s.739 - Dispute resolution

Australian Municipal, Administrative, Clerical and Services Union

Dispute about a matter arising under the enterprise agreement - Commission's powers to deal with a dispute - Proper construction of dispute settlement procedure - Whether dispute settlement procedure limits the Commission's powers

• [1] This decision concerns an application by the Australian Municipal, Administrative, Clerical and Services Union (ASU) pursuant to s.739 of the Fair Work Act 2009 (FW Act) in respect of a dispute with Malaysia Airlines, also referred to as Malaysia Airlines Berhad (MAB).

• [2] The dispute relates to a decision by MAB to reclassify employees covered by the Malaysia Airlines Enterprise Agreement 2018 (Agreement) to classifications which MAB contends are beyond the coverage of the Agreement. The ASU states that because of the reclassification, the relevant employees are not receiving the terms and conditions of the Agreement and that MAB has acted in a manner that undermines the intent and application of the Agreement.

• [3] MAB raised a number of jurisdictional objections to the Commission dealing with the application. Firstly, MAB contends that the relevant employees are no longer covered by the Agreement. Secondly, that the prefiling steps in clauses 8.1 and 8.2 of the Agreement have not been complied with. Thirdly, that clause 8.3 of the Agreement requires the parties to agree on the process to be utilised by the Commission to resolve the dispute and that it does not agree to the Commission dealing with the dispute by conciliation or arbitration. MAB submits that its agreement is a pre-condition for the Commission to invoke such powers or steps under the dispute resolution clause.

• [4] It is necessary that the Commission deal with the third jurisdictional objection first. The parties did not oppose this course and both parties filed submissions in support of their respective positions. Furthermore, the parties agreed that a hearing was not necessary and that the Commission determine this point on the papers.

• [5] For the following reasons, I find that clause 8.3 of the Agreement does not limit the Commission's powers to deal with the dispute by mediation or conciliation or by making a recommendation or expressing an opinion.

• [6] The dispute settlement procedure is set out in clause 8 of the Agreement which provides as follows:

8.1 In the event of a dispute about a matter under this Agreement, or a dispute in relation to the NES (except for disputes to reasonable business grounds for refusal of requests for flexible working arrangements or additional unpaid leave), in the first instance the parties must attempt to resolve the matter at the workplace by discussions between the Employee or Employees concerned and the relevant supervisor. If such discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner by discussions between the Employee or Employees concerned and more senior levels of management as appropriate.

8.2 If a dispute about a matter arising under this Agreement or a dispute in relation to the NES is unable to be resolved at the workplace, and all appropriate steps under clause 8.1 have been taken, a party to the dispute may refer the dispute to the Fair Work Commission.

8.3 The parties may agree on the process to be utilised by the Fair Work Commission including mediation, conciliation and consent arbitration.

8.4 An employer may appoint another person, organisation or association to accompany and/or represent them for the purposes of this clause. An employee may appoint another person or the Union to represent them for the purposes of this clause.

8.5 While the dispute resolution procedure is being conducted, work must continue in accordance with this award and the Act. Subject to applicable occupational health and safety legislation, an employee must not unreasonably fail to comply with a direction by the employer to perform work, whether at the same or another workplace that is safe and appropriate for the employee to perform.

(1) FWA may deal with a dispute only if FWA is expressly authorised to do so under or in accordance with another provision of this Act.

(2) FWA may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:

(b) by making a recommendation or expressing an opinion.

(3) FWA may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if FWA is expressly authorised to do so under or in accordance with another provision of this Act.

Example: Parties may consent to FWA arbitrating a bargaining dispute (see subsection 240(4)).

(4) In dealing with a dispute, FWA may exercise any powers it has under this Subdivision.

Example: FWA could direct a person to attend a conference under section 592.

(5) To avoid doubt, FWA must not exercise any of the powers referred to in subsection (2) or (3) in relation to a matter before FWA except as authorised by this section.

• [8] Section 738 of the FW Act relevantly states:

(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6).

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.

• [10] Section 186(6) of the FW Act states:

(6) The FWC must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the 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.

• [11] MAB cited the decision of a Full Bench of the Commission in Southern Cross Care v Taylor[1] (Southern Cross Care) and submitted that when the Commission is dealing with a dispute under a dispute settlement procedure in an enterprise agreement, the Commission's powers are derived from the terms of the enterprise agreement.

• [12] MAB also cited the decision of a Full Bench of the Commission in Woolworths Ltd trading as Produce and Recycling Distribution Centre[2] (Woolworths) and the Explanatory Memorandum to the Fair Work Bill 2008 and submitted that when dealing with dispute settlement procedures, the Commission's general powers are subject to any limitation that the parties have agreed to under the dispute settlement clause.

• [13] MAB submitted that in order to determine the extent of the Commission's powers under the Agreement, it is necessary to consider the proper construction of clause 8.3.

• [14] MAB submitted that the principles relevant to the proper construction of an enterprise agreement were summarised by the Full Bench in "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Berri Pty Ltd[3] (Berri). MAB also referred to the following observations of Callinan J in Amcor Limited v Construction, Forestry, Mining and Energy Union[4](Amcor):

• 147. An industrial agreement has a number of purposes, to settle disputes, to anticipate and make provision for the resolution of future disputes, to ensure fair and just treatment of both employer and employees, and generally to promote harmony in the workplace. It is with the third of these that cl 55 of the Agreement is particularly concerned. It is important to keep in mind therefore the desirability of a construction, if it is reasonably available, that will operate fairly towards both parties. In this connexion it is not without significance that the primary judge adopted a construction which he thought to be not only arguably absurd, but also potentially unjust to the appellant.[5]

• [15] Turning to the construction of clause 8.3, MAB submitted that the inclusion of the word "agree" connotes that one party cannot unilaterally invoke the referral power stipulated in clause 8.3. MAB accepts that the use of the word "may" does not connote a compulsion to do something in the same way as the words "will" or "must" but submits in the context of the Agreement, there must be agreement between the parties as to the process before the Commission can act. MAB submitted that a construction that allows the Commission to exercise those powers in the absence of agreement between the parties requires words to be included in the Agreement that are not there.

• [16] MAB submitted that the proper construction of clause 8.3 is that the parties may agree to the process to be followed by the Commission and that process can include mediation, conciliation or consent arbitration. But if the parties do not agree, and they are not compelled to agree, the Commission is not given any separate or additional power to do any of those things.

• [17] MAB referred to the decision in Woolworths where the Full Bench followed the decision in Ampol Refineries (NSW) Pty Ltd and Australian Institute of Marine and Power Engineers (1998)[6] (Ampol) and found there was no requirement that a dispute settlement clause in an enterprise agreement contain an arbitration clause or any other mechanism to guarantee settlement of a dispute. MAB submitted that the comments of the Full Bench in Woolworths equally apply to conciliation or similar