Federal Court of Australia

Secretary, Department of Employment and Workplace Relations v Dooley [2023] FCA 651

ORDERS

THE COURT ORDERS THAT:

1.    The decision of the Administrative Appeals Tribunal made on 15 September 2022 be set aside.

2.    An order in the nature of a writ of mandamus issue requiring the Tribunal to hear and determine the respondent’s application for review of the decision of the delegate of the applicant made on 20 July 2021 according to law.

The Court Notes That:

3.    The applicant does not seek an order for costs.

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

REASONS FOR JUDGMENT

(Revised from the transcript)

RARES J:

Introduction

1    The Secretary, Department of Employment and Workplace Relations appealed to the Court on a question of law under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) against the decision of the Administrative Appeals Tribunal made on 15 September 2022. The Secretary seeks an order setting aside the decision of an internal review delegate made on 20 July 2021 that Gerard Dooley was eligible for an advance of $60,152.76 under s 15(1) of the Fair Entitlements Guarantee Act 2012 (Cth) (FEG Act) in respect of his redundancy pay entitlement and remitting the review to the Secretary for recalculation of that entitlement under s 23 of the FEG Act.

2    Earlier, on 20 April 2021, the first delegate had determined that Mr Dooley’s redundancy pay entitlement was $89,297.04 before tax but, on an internal review, the review delegate set aside the previous decision and substituted the lesser calculation of $60,152.76. The Secretary raised seven questions of law and 13 grounds in his notice of appeal that I summarise at [33] below.

The Legislative Scheme

3    Relevantly, the FEG Act provides:

5    Definitions

governing instrument for employment means any of the following that governs the employment:

(a)      a written law of the Commonwealth, a State or a Territory;

(b)      an award, determination or order that is made or recorded in writing;

(c)      a written instrument;

(d)      an agreement (whether a contract or not).

…

redundancy pay entitlement has the meaning given by subsection 6(5).

6    Kinds of employment entitlements

…

Redundancy pay entitlement

(5)    The person’s redundancy pay entitlement is the amount of redundancy pay the person is entitled to under the governing instrument from the employer for termination of the employment.

4    The basic amount of a person’s redundancy pay entitlement was defined in s 23 as follows:

The basic amount for a person’s redundancy pay entitlement for his or her employment by an employer is so much of the entitlement as:

(a)    is not a cost of the winding up or bankruptcy of the employer; and

(b)    does not exceed the total of:

(i)    4 weeks’ pay (at the rate relevant to working out that entitlement) for each full year of the person’s service with the employer for which the employer was required to pay redundancy pay by the governing instrument for that employment; and

(ii)    if that instrument requires payment of redundancy pay for a proportion of a year (less than a full year) of the person’s service with the employer—that proportion of 4 weeks’ pay (at the rate relevant to working out that entitlement).

(emphasis added)

5    In addition, ss 43(2) and (2B) of the AAT Act provide:

(2)    Subject to this section and to sections 35 and 36D, the Tribunal shall give reasons either orally or in writing for its decision.

…

(2B)    Where the Tribunal gives in writing the reasons for its decision, those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.

6    The issue that arose before the Tribunal involved its identification of what the governing instrument for Mr Dooley’s redundancy pay entitlement was, as opposed to any challenge to the manner of calculation that the review delegate used.

Background

7    At the time of his redundancy, Mr Dooley was employed by Ovato Print Pty Ltd (formerly named PMP Print), a member of the Ovato group of companies, that ran a large integrated printing and distribution business in Australia and New Zealand. Mr Dooley originally worked at PMP Print’s Moorebank premises. In early 2019, Ovato Print announced that it intended to close the Moorebank premises, make a number of staff redundant, initially seek voluntary redundancies and transfer those who were willing to continue working to its plant at Warwick Farm.

8    Over the years preceding the termination of his employment, pursuant to its powers in ss 186 and 188 of the Fair Work Act 2009 (Cth), the Fair Work Commission approved three relevant enterprise agreements, being the PMP Print Distribution and Digital Enterprise Agreement 2015 on 26 August 2015 (the 2015 agreement), the PMP Print Distribution and Digital Enterprise Agreement 2018 on 12 March 2019 (the 2018 agreement) and the Ovato Print Enterprise Agreement 2020 on 6 November 2020 (the 2020 agreement). Two unions were covered by the 2018 and 2020 agreements, namely the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, known as the Australian Manufacturing Workers’ Union (AMWU), and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union (CEPU).

9    Relevantly, the retrenchment benefit provisions in cl 22 of each of the 2015 and 2018 agreements were the same. At the time that the Commission approved the 2018 agreement, there appear to have been somewhat different terms and conditions applicable to employees of PMP Print at each of its 7 sites, including the Moorebank and Warwick Farm premises. This is reflected in cl 2 of the 2018 agreement which provided that:

All sites mentioned above have site specific Appendices. Where there is an inconsistency with this Agreement and an Appendix specific to a site, the Appendix shall prevail to the extent of the inconsistency. Where an employee transfers from one site to a new site, the Appendix specific to the new site will apply to that employee from the date the transfer takes effect.

