Federal Court of Australia

BHP Coal Pty Ltd v Mining and Energy Union [2025] FCA 1116

ORDERS

THE COURT ORDERS THAT:

1.    The applicants’ interlocutory application filed on 1 September 2025 is dismissed.

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

REASONS FOR JUDGMENT

WHEELAHAN J:

1    On 7 July 2025, the Fair Work Commission constituted by a Full Bench published a decision that regulated labour hire arrangement orders should be made under s 306E of the Fair Work Act 2009 (Cth) in relation to employees of the second applicant (OS Maintenance) and the third applicant (OS Production) who are engaged in work at three coal mines in the Bowen Basin in central Queensland. The coal mines are operated by a joint venture between companies of which the first applicant, BHP Coal Pty Ltd, is the ultimate holding company, and other companies associated with Mitsui Corporation and Perpetual Ltd.

2    On 26 August 2025, the Commission gave effect to its decision by making six sets of orders pursuant to s 306E of the Act that were in similar terms. The principal effect of the orders is that the terms and conditions of employment of certain employees (the regulated employees) of OS Maintenance and OS Production working at the three coal mines will be the subject of a host enterprise agreement, namely the BMA Enterprise Agreement 2022. The orders come into force on 14 September 2025.

3    On 8 August 2025, and before the Commission made its orders, the applicants commenced this proceeding in the original jurisdiction of the Court seeking orders in the nature of constitutional writs quashing the decisions of the Commission and directing the Commission to redetermine the matters according to law. The applicants claim that the Commission’s decision is affected by jurisdictional error on grounds that are set out in the supporting affidavit. The applicants have foreshadowed an application to amend the originating application to bring within it a challenge to the orders that the Commission made on 8 August 2025, and this challenge therefore forms part of the matter before the Court.

4    Before the Commission made its orders on 26 August 2025, it afforded the parties an opportunity to make submissions as to the terms of the orders, and the time from which the orders should take effect. The applicants to this proceeding submitted that the orders should come into force on 30 November 2025, or alternatively on 19 October 2025. The Commission did not accept the applicants’ submissions as to the date on which the orders should come into force and, instead, determined that the orders should come into force on 14 September 2025. In allowing for this period, the Commission accepted undertakings from OS Maintenance and OS Production to backpay the regulated employees as if the orders specified an effective date of 7 July 2025. The undertaking was subject to the outcome of this proceeding, so that the undertaking would not be effective if this Court ordered a stay of the orders of the Commission.

5    The final hearing of the applicants’ originating application in this Court has been expedited and referred to a Full Court exercising original jurisdiction. The hearing has been fixed for 14 November 2025.

6    By an interlocutory application the applicants seek a stay of the Commission’s orders on the following grounds –

(1)    the applicants have a sufficiently arguable case of jurisdictional error;

(2)    the applicants will suffer irremediable prejudice should they be successful in this proceeding and a stay is not granted;

(3)    the applicants offer undertakings to make backpay to the regulated employees calculated from 7 July 2025 with interest should they be unsuccessful in the proceeding; and

(4)    the proceeding is to be heard expeditiously, and has now been fixed for hearing on 14 November 2025.

The claimed prejudice

7    The principal practical consequence of the Commission’s orders is that, on the assumption they are valid, from 14 September 2025 OS Maintenance and OS Production must pay the regulated employees at no less than the protected rate of pay, being the full rate of pay that would be payable to the employees if the host employment instrument covered by the regulated labour hire arrangement order were to apply to the employees: Fair Work Act, s 306F. A contravention of these obligations renders the employers liable to a civil penalty.

8    The applicants adduced evidence to the following effect –

(1)    There are approximately 1,132 regulated employees of OS Maintenance and OS Production who are covered by the Commission’s orders.

(2)    In order to comply with the Commission’s orders the applicants intend to make additional, “top-up” payments to the regulated employees to meet the protected rate of pay.

(3)    For the period 1 September 2025 to 31 August 2026, the quantum of top-up payments required is estimated to be approximately $28,421,728 (inclusive of oncosts) or $25,839,318 (inclusive of oncosts), depending on whether higher or lower classification levels under the enterprise agreement are found to be applicable to certain individuals.

(4)    The increased value as a result of the Commission’s orders of paid annual leave and personal or carer’s leave is estimated as being approximately $3,646,159.

