1
[Note: refer to the Federal Court decision dated 14 August 2012 [2012] FCAFC 108 for
result of appeal.]
[2011] FWAFB 6684
DECISION
Fair Work Act 2009
s.604 - Appeal of decisions
The Australian Industry Group
v
ADJ Contracting Pty Ltd
(C2011/4401)
Electrical contracting industry
SENIOR DEPUTY PRESIDENT HARRISON
SENIOR DEPUTY PRESIDENT RICHARDS
COMMISSIONER ROE SYDNEY, 13 OCTOBER 2011
Appeal against decisions [[2011] FWA 2380 and [2011] FWAA 1447] of Senior Deputy
President Acton at Melbourne on 28 April 2011 and 4 May 2011 in matter number
AG2011/364.
DECISION OF SENIOR DEPUTY PRESIDENT HARRISON AND
COMMISSIONER ROE
[1] ADJ Contracting Pty Ltd and its employees made an enterprise agreement and applied
to have that agreement approved by Fair Work Australia (FWA). It was approved. An appeal
against the approval is now made by a person not a party to the agreement on the grounds that
certain clauses contained in it are contrary to the Fair Work Act 2009 (FW Act). The appeal
does not raise discretionary considerations about whether the clauses are appropriate for the
enterprise. The fact they are agreed suggests the parties decided they are. The appeal raises
questions about the interpretation of a number of sections of the FW Act and their application
to the clauses in contention.
[2] The appeal is made under s.604 of the FW Act by the Australian Industry Group
(AIG) against the decision of Senior Deputy President Acton to approve the ADJ Contracting
Pty Ltd Enterprise Agreement 2010-2014 (the ADJ agreement). This appeal was heard at the
same time as matter C2011/4632 which is an appeal by the Construction, Forestry, Mining
and Energy Union (CFMEU) against the decision of Senior Deputy President O’Callaghan to
refuse to approve the Moyle Bendale Timber Pty Ltd Enterprise Bargaining Agreement 2010-
2013 (the Moyle Bendale agreement).1 It was accepted by all persons appearing before us that
in relation to the matters raised by the grounds of appeal which are common to each appeal,
the submissions made in one may be taken into account in the other. This is of particular
relevance to the provisions of the FW Act which concern right of entry.
AUSTRALIA FAIR WORK AUSTRALIA
http://www5.austlii.edu.au/cgi-bin/sign.cgi/au/cases/cth/FCAFC/2012/108
[2011] FWAFB 6684
2
[3] We should indicate that Her Honour published two decisions and the AIG notice of
appeal indicates it is made against both decisions. It was common ground before us that it was
the first of Her Honour’s decisions containing her detailed reasons in respect of a number of
objections that had been made to the approval of the ADJ agreement which was the focus of
the appeal. Her Honour’s subsequent approval decision could only be understood in the
context of her earlier decision. It was not suggested we need make any further ruling about
this issue.
[4] Before us, Mr Wood appeared with Mr Tracey for the AIG and Mr Borenstein
appeared for the Communications, Electrical, Electronic, Energy, Information, Postal,
Plumbing and Allied Services Union of Australia (CEPU). Mr Irving (who appeared for the
CFMEU in the Moyle Bendale appeal) sought permission for the CFMEU to intervene in this
appeal. Leave to intervene was also sought by Australian Mines and Metals Association Inc
(AMMA) for whom Mr Follett appeared and the Australian Council of Trade Unions (ACTU)
represented by Mr Fetter. In each case where counsel sought permission to appear it was
granted. In each case where permission was sought to intervene to make submissions
permission was granted. We note that the FW Act does not refer to an intervener however it
was not in issue that an application to make submissions may be made by a person who is
able to establish a relevant interest in the matters raised by the appeal grounds.2
[5] AMMA supported the submissions of AIG and made some additional comments about
them and the ACTU supported the submissions of the CEPU and the CFMEU. Generally, we
will only refer to the submissions of AIG and the unions when addressing each ground of
appeal but in doing so we have also taken into account the submissions made by AMMA and
the ACTU about those grounds.
[6] The appeal is made under s.604 of the FW Act. The relevant parts of that section are:
“604 Appeal of decisions
(1) A person who is aggrieved by a decision:
(a) made by FWA (other than a decision of a Full Bench or the Minimum
Wage Panel); or
(b) …
may appeal the decision, with the permission of FWA.
(2) Without limiting when FWA may grant permission, FWA must grant
permission if FWA is satisfied that it is in the public interest to do so.
Note: …
(3) A person may appeal the decision by applying to FWA.”
[2011] FWAFB 6684
3
The competence of AIG’s appeal
[7] As is clear from s.604(1) it is necessary for AIG to establish that it is a person
aggrieved by the decision to approve the ADJ agreement. The CEPU submits it is not. It relies
on the fact that the application for approval was made by ADJ Contracting Pty Ltd (ADJ
Contracting) and supported by the CEPU. AIG did not represent ADJ Contracting and had no
role in the negotiation of the agreement. The CEPU acknowledged that AIG had been granted
permission to intervene before Her Honour. However, it submitted that AIG cannot be said to
be aggrieved as it has put forward for approval enterprise agreements with clauses of the kind
which it now seeks to challenge. Some examples were given. In these circumstances the
CEPU submits that its appeal is incompetent. In the alternative it submits that AIG should not
be granted permission to appeal.
[8] We accept that AIG has established that the clauses it challenges deal with issues of
importance to it and its members. For reasons similar to those given by a Full Bench in
Australian Industry Group and Pacific Brands Limited t/a Dunlop Foams3 (Dunlop Foams)
we have decided that AIG is a person aggrieved and has standing to bring this appeal.4
Permission to appeal
[9] Whether we should grant permission to appeal is a matter which we have decided with
some hesitation. We are concerned about the grant of permission in circumstances where AIG
does not represent ADJ Contracting and neither that company nor the employer association
which did represent it have appeared. Additionally, it is accepted by AIG that it has
represented members in relation to the approval of their enterprise agreements where those
agreements contain clauses similar to those AIG now submits are objectionable.5 Despite
these concerns we have decided, on balance, that even though some aspects of the issues
raised by this appeal have been considered by earlier Full Benches the scope of the matters
now raised, and the submissions in support, concern matters of general importance to the
approval of enterprise agreements and it is in the public interest to grant permission to appeal.
ADJ Contracting and NECA
[10] We wish to comment briefly on the absence of certain persons in this appeal. In the
case of the ADJ agreement the bargaining representative for the employer was the National
Electrical and Communications Association (NECA). It would seem that the agreement was
one of a number of agreements which reflected the outcome of industry negotiations at a state
level between NECA and the CEPU. Neither ADJ Contracting nor NECA appeared before us
to make any submissions about the terms of the agreement they had reached, and in respect of
which approval had been sought. We consider it unsatisfactory that NECA did not seek to
support the terms of the agreement it had negotiated on behalf of its member ADJ Contracting
and many others in a like position in the industry.
The issues raised by the grounds of appeal
[11] AIG indicated that the appeal raises four broad issues. They are as follows:
1. Whether clause 4.3(b)(v) of the ADJ agreement is an unlawful term because it has the
effect of requiring or permitting ADJ Contracting to contravene the “General
[2011] FWAFB 6684
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Protections” provisions found in Part 3-1 of the FW Act namely, s.340(1)(a) of the
FW Act, which (read with ss341 and 342) provides that a person must not, as
principal, take adverse action against a contractor or proposed contractor, because that
contractor has a workplace right or proposes to exercise a workplace right, being a
right arising from it being entitled to the benefit of a workplace instrument;
2. Whether compliance with clause 4.3(b)(v) of the ADJ agreement may, in the terms of
s.192 of the FW Act, result in a person, namely ADJ Contracting or the CEPU, being
liable to pay a pecuniary penalty in relation to a contravention of ss. 45E or 45EA of
the Competition and Consumer Act 2010 (Cth)(CC Act);
3. Whether clause 15.2(k) of the ADJ agreement, which concerns right of entry, is an
unlawful term because it provides for right of entry other than in accordance with Part
3-4 of the FW Act; and
4. Whether clauses 16.6(b) and (d) of the ADJ agreement, which concern inducement of
employees to take union “membership action”, are unlawful terms because they
require a contravention of s. 350 of the FW Act.
Clause 4.3(b)(v) - the first two grounds of appeal
[12] To place the first challenge to this clause into context we should reproduce two
sections of the FW Act. The first is the definition of objectionable term in s.12 which provides
that it means a term that:
“(a) requires, has the effect of requiring, or purports to require or have the effect of
requiring; or
(b) permits, has the effect of permitting, or purports to permit or have the effect of
permitting;
either of the following:
(c) a contravention of Part 3-1 (which deals with general protections);
(d) the payment of a bargaining services fee.”
[13] The next section is s.194. It reads as follows:
“194 Meaning of unlawful term
A term of an enterprise agreement is an unlawful term if it is:
(a) a discriminatory term; or
(b) an objectionable term; or
(c) if a particular employee would be protected from unfair dismissal under Part 3-
2 after completing a period of employment of at least the minimum employment
[2011] FWAFB 6684
5
period—a term that confers an entitlement or remedy in relation to a termination of the
employee’s employment that is unfair (however described) before the employee has
completed that period; or
(d) a term that excludes the application to, or in relation to, a person of a provision
of Part 3-2 (which deals with unfair dismissal), or modifies the application of such a
provision in a way that is detrimental to, or in relation to, a person; or
(e) a term that is inconsistent with a provision of Part 3-3 (which deals with
industrial action); or
(f) a term that provides for an entitlement:
(i) to enter premises for a purpose referred to in section 481 (which deals
with investigation of suspected contraventions); or
(ii) to enter premises to hold discussions of a kind referred to in
section 484;
other than in accordance with Part 3-4 (which deals with right of entry); or
(g) a term that provides for the exercise of a State or Territory OHS right other
than in accordance with Part 3-4 (which deals with right of entry).”
[14] The applicability of the above sections to this appeal arises in this way. Section 186(1)
provides that if an application for approval of an enterprise agreement is made FWA must
approve the agreement if the requirements set out in that section and s.187 are met. One
requirement in s.186(4) is that FWA must be satisfied that the agreement does not include any
unlawful terms. As can be seen from s.194 the meaning of unlawful term includes an
objectionable term. So, the first ground of appeal is that Her Honour should have found that
clause 4.3(b)(v) was an objectionable term because it has the effect of requiring or permitting
ADJ Contracting to contravene s.340 of the FW Act (a section contained within Part 3-1
which deals with workplace rights).
[15] Although AIG’s submissions concentrated on clause 4.3(b)(v) we should reproduce all
of clauses 4.3(a) and (b):
“4.3 Security of Employment Arrangements
(a) Overview
(i) The Employer is committed to maintaining a stable and skilled
workforce, recognising its contribution to the operation of the
Employer. Subject to the terms of this Agreement, full-time direct and
ongoing employment is a guiding principle of this Agreement.
(ii) The Employer will take all measures to achieve employment security
for the direct permanent employees of the Employer. All persons
[2011] FWAFB 6684
6
covered by this Agreement recognise the importance of measures to
protect and enhance the employment security, health and safety, terms
and conditions of employment and career development of the
Employees.
(iii) The Employer agrees that it is highly important that work is performed
effectively, efficiently and without undue pressure or bullying, and in a
way that promotes OHS and EO principles and practices in the
workplace and appropriate representation of Employees should they so
request. The Employer will ensure that its employment practices are
consistent with the above principles and practices.
(b) Contractors
(i) Where the Employer makes a definite decision that it intends to engage
contractors or labour hire companies to perform work covered by the
Agreement, (which would ordinarily be undertaken by the employees),
the Employer shall consult with the employees and their
representatives, in accordance with this clause.