(emphasis added)

10    In the 2018 agreement, cl 22 relevantly provided:

22.    Redundancy

22.1    The parties are committed to growth in the company and to job security. If, however the company makes a decision to reduce jobs, not being the result of normal and customary turnover of labour, and that it no longer wants those jobs performed by anyone, this may lead to termination of employment.

…

22.8    Retrenchment Benefit

22.8.1    Employees shall receive payment of:

•    5 weeks’ notice

•    4 weeks per year of service uncapped

•    Shift loadings paid on base rate

•    17.5% or shift loading, whichever [is] greater, paid on annual leave

•    LSL [scil: long service leave], pro rata at 7 years or as per state legislation, whichever is more beneficial.

•    Accrued long service leave and pro rata long service leave after 7 years of service

•    Accrued annual leave plus shift loading or loading of 17.5%, whichever is greater

•    One day per week for interviews/outplacement services prior to the separation date.

(emphasis added)

11    Appendix 2 to the 2018 agreement applied to Moorebank employees and appendix 8 to Warwick Farm employees. The chapeaux to appendices 2 and 8 were:

Appendix 2 applies to all Company employees working at the PMP site at Moorebank in NSW, or at any new address to which the Company moves the operations.

Appendix 8 applies to all Company employees working at the PMP site at Warwick Farm NSW, or at any new address to which the Company moves the operations.

(emphasis added)

12    Appendix 2 did not contain any specific reference to severance or redundancy pay or to any manner of calculation of the basis on which redundancy pay would be calculated for employees who worked at Moorebank and became redundant. However, in contrast, addendum 1 to appendix 8, under the heading ‘Severance and Warwick Farm service’, contained specific provisions that applied to Warwick Farm employees, relevantly:

Severance and Warwick Farm service

The period between an employee’s original hire date and 30 June 2017 will attract a severance calculation as follows:

(a)     0 – 20 years of service = 4 weeks per year of service

(b)     20+ years of service = 3 weeks per year of service

(c)     Such payments are based on the employees’ base hourly rate as at the date of termination x hours worked per week. If the employee is rostered to work a shift that includes shift loadings as part of their regular roster in the month prior to termination, this is also included in this calculation.

(emphasis added)

13    In the 2020 agreement, the redundancy pay entitlement was significantly less:

22.    Redundancy

…

22.3     An Employee who is redundant will be paid an amount equal to two weeks’ pay for each completed year of employment to a maximum of 52 weeks’ pay (Severance Payment).

22.4     The Severance Payment consists of:

(a)     a payment in lieu of notice required by the NES; and

(b)     a redundancy payment.

22.5     Where the Employee’s entitlement to redundancy pay and pay in lieu of notice under the NES is greater than the Severance Payment, the Employee will be paid the amount required to be paid under the NES.

…

22.7    Where a redundant employee’s dismissal is effective on or before 31 December 2021:

(a)     a week’s pay for the purposes of the redundancy payment is calculated at the Employee’s base rate of pay for ordinary hours worked together with the shift loading paid to the employee immediately before the employee’s dismissal; and

(b)     any payment in lieu of accrued annual leave will include either the shift loading or annual leave loading of 17.5%, whichever is greater.

22.8     An Employee who is over 45 years old and has completed at least 2 years of continuous service with the Employer will be paid an additional week’s pay in lieu of notice.

(emphasis added)

14    All three of the enterprise agreements referred to the role of the Grand Chapel, (which seems to have been a body comprising officers of one or both of the AMWU and or CEPU), in a specific clause, including what was cl 14(k) in the 2018 agreement. That stated that the parties were “committed to”:

Union Delegates will have the right to have the Company set out in writing any agreements and/or arrangements affecting conditions negotiated at the site upon written request through the CC [scil: Consultative Committee under cl 11].

15    Several documents were in evidence before the Tribunal. One was a document signed by Adrian O’Connor, Ovato’s chief executive officer of the print and residential distribution, and by Lorraine Cassin, the National Secretary of the AMWU printing division, headed ‘Grand Chapel Update NSW Site Consolidation’ (the Grand Chapel agreement). The Grand Chapel agreement reflected the result of a meeting held on 21 March 2019 between Mr O’Connor and AMWU officials. It relevantly provided that:

The company has agreed to:

•    Maintain employees’ current hourly wages rates; and

•    Grandfather / freeze redundancy entitlement for redeployed employees as at date of transfer.

Regarding the issue of forced redeployment to Warwick Farm, the company’s position is to defer this until Voluntary Redundancies have been called. The two Site Chapels will meet with the company at this point to work through issues further.

The issue of employees knowing their futures in August was also raised in terms of bringing this forward to June to provide certainty. The company’s position is that it will have internal discussions to see if this can be achieved, considering time lines with the first round of redundancies to be completed by May.

The company will facilitate voluntary redundancies wherever possible, including specifically for the first round of redundancies in May.