(5)    If their application for judicial review is ultimately successful and orders in the nature of certiorari are issued, it will be difficult, time-consuming, and costly for the applicants to recover the top-up payments. The applicants led evidence that there were certain features of the payroll system which made the task of calculating overpayments complicated. In such circumstances, the applicants will be required to calculate the amount overpaid for each individual, and then either obtain employee consent to deduct the overpaid amount owing to the operation of s 324(1) of the Fair Work Act if that is lawful, or commence recovery proceedings in restitution against each individual employee if employee consent cannot be obtained or is otherwise ineffective to permit deduction of the overpaid amounts. There are no clauses in the relevant enterprise agreements applicable to the regulated employees that provide a mechanism for the applicants to deduct any overpaid amounts. The applicants submitted that any recovery proceedings would attract the operation of s 570 of the Fair Work Act, precluding on a prima facie basis any orders for costs.

9    Both respondents accepted that in the event that the applicants were successful in having the orders of the Commission quashed, recovery of overpaid amounts would be difficult. The first respondent accepted that the prospects of recovery would be affected by considerations such as whether a change of position defence was available to individual employees. For its part, the second respondent accepted that recovery would be at least uncertain, and that it would be appropriate for the Court to proceed on an assumption that none of the amounts would be recoverable.

10    The applicants have offered undertakings to the Court to pay the additional amounts to the regulated employees from 7 July 2025, being the date of the Commission’s first decision, together with interest calculated at the Federal Court rates applicable to pre-judgment interest. The applicants will also undertake to make applicable superannuation contributions in the event that their application for judicial review of the Commission’s orders is unsuccessful.

The claimed jurisdictional errors

11    The applicants submitted that its claims of jurisdictional error were sufficiently arguable to support their application for a stay of the Commission’s orders. Those submissions turned on the construction of s 306E of the Fair Work Act, which relevantly provides –

306E    FWC may make a regulated labour hire arrangement order

Regulated labour hire arrangement order

(1)    The FWC must, on application by a person mentioned in subsection (7), make an order (a regulated labour hire arrangement order) if the FWC is satisfied that:

(a)    an employer supplies or will supply, either directly or indirectly, one or more employees of the employer to perform work for a regulated host; and

(b)    a covered employment instrument that applies to the regulated host would apply to the employees if the regulated host were to employ the employees to perform work of that kind; and

(c)    the regulated host is not a small business employer.

Note:    The FWC may make other decisions under this Part which relate to regulated labour hire arrangement orders: see Subdivisions C (short-term arrangements) and D (alternative protected rate of pay orders) of this Division, and Division 3 (dealing with disputes).

(1A)    Despite subsection (1), the FWC must not make the order unless it is satisfied that the performance of the work is not or will not be for the provision of a service, rather than the supply of labour, having regard to the matters in subsection (7A).

...

(7A)    For the purposes of subsection (1A), the matters are as follows:

(a)    the involvement of the employer in matters relating to the performance of the work;

(b)    the extent to which, in practice, the employer or a person acting on behalf of the employer directs, supervises or controls (or will direct, supervise or control) the regulated employees when they perform the work, including by managing rosters, assigning tasks or reviewing the quality of the work;

(c)    the extent to which the regulated employees use or will use systems, plant or structures of the employer to perform the work;

(d)    the extent to which either the employer or another person is or will be subject to industry or professional standards or responsibilities in relation to the regulated employees;

(e)    the extent to which the work is of a specialist or expert nature.

12    One of the principal issues argued by the applicants before the Commission and which was determined adversely to them was whether the work performed by the regulated employees of OS Maintenance and OS Production was for the provision of a service rather than the supply of labour, thereby engaging s 306E(1A).

13    The applicants submitted that the Commission constructively failed to form the satisfaction in s 306E(1A) because it misconstrued and misapplied s 306E(1A) and (7A). The consequence of this, on the applicants’ submissions, is that the Commission misapprehended the true inquiry, with the further consequence that its satisfaction was not properly formed: R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430–432 (Latham CJ); Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at [30]–[32] (Gleeson CJ, Gaudron and Hayne JJ). As to how the Commission misconstrued and misapplied s 306E(1A) and (7A), the applicants advanced two grounds.

14    First, the applicants submitted that the Commission erroneously introduced concepts of “identifiable and discrete” and “distinct” as part of the test that it applied to determine whether the relevant work at the mines constituted the provision of a service rather than the supply of labour. This submission was directed to [42] of the Commission’s decision, where the Commission reasoned that –

The general concept of labour hire is contemplated by the requirement in s 306E(1)(a) and provides a useful frame of reference for the assessment required by s 306E(1A). In our view, having regard to the language of s 306E(1A) and the matters listed in s 306(7A), the core question asked is whether the performance of work by the regulated employees is properly characterised as being for the provision of an identifiable and discrete service to the regulated host which is distinct from the supply of the labour of the workers to work in or as part of the business of the regulated host.

(Emphasis added.)