(ii) In the normal course, it is expected that consultation will occur within
the 14 days leading up to the commencement of the work by the
contractors / labour hire employees. If for any reason this does not
occur, or if the Employer has less than 14 days’ notice of the need to
commence the work, consultation will occur as soon as reasonably
practicable - and in any case not more than 14 days after the contractors
/ labour hire employees commence work.
(iii) For the purpose of the consultation, the Employer must inform the
employees and their representatives of:
(A) the name of the proposed contractor(s) / labour hire company;
(B) the type of work proposed to be given to the contractors(s) /
labour hire company;
(C) the number of persons and qualifications of the persons the
proposed contractor(s) / labour hire company may engage to
perform the work; and
(D) the likely duration.
(iv) The Employer will consult with the employees and their representatives
over the following issues:
(A) safety; and
(B) inductions and facilities for contractor and labour hire
employees.
[2011] FWAFB 6684
7
(v) The Employer shall only engage contractors and employees of
contractors, to do work that would be covered by this Agreement if it
was performed by the Employees, who apply wages and conditions that
are no less favourable than that provided for in this Agreement. This
will not apply where the Employer is contractually obliged by the head
contractor / client to engage a specific nominated contractor to do
specialist work.
(vi) This clause does not apply in respect of specialist contractors engaged
by the Employer where the provisions of sub clause (v) are met.
However, this exclusion will not be effective if the specialist contractor
further sub-contracts any portions of the works for which it has been
contracted by the Employer, unless otherwise agreed by the Employer
and the Union.
(vii) In the event of a dispute about whether consultation has occurred under
this clause, the employee or the Union may refer the matter to the
Disputes Board to determine. Nothing in this clause will be taken to in
any way limit, prevent or delay the commencement of work by
contractors or employees, or provide justification for work to cease
pending determination by the Disputes Board. Any commencement of
work will not prejudice the outcome of the dispute. The Disputes
Board’s determination shall be final and binding on the Parties (and
there shall be no right of review by FWA in respect of such a decision).
(vii) No employee shall be made redundant whilst labour hire employees,
contractors and/or employees of contractors, engaged by the Employer,
are performing work that is or has been performed by the Employees
on the particular site or project. This clause does not apply in respect of
specialist contractors.”
[16] Her Honour indicated that AIG’s argument was that the clause requires ADJ
Contracting to contravene s.340(1) of the FW Act because it requires it to refuse to engage or
use a contractor who has an enterprise agreement or other workplace instrument providing
less generous terms and conditions of employment than those in the ADJ agreement. A
similar argument was put to us. To fully understand this argument further provisions of the
FW Act need to be referred to. Section 340, as we have earlier noted, is contained in Part 3-1
of the FW Act. It is in these terms:
“340 Protection
(1) A person must not take adverse action against another person:
(a) because the other person:
(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii) proposes or proposes not to, or has at any time proposed or
proposed not to, exercise a workplace right; or
[2011] FWAFB 6684
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(b) to prevent the exercise of a workplace right by the other person.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2) A person must not take adverse action against another person (the second
person) because a third person has exercised, or proposes or has at any time proposed
to exercise, a workplace right for the second person’s benefit, or for the benefit of a
class of persons to which the second person belongs.
Note: This subsection is a civil remedy provision (see Part 4-1).”
[17] Section 341 must also be referred to. It defines what a workplace right encompasses.
“341 Meaning of workplace right
Meaning of workplace right
(1) A person has a workplace right if the person:
(a) is entitled to the benefit of, or has a role or responsibility under, a
workplace law, workplace instrument or order made by an industrial body; or
(b) is able to initiate, or participate in, a process or proceedings under a
workplace law or workplace instrument; or
(c) is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law
to seek compliance with that law or a workplace instrument; or
(ii) if the person is an employee—in relation to his or her
employment.”
[18] The focus of AIG’s submission is upon the reference to a “workplace instrument” in
s.341(1)(a). That is defined in s.12 as an instrument made under, or recognised by, a
workplace law and concerns the relationships between employers and employees. A
“workplace law” is also defined in s.12 and includes the FW Act.
[19] Section 342(1) is a table containing the types of action that will constitute adverse
action. Included in the table are actions that are taken by a person against an independent
contractor both where a contract has been entered into and where it is proposed to enter into a
contract. It is adequate to identify some of the actions. Examples include where a person
terminates the contract or refuses to engage the contractor, injures or discriminates against
them in relation to the terms of the contract, alters the contractor’s position to its prejudice or
refuses to make use of the services of the independent contractor.
[20] We now turn to Her Honour’s decision on this challenge. She said:
[2011] FWAFB 6684
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“[18] I consider the AIG’s concern that clause 4.3(b)(v) requires ADJ to contravene
s.340(1) of the FW Act is unfounded. Clause 4.3(b)(v) requires ADJ to only engage
contractors who apply wages and conditions no less favourable than those provided for
in the ADJ Agreement. The clause is not concerned with whether or not an enterprise
agreement or other workplace agreement covers the contractor.”
[21] Her Honour noted that her conclusion was consistent with the decision of a Full Bench
in Asurco Contracting Pty Ltd v Construction, Forestry, Mining and Energy Union6 (Asurco)
which dealt with a clause similar in effect to clause 4.3(b)(v). That Full Bench said:
“[12] Asurco also argues that the clauses in question contain unlawful content. It
contends that the clause requires or permits the employer to refuse to engage an
independent contractor because the independent contractor is entitled to the benefit of
a workplace law or workplace instrument. We reject this argument. First the terms of
an agreement cannot override the terms of the Act. Any objectionable term has no
effect:
“356 Objectionable terms
A term of a workplace instrument, or an agreement or arrangement (whether
written or unwritten), has no effect to the extent that it is an objectionable
term.”
[13] In any event, the obligation sought to be imposed on the employer is to require
contractors to be paid, as a minimum, the amounts in the agreement applicable to
employees. The existence of another enterprise agreement with higher or lower terms
does not preclude any such obligation being observed, nor does it follow, as was
submitted by Asurco, that such a provision would lead to a breach of the general
protections provisions of the Act.”
[22] AIG accepts that judicial consideration about what comprises a workplace right has
generally been in the context of employee rights but it submits an employer also has a
workplace right. That right is to employ its employees at a rate which is that prescribed in the
relevant workplace instrument be it an award or an enterprise agreement. The effect of clause
4.3(b)(v) is said to require ADJ Contracting and like employers only to engage or deal with
contractors who apply wages and conditions no less favourable than those provided for in the
ADJ agreement. It submits this amounts to ADJ Contracting engaging in adverse action.
[23] We first refer to the comment made by Her Honour about her decision being
consistent with the decision of the Full Bench in Asurco. Clearly it is. No adequate basis was
established for Her Honour, as single member, to not follow that decision and no error is
made out for her doing so. We do not understand that AIG sought to distinguish Asurco
before Her Honour and, before us, it accepted it was appropriate for Her Honour in those
circumstances to have followed it. However, AIG submits that to the extent Asurco is contrary
to its submissions this Full Bench should find that it was wrongly decided and decline to
follow it.
[2011] FWAFB 6684
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[24] We are not persuaded by AIG’s submission to decline to follow Asurco. In reaching
this conclusion we have considered the comments of the High Court of Australia in Nguyen
and Nguyen7 (Nguyen) which was referred to in the Full Bench decision of Transport
Workers’ Union of Australia and Australian Air Express8 (AaE) as to the “test” to be applied
by a Full Bench when deciding to not follow a previous relevant decision on the same point.
As was noted in AaE Full Benches of the Australian Industrial Relations Commission (the
Commission) had traditionally taken the view that they should only depart from previous
decisions in limited circumstances and, when considering an invitation to do so, the approach
taken by the High Court in Nguyen was frequently quoted as being appropriate. It was
acknowledged that although the then Commission (and now FWA) is not a court nonetheless
the underlying public interest considerations apply with similar force to appeal proceedings
and the same approach has been adopted. The relevant passage from Nguyen is as follows:
“Where a Court of Appeal holds itself free to depart from an earlier decision it should
do so cautiously and only when compelled to the conclusion that the earlier decision is
wrong. The occasions upon which the departure from previous authority is warranted
are infrequent and exceptional and pose no real threat to the doctrine of precedent and
the predictability of the law.”9
[25] We were not persuaded by the arguments of AIG that Asurco was wrongly decided.
Indeed we think it is correct. AIG made additional submissions in support of this ground of
appeal which were not addressed in Asurco. We have decided we should deal with them. The
submissions concern the question of whether an employer (and in this respect here a
contractor) has a workplace right within the meaning of s.341(1)(a). It relies in particular on
that right being that of a person entitled to the benefit of a workplace instrument. It can be
seen from the manner in which Her Honour dealt with the submission made to her she did not
rule expressly on this issue, nor did Asurco.
[26] The CEPU submitted it had been unable to find any case which applies s.341 to
contractors in the manner contended for by AIG. We too are not aware of any case which
directly deals with this point. CEPU is correct to submit that without establishing that the
contractor has a workplace right the whole of AIG’s argument must fail. To the extent the
meaning of the section is unclear and resort may be had to the Explanatory Memorandum’s
comments on this section all those comments refer to employee rights.10 It is not common to
describe an employer (here a contractor) being covered by an enterprise agreement as it being
entitled to the benefit of that agreement. The only place in the FW Act in which the term
“entitled to the benefit of.... a workplace instrument” is used is in s.341. We do however note
the terms of the now repealed s.298L(1)(h) of the Workplace Relations Act 1996 (WR Act)
which described a prohibited reason as one carried out because an independent contractor is
entitled to the benefit of an industrial agreement. We also note that the then s.298N made it an
offence for an employee to cease work in the service of an employer because the employer
was entitled to the benefit of an industrial instrument. However we were not taken to any case
which has described an employer as being entitled to the benefit of an industrial agreement
when speaking about the wages and conditions to be afforded to its employees.
[27] Nonetheless, we proceed on the basis that we assume the term is capable of bearing
the meaning for which AIG contends. However, the question remains, as the CEPU submits,
whether the contractor is entitled with respect to the matters covered by clause 4.3(b)(v) of the
ADJ agreement. It does not change the fact that compliance with clause 4.3(b)(v) in the ADJ
[2011] FWAFB 6684
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agreement does not concern itself with the terms of any instrument covering the contractor
and its employees. Further, and also assuming a workplace right, we agree with the CEPU
submission that there is nothing in clause 4.3(b)(v) which, in terms of the s.12 definition of an
objectionable term, “requires” ADJ Contracting to take any action against a contractor
“because” the contractor is entitled to the benefit of an industrial instrument. ADJ
Contracting’s concern is directed only at the rates of pay and conditions which the contractor
is to apply. The clause requires no consideration be given to the existence, nor the terms, of
any other agreement.
[28] Next AIG submits Her Honour was in error in failing to consider the effect of the
reference in paragraph (b) of the s.12 definition of objectionable term to “permits” or “has the
effect of permitting”. It submits that broadens the scope of the considerations as to whether
clause 4.3(b)(v) requires a contravention of s.340 of the FW Act. It says that the effect of the
reference to permitting is to allow a more hypothetical and broad ranging enquiry as to ADJ
Contracting’s reason for not engaging a particular contractor. We are not persuaded by this
submission. We think the better construction of the words in this part of the definition is that
adopted by a Full Bench of the Commission when considering the construction of s.298Z of
the WR Act. That section concerned terms of an agreement which required or permitted
certain conduct that would contravene the FW Act. The section contained a definition of
“permits” and like s.12 extended it to also include having the effect of permitting. This
provision was considered by the Full Bench in Office of Employment Advocate v Construction
Forestry Mining and Energy Union11. The case concerned an application made by the
Employment Advocate to vary a certified agreement to remove an objectionable provision.