(emphasis added)

16    Another document in evidence before the Tribunal appears to be a file note prepared by AMWU delegates recording the outcomes of the meeting on 21 March 2019 with Mr O’Connor and Ms Cassin. The file note recorded that Mr O’Connor had provided background to the proposed consolidation, the progress that the Ovato group had been making commercially and then identified the following to help deal with concerns “around staff waiting for answers about their future and to assist them with their decisions”:

1.    There will be no change to hourly rates for staff moving from MK [scil: Moorebank] to a like role at WF [scil: Warwick Farm]. (Agreed)

2.    Any MK [scil: Moorebank] staff that move to WF [scil: Warwick Farm] will have their redundancy calculation at the time of transfer grandfathered. This was designed to deal with staff who had worked on night shift for many years at MK [scil: Moorebank] and changed shift when moving to WF [scil: Warwick Farm] which would reduce value of redundancy (Agreed)

3.    The company only take volunteers for the first phase of redundancies when Press F closes, i.e. no forced redundancies for phase 1 provided there are enough volunteers. (Not agreed – we would need to consider the volunteers and potential skills lost before confirming)

(emphasis added)

17    The emphasised words in par 2 of the file note suggest that the subject matter of the grandfathering or freezing was the rate of pay used in calculating any redundancy entitlement of Moorebank employees who worked on night shift but who might be redeployed at Warwick Farm to work on lower remunerated shifts.

18    The Tribunal also had in evidence a document that Ovato appears to have written in 2020 for the purpose of explaining to employees at Warwick Farm the basis of the then proposed 2020 agreement. It stated among other matters:

Grandfathering of MBK [scil: Moorebank] packages? What is happening here?

Shifts previously worked at MBK will be recognised in the calculations up to when applying shift loadings to the new redundancy clause. All shift loadings for all staff will be included in redundancy calculations up until December 2021. (Clause 22.7)

(emphasis added)

19    On 21 December 2020, Black J in the Supreme Court of New South Wales made an order approving a scheme of arrangement under the Corporations Act 2001 (Cth) that provided that Ovato Print and some other companies in the Otavo group would be wound up: In the matter of Ovato Print Pty Ltd [2020] NSWSC 1882. The winding up occurred on 29 December 2020. Black J understood that the liquidation of Ovato Print would leave it with insufficient funds to cover employee entitlements because its assets were to be transferred under the scheme to other companies in the Ovato group.

20    Mr Dooley had been stood down on 9 December 2020 and when Ovato Print was wound up on 29 December 2020, his employment was terminated, leading to his claim under the FEG Act. He claimed that he was eligible for an advance, and, on 20 April 2021, the first delegate determined that he was entitled to an advance of $89,297.04. Mr Dooley objected to that assessment, however, the review delegate reduced the advance to $60,152.76.

The tribunal’s Reasons

21    The Tribunal recorded that:

    Mr Dooley gave evidence and called one witness, who was an employee of Ovato Print, who also gave evidence. (I note that the Tribunal does not seem to have referred in its reasons to the evidence of that witness beyond stating that he gave evidence and, in a footnote, had said that a person may have been at a meeting);

    Mr Dooley commenced employment with PMP Print under a contract of employment dated 7 October 2004 for a six-month term. There was no other evidence of any written contract of employment; and

    Mr Dooley claimed that the Grand Chapel agreement had adopted the redundancy provisions in cl 22 of the 2018 agreement by freezing or grandfathering them so that they could not be reduced in the future by actions such as the significant variations in cl 22 of the 2020 agreement.

22    The Tribunal identified at par 8 what it called “the dispositional issue”, being the identification of the applicable governing instrument of Mr Dooley’s employment for the purposes of s 23(b) of the FEG Act. It noted that the Secretary contended that the 2020 agreement was the governing instrument within the meaning of par (b) of the definition of ‘governing instrument’ in s 5 of the FEG Act.

23    The Tribunal found that:

    on 14 August 2017, PMP Print’s management wrote to staff about proposed changes to the 2015 agreement and made assurances to employees at Moorebank that the general PMP Print terms and conditions would continue to apply to them together with site specific conditions for Moorebank employees. (I note that this appears to have been translated into the terms of the 2018 agreement, including annexure 2.)

    in early 2019, PMP Print invited employees working at Moorebank to move to Warwick Farm because of PMP Print’s intention to close its operations at Moorebank and focus on the other site where new plant was to be installed;

    over the period between 2019 and 2020, Ovato group undertook measures to improve its financial position, including by making site consolidations, negotiating with creditors and employees, and raising equity. It found that Ovato group was a major employer with 1,187 employees spread across sites in Australia and New Zealand;

    on 29 July 2020, the chief executive officer of Ovato group, Kevin Slaven, wrote to the workforce to update it about the group’s plans to “resize the business to quickly match the changes in the way our clients are behaving” (no doubt due to the effects of the COVID-19 pandemic). He told the employees that this would involve a reduction in the workforce and that the current redundancy requirements in the 2018 agreement “were no longer appropriate or affordable”, that Ovato group had applied to the Commission to terminate its 2018 agreement and that, if the Commission did so, the 2018 agreement would no longer operate with the result that the employees’ base entitlements would be governed by the relevant industry award that attracted lower wages. He said that Ovato group intended to negotiate a new enterprise agreement with the AMWU and flagged that, if the 2018 agreement were terminated, the redundancy entitlements of the employees would reduce to those in s 119 of the Fair Work Act, which were lower than their entitlements under the 2018 agreement. He made clear that would mean that any employees who were retrenched after any new enterprise agreement was approved would receive a lower payout than they could have expected under the then present arrangements. He said that the priority was to keep the businesses running; and

    on 31 July 2020, Mr Slaven sent a newsletter to employees entitled ‘Dispelling myths Q&A’, that referred to the FEG scheme.

