Australian Industry Group v Fair Work Australia

Division: FAIR WORK DIVISION

Counsel for the Applicant: Mr SJ Wood SC with Mr JRM Tracey

Solicitor for the Applicant: Australian Industry Group

Counsel for the First Respondent: The First Respondent did not appear

Counsel for the Second Respondent: The Second Respondent did not appear

Counsel for the Third Respondent: Mr H Borenstein SC with Mr MW Harding

Solicitor for the Third Respondent: Mr G Borenstein, In-House Lawyer, Electrical Trades Union

Counsel for the Fourth Respondent: The Fourth Respondent did not appear

Counsel for the Fifth Respondent: The Fifth Respondent did not appear

Solicitor for the Sixth Respondent: Ms A Cochrane, In-House Lawyer, Australian Mines and Metals Association Inc

Counsel for the Seventh Respondent: The Seventh Respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 1388 of 2011

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA

JUDGES: NORTH, MCKERRACHER AND REEVES JJ DATE OF ORDER: 14 August 2012 WHERE MADE: MELBOURNE

1. The application is dismissed.
2. The applicant file submissions on costs within 14 days.
3. The respondents file any submissions on costs 7 days thereafter.
4. The costs determination be on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 1388 of 2011

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA

JUDGES: NORTH, MCKERRACHER AND REEVES JJ DATE: 14 August 2012 PLACE: MELBOURNE

INTRODUCTION 1 This is an application for judicial review relating to the approval of an Enterprise Agreement (the Agreement) by the first respondent (FWA). It has been referred to the Full Court by a single judge of the Court. The applicant (AIG) was not a party to the Agreement but was given leave by FWA to be heard in opposition to the Agreement being approved. The sixth respondent (AMMA) supported AIG's argument from a similar position. But for one observation, none of those directly bound by the Agreement including the first respondent (ADJ) seeks to be heard in relation to it. The observation is that the third respondent (CEPU) was the bargaining representative for the Agreement. It gave notice under s 183 of the Fair Work Act 2009 (Cth) (FW Act) that it wanted the Agreement to cover it. FWA approved that the Agreement covered the CEPU on 4 May 2011. The main support for the Agreement and two decisions of FWA approving it come from CEPU. The other respondents did not play an active role in the hearing. Largely, for reasons advanced by CEPU, we consider that the FWA decisions were correct. 2 AIG seeks writs of certiorari and mandamus directed to FWA. By originating application, AIG contends that: (a) FWA's decision of 13 October 2011 in matter no C2011/4401 (the Decision) being an appeal to the Full Bench of FWA under s 604 of the FW Act; and (b) FWA's decision of 4 May 2011 in matter no AG2011/364 (the Original Decision) from the s 604 appeal was brought were both affected by jurisdictional error. AIG contends that the decisions are therefore invalid and should be set aside. 3 By the Original Decision, FWA approved, on the provision of undertakings pursuant to s 190 of the FW Act, an 'Enterprise Agreement'. The Enterprise Agreement was made pursuant to Pt 2-4 of the FW Act and was known as the 'ADJ Contracting Pty Ltd Enterprise Agreement 2010-2014' (the Agreement).

The Court's jurisdiction 4 No objection is taken to the jurisdiction of the Court which is conferred pursuant to s 562 of the FW Act 'in relation to any matter arising under' the FW Act. The section in full reads as follows: 562 Conferring jurisdiction on the Federal Court Jurisdiction is conferred on the Federal Court in relation to any matter (whether civil or criminal) arising under this Act. 5 The controversy between the parties as to whether the Agreement should have been approved (and whether the appeal to the Full Bench of FWA should have been allowed) constitutes a matter arising under the FW Act. 6 The Court's jurisdiction having been attracted by the existence of the matter arising under the FW Act, the provisions of s 22 and s 23 of the Federal Court of Australia Act 1976 (Cth) (FCAA) empower the Court to issue writs of certiorari and mandamus directed to FWA. Those provisions of the FCAA provide as follows: 22 Determination of matter completely and finally The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided. 23 Making of orders and issue of writs The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.

LEGISLATIVE PROVISIONS 7 This application has raised several legislative provisions of both the FW Act and the Competition and Consumer Act 2010 (Cth) (the CC Act). Some of those provisions are set in the text of the reasons that follow but in order to facilitate better continuity of the reasoning process other provisions of the FW Act, to the extent they are presently relevant, are set out below: 12 The Dictionary … "objectionable term" 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. 172 Making an enterprise agreement Enterprise agreements may be made about permitted matters (1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part: (a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer's employees who will be covered by the agreement; (b) matters pertaining to the relationship between [ADJ] or employers, and the employee organisation or employee organisations, that will be covered by the agreement; (c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement; (d) how the agreement will operate. … 185 Bargaining representative must apply for FWA approval of an enterprise agreement Application for approval (1) If an enterprise agreement is made, a bargaining representative for the agreement must apply to FWA for approval of the agreement. (1A) Despite subsection (1), if the agreement is a greenfields agreement, the application must be made by: (a) an employer covered by the agreement; or (b) a relevant employee organisation that is covered by the agreement. Material to accompany the application (2) The application must be accompanied by: (a) a signed copy of the agreement; and (b) any declarations that are required by the procedural rules to accompany the application. When the application must be made (3) If the agreement is not a greenfields agreement, the application must be made: (a) within 14 days after the agreement is made; or (b) if in all the circumstances FWA considers it fair to extend that period - within such further period as FWA allows. (4) If the agreement is a greenfields agreement, the application must be made within 14 days after the agreement is made. Signature requirements (5) The regulations may prescribe requirements relating to the signing of enterprise agreements. 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. (emphasis added) … 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) … 253 Terms of an enterprise agreement that are of no effect (1) A term of an enterprise agreement has no effect to the extent that: (a) it is not a term about a permitted matter; or (b) it is an unlawful term; or (c) it is a designated outworker term. (2) However, if an enterprise agreement includes a term that has no effect because of subsection (1), or section 56 or 326, the inclusion of the term does not prevent the agreement from being an enterprise agreement. 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 (b) to prevent the exercise of a workplace right by the other person. (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. 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 … 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. 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. (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. 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. 8 The relevant sections of the CC Act provide: 45E 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 (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. ... 45EA 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).

