1
Fair Work Act 2009
s.603 – Application to revoke an order of the Fair Work Commission
Esso Australia Pty Ltd
v
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU);
The Australian Workers’ Union and Communications, Electrical,
Electronic, Energy, Information, Postal, Plumbing and Allied Services
Union of Australia
(C2017/7086)
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER BISSETT
SYDNEY, 13 JULY 2018
Application to revoke an order made under s.424 terminating industrial action; whether the
status of the industrial action as protected is a jurisdictional fact; whether decision to make
the order otherwise affected by jurisdictional error; whether other discretionary
considerations favour revocation; order revoked.
Introduction and background
[1] Since late 2014 and until 7 December 2016, The Australian Workers’ Union (AWU),
the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied
Services Union of Australia (CEPU) and the Automotive, Food, Metals, Engineering, Printing
and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union
(AMWU) (collectively “the Unions”), in their capacities as bargaining representatives had
been bargaining with Esso Australia Pty Ltd (Esso) for a proposed enterprise agreement or
agreements that would replace, inter alia, the Esso Gippsland (Longford and Long Island
Point) Enterprise Agreement 2011 (Longford & LIP Agreement) and the Esso Offshore
Enterprise Agreement 2011 (Offshore Agreement). Both the Longford & LIP and the
Offshore Agreements had passed their respective nominal expiry dates on 1 October 2014.
[2] In furtherance of its bargaining claims, the AWU organised, and many of its members
engaged in, various forms of industrial action directed against Esso commencing early in
2015. The AWU maintained that all such industrial action was protected industrial action
under s.408(a) of the Fair Work Act 2009 (Cth) (Act). Esso maintained that aspects of the
industrial action were not protected action.
[2018] FWCFB 4120 [Note: An application relating to this matter has been
filed in the Federal Court - Refer to the Federal Court decision of
19 February 2019 for the result of this matter.]
DECISION
AUSTRALIA FairWork Commission
https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2019/2019fcafc0026
[2018] FWCFB 4120
2
[3] The disputed industrial action included bans on the performance of equipment testing,
air freeing and leak testing. The AWU’s bans on these activities were imposed from 2 March
2015. Although the AWU issued a notice under s.414 of the Act advising Esso of action in the
form of a ban on the “de-isolation of equipment”, which had the effect of engaging the
protected industrial action provisions in relation to the “de-isolation of equipment”, Esso
maintained that equipment testing, air freeing and leak testing did not fall within the
description “de-isolation of equipment” and therefore was not protected action.
[4] Esso obtained a number of orders from the Commission directed, inter alia, to the
AWU stopping unprotected industrial action in 2015.1 Relevantly, it obtained an order on 6
March 2015 (IA Order)2 issued pursuant to s.418(1) of the Act. Clause 4.1 of the IA Order
required the AWU (and its delegates, officers, employees and agents) to stop organising
certain industrial action including any action constituting a ban, limitation or restriction on the
performance of equipment testing, air freeing or leak testing. The IA Order came into effect at
6.00 pm on 6 March 2015 and ceased to operate at 6.00 pm on 20 March 2015.
[5] In contravention of the IA Order, the AWU continued to organise the action, including
the ban on air freeing and leak testing between 6.00 pm on 6 March 2015 and 9.30 am on 7
March 2015, and a ban on the manipulation of bleeder valves to facilitate air freeing and leak
testing between 9.30 am on 7 March 2015 and 17 March 2015.
[6] Esso commenced proceedings in the Federal Court of Australia, pursuant to s.562 of
the Act, seeking, inter alia, declarations that, because of the contravention of the IA Order,
the AWU had contravened an order which applies to it in relation to the agreement to which
the proposed protected industrial action related, with the consequence that action thereafter
organised by the AWU in relation to the agreement was not protected industrial action. An
issue requiring determination was the proper construction of s.413(5).
[7] In an earlier judgment in Australian Mines and Metals Association Inc. v The
Maritime Union of Australia3(AMMA v MUA), Barker J held that s.413(5) of the Act did not
apply without qualification to any contravention no matter when the contravention occurred.4
Rather, the focus is on contravention of orders that apply to the bargaining representative or
employee at the time the industrial action is proposed.5 In Esso Australia Pty Ltd v The
Australian Workers’ Union6 Jessup J held that, despite his own view of the effect of s.413(5),
His Honour could not say that AMMA v MUA was plainly wrong, and therefore he was bound
to follow it.7 On that basis, the Court rejected Esso’s claim.
[8] Esso appealed to the Full Court of the Federal Court. The same Court also heard an
appeal against the judgment in AMMA v MUA. Reasons for judgment in the two appeals were
delivered on 25 May 2016. The Full Court dismissed both appeals.8
1 See PR561142, PR561655 and PR561701.
2 PR561701.
3 (2015) 251 IR 75.
4 Ibid at [175].
5 Ibid at [171].
6 [2015] FCA 758; (2015) 253 IR 304.
7 Ibid at 351-352 [135] - [139], 354-355 [144]-[148].
8 See Esso Australia Pty Ltd v The Australian Workers' Union [2016] FCAFC 72; (2016) 245 FCR 39 and Australian Mines
and Metals Association Inc. v Maritime Union of Australia [2016] FCAFC 71; (2016) 242 FCR 210.
[2018] FWCFB 4120
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[9] On 21 June 2016, Esso filed in the High Court of Australia, an application for special
leave to appeal particular orders of the judgment aforementioned of the Full Court. By its
application, Esso contended, inter alia, that the Full Court had erred in its construction of
s.413(5) of the Act.
[10] On 30 November 2016, the Unions served on Esso notices of intention to take
protected industrial action pursuant to s.414 of the Act. Two of the notices were given by the
AWU of the intention:
of employees for whom the AWU is a bargaining representative, and who are
covered by the Longford & LIP Agreement to take employee claim action in the
form of “Twenty four (24) consecutive one (1) hour stoppages on the performance of
all work by the employees commencing at 6:00am on 9 December 2016 and repeated
from 6:00am on each day thereafter, until 6:00am on 1 March 2017” (AWU
Longford & LIP Notice); and
of employees for whom the AWU is a bargaining representative, and who are
covered by the Offshore Agreement to take employee claim action in the form of
“Twenty four (24) consecutive one (1) hour stoppages on the performance of all
work by the employees commencing at 6:00am on 9 December 2016 and repeated
from 6:00am on each day thereafter, until 6:00am on 1 March 2017” (AWU
Offshore Notice) (together “the AWU Notified Action”).
[11] Relevantly analogous notices were served by the AMWU and the CEPU (collectively,
“the Notices”).
[12] On 7 December 2016, Vice President Watson made an order9 (Order) pursuant to
s.424 of the Act purporting to terminate protected industrial action, notice of which had been
given by the Unions, due to commence on 9 December 2016 and to be taken in furtherance of
proposed enterprise agreements to replace the Longford & LIP and the Offshore Agreements.
The applications giving rise to the Order were made by the Minister for Industrial Relations
for the State of Victoria.
[13] Esso’s special leave application had not, at this stage, been heard.10
[14] The Order relevantly provided:
“Further to decision [2016] FWC 8826, the following orders are made:
1. Pursuant to s.424 of the Fair Work Act 2009 (the Act) it is ordered that
protected industrial action at Esso Australia Pty Ltd (Esso) to be
undertaken in accordance with notices dated 30 November 2016 served by
The Australian Workers’ Union (AWU), Communications, Electrical,
Electronic, Energy, Information, Postal, Plumbing and Allied Services
Union of Australia (CEPU) and the “Automotive, Food, Metals,
Engineering, Printing and Kindred Industries Union” known as the
9 PR588352.
10 The High Court of Australia granted special leave on 16 December 2016 (see [2016] HCATrans 311).
[2018] FWCFB 4120
4
Australian Manufacturing Workers’ Union (AMWU) (AMWU) in relation
to the proposed agreements set out in paragraph 2 be terminated.
2. The proposed agreements are agreements to cover Esso and its employees
covered by the Esso Offshore Enterprise Agreement 2011 and the
Gippsland (Longford and Long Island Point) Enterprise Agreement 2011
and to replace those agreements.