24    The Tribunal also referred to the findings of Black J when approving the scheme of arrangement in which his Honour foreshadowed that, without the scheme, Ovato companies bound by it were likely to have been placed in administration or liquidation, potentially leading to the loss of more employees’ jobs and a larger claim under the FEG Act.

25    The Tribunal then identified the relevant statutory provisions under the FEG Act before turning to discuss what was the governing instrument for the purposes of the definition of Mr Dooley’s redundancy pay entitlement in s 6(5) of the Act. It noted that Mr Dooley contended that the Grand Chapel agreement was the “governing instrument” both while he worked at Moorebank and when he transferred to Warwick Farm. It recorded his argument that this was because the Grand Chapel agreement grandfathered or froze provisions that dealt with redundancy entitlements and that what was grandfathered or frozen under it was the employees’ entitlement to four weeks’ pay per year of service, as provided in the 2018 agreement that would continue regardless of the 2018 agreement’s effect as an enterprise agreement made under the Fair Work Act.

26    The Tribunal noted:

    the findings of the review delegate in the decision of 20 July 2021 that the 2020 agreement was the governing instrument; and

    the AMWU’s file note of 21 March 2019 and the statement in par 2 that I have emphasised in [16] above. (I note that it never returned to address the significance of that statement or why it did not bear on the construction of whatever may have been the grandfathering or freezing with which the Grand Chapel agreement was concerned.)

27    In the section of its reasons headed ‘Consideration’, the Tribunal discussed the corporate restructure of Ovato group that occurred in late 2020. It found that:

    Mr Dooley had worked for PMP Print (renamed Ovato Print) for 15 years by the time of his redundancy; and

    a substantial majority of employees across the Ovato group had approved the 2020 agreement, saying that they were:

no doubt motivated by self-interest and the hope that jobs and especially their jobs would be saved, the impact upon those who were retrenched was severe, especially for long serving employees.

28    The Tribunal then noted the Secretary’s submission that, as a result of the employees’ vote and the approval of the Commission, the 2020 agreement applied to Mr Dooley’s employment by force of the Fair Work Act and that the Commission’s approval of the 2020 agreement impliedly revoked any relevance of the Grand Chapel agreement to Mr Dooley’s previous redundancy entitlements. The Tribunal then said:

46.    The question for the Tribunal is whether the 2020 EA [scil: 2020 agreement], properly interpreted, is inconsistent with the GCA agreement [scil: Grand Chapel agreement], or, putting it differently, to what extent can the GCA be honoured without breaching the relevant provisions of the 2020 EA? There is nothing in the [Fair Work Act] that prevents an employer from promising more favourable terms than the prevailing enterprise agreement under certain prescribed circumstances.

47.    Under the 2020 EA, the 52-week cap is unambiguous and provides an upper limit for Mr Dooley’s FEG claim.

(emphasis added)

29    It then asked the question about how the rate at which redundancy pay occurred under the 2020 agreement and said:

48.    … The formulation in clause 22.3 that an employee made redundant ‘will be paid’ two weeks for each year of service, although cast in obligatory rather than permissive language, is not in my view sufficient to exclude a higher amount being paid if the employer has expressly agreed to do so. The EA does not contain words such as, for example, ‘Despite any promise or undertaking to the contrary, the redundancy entitlement is a maximum of 2 weeks per year of service’. There is no reference in the EA to the specific exclusion of the GCA, or to the exclusion of any other representation or promise. It is therefore open for the Tribunal to find that the accrual rate was modified by the GCA so as to allow accumulation of redundancy pay up to the 2020 EA cap.

(bold emphasis added, italic emphasis in original)

30    The Tribunal then noted that:

    par (d) of the definition of ‘governing instrument’ in s 5 of the FEG Act included an agreement, whether a contract or not; and

    the Secretary had contended that, first, the Grand Chapel agreement did not govern Mr Dooley’s employment and was, in any event, extinguished by force of the Commission’s approval of the 2020 agreement and, secondly, any agreement between Ovato Print and the AMWU, such as in the Grand Chapel agreement, had not been made in relation specifically to Mr Dooley and that he was not entitled to the benefit of any promise made in it by Ovato Print to the Union.

31    The Tribunal found:

51.    There is however force in Mr Dooley’s argument that Ovato Print is bound by its agreement with the AMWU in respect of those employees it was seeking to redeploy; namely, that if after their redeployment the company was wound up and their employment terminated, the redundancy component of their entitlement would be ‘frozen’ or ‘grandfathered’ at the 2018 EA levels. These notions (‘freeze’, ‘grandfather’) carry considerable force. They were unequivocally intended to insulate those to whom the promise was made from the very consequence that subsequently occurred.

52.     In principle, a promise may be withdrawn before acceptance, and an agreement may be varied by mutual consent. The pamphlets distributed to the workforce indicate that the company wished to reduce redundancy entitlements. However, the statements attributed to Mr Slaven were made outside the Grand Chapel process, and lack the force of the original GCA. Mr Slaven was addressing the entire workforce and not just the class of redeployed workers. He did not at any point in these communications explicitly refer to or seek to revoke the GCA.