GROUNDS OF REVIEW 9 The grounds for review were dealt with collectively in the manner summarised both in oral argument and in these reasons. However, for completeness, the grounds in full as they appear in the affidavit of Mr Stephen Thomas Smith, Director of National Workplace Relations, AIG, sworn 8 December 2011, are now set as follows: 1. In considering whether clause 4.3(b)(v) of the [Agreement] was an objectionable, and thus unlawful, term within the meaning of the FW Act (ss 12, 194(b)), because it has the effect of requiring or permitting [ADJ] to contravene the "General Protections" provisions found in Part 301 of the FW Act, FWA erred by identifying a wrong issue and asking itself a wrong question. 2. Namely, FWA wrongly identified the issue and question as being whether clause 4.3(b)(v) of the [Agreement], or compliance with the clause by a contractor engaged by [ADJ], concerns itself with the terms of an instrument covering the contractor and its employees, and whether clause 4.3(b)(v) requires consideration to be given to the existence or terms of another agreement or instrument [see, for example, the reasons of the Full Bench at [27]]. 3. FWA ought to have found that clause 4.3(b)(v) was an objectionable, and thus unlawful, term because it has the effect of requiring or permitting [ADJ] to contravene the "General Provisions" provisions found in Part 3-1 of the FW Act by taking adverse action against the contractor because the contractor has workplace right or proposes to exercise a workplace right to pay wages and accord conditions under its own workplace instrument, of which it has the benefit (FW Act, ss 340(1)(a), 341 and 342). 4. In considering whether compliance with clause 4.3(b)(v) of the [Agreement] might, in the terms of s 192 of the FW Act, result in a person, namely [ADJ] or the CEPU, being liable to pay a pecuniary penalty in relation to a contravention of s 45EA of the [CC Act], FWA erred in finding that the enterprise agreement and the negotiations antecedent to its approval should not "be considered [or "categorised as"] an arrangement or understanding in terms of the CC Act" because "the making of an enterprise agreement does not comfortably fit within the terms of s 45E". 5. FWA ought to have found that: a. clause 4.3(b)(v), and the negotiations antecedent to the inclusion of that clause in the [Agreement], amounted to making an unlawful arrangement or arriving at an unlawful understanding within the meaning of s 45E of the CC Act; and b. compliance with clause 4.3(b)(v), a provision of that arrangement or understanding, may result in a person being liable to pay a pecuniary penalty in relation to a contravention of s 45EA of the CC Act. and, in those circumstances, should have exercised its discretion to refuse to approve the [Agreement] in accordance with s 192 of the FW Act. 6. In considering whether clause 15.2(k) of the [Agreement], which concerns right of entry, was an unlawful term because it provides for right of entry other than in accordance with Part 3-4 of the FW Act (s 194(f)), the majority of FWA erred in construing clause 15.2 and finding that clause 15.2(k) did not provide for entry for a purpose referred to in s 481 (which deals with investigation of suspected contraventions) or s 484 (which refers to entry for the purpose of holding discussions) of the FW Act. 7. FWA ought to have found that clause 15.2(k) does provide for a right of entry for a purpose referred to in s 481 and s 484 of the FW Act, and that it was an unlawful term within the meaning of s 194(f) of the FW Act because it provides for right of entry "other than in accordance with Part 3-4 of the FW Act" (which deals with right of entry). 8. In considering whether clauses 16.6(b) and (d) of the [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, FWA erred by identifying a wrong issue and asking itself a wrong question, and took into account an irrelevant consideration. 9. Namely, FWA wrongly identified the issue and question as being whether the verbs "promote" and "encourage", used in clauses 16.6(b) and (d) of the [Agreement], "meant", or could be defined as, "induce", which is the verb used in s 350 of the FW Act. The Full Bench was also led into error by taking into account an irrelevant consideration, viz. that "it will be a question of fact which will need to be determined on the evidence and by looking at all the circumstances of the case" whether there has been a contravention of s 350 of the FW Act. 10. FWA ought to have found that clauses 16.6(b) and (d) of the [Agreement] are objectionable, and thus unlawful, terms, because they require a contravention of s 350 of the FW Act in that they required [ADJ] to induce the employees to engage in "membership action" within the meaning of s 350. 10 In substance, AIG's grounds can be reduced to four as they were before the Full Bench of FWA and the Full Court. They go to the construction of the relevant provisions of the FW Act and the Agreement. They are: (a) Whether cl 4.3(b)(v) of the Agreement is an unlawful term because it has the effect of requiring ADJ to contravene 'general protections' provisions found in Pt 3-1 of the FW Act, namely, s 340(1)(a) of the FW Act. Read together with s 341 and s 342, that provision stipulates that a person must not as a 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 the right arising from it being entitled to the benefit of a workplace instrument; (b) Whether compliance with cl 4.3(b)(v) of the Agreement made in the terms of s 192 of the FW Act results in a person, namely, ADJ or CEPU, being liable to pay a pecuniary penalty in relation to the a contravention of s 45E or s 45EA of the CC Act; (c) Whether cl 15.2(k) of the Agreement which concerns a right of entry, is an unlawful term because it provides a right of entry other than in accordance with Pt 3-4 of the FW Act (see s 194(f) of the FW Act); and (d) Whether subcl 16.6(b) and subcl 16.6(d) of the Agreement, which concern inducement of employees to take union membership action, are unlawful terms because they require contravention of s 350 of the FW Act.