3. The Order is binding on:
a) Esso;
b) The AWU;
c) The CEPU;
d) The AMWU;
e) (e) All employees who will be covered by the proposed
agreements referred to in paragraph 2.
…”11
[15] In making that Order, the Vice President made the following findings:
given the Notices, he was satisfied that “protected industrial action” was threatened,
impending and probable;12
the industrial action would immediately threaten gas supply to each of the regions
and industries currently supplied with gas through the Esso production facilities;13
the critical nature of gas supply for domestic and industrial use makes it inevitable
that the protected industrial action threatens to endanger the welfare of the
population in various regions of South East Australia;14 and
there could be no doubt that the industrial action will cause significant damage to the
Victorian economy and additional damage to other parts of South East Australia.15
[16] During the course of hearing the Minister’s applications, Esso accepted that the Full
Court’s judgment in Esso Australia Pty Ltd v Australian Workers’ Union16 was binding on the
Commission at that time, and that the common requirements for protected action set out in
s.413 of the Act had been met.17 Esso noted that this position could change if it was
11 PR588352.
12 [2016] FWC 8826 at [11].
13 Ibid at [12]-[13].
14 Ibid at [14].
15 Ibid at [16].
16 (2016) 245 FCR 39.
17 Esso’s Outline of Submissions dated 6 December 2016 in B2016/1264 and B2016/1267 at [4]-[5].
[2018] FWCFB 4120
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successful in its application for special leave and if the subsequent appeal in the High Court of
Australia was ultimately successful.18
[17] Following the making of the Order:
The bargaining representatives for the Longford and LIP Agreement reached
agreement prior to the end of the post-industrial action negotiating period and the
Esso (Longford and Long Island Point) Enterprise Agreement 2017 was approved by
the Commission on 4 April 2017 commencing operation on 11 April 2017.
Esso and the Unions engaged in further negotiations during the post-industrial action
negotiating period but were unable to agree on the terms of a new enterprise
agreement to replace the Offshore Agreement. No application was made to extend
the period, and accordingly the post-industrial action negotiating period ended on 28
December 2016. This Full Bench was convened to deal with making an ensuing
workplace determination as contemplated by s.266 of the Act. In this connection we
have heard lengthy evidence and submissions in respect of a workplace
determination that is to be made. We have reserved our decision.
[18] On 6 December 2017, the High Court of Australia delivered judgment in Esso
Australia Pty Ltd v The Australian Workers’ Union19 (Esso HCA) in which a majority of the
Court allowed an appeal by Esso, holding that the industrial action organised by the AWU in
relation to a replacement enterprise agreement or agreements for, relevantly the Longford &
LIP Agreement and the Offshore Agreement was not protected industrial action subsequent to
the AWU’s contravention on 6 March 2015 of the IA Order. This was because it did not meet
the common requirements provided in s.413(5) of Act.20 As to the effect of s.413(5), the
majority said:
“[35]… Although the title of s 413(5) still makes reference to “Compliance with
orders”, the change from “has complied with the order or direction so far as it applies
to the organisation” (emphasis added), in the body of s 443(1) of the Workplace
Relations Act, to “have [not] contravened any orders that apply to them” (emphasis
added), in the body of s 413(5) of the Fair Work Act, bespeaks an explicit change in
emphasis from a state of compliance with orders to a state of absence of past
contravention of orders. And, so far as can be seen, the only reason for the change is to
make clear, or possibly clearer, that the provision applies to past contraventions of
orders.
…
[51]… For the reasons already given, the change in tense from the present tense in s
413(2) and (3), to the present perfect tense in s 413(4) and (5), followed by the change
back to the present tense in s 413(6) and (7), read in context, leaves no room for doubt
that the Parliament intended s 413(5) to apply to past contraventions of orders…”21
18 Affidavit of Mr D Trindade dated 6 December 2016 in B2016/1264 and B2016/1267 at [7]-[8].
19 [2017] HCA 54.
20 Ibid at [64].
21 Ibid at [35] and [51].
[2018] FWCFB 4120
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[19] Esso has applied under s.603 of the Act for an order revoking the Order made by Vice
President Watson on 7 December 2016. The Minister and the Unions oppose revocation.
Consideration
Relevant statutory provisions
[20] Section 424 of the Act provides the following:
“424 FWC must suspend or terminate protected industrial action—endangering
life etc.
Suspension or termination of protected industrial action
(1) The FWC must make an order suspending or terminating protected industrial
action for a proposed enterprise agreement that:
is being engaged in; or
(b) is threatened, impending or probable;
if the FWC is satisfied that the protected industrial action has threatened, is
threatening, or would threaten:
(c) to endanger the life, the personal safety or health, or the welfare, of the
population or of part of it; or
(d) to cause significant damage to the Australian economy or an important part
of it.
(2) The FWC may make the order:
(a) on its own initiative; or
(b) on application by any of the following:
(i) a bargaining representative for the agreement;
(ii) the Minister;
(iia) if the industrial action is being engaged in, or is threatened,
impending or probable, in a State that is a referring State as defined in
section 30B or 30L—the Minister of the State who has responsibility for
workplace relations matters in the State;
(iib) if the industrial action is being engaged in, or is threatened,
impending or probable, in a Territory—the Minister of the Territory who
has responsibility for workplace relations matters in the Territory;
(iii) a person prescribed by the regulations.
[2018] FWCFB 4120
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Application must be determined within 5 days
(3) If an application for an order under this section is made, the FWC must, as far as
practicable, determine the application within 5 days after it is made.
Interim orders
(4) If the FWC is unable to determine the application within that period, the FWC
must, within that period, make an interim order suspending the protected industrial
action to which the application relates until the application is determined.
(5) An interim order continues in operation until the application is determined.”
[21] Division 2 of Part 3-3 of Act contains provisions which describe that which is
“protected industrial action”. Section 413 contains the common requirements that apply for
industrial action to be protected. Relevantly, protected industrial action is “employee claim
action”.22 Employee claim action is in turn described in s.409 as follows:
“409 Employee claim action
Employee claim action
(1) Employee claim action for a proposed enterprise agreement is industrial action
that:
(a) is organised or engaged in for the purpose of supporting or advancing
claims in relation to the agreement that are only about, or are reasonably
believed to only be about, permitted matters; and
(b) is organised or engaged in, against an employer that will be covered by the
agreement, by:
(i) a bargaining representative of an employee who will be covered by
the agreement; or
(ii) an employee who is included in a group or groups of employees
specified in a protected action ballot order for the industrial action; and
(c) meets the common requirements set out in Subdivision B; and
(d) meets the additional requirements set out in this section.
Protected action ballot is necessary
(2) The industrial action must be authorised by a protected action ballot (see
Division 8 of this Part).
Unlawful terms
22 Fair Work Act 2009 (Cth), s.408(a).
[2018] FWCFB 4120
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(3) The industrial action must not be in support of, or to advance, claims to include
unlawful terms in the agreement.
Industrial action must not be part of pattern bargaining
(4) A bargaining representative of an employee who will be covered by the agreement
must not be engaging in pattern bargaining in relation to the agreement.
Industrial action must not relate to a demarcation dispute etc.
(5) The industrial action must not, if it is being organised or engaged in by a
bargaining representative, relate to a significant extent to a demarcation dispute or
contravene an FWC order that relates to a significant extent to a demarcation dispute.
Notice requirements after suspension order must be met
(6) If section 429 (which deals with employee claim action without a further protected
action ballot after a period of suspension) applies in relation to the industrial action,
the notice requirements of section 430 must be met.
Officer of an employee organisation
(7) If an employee organisation is a bargaining representative of an employee who will
be covered by the agreement, the reference to a bargaining representative of the
employee in subparagraph (1)(b)(i) of this section includes a reference to an officer of
the organisation.”
[22] As may be seen, employee claim action is organised or engaged in, against an
employer that will be covered by the proposed agreement, by a bargaining representative or
an employee within the relevant group, for the purpose of supporting or advancing claims in
relation to the proposed agreement.