53.     The whole of commerce depends upon vigorous enforcement of the requirement that a person (including a corporation) should be bound by a promise; especially where the person for whose benefit the promise was made has acted to their detriment, and in reliance on it. Mr Dooley did not seek work elsewhere or withdraw his labour. He did move to the Warwick Farm site. He was comforted by the promise that his entitlements would be frozen or grandfathered if he redeployed to a different site, which given the nature of the Sydney conurbation, is not a trivial matter.

54.    Counsel for the Respondent argues that although such considerations may be relevant in equity or contract law, they do not apply to the question of identifying the governing instrument and its terms.

55.     The Tribunal is required to do justice between the parties and to arrive at the correct decision and, if two decisions are open on the law, the preferable decision. It is not free to follow its heart when its head must lead. Yet, the essential nature of justice is informed by fairness no less than by hard reason. The Respondent asks the Tribunal to find that the GCA is of no assistance to Mr Dooley and has no legal significance in these proceedings. But it is by no means clear to the Tribunal that this is so.

56.     I make the following findings in light of the evidence presented to the Tribunal.

(a)     I am satisfied that on 21 March 2019, the employer ‘agreed’ to grandfather/freeze redundancy entitlements at the levels prescribed by the 2018 EA then in force. This agreement was explicitly made for the benefit of those employees who were redeployed from Moorebank to Warwick Farm and then made redundant.

(b)     I am satisfied that the GCA was not revoked by the company prior to the winding up, either expressly or by the advent of the 2020 EA.

57.     With regard to the identification of the governing instrument and its relevant terms, I find that:

(a)     The governing instrument for the entire period of Mr Dooley’s employment is the 2020 EA, subject to (d) below;

(b)     A redundancy cap of 52 weeks applies to all employees governed by the 2020 EA, including Mr Dooley;

(c)     From the date of Mr Dooley’s redeployment to Warwick Farm, the applicable rate of accrual is 2 weeks for each completed year of service, as provided for under the 2020 EA;

(d)     For service prior to the date of redeployment to Warwick Farm, the rate of redundancy pay is the sum of 2 weeks per year of service (as provided for by the 2020 EA) plus 2 weeks per year of service (as provided for by the GCA), up to the 52 week cap.

(bold emphasis added, italic emphasis in original, footnote omitted)

32    The Tribunal then recorded its decision to set aside the review delegate’s decision and remit Mr Dooley’s application to the Secretary for recalculation in accordance with par 57 of its reasons.

The Secretary’s Submissions

33    The Secretary contended that the Tribunal’s decision gave rise to seven questions of law that distil substantively two issues, namely:

(1)    whether there could be more than one governing instrument giving rise to Mr Dooley’s redundancy pay entitlement within the meaning of s 6(5) of the FEG Act, namely both the 2020 agreement and the Grand Chapel agreement (question 1); and

(2)    whether the Tribunal had evidence before it and gave reasons, or adequate reasons, for its finding that the Grand Chapel agreement was capable of creating a binding promise or agreement on the part of Ovato Print that it would preserve and pay Mr Dooley redundancy pay calculated on the basis of four weeks’ pay for every year of service irrespective of the prevailing industrial arrangements, and in particular, the 2020 agreement, approved under the Fair Work Act that applied to his employment (questions 2–7).

34    The Secretary appeared today represented by counsel and Mr Dooley represented himself. He prepared very clear and cogent submissions to seek to support the Tribunal’s conclusion and elaborated on those during the course of oral arguments today, including by addressing concerns that I had raised.

Consideration

35    The legislative purpose of imposing a duty on an administrative decision-maker to give reasons for a decision in the terms of ss 43(2) and (2B) of the AAT Act or its analogues is remedial. The statutory duty has the purpose of enabling a person affected by the decision to be supplied with findings and a reference to the evidence or other material on which those findings were based so that the person can shape the course of his, her or its future conduct on that basis: Dalton v Deputy Commissioner of Taxation (1986) 160 CLR 246 at 250 per Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ.

36    In Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 224 [40], Gleeson CJ, Gummow and Heydon JJ said of a statutory duty of a Minister to give reasons:

In any event, the Parliament obliged the Minister, having reached a conclusion, to set out his reasons and, in order to discharge that duty, it was at least necessary for him to express the essential ground or grounds for his conclusion that the prosecutor had not satisfied him that he passed the character test and that the prosecutor’s visa should be cancelled.

(emphasis added, footnote omitted)

37    In Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 346 [69], McHugh, Gummow and Hayne JJ said that the purpose of an analogous provision to s 43(2B) of the AAT Act is to require the decision-maker to set out its findings on the questions of fact that it considered to be material, so as to ensure that a person dissatisfied with the result at which the decision-maker had arrived could identify with certainty what reasons were for reaching that conclusion and that a court, asked to review the decision, would be able to identify the decision-maker’s reasons and the findings he, she or it made in reaching the decision. They held that a court is entitled to infer that a matter that the decision-maker’s statement of reasons did not mention was not considered by the decision-maker to be material. They said:

The Tribunal’s identification of what it considered to be the material questions of fact may demonstrate that it took into account some irrelevant consideration or did not take into account some relevant consideration.