Clause 4.3(b)(v): unlawfulness 11 Central to the AIG submission before the Full Bench was that although 'workplace rights' have usually been seen in the context of employee rights, employers also have workplace rights. AIG contended, before the Full Bench, that the contractors or employers are entitled to employ its employees at a rate which is prescribed in the relevant workplace instrument, be it an award or an enterprise agreement. The effect of cl 4.3(b)(v) required ADJ and like employers to only engage or deal with those contractors who applied wages and conditions no less favourable than those provided for in the Agreement. AIG submitted that this amounted to ADJ engaging in adverse action under the FW Act. 12 The Full Bench (at [15]) set out the subclauses in full: 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) [ADJ] is committed to maintaining a stable and skilled workforce, recognising its contribution to the operation of [ADJ]. Subject to the terms of this Agreement, full-time direct and ongoing employment is a guiding principle of this Agreement. (ii) [ADJ] will take all measures to achieve employment security for the direct permanent employees of [ADJ]. All persons 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) [ADJ] 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. [ADJ] will ensure that its employment practices are consistent with the above principles and practices. (b) Contractors (i) Where [ADJ] 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), [ADJ] 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 [ADJ] 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, [ADJ] 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) [ADJ] 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. (v) [ADJ] 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 [ADJ] 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 [ADJ] 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 [ADJ], unless otherwise agreed by [ADJ] 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 [ADJ], 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. 13 The majority referred to s 340 and s 341 of the FW Act (at [16] and [17]) and noted that for the purposes of the definition of 'workplace instrument' where it appears in s 341 defining a 'workplace right', reference is made to s 12 as a workplace instrument being an instrument made under, or recognised, by a workplace law and which concerns a relationship between employers and employees. Workplace law, which is also defined in s 12, includes the FW Act. It was then necessary to turn to s 342(1) of the FW Act which contains a table setting out the types of actions that will constitute adverse actions. 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. Examples include where a person terminates the contract or refuses to engage a contractor. 14 In the Decision, the submission that cl 4.4(b)(v) of the Agreement required ADJ to contravene s 340(1) of the FW Act was rejected. 15 While the majority had doubts that it was correct to describe an employer as having workplace rights, it still proceeded on the basis that it assumed that the term was capable of bearing the meaning for which AIG contended. Regardless of that, it was of the view that compliance with cl 4.3(b)(v) in the Agreement did not concern itself with the terms of any instrument covering the contractor and its employees. There was nothing in cl 4.3(b)(v) which in terms of the s 12 definition of an objectionable term, 'requires' ADJ to take any action against a contractor 'because' the contractor is entitled to the benefit of an industrial instrument. The clause required no consideration to be given to the existence or the terms of any other agreement. The majority held (at [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 [Agreement]. It does not change the fact that compliance with clause 4.3(b)(v) in the [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] to take any action against a contractor "because" the contractor is entitled to the benefit of an industrial instrument. [ADJ]'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. 16 It was held that the clause was not concerned with whether or not an enterprise agreement or other workplace agreement covers the contractor. Reference was made to Asurco Contracting Pty Ltd v Construction, Forestry, Mining and Energy Union (2010) 197 IR 365 in which the Full Bench said (at [12] and [13]): [12] Asurco also argues that the clauses in question contain unlawful content. It contends that the clause requires or permits [ADJ] 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 [FW] 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 [ADJ] 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 [FW] Act. (emphasis added)

Permitting 17 A specific further argument advanced for AIG before the Full Bench was that the Original Decision was erroneous in failing to address the effect of the reference in the s 12(b) definition of objectionable term to 'permits' or 'has the effect of permitting'. AIG contended before the Full Bench that the effect of the reference to permitting was to allow a more hypothetical and broad ranging enquiry as to ADJ's reason for not engaging a particular contractor. The Full Bench also rejected that submission. 18 The Full Bench concluded that the better construction of the words in this part of the definition was that adopted by a Full Bench of the Commission when considering the construction of s 298Z of the Workplace Relations Act 1996 (Cth) (the WR Act) concerning terms of an agreement which required or permitted certain conduct that would contravene the FW Act. That section contained a definition of 'permits' and, like s 12, extended it to also include having the effect of permitting. The Full Bench followed Office of Employment Advocate v Construction, Forestry, Mining and Energy Union (2003) 126 IR 468 where another Full Bench held (at [16]) (endnotes omitted): 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 ed) "(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 [ADJ] may do but what the clause by its terms requires or permits etc. [ADJ] to do which is determinative. The Full Bench illustrated this distinction with the following example: "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 Pt XA if it authorises such conduct by its terms, either directly or by necessary implication, and will only have the "effect ... of permitting" conduct in contravention of Pt XA if it has the "effect" of authorising such conduct by its terms, either directly or by necessary implication. (emphasis added) 19 Clause 4.3(b)(v) of the Agreement did not, therefore, permit or have the effect of permitting a contravention of s 340 of the FW Act in the view of the majority.

The CC Act 20 The next ground of review was the same as the ground of appeal before the Full Bench (as set out above (at [9]). The majority considered s 192 of the FW Act and s 45E and s 45EA of the CC Act. 21 In the Original Decision it had been held (at [23]-[25]) in relation to s 45 of the CC Act) that: [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 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. 22 Again and for the simple reason that the clause was not in the terms of s 45E, the making of an arrangement or understanding with a union or any union official as distinct from a majority of employees, the majority of the Full Bench rejected this argument. 23 The members also went on to say that the making of an enterprise agreement did not comfortably fit within the terms of s 45E in any event. The reason for this was that it was not the type of consensual agreement envisaged by that provision. When approved, it is a statutory instrument operating in an entirely different legal context that an arrangement or understanding within the meaning of s 45E of the CC Act. The majority of the Full Bench said (at [34]): … When it is in the course of being negotiated it must be processed in accordance with the numerous requirements of the FW Act. Also, the [Agreement] is not one made with a union or any officer of a union as is a requirement of s.45E. As we have earlier noted it is made with employees and when a majority of those employees cast a valid vote for it. … 24 The majority noted (at [35]) that there was no evidence as to earlier drafts of agreement reflecting a meeting of minds and a consensus of what was to be done. The Full Bench concluded that the Agreement itself was not an arrangement or understanding for the purposes of s 45E of the CC Act.

Discretion 25 Having already rejected the first grounds of appeal in relation to cl 4.3(b)(v) the majority made some additional observations (at [46] onwards). The first of those was that even if AIG had succeeded in persuading it that the clause may lead to a contravention of s 45E and hence a pecuniary penalty, it was not correct to say that it was obligatory for FWA to refuse approval of the Agreement. Section 192 did not require that result but rather, provided that a member may refuse, not must refuse, to approve it. The majority took into account the provisions of s 253 and s 356 of the FW Act (set out above) in relation to this issue. Those provisions are further considered below. 26 It would have been surprising, the majority noted, if a term of an enterprise agreement such as cl 4.3(b)(v) which was a permitted matter about which an agreement may be made would none the less be an unlawful term under s 194. The majority noted (at [48]) that 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, the legislature would have made that clear. If there had been a need to resort to the Explanatory Memorandum to assist in this respect, that would not have assisted the contention for AIG. 27 Finally, the majority noted (at [49]) that all of the arguments for AIG required the Full Bench to assume a number of matters existed or will exist in order to make out the alleged unlawfulness. It was noted, however, that there was no evidence before the Full Bench or in relation to the Original Decision about ADJ. AIG's response was that the Full Bench should infer how the clause would operate and to make a judgement or assessment looking forward. The Full Bench noted that it was being asked to do that with no knowledge of ADJ's business activities, how many employees it had or will have, what jobs they bid for, what contractors, if any, they engaged, the corporate status of those contractors, what those contractors' industrial instrument coverage may be and the specialist skills that the employees had. It was not prepared to exercise its imagination to the extent suggested by AIG.