[23] For present purposes, s.413(5) contains an exclusionary rule as follows:
“413 Common requirements that apply for industrial action to be protected
industrial action
…
Compliance with orders
(5) The following persons must not have contravened any orders that apply to them
and that relate to, or relate to industrial action relating to, the agreement or a matter
that arose during bargaining for the agreement:
(a) if the person organising or engaging in the industrial action is a bargaining
representative for the agreement—the bargaining representative;
[2018] FWCFB 4120
9
(b) if the person organising or engaging in the industrial action is an employee
who will be covered by the agreement—the employee and the bargaining
representative of the employee.”
[24] The Commission has power under s.418 to make orders suspending or terminating
industrial action if it appears, inter alia, that industrial action by one or more persons is not
protected industrial action. That section provides:
“418 FWC must order that industrial action by employees or employers stop etc.
(1) If it appears to the FWC that industrial action by one or more employees or
employers that is not, or would not be, protected industrial action:
(a) is happening; or
(b) is threatened, impending or probable; or
(c) is being organised;
the FWC must make an order that the industrial action stop, not occur or not be
organised (as the case may be) for a period (the stop period) specified in the
order.
Note: For interim orders, see section 420.
(2) The FWC may make the order:
(a) on its own initiative; or
(b) on application by either of the following:
(i) a person who is affected (whether directly or indirectly), or who is
likely to be affected (whether directly or indirectly), by the industrial
action;
(ii) an organisation of which a person referred to in subparagraph (i) is a
member.
(3) In making the order, the FWC does not have to specify the particular industrial
action.
(4) If the FWC is required to make an order under subsection (1) in relation to
industrial action and a protected action ballot authorised the industrial action:
(a) some or all of which has not been taken before the beginning of the stop
period specified in the order; or
(b) which has not ended before the beginning of that stop period; or
(c) beyond that stop period;
[2018] FWCFB 4120
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the FWC may state in the order whether or not the industrial action may be
engaged in after the end of that stop period without another protected action
ballot.”
[25] Subdivision C of Division 2 of Part 3-3 of the Act contains provisions which deal with
the significance of industrial action being protected. Relevantly, s.415 contains a limited
immunity provision as follows:
“415 Immunity provision
(1) No action lies under any law (whether written or unwritten) in force in a State or
Territory in relation to any industrial action that is protected industrial action unless
the industrial action has involved or is likely to involve:
(a) personal injury; or
(b) wilful or reckless destruction of, or damage to, property; or
(c) the unlawful taking, keeping or use of property.
(2) However, subsection (1) does not prevent an action for defamation being brought
in relation to anything that occurred in the course of industrial action.”
[26] Under s.424, the Commission must make an order suspending or terminating protected
industrial action for a proposed enterprise agreement that is being engaged in or is threatened,
impending or probable if satisfied that the protected industrial action has, is or would have
certain consequences. That section has been extracted above.
[27] An order made under s.424 is, pursuant to s.266(2)(a), a “termination of industrial
action instrument” in relation to a proposed enterprise agreement. Section 266(1)(a) deals
with the consequences of a termination of industrial instrument having been made in relation
to a proposed agreement and provides:
“266 When the FWC must make an industrial action related workplace
determination
Industrial action related workplace determination
(1) If:
(a) a termination of industrial action instrument has been made in relation to a
proposed enterprise agreement; and
…”
[28] Section 266(3) deals with the “post-industrial action negotiation period” as follows:
“…
[2018] FWCFB 4120
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Post-industrial action negotiating period
(3) The post-industrial action negotiating period is the period that:
(a) starts on the day on which the termination of industrial action instrument is
made; and
(b) ends:
(i) 21 days after that day; or
(ii) if the FWC extends that period under subsection (4)—42 days after
that day.
…”
[29] Section 267 deals with the terms that are to be included in an industrial action related
workplace determination as follows:
“267 Terms etc. of an industrial action related workplace determination
Basic rule
(1) An industrial action related workplace determination must comply with
subsection (4) and include:
(a) the terms set out in subsections (2) and (3); and
(b) the core terms set out in section 272; and
(c) the mandatory terms set out in section 273.
Note: For the factors that the FWC must take into account in deciding
the terms of the determination, see section 275.
Agreed terms
(2) The determination must include the agreed terms (see subsection 274(2)) for the
determination.
Terms dealing with the matters at issue
(3) The determination must include the terms that the FWC considers deal with the
matters that were still at issue at the end of the post-industrial action negotiating
period.
Coverage
(4) The determination must be expressed to cover:
(a) each employer that would have been covered by the proposed enterprise
agreement concerned; and
[2018] FWCFB 4120
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(b) the employees who would have been covered by that agreement; and
(c) each employee organisation (if any) that was a bargaining representative of
those employees.”
[30] As should be apparent from the foregoing, the scheme of the Act deals with industrial
action in two ways. Action that is protected may be engaged in for the purposes of supporting
or advancing claims in relation to a proposed agreement. The usual statutory and common law
consequences of organising or engaging in industrial action are removed in relation to
protected industrial action. Serious or potentially serious forms of protected industrial action
must be suspended or terminated if there is satisfaction that the action has or will have, or
threatens to have a particular effect. Mechanisms are in place in the Act to ensure that if
protected industrial action is terminated on this basis, the issues agitated during bargaining for
a proposed agreement are resolved, either by agreement, or through a determination made by
the Commission.
[31] On the other hand, industrial action that is not protected may be the subject of a stop
order. Such action, whether taken in support of an agreement or otherwise receives no
immunity from the usual statutory or common law consequences of such action. An order
stopping the action does not lead to an arbitral outcome resolving terms and conditions of the
employment of the employees involved.
[32] One form of industrial action is sanctioned by the Act, in the sense that it is a
legitimate form of bargaining pressure that may be applied in furtherance of claims for an
enterprise agreement. The other is not. We will return to the significance of this later in this
decision.
[33] Section 603 provides power to the Commission to vary or revoke certain decisions
made under the Act. That section provides:
“603 Varying and revoking the FWC’s decisions
(1) The FWC may vary or revoke a decision of the FWC that is made under this Act
(other than a decision referred to in subsection (3)).
Note: If the FWC makes a decision to make an instrument, the FWC may
vary or revoke the instrument under this subsection (see subsection 598(2)).
(2) The FWC may vary or revoke a decision under this section:
(a) on its own initiative; or
(b) on application by:
(i) a person who is affected by the decision; or
(ii) if the kind of decision is prescribed by the regulations—a person
prescribed by the regulations in relation to that kind of decision.
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(3) The FWC must not vary or revoke any of the following decisions of the FWC
under this section:
(a) a decision under Part 2-3 (which deals with modern awards);
(b) a decision under section 235 or Division 4, 7, 9 or 10 of Part 2-4 (which deal with
enterprise agreements);
(c) a decision under Part 2-5 (which deals with workplace determinations);
(d) a decision under Part 2-6 (which deals with minimum wages);
(e) a decision under Division 3 of Part 2-8 (which deals with transfer of
business);
(f) a decision under Division 8 of Part 3-3 (which deals with protected action
ballots);
(g) a decision under section 472 (which deals with protected action ballots)
(h) a decision that is prescribed by the regulations.
Note: The FWC can vary or revoke decisions, and instruments made by
decisions, under other provisions of this Act (see, for example, sections 447 and 448).”
Contentions
[34] The competing contentions of the parties may be shortly stated.