The Full Bench said:
“[16] In our opinion, as used in s.298Z, the word “permit” carries the connotation
“authorize” as in part of the definition in the New Shorter Oxford English Dictionary
to “give permission or opportunity for”. The different connotations that the word may
bear are also illustrated by two of its definitions in the Macquarie Dictionary (3rd
edition)"5. to grant permission; allow liberty to do something. 6. to afford opportunity
or possibility". It is the first of these two connotations that the word bears in s.298Z.
As was decided in Accurate Factory Maintenance, it is not so much what the employer
may do but what the clause by its terms requires or permits etc. the employer to do
which is determinative. The Full Bench illustrated this distinction with the following
example5:
“The position is analogous to one that might arise if an employer terminated the
employment of a union delegate, pursuant to a general provision for
termination of employment in a certified agreement, because of the delegate's
union affiliation. Although in such a case the adverse activity would be
permitted by the provision in the agreement, it could not be said that the
provision required or permitted, etc. conduct in breach of Part XA.”
It follows that for the purposes of the definition in s.298Z(5) a provision in an
agreement will only “permit” conduct in contravention of Part XA if it authorizes such
conduct by its terms, either directly or by necessary implication, and will only have the
“effect... of permitting” conduct in contravention of Part XA if it has the “effect” of
authorizing such conduct by its terms, either directly or by necessary implication.”
http://www.fwa.gov.au/FWAISYS/isysquery/d984fe65-6780-4453-a0ee-5d33092bdbd3/2/doc/#P115_9360
[2011] FWAFB 6684
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[29] Applying the construction adopted in the above extract leads us to the same conclusion
we reached in respect of earlier submissions. Clause 4.3(b)(v) does not permit or have the
effect of permitting a contravention of s.340 of the FW Act.
[30] The next ground of appeal also concerns clause 4.3(b)(v). This ground relates to s.192
of the FW Act. It is submitted that compliance with the clause may result in a person, namely
ADJ Contracting or the CEPU, being liable to pay a pecuniary penalty in relation to a
contravention of ss45E or 45EA of the CC Act. Section 192 is in these terms:
“192 When FWA may refuse to approve an enterprise agreement
(1) If an application for the approval of an enterprise agreement is made under
section 185, FWA may refuse to approve the agreement if FWA considers that
compliance with the terms of the agreement may result in:
(a) a person committing an offence against a law of the Commonwealth; or
(b) a person being liable to pay a pecuniary penalty in relation to a
contravention of a law of the Commonwealth.
(2) Subsection (1) has effect despite sections 186 and 189 (which deal with the
approval of enterprise agreements).
(3) If FWA refuses to approve an enterprise agreement under this section, FWA
may refer the agreement to any person or body FWA considers appropriate.”
[31] The relevant parts of s.45E are as follows:
“Prohibition of contracts, arrangements or understandings affecting the supply or
acquisition of goods or services
Situations to which section applies
(1) This section applies in the following situations:
(a) a supply situation --in this situation, a person (the first person ) has
been accustomed, or is under an obligation, to supply goods or services to
another person (the second person ); or
(b) an acquisition situation --in this situation, a person (the first person)
has been accustomed, or is under an obligation, to acquire goods or services
from another person (the second person).
Despite paragraphs (a) and (b), this section does not apply unless the first or second
person is a corporation or both of them are corporations.
...
Prohibition in an acquisition situation
http://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/s130.html#corporation
http://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/s130.html#corporation
http://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/s45dd.html#person
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[2011] FWAFB 6684
13
(3) In an acquisition situation, the first person must not make a contract or
arrangement, or arrive at an understanding, with an organisation of employees, an
officer of such an organisation or a person acting for and on behalf of such an officer
or organisation, if the proposed contract, arrangement or understanding contains a
provision included for the purpose, or for purposes including the purpose, of:
(a) preventing or hindering the first person from acquiring or continuing to
acquire such goods or services from the second person; or
(b) preventing or hindering the first person from acquiring or continuing to
acquire such goods or services from the second person, except subject to a
condition:
(i) that is not a condition to which the acquisition of such goods or
services by the first person from the second person has previously been
subject because of a provision in a contract between those persons; and
(ii) that is about the persons to whom, the manner in which or the
terms on which the second person may supply any goods or services.
...
Meaning of accustomed to acquire
(7) In this section, a reference to a person who has been accustomed to acquire
goods or services from a second person includes (subject to subsection (8)):
(a) a regular acquirer of such goods or services from the second person; or
(b) a person who, when last acquiring such goods or services, acquired
them from the second person; or
(c) a person who, at any time during the immediately preceding 3 months,
acquired such goods or services from the second person. ...”
[32] The only challenge made before Her Honour was by reference to s.45E of the CC Act.
Section 45EA was not raised by AIG. About the challenge that it did raise before Her Honour
she said:
“[23] The AIG’s concerns about ADJ’s compliance with clause 4.3(b)(v) and s.45E
of the CC Act can be readily dismissed.
[24] Section 45E is concerned with the making of certain contracts, arrangements or
understandings between a person and a union, officer of a union or person acting on
behalf of such an officer or union. It is not concerned with the person’s compliance
with such contracts, arrangements or understandings. Accordingly, even if clause
4.3(b)(v) amounts to such a contract, arrangement or understanding, ADJ’s
compliance with clause 4.3(b)(v) would not result in ADJ committing an offence
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[2011] FWAFB 6684
14
against s.45E of the CC Act as compliance with such a contract, arrangement or
undertaking, as opposed to making such a contract, arrangement or undertaking, is not
an offence under s.45E.
[25] It can be added that given the terms of clause 4.3(b)(v), ADJ’s compliance
with clause 4.3(b)(v) does not require them to not engage contractors or labour hire
companies who do not have industrial instruments acceptable to the CEPU and the
AIG’s assertion that it is likely to is without foundation.”
[33] Insofar as Her Honour decided this ground of appeal on the submissions made to her
we do not discern any error. The clause and the agreement in which it is contained reflect the
concluded outcome of negotiations and a document which comprises an agreement made with
a majority of employees who cast a valid vote for it. It is not, in terms in s.45E, the making of
an arrangement or understanding with a union or any union official.
[34] Further, in our opinion the making of an enterprise agreement does not comfortably fit
within the terms of s.45E. It is not, as the CEPU submits, the type of consensual agreement
envisaged by that section. When approved it is a statutory instrument which operates in an
entirely different legal context than an arrangement or understanding within the meaning of
s.45E of the CC Act. When it is in the course of being negotiated it must be processed in
accordance with the numerous requirements of the FW Act.12 Also, the ADJ agreement is not
one made with a union or any officer of a union as is a requirement of s.45E.13 As we have
earlier noted it is made with employees and when a majority of those employees cast a valid
vote for it. In fact an enterprise agreement will also cover persons who did not vote for it and
persons not even yet in employment at the time of the vote but who may at any time it is in
operation become employed.
[35] We are unable to categorise the ADJ agreement or any earlier drafts of the agreement
(about which we have no evidence) as reflecting “a meeting of the minds and a consensus as
to what is to be done”.14 In this respect we accept the following submission of the CEPU:
“.... AIG accepts ..... that in order for liability to arise under s45E, there must be a
meeting of the minds and a consensus as to what is to be done rather than a mere hope
or expectation of what might be done. It accepts that one party must assume an
obligation or give an assurance or undertaking that it will act in a particular way. Here
that relevant party would have to be the Employer. Unless and until the relevant
enterprise agreement is approved by FWA, it is completely untenable to suggest that
the Employer has undertaken or assumed any obligation to act in any particular way.
Once the agreement is approved by FWA, it is quite incongruous to describe it as
something other than what the statute makes it.”15
[36] AIG raises an additional consideration in support of this ground of appeal. It notes that
Her Honour decided the challenge it had made to the clause without expressing a view about
whether an enterprise agreement could be categorised as an arrangement or understanding
(AIG did not suggest it could be a contract). Her conclusion proceeds on the assumption there
could be said to be an arrangement or understanding. AIG submits however we should make
an express finding to that effect and, having done so, we should then find compliance with the
agreement and clause 4.3(b)(v) in particular may result in ADJ Contracting having to pay a
pecuniary penalty for the contravention of s.45EA.
[2011] FWAFB 6684
15
[37] To succeed AIG must first establish there is an arrangement or understanding within
the meaning of s.45E of the CC Act. In this respect it relies on the Federal Court of Australia
judgment of Justice Smithers in Gibbins and others v Australasian Meat Industry Employees’
Union16 (Gibbins) and the more recent Full Court judgment of Communications, Electrical,
Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v
Australian Competition and Consumer Commission17 (Edison).
[38] The agreement in Gibbins which was found to also be able to constitute an
understanding for the purposes of the then s.45D and s.45E of the Trade Practices Act 1974
(TP Act) was one between the operator of an abattoir, Borthwicks and the Australasian Meat
Industry Employees’ Union and was reached as part of conciliation proceedings under the
then provisions of Division 5A of Part 3 of the Conciliation and Arbitration Act 1904.
Division 5A dealt with disputes relating to boycotts. That is, it specifically applied in relation
to disputes about the contraventions of the then TP Act but, as s.88DG made clear, nothing in
the division affected the operation of the TP Act. When proceedings had been commenced in
the Federal Court of Australia an application could be made to the Commission. The
Commission was empowered to settle such a dispute by conciliation. The observations made
by His Honour about the status that may be assigned to a conciliation settlement that arose out
of proceedings in the Commission are not, in our opinion, readily applicable here. We are not
persuaded that Gibbins constitutes authority for the proposition that an enterprise agreement
entered into in accordance with the provisions of the FW Act may be categorised as an
arrangement or understanding.
[39] When Gibbins was referred to by the Full Court in Edison it was in the context of the
Court considering the evidence in that case, constituted as it was by letters and a heads of
agreement document, as demonstrating that an arrangement or understanding had been
entered into between the CEPU and Edison Mission. There was also a memorandum of
understanding about which we need not comment. As very little was said to us about the
relevance of this case it is not readily apparent what we should make of it in the context of
this ground of appeal. We can discern nothing in the decision which might persuade us that
the ADJ agreement should be considered an arrangement or understanding in terms of the CC
Act.
[40] We should not be taken to have decided an enterprise agreement could never be an
arrangement or understanding for the purposes of s.45E of the CC Act. On the basis of the
limited submissions made about this issue we do no more than indicate we are not persuaded
to make the express finding AIG urges upon us which we have referred to in paragraph 36.
[41] We now turn to the reliance placed on s.45EA of the CC Act. As we have earlier
indicated AIG also submits that compliance with clause 4.3(b)(v) may result in ADJ
Contracting being liable to pay a pecuniary penalty in relation to a contravention of s. 45EA.
It follows therefore that s.192 of the FW Act applies and Her Honour should have refused the
approval of the ADJ agreement.
[42] Section 45EA reads as follows:
[2011] FWAFB 6684
16
“Provisions contravening section 45E not to be given effect
A person must not give effect to a provision of a contract, arrangement or
understanding if, because of the provision, the making of the contract or arrangement,
or the arriving at the understanding, by the person:
(a) contravened subsection 45E(2) or (3); or
(b) would have contravened subsection 45E(2) or (3) if:
(i) section 45E had been in force when the contract or arrangement was
made, or the understanding was arrived at; and
(ii) the words "is in writing and" and " written" were not included in
subsection 45E(4).