15    Additionally, at [64] of its reasons, the Commission set out its summary of the proper approach to s 306E(1A) and (7A), which comprised the following propositions –

(a)    The Commission is required to be positively satisfied that the performance of work by the regulated employee or employees is not for the provision of a service, rather than the supply of labour.

(b)    The formation of that state of satisfaction requires the characterisation of the purpose, object or function of the performance of work by the regulated employees and involves an evaluative inquiry in which all relevant matters, at least including those in s 306E(7A), are taken into account.

(c)    The inquiry as to whether the performance of work is for the “provision of a service” cannot be reduced to an examination of whether the employer provides anything more than “merely” or “just” the supply of labour. Questions of extent and degree are likely to be involved in the characterisation exercise.

(d)    The focus is required to be on the performance of work by the regulated employees albeit that the commercial or contractual arrangements between the employer and the regulated host and the nature of the employer’s operations may be relevant when characterising the purpose or function of the work of the regulated employees.

(e)    The Commission is required to have regard to the matters in s 306E(7A) in the sense those matters are to be treated as a matter of significance in the decision-making process, but the considerations listed in s 306E(7A) are not necessarily exhaustive of the matters to be considered. The Commission may have regard to other relevant matters.

(f)    The question posed by s 306E(1A) is likely to turn on whether the purpose of the work performed by the regulated employees can properly be characterised as contributing to the provision of an identifiable and discrete service to the regulated host which is distinct from the supply of the labour of the workers to work in or as part of the business of the regulated host.

(Emphasis added.)

16    Subparagraph (f) of [64] gives arguable support to the applicants’ submission that the Commission’s approach to s 306E(1A) turned on a characterisation of “the provision of an identifiable and discrete service” to the regulated host as being “distinct” from the supply of labour.

17    In applying the approach set out at [64], the Commission concluded at [268] that –

Once all the relevant features of the arrangements are taken into account, we are satisfied that the evidence does not establish that the work of employees of OS Production and OS Maintenance involves the provision of an identifiable and discrete service to BMA as distinct from the supply of the labour of those workers to work in or as part of the business of the BMA. The consequence is that we are satisfied of the matters set out in s 306E(1A).

(Emphasis added.)

18    The applicants submitted that a test concerning “identifiable and discrete” and “distinct”, that was employed by the Commission in the above passages of its reasons, finds no textual support in the provisions of the Fair Work Act and wrongly focuses attention on characterising the performance of work itself, rather than characterising the thing for which the relevant employees were supplied to perform work. On the applicants’ submissions, the difficulty of the approach taken by the Commission is that the supply of labour will often be integral and connected with a provision of a service, so concepts of “identifiable and discrete” and “distinct” inappropriately exclude cases that Parliament intended should be captured by the carve out found in s 306E(1A). The applicants submitted that in this way the Commission impermissibly added its own gloss on the statutory language of s 306E, introducing notions that should not be read into the legislation as part of the Commission’s statutory task. By way of example, the applicants submitted that, in respect of production and maintenance work, the cost of what is being provided may “overwhelmingly… be attributable to the labour” of supplied employees, but that fact “should not be a disqualifying factor for the characterisation of service on the basis that it is not discreet enough, or not distinct from the labour”.

19    The applicants submitted that had the Commission identified the correct inquiry required by s 306E(1A), it would have been satisfied that the work in question was actually the provision of a full suite of services required to deliver on the respective scope of works at the three mines, which included the provision of services such as execution personnel, supervisors, managers, superintendents, line and reliability engineering support, and human resources support. The applicants further submitted that labour is quintessentially going to be the foundation of whatever is being provided or supplied, but in circumstances where something of substance beyond the mere supply of labour occurs, then the true characterisation of that work should be that it is the provision of a service.

20    As to the second ground of jurisdictional error that was advanced on this interlocutory application, the applicants submitted that, in its approach to the factors in s 306E(7A) of the Fair Work Act, the Commission constructively failed to form the state of satisfaction in s 306E(1A). By way of example, the applicants submitted that the Commission erroneously made comparisons between the services provided by OS Maintenance and OS Production and those provided by other employers the subject of the Commission’s decision, namely Workpac Pty Ltd, Workpac Mining Pty Ltd and Chandler Macleod Pty Ltd, which was an irrelevant consideration to which the Commission was not entitled to have regard. Another example given was the approach taken by the Commission to safety and health management systems required by the Coal Mining Safety and Health Act 1999 (Qld), whereby the Commission regarded the systems in place as indicative of a lack of control and direction by OS Maintenance and OS Production. The applicants submitted that in addressing for the purposes of s 306E(7A)(b) the extent to which, in practice, the employer or a person acting on behalf of the employer directed, supervised or controlled the regulated employees when they perform the work, including by managing rosters, assigning tasks or reviewing the quality of the work, it was impermissible to have regard to the control exercised by the host employer that was brought about by its obligations to comply with the safety and health legislation.

