My own analysis
53 The challenge (as I accept it is, due to the lack of legislative clarity which has led to the present debate) is to understand the operation of s 413(5) in the context of s 413 as a whole and in the context of the surrounding provisions.
54 I begin with the premise that the meaning of the constituent elements of s 413 is to be discerned, if possible, as a natural consequence of the statutory text, having regard to its place and evident purpose in the legislation in question.
55 In that connection it is relevant to observe that one "significance" of industrial action being "protected industrial action" is the subject of s 415 which I set out earlier. It is the first provision in "Subdivision C - Significance of industrial action being protected industrial action" of "Division 2 - Protected industrial action" of "Part 3-3 - Industrial action" of "Chapter 3 - Rights and responsibilities of employees, employers, organisations etc." of the FW Act.
56 The other important consequences, as I said, arise from the interrelated operation of s 418 (and s 420) and s 421. It is important to observe that, after the expiry of the nominal term of an enterprise agreement, industrial action (whether or not protected industrial action) is not directly prohibited by the FW Act (c.f. s 417). It may, if not protected industrial action, be prohibited by order of the FWC (ss 418, 420). The status of protected industrial action may be suspended or removed under provisions to which I will refer (ss 423 to 430 and s 431). And the status of protected industrial action must be achieved in compliance with a detailed regime consisting of a number of different elements.
57 Section 408 provides:
408 Protected industrial action
Industrial action is protected industrial action for a proposed enterprise agreement if it is one of the following:
(a) employee claim action for the agreement (see section 409);
(b) employee response action for the agreement (see section 410);
(c) employer response action for the agreement (see section 411).
(Emphasis in original.)
58 Sections 409, 410 and 411 then state particular conditions to be satisfied for each form of protected industrial action. It is sufficient to set out s 409 and to note that its requirements are ones to be satisfied when industrial action is organised or engaged in - i.e. at that point in time. Section 409 provides:
409 Employee claim action
Employee claim action
(1) Employee claim action for a proposed enterprise agreement is industrial action that:
(a) is organised or engaged in for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters; and
(b) is organised or engaged in, against an employer that will be covered by the agreement, by:
(i) a bargaining representative of an employee who will be covered by the agreement; or
(ii) an employee who is included in a group or groups of employees specified in a protected action ballot order for the industrial action; and
(c) meets the common requirements set out in Subdivision B; and
(d) meets the additional requirements set out in this section.
Protected action ballot is necessary
(2) The industrial action must be authorised by a protected action ballot (see Division 8 of this Part).
Unlawful terms
(3) The industrial action must not be in support of, or to advance, claims to include unlawful terms in the agreement.
Industrial action must not be part of pattern bargaining
(4) A bargaining representative of an employee who will be covered by the agreement must not be engaging in pattern bargaining in relation to the agreement.
Industrial action must not relate to a demarcation dispute etc.
(5) The industrial action must not, if it is being organised or engaged in by a bargaining representative, relate to a significant extent to a demarcation dispute or contravene an FWC order that relates to a significant extent to a demarcation dispute.
Notice requirements after suspension order must be met
(6) If section 429 (which deals with employee claim action without a further protected action ballot after a period of suspension) applies in relation to the industrial action, the notice requirements of section 430 must be met.
Officer of an employee organisation
(7) If an employee organisation is a bargaining representative of an employee who will be covered by the agreement, the reference to a bargaining representative of the employee in subparagraph (1)(b)(i) of this section includes a reference to an officer of the organisation.
(Emphasis in original.)
59 Section 409(2) engages the requirements of s 443. Section 443(1) and (2) provide:
443 When the FWC must make a protected action ballot order
(1) The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:
(a) an application has been made under section 437; and
(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.
(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).
60 Again, the requirement to be satisfied is a contemporaneous one.
61 In addition to the particular requirements for specific kinds of industrial action to be protected (e.g. authorisation by a "protected action ballot" in the case of employee claim action) there are some "common requirements". These are the requirements stated by s 413, which bears that heading.
62 Section 413 provides:
413 Common requirements that apply for industrial action to be protected industrial action
Common requirements
(1) This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.