Note: Conduct that would otherwise contravene this section can be authorised under
subsection 88(7A).”
[43] AIG did not make this submission to Her Honour. CEPU did not say much about that
presumably as it was able, in a few words, to dismiss the argument. It submitted that if s.45E
has no application to the ADJ agreement then s.45EA does not arise. We agree and do not
intend to make any comments about the undesirability of an appellant raising arguments for
the first time on appeal which could have been made at first instance.
[44] AMMA raised a challenge to clause 4.3(b)(v) which it conceded was not raised before
Her Honour.18 It submitted that compliance with the clause may result in ADJ Contracting
being liable to pay a pecuniary penalty under the Building and Construction Industry
Improvement Act 2008 for a contravention of s.45 of that act. The submission has little
immediate attraction. It is not at all clear how compliance with the clause would constitute an
act of discrimination as provided for in s.45(1)(a)(i) or (ii). Compliance with the clause
requires no consideration to be given to the kind of industrial instrument covering the
contractor nor which person the industrial instrument is made with. This is not a matter raised
by the grounds of appeal and we are not inclined to consider it further. The point was not
developed in any detail and it is relevant to note does not appear to have been raised below by
the Australian Building and Construction Commissioner (ABCC) who appeared before Her
Honour. The challenge made by the ABCC to clause 4.3(b)(v) was referable to s.354 of the
FW Act and was dismissed by Her Honour at paragraphs 29 and 30 of her decision.
[45] For the above reasons we dismiss the first two grounds of appeal. We have decided
however to make a number of additional comments although the challenges to this clause
have been decided for the reasons we have given. These comments merely serve to confirm
the construction of the provisions of the FW Act we have adopted.
[46] Firstly, even if AIG had made out its ground of appeal that compliance with clause
4.3(b)(v) may lead to a contravention of s.45E and hence a pecuniary penalty it is not correct
to submit, as it does, that Her Honour was obliged to refuse to approve the ADJ agreement.
Section 192 does not require that result. It provides that a member may refuse, not must
refuse, to approve it.
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[2011] FWAFB 6684
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[47] If AIG had persuaded us that compliance with clause 4.3(b)(v) was an unlawful term
then we would have needed to consider how the provisions of s.253 of the FW Act impact on
this ground of appeal. That section provides that a term of an enterprise agreement has no
effect to the extent it is an unlawful term. Similarly, s.356 provides that a term of a workplace
instrument (here an enterprise agreement) has no effect to the extent it is an objectionable
term. The way in which these provisions should interact with ss.186(4) and 194 would need to
have been considered.
[48] Next we observe that it would be a surprising result if a term of an enterprise
agreement such as clause 4.3(b)(v) which is a permitted matter about which an agreement
may be made would nonetheless be an unlawful term under s.194. It is notorious that terms
similar to this clause are in hundreds of enterprise agreements and such a term has been the
subject of judicial and Commission consideration for many years. If it was intended that s.194
had the effect of disallowing such a clause in an enterprise agreement we think the legislation
would have made that clear. If there had been a need to resort to the Explanatory
Memorandum to assist in this respect we would note paragraph 672 of that memorandum
which says:
“672. It is intended that the following terms would be within the scope of permitted
matters for the purpose of paragraph 172(1)(a):
…
- terms relating to conditions or requirements about employing casual employees or
engaging labour hire or contractors if those terms sufficiently relate to employees’ job
security – e.g. a term which provided that contractors must not be engaged on terms
and conditions that would undercut the enterprise agreement;”
[49] Finally, all of AIG’s arguments require us to assume a number of matters exist or will
exist in order to make out the alleged unlawfulness. The CEPU rightly submits there was no
evidence before us (or Her Honour) about ADJ Contracting. AIG’s answer to this is that we
should use our imagination about how the clause will operate and to make a judgement or
assessment looking forward.19 But we are asked to do this with no knowledge of ADJ
Contracting’s business activities, how many employees it currently has or will have, what jobs
they bid for, what contractors if any they engage and the corporate status of those contractors,
what those contractors industrial instrument coverage may be (eg if they have any enterprise
agreement coverage - they may only have over award or site agreements which may not be
workplace instruments)20 and what specialist skills the employees have. We think for us to
make a guess about all of these matters is to use a little too much imagination and embark on
an exercise beyond what the proper application of the provisions of Part 2-4 of the FW Act
requires.
Clause 15.2(k)
[50] The next ground of appeal concerns clause 15.2 of the ADJ agreement. As we have
earlier indicated AIG submits that this clause is an unlawful term and cannot be included in an
enterprise agreement by reason of s.194(f) of the FW Act. We have set out that section earlier
in this decision. Clause 15 is titled “Dispute Settling Procedures” and clause 15.1 deals with
[2011] FWAFB 6684
18
occupational health and safety issues. Clause 15.2 deals with the resolution of other issues.
Although it is only clause 15.2(k) which is the focus of this ground of appeal it is appropriate
the whole of the clause is reproduced. It is in the following terms:
“15.2 Resolving Other Issues
(a) Where a dispute arises over permitted matters (as currently defined in the Fair
Work Act), the application of this Agreement or the NES, the matter shall be
first submitted by the Union, employee or Employee Representative (if any) to
the supervising officer or another appropriate manager, or vice versa. If not
settled, the matter may be referred to more senior persons.
(b) While this procedure is being followed the status quo that existed immediately
prior to the events that gave rise to the dispute will remain and, subject to this,
work shall continue normally where it is agreed that there is an existing custom
and practice, but in other cases, the work shall continue at the instruction of the
Employer. Failure to continue shall be a breach of the Agreement.
(c) No party shall be prejudiced as to the final settlement by the continuance of
work in accordance with this subclause.
(d) If still not settled, either party may submit the matter, in accordance with this
clause, to:
(i) the Disputes Board for conciliation and/or, arbitration; or
(ii) directly to FWA for conciliation and/or arbitration, or for a review of
an arbitrated decision of the Disputes Board.
(e) To avoid doubt, a party to a dispute may:
(i) apply to FWA notwithstanding the fact that the Disputes Board has
already conciliated the matter; or
(ii) if the Disputes Board has arbitrated the matter, apply to FWA for a
review of the decision within 14 days of the decision having been
made; or
(iii) elect to submit the matter directly to FWA without first going to the
Disputes Board.
(f) If a matter is submitted to the Disputes Board:
(i) The decision of the Disputes Board is binding on the parties, subject to
the right to review in accordance with this clause.
(g) Where a matter does progress to FWA for arbitration or review, its decision
shall be final and binding on the parties, subject to either party exercising any
right of appeal against the decision to a Full Bench.
[2011] FWAFB 6684
19
(h) In conciliating or arbitrating a matter under this clause, or conducting an
appeal under this clause, FWA may exercise such procedural and other powers
in relation to conferences, hearings, witnesses, evidence and submissions as are
necessary to make the conciliation, arbitration, arbitration hearing, or review
effective. To avoid doubt, in conducting a review, FWA is not confined to a
consideration of the materials before the Disputes Board, and may deal with
the matter afresh or conduct any hearing afresh and substitute its decision for
that of the Disputes Board. In conducting a review, it is not necessary for FWA
to determine whether the decision of the Disputes Board was affected by error.
(i) A decision of the Disputes Board or FWA made pursuant to this clause 15.2
must not be inconsistent with the National Code of Practice for the
Construction Industry, the Implementation Guidelines for the National Code of
Practice for the Construction Industry or legislative obligations.
(j) For the purposes of the disputes procedure:
(i) At all stages of this procedure, those involved in the dispute may seek
the assistance of the Union, an employee representative, Employer
representative (if any) and/or other representative.
(k) An Employee Representative or an official of the ETU shall be allowed to
enter the workplace (excluding residential premises) to assist with representing
an employee(s) under the dispute resolution clause in this Agreement provided
that:
(i) prior to seeking entry:
(A) a dispute has been submitted to the Employer in accordance
with clause 15.2(a) notifying the Employer of the nature of the
dispute (as far as practicable), and which employees are
affected (as far as practicable);
(B) a person involved in the dispute has sought the assistance of the
representative (or official); and
(C) the parties have discussed mutually convenient arrangements
for the entry, having regard to the operational requirements of
the workplace;
(ii) the entry must not be used for any other purpose; and
(iii) the representative must not intentionally hinder or obstruct any person,
or otherwise act in an inappropriate manner (which does not include
actions involved in assisting the relevant employees in respect of the
dispute), during the attendance or entry (or the representative has
previously been found by FWA or the Disputes Board to have so acted
in respect of that dispute).
[2011] FWAFB 6684
20
Without limiting the rights or obligations of the parties in relation to a breach
of this Agreement, any dispute about entry to the workplace will be dealt with
in accordance with this procedure. For the avoidance of doubt, clause 15.2(b)
will apply while the procedure is followed.”
[51] Any agreement for which approval is sought must have a disputes resolution clause.
Section 186 of the FW Act contains a number of provisions which are described as
requirements that must be met in order for an agreement to be approved. One such
requirement is in s.186(6) and it provides that FWA must be satisfied that an agreement
includes a term that provides a procedure to settle disputes about matters arising under the
agreement or in relation to the National Employment Standards and that allows for the
representation of employees covered by the agreement for the purposes of that procedure.
[52] Her Honour observed that a right of entry clause in an enterprise agreement was
considered by a Full Bench of FWA in Dunlop Foams. She then set out a lengthy extract from
that decision. We do not reproduce all of it and the following paragraphs are adequate for this
decision:
“[7] The agreement for which Dunlop Foams sought approval in this case contained
a provision dealing with right of entry. The provision reads:
‘44 Right of Entry
An authorised NUW representative is entitled to enter at all reasonable times
upon premises and to interview any employee, but not so as to interfere
unreasonably with the Employer’s business.’
...
[33] This summary of the legislative provisions indicates that the Fair Work Act
regulates the exercise of entry rights by a permit holder in a comprehensive way.
There cannot be any doubt that if cl.44 had been drafted so as to apply to a permit
holder it would have been clearly inconsistent with the regime established by Part 3-4.
It should be noted, however, that s.194(f) does not strike at agreement terms which
deal with a permit holder as such, but at agreement terms which deal with an
entitlement relating to particular types of entry to premises.
[34] In order to be an unlawful term within s.194(f) an agreement term must have
three elements. The agreement term must provide for an entitlement, the entitlement
must be to enter premises for a purpose referred to in s.481 or to hold discussions of a
kind in s.484 and the term must purport to permit entry other than in accordance with
Part 3-4.
[35] We have no doubt that cl.44 provides for an entitlement. Subject to compliance
with the prescribed conditions an authorised NUW representative may enter the
premises at any time. Provided the conditions are complied with there is nothing that
Dunlop Foams can do to prevent or restrict entry. It is also clear that the entitlement,
being unrestricted by reference to purpose, includes entry for the purpose referred to in
[2011] FWAFB 6684
21
s.481, namely investigation of suspected contraventions. Equally the entitlement
extends to the holding of discussions with employees, the matter dealt with in s.484.
Finally it is clear that cl.44 is not limited in its operation by reference to the provisions
of Part 3-4. As we have seen, those provisions establish a regime of regulation of entry
to premises based on the requirement to obtain a permit and to observe a number of
procedures and rules.”
[53] Having referred to the above Full Bench decision Her Honour then made the following
comments about clause 15.2(k):
“[36] In my view, the terms of clause 15.2(k) are clearly different to those
considered by the Full Bench in the Dunlop Foams’ case. Setting aside the last
paragraph of clause 15.2(k) concerning a dispute about entry to the workplace, to
which I will return shortly, the clause provides for an employee representative or an
official of the CEPU to enter a workplace to assist with representing an employee
under the dispute resolution clause of the ADJ Agreement. The clause provides that the
entry must not be used for any other purpose.