21    In further support of their claim that their grounds of review were sufficiently arguable, the applicants’ submitted that their judicial review application raises novel questions of construction because the provisions of the Fair Work Act in question are the product of recent amendments which have not been the subject of previous judicial analysis, and which do not have historic or contemporary statutory analogues.

The relevant principles

22    The obligations of OS Maintenance and OS Production to pay the regulated employees at the protected rates of pay arise by force of s 306F of the Fair Work Act upon the supposition that the Commission’s orders are valid. If, however, the Commission’s orders are affected by jurisdictional error, then they are likely to have no legal effect: Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; 209 CLR 597 at [51] (Gaudron and Gummow JJ).

23    The Court has no express statutory power to stay the operation of the Commission’s orders. Any powers that the Court has are derived from the conferral of jurisdiction by s 562 of the Fair Work Act and s 39B of the Judiciary Act 1903 (Cth). That conferral of jurisdiction brings with it implied powers, and the powers that are conferred on the Court by s 23 of the Federal Court of Australia Act 1976 (Cth).

24    In Attorney-General (Ex rel Tamworth Corporation) v Birmingham, Tame and Rea District Drainage Board [1912] AC 788, Earl Loreburn LC stated at 795 that “[a] Court of law has no power to grant a dispensation from obedience to an Act of Parliament”. A similar statement was made in Reid v Howard (1995) 184 CLR 1 at 16 (Toohey, Gaudron, McHugh and Gummow JJ) in relation to the scope of the general power conferred on the Supreme Court of New South Wales by s 23 of the Supreme Court Act 1970 (NSW), where it was held that ”neither the inherent power nor the completely general terms of s 23 can authorise the making of orders excusing compliance with obligations or preventing the exercise of authority deriving from statute”. Thus, it was held that the general terms of s 23 of the Supreme Court Act did not support the making of orders by a court that authorised non-compliance with a search warrant that was issued in the exercise of a statutory power.

25    There is an exception to the above general principle, which is that there may be circumstances where a court may make orders to preserve the subject matter of a proceeding where the existence of a statutory obligation or the legality of an administrative process is the matter that is in issue, as with Tait v The Queen (1962) 108 CLR 620. Such orders may be made so as to prevent the frustration of the court’s process, and to protect the court’s processes once set in motion. In Minister for Immigration v MZAPC [2025] HCA 5; 99 ALJR 486 (MZAPC) at [25] Gageler CJ, Gordon, Gleeson and Jagot JJ described this Court’s power in those circumstances as follows –

As an incident of its statutory power to make such interlocutory orders as are judicially considered to be appropriate, the power of the Federal Court to “protect the integrity” of the processes before it “once set in motion” includes the vindication of its own authority to ensure it can determine the proceeding before it and grant final relief of utility.

(Citations omitted.)

26    In the case of statutory obligations and processes, the scope of the power is closely confined and is directed to the protection of the integrity of the court’s process where the legality of the subject matter is in issue. It is not concerned with any broader object of alleviating any unfairness or injustice of administrative processes, even of a gross nature. As Edelman J stated in MZAPC at [61] –

A perception of gross unfairness is not a sufficient basis for a court to refuse to follow the law. The only alternative for a judge whose conscience does not permit them to refuse a stay due to their perception of gross unfairness is resignation.

27    In the industrial context, the implied power of a superior court to make an order of the type sought by the applicants was referred to by Mason J in Re Marks and Federated Ironworkers’ Association; Ex parte Australian Building Construction Employees and Builders’ Labourers’ Federation (1981) 34 ALR 208 (Re Marks). At that time, the High Court Rules 1952 (Cth) provided in O 55, r 10 that an order nisi for certiorari or prohibition should, if the Court or a Justice so directs, operate as a stay of the proceedings in question until the determination of the application or until the Court or a Justice otherwise orders. The applicant in Re Marks sought an order from the High Court in its original jurisdiction staying orders that had been made by the Australian Conciliation and Arbitration Commission. The statutory power in O 55, r 10 had no application because the applicant had failed to obtain an order nisi. Mason J referred at 211 to the inherent jurisdiction of the High Court to grant a stay of proceedings to preserve the subject matter of litigation, citing Tait v The Queen, before adding –

There is no reason for thinking that in an appropriate case the court cannot exercise the jurisdiction so as to preserve the subject matter of the litigation when the litigation is an application for a writ of prohibition.