(emphasis in original, footnote omitted)

38    In Wonson v Comcare (2020) 276 FCR 613 at 635 [93] (see also at 634 [90]), Katzmann, Anastassiou and Abraham JJ said:

The Tribunal’s duty to give reasons in conformity with s 43(2) similarly requires the Tribunal to disclose its path or process of reasoning in sufficient detail to enable a court to see whether it has made an error of law. That will necessarily involve making reference to the findings on material questions of fact and the evidence or other material on which those findings were based, but the duty is not discharged merely by including those references.

(emphasis added)

39    In Repatriation Commission v Holden (2014) 142 ALD 267 at 284 [78], Mortimer J said that the Tribunal’s duty to give reasons under s 43(2B) required it to “explain what evidence it has accepted or rejected in making those findings”. And, in a well-known passage in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 280D–F, McHugh JA said that where there is an obligation to give reasons for a decision:

its discharge does not require lengthy or elaborate reasons … But it is necessary that the essential ground or grounds upon which the decision rests should be articulated. In many cases the reasons for preferring one conclusion to another also need to be given.

(emphasis added)

40    However, it is not enough for a decision-maker that he, she or it considered one or more matters, to which a statute requires the decision-maker to have regard, “in the sense of having looked at but discarded them” as Gummow and Hayne JJ held in East Australian Pipeline Pty Ltd v Australian Competition and Consumer Commission (2007) 233 CLR 229 at 256 [102], and see too at 244 [52] per Gleeson CJ, Heydon and Crennan JJ.

41    Brennan CJ, Toohey, McHugh and Gummow JJ explained in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 the role of a court in reviewing an administrative decision. They said:

a court should not be “concerned with looseness in the language … nor with unhappy phrasing” of the reasons of an administrative decision-maker ([Collector of Customs v] Pozzolanic [Enterprises Pty Ltd] (1993) 43 FCR 280 at 287). The Court continued (Pozzolanic (1993) 43 FCR 280 at 287): “The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error”.

These propositions are well settled. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed (See McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609 at 616).

42    Their Honours also affirmed that a judicial review of an administrative decision is concerned with whether the decision-maker acted according to law in making the challenged decision and that this was not a review of the merits of the decision. That is because the merits are the sole concern of the administrative decision-maker under the legislation that the Parliament has enacted. In Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173 at 184–186 [23], [25], 195–196 [59]–[60], French CJ, Bell, Keane and Gordon JJ held that a decision-maker’s reasons had to be read fairly as a whole and reemphasised the caution against engaging in merits review that the Court must adopt in reviewing administrative decisions.

43    Here, the Tribunal found the Grand Chapel agreement, and not the 2020 agreement, was the governing instrument for determining Mr Dooley’s redundancy pay entitlement for his service prior to his redeployment to Warwick Farm under s 23 of the FEG Act. However, as the Secretary pointed out, that was an agreement between Ovato Print and the AMWU to which none of the employees was party. The document does not suggest that the Union was acting to make a contract on behalf of the employees, or as their agent, albeit that, of course, the Union was representing the interests of employees. Be that as it may, ordinarily, courts have been careful not to translate industrial agreements between an employer and a union as creating legal rights of employees, whom the union represented, against the employer that are enforceable as contractual rights: see, for example, Ryan v Textile Clothing and Footwear Union of Australia [1996] 2 VR 235 at 257–258 per Hayne JA, with whom Brooking and Tadgell JJA agreed, and Hanlon v Refined Sugar Service Pty Ltd [2002] FCA 1395 at [24] per Emmett J.

44    Although the Grand Chapel agreement was expressed in terms that may appear similar to a contract, including its description as an ‘agreement’, in the absence of evidence and findings as to its creation, purpose and what it dealt with, it is difficult to characterise it as intended to give rise to contractual relations between Ovato and the AMWU.

45    In Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at 105 [24]–[25], Gaudron, McHugh, Hayne and Callinan JJ said:

24    “It is of the essence of contract, regarded as a class of obligations, that there is a voluntary assumption of a legally enforceable duty.” (Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 at 457, per Dixon CJ, Williams, Webb, Fullagar and Kitto JJ) To be a legally enforceable duty there must, of course, be identifiable parties to the arrangement, the terms of the arrangement must be certain, and, unless recorded as a deed, there must generally be real consideration for the agreement. Yet “[t]he circumstances may show that [the parties] did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts” (South Australia v The Commonwealth (1962) 108 CLR 130 at 154, per Windeyer J).

25    Because the inquiry about this last aspect may take account of the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances (South Australia v The Commonwealth (1962) 108 CLR 130 at 154; Placer Development Ltd v The Commonwealth (1969) 121 CLR 353 at 367, per Windeyer J), not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the “intention to create contractual relations” requires an objective assessment of the state of affairs between the parties (Masters v Cameron (1954) 91 CLR 353 at 362, per Dixon CJ, McTiernan and Kitto JJ; ABC v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548-549, per Gleeson CJ) (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules.

(emphasis added)

46    Moreover, in the context that both the 2020 agreement and the Grand Chapel agreement were made in an industrial context, it was important to have regard to the industrial purpose of each together with its respective commercial and legislative purposes as well as to the terms of the particular document as a whole: Energy Australia Yallourn Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union (2018) 264 FCR 342 at 356–357 [56] per Rares and Barker JJ citing Kucks v CSR Ltd (1996) 66 IR 182 at 184 per Madgwick J.