[35] Esso says that the Order should be revoked in whole. It contends that the power to
make an order under s.424 is predicated on the objective fact that the action is protected
industrial action.23 In essence, it says that on a proper construction of s.424(1) of the Act, the
protected status of the action is a jurisdictional fact.24 A consequence of Esso HCA, according
to Esso, is that the industrial action threatened by the AWU was not protected industrial
action because it failed to meet the common requirement set out in s.413(5) of the Act.25 The
Order terminated the AWU Notified Action. As Esso HCA makes clear, the AWU Notified
Action was not protected industrial action. Therefore, the Order terminating the industrial
action was made with that essential preliminary element missing in respect of the AWU
Notified Action.26
[36] Esso also contends that even if the protected status of industrial action is not a
jurisdictional fact, thus allowing the Commission to act on satisfaction about whether the
industrial action was protected, the Vice President did not properly form that satisfaction
because the he failed to consider s.413(5) of the Act. At its highest, the Vice President
proceeded on an implicit assumption that the Full Court judgment was correct as to the
23 Esso’s Submissions on Revocation of the Section 424 Order dated 5 February 2018 at [33] – [34].
24 Ibid at [36].
25 Ibid at [28].
26 Ibid at [37].
[2018] FWCFB 4120
14
construction of s.413(5). Esso says that assumption was wrong. Accordingly, the Vice
President proceeded on a misconception of the statutory scheme and failed to appreciate a
matter that was fundamental to the state of satisfaction about whether the notified industrial
action was protected action. This constitutes a constructive failure to form the satisfaction.27
[37] The Minister contends that the Order is not invalid and the basis upon which Esso’s
application for revocation is founded is not made out. Alternatively, the Minister maintains
that the Order should be maintained in respect of the CEPU and the AMWU Notified Action.
The Minister contends first, that the Vice President, in exercising power under s.424, could
not simply ignore the Full Court’s decision and orders. The Full Court’s decision was binding
upon the Vice President and the decision and orders were still valid and binding as at 7
December 2016 notwithstanding Esso HCA. This was because that decision does not render
the Full Court’s orders void ab initio. It follows, according to the Minister, that the Order was
validly made.28
[38] Secondly, the Minister contends that the issue whether industrial action is “protected”
is not a jurisdictional fact which must objectively exist in order that the Commission have
jurisdiction to make an order under s.424.29 The Minister contends that characterising the
existence of protected industrial action as a jurisdictional fact does not assist Esso in
furtherance of its application for revocation because, as at 7 December 2016, the fact is and
was, even after Esso HCA, that the AWU was proposing to engage in protected industrial
action, in light of the Full Court’s decision and orders which were valid unless and until set
aside.30
[39] The Minister also contends that the Vice President did not misconstrue the Act in a
manner which affected his jurisdiction. Interpretation of the Act in the exercise of jurisdiction
under s.424 is a matter committed to the Commission, which may make an error of law
without giving rise to jurisdictional error. The Minister contends that no error of law
amounting to jurisdictional error was committed by the Vice President in his reliance on a
binding decision of the Full Court, which is valid until set aside, about the meaning of a
particular provision of the Act.31
[40] The Unions contend that the application for revocation of the Order should be
dismissed. They contend that the issue whether industrial action is “protected” is not a
jurisdictional fact which must objectively exist in order that the Commission have jurisdiction
to make an order pursuant to s.424 and that Esso’s contention to the contrary is unsustainable
having regard to the text of s.424(1) and in light of the judgment in Australian and
International Pilots Association v Fair Work Australia and Ors3233 (AIPA v FWA).
27 Ibid at [38].
28 Submissions of the Minister in Response to Application Pursuant to Section 603 of the Fair Work Act 2009 (Cth) dated 23
February 2018 at [36] – [44].
29 Ibid at [46]; Support for this contention is derived from Australian and International Pilots Association v Fair Work
Australia and Ors (2012) 202 FCR 200.
30 Submissions of the Minister in Response to Application Pursuant to Section 603 of the Fair Work Act 2009 (Cth) dated 23
February 2018 at [47].
31 Ibid [48] – [51]; (2012) 202 FCR 200.
32 (2012) 202 FCR 200.
33 Unions’ Submissions on Revocation of the Section 424 Order dated 23 February 2018 at [6] – [19].
[2018] FWCFB 4120
15
[41] The Unions further contended that the Vice President, and indeed all parties, accepted
that at the time the Order was made the AWU Notified Action was protected industrial action
on the basis of the Full Court’s judgment. The Vice President was bound to apply the law as
held by the Full Court. There was no error in doing so. He did not constructively fail to
exercise jurisdiction. However, if the Vice President made an error, it was an error within
jurisdiction. The Vice President correctly understood that he had to consider whether the
action was “protected”. If he reached the wrong result in that inquiry, it would be an error
within jurisdiction.34
Section 424 – whether industrial action is protected – a jurisdictional fact?
[42] A jurisdictional fact is a condition precedent to the exercise of jurisdiction or criterion
the satisfaction of which enlivens a statutory power or discretion.35 Unless the condition is
fulfilled or the criterion is satisfied, a decision purportedly made in the exercise of the
jurisdiction, the power or the discretion conferred by the statute will have been made without
authority.36 The existence of a jurisdictional fact is to be objectively determined.37 If the
exercise of power is expressly conditioned on the formation of an opinion or belief by the
decision-maker, the existence of the requisite opinion or belief is a jurisdictional fact.38
[43] Not every condition precedent or criterion in a statute will be a jurisdictional fact. The
question whether a condition precedent or criterion is a jurisdictional fact will depend on
whether as a matter of statutory construction the Parliament intended that the question of
satisfaction of the relevant condition precedent or criterion is to be left to the administrative
decision maker or is reviewable by a court on judicial review.39
[44] The issue whether the existence of protected industrial action was a jurisdictional fact
was considered in AIPA v FWA. That case concerned one of three unions (AIPA) mounting a
challenge to an order made by a Full Bench of Fair Work Australia (FWA) under s.424(1) of
the Act terminating protected industrial action. AIPA had been taking industrial action
directed against Qantas in support of claims for a new enterprise agreement. AIPA’s industrial
action consisted of its members who were airline pilots wearing incorrectly coloured ties and
making announcements at the end of each flight. As response action, Qantas announced that it
would ground its fleet worldwide and lockout members of the three unions who were
engaging in industrial action, for an indefinite period. AIPA argued, inter alia, that FWA had
committed jurisdictional error in making an order under s.424 because the question of
whether industrial action was protected industrial action was a jurisdictional fact for the
purposes of s.424 of the Act and Qantas’ employer response action against it did not
34 Ibid [20] – [33].
35 R v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69 CLR 407 at 429–30; Gedeon v
Commissioner of the New South Wales Crime Commission [2008] HCA 43; (2008) 236 CLR 120 at [43]; One Key
Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 at [98].
36 Ibid.
37 Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55 at [40]; One Key Workforce Pty Ltd v
Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 at [101].
38 Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144 at [57]; One Key
Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 at [99].
39 Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales v State of New
South Wales [2014] NSWCA 116; (2014) 242 IR 338 at [75]; Australian Commercial Catering Pty Ltd v Fair Work
Commission [2015] FCAFC 189; (2015) 235 FCR 441 at [42]; One Key Workforce Pty Ltd v Construction, Forestry,
Mining and Energy Union [2018] FCAFC 77 at [100].
[2018] FWCFB 4120
16
constitute protected industrial action because it was not undertaken in response to any action
taken by its members. It was said to be responsive to the industrial action taken by members
of the other unions involved.
[45] Lander J opined that the issue of whether Qantas’ lockout was organised or engaged in
as a response to industrial action was a jurisdictional fact need not be resolved. His Honour
observed that FWA found Qantas’ lockout was organised or engaged in in response to
protected industrial action of the three separate unions and if the question is a jurisdictional
fact, the evidence overwhelmingly supported the finding made by FWA.40
[46] Buchanan J expressed the opinion that the question whether Qantas was responding
primarily to the industrial action taken by the two unions, or whether members of AIPA were
simply swept up indiscriminately by Qantas’ response action, did not raise any question of
jurisdictional fact, rather the only question raised is whether the FWA might have made an
error within jurisdiction.41
[47] Perram J in dealt with the issue at greater length. His Honour said:
“146. The text of s 424 is set out above. It does not, in terms, say that the power of
Fair Work Australia to make a termination order is contingent upon it first forming an
opinion, or being satisfied, that what is taking place is ‘protected industrial action’.
This omission formed the springboard for AIPA’s submission, developed during oral
argument, that the power in s 424 was dependent for its existence upon the fact that
there was ‘protected industrial action’. Since this Court had power to grant relief
where an excess of jurisdiction was shown, it followed that this Court was not only
entitled but also obliged to consider whether that jurisdictional fact had been
established. Viewed this way, Fair Work Australia’s opinion as to whether there was
protected industrial action was largely irrelevant. Instead, it was for this Court to form
its own opinion on the matter based on the evidence before it.