The entry clause 28 AIG's submission before the Full Bench was that cl 15.2(k) provides 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 a discussion with employees. It was submitted that it was unlawful because it provided for a right of entry in a manner inconsistent with s 481 and s 484 of the FW Act. The Full Bench set out cl 15.2 of the Agreement dealing with the resolution of other issues but giving rise to debate only in relation to cl 15.2(k). Clause 15.2 in its entirety (which was set out by the Full Bench) provides as follows, (with emphasis added): 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 [ADJ]. 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. (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 [ADJ] in accordance with clause 15.2(a) notifying [ADJ] 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). 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. (emphasis added) 29 The majority noted (at [56]) that cl 15.2(k) relates to the subject matter of dispute resolution. Section 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. 30 After noting that any agreement for which approval is sought must have a dispute resolution clause (s 186(6) of the FW Act), the majority also considered the decision of a Full Bench in Re Australian Industry Group (2010) 196 IR 125 (at [7]) in relation to a right of entry provision. 31 The Full Bench upheld the Original Decision on this issue as well, the majority saying (at [52]-[58]): [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 [ADJ]'s business.' ... [33] This summary of the legislative provisions indicates that the [FW] 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 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 [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 [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 [ADJ]'s premises. (b) Enterprise agreements may include terms granting additional entitlements to officers to enter [ADJ]'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 Memorandum the following paragraph would be informative: "838. It is intended that agreements can include terms allowing for union officials to enter [ADJ]'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 [ADJ]'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 [ADJ] 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.

Membership action 32 Clause 16.6 of the Agreement is as follows: 16.6 Union recognition (a) Collective industrial relations will continue as a fundamental principle of [ADJ]. (b) Union membership shall be promoted by [ADJ] 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. 33 Section 350 of the FW Act provides as follows: 350 Inducements - membership action (1) An employer must not induce an employee to take, or propose to take, membership action. … (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. … (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. 34 The majority agreed with the Original Decision that the word 'induce' in s 350 did not mean 'promote' or 'encourage'. In considering that conclusion, the majority of the Full Bench said (at [63]-[64]) as follows (endnotes omitted): [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. 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] will go about complying with clause 16. The fact the [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] to contravene s.350 of the FW Act. (emphasis added) 35 In the decision of Senior Deputy President Richards, the point of departure was only in relation to the entry clause, the cl 15.2(k) argument. He concluded (at [86]) that: Generally, it is enough to say at this point that the manner in which entry to [ADJ]'s premises is to be effected under the [Agreement] is not consistent with the rules and procedures prescribed in Part 3-4 of the [FW] Act which condition the manner in which entry for purposes of s.481 and s.484 of the [FW] Act are effected. 36 After setting out a number of those provisions, his Honour noted (at [92]) that the purpose of subdiv A and B of Div 2 of Pt 3-4 of the FW 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 ADJ not to be unduly inconvenienced when those rights are being exercised. He accepted the argument for AIG.

