument is that where one party to the EA notifies a dispute to the FWC which includes a claim alleging breach of a term of the EA and it is determined by the FWC, the other party (who did not notify the dispute) would lose its right or entitlement to seek compensation for losses suffered through any breach under s 545 and the imposition of a pecuniary penalty under s 546 through the courts. That is so because cl 10.1(e), like many dispute settlement terms, empowers the FWC to arbitrate the dispute if it is not resolved by conciliation. On Airservices’ argument determination of the dispute will extinguish all the parties’ rights and liabilities in relation to the entire justiciable controversy, even those parts which the FWC had no power to determine such as any entitlement to compensation or a pecuniary penalty. That would be an absurd result, and it would be likely to incentivise the party that breaches the EA to notify a dispute to the FWC so as to avoid the risk of an order for a pecuniary penalty or compensation by a court. That also points away from construing the statutory scheme in the way Airservices contends.

113    Airservices’ contentions regarding the statutory scheme also sit poorly with the public policy purpose inherent in the regime under Part 4-1, particularly the promotion of the public interest in compliance with the terms of enterprise agreements that is evident in the availability of pecuniary penalties and compensation for contraventions and the importance attached to specific and general deterrence: see Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482 at [55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ). Nor do they sit well with the object in s 3(e) of the FWA of “providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms”. Those compliance mechanisms include the power of the courts to make declarations of contravention, impose pecuniary penalties or order compensation.

114    I do not accept Airservices’ contention that if Parliament had intended that following resolution of an industrial dispute by arbitration it was open to a party to the dispute to then re-agitate part of it in the courts it would have said so expressly, including by putting in place mechanisms for preventing the abuse of such a process including the application of the rules of evidence. More particularly, I do not accept that absent such express words a contrary intention is to be inferred.

115    First, it is inappropriate for Airservices to characterise the present application as amounting to re-agitation when Civil Air does not seek that the Court construe the relevant clauses of the EA or venture into whether or not Airservices failed to comply with those clauses, and accepts that those questions have been finally and conclusively decided by the FWC; instead it seeks to rely upon the FWC Decision in that regard. Nor is it apt to say that Airservices faces ‘double jeopardy’ when: (a) no relief was imposed against Airservices for the failures to comply which were found by the FWC; and (b) the claims which Civil Air now seeks be decided by the Court involve some different questions that were not before, and could not have been put before, the FWC.

116    Second, the parties agreed on the dispute resolution procedure in cl 10.1 of the EA and it was open to them to select an independent person other than the FWC to settle any disputes that arose, and to agree upon the processes that would be used in any arbitration. The parties chose the FWC and must have known that the FWC could inform itself in such manner as it considers appropriate (s 590(1)), and was not required to follow the rules of evidence and procedure (s 591). It is appropriate to infer that the parties understood and were content with the manner in which any dispute that arose would be determined by the FWC, and content that any finding would be final and binding subject to their right to appeal to the Full Bench.

117    Further, to the extent that by this contention Airservices seeks to insinuate that the FWC’s processes in the present case were somehow deficient, or that it did not receive procedural fairness, that must also be rejected. The Questions for Determination by the FWC were identified with precision, both parties were legally represented including by senior and junior counsel, evidence was adduced by way of witness statements provided in advance of the hearing and the witnesses were available for cross-examination. The FWC provided comprehensive reasons, and neither party appealed the result. In my view the parties enjoyed an abundance of procedural fairness.

118    For these reasons I consider there remains a subsisting justiciable controversy between the parties, and there remains a “matter” arising under s 562 of the FWA. In my view the Court has jurisdiction to hear the originating application.

Airservices’ alternative submission

119    In the alternative, Airservices submits that Civil Air’s originating application is brought contrary to the doctrine of approbation and reprobation. It argues that by referring to the FWC the dispute regarding whether Airservices had an obligation to comply with cll 7.2, 8.3, 8.10 and 10.1(g) of the EA and whether it had failed to comply with those clauses, Civil Air elected between two alternative and inconsistent courses of conduct. It contends that Civil Air cannot approbate and reprobate and is bound by the choice it made and by the way in which the FWC determined the dispute. It argues that it is not open to Civil Air to seek to re-agitate the dispute through this proceeding.

120    Airservices accepts that the effect of its argument is that if the parties to an enterprise agreement are in dispute in relation to a matter arising under the agreement, and pursuant to the dispute settlement procedure in that agreement, one party notifies the dispute to the FWC or another independent person as provided for by the dispute resolution procedure, the party has made an election and has lost its right to sue for compensation or to seek the imposition of a pecuniary penalty. It says though that this is the result of the choice the party made.

121    In Mandurah Enterprises Pty Ltd v Western Australian Planning Commission [2008] WASCA 211; (2008) 38 WAR 276, cited with approval by the Full Court in Acohs Pty Ltd v Ucorp Pty Ltd [2012] FCAFC 16; (2012) 201 FCR 173 at [201] (Jacobson, Nicholas and Yates JJ), McClure JA explored the notion of approbation and reprobation. Her Honour said (at [108]-[110]:

The doctrine of approbation and reprobation was initially part of Scottish law. Its English equivalent was the doctrine of equitable election between estates: Lissenden v CAV Bosch Ltd [1940] AC 412; Douglas-Menzies v Umphelby [1908] AC 224; Elder’s Trustee and Executor Co Ltd v Commonwealth Homes and Investment Co Ltd [1941] HCA 31; (1941) 65 CLR 603, 617 - 618. The notion of approbation and reprobation is used interchangeably in the case law with election, waiver and estoppel. As a result, it is difficult to confidently identify from the cases the material elements of any independent doctrine of approbation and reprobation.