Type of proposed enterprise agreement
(2) The industrial action must not relate to a proposed enterprise agreement that is a greenfields agreement or multi-enterprise agreement.
Genuinely trying to reach an agreement
(3) The following persons must be genuinely trying to reach an agreement:
(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement - the bargaining representative;
(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement - the bargaining representative of the employee.
Notice requirements
(4) The notice requirements set out in section 414 must have been met in relation to the industrial action.
Compliance with orders
(5) The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:
(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement - the bargaining representative;
(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement - the employee and the bargaining representative of the employee.
No industrial action before an enterprise agreement etc. passes its nominal expiry date
(6) The person organising or engaging in the industrial action must not contravene section 417 (which deals with industrial action before the nominal expiry date of an enterprise agreement etc.) by organising or engaging in the industrial action.
No suspension or termination order is in operation etc.
(7) None of the following must be in operation:
(a) an order under Division 6 of this Part suspending or terminating industrial action in relation to the agreement;
(b) a Ministerial declaration under subsection 431(1) terminating industrial action in relation to the agreement;
(c) a serious breach declaration in relation to the agreement.
(Emphasis in original.)
63 There is, obviously enough, also an even wider context to be taken into account, before I return to deal more particularly with the operation of s 413.
64 The advancement of collective bargaining which the FW Act encourages (see especially s 3(f) "achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action") proceeds in large measure through the mechanisms for making enterprise agreements.
65 That is the particular subject of "Part 2-4 - Enterprise agreements" of "Chapter 2 - Terms and conditions of employment" of the FW Act. Section 171 states the objects of Part 2-4 as follows:
171 Objects of this Part
The objects of this Part are:
(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and
(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:
(i) making bargaining orders; and
(ii) dealing with disputes where the bargaining representatives request assistance; and
(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.
66 Provision is then made for employers and employees to have a "bargaining representative". An employer is its own bargaining representative (s 176(1)(a)), but may appoint another person (s 176(1)(d)). An employee may appoint himself or herself as bargaining representative (s 176(4)), or appoint another person (s 176(1)(c)) or an employee organisation may in some circumstances be a bargaining representative of an employee who is its member (s 176(1)(b)).
67 Requirements are imposed upon bargaining representatives to bargain in good faith about the terms of a proposed enterprise agreement. Those requirements are stated in s 228. They may be supplemented by a bargaining order made under s 230. That is what happened in the present case.
68 If an enterprise agreement is successfully negotiated and approved by a majority of employees, it is made (s 182). A bargaining representative must then apply to the FWC for approval of the agreement (s 185). There are stated conditions for approval by the FWC.
69 An enterprise agreement comes into operation seven days after approval by the FWC, or on some later day specified in the agreement (s 54(1)). The nominal expiry date of the enterprise agreement must be not more than four years after the date of approval by the FWC (s 186(5)). An enterprise agreement will generally remain in operation after its nominal expiry date (see s 54(2)) until replaced by a further enterprise agreement (s 58(2)(e)) which cannot happen until the nominal expiry date of the first enterprise agreement is reached (s 58(2)(d)).
70 There are some important consequences which follow from the fact that an enterprise agreement has passed its nominal expiry date or, alternatively, has not.
71 Section 417 prohibits industrial action by persons (employer, employee or employee organisation or its officers) who are covered by an enterprise agreement which has not passed its nominal expiry date.
72 By contrast, after that date industrial action may be organised and taken in support of claims for a new enterprise agreement, which industrial action may be, or become, protected industrial action if the statutory conditions are met.
73 It is important to appreciate that at the expiry of the nominal term of an enterprise agreement, a prohibition on industrial action gives way to the possibility of industrial action. That such industrial action may not be protected does not signify that it is prohibited. Prohibition of industrial action in a bargaining period requires further steps to be taken - e.g. by application under s 418.