WAS THERE JURISDICTIONAL ERROR? 37 There is a threshold question as to whether there was jurisdictional error by the Full Bench. CEPU contends that there was no error of any nature but that, in any event, if error were to be found, such an error was not jurisdictional error. 38 The jurisdiction which the Full Bench was exercising was that under s 186(1) of the FW Act to deal with an application made under s 185 for an approval of an enterprise agreement. Relevantly s 186 provides: 186 When FWA must approve an enterprise agreement - general requirements Basic rule (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. Requirements relating to the safety net etc. (2) FWA must be satisfied that: (a) if the agreement is not a greenfields agreement - the agreement has been genuinely agreed to by the employees covered by the agreement; and (b) if the agreement is a multi-enterprise agreement: (i) the agreement has been genuinely agreed to by each employer covered by the agreement; and (ii) no person coerced, or threatened to coerce, any of employers to make the agreement; and (c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and (d) the agreement passes the better off overall test. Requirement that the group of employees covered by the agreement is fairly chosen (3) FWA must be satisfied that the group of employees covered by the agreement was fairly chosen. (3A) If the agreement does not cover all of the employees of [ADJ] or employers covered by the agreement, FWA must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct. 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). … Requirement for a term about settling disputes (6) FWA must be satisfied that the agreement includes a term: (a) that provides a procedure that requires or allows FWA, or another person who is independent of employers, employees or employee organisations covered by the agreement, to settle disputes: (i) about any matters arising under the agreement; and (ii) in relation to the National Employment Standards; and (b) that allows for the representation of employees covered by the agreement for the purposes of that procedure. (emphasis added) 39 Approval, in the exercise of FWA's jurisdiction, is conditioned on the requirements in s 186 and s 187 being met. Section 186(4) governs the present circumstances. It requires FWA to be satisfied that the Agreement does not contain 'unlawful terms' as defined in s 194 of the FW Act. That definition includes 'objectionable term' in s 12. 40 A starting point is that each of the clauses of the Agreement that are challenged on review deals with a matter permitted to be included in an enterprise agreement pursuant to s 172(1) of the FW Act. Of course, that is not the entire enquiry. 41 AIG says that if FWA misconstrued any of the relevant legislative provisions which empowered it to approve the Agreement upon reaching the requisite state of satisfaction, FWA has not actually (as opposed to purportedly) reached that state of satisfaction. AIG contends that, as a consequence, FWA will have constructively failed to exercise its jurisdiction. In doing so, it will have committed jurisdictional error. The application, however, proceeds on the premise that, as terms of the agreement were unlawful, FWA could not have been 'satisfied' as to the lawfulness. That it is said constitutes jurisdictional error. 42 The grounds have been crafted in such a way that they complain of more than mere legal error. But it will be a question of what, in substance, the grounds truly contend. In Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 (at [30]-[31]) it was held (by the plurality) that there was no jurisdictional error on the part of the Commission if it misconceived its role under the section there in issue. There would only have been jurisdictional error if it had misconceived its role; misunderstood the nature of its jurisdiction; failed to apply itself to answering the question which the section of the Act prescribed; or misunderstood the nature of the opinion on which it was required to form. 43 By reason of subs (4), the jurisdiction is not conditioned on the actual absence of an unlawful term in the Agreement but rather on FWA being satisfied about that. 44 Whether the need for FWA only to be satisfied about the matters in s 186(4) of the FW Act will preclude it from review for satisfaction based on error is a matter to be resolved by consideration of the legislative scheme: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 (at [91] and [69]-[71]). This can be shortly answered by reference to two of the FW Act provisions. What is clear from s 253(1)(b) and s 356 of the FW Act is that it was not the intention of the legislature that an erroneously based satisfaction under s 186(4) would invalidate the approval of an enterprise agreement in its totality. Otherwise those sections which exclude invalid provisions would have no work to do. 45 This feature of the legislative scheme is consistent with the fact that such an agreement containing a very broad range of terms and conditions including rates in pay would not have been intended by Parliament to be struck down fully on one unlawful term being discerned. Section 253(1) and s 356 of the FW Act have the effect of preserving the overall bargain reached and approved by the employees. Insofar as the two may have both lawful and a potentially unlawful operation, those provisions limit the operation of the term only to that which is lawful. 46 In Commissioner of Taxation of the Commonwealth of Australia v Futuris Corporation Ltd (2008) 237 CLR 146, the High Court considered whether errors in the process of assessment by the appellant Commissioner went to jurisdiction so as to attract the remedies of constitutional writs. Section 175 of the Income Assessment Act 1936 (Cth) provided that the validity of an assessment would not be affected by failure to comply with the provisions of the Act. Section 177(1) provided that the production of a notice of assessment under the hand of the Commissioner was conclusive evidence of the due making of the assessment. The Commissioner had issued a notice of amended assessment which added assessable income attributable to a capital gain made by the respondent company to the High Court appeal on disposal of an asset. The Commissioner subsequently disallowed an objection by the company which appealed to the Federal Court under Pt IVC of the Taxation Administration Act 1953 (Cth). Two years later the Commissioner issued a further amended assessment based on a determination made under s 177F(1)(a) in respect of the same capital gain. The company appealed to the Federal Court under s 39B of the Judiciary Act 1903 (Cth) for a declaration as to the invalidity of the assessment. In discussing those provisions, the High Court (Gummow, Hayne, Heydon and Crennan JJ) noted (at [23]) that the significance of s 175 for the operation of the Act and scope of judicial review outside of Pt IVC is to be assessed in the manner indicated in Project Blue Sky (per McHugh, Gummow, Kirby and Hayne JJ (at [93])). The question in Futuris, applying that test, was whether it was a purpose of the Act that a failure by the Commissioner to comply with the provisions of the Act, in the process of assessment, rendered the assessment invalid. In determining that question of legislative purpose, regard was to be had to the language of the relevant provisions and the scope and purpose of the statute. The High Court stated (at [24]-[25]) in Futuris: 24 Section 175 must be read with ss 175A and 177(1). If that be done, the result is that the validity of an assessment is not affected by failure to comply with any provision of the Act, but a dissatisfied taxpayer may object to the assessment in the manner set out in Pt IVC of the Administration Act; in review or appeal proceedings under Pt IVC the amount and all the particulars of the assessment may be challenged by the taxpayer but with the burden of proof provided in ss 14ZZK and 14ZZO of the Administration Act. Where s 175 applies, errors in the process of assessment do not go to jurisdiction and so do not attract the remedy of a constitutional writ under s 75(v) of the Constitution or under s 39B of the Judiciary Act. 25 But what are the limits beyond which s 175 does not reach? The section operates only where there has been what answers the statutory description of an "assessment". Reference is made later in these reasons to so-called tentative or provisional assessments which for that reason do not answer the statutory description in s 175 and which may attract a remedy for jurisdictional error. Further, conscious maladministration of the assessment process may be said also not to produce an "assessment" to which s 175 applies. Whether this be so is an important issue for the present appeal. (emphasis added) 47 Kirby J in Futuris (at [134]) noted that, according to a leading Australian academic authority on the subject (Aronson, "Jurisdictional error without the tears", in Groves and Lee (eds), Australian Administrative Law - Fundamentals, Principles and Doctrines (2007) 330, at pp 335-336), the following categories of jurisdictional error have been recognised: 1. A mistaken assertion or denial of the very existence of jurisdiction. 2. A misapprehension or disregard of the nature or limits of the decision maker's functions or powers. 3. Acting wholly or partly outside the general area of the decision maker's jurisdiction, by entertaining issues or making the types of decisions or orders which are forbidden under any circumstances ... 4. ... Acting on the mistaken assumption or opinion as to the existence of a certain event, occurrence or fact ... or other requirement, when the Act makes the validity of the decision maker's acts contingent on the actual or objective existence of those things, rather than on the decision maker's subjective opinion. 5. Disregarding a relevant consideration which the Act required to be considered or paying regard to an irrelevant consideration which the Act required not to be considered, in circumstances where the Act's requirements constitute preconditions to the validity of the decision maker's act or decision ... 6. Misconstruing the decision maker's Act ... in such a way as to misconceive the nature of the function being performed or the extent of the decision maker's powers ... 7. [Acting in] bad faith. 8. [A] breach of natural justice. 48 None of the grounds advanced by AIG can be fairly described as falling within these categories of jurisdictional error. AIG advanced no argument that FWA deliberately arrived at the wrong conclusion. 49 The categories of jurisdictional error are not necessarily confined by the facts of past cases. But in whichever way the submissions for AIG are shaped, in the end they appear to us to be no more than submissions that the FWA reached the wrong conclusion at law. The traditional approach has been that a judicial determination of invalidity will not be precluded where the making of an assessment involves 'jurisdictional error'. However, it may well be precluded where the error, even if one of law, is not so as to take the decision-maker outside or beyond the available jurisdictional power. Even an error of law may be an error made within jurisdiction. 50 For these reasons, we would not consider that any of the contended errors, as contended, on the part of FWA would constitute jurisdictional error. This is applicable to the entirety of the analysis of the grounds of review. However, regardless of this central point, we do not discern error in the approach taken by FWA for the reasons advanced by AIG or otherwise. For completeness we go on to consider those grounds.