28    Mason J then contrasted an application to stay proceedings, and the application before him which was to stay the orders themselves that had been made by the Commission in circumstances where the proceedings before the Commission were no longer on foot. His Honour observed that the distinction was not altogether clear. His Honour stated that, “the stay of an order of the kind in question in the exercise of the inherent jurisdiction pending an application for prohibition is at best an exceptional undertaking”. His Honour refused the application for a number of reasons that are set out at 212. Amongst those reasons were that the grant of a stay in the exercise of inherent jurisdiction was an exceptional course, and that the prospects of the applicant succeeding in obtaining a writ of prohibition were not strong.

29    In Re Merriman; Ex parte Australian Building and Construction Employees’ and Builders Labourers’ Federation (1984) 53 ALR 440 (Re Merriman) a Commissioner of the Australian Conciliation and Arbitration Commission made orders for the allocation of work in the course of dealing with demarcation disputes between three unions. One of the unions sought writs of certiorari and prohibition and sought a stay of the Commissioner’s orders. At 443 Brennan J stated that a stay of the Commissioner’s orders would be exceptional, citing Re Marks. For two reasons, his Honour was not persuaded to grant the stay. The first was that the order of the Commissioner was made as a means of settling an industrial dispute, and that a stay of the order might well have an unsettling effect. The second was that in response to a submission that the Commissioner’s order should not prevail if the absence of jurisdiction was manifest, his Honour held that the question of absence of jurisdiction was a matter for the Full Court to decide, and that the error was not so manifest as to warrant the making of an order neutralising the Commissioner’s order.

30    In Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 (Jennings Construction) Brennan J at 683 cited Re Marks and Tait v The Queen in the context of an application to stay orders of the Supreme Court of the Northern Territory pending an application for special leave to appeal to the High Court. Brennan J framed the issue in the application by stating that the jurisdiction to grant a stay depended on whether a stay was necessary to preserve the subject matter of the litigation. His Honour stated that if an application for special leave to appeal would be futile unless a stay was granted, then jurisdiction arose. His Honour stated that “[a] stay to preserve the subject-matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted”. Upon the premise that the Court was satisfied that a stay was necessary to preserve the subject matter of the litigation, Brennan J held that it was relevant to consider, amongst other things, whether there was a substantial prospect that special leave would be granted, whether the stay would cause loss to the respondent, and where the balance of convenience lay.

31    In Re Griffin; Ex parte Professional Radio and Electronics Institute (Aust) (1988) 167 CLR 37 (Re Griffin), Brennan J considered an application for an order nisi for prohibition and certiorari in relation to a decision of a Commissioner of the Australian Conciliation and Arbitration Commission to vary an earlier decision to increase weekly wages payable under an award by reducing the increase. The basis of the application was a denial of natural justice, which Brennan J held to be arguable in support of a writ of prohibition. The applicant applied for a stay of the Commissioner’s order, which was sought on the assumption that the order would lead to the original increase in weekly wages before the purported variation. Brennan J refused the application for the stay. His Honour noted that a stay of a Commissioner’s decision is exceptional, citing the Court’s earlier decisions to this effect. His Honour then continued at 42 –

There are sound reasons for this rule. Decisions of the Commission are made in a climate of industrial relations and of economic conditions which presents a multitude of considerations which the Commission must evaluate in deciding where the merits lie. This Court is concerned solely with the legality of the exercise or purported exercise of the Commission’s powers and not with the merits of the decision whose legality is challenged. Exceptional circumstances need to be shown to warrant the making of an order by this Court, before it determines the legality of an impugned decision, which affects the merits of a problem in industrial relations. In this case, it would be inappropriate for this Court to attempt to determine where the merits lie. Yet that is the result which the applicant seeks by an exercise of this Court’s discretion to stay the Commissioner’s decision until the case is disposed of. A stay must be refused and the position must be left unaltered by this Court until the Full Court decides whether the Commissioner has validly exercised her powers.

32    In Re Moore; Ex parte Pillar (1991) 103 ALR 11 (Re Moore), Dawson J considered an application to lift a stay of an order of the Australian Conciliation and Arbitration Commission which had been granted ex parte. The order of the Commission under challenge was to fix a day for the amalgamation of two unions which, if valid, had prescribed statutory consequences including the transmission of assets and liabilities to the amalgamated union. In granting the application to lift the stay Dawson J referred at 14 to Mason J’s statement in Re Marks and stated –

As Mason J observed in Re Marks, at 212, the grant of a stay of an order in the exercise of the inherent jurisdiction of the court is an exceptional course. Ultimately the power to grant a stay is to be found only where it is necessary to preserve the subject matter of the litigation or, perhaps, where the refusal of the stay would make it difficult in the determination of the proceedings in this court to grant the relief sought: [citations omitted].