74 I may return now to the operation of s 413. In the context of the overall plan for bargaining towards an enterprise agreement to which I have referred, given that industrial action is not prohibited after a nominal expiry date and may, indeed, be clothed with statutory protection, the provisions in s 413 seem to me also (i.e. as do ss 409, 410, 411 and 443) to state conditions to be satisfied at the time industrial action is organised or engaged in.
75 That is to say, the stipulations in s 413 are those "for industrial action to be protected" (s 413(1)) (my emphasis). Satisfying that condition means that the industrial action, when it actually occurs, is protected, within the meaning and operation of s 415(1).
76 What then are the stipulations?
77 The industrial action (i.e. when it occurs) must not relate to a greenfields or multi-enterprise agreement (s 413(2)).
78 Stated persons must be genuinely trying to reach agreement (i.e. at the time the particular industrial action occurs or is organised). It is worth noting that the same identified persons referred to in s 413(3)(a) and (b) (bargaining representatives in each case) are also referred to in s 413(5)(a) and (b) (with the addition of "the employee" referred to in s 413(5)(b)).
79 The notice requirements of s 414 must have been met (i.e. before the industrial action occurs) (s 413(4)). That ensures a degree of specificity about the industrial action being notified because s 414(6) provides:
414 Notice requirements for industrial action
…
Notice requirements - content
(6) A notice given under this section must specify the nature of the action and the day on which it will start.
80 The requirement in s 413(4) is located necessarily in the past (and is referred to in the past tense) because s 414 requires at least three days' written notice of employee claim action and at least some written notice of employee response action or employer response action. Satisfaction of this condition must be in place when the industrial action in fact occurs for it to be protected industrial action.
81 I will pass over s 413(5) for the moment.
82 The person organising or engaging in industrial action must not contravene s 417 by organising or engaging in the industrial action (s 413(6)). This requirement is expressed in the present tense. As s 417 prohibits industrial action during the nominal term of an enterprise agreement, this states a temporal condition to be satisfied at the time the industrial action occurs.
83 Finally, none of the instruments specified in s 413(7) must be in operation. Those instruments (discussed below) operate inconsistently with the immunity afforded by s 415.
84 Division 6 of Part 3-3 of Chapter 3 deals (from s 423 to s 430) with suspension or termination of protected industrial action by the FWC. The premise is that protected industrial action is occurring. If that protected industrial action is suspended or terminated by an order of the FWC, then by s 413(7)(a), it no longer is protected industrial action for the purpose of the immunity given by s 415.
85 Section 431 (in Division 7) permits the Minister to terminate protected industrial action by declaration published in the Gazette. Then, by s 413(7)(b) it no longer is protected industrial action under s 415.
86 If protected industrial action is terminated by the FWC or by the Minister (and the negotiating period ends and the matters at issue are not settled), the FWC must, after a short period, step in and determine the outcome by making a "workplace determination" (s 266) which then operates as if it was an enterprise agreement (s 279).
87 A serious breach declaration, as referred to in s 413(7)(c), is a declaration made by the FWC under s 235(1). It may be made if there is a serious and sustained breach of a bargaining order. The provision, therefore, operates on past conduct in the same general territory as the operation claimed by the appellants for s 413(5), but its requirements are much more stringent. Section 235(2) provides:
235 When the FWC may make a serious breach declaration
…
(2) The FWC must be satisfied that:
(a) one or more bargaining representatives for the agreement has contravened one or more bargaining orders in relation to the agreement; and
(b) the contravention or contraventions:
(i) are serious and sustained; and
(ii) have significantly undermined bargaining for the agreement; and
(c) the other bargaining representatives for the agreement (the designated bargaining representatives) have exhausted all other reasonable alternatives to reach agreement on the terms that should be included in the agreement; and
(d) agreement on the terms that should be included in the agreement will not be reached in the foreseeable future; and
(e) it is reasonable in all the circumstances to make the declaration, taking into account the views of all the bargaining representatives for the agreement.
(Emphasis in original.)
88 On the construction of s 413(5) advanced by the appellants in the present case, it would operate more drastically and more extensively than s 235. An operation of that kind would render s 413(7)(c) irrelevant.