GROUND 1 51 It will be recalled that cl 4.3(b)(v) of the Agreement (the First Impugned Clause) provides that ADJ: shall only engage contractors and employees as contractors, to do work that would be covered by the 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 [ADJ] is contractually obliged by the head contractor/client to engage a specific nominated contractor to do specialist work. 52 AIG contends that the First Impugned Clause is objectionable within the meaning of s 12 of the FW Act. That makes it therefore additionally an 'unlawful term' under s 194(b) which cannot be included in the Agreement. Therefore it cannot be approved by FWA (s 186(4)). 53 The reason that it is an objectionable term, according to AIG, is because it constitutes 'adverse action'. It is said to be adverse action against a contractor because the contractor has a workplace right or proposes to exercise a workplace right. These topics were argued before the Full Bench in the Decision and rejected for the reasons discussed above (in [13]-[16]). 54 The Full Bench was unpersuaded, it appears, that a workplace right could be a contractor's workplace right but proceeded nonetheless on the assumption that a contractor has a workplace right. AIG argues that the workplace right is founded upon it having the benefit of the content of an applicable workplace instrument under the FW Act, s 341(1). AIG argues that although most cases concerning workplace rights deal with the workplace rights of employees, employers, like the contractors in the present case, also have workplace rights. Their right is to employ their employees at a rate which is the rate prescribed by the relevant workplace instrument, be it an award, enterprise agreement or similar instrument made under a workplace law. That is the only sum which by law ADJ/contractor is obliged to pay. 55 AIG contends that the First Impugned Clause has the effect of requiring ADJ (and other employers covered by the pattern agreement) only to engage or deal with contractors and employees of contractors 'who apply wages and conditions that are no less favourable than that provided for in this Agreement' (emphasis added). AIG submits that 'require' means, amongst other things, demand, order, need or call for. 56 It follows, AIG argues, that the effect of the First Impugned Clause is that ADJ is required, in the case of existing contractors: (a) to alter the contractor's position to its prejudice by requiring a contractor to increase its wages beyond the minimum level at which they are set by a workplace instrument to fix them by reference to the terms of ADJ's agreement with the CEPU; (b) to threaten to alter the position of the contractor to the contractor's prejudice by requiring that the contractor increase its wage rates below the minimum level at which wages are set; (c) to refuse to make use of the contractor's services where the contractor insists on applying wages pursuant to its applicable workplace instrument; (d) to threaten or refuse to make use of the contractor's services in those terms; (e) to terminate the contract with the contractor where the contractor insists on according wages and conditions under its workplace instrument; and/or (f) to threaten or terminate the contract with the contractor where the contractor insists on according wages and conditions under its workplace instrument. 57 AIG argues that the effects of the First Impugned Clause in the case of proposed, rather than existing, contractors are that: (a) it would require ADJ to refuse to engage the contractor where it insists on paying wages under its workplace instrument; (b) it would impose a threat in that regard; (c) it would refuse to make use of the services of the contractor in those circumstances; and (d) it would impose a threat of refusal. 58 Part of the argument for AIG is that under s 360 of the FW Act, a prohibited reason does not need to be the sole reason for the conduct of ADJ. ADJ's reasons for engaging in adverse action need only include a 'prohibited reason' (emphasis added). 59 AIG contends that the error in the approach by the Full Bench in the Decision was to misunderstand the meaning and effect of the First Impugned Clause. AIG argues that it failed to apprehend the nature of the enquiry which the FW Act required it to undertake, in determining, as a matter of jurisdictional fact, whether cl 4.3(b)(v) of the Agreement is an unlawful term for the reasons advanced by AIG. AIG argues that the Full Bench wrongly identified the issue as being whether the First Impugned Clause (or compliance with it) concerns itself with the terms of an instrument covering the contract or its employees and whether the First Impugned Clause requires consideration to be given to the existence or terms of another agreement or instrument. 60 This part of the analysis in the reasons of the majority (at [27]) is incorrect in AIG's submission because the First Impugned Clause is, in fact, concerned with the terms of an instrument covering the contractor. It is concerned with the wages and entitlements a contractor accords to the contractor's employees and, thus, is necessarily concerned with an industrial instrument which describes terms governing wages and entitlements. The provision is aimed at contractors engaged or proposed to be engaged by ADJ and, more specifically, the wages and conditions which those contractors provide to the employees under workplace instruments whether an award or an enterprise agreement of some kind. Its industrial purpose is to ensure that regardless of the fact that the contractor is entitled to apply its own workplace instrument and have its own workplace rights protected by the FW Act, the contractor in effect becomes bound to accord employees' terms and conditions arising under a foreign agreement which would not otherwise bind it in any way. 61 As noted, clauses such as the First Impugned Clause are 'permitted matters' within the meaning of s 172(1) of the FW Act confirmed by cl 672 of the Explanatory Memorandum to the Fair Work Bill 2008 which states: 672. It is intended that the following terms should 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 hirer or contractors if those terms sufficiently relate to employees' job security - eg. a term which provided that contractors must not be engaged on terms and conditions that would undercut the enterprise agreement. (emphasis added) 62 Although AIG contends that the contractors have a 'workplace right' (being entitled to the benefit of industrial instrument), this is not supported by the authorities. There has been no such determination in the authorities on relevant entitlements of employers. There is no case which has applied s 341(1)(a) with respect to an employer in the manner argued for by AIG. It is doubtful, therefore, that AIG has made out the essential first limb of its argument, namely, that there is relevant 'workplace right' on the part of the contractor. Without that argument, the first ground of review must fail. 63 If, however, it is proper to describe a contractor's rights as being workplace rights under the FW Act, the argument faces a second difficulty. In relation to adverse action there is no evidence that the consequences of the First Impugned Clause would be adverse for a contractor in all cases. That being so, the term would not be automatically objectionable within s 12 of the FW Act. Importantly, in a case where the consequence was adverse (again on which there is not evidence), the term would be unenforceable. 64 Additionally, the primary consideration relied upon by the Full Bench was that the clause is not concerned with whether or not an enterprise agreement or other workplace agreement covers the contractor. The existence or content of a contractor's industrial instrument is not the operative or immediate reason of any conduct. In Maritime Union of Australia v CSL Australia Pty Ltd (2002) 113 IR 326 (at [54]) Branson J said: It is difficult, if not impossible, to identify the ratio decidendi of Greater Dandenong. However, two members of the Full Court (Merkel and Finkelstein JJ) concluded that the learned primary judge had erroneously failed to distinguish between the operative (or immediate) reason for the Council's conduct and the cause (or proximate reason) for the Council's conduct. While, as it seems to me, this distinction may in many cases be easier to articulate than to draw, especially in respect of a statutory provision that recognises the possibility of a number of reasons having a causal connection with conduct, I consider that I should be guided by the approach taken by Merkel and Finkelstein JJ who constituted a majority of the Full Court in Greater Dandenong on this issue. I am fortified in my decision to adopt this approach by the fact that the approach appears to me to be consistent with that adopted by R D Nicholson J in MUA v Geraldton … . (emphasis added) 65 Applying this test, there is nothing in the First Impugned Clause which 'requires' ADJ to take any action against a contractor 'because' the contractor is entitled to the benefit of any industrial instrument. The clause concerned is with the rates of pay and conditions, not the source of the obligation in respect of the rates of pay. ADJ's concern is directed only towards the rates of pay which the contractor is paying. Nothing else is relevant in order to comply with the clause. Significantly, the clause would operate in the same way whether the contractor paid its employees under an industrial instrument or a common law contract or some other causal arrangement not caught by the FW Act. 66 AMMA adds to the AIG arguments an argument that the clause 'permits' contravention of s 354. The Full Bench did address the 'permits' argument. It relied upon two previous Full Bench decisions indicating that the word means 'authorises'. Taken in context, 'permits' should be read in that manner. It thus calls for the positive operation of the clause in question rather than a passive one: Pearce, DC and Geddes, RS Statutory Interpretation in Australia, (7th ed, LexisNexis, 2011) (at [4.23]-[4.24]). The Full Bench was correct in this approach for the reasons stated by it. 67 This ground of review must be dismissed.