[37] Accordingly, I am satisfied clause 15.2(k), excluding the last paragraph of the
clause, is not an unlawful term within the meaning of s.194(f) or s.194(g). While the
clause provides for an entitlement, the entitlement is to enter premises for the purpose
of representing an employee under the dispute resolution clause of the ADJ Agreement
and not for either a purpose referred to in s.481 or to hold discussions of a kind
referred to in s.484 or for the exercise of a State or Territory OHS right.
[38] I am concerned, however, that the last paragraph of clause 15.2(k) provides for
any dispute about entry to the workplace to be dealt with in accordance with clause 15,
rather than in accordance with Division 5 of Part 3-4 of the FW Act where the dispute
is about the operation of Part 3-4. I will return later to whether it is appropriate for me
to accept a written undertaking from ADJ in respect of the last paragraph of clause
15.2(k).”
[54] AIG submitted to Her Honour, and submitted again to us, that the clause provides for
entry by a union official for the purpose of investigating a suspected contravention of the FW
Act or a fair work instrument and may also be entry for the purpose of holding discussions
with employees. These are purposes referred to in ss.481 and 484 respectively. It is unlawful
because it provides for a right of entry in a manner inconsistent with those sections which are
contained in Part 3-4 of the FW Act.
[55] In the Moyle Bendale appeal, which relates only to the issue of right of entry and
whether a clause in the Moyle Bendale agreement was unlawful, the CFMEU summarised in
four points what it said was the proper construction to be given to ss194(f), 481 and 484. AIG
agreed with this construction. The CFMEU points are as follows:
“21. The preferred construction of section 194 (f), and the Act’s scheme concerning
terms in enterprise agreements about right of entry is as follows:
(a) Part 3-4 of the Act does not create an exclusive code governing the
rights of officers to enter the employer’s premises.
[2011] FWAFB 6684
22
(b) Enterprise agreements may include terms granting additional
entitlements to officers to enter the employer’s premises, so long as the
terms granting those additional right of entry entitlements is not an
unlawful term under section 194 (f).
(c) A term is only an unlawful term under section 194 (f) if it grants an
entitlement to enter premises for the purposes referred to in sections
481 or 484 of the Act other than in accordance with Part 3-4.
(d) It follows from points (a), (b) and (c) that a term is not an unlawful
term under section 194 (f) if it grants a right of entry for a purpose not
specified in sections 481 or 484 of the Act.”
[56] We agree with the above construction. It is also a construction which is consistent with
Dunlop Foams. That case of course concerned a clause in significantly different terms to
clause 15.2(k). It was, as the Full Bench there described, a clause which granted a right of
entry unrestricted by reference to purpose. Clause 15.2(k) as Her Honour observed, is clearly
different to the terms of the clause in Dunlop Foams. The clause relates to the subject matter
of dispute resolution. As we have earlier observed s.186(6) requires an agreement to have a
dispute resolution clause and such clause must allow for the representation of employees
covered by the agreement. That is precisely what clause 15.2(k) addresses. It also makes clear
that the entry to enable the employee to be represented cannot be used for any other purpose.
It can be invoked only when a dispute has arisen and then only in respect of an employee who
has asked the representative to become involved. For these reasons we agree with Her Honour
that the clause is not an unlawful term and accordingly this ground of appeal should be
dismissed.
[57] If it was thought that despite all of the foregoing observations there remained a need to
confirm the meaning of s.194(f) and that recourse could properly be had to the Explanatory
Memorandum21 the following paragraph would be informative:
“838. It is intended that agreements can include terms allowing for union officials to
enter the employer’s premises for purposes other than those set out in paragraphs
194(f) and (g). An agreement might, for example, provide an entitlement to enter the
employer’s premises for a range of reasons connected to the terms of the agreement,
such as:
to assist with representing an employee under a term dealing with the resolution
of disputes or consultation over workplace change; or
to attend induction meetings of new employees; or
to meet with the employer when bargaining for a replacement to the current
agreement.”
[58] Clause 15.2(k) is the type of clause envisaged by the above extract from the
Explanatory Memorandum.
[2011] FWAFB 6684
23
Clauses 16.6(b) and 16.6(d)
[59] The final ground of appeal concerns clauses 16.6(b) and (d) and it is submitted that
they are unlawful terms because they require a contravention of s.350 of the FW Act. AIG
submits that the clauses require ADJ Contracting to induce its employees to engage in
“membership action” within the meaning of s.350.
[60] Clause 16.6 is as follows:
“16.6 Union recognition
(a) Collective industrial relations will continue as a fundamental principle
of the Employer.
(b) Union membership shall be promoted by the Employer to all
prospective and current Employees.
(c) To ensure all new employees properly understand their rights under this
Agreement, the Shop Steward shall, as part of the official induction
program, be allowed to explain to the new employees how the terms of
this Agreement operate and benefit the Employees.
(d) The employees who are members of the ETU shall be encouraged to
participate in Union meetings and exercise their democratic rights.”
[61] Section 350 is in these terms:
“350 Inducements—membership action
(1) An employer must not induce an employee to take, or propose to take,
membership action.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2) A person who has entered into a contract for services with an independent
contractor must not induce the independent contractor to take, or propose to take,
membership action.
Note: This subsection is a civil remedy provision (see Part 4-1).
(3) A person takes membership action if the person becomes, does not become,
remains or ceases to be, an officer or member of an industrial association.”
[62] Her Honour’s conclusion about this challenge was as follows:
“[43] I am prepared to assume clause 16.6(d) requires ADJ to encourage its
employees who are CEPU members to participate in union meetings, etc. I am also
[2011] FWAFB 6684
24
prepared to assume encouraging those employees to participate in union meetings, etc
is to encourage union membership.
[44] However, I am satisfied clauses 16.6(b) and (d) do not require, etc ADJ to
contravene s.350 of the FW Act. This is because I am satisfied the word “induce” in
s.350 does not mean “promote” or “encourage”
[63] In support of its argument AIG relies on two decisions of the Federal Court of
Australia both concerning proceedings between BHP Iron Ore Pty Ltd and the Australian
Workers’ Union.22 However, it did not develop its submission about the applicability of those
cases in any detail. It is to be noted that in both of them the court was considering sections of
the WR Act and s.298M in particular. The relevant sections there under consideration differ to
s.350 although we accept one aspect is similar. We note that s.298M prohibited an employer
by threats, promises or otherwise from inducing an employee to stop being an officer or
member of an industrial association. The provisions of s.350 relate to inducing an employee
to take or propose to take membership action and that membership action concerns both the
employee ceasing to be a member of the association but also relates to the person becoming,
not becoming or remaining such a member. Accepting the proposition made by AIG that
“mere persuasion may be enough to establish an attempt to induce” the cases make it clear it
will be a question of fact which will need to be determined on the evidence and by looking at
all of the circumstances of the case. Unlike those court proceedings in which parties were
represented, evidence was tendered and submissions made about the application of that
evidence to the alleged breaches of the WR Act, here, there is no evidence and no relevant
circumstances established about how ADJ Contracting will go about complying with clause
16. The fact the ADJ agreement contains clause 16 does not give it any immunity from s.350.
In the event that some of the hypothetical actions AIG asserts do arise, and amount to
inducing an employee to engage in membership action, then it would be exposed to the
potential of proceedings under the section.
[64] In dismissing this ground of appeal we adopt Her Honour’s construction of the
relevant provisions of the FW Act and the WR Act. Her reasons contain a detailed
consideration of the current provisions and their previous counterparts. In this respect we refer
to paragraphs 45 to 52 of her reasons. We agree with those reasons and do not identify in
them any error. The word “induce” in s.350 does not mean promote or encourage. It follows
that clauses 16.6(b) and (d) do not require ADJ Contracting to contravene s.350 of the FW
Act.
[65] For the reasons we have given in this decision the appeal is dismissed.
SENIOR DEPUTY PRESIDENT
[2011] FWAFB 6684
25
DECISION OF SENIOR DEPUTY PRESIDENT RICHARDS
[66] I have had the opportunity to read the decision of Senior Deputy President Harrison
and Commissioner Roe, and agree with it other than in respect of its reasoning and
conclusions in relation to the appeal grounds concerning clause 15.2 of the ADJ Agreement.
[67] My views in relation to whether clause 15.2 of the ADJ Agreement is an unlawful
clause for purposes of s.194(f) of the Act are as follows.
[68] The clause before Her Honour for consideration was clause 15.2 of the ADJ
Agreement, which reads relevantly for current purposes as follows:
15.2 Resolving Other Issues
(a) Where a dispute arises over permitted matters (as currently defined in
the Fair Work Act), the application of this Agreement or the NES, the
matter shall be first submitted by the Union, employee or Employee
Representative (if any) to the supervising officer or another appropriate
manager, or vice versa. If not settled, the matter may be referred to
more senior persons.
[...]
(k) An Employee Representative or an official of the ETU shall be allowed
to enter the workplace (excluding residential premises) to assist with
representing an employee(s) under the dispute resolution clause in this
Agreement provided that:
(i) prior to seeking entry:
(A) a dispute has been submitted to the Employer in
accordance with clause 15.2(a) notifying the Employer
of the nature of the dispute (as far as practicable), and
which employees are affected (as far as practicable);
(B) a person involved in the dispute has sought the
assistance of the representative (or official); and
(C) the parties have discussed mutually convenient
arrangements for the entry, having regard to the
operational requirements of the workplace;
(ii) the entry must not be used for any other purpose; and
(iii) the representative must not intentionally hinder or obstruct any
person, or otherwise act in an inappropriate manner (which does
not include actions involved in assisting the relevant employees
in respect of the dispute), during the attendance or entry (or the
[2011] FWAFB 6684
26
representative has previously been found by FWA or the
Disputes Board to have so acted in respect of that dispute).
Without limiting the rights or obligations of the parties in relation to a
breach of this Agreement, any dispute about entry to the workplace will
be dealt with in accordance with this procedure. For the avoidance of
doubt, clause 15.2(b) will apply while the procedure is followed. [My
emphasis]
[69] I note that the last paragraph in clause 15.2 of the ADJ Agreement, which concerns
right of entry, was the subject of an undertaking under Regulation 2.07 of the Fair Work
Regulations 2009 (“the Regulations”). For reasons of clarity, when reference is made to
clause 15.2(k) of the ADJ Agreement in the foregoing, it is taken to be without reference to
the final paragraph, to which the undertaking was sought (and about which no issue arises for
purposes of this appeal).
[70] The issue the Senior Deputy President needed to determine for purposes of s.186(4) of
the Fair Work Act 2009 (“the Act”) was whether clause 15.2(k) of the ADJ Agreement was an
unlawful term within the meaning of s.194(f) of the Act. Section 194(f) of the Act reads as
follows:
194 Meaning of unlawful term
A term of an enterprise agreement is an unlawful term if it is:
[...]
(f) a term that provides for an entitlement:
(i) to enter premises for a purpose referred to in section 481
(which deals with investigation of suspected contraventions); or
(ii) to enter premises to hold discussions of a kind referred to in
section 484;
other than in accordance with Part 3-4 (which deals with right of entry);
[...].
[71] Section 186(4) of the Act requires Fair Work Australia to satisfy itself that an
agreement before it for approval does not include (amongst other things) an unlawful term for
purposes of s.194(f) of the Act.