89 When a serious breach declaration is made, one consequence is that the FWC must also, after a short period, step in and determine the outcome by making a "workplace determination" (s 269) which then applies as if it was an enterprise agreement (s 279).
90 I may return one last time to the terms of s 413(5), which I will set out again for convenience:
413 Common requirements that apply for industrial action to be protected industrial action
…
Compliance with orders
(5) The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:
(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement - the bargaining representative;
(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement - the employee and the bargaining representative of the employee.
91 The appellants, in their written submissions, posed the question "what is the purpose of section 413(5)?" The answer offered was as follows:
19 … It is submitted that the evident (and perhaps only) purpose of this provision is clear: if bargaining representatives, employers and employees comply with the rules governing bargaining and industrial action, they are entitled to the statutory privilege of protected industrial action, whereas if they break those rules, they lose that privilege.
92 I do not accept this contention. In my view, it seeks to introduce an extended operation for s 413(5) which goes beyond, and is foreign to, its purpose. In my respectful view, s 413(5) is concerned with an assessment of the particular industrial action which is being considered to see whether it meets the common requirements stated in s 413. In that context, what is relevant to establish, for the purpose of s 413(5), is whether organising or engaging in that industrial action has contravened an order which applies to the person concerned. Section 413(5), like s 413 as a whole, is in my view concerned with a contemporary "point in time" assessment as the primary judge found.
93 One matter addressed by s 413(5) is the identification of the persons whose conduct is to be assessed. For the industrial action, as or when it occurs, to be protected industrial action (s 413(1)) at that time (i.e. as it is in fact occurring or being organised) the identified persons must not have contravened orders applying to them. Unlike s 413(3), s 413(5) requires that if an employee is organising or engaging in industrial action the conduct of the employee (or those employees) is to be considered, as well as the conduct of bargaining representatives. None must have contravened orders applying to them. Those orders may relate to the agreement, may relate to industrial action in connection with the agreement or may relate to a matter that arose during bargaining (e.g. a requirement to meet with a stated frequency or exchange stated information - i.e. ongoing or concurrent requirements under a bargaining order). The orders being referred to have the common characteristic, in my view, that they must be current and operative - i.e. order(s) applying to the person(s) at the time when the industrial action is being organised or engaged in.
94 In my view, therefore, the effect of s 413(5) is that the identified persons must not have contravened any such orders when organising or engaging in the particular industrial action which is being assessed to see whether it is, or will be, protected (i.e. the orders must have ongoing significance with respect to, or have an operation in relation to, the industrial action under assessment). On the view which I take of s 413(5) it is concerned with orders which might bear directly upon organising or engaging in the industrial action under assessment for the purpose of s 415, s 418, s 420 and s 421. It is not concerned with matters more remote from that industrial action or with matters of history. Examples of orders which might engage s 413(5) would be an existing "stop order" under s 418 or s 420, an injunctive order under s 422 against pattern bargaining, or a bargaining order under s 230 imposing ongoing requirements about how bargaining should occur. Such orders do not separately fall within s 413(7).
95 It is relevant in this connection that the immunity given to industrial action which is protected industrial action is not absolute. It can be lost by contravention of an order during the currency of that industrial action. If, for example, a bargaining order requires a certain step to be taken at a moment during the industrial action, a failure to comply with the order will, in my view, render that industrial action (and any other protected industrial action in connection with the enterprise agreement) not protected for so long as the contravention occurs.
96 Bargaining orders, like other forms of order, are enforceable in their own right and separately from any operation of s 413. They do not depend for their effectiveness on being always connected with some future assessment of whether particular industrial action is protected industrial action. I respectfully disagree with Jessup J that s 413(5) is "concerned with contraventions … at any time in the past" rather than with compliance. Stop orders and injunctions against pattern bargaining (there may be other examples) are in a different category. Although they also are separately enforceable, defiance of them strikes directly at the contemporary character of the industrial action and bears upon the assessment of whether it is or will be protected under s 415. So also may defiance of a bargaining order with current requirements.
97 Accordingly, upon the view of s 413(5) which its terms suggest to me in the context in which they appear, only such orders as are relevantly prohibitory and operative at the time of organising and engaging in the particular industrial action will require consideration under s 413(5).