CLAUSE 4.3(b)(v) contravention of the cc act (ground 4 and ground 5) 68 AIG argues that compliance with the First Impugned Clause might in terms of s 192 of the FW Act result in a person, namely, ADJ or the CEPU being liable to pay a pecuniary penalty in relation to a contravention of s 45EA of the CC Act. FWA fell into jurisdictional error, AIG says, in concluding that the Agreement and the conduct antecedent to the approval should not 'be considered [or 'categorised as'] an arrangement or understanding in terms of the CC Act' because 'the making of an enterprise agreement does not comfortably fit within the terms of s 45E'. Section 45E of the CC Act is directed towards preventing union conduct through exercise of significant power from threatening companies dealing with other companies who do not possess the qualities that the union seeks or requires. AIG says the First Impugned Clause contains such a provision. AIG contends that both the First Impugned Clause and the conduct antecedent to the inclusion of the clause in the Agreement amounted to making an unlawful arrangement or reaching an unlawful understanding within the meaning of s 45E of CC Act. 69 Regardless of the intricacies of supply and acquisition on which there is no specific evidence, the argument for AIG fails at five levels: First, the Agreement itself is not with a union in the s 45E sense. Secondly, the Agreement has statutory force - it is not the consensual type of agreement, arrangement or understanding to which the CC Act is directed. Thirdly, s 192 of the FW Act is concerned with agreements not arrangements or understandings. Fourthly, the Agreement is not an arrangement or understanding with CEPU. Fifthly, there is no evidence of CEPU's involvement in the antecedent conduct which could suffice to establish the elements of s 45E of the CC Act. 70 To expand on these points a little, for this argument to succeed, AIG must overcome the difficulty of the absence of evidence. AIG does not and cannot contend that a contract with CEPU arose by ADJ agreeing to the Agreement. It relies upon the fact that ADJ and the CEPU 'would have to have made' an arrangement or at least reached an understanding as to those terms so as to give rise to creation of the Agreement. But there is no cogent evidence of this. 71 In any event, s 192(1) of the FW Act deals with the consequences of a failure to comply with the terms of an 'agreement'. It is not dealing with compliance with any anterior arrangement or understanding as that is known for the purposes of the CC Act. 72 Further, not only is the Agreement not an agreement with a union for the purpose of s 45E of the CC Act (which AIG concedes), but it cannot operate in itself as an arrangement or understanding. The Agreement has statutory force. It is neither a contract, arrangement or understanding within the meaning of the CC Act, but a creature of statute. The anterior process of negotiation is not the reaching of an agreement or understanding for the purpose of s 45E of the CC Act. 73 The AIG argument that the statutory instrument is less binding and less formal than a formal contract (and therefore an agreement or understanding) must also be rejected. The statutory instrument has more formality and greater consequence than any contract arrangement or understanding could have. Sanctions for its breach are greater and apply to persons whether they voted for it or not, whether they were in the relevant employment at the time when it was approved and even if they were completely unaware of its existence. 74 As to s 45EA of the CC Act, the argument necessarily fails if the argument under s 45E fails. As s 45E is not contravened, s 45EA cannot be breached. 75 AMMA also raised an additional ground of review not raised by AIG in relation to potential contravention of s 45 of the Building Construction Industry Improvement Act 2005 (Cth) (the BCII Act). This argument was raised before the Full Bench and rejected. At [44] of the majority decision, Senior Deputy President Harrison and Commissioner Roe said (endnotes omitted): [44] AMMA raised a challenge to clause 4.3(b)(v) which it conceded was not raised before Her Honour. It submitted that compliance with the clause may result in [ADJ] being liable to pay a pecuniary penalty under the Building and Construction Industry Improvement Act 2008 (sic) 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. 76 The Full Bench was correct to reject this submission for the reasons it did. Section 45 of the BCII Act relevantly prohibits discrimination on the basis of a person's employees not being covered by a particular kind of industrial instrument or industrial instrument made with a particular person. The operation of the First Impugned Clause does not contain any discriminatory content within any of the reasons set out in s 45 of the BCII Act. 77 Each of these grounds for AIG and AMMA must be dismissed.