33    Dawson J went on to hold that although there might be consequences that were irreversible, that did not mean that the proceedings would prove to be futile. His Honour further held that in any event he was not satisfied that the consequences would prove to be irreversible.

34    The decision of McHugh J in Re Australian Nursing Federation; Ex parte State of Victoria (1993) 112 ALR 177 (Re ANF) was the subject of close attention by the parties in submissions. In four separate applications the applicants sought writs of certiorari to quash findings that certain agencies of the State of Victoria were parties to industrial disputes, and in two applications sought orders quashing federal awards. The applicants sought orders nisi pursuant to O 55, r 10 of the High Court Rules that operated as a stay of proceedings in relation to two matters where disputes had been found, and in the other two matters sought a stay of the awards that had been made. In relation to the two different types of application, McHugh J stated at 184–185 –

Order 55, r 10 only applies to an order seeking to stay proceedings and not an order seeking to stay an order or award. “Speaking generally, the distinction is between a stay of further proceedings in litigation and a suspension of a judgment or order”. An order for a stay of an order, award or judgment must be made under the inherent jurisdiction of the court. It is only in exceptional circumstances that this court will make an order sterilising the operation of an order or award of the Commission before the court has determined the validity of an order or award made by the Commission. In Re Moore; Ex parte Pillar, Dawson J said –

Ultimately the power to grant a stay is to be found only where it is necessary to preserve the subject matter of the litigation or, perhaps, where the refusal of the stay would make it difficult in the determination of the proceedings in this court to grant the relief sought.

Although it may be easier to obtain a stay under O 55, r 10 than the inherent jurisdiction, the jurisdiction under O 55, r 10 is also one that is to be used sparingly and with caution. Ordinarily a strong case will need to be shown before a stay will be granted under that rule.

35    McHugh J refused the two applications to stay the awards, not being satisfied that exceptional circumstances existed. In one of the applications, Matter M12, his Honour held at 186 that, although the applicants had an arguable case in the sense that their contentions could succeed, there were obvious difficulties in the way of a successful challenge to the jurisdiction of the Commission which his Honour identified. In the other application, Matter M11, the award had been made by consent, which appeared to be fatal to the application for a stay.

36    The parties relied on several decisions of this court on the question of what degree of strength of an applicant’s case for final relief must be demonstrated in order to succeed in an application to stay orders of an industrial tribunal such as the Commission. The respondents relied on the following authorities to support a submission that the applicants must demonstrate a strong case for final relief: EnergyAustralia Yallourn Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FCA 360 at [34] (Murphy J); MI&E Holdings Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Plumbing, Postal and Allied Services Union [2013] FCA 360 at [15] (Gilmour J); and Woodside Energy Limited v Australian Workers’ Union [2022] FCA 1391 at [32] and [54] (Katzmann J).

37    The applicants submitted that a strong case for final relief was not a prerequisite to a successful application for a stay of an order of the Commission, but that the threshold was more appropriately framed as a case for final relief that was sufficiently arguable. The applicants relied for this submission on what they submitted to be a correct understanding of the reasons of McHugh J in Re ANF at 185–186, and on the following authorities: Re Australian Industrial Relations Commission; Ex parte Hail Creek Coal Pty Ltd [2003] FCAFC 322; Shop, Distributive and Allied Employees Association v National Retail Association [2011] FCA 1167 at [6]–[8]; Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees’ Union [2015] FCA 109 at [11], [13], [19]–[21] and [39] (Buchanan J); and National Road Transport Association Ltd v Road Safety Remuneration Tribunal [2016] FCAFC 56 (National Road Transport Association) at [16]–[18] and [46] (Jessup, Buchanan and Rangiah JJ).

38    On this issue, I will follow the decisions of the High Court to which I referred earlier, together with the approach taken by the Full Court in National Road Transport Association. The starting point is the object of the exercise of the power, which is to preserve the subject matter of the litigation. There may be cases, of which Tait v The Queen is an example, where there is no need for an evaluation of the strength of the grounds for relief. Dixon CJ stated at 624 that the adjournment and stay of execution was granted “entirely so that the authority of this Court may be maintained and we may have another opportunity of considering it”.

39    The High Court industrial cases to which I have referred, from Re Marks onwards, consistently emphasise the exceptional nature of the power to stay the operation of orders of industrial tribunals such as the Commission, but none of them establishes as a necessary prerequisite a strong case for final relief. In Re Merriman a submission was made that an order of the Commission should not prevail if there was a manifest absence of jurisdiction. It was in response to that submission that Brennan J held that the error alleged was not manifest. His Honour did not thereby hold that manifest jurisdictional error was required in order to qualify for a stay, but his Honour may be taken as saying that the demonstration of manifest jurisdictional error can support an order for a stay.