There is authority in Australian law for an independent doctrine of approbation and reprobation: Commonwealth v Verwayen (1990) 170 CLR 394, 421 - 422 (Brennan J); Fried v National Australia Bank Ltd [2000] FCA 910. The doctrine is summarised in Halsbury’s Laws of Australia, vol 190 [190-35] as follows:

A person may not ‘approbate and reprobate’, meaning that a person, having a choice between two inconsistent courses of conduct and having chosen one, is treated as having made an election from which he or she cannot resile once he or she has taken some benefit from the chosen course.

In Halsbury’s Laws of England, vol 60 [962] the authors state:

Thus a claimant, having two inconsistent claims, who elects to abandon one and pursue the other may not, in general, afterwards choose to return to the former claim and sue on it; but this rule of election does not apply where the two claims are not inconsistent and the circumstances do not show an intention to abandon one of them.

(Emphasis added.)

122    In Verwayen at 421 Brennan J (as his Honour then was) described the doctrine of approbation and reprobation as being closely related to the doctrine of election. His Honour noted that the doctrine “precludes a person who has exercised a right from exercising another right which is alternative to and inconsistent with the right he exercised.”

123    Civil Air expressed some doubt that the principle of approbation and reprobation operates as an independent doctrine, but it is unnecessary to decide that question. On the assumption that it does so operate, I am not persuaded that Civil Air’s decision to notify the dispute to the FWC or to ask for arbitration involved a choice between alternative and inconsistent courses of conduct.

124    When it notified the dispute, Civil Air sought conciliation (see the Dispute Notification and cl 10.1(d) of the EA) but the conciliation was unsuccessful. Upon the conciliation being unsuccessful cl 10.1(e) empowered the FWC to arbitrate the dispute and make a final and binding determination. It is uncontentious that, in fact, Civil Air asked for arbitration at that point, but that request appears to me to have been unnecessary. Little however turns on that. In my view notifying the dispute and seeking conciliation, and then seeking arbitration when the dispute was not resolved, was not an alternative to or inconsistent with later seeking declarations of contravention and the imposition of a pecuniary penalties through the courts. That must be so when the FWC had no power to make declarations of contravention or impose pecuniary penalties and was not asked to do so.

125    Inconsistency denotes that the options available are alternative and mutually exclusive, such that the elector cannot adopt both options; he or she must choose one or the other. That is not the position here. As I have said, Parts 2-4, 4-1 and 6-2 of the FWA must be read together and harmoniously. Taken together they create a scheme that provides both for the resolution of disputes between parties in relation to matters arising under an enterprise agreement by conciliation, mediation, recommendation and by arbitration by third party arbitrators (including the FWC), and also for the determination and enforcement of the parties’ rights and liabilities by the courts. The statutory scheme indicates that the entirety of a dispute in relation to matters arising under an enterprise agreement may be determined through the dispute settlement procedure in an enterprise agreement, or only part of the dispute may be dealt with. Where particular causes of action or claims are advanced by a party to the dispute (such as, for example, claims for compensation under s 545 of the FWA or for the imposition of a pecuniary penalty under s 546), those parts of the dispute will not and cannot be determined by the FWC or another independent person. They can only be determined by a court of competent jurisdiction. Having regard to the text, context or purpose of the FWA the notification of a dispute to the FWC does not involve a choice between alternative and inconsistent courses of conduct, such that the notifying party cannot then seek recourse through the courts. Pursuing some parts of a dispute in the FWC and other parts in a court does not necessarily show that a person is approbating and reprobating. It may show no more than that different parts of the justiciable controversy are required to be determined in different forums.

126    As I have said, Airservices’ argument also sits poorly with the public policy purpose inherent in the regime under Part 4-1 of the FWA, particularly the promotion of the public interest in compliance with the terms of enterprise agreements that is evident in the availability of pecuniary penalties and compensation for such contraventions, and with the object in s 3(e) of the FWA of “providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms”. Airservices was unable to take the Court to any authority in support of its argument that the statutory scheme provides that notification of a dispute amounts to an election by the notifying party or that the notifying party, thereby loses any rights or entitlements to apply to the courts.

127    Where a party to a dispute chooses to refer part of the justiciable controversy for arbitration to an agreed third party, and then subsequently seeks that another part be decided by a court, the principles in Dobbs and TCL govern the interaction between any arbitral award that is made and the proceeding before the court. There is no ‘inconsistency’ in such courses because the parties are bound by the arbitral award in relation to “the causes of action awarded upon” and are precluded from “asserting in the Courts the claims which the award determined”: Dobbs at 653; TCL at [77]. The arbitral award in relation to the causes of action determined is final and conclusive between the parties and “both extinguishes the original cause of action and imposes new obligations on the parties in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration”: TCL at [78]. But it does not extinguish the parties’ rights and liabilities in relation to causes of action that were not determined. Thus notification of the a dispute to the FWC and then asking for arbitration when conciliation failed to resolve the dispute did not require Civil Air to choose between alternative and inconsistent courses.

128    Further, there is no evidence before me that indicates that when Civil Air notified the dispute, or when it asked for arbitration, that it intended to make an election between alternative and inconsistent courses of conduct. The doctrine of approbation and reprobation does not apply “where the two claims are not inconsistent and the circumstances do not show an intention to abandon one of them”: Mandurah at [110] citing Halsbury’s Laws of England vol 60 [962]. In the circumstances of the case I would not infer that by notifying the dispute, or by asking for arbitration of the Questions for Determination, Civil Air intended to abandon its right or entitlement to seek declarations of contravention and pecuniary penalties through the courts.

129    Airservices’ alternative argument must therefore be dismissed.

CONCLUSION

130    I have ordered the dismissal of Airservices’ interlocutory application. The parties are directed to confer and endeavour to agree a timetable for the hearing of the substantive proceeding.

Associate:

Dated:    17 November 2020