CLAUSE 15.2(k) AS AN UNLAWFUL TERM 78 Clause 15.2 including cl 15.2(k) has been set out above (at [28]). AIG contends that the clause and, in particular, subcl(k) (the right of entry clause) is unlawful as it provides for a right of entry other than according to Pt 3-4 of the FW Act (s 194(f)). It argues that the majority of the Full Bench fell into jurisdictional error in construing cl 15.2 in a way that subclause (k) did not provide for entry for a purpose referred to in s 481 dealing with investigation of suspected contraventions or s 484 referring to entry for the purpose of holding discussions of the FW Act. AIG argues that the Full Bench should have found, as in the minority judgment, that the subclause does provide for right of entry for the purposes referred in those sections and therefore it was unlawful because it provided for a right of entry 'other than in accordance with Pt 3-4 of the FW Act' which deals with the right of entry. 79 AIG argues that read as whole in the context of cl 15.2 and the overall context of the Agreement, cl 15.2(k) provides for a right of entry in circumstances where a dispute has arisen 'over permitted matters (as currently defined in the FW Act), the application of this Agreement or the NES' (the National Employment Standards) pertaining to various minimum conditions including pay rates, entitlements to leave, public holidays, matters of termination and the etc. Therefore the entry of the official is for the purpose of investigating a suspected contravention of the FW Act or a fair work instrument within the meaning of s 481 of the FW Act. It may also be entry for the purpose of holding discussion with employees, that is, a purpose under s 484 of the FW Act. This, AIG says, is unavoidable. The official has to be 'assisting with representing' the employee where a dispute has arisen and has clearly entered the workplace for a s 481 or s 484 purpose notwithstanding the CEPU's attempt to characterise the purpose of the right of entry as being something else. The entry, it is said, is part of the 'investigation' being undertaken; it is tied up with the question of whether or not there has been a relevant contravention, and with the advocacy by the official on behalf of an employee, whereby the contravention alleged is investigated and discussed. 80 AIG argues that once the true purpose of cl 15.2(k) is understood, it is clear that it is unlawful within the meaning of s 194(f) of the FW Act. It provides a right of entry in a manner inconsistent with Pt 3-4 of the FW Act and purports to give entry other than in accordance with Pt 3-4. The inconsistency arises because it does not require that the representative be a permit holder within Div 6 of Pt 3-4; it does not require the representative to give an entry notice or exception certificate for at least 24 hours but no more than 14 days before the entry (s 487) thus permitting entry at any time without written notice; it does not require production of authority documents (s 489); it enables entry and discussions outside working hours and meal breaks (s 490); and it does not require the representative to comply with the reasonable request of ADJ (s 492). 81 This ground of review also must be rejected for the following reasons: 82 First, the words of s 194(f) of the FW Act envisage that there can be terms relating to entry onto an employer's premises other than in circumstances which would give rise to the description under s 194(f). It therefore clearly contemplates the possibility of entry for other purposes or for other kinds of discussions. Lest there be any doubt about that, as the majority of the Full Bench noted (at [57]), the Explanatory Memorandum to the Fair Work Bill 2008 makes clear that this is so providing: 838. It is intended that agreements can include terms allowing for union officials to enter [ADJ]'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 [ADJ]'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 [ADJ] when bargaining for a replacement to the current agreement. (emphasis added) 83 The Parliamentary intention was therefore that agreements can include terms allowing for union officials to enter ADJ's premises for purposes other than those set out in s 194(f) and s 194(g). An agreement might, for example, provide an entitlement to enter ADJ's premises for a range of reasons connected with terms of the Agreement, such as those cited in the Explanatory Memorandum above. 84 The first point in the Explanatory Memorandum is entirely consistent with cl 15.2(k). The clause specifies a purpose other than that contained in s 481. It is not for the purpose of investigating suspected contraventions. The purpose is to represent an employee in a particular process under the Agreement. Similarly, in relation to s 194(f)(ii), it operates by reference to the kind of discussions to be held, specifying a purpose other than that in s 484. The contention for AIG that entry under the clause 'must be' for the purpose of actually investigating a suspected contravention is without merit. A dispute under the clause does not necessarily involve a contravention. Equally, it does not follow that the union official's discussions are of a kind envisaged by s 484. The purpose of the official is 'to assist with representing'.

CLAUSE 16.6(b) AND CL 16.6(d) MEMBERSHIP ACTION (GROUNDS 8, 9 AND 10) 85 It will be recalled that relevantly these subclauses provide respectively: 16.6 Union recognition … (b) Union membership shall be promoted by [ADJ] to all prospective and current Employees. … (d) The employees who are members of the ETU shall be encouraged to participate in Union meetings and exercise their democratic rights. 86 AIG argues that as those clauses require ADJ to induce its employees to engage in 'membership action' within the meaning of s 350 of the FW Act, they are objectionable and, therefore, unlawful. 'Membership action' is said to be 'becoming' or 'remaining' a 'member' of 'an industrial association'. 87 Section 350 of the FW Act relevantly provides as follows: 350 Inducements - membership action (1) An employer must not induce an employee to take, or propose to take, membership action. … (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. … (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. (emphasis added) 88 AIG contends that 'promote' means to 'further', to 'advance' or to 'encourage' something. It argues that the Full Bench fell into error by asking itself the wrong question as being whether the words 'promote' and 'encourage' used in the subclauses 'meant' 'or could be defined' as 'induce' which is the word used in s 350 of the FW Act. A further error, it is argued, was in taking into account an irrelevant consideration, namely, that 'it will be a question of fact which will need to be determined on the evidence and by looking at all the circumstances in the case'. AIG contends that the conclusion of the Full Bench was inconsistent with authority binding on it, citing BHP Iron Ore Pty Ltd v Australian Workers' Union and Others (2000) 102 FCR 97 (at [61]-[62] and [78]). 89 There is nothing in cl 16.6 which dictates conduct of ADJ which would be in contravention to s 350. The employer's potential conduct is entirely speculative. ADJ should be assumed for present purposes to take conduct that does not contravene s 350. This conduct may occur in any number of ways. The clause is capable of being given a lawful operation. As it is capable of being given lawful operation, the argument of AIG must fail.

CONCLUSION 90 For the foregoing reasons, each of the grounds of application for judicial review having failed, the application should be dismissed. The Full Court will receive written submissions on costs as requested by the parties. Those submissions will be determined on the papers. The costs submissions of AIG are to be filed within 14 days and the costs submissions of the respondents are to be filed seven days thereafter. I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices North, McKerracher and Reeves.