40    In Jennings Construction, which concerned an application for a stay pending a special leave application, Brennan J stated that it was relevant to consider whether there was a substantial prospect that special leave would be granted, thereafter holding that he did not think that the prospect of a grant of special leave was insubstantial.

41    In Re ANF at 185 McHugh J suggested in the passage I extracted at [34] above that it may be easier to obtain a stay under O 55, r 10 of the High Court Rules than the inherent jurisdiction of the Court, and stated that ordinarily a strong case would need to be shown before a stay would be granted under the rule. A fortiori, an even stronger case might need to be shown in order to obtain a stay of an order in the exercise of the Court’s inherent jurisdiction. I consider that the preferable understanding of McHugh J’s reasons is that a strong case for a stay must ordinarily be demonstrated rather than a strong case for final relief. Such an understanding allows appropriate weight to be given to the potential jeopardy to the exercise of a court’s jurisdiction in all cases where exceptional circumstances justify the protection of that jurisdiction. McHugh J held that in relation to a stay in the inherent or implied jurisdiction of a superior court, exceptional circumstances must be shown.

42    The Full Court’s decision in National Road Transport Association concerned an application to stay an order of the Road Safety Remuneration Tribunal. The approach of the Full Court is evident from [16], where the Court cited Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 –

The present are not, however, conventional civil proceedings. Even in such proceedings, “the governing consideration [is] that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought”: O’Neill 227 CLR at 84, [71]. This principle leads naturally to the identification of the approach which is appropriate in a setting in which the act of a public regulatory official is sought to be stayed, such as, and most analogously in the present context, the stay of an industrial award.

43    As to the appropriate approach, at [17] and [18], the Full Court extracted the passage from the judgment of Brennan J in Re Griffin at 42 (see [31] above) and the passage from the judgment of McHugh J in Re ANF at 184–185 (see [34] above) before stating that all parties and the intervener accepted that this was the approach that the Court should take.

44    Later, the Full Court stated at [46] –

Neither individually nor in any conceivable combination do the arguments advanced by the applicants present a prima facie case of the strength sufficient to justify the grant of an interlocutory stay as required by the authorities. Far from demonstrating self-evidently strong prospects, we would express the provisional assessment that the applicants’ grounds lie well towards the weaker end of the spectrum. Consistently with O’Neill and the other authorities to which we have referred, that conclusion does not, of itself, produce the result that the interlocutory stay sought by the applicants should not be granted. As always in such cases, it is necessary to take account of where the balance of convenience – or, perhaps more accurately in the circumstances of the present case, the balance of disadvantage – lies; and to consider also such other discretionary matters as may be relevant to that question. It is, therefore, to those aspects that we next turn.

45    Thereafter, the Full Court stated at [48] –

Considerations of this kind inform the principle, conventionally recognised in the setting of administrative law challenges to industrial awards, that exceptional circumstances must be shown before the operation of such an award will be stayed on the establishment of no more than a prima facie case of invalidity. This is not to set the bar unreasonably high for an applicant in such a context. It is no more than a recognition of the wider public interest involved in the discharge of the regulatory functions of the award-maker and of the premise, usually readily available, that detriment will, or at least may, be suffered over a wide front if some new provision considered to be meritorious does not operate according to its terms. The quasi-legislative function of the Tribunal under the RSR Act makes the case for the analogous invocation of this principle an obvious, if not a compelling, one. That is to say, at this point, at least, there is a sound working hypothesis which must be accepted that the Tribunal acted within its jurisdiction rather than outside it unless a strong and clear case seems available to the contrary. We are not satisfied that the applicants or the intervener have demonstrated such a strong and clear case which would warrant intrusion by the court at this stage to stay the impugned decisions.

46    Accordingly, the approach of the Full Court in National Road Transport Association in relation to the relevance of the strength of the applicants’ claim for final relief was that –

(a)    exceptional circumstances had to be shown by an applicant seeking a stay of an order of the Tribunal;

(b)    the strength of the claim for final relief was relevant, but the absence of a strong claim for final relief was not necessarily determinative;

(c)    nonetheless, the failure of the applicants to demonstrate a strong and clear case of jurisdictional error had the result that there was no warrant for intrusion by the court to stay the impugned decision.

47    In summary, it has long been recognised that the exercise of an inherent or implied power of a court to stay the operation of awards or orders of industrial tribunals having ostensible effect, thereby sterilising their operation, is an exceptional course. That characterisation of the circumstances in which the power will be exercised is a product of the confined nature of the court’s jurisdiction, which is one of judicial review concerned only with the legality of the Commission’s orders, and not with the underlying merits. It is also a product of the object of the power that is being exercised, which is to preserve the subject matter of the proceeding and to protect the administration of justice. In determining whether exceptional circumstances exist, it may be relevant to inquire whether the applicant has a strong case for final relief, but the existence of a strong case for final relief, as opposed to a strong case for a stay, is not a necessary condition.