47    Here, the obvious questions are what was the purpose of, subject matter of, and the consideration for, the “agreement” and how could the AMWU or an employee enforce it? The fact that the Grand Chapel agreement was not incorporated into either the 2018 or 2020 agreements would suggest that the AMWU and Ovato group did not intend it to be enforceable directly under the Fair Work Act.

48    The Tribunal had a body of evidence before it to which it did not refer in its reasons that may or may not have enabled it to come to the conclusion that it ultimately reached, namely that the governing instrument for Mr Dooley’s entitlement to redundancy pay was the Grand Chapel agreement. But, in order to do so, it was essential that the Tribunal resolve at least one of the issues that it recorded that the Secretary had raised from the minutes taken by the AMWU of their meeting with Mr O’Connor on 21 March 2019, namely that:

Any MK [scil: Moorebank] staff that move to WF [scil: Warwick Farm] will have their redundancy calculation at the time of transfer grandfathered. This was designed to deal with staff who had worked on night shift for many years at MK [scil: Moorebank] and changed shift when moving to WF [scil: Warwick Farm] which would reduce value of redundancy (Agreed)

(emphasis added)

49    Yet, the Tribunal did not address this contextual statement of the purpose, presumably known to both Mr O’Connor and Ms Cassin when they “agreed” about the “grandfathering” or “freezing” of something to do with redundancy payments. Contracts are not made in a factual vacuum and their meaning can be, and often is, illuminated by what a reasonable person in the position of the parties would have understood from the words of the contract having regard to the surrounding circumstances, the aim, genesis and purpose of the agreement known to both parties: Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 462 [22] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ.

50    In the context known to the parties at the time at which the Grand Chapel agreement was struck on 21 March 2019, the Commission had approved the 2018 agreement just days earlier. It was binding on all of the employees, the PMP companies and the two unions by force of ss 51 and 52 of the Fair Work Act. Thus, there could be no doubt that all employees across the PMP group sites covered by the 2018 agreement were entitled to have uncapped redundancy pay based on four weeks’ pay for every year of service, as provided in cl 22.8, and that shift loadings would be calculated on a base rate. As noted above, there may have been a difference in the calculations applicable to staff at Warwick Farm or who moved there and were to be assigned to different shifts as compared to those applicable to them or the shifts they worked at Moorebank. But, the question for the Tribunal was to what did the Grand Chapel agreement refer in the words “Grandfather / freeze redundancy entitlement for redeployed employees as at date of transfer”?

51    The Tribunal did not explain how the Grand Chapel agreement came to have the binding force of continuing in effect even after at least the majority of Ovato group’s work force had voted in accordance with the requirements of the Fair Work Act to approve the 2020 agreement with the understanding that, if they approved it, it would significantly reduce their previous entitlements on redundancy. In particular, the Tribunal did not explain what the agreement in the Grand Chapel agreement was, who the parties to it were and how it came, as matter of contract, or because of a statutory foundation, to create a legally enforceable right that an employee in Mr Dooley’s position could enforce.

52    In addition, the Tribunal had the evidence, to which it referred in par 20 of its reasons, where Mr Slaven had explained to employees how the draft 2020 agreement would affect their rights, and the explanatory document for that draft that gave an explanation under the heading ‘Grandfathering of MBK [scil: Moorebank] packages?’ that I have quoted at [18] above.

53    It was not sufficient for the Tribunal simply to assert, as it did, that the 2020 agreement did not contain or should have contained words that excluded the Grand Chapel agreement from operating. It mischaracterised its task in par 46 of its reasons by asking whether the 2020 agreement, properly interpreted, was inconsistent with the Grand Chapel agreement or whether that latter agreement could be honoured consistently with the 2020 agreement. The 2020 agreement’s provisions relating to redundancy were directly inconsistent with previous corresponding provisions in cl 22 of the 2018 agreement because they were significantly reduced from payments of four to two weeks’ pay for every year of service: East Australian Pipeline 233 CLR at 244 [52], 256 [102] per Gummow and Hayne JJ, Wonson 276 FCR at 635 [93] per Katzmann, Anastassiou and Abraham JJ, Soulemezis 10 NSWLR at 280D–F per McHugh JA.

54    The Tribunal did not make any findings about what the terms of the Grand Chapel agreement were, other than its general statement about redundancy payments. The Tribunal needed to make findings and give reasons for doing so as to what the particular terms of the Grand Chapel agreement were in circumstances where there was conflicting evidence and submissions about what was being grandfathered or frozen concerning redundancy payments that was not otherwise already covered by the 2018 agreement. The Tribunal failed to identify or explain in a reasoning process how the arrangement reflected in the Grand Chapel agreement between the AMWU and Ovato group enabled an employee in Mr Dooley’s position to assert that it was a binding agreement and why they would have applied it to a subject already addressed in the 2018 agreement, namely the entitlement to four weeks’ pay for every year of service. It did not explain why it found this was the subject of the grandfathering or freezing rather than something not addressed in the 2018 agreement (such as allowing transferring employees who moved to a less well paid shift at Warwick Farm to have their redundancy pay calculated on their previous rate of pay at Moorebank) which an employee could enforce, especially given its inconsistency with the 2020 agreement.