[72] Sub paragraph (k) of clause 15.2 of the ADJ Agreement (upon which Her Honour’s
attention fell initially) stipulated the purpose for the right of entry under the clause. The sub
paragraph reads as follows:
An Employee Representative or an official of the ETU shall be allowed to enter the
workplace (excluding residential premises) to assist with representing an employee(s)
under the dispute resolution clause in this Agreement [...] (sic).
[2011] FWAFB 6684
27
[73] The effect of this clause is that once an Employee Representative or an official of the
ETU is seized of the requisite purpose (that being to assist with representing an employee
under the dispute resolution clause in the ADJ Agreement) the Employee Representative or an
official of the ETU may enter the employer’s premises (regulated only by the rules and
procedures prescribed in the remainder of clause 15.2 of the ADJ Agreement, which are set
out above).
[74] Her Honour’s reasons for her decision in relation to whether the entitlement to entry
posited by clause 15.2(k) of the ADJ Agreement was an unlawful term is set out in the
following two paragraphs of her decision:
[36] In my view, the terms of clause 15.2(k) are clearly different to those considered
by the Full Bench in the Dunlop Foams’ case. Setting aside the last paragraph of
clause 15.2(k) concerning a dispute about entry to the workplace, to which I will
return shortly, the clause provides for an employee representative or an official of the
CEPU to enter a workplace to assist with representing an employee under the dispute
resolution clause of the ADJ Agreement. The clause provides that the entry must not
be used for any other purpose.
[37] Accordingly, I am satisfied clause 15.2(k), excluding the last paragraph of the
clause, is not an unlawful term within the meaning of s.194(f) or s.194(g). While the
clause provides for an entitlement, the entitlement is to enter premises for the purpose
of representing an employee under the dispute resolution clause of the ADJ Agreement
and not for either a purpose referred to in s.481 or to hold discussions of a kind
referred to in s.484 or for the exercise of a State or Territory OHS right.
[75] The elemental issue of construction of the clause asserted by Her Honour, therefore,
was that the entitlement for the employee organisation to enter the employer’s premises so
that it can represent an employee in a dispute resolution procedure under the ADJ Agreement
was distinguishable in its purpose from an entitlement to entry for purposes of s.481 of the
Act (which concerns a suspected “contravention of this Act, or a term of a fair work
instrument”), or for purposes of s.484 of the Act (which concerns entry for “purposes of
holding discussions with one or more employees [...]”). The terms of s.481 and s.484 of the
Act are set out below.
[76] Because of her finding in this regard, Her Honour was of the view clause 15.2(k) of
the ADJ Agreement was not an unlawful term for purposes of s.194(f) or s.194(g) of the Act.
[77] It is this finding that must be investigated, and which is the subject of appeal.
Observations about scope of the dispute resolution clause in the ADJ Agreement and
consistency with procedures and rules in Part 3-4 of the Act
[78] Initially, it is useful to identify the scope of the application of the dispute resolution
process provided for under the ADJ Agreement, which is set out in clause 15.2(a):
Where a dispute arises over permitted matters (as currently defined in the Fair Work
Act), the application of this Agreement or the NES, the matter shall be first submitted
by the Union, employee or Employee Representative (if any) to the supervising officer
[2011] FWAFB 6684
28
or another appropriate manager, or vice versa. If not settled, the matter may be referred
to more senior persons. [My emphasis]
[79] An employee representative or official of the ETU therefore is provided with an
entitlement to enter an employer’s premises to assist in representing an employee where “a
dispute arises over”:
Permitted matters (as defined in the Act);
The application of the agreement; and
The application of the National Employment Standards (“the NES”).
[80] Permitted matters are defined by s.172(1) of the Act.
[81] It is not immediately clear whether the scope of representation (and right of entry) in
relation to permitted matters is intended by sub clause 15.2(k) of the ADJ Agreement to be
confined to such matters to the extent that they arise under the ADJ Agreement itself, or more
widely in respect of matters that can be covered by an agreement generally.
[82] Notwithstanding this, the ADJ Agreement affords an official of the ETU an
entitlement to enter an employer’s premises in order to represent employees in disputes about
a wide scope of matters relevant to the workplace and the ADJ Agreement.
[83] Sub clause 15.2(k) of the ADJ Agreement also entitles an official of the ETU to enter
the employer’s premises in order to represent employees in relation to disputes about the
application of the NES.
[84] The NES are statutory arrangements set out at Part 2-2 of the Act. A suspected
contravention of the Act for purposes of s.481 of the Act, therefore, would include a
suspected contravention of the NES.
[85] I observe also that the right of entry clause in the ADJ Agreement requires an official
of the ETU not to hinder or obstruct any person or otherwise act in an inappropriate manner.
However, any actions taken by the ETU official involved in assisting the relevant employee(s)
in respect of a dispute are not taken as forming part of this obligation:
(iii) the representative must not intentionally hinder or obstruct any person, or
otherwise act in an inappropriate manner (which does not include actions involved in
assisting the relevant employees in respect of the dispute), during the attendance or
entry (or the representative has previously been found by FWA or the Disputes Board
to have so acted in respect of that dispute). (Sic) [My emphasis]
[86] Generally, it is enough to say at this point that the manner in which entry to the
employer’s premises is to be effected under the ADJ Agreement is not consistent with the
rules and procedures prescribed in Part 3-4 of the Act which condition the manner in which
entry for purposes of s.481 and s.484 of the Act are effected.
Observations about the construction of Part 3-4 of the Act
[87] Before proceeding further, I will set out some of the provisions of Part 3-4 of the Act.
[2011] FWAFB 6684
29
Part 3-4—Right of entry
Division 1—Introduction
478 Guide to this Part
This Part is about the rights of officials of organisations who hold entry permits to
enter premises for purposes related to their representative role under this Act and
under State or Territory OHS laws.
Division 2 allows permit holders to enter premises to investigate suspected
contraventions of this Act and fair work instruments. The Division makes special
provision in relation to TCF outworkers. Division 2 also allows permit holders to enter
premises to hold discussions with certain employees and TCF outworkers. In
exercising rights under Division 2, permit holders must comply with the requirements
set out in the Division.
Division 3 sets out requirements for exercising rights under State or Territory OHS
laws.
Division 4 prohibits certain action in relation to the operation of this Part.
Division 5 sets out powers of FWA in relation to the operation of this Part.
Division 6 deals with entry permits, entry notices and certificates.
[...]
480 Object of this Part
The object of this Part is to establish a framework for officials of organisations to enter
premises that balances:
(a) the right of organisations to represent their members in the workplace, hold
discussions with potential members and investigate suspected contraventions
of:
(i) this Act and fair work instruments; and
(ii) State or Territory OHS laws; and
(b) the right of employees and TCF outworkers to receive, at work, information
and representation from officials of organisations; and
(c) the right of occupiers of premises and employers to go about their business
without undue inconvenience.
Division 2—Entry rights under this Act
[2011] FWAFB 6684
30
Subdivision A—Entry to investigate suspected contravention
481 Entry to investigate suspected contravention
(1) A permit holder may enter premises and exercise a right under section 482
or 483 for the purpose of investigating a suspected contravention of this Act, or
a term of a fair work instrument, that relates to, or affects, a member of the
permit holder’s organisation:
(a) whose industrial interests the organisation is entitled to represent;
and
(b) who performs work on the premises.
Note 1: Particulars of the suspected contravention must be specified in an entry
notice or exemption certificate (see subsections 518(2) and 519(2)).
Note 2: FWA may issue an affected member certificate if it is satisfied that a
member referred to in this subsection is on the premises (see subsection
520(1)).
(2) The fair work instrument must apply or have applied to the member.
(3) The permit holder must reasonably suspect that the contravention has
occurred, or is occurring. The burden of proving that the suspicion is
reasonable lies on the person asserting that fact.
Note: A permit holder who seeks to exercise rights under this Part without
reasonably suspecting that a contravention has occurred, or is occurring, is
liable to be penalised under subsection 503(1) (which deals with
misrepresentations about things authorised by this Part).
[...]
Subdivision B—Entry to hold discussions
484 Entry to hold discussions
A permit holder may enter premises for the purposes of holding discussions with one
or more employees or TCF outworkers:
(a) who perform work on the premises; and
(b) whose industrial interests the permit holder’s organisation is entitled to
represent; and
(c) who wish to participate in those discussions. [My emphasis]
[2011] FWAFB 6684
31
[88] Section 478 of the Act provides guidance that Part 3-4 of the Act is concerned with the
rights of officials of registered organisations who hold permits to enter premises for purposes
related to their representative role under the Act, and under other relevant laws.
[89] Section 480 of the Act states that the object of Part 3-4 of the Act “is to establish a
framework for officials of organisations to enter premises that balances” three sets of distinct
rights, these being:
the rights of those officials (to represent their organisation’s members in the
workplace);
the rights of employees (to receive representational services from organisations); and
the rights of employers (to go about their business without undue interference).
[90] Section 480 of the Act does not condition or prescribe the range of representational
functions or services an employee organisation might extend to its members in the workplace.
[91] In relation to the rights of officials of organisations, s.480(a) of the Act states that Part
3-4 provides the framework within which “the right of organisations to represent their
members in the workplace, hold discussions with potential members and investigate suspected
contraventions of the Act, fair work instruments” and relevant other laws is exercised in
accordance with various rules and procedures.
[92] The purpose of Sub Divisions A and B of Division 2 of Part 3-4 of the Act is to give
effect to the balance between the workplace representational and investigative rights of
employee organisations, the rights to employees to receive those representational rights and
other information from their employee organisations in the workplace, and for the employer
not to be unduly inconvenienced when those rights are being exercised (by employee
organisations and employees).
[93] Section 478 of the Act and, in particular, s.480 of the Act provide a statutory direction
that the rights of entry for the purposes of s.481 and s.484 of the Act are intended (amongst
other things) to give effect to an employee organisation’s rights to enter lawfully an
employer’s premises in order to provide representation to employees in relation to suspected
contraventions of the Act, which are particularised matters, or, more ubiquitously, by way of
holding discussion with the relevant employee(s).
[94] The Act does not seek to regulate, and reasonably so it might be argued, the purpose of
the holding of discussions with employees by organisations, other than that those discussions
be for a representative purpose of the kind set out at s.480 of the Act. By so doing, the Part
renders lawful the entry by an official of an organisation to an employer’s premises when it is
for the broad purpose of holding discussions arising from the organisation’s representative
role with any employees of the requisite type.
[95] If this were not the case, s.478 and s.480 of the Act would have no work to do
whatsoever, and the scope of the meaning of the relevant sections (s.481 and s.484 of the Act)
would not be construed in their immediate relevant statutory context.
[2011] FWAFB 6684
32
[96] It appears to me that this construction of the jurisdiction by reference to the objects of
Part 3-4 of the Act is the approach adopted by the Full Bench in The Australasian Meat
Industry Employees’ Union v Dardanup Butchering Company Pty Ltd:23
Next, it should be observed that the right of entry conferred by s.484 is properly to be
seen as part of a suite of provisions in the Act that give recognition and effect to the
fundamental principles of freedom of association and the right to act collectively.
Australia remains a party to the Freedom of Association and Protection of the Right to
Organise Convention, 1948 (No. 87) and the Right to Organise and Collective
Bargaining Convention, 1949 (No. 98). It is particularly relevant that the right
conferred by s.484 extends to a right for a union official who is a permit holder to
enter a workplace for the purpose of holding discussions with potential members. In
other words, one of the legitimate purposes for which the right of entry conferred by
s.484 may be exercised is to seek to persuade employees who are not members of the
union to become members of the union.24 [My emphasis]
[97] In this construction, the Full Bench concerned itself with the purpose of holding
discussions with employees under s.484 of the Act (which itself was for the purpose of
persuading employees to become members of the union) and found that it was derived by
reference to the objects of the Part, at s.480 of the Act.