147. The principles in this area are well-established. In Australian Heritage
Commission v Mount Isa Mines Ltd [1997] HCA 10; (1997) 187 CLR 297, the High
Court unanimously adopted at 303 the dissenting analysis of Black CJ on this issue in
the Full Court below. That judgment, which is reported as Australian Heritage
Commission v Mount Isa Mines Ltd (1995) 60 FCR 456, establishes four propositions
which are presently relevant: first, whether a statutory power is to be read as subject to
the formation of an opinion about the existence of a matter by the decision maker or,
instead, by the bare existence of the matter itself is a question of statutory construction
(at 466); secondly, the resolution of that question is assisted by an examination of the
nature of the task reposed in the decision maker—where that task is a difficult and
complicated one involving the careful assessment of complex facts and the formation
of opinions and value judgments on a potentially wide range of matters, this will
suggest that Parliament intended that the decision maker would have power to make
its own determination of that matter (at 466); thirdly, the inconvenience which may
attend the conclusion that a matter is a jurisdictional fact is itself an indicator that this
is unlikely to have been what Parliament intended (at 466); and, finally, the specialist
qualifications of the members of an administrative tribunal may well be an indicator
40 (2012) 202 FCR 200 at 221 [87] – [88].
41 Ibid at 227 – 228 [122] – [126].
[2018] FWCFB 4120
17
that it is this body, with its expertise, that is to resolve the issue at hand (at 467). The
High Court’s reasoning in Plaintiff M70/2011 v Minister for Immigration &
Citizenship (2011) 280 ALR 18; [2011] HCA 32 at [57]- [58] per French CJ, [107]-
[109] per Gummow, Hayne, Crennan and Bell JJ and [164] per Heydon J is consistent
with this distillation, although the result in that case may show that its application is
not always easy or without controversy.
148. Each of these factors points to the conclusion that s 424(1) should be construed as
requiring as a condition precedent to the power arising, the satisfaction of Fair Work
Australia that there was protected industrial action rather than the existence of
protected industrial action as a matter of jurisdictional fact. The concept of protected
industrial action takes one to s 408. Each of the three species of protected industrial
action there set out contain statutory requirements involving complicated matters of
factual assessment. For example, protected industrial action includes ‘employee claim
action’ which, in s 409(1), is defined to be industrial action which ‘is organised or
engaged in for the purpose of supporting or advancing claims in relation to the
agreement that are only about, or are reasonably believed to only be about, permitted
matters’ (emphasis added). Further, the definitions of employee claim action,
employee response action and employer response action are accompanied by a
requirement that each ‘meets the common requirements set out in Subdivision B’: ss
409(1)(c), 410(1)(c) and 411(1)(c). Subdivision B is headed ‘Common requirements
for industrial action to be protected industrial action’ and includes a requirement that
the parties be ‘genuinely trying to reach an agreement’ (s 413(3)). Again this is a
matter of a complicated and evaluative kind.
149. Then there is the consideration that if s 424(1) makes the existence of protected
industrial action a jurisdictional fact great inconvenience is likely to ensue. Section
424(1) is a power which must almost always be exercised urgently (as it was in this
case). Section 424(3) requires Fair Work Australia to resolve any application within
five days. If it is unable to do so it must make an interim suspension order: s 424(4).
This is hardly surprising since the inquiry erected by s 424(1)(d) directs attention to
whether the protected industrial action is harming the national economy. It would
strike at the heart of the urgency contemplated by these provisions if all of Fair Work
Australia’s deliberations were made contingent upon this Court’s subsequent, and
potentially unexpedited, views on whether there had been protected industrial action in
the first place. This conclusion is further reinforced by the fact that Fair Work
Australia is authorised to move on its own motion: s 424(2)(a).
150. It is significant too that the membership of Fair Work Australia is a specialised
one as in the Australian Heritage Commission case. By s 627(1)-(3) each of the
President, the Deputy Presidents and the Commissioners of Fair Work Australia must
have experience in one or more of the fields of workplace relations, law or business,
industry or commerce. Further, Fair Work Australia and its predecessors have been
administering the industrial arrangements of this nation for more than a century.
Parliament may be presumed to be aware of its substantial experience and expertise in
industrial matters. It is likely that in conferring the powers in s 424 (linked as they are
to the most serious issues of industrial and economic policy) Parliament had in mind
precisely the utilisation of Fair Work Australia’s expertise.
[2018] FWCFB 4120
18
151. In those circumstances, s 424(1) is to be construed as being enlivened when Fair
Work Australia forms the opinion that there is protected industrial action; the matter is
not therefore a matter for judgment by this Court. That is not to say that review of Fair
Work Australia’s state of satisfaction is not available. To the contrary, the principles
governing review of such matters are well established. Section 424(1) will be treated
as referring to an opinion or satisfaction which is ‘such that it can be formed by a
reasonable man who correctly understands the meaning of the law under which he
acts’ (R v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69
CLR 407 at 430 per Latham CJ). Consequently, if the opinion or satisfaction is formed
taking into account irrelevant considerations or as a result of misconstruing the
relevant legislation, then it will be ultra vires s 424(1): Connell at 432; Minister for
Immigration v Eshetu (1999) 197 CLR 611 at 651-654 [131]-[137] per Gummow J.
What is important for present purposes is that review of that kind does not permit the
reviewing court to substitute its own opinions on the matter.”42
[48] Esso contends that AIPA v FWA provides only obiter support for the proposition that
the protected status of industrial action is not a jurisdictional fact.
[49] We do not consider AIPA v FWA merely provides obiter support for the proposition
that the protected status of industrial action, the subject of proceedings under s.424 of the Act,
is not a jurisdictional fact. In AIPA v FWA, there was a challenge to FWA’s finding that
Qantas’ response action was “protected” within the meaning of s.408 of the Act, and so,
“protected” for the purposes of s 424. Although Lander J found it unnecessary to deal with the
question, because as we note above, His Honour concluded, if it was a jurisdictional fact, the
evidence overwhelmingly supported the finding made by FWA, the other members of the Full
Federal Court both reached a conclusion about the issue. As we have already noted, Buchanan
J concluded that the evaluation of the question whether Qantas was responding primarily to
the industrial action taken by the two unions, or whether members of AIPA were simply
swept up indiscriminately by Qantas’ response, did not raise any question of jurisdictional
fact, rather the only question raised is whether FWA might have made an error within
jurisdiction. In a lengthier analysis, Perram J concluded that s.424(1) is to be construed as
being enlivened when FWA forms the opinion that there is protected industrial action and that
the matter is not therefore a matter for judgement by the Court.
[50] We therefore consider AIPA v FWA to be binding on us and we apply it by
determining that the Vice President, in making the Order was not required to objectively
determine that the AWU Notified Action was “protected” industrial action. He need only have
reached, as he evidently did, the requisite level of satisfaction.
[51] If we are wrong in our assessment as to the effect of the judgments in AIPA v FWA,
we consider Perram J’s analysis to be particularly persuasive and would respectfully adopt it
in reaching our own conclusion that the question whether industrial action for the purposes of
exercising power under s.424 of the Act is protected, is an evaluative one and not one
requiring the protected status to be objectively established as a jurisdictional fact.
[52] For these reasons it follows that the Vice President’s decision to make the Order is not
attended by jurisdictional error in this regard.
42 Ibid at 233 – 235 [146] – [151].
[2018] FWCFB 4120
19
Is the Order affected by jurisdictional error by reason of the Vice President’s failure to form
the satisfaction as to whether the AWU Notified Action was protected?