55    In order to understand what the terms of the Grand Chapel agreement were and what they meant, it was necessary for the Tribunal to construe it from the objective position of a reasonable person in the position of the parties and in the industrial context in which they found themselves and then to make findings and express a reasoning process to explain, first, how the Grand Chapel agreement created binding rights which were enforceable at the suit of an employee, such as Mr Dooley, secondly, precisely what those rights were and, thirdly, why it arrived at the construction that it did.

56    While the identification of the terms of a contract involves questions of fact, construction or application of those terms in any particular situation, so as to effect legal rights, is a question of law: see Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1 at 14 [27]–[28] per French CJ, Kiefel and Bell JJ, 40 [131] per Keane J.

57    Because of the absence of any findings, and a reference to the evidence on which they were based, about what the terms of the Grand Chapel agreement were, beyond the Tribunal’s assertion that they somehow, and for no identifiable purpose, grandfathered or froze what was already in the 2018 agreement about the use of four weeks’ pay for each year of service to calculate redundancy pay, it is not possible to find that the ultimate result at which it arrived was not open to it.

58    There was evidence before the Tribunal that might have enabled it to find that Ovato had made some (unspecified) representation in the Grand Chapel agreement that had been communicated to employees, and, in particular, Mr Dooley, at the time it was made and that it comprised some form of offer, capable of acceptance by all the world, such as in Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256. However, the Tribunal did not make any findings or identify any evidence as to how Mr Dooley could be able to assert legal rights under the Grand Chapel agreement, and what those rights were, consistently with the industrial context in which the 2018 and 2020 agreements gave him and Ovato’s other employees enforceable rights to redundancy pay under the Fair Work Act.

59    The Tribunal seems to have taken the view that the Grand Chapel agreement was and remained binding on employees and Ovato, despite the Fair Work Act entitling the Commission to approve the 2020 agreement, pursuant to being satisfied of the matters in ss 186–188, including that the employees genuinely had agreed to the 2020 agreement as required by ss 186(2) and 188. The 2020 agreement had the legal effect, in common with many other instances throughout Australia, of reducing employees’ entitlements (with their agreement, by majority) because of the significant economic impacts on business as a result of the COVID-19 pandemic and lockdowns in many parts of Australia. Yet, the Tribunal asserted, without a reasoning process or fact finding, that somehow, at the time of approving the 2020 agreement, the Commission and the parties intended to leave extant the Grand Chapel agreement to override cl 22.7 of the 2020 agreement despite it significantly reducing the employees’ redundancy entitlements. The Tribunal seems to have thought that it could act as it did because of what it described as “the essential nature of justice is informed by fairness no less than by hard reason”.

60    In my opinion, the Tribunal failed to give any adequate reasons in accordance with its obligation under s 43(2) and (2B) of the AAT Act. It did not specify sufficient findings on material questions of fact and references to the evidence or other material on which those findings were based to enable a reasonable person to understand how it arrived at its conclusion that the Grand Chapel agreement was within the definition of ‘governing instrument’ under s 5 of the FEG Act so that it could have conferred a legal right that Mr Dooley could enforce. The Grand Chapel agreement was not any of the matters in pars (a), (b) or (d) of the definition, at least on the Tribunal’s findings, to which Mr Dooley was a party and therefore gave him a redundancy pay entitlement. Although the Grand Chapel agreement might be capable of being described as a “written instrument” within par (c) of that definition, the Tribunal did not give reasons as to how that agreement applied as a governing instrument in the industrial context known to all parties by the time the Commission approved the 2020 agreement with the deliberate purpose voted on by the majority of employees of reducing their redundancy entitlements.

61    In my opinion, because the 2020 agreement significantly reduced the redundancy entitlements of all employees from their rights under the 2018 agreement, the Tribunal’s reasons failed to make findings and identify the evidence it considered relevant to its asserted conclusion. It is impossible to understand from its reasons how the Tribunal arrived at its decision because it gave none about what were the terms of the Grand Chapel agreement and what they meant, did not explain how it arrived at its construction of whatever it was that the terms of that agreement contained in the context of the circumstances of the parties at the time.

62    However, it is not appropriate to make a finding, as sought by the Secretary, that the Grand Chapel agreement could not have been a governing instrument applicable to Mr Dooley’s redundancy pay entitlement for the purposes of the FEG Act because of the Tribunal’s failure to discharge its obligation properly to give reasons, make findings of fact and provide a reasoning process for its conclusion adequate to enable one to understand how it arrived at what, on its face, does not seem to be a logical conclusion on the limited factual material to which I have referred, which was not the whole of the facts before the Tribunal. The problem is that the Tribunal failed to make findings of fact in its reasons, including about Mr Dooley’s evidence as to how he said the Grand Chapel agreement gave him rights, or what those were, or about anything that the witness he called said that he thought supported his account.

Conclusion

63    It is through no fault of Mr Dooley’s that he is in this position. However, for these reasons, I am of opinion that the Tribunal failed to give adequate reasons for its conclusion. Accordingly, its decision must be set aside and an order in the nature of a writ of mandamus should issue requiring it to hear and determine Mr Dooley’s application for review of the review delegate’s decision according to law. The Secretary, very properly, did not seek an order for costs.

Associate:

Dated:    15 June 2023