[98] It follows from the above discussion that where a term of an agreement establishes an
entitlement to a right of entry to an employer’s premises for purposes of exercising
representational rights to employees in the workplace (that includes conduct in relation to
investigating a suspected contravention of the Act or in any other relevant dispute or context
which may extend to holding discussions with employees), that employee organisation is
taken to be exercising an entitlement of the kind contemplated in s.481 and s.484 of the Act.
[99] Accordingly, where a term of an agreement is taken to extend to such a purpose, or
includes such a purpose, and that purpose is not to be exercised in accordance with the rules
and procedures of Part 3-4 of the Act, the term must be an unlawful term for the purposes of
s.194(f) of the Act.
Clause 15.2(k) of the ADJ Agreement
[100] Clause 15.2(k) of the ADJ Agreement gives effect to an entitlement to right of entry so
that the employee organisation (in this case an official of the ETU) may exercise
representational rights and assist an employee (in a range of disputes). Does such an
entitlement extend to or include an entitlement of the kind contemplated s.481 and\or s.484 of
the Act?
Section 484 of the Act
[101] Her Honour’s finding, as set out above, was that the purpose of s.484 of the Act,
which concerns the representational right of an official of an organisation to enter the
employer’s premises for the purpose of holding discussion with employees, was
distinguishable from the purpose of clause 15.2(k) of the ADJ Agreement, which concerned a
right for an official of the ETU to enter the employer’s premises for the purposes of
exercising representative rights to assist employees in disputes.
[2011] FWAFB 6684
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[102] On the basis of the above discussion, it seems to me that an entitlement to enter the
employer’s premises under clause 15.2(k) of the ADJ Agreement would include an
entitlement, for purposes of s.484 of the Act, which concerns the representational right of an
organisation to hold discussions with one or more employees in the workplace. This is
because the steps taken by an employee organisation to assist in representing any employee(s)
in a variety of disputes, in its ordinary industrial context, must be taken to be an entitlement
that without further qualification would extend to or include holding discussions with the
affected employee(s) in the workplace.
[103] Indeed, it might appear unusual if the clause did not extend to or include entry for the
purpose of holding discussions with employees. This is because if the clause did not extend to
holding discussions with employees it would give rise to questions as to how the invitation for
representation by the employee for purposes of clause 15.2(k)(i)(B) of the ADJ Agreement
could be given effect in the first place, or how the very issue in dispute was ever elucidated
for purposes of clause 15.2(k)(i)(A) of the ADJ Agreement (which requires the relevant
official to advise the employer of the nature of the dispute and the identity of those affected).
[104] I also add that it appears to me that a perverse construction of the Act arises if an
entitlement to right of entry for a representative purpose which, because it is unqualified
includes or extends to holding discussions with one or more employees, is held to be
distinguishable in purpose from an entitlement to right of entry for the purposes of s.484 of
the Act itself. It is a perverse construction because s.484 of the Act would never be enlivened
where a discussion with employees had a purpose, or conversely, s.484 of the Act would only
be enlivened when the discussion was purposeless.
Section 481 of the Act
[105] Equally, it would appear, absent any qualification, that an entitlement to right of entry
to assist any employee(s) in disputes about the application of the NES, a statutory condition of
employment, would also extend to or include the activity of entering the employer’s premises
“for the purpose of investigating a suspected contravention of this Act, or a term of a fair
work instrument, that relates to, or affects, a member of the permit holder’s organisation:
(a) whose industrial interests the organisation is entitled to represent; and
(b) who performs work on the premises.”
[106] A dispute about the application of the NES ordinarily will include a concern about a
suspected contravention of the NES. Absent any qualification, therefore, the entitlement under
the clause to enter the employer’s premises to assist in representation in relation to a dispute
about the NES will include or extend to investigating a breach of the Act (of which the NES is
a part).
[107] Clause 15.2(k) of the ADJ Agreement therefore will include or extend to an
entitlement to enter the employer’s premises for a purpose under s.481 of the Act.
[2011] FWAFB 6684
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[108] Beyond this, for the reasons I have discussed above, it is apparent from its terms that
clause 15.2(k) of the ADJ Agreement does not operate in accordance with the rules and
procedures governing rights of entry under Part 3-4 of the Act.
[109] For these reasons, clause 15.2(k) of the ADJ Agreement therefore must be an unlawful
term for purposes of s.194(f) of the Act.
[110] Because clause 15.2(k) of the ADJ Agreement is an unlawful clause, Her Honour’s
decision therefore is wrong.
Disposition in relation to Majority Decision
[111] I have set out above my reasons for my finding that clause 15.2(k) of the ADJ
Agreement is unlawful for purposes of s.194(f) of the Act, and that the clause is not
distinguishable for reasons of purpose from s.481 and s.484 of the Act. I will, however,
briefly address some of the discrete lines of reasoning posed by the majority decision in the
following, which are not considered above.
[112] It does not appear to me that the requirement for an agreement to have a dispute
resolution procedure (assuming the scope of meaning given to the intended “procedure”)
under s.186(6)(b) of the Act means that a clause in any agreement that meets that description
as to purpose, and extends an entitlement to right of entry for that purpose by an organisation,
will not be a clause that provides for right of entry in respect of an alleged contravention of
the Act or a fair work instrument or for purposes of holding discussions with or one or more
employees under s.484 of the Act. This is because the requirement of s.186(6) of the Act has
nothing to say about entitlements to enter an employer’s premises for particular purposes,
which are regulated by Part 3-4 of the Act.
[113] I add that s. 478 of the Act, as set out above, states that:
This Part is about the rights of officials of organisations who hold entry permits to
enter premises for purposes related to their representative role under this Act [...].
[114] It appears to me that where an official of an organisation performs a representative
role under this Act, such as providing representation to employees in the workplace under the
terms of an agreement by way of s.186(6)(b) of the Act, and exercises an entitlement to right
of entry for that purpose, that clause may fall within the meaning of either or both of s.481 or
s.484 the Act, unless otherwise qualified.
[115] The majority decision appears also to suggest that clause 15.2(k) of the ADJ
Agreement is made permissible for reasons of or for further reason that (a) the clause cannot
be used for any other purpose and (b) then only in respect of employees who have asked that
the representative become involved.
[116] In relation to (a) above, the fact that the disputes clause, which establishes an
entitlement to a right of entry, can only be applied for the purpose of assisting employees in a
dispute does not cure the implication that the entitlement to right of entry may include or
extend to holding discussions with one or more employees, as I have discussed above. The
[2011] FWAFB 6684
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relevant issue as I see it is what happens as part of the representational process, not what
happens in addition to it or beyond its intended terms.
[117] In relation to (b) above, the further fact that clause 15.2(k) of the ADJ Agreement
applies only in respect of employees who have asked that the representative become involved
appears to be a further reason for the permissibility of the clause. On the argument of the
majority decision, however, such a qualification would not be a matter which is relevant to the
lawfulness of the clause (under s.194(f) of the Act) as the clause cannot be a clause for
purposes of s.481 or s.484 of the Act, and may be drafted to provide for right of entry on any
terms whatsoever as a consequence.
[118] The majority also cited Item 838 of the Explanatory Memorandum to the Act in order
to support its construction of whether an entitlement to right of entry is for purposes of s.481
or s.484 of Act.
[119] Item 838 of the Explanatory Memorandum reads as follows:
838. It is intended that agreements can include terms allowing for union officials to
enter the employer’s premises for purposes other than those set out in paragraphs
194(f) and (g). An agreement might, for example, provide an entitlement to enter the
employer’s premises for a range of reasons connected to the terms of the agreement,
such as:
to assist with representing an employee under a term dealing with the
resolution of disputes or consultation over workplace change; or
to attend induction meetings of new employees; or
to meet with the employer when bargaining for a replacement to the
current agreement.
[120] The Explanatory Memorandum does not assist in the issue of construction discussed
above. At best, it merely invites a circuitous debate as to whether a clause that is for a
particular representative purpose can be taken to include or extend to another purpose (under
s.481 or s.484) unless it is appropriately qualified.
[121] Generally, however, it seems to me that the task of construing what is an entitlement
under s.481 and s.484 of Part 3-4 of the Act, which has its own objects, is not assisted by
making reference to matters dealt with in the Explanatory Memorandum that purport to relate
to Part 2-4 of the Act.
[122] Indeed, there is nothing in the plain words of either Part 2-4 or Part 3-4 of the Act that
appear to reflect or otherwise require reference to the asserted intention claimed by the
Explanatory Memorandum.
[123] For good reason, the task of properly construing Part 3-4 of the Act therefore relies
generally on the ordinary principle of constructing the plain words of the Part (s.481 and s.484
of the Act) in their proper context. 25
[124] If further comment is needed on the difficulties of relying on extraneous sources as
aides to construction, I add that neither the Second Reading Speech of the then Minister nor
the Senate Standing Committee on Education, Employment and Workplace Relations
[2011] FWAFB 6684
36
Majority Report on the Fair Work Bill appear to make reference to the matters raised in Item
838 of the Explanatory Memorandum when dealing the right of entry provisions or agreement
making under the Act. That is, there appears to be no consistency amongst the various
extraneous resources.
Further Consideration: Full Bench in Dunlop Foams
[125] Her Honour’s finding, as set out above, was that the purpose of s.484 of the Act,
which concerns the right of an official of an organisation to enter the employer’s premises for
the purpose of holding discussion with employees, was distinguishable from the purpose of
clause 15.2(k) of the ADJ Agreement, which concerned a right for an official of the ETU to
enter the employer’s premises for the purposes of exercising representative rights to assist
employees in disputes.
[126] In the appeal proceedings, support was lent to this approach by Counsel for the CEPU,
who stated the central question on appeal in respect of this particular issue:
“ [...] is focused on the question of the purpose of the person entering and, absent any
attack on the basis of genuineness, if the purpose is one that is not identified in Part 3-
4, then a clause to that effect is permitted. [...].”26
[127] A question of the correct approach arises. If an agreement establishes an entitlement to
right of entry and asserts that the purpose of the right of entry is not for the purpose of holding
discussions with employees, is that clause permissible, regardless, absent an attack on
genuineness?
[128] The Full Bench in Australian Industry Group Re: Pacific Brands Limited t/a Dunlop
Foams27 (“Dunlop Foams”) considered a term which purported to establish an entitlement to
entry by an employee organisation to “interview an employee”. The Full Bench characterised
the clause before it as follows:
It can be seen that cl.44 entitles an authorised representative of the National Union of
Workers (NUW), a registered organisation of employees, to enter Dunlop Foams’
premises at all reasonable times to interview employees but not so as to interfere
unreasonably with the employer’s business.28 [My emphasis]
[129] The Full Bench found the clause, which established an entitlement to a right of entry
so that the NUW was entitled to interview employees, “extends to” an entitlement to entry for
the “purpose of holding discussions with one or more employees” under s.484 of the Act
(even though the interview may have had other purposes as well, such as soliciting the views
of employees about a union service or some such other issue).
[130] The asserted right to enter premises for the purpose of interviewing employees,
according to the Full Bench, also “includes” the purpose referred to in s.481 of the Act (which
concerns investigation a suspected contravention of the Act, fair work instruments and other
laws).
[2011] FWAFB 6684
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[131] The Full Bench did not take the clause’s asserted purpose for the entitlement to right
of entry (which was to “interview employees”) as being permissible on its face for reason that
interviewing employees would be for that prescribed purpose only, and therefore was
distinguishable from holding discussions with employees or investigating suspected breaches
of the Act or fair work instruments.