[53] Where a statute vests a power in, or imposes a duty on, an administrative decision-
maker to do something upon reaching a state of satisfaction and the matters the statute
requires the decision-maker to take into account are not considered, as a matter of law the
requisite state of satisfaction is not reached. There will thus be jurisdictional error.43 An
illustration of this point is to be found in The King v Connell and Anor; Ex parte The Hetton
Bellbird Collieries Limited and Ors44 in which Latham CJ said:
“…It is necessary to ascertain what is meant by the provision that the Industrial
Authority must be satisfied that the rates are anomalous…In the present case the
powers of an Industrial Authority are limited by law, and the opinion of the Authority,
not that a particular exercise of its powers is within the law, but that a certain
condition, namely the existence of an anomaly, is fulfilled, is made decisive. But, as
we proceeded to say in the Man Power Case with reference to a provision in the
National Security Act that the Governor-General might make such regulations as
appear to him to be necessary for certain purposes —”A regulation, though complying
in terms with the section as being necessary for defence purposes in the opinion of the
Governor-General, could nevertheless not be held to be valid if it was shown that the
Governor-General could not reasonably be of opinion that the regulation was
necessary or expedient for such purposes”. Thus where the existence of a particular
opinion is made a condition of the exercise of power, legislation conferring the power
is treated as referring to an opinion which is such that it can be formed by a reasonable
man who correctly understands the meaning of the law under which he acts. If it is
shown that the opinion actually formed is not an opinion of this character, then the
necessary opinion does not exist.
...
It should be emphasised that the application of the principle now under discussion
does not mean that the court substitutes its opinion for the opinion of the person or
authority in question. What the court does do is to inquire whether the opinion
required by the relevant legislative provision has really been formed. If the opinion
which was in fact formed was reached by taking into account irrelevant considerations
or by otherwise misconstruing the terms of the relevant legislation, then it must be
held that the opinion required has not been formed. In that event the basis for the
exercise of power is absent, just as if it were shown that the opinion was arbitrary,
capricious, irrational, or not bona fide.”45 [Footnotes omitted]
[54] If there is a misconception as to that which the exercise of a statutory power entails,
there will also be jurisdictional error.46 But, as a Full Court of the Federal Court in One Key
43 Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26; (1949) 78 CLR 353 at 360; Buck v Bavone
[1976] HCA 24; (1976) 135 CLR 110 at 118–119; Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996)
185 CLR 259 at 275; Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 at [54];
One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 at [109].
44 (1944) 69 CLR 407.
45 Ibid at 430 – 431.
46 Graham v Minister for Immigration and Border Protection [2017] HCA 33; (2017) 91 ALJR 890; 347 ALR 350 at [68].
[2018] FWCFB 4120
20
Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union47 recently restated, it
is often said that there is no bright line between jurisdictional error and error in the exercise of
jurisdiction, though the distinction is a real one.48 In Re Refugee Review Tribunal; Ex parte
Aala49 Hayne J explained that there will be jurisdictional error:
“…if the decision maker makes a decision outside the limits of the functions and
powers conferred on him or her, or does something which he or she lacks power to do.
By contrast, incorrectly deciding something which the decision maker is authorised to
decide is an error within jurisdiction. (This is sometimes described as authority to go
wrong, that is, to decide matters within jurisdiction incorrectly.) The former kind of
error concerns departures from limits upon the exercise of power. The latter does
not.”50
[55] As we have already observed, Esso says that the Vice President proceeded on the
implicit assumption that the judgment of the Full Court was correct in respect of its
interpretation of s.413(5) of the Act. That assumption was incorrect by reason of Esso HCA.
To that end, Esso says the Vice President proceeded on a misconception of the statutory
scheme and he failed to appreciate a matter that was fundamental to the state of satisfaction
about whether the notified industrial action was protected action. This constituted a
constructive failure to form the satisfaction51 and was ultra vires.52 Consequently, the making
of the Order was said by Esso to be affected by jurisdictional error and it must therefore be
treated as “never having been made”.53
[56] The Vice President approached the question whether industrial action in the Notices
was protected industrial action that was threatened, impending or probable as follows:
“[9] Both the Gippsland Agreement and the Offshore Agreement passed their nominal
expiry dates on 1 October 2014. Since that time, Esso and the Unions have been
negotiating for replacement agreements. In November 2014 each of the Unions made
applications for protected action ballot orders. On 10 December 2014 the Commission
made orders for the conduct of ballots of relevant Esso employees. On 9 January 2015
the Australian Electoral Commission declared that more than 50% of relevant
employees voted and more than 50% of the valid votes approved each of the proposed
forms of industrial action.
[10] On 30 November 2016 the Unions gave notice of employee claim action in the
form of 24 consecutive one hour stoppages commencing at 6:00am on 9 December
2016 and repeated from 6:00am each day thereafter until 6:00am on 1 March 2017.
This action falls within the actions authorised by the protected action ballot.
47 [2018] FCAFC 77.
48 Ibid at [194].
49 [2000] HCA 57; (2000) 204 CLR 82.
50 Ibid at [163]; see also Kirk v Industrial Court of New South Wales [2010] HCA 1; (2010) 239 CLR 531 at [66].
51 The King against Connell and Another; Ex parte The Hetton Bellbird Collieries Limited and Others (1944) 69 CLR 407 at
432 per Lathan CJ; Coal and Allied v AIRC (2000) 203 CLR 194 at [31] per Gleeson CJ, Gaudron and Hayne JJ;
Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd & Anor (2015) 228 FCR 297 at [60]-[63].
52 Transcript of Proceedings in C2017/7086, 21 March 2018 at PN10; PN42-46.
53 Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; Ha v New South Wales (1997) 189 CLR
465 at 465, 503-4, 515; Wattmaster Alco Pty Ltd v Button (1986) 70 ALR 330 at 335.
[2018] FWCFB 4120
21
[11] I am satisfied that protected industrial action as described in the Notices is
threatened, impending and probable.”54
[57] It is evident that the Vice President did not, in express terms, give consideration to the
effect of s.413(5) of the Act upon the AWU Notified Action. But that he did not do so
expressly seems to us to be explained by the fact that Esso accepted that the Full Court’s
judgment in Esso Australia Pty Ltd v Australian Workers’ Union55 was binding on the
Commission at that time, and that the common requirements for protected action set out in
s.413 of the Act had been met.56 Esso noted that this position could change if its application
for special leave and subsequent appeal in the High Court of Australia were ultimately
successful.57 This position was reinforced by counsel for Esso during the course of the
hearing:
“…Esso’s position is as follows. The Commission can be satisfied that there is
protected industrial action as the law stands now. Your Honour will note from our
submissions in paragraphs 3 to 5 that there are proceedings in other places and
proposed proceedings in another place which go to the industrial action taken by the
AWU.
That action as matters currently stand is protected industrial action, but we make the
point that that’s an issue for challenge by us. But we certainly don’t make any
submission that the action is not protected…” 58
[58] It is plain from the above that the Vice President did more than implicitly assume the
Full Court to be correct. The Vice President was told, and it appears he accepted; that on the
state of the law, he could be satisfied that there is protected industrial action. Understood in
this way, we agree with the Minister and the Unions that the Vice President understood that
he had to consider whether the proposed industrial action was “protected”, and that he did so.
It seems to us therefore, that the Vice President arrived at the requisite state of satisfaction on
the basis of that which appeared to be the agreed position of all parties to the proceeding. That
is, that as the law then stood, the Vice President could be satisfied that the AWU Notified
Action was protected industrial action. The Act authorised the Vice President to reach a level
of satisfaction as to whether the industrial action was protected. He did so based on the
apparent views of all concerned that as the law then stood, the action was protected industrial
action. That he was wrong means that there was an error within jurisdiction.
[59] The High Court’s exposition as to the meaning and effect of s.413(5) means that the
AWU Notified Action, when notified, was not, as a matter of law, protected industrial action.
Though the Vice President might not have committed jurisdictional error, he was nevertheless
wrong in concluding that the AWU Notified Action was industrial action that was protected.
The law is, and was, when the Order was made, as stated by the High Court in Esso HCA.
54 [2016] FWC 8826 at [9] – [11].
55 (2016) 245 FCR 39.
56 Esso’s Outline of Submissions dated 6 December 2016 in B2016/1264 and B2016/1267 at [4]-[5].
57 Affidavit of Mr D Trindade dated 6 December 2016 in B2016/1264 and B2016/1267 at [7]-[8].
58 Transcript of Proceedings in B2016/1264 and B2016/1267, 7 December 2016 at PN108 – PN109.
[2018] FWCFB 4120
22
[60] It seems to us therefore that the question whether the Order should be revoked needs
to be determined by reference to discretionary considerations other than whether the Order is
affected by jurisdictional error. We turn then to consider that issue.