Consideration

48    I accept that if the Commission’s decision is ultimately found to be affected by jurisdictional error, then there will be considerable inconvenience and difficulty occasioned to the applicants, and in all likelihood the regulated employees also, should payments made under the host employer instrument be repayable under general law restitutionary principles. I also accept that the scale of recovery would likely be large, and that the remedies available to the employers would be the subject of legal and practical limitations as a result of the operation of s 324(1) of the Fair Work Act in combination with the applicable enterprise agreement which would likely preclude any deduction from wages. However, while recovery would be very difficult, I do not think that all recovery rises to the level of impossible.

49    I am satisfied that the applicants have a prima facie case for final relief on the ground of jurisdictional error. But I go no further. At an impressionistic level, the errors alleged by the applicants do not strike me as manifest jurisdictional errors. Otherwise, it is not necessary or desirable to engage in a detailed appraisal of the strength of the applicants’ claims, which is not possible given the nature of the errors that are alleged, the novel statutory provisions that are involved, and the absence of full argument. The claims of jurisdictional error will be a matter for the Full Court.

50    Putting aside the strength of the applicants’ case for judicial review, whether a stay should be granted turns on whether there are exceptional circumstances. Those circumstances have been held to arise only where the applicants have demonstrated that a stay is required to preserve the subject matter of the litigation, or that refusal of a stay would make it difficult to grant the ultimate relief sought: Re ANF at 185 (McHugh J), citing Re Moore at 14 (Dawson J). The first respondent submitted that it would only be if final relief in this proceeding would be rendered “inutile” that the circumstances would justify a stay. This formulation reflects the statement in the joint judgment in MZAPC at [25] that the power of the Federal Court to protect the integrity of the processes before it is to ensure that it can grant final relief of utility.

51    I am not satisfied that the final relief in this proceeding would be frustrated if a stay of the Commission’s orders were not made. The subject matter of this proceeding is the legality of the Commission’s orders, and not the consequences of complying with the statutory obligations that arise on the supposition that the orders are valid. While the applicants have established a likelihood that they will suffer some irreversible detriment should a stay not be ordered and on the assumption they obtain final relief, there is no real prospect that final relief would be futile. Far from it. In Re Moore at 15, Dawson J did not consider that claimed irreversible collateral consequences of the Commission’s orders that were under challenge were matters that rendered the proceedings futile. That is the situation here. In this proceeding, a stay is not necessary to preserve the subject matter of the litigation.

Conclusions

52    For the following reasons I am not satisfied that the applicants have established exceptional circumstances that would make it appropriate for the Court to exercise its power to protect the subject matter of the proceeding –

(1)    The situation of the employees is a matter to be given weight. It is to be presumed for the purposes of assessing prejudice to the employees that the Commission’s orders are valid, and that the regulated employees are entitled to the benefits that will accrue to them as a result. Although the applicants have offered undertakings which, following revision, were not ultimately criticised by the respondents at the hearing, the undertakings are only to compensate the regulated employees for the deprivation of the increased pay and other entitlements that will accrue to them by way of regular wages, superannuation contributions, and claims for leave.

(2)    While I am satisfied that the applicants have established a prima facie case, I am not persuaded that there is a strong case on the limited argument that was presented on the interlocutory application. While the existence of a strong case is not a prerequisite to relief, the absence of a strong case or the absence of manifest error are, in combination with other circumstances, relevant to the existence of exceptional circumstances.

(3)    The Court has expedited the hearing of the originating application which is fixed before a Full Court on 14 November 2025, thereby containing any adverse collateral consequences for the applicants. While the total sums that will likely be paid to the regulated employees in the period up to the Court’s judgment will be substantial, it is necessary to look at the matter proportionally. The parties agreed as a rough estimate that the increased pay represented an increase of about 15% of the regulated employees’ current remuneration.

(4)    I give little weight to the claimed difficulties in calculating any overpayments should the orders of the Commission be quashed. Given the significant sums involved on the applicants’ case, it was not persuasively explained why an accurate accounting of any overpayments could not be kept and calculations made by appropriately qualified staff, contractors, or professional advisers.

(5)    Finally, and this is the leading consideration, I am not satisfied that there is any real risk that the final relief claimed by the applicants will be imperilled if the stay is refused. This consideration takes this case outside the accepted exceptional circumstances in which the power to order a stay of the Commission’s orders may be exercised.

53    The applicants’ interlocutory application will be dismissed.

Associate:

Dated:    10 September 2025