98 Criticisms of this approach were made in argument in both this appeal and another matter where it arose for consideration (see Esso Australia Pty Ltd v The Australian Workers' Union [2016] FCAFC 72, which is being handed down concurrently with the present judgment). It was argued in both matters that the construction I have suggested involves reading extra words into s 413(5) and is "too big" a step.
99 This contention was drawn from Taylor v The Owners - Strata Plan No 11564 (2014) 253 CLR 531 at [38] where French CJ, Crennan and Bell JJ said:
38 The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills "gaps disclosed in legislation" or makes an insertion which is "too big, or too much at variance with the language in fact used by the legislature".
(Footnotes omitted.)
100 On the approach which I favour to the construction of s 413(5), if the identified persons (in (a) and (b)) and their activities are first "read into" the opening text of s 413(5), it becomes clearer that the focus of attention is properly upon the conduct of those persons as persons organising or engaging in the particular industrial action being assessed to see whether it is protected.
101 I accept, however, that my construction involves subordinating one view of the language of s 413(5) to the premise which, in my view, informs an understanding of its purpose and intended operation. To that extent, it may be correct to say that my construction assumes the opening phrase - "In organising or engaging in the industrial action, the following persons etc …".
102 That, with respect, does not seem to me to be "an insertion which is 'too big, or too much at variance with the language in fact used by the legislature'".
103 Finally, the Explanatory Memorandum for the Fair Work Bill 2008 (Cth) ("the EM") appears to support this approach to the construction of s 413(5).
104 The EM (in the "Regulatory Analysis" section) records:
Protected industrial action
…
r.284. A pre-condition for taking protected industrial action will be that the participants are genuinely trying to reach agreement and are complying with any good faith bargaining orders in place.
(Emphasis added.)
105 Later, the EM explains:
Division 2 - Protected industrial action
Subdivision A - What is protected industrial action?
…
1631. The distinction between protected industrial action and industrial action that is not protected is important due to the consequences that flow from the classification of the action. For example, FWA may order that industrial action that is not protected stop, not occur or not be organised. Also, only persons who organise or engage in protected industrial action are subject to immunity from certain legal proceedings. Industrial action is only protected if it meets all of the requirements set out in this Division.
106 The EM goes on to explain the nature of the structural change being made from the Workplace Relations Act 1996 (Cth) ("the WR Act") which was being replaced by the FW Act, and the fact that earlier arrangements were being "consolidated":
1632. This Division consolidates the provisions that determine when industrial action is protected. In so doing, the Bill has 'common requirements' for all types of industrial action and specific requirements that relate to industrial action depending on whether it is taken by an employer or employees. These requirements must be met for industrial action to be protected, rather than 'exclusions' for when action is not protected (which is the framework in the WR Act).
107 It then identifies some structural features of the WR Act and goes on:
1634. Under the Bill, these factors are preconditions for protected industrial action and not grounds for suspending or terminating a bargaining period (or protected industrial action).
1635. This means that, for industrial action to be protected, a person must (among other things) be genuinely trying to reach an agreement, complying with any orders of FWA and not engaging in pattern bargaining. Failure to comply with these preconditions immediately exposes the person to the possibility of being subject to an FWA order to stop the industrial action.
(Emphasis added.)
108 In my respectful view, the focus on current compliance is unmistakable. It is the antithesis of the contention by the appellants that s 413(5) is concerned to bring to account any past contravention of any previously operative bargaining order, no matter how trivial or distant the contravention.
109 I accept that the statutory language lacks clarity, but construed with appropriate regard for the apparent legislative purpose to which s 413 is directed, in my view the appellants' arguments should be rejected.
110 In my view, the common conditions stated by s 413, which are to be met if industrial action is to be protected industrial action as and when it takes place, are all ones which operate by reference to the particular industrial action which is being assessed to see if it is protected industrial action in a direct and immediate way. That is, as I have attempted to explain, the conditions all relate to, or impose, a contemporary requirement and not an historical one.