Power under s.603 and whether we should exercise it to revoke the order
[61] It is firstly to be observed that the power in s.603(1) of the Act to revoke a decision or
order is not affected by the limitations on the exercise of that power found in s.603(3). In Esso
HCA the High Court gave some consideration to the breadth of the Commission’s power
under s.603 of the Act. The majority observed:
“The AWU’s contention that to construe s 413(5) in the manner contended for by Esso
would be productive of capricious, unjust results is also unpersuasive. The Fair Work
Commission has broad powers under s 603 of the Fair Work Act to vary or revoke
orders, including power to vary or revoke orders retrospectively. The very
considerable breadth of the power accorded by s 603 stands in contrast to the more
limited power accorded by s 602 to correct “obvious errors”. Thus, although it has
been said that courts should eschew the exercise of inherent power to vary an order
nunc pro tunc where the variation would have the effect of altering the substantive
rights of the parties, the statutory power accorded by s 603 is different. As was
observed in George Hudson Ltd v Australian Timber Workers’ Union in relation to the
retrospective operation of the Conciliation and Arbitration Act, the provisions of that
Act were not to be read down as if confined to a prospective operation at the expense
of the “great public policy” which the Act embodied, namely, that of encouraging and
maintaining “industrial peace in the Commonwealth”. So also, in Australian Tramway
and Motor Omnibus Employees Association v Commissioner for Road Transport and
Tramways (NSW), the Court held that the Conciliation Commissioner had power to
vary the terms of an award that had expired (but continued in force by operation of
statute). As Murphy J stated in R v Gough; Ex parte Key Meats Pty Ltd, it was clear
that the Australian Conciliation and Arbitration Commission was entitled to vary or set
aside an award provision in accordance with the Act even if its new provision operated
“locally, temporarily, prospectively or retrospectively, provided the provision would
have been within the scope or ambit of the original dispute”. The same considerations
informed this Court’s decision in Re Dingjan; Ex parte Wagner that the power to set
aside or vary the terms of a harsh or unfair contract under ss 127A and 127B of the
Industrial Relations Act could be exercised in relation to a contract that had been
discharged. And the same is surely true of the Fair Work Commission’s statutory
power under s 603 of the Fair Work Act to vary or revoke orders relating to a proposed
agreement or matters arising during the bargaining for such an agreement. To adopt
and adapt the language of Kirby J in Emanuele v Australian Securities Commission, it
may be inferred that Parliament contemplated that oversight and inadvertence would
sometimes occur for which the Fair Work Commission’s powers of variation and
revocation under s 603 would be available.
Hence, if a document cannot be filed within the time specified in an order made by the
Fair Work Commission, an application might be made for the time to be enlarged, or
alternatively for the order to be revoked and a new order made allowing greater time,
and, if there were good reason for the failure to file the document timeously, no doubt
time would be enlarged, especially when it is appreciated that to refuse to enlarge time
would preclude the possibility of protected industrial action by reason of s 413(5).
[2018] FWCFB 4120
23
Similarly, if a document were filed within time but later found not to comply with
requirements imposed by the Fair Work Commission, and there was a satisfactory
excuse for the failure in compliance, time in which to file a document complying with
requirements might be enlarged retrospectively. If, in exercise of the power conferred
by s 603, an order were made by the Fair Work Commission varying or revoking a
previous order with effect from a time earlier than the alleged contravention, the effect
would be that there would not have been a contravention of the order. If, however, it
appeared that the failure to file the document on time or to file what was required by
the previous order was the result of contumaciousness or unacceptably careless
disregard for the terms of the order, or if it were thought that to alter the order
retrospectively would amount to an inappropriate or unfair interference with the rights
of the parties, it might be expected that the Fair Work Commission would decline to
exercise the power conferred by s 603 with the effect that the immunity attaching to
protected industrial action would not arise.”59 [Footnotes omitted]
[62] Esso contends that the power conferred under s.603 is sufficiently broad to allow the
Commission to revoke Order. It says that if the Order was not revoked, the Commission
would be consigned to completing the workplace determination proceeding. At best, that
instrument would be under a cloud of doubt as to its validity.
[63] The Unions posited that the High Court’s statement, which we have reproduced above
concerning the breadth of the power under s.603 of the Act should to be treated with caution,
as a general statement of that kind is to be read in its context.60 The majority was discussing
the availability of s.603 in the context of contended difficulties arising from a literal
construction of s.413(5) of the Act. Furthermore, broad or unconfined discretions must be
exercised consistently with the statutory object and purpose, and therefore the exercise of
discretion under s.603 of the Act should not be seen as enabling the circumvention of the
proper interpretation of s.424.
[64] As to relevant discretionary considerations, the Unions and the Minister also contend
that Esso’s application does not account for the status of the Longford & LIP Agreement if
the Order was to be revoked.61 The Unions highlighted that the CEPU and the AMWU
(whose protected industrial action was not under challenge) had suffered disadvantage
because they were deprived of the opportunity of continuing industrial action and were forced
to participate in a time consuming and expensive workplace determination process. The
Minister further submitted that third party interests might be prejudiced if the Order was
revoked,62 for instance upon the employees who voted in favour of the Longford & LIP
Agreement in the post-industrial action negotiating period.63 Esso contended that the making
of the Order and the failure to reach an agreement on the Offshore Agreement was that of the
59 [2017] HCA 54 at [49]-[50].
60 Ogden Industries v Lucas (1968) 118 CLR 32.
61 This was however addressed in the Esso’s reply oral submissions at PN262 in which Esso stated that the date of revocation
ought to be 7 December 2016, being the date the s.424 Order was made. This would have no effect on the Longford/Long
Island Point Agreement which was made and approved under Part 2-4 of the FW Act – unaffected by either s.266 or
s.424.
62 See generally Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 592 [165]; 546 [25] (Gleeson CJ), 546 [26] (Gaudron
J), 565 [81] (McHugh J), 635 [304] (Callinan J) regarding the significance of exercising judicial power which affects
acquired rights of third parties.
63 Transcript of Proceedings in C2017/7086, 21 March 2018 at PN197.
[2018] FWCFB 4120
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Minister’s and the Unions’ own making.64 Therefore, claims with respect the disadvantage
asserted by the AWU cannot readily be sustained.65
[65] The Minister contended that it would be in the public interest if finality was reached in
the industrial disputes in respect of the Longford & LIP Agreement. The workplace
determination proceeding should be allowed to proceed, and the AMWU and CEPU should be
allowed to resume protected industrial action in support of an agreement to replace the
Offshore Agreement. If the workplace determination proceeding had concluded and a
determination was made by the Commission, the concept of nullity as urged by Esso, would
be a factor which weighs against the exercise of discretion under s.603 of the Act.66 Esso
contends that it does not seek a determination that the Order was a nullity, but rather it seeks
an order of the Commission to revoke the Order.67
[66] The Minister advanced that the Commission’s statutory discretion must be exercised
reasonably in the context of the statute as a whole.68 It is significant that s.424 orders can only
be made where the Commission is satisfied of a threat to life, health, safety welfare or the
economy. Moreover, s.266 of the Act imposes a strict regime for the resolution of the
industrial dispute that does not readily contemplate delays. While s.603(3) of the Act does not
exclude orders made under s.424 from revocation, that must be understood in light of the
statutory assumption that orders made under s.424 would be promptly followed by agreed
enterprise agreements or workplace determinations (the latter being listed in s 603(3)). This
application to revoke is therefore inconsistent with the certainty that the statutory regime
seeks to achieve. We agree with the Minister’s submission that the discretionary exercise of
our power to revoke should be guided by the statute as a whole, but we do not accept that a
revocation on the Order in the circumstances of this case is inconsistent with the statutory
scheme.
[67] It appears to us that the following matters are relevant in assessing whether we should
exercise our discretion to revoke the Order.