[132] That is, the Full Bench did not assume that an official of the NUW when exercising
rights “to interview employees” under the clause would do so in a manner that did not include
or extend to an activity of the kinds contemplated under s.481 or s.484 of the Act.
[133] The Full Bench required more by way of particularised purpose(s) that distinguished
the purposes for entry (which was to “interview employees”) from s.481 of the Act (which
concerned investigating suspected breaches of the Act etc) and s.484 of the Act (which
concerned entry for purposes of holding discussions):
We have no doubt that cl.44 provides for an entitlement. Subject to compliance with
the prescribed conditions an authorised NUW representative may enter the premises at
any time. Provided the conditions are complied, with there is nothing that Dunlop
Foams can do to prevent or restrict entry. It is also clear that the entitlement, being
unrestricted by reference to purpose, includes entry for the purpose referred to in
s.481, namely investigation of suspected contraventions. Equally the entitlement
extends to the holding of discussions with employees, the matter dealt with in s.484.
Finally it is clear that cl.44 is not limited in its operation by reference to the provisions
of Part 3-4. As we have seen, those provisions establish a regime of regulation of entry
to premises based on the requirement to obtain a permit and to observe a number of
procedures and rules.29 [My emphasis]
[134] Absent any particularisation of purpose which defined the scope of its operation, the
clause “includes” an entitlement to entry “for the purpose referred to in s.481” and was taken
also on its own terms to “extend to the holding of discussions with employees, the matter
dealt with in s.484” of the Act.
[135] I add that the transcript of proceedings demonstrates that in its submissions to the Full
Bench the ACTU argued that the Full Bench should adopt the approach that a clause would
only be unlawful for purposes of s.194(f) of the Act if it was for the purpose of s.481 and\or
s.484 of the Act and was expressly for one or both of those purposes. As the clause before the
Full Bench was for the purpose that was to “interview employees”, it was not unlawful
because it was not an entitlement for the purposes of s.481 or s.484 of the Act, and no further
construction should be imposed upon the clause:
[…] In relation to a point made in their written submissions at paragraph 4 that, "An
enterprise agreement establishes legally enforceable rights and obligations to the
parties to the agreement." I can, but there is no rule that says every provision in an
enterprise agreement needs to be an enforceable one. It can be a permitted matter
without creating an obligation. Again at paragraph 9 is a criticism they also made of
AIG, it says, "Clause 44 is an unlawful term as it doesn't limit the subject matter to
[2011] FWAFB 6684
38
conducting interviews." We say it doesn't need to. It says the purpose is an interview
and the purpose is not an investigation. The purpose is an interview.
[…] we have got a different view about authorised NUW representative in its plain
and ordinary meaning but we would say in any event where the question is whether or
not you are entitled to be satisfied and you had submissions, this is what the clause
means, Commissioner, then probably it was needed to be satisfied that might dispose
of that issue (indistinct) to be looked at. The point at paragraph 25 that, "It imposes no
restrictions on the purposes for which an authorised representative may enter the
premises," well, it does. It says the purpose has to be one to interview. That doesn't
mean that it's necessarily an entry for the purposes of holding discussions of a kind
referred to in section 484 because discussions of a kind means either what Senator
Murray said it means or if it doesn't it has to be something that is more confined.
There has to be - for you to cross the line, as I say, there needs to be an identity for
two things, because the Minister's own examples aren't consistent with 25A. So give
examples of permissible clauses where you can come in and participate in a staff
meeting. Well, you are having a discussion. How does it work? In relation to the
points raised at paragraph 26 onwards of the Minister's submission, it is only
necessary, we say, for a clause to provide entry to be in accordance with part 3.4 of the
Act where the purpose that the clause says the entry is for the purposes for each
section 194 F or G refers to, and if they are for different purposes then it doesn't. 30
[My emphasis]
[136] As is evident from its decision, the Full Bench rejected this argument. That is, the Full
Bench did not accept the argument that the clause would only be applied for the purpose it
prescribed (which in this case was “to interview employees”), and instead considered the
scope of the clause’s meaning and what conduct it “extends to” and\or might “include”
(unless further qualified by reference to its purpose).
[137] For these reasons, I consider the ratio of the Full Bench in Dunlop Foams to read
conformably with my earlier findings.
[138] I add as a passing observation that it does not appear to me that every occasion on
which an employee organisation seeks to enter an employer’s premises will be regulated by
Part 3-4 of the Act. There will be other circumstances in which an employee organisation
might lawfully enter an employer’s premises, but these circumstances are not the subject of
this appeal.
Approval status of ADJ Agreement
[139] As I have found above, clause 15.2(k) of the ADJ Agreement is an unlawful term for
purposes of s.194(f) of the Act, and s.186(4) of the Act therefore has effect. Section 186(4) of
the Act reads as follows:
186 When FWA must approve an enterprise agreement—general requirements
Basic rule
[2011] FWAFB 6684
39
(1) If an application for the approval of an enterprise agreement is made under
section 185, FWA must approve the agreement under this section if the
requirements set out in this section and section 187 are met.
Note: FWA may approve an enterprise agreement under this section with
undertakings (see section 190).
[...]
Requirement that there be no unlawful terms
(4) FWA must be satisfied that the agreement does not include any unlawful
terms (see Subdivision D of this Division).
[140] Fair Work Australia cannot approve an agreement where it is not satisfied the
applicable agreement does not include an unlawful term.
Disposition on Appeal and Conclusion
[141] I adopt the approach on appeal as it was applied by the Full Bench in Dunlop Foams31.
[142] Section 604(1) of the Act provides that permission is required to appeal. Section
604(2) provides that Fair Work Australia must grant permission if it is satisfied that it is in the
public interest to do so. As to my disposition on appeal, I would grant permission to appeal in
the public interest, because the relevant considerations extend the construction of Part 3-4 of
the Act. Such considerations necessarily attract the public interest.
[143] Further, for the reasons I have given above, I would uphold the appeal and quash the
decision in [2011] FWA 2380. I would do so for the same reason as the Full Bench in Dunlop
Foams cited above upheld the appeal in the circumstances before it, and that was because in
my view:
“[...] the conclusion that [clause] is not an unlawful term is wrong. The decision
approving the agreement must be quashed.”32
[144] Having reached this conclusion, the remaining question before me concerns whether
the error in the approval process cited above can be overcome by an undertaking pursuant to
s.190 of the Act.
190 FWA may approve an enterprise agreement with undertakings
Application of this section
(1) This section applies if:
(a) an application for the approval of an enterprise agreement has been made
under section 185; and
(b) FWA has a concern that the agreement does not meet the requirements set
out in sections 186 and 187.
[2011] FWAFB 6684
40
Approval of agreement with undertakings
(2) FWA may approve the agreement under section 186 if FWA is satisfied
that an undertaking accepted by FWA under subsection (3) of this section
meets the concern.
Undertakings
(3) FWA may only accept a written undertaking from one or more employers
covered by the agreement if FWA is satisfied that the effect of accepting the
undertaking is not likely to:
(a) cause financial detriment to any employee covered by the
agreement; or
(b) result in substantial changes to the agreement.
FWA must seek views of bargaining representatives
(4) FWA must not accept an undertaking under subsection (3) unless FWA has
sought the views of each person who FWA knows is a bargaining
representative for the agreement.
Signature requirements
(5) The undertaking must meet any requirements relating to the signing of
undertakings that are prescribed by the regulations.”
[145] Section 190(1)(b) of the Act applies to s.186(4) of the Act.
[146] Because of this, I would be prepared to accept a written undertaking from ADJ
Contracting Pty Ltd if ADJ Contracting Pty Ltd gives a written undertaking (in addition to
those it has already offered) in accordance with Regulation 2.07 of the Regulations that any
right of entry to the workplace for a purpose referred to in s.481 of the Act or to hold
discussions of a kind referred to in s.484 of the Act or for the exercise of a State or Territory
OHS rights, will be dealt with in accordance with Part 3-4 of the Act .
[147] I would do so mindful, as I have noted above, that such undertakings may create
difficulties in the operation of the clause.
[148] Acceptance of this undertaking would be contingent upon ADJ Contracting Pty Ltd
both filing that undertaking with Fair Work Australia and serving it on the CEPU as a
bargaining representative for the employees covered by the ADJ Agreement within seven
days of this decision.
[149] If I receive from the CEPU, as a bargaining representative, within seven working days
of receipt of the written undertaking by ADJ Contracting Pty Ltd its views about the
undertaking I will consider those views for purposes of finally approving the agreement.
[2011] FWAFB 6684
41
[150] If the CEPU’s views are not received in seven working days, I will approve agreement
on the basis that Fair Work Australia has “sought the views” of the CEPU as a bargaining
representative under s.190(4) of the Act. Section 190(4) of the Act does not require the views
Fair Work Australia seeks of the bargaining representative to be receipted or received (though
I note this was a requirement for approval of the ADJ Agreement made by Her Honour in her
decision)33.
[151] If I:
was in receipt of the written undertaking by ADJ Contracting Pty Ltd;
had concluded I should accept the undertaking in light of the CEPU’s views, if
received within the stipulated time period; and
deemed, as would be appropriate on the face of it, that the undertaking would not
cause financial detriment to any employee covered by the ADJ Agreement or result
in substantial changes to the ADJ Agreement;
I would be satisfied that the requirements for approval of the ADJ Agreement had been met.
SENIOR DEPUTY PRESIDENT
Appearances:
S. Wood, Counsel with J. Tracey for The Australian Industry Group.
H. Borenstein, Senior Counsel for the Communications, Electrical, Electronic, Energy,
Information, Postal, Plumbing and Allied Services Union of Australia.
M. Irving, Counsel for the Construction, Forestry, Mining and Energy Union.
M. Follett, Counsel for the Australian Mines and Metals Association Inc.
J. Fetter for the Australian Council of Trade Unions.
Hearing details:
2011.
Melbourne:
July 28.
WORK AUSTRALIA THE SEAL OF A
[2011] FWAFB 6684
42
Printed by authority of the Commonwealth Government Printer
Price code G, PR515102
1 [2011] FWAFB 6761
2 Sections 589 and 590
3 [2010] FWAFB 4337
4 [2010] FWAFB 4337 at paras 9-12
5 PN 444 and 560
6 [2010] FWAFB 6180
7 [1990] 169 CLR 245
8 PR959284
9 [1990] 169 CLR 245, the judgement of Dawson, Toohey and McHugh JJ at para 21
10 Paras 1359-1364
11 [2003] 126 IR 468
12 Sections 172-183
13 We have not considered greenfields agreements in this decision,
14 AIG submission paragraph 60
15 CEPU submission paragraph 39
16 [1986] 12 FCR 450
17 [2007] FCAFC 132 at paragraph 98
18 PN219
19 PN 565 -567
20 See for example the exchange at paras 102 - 111
21 Section 15AB Acts Interpretation Act 1901
22 BHP Iron Ore Pty ltd v Australian Workers’ Union [2000] FCA 430 and Australian Workers’ Union v BHP Iron Ore Pty
Ltd [2001] FCA 3
23 [2011] FWAFB 3847
24 Ibid at PN 20.
25 J.J. Richards & Sons Pty Ltd v Transport Workers Union of Australia [2010] FWAFB 9963 at PNS 28-31.
26 Transcript of proceedings, 28 July 2011 at PN 515.
27 [2010] FWAFB 4337
28 Ibid at PN 8.
29 Ibid at PN 35.
30 Transcript of proceedings in Dunlop Foams, 21 April 2010 at PNS 244 - 246.
31 [2010] FWAFB 4337 at PNS 25 - 27.
32 Ibid at PN 36.
33 [2011] FWA 2380 at PN 57.