[68] First, there is the question whether the Order was affected by jurisdictional error and
for the reasons we have outlined, we do not consider that it was so affected and consequently
this weighs against the exercise of our discretion. Secondly, it is now patently clear that the
AWU Notified Action was not protected industrial action. Faced with an application under
s.424 now made in relation to the same action, the Commission could not properly form the
requisite satisfaction so as to enliven the jurisdiction under s.424. Although the Vice President
acted within jurisdiction, he was nonetheless wrong in his conclusion that the AWU Notified
Action was protected action. This in our view weighs in favour of the exercise of our
discretion.
[69] Thirdly there is the statutory scheme. The power in s.424 is exercisable in respect of a
particular species of industrial action, namely protected industrial action. An order under
s.424 is not available in respect of unprotected industrial action. Mechanisms for stopping
unprotected industrial action are found in s.418. The consequence of an order terminating
64 Ibid at PN269-275.
65 Ibid.
66 Ibid at PN220-222.
67 Ibid at PN276.
68 See for example Minister for Immigration v Citizenship v Li (2013) 249 CLR 332 at 362 [63].
[2018] FWCFB 4120
25
protected industrial action are those set out earlier and in particular the prospect that a
workplace determination will be made. This is part of the bargaining regime which envisages
bargaining parties, inter alia, having access to protected industrial action as a means of
leveraging an agreement. Section 424 recognises that the protected industrial action is a
legitimate leveraging tool that is available, but that some protected industrial action has such a
significant effect on the population or a part of the population or upon the economy or part of
the economy that it should no longer be permitted to continue. Where such action is
terminated, the parties may still reach an agreement during the post termination negotiating
period, but if they ultimately do not, the Commission will determine relevant terms and
conditions which will be applicable and these will be set out in a workplace determination. No
such consequences flow from unprotected industrial action. The taking of unprotected
industrial action in support of an enterprise agreement is not given any legitimacy under the
Act. Significant statutory and common law consequences may flow from the organising of or
engaging in unprotected industrial action. It seems to us that the making of a workplace
determination after the termination of protected industrial action is the response to the concern
that the termination of the protected industrial action diminishes one party’s bargaining power
or industrial leverage vis-à-vis the other. It brings ultimate finality to the bargaining process
part of which involved the taking or threatened taking of particular industrial action.
Unprotected industrial action is not part of the bargaining regime. The termination of
protected industrial action and the consequent making of a workplace determination which
follows is part of that regime. It does not appear to us that the statutory scheme should be
understood as having intended unprotected industrial action to result in the making of a
workplace determination. It seems to us therefore that this factor also weighs in favour of the
exercise of our discretion.
[70] A further discretionary consideration is that it is apparent that Esso, the Unions and
their respective members took steps in reliance of the Order and as a consequence may suffer
some prejudice if the Order is revoked. Prejudice is ultimately a matter for those parties to
demonstrate, but some prejudice is self-evident in the circumstances of this longstanding
matter. The proceedings concerning the making of a workplace determination consequent
upon the Order were lengthy and complex. They involved a great deal of evidence gathering
and preparation and doubtless, a great deal of expense. Those proceedings have concluded
and the decision is reserved. A revocation of the Order will have the result that the time, cost
and expenditure incurred by the parties’ participation in the proceedings will have been
wasted. Moreover, the underlying bargaining dispute that is between the parties will remain
unresolved. These matters are not insignificant and tend to weigh against the exercise of our
discretion to revoke the Order.
[71] There is also the position of employees who are not the subject of the workplace
determination, but who are represented by the unions. During the post-industrial action
negotiating period following the making of the Order, and in reliance on the Order, an
agreement was reached in relation to an enterprise agreement to cover onshore employees.
Subsequently, an agreement to replace the Longford & LIP Agreement was made and then
approved by the Commission. The Order denied the Unions and their members the capacity to
exert legitimate industrial pressure through a continuation of protected industrial action in
respect of the proposed replacement for the Longford & LIP Agreement. This is also a matter
that weighs against the exercise of our discretion.
[72] However, the ultimate weight that is to be attributed to the matters discussed in the
preceding two paragraphs is to be assessed in the context of and tempered by the fact that the
[2018] FWCFB 4120
26
prejudice sustained in the circumstances with which we are now faced are ultimately the
product of conduct which was within the AWU’s power to control.
[73] It was also contended that the public interest favours finality in the industrial disputes
between the Unions and Esso in respect of the Longford plant. Finality is not to be achieved
by revoking the Order. It is to be achieved by instead permitting the workplace determination
proceeding to conclude. Whilst it is undoubtedly true that the termination of protected
industrial action pursuant to s.424 should result in either an agreement being made consequent
upon productive and successful negotiations held during post-industrial action negotiating
period following the making of an order, or the making of a workplace determination, we do
not consider that it could have been the intended effect of the legislative scheme that finality
be achieved at any price. As we have already indicated, the taking of unprotected industrial
action should not, under the legislative scheme, result in the making of a workplace
determination.
[74] We are mindful that our discretion must be exercised reasonably and in the context of
the statute as a whole.69 An order under s.424 terminating protected industrial action may only
be made if the Commission is satisfied the industrial action has or threatens to have the
particularised effect on life, health, safety welfare or the economy. Section 266 imposes a
regime for the resolution of the dispute that does not readily contemplate delay. The
Commission is required to make a workplace determination as quickly as possible. But that
said, we cannot countenance an outcome which has the result that a workplace determination
should be made on the basis of an order which, though not affected by jurisdictional error,
nonetheless terminated industrial action in the AWU Notified Action, which according to the
decision in Esso HCA was plainly not protected industrial action at the time the Order was
made. Whether or not a workplace determination, made consequent on the Order, is
susceptible to subsequent challenge is in our view beside the point. We are in a position to
determine whether the foundation upon which a workplace determination would be built
should be removed. We consider that the discretionary matters which we discuss above,
which point in favour of the exercise of our discretion, outweigh those going the other way.
For these reasons we therefore propose to revoke the Order pursuant to s.603(1) of the Act.
[75] The Minister with the support of the Unions initially contended that, in the event we
were persuaded to revoke the Order, the appropriate course would be to vary the Order70 so as
to excise the AWU Notified Action but to leave it in place in respect of the CEPU and the
AMWU Notified Action. However, during the hearing, the Minister conceded, properly in our
view, that a varied order could not properly be made under s.424 of the Act because the
evidentiary record before the Commission would not enable us to properly be satisfied that
the remaining industrial action insofar as it relates to the AMWU and the CEPU Notified
Action had the requisite deleterious consequence or threatened consequence envisaged by the
section.71 On that basis, the Minister and the Unions did not press the variation or reading
down of the s.424 Order.72
[76] We would encourage the parties to engage in immediate discussions with a view to
concluding an enterprise agreement to replace the Offshore Agreement. We are able to make
69 Minister for Immigration v Citizenship v Li (2013) 249 CLR 332 at 362 [63].
70 Acts Interpretation Act 1901 (Cth) s.46 would also permit the FWC to vary the s.424 Order to excise the AWU.
71 Transcript of Proceedings in C2017/7086, 21 March 2018 at PN138.
72 Ibid at PN138 and PN228.
[2018] FWCFB 4120
27
available a member of the Full Bench to facilitate those discussions. We would also be
prepared to advise the parties in conference as to our views on the likely form of a workplace
determination that we would have made. We would also be prepared to set out the likely form
of a workplace determination that we would have made in a recommendation if the parties
provided an indication that they would each accept the recommendation and allow employees
the opportunity to vote to approve an enterprise agreement consistent with that
recommendation.
Conclusion
[77] For the reasons stated we are satisfied that the Order should be revoked.
Order
[78] Pursuant to s.603(1) of the Act, the order in PR588352 is revoked with effect on and
from the date on which it was made (7 December 2016).
VICE PRESIDENT
Appearances:
Mr F Parry, QC with Mr R Dalton, Counsel for Esso Australia Pty Ltd
Mr H Borenstein, QC with Mr J Fetter, Counsel for the Unions
Mr C Dowling, SC with Mr C Tran, Counsel for the Minister for Industrial Relations for the
State of Victoria
Hearing details:
2018
Melbourne
21 March.
Printed by authority of the Commonwealth Government Printer
PR608941
ORK COMMISSION WORK THE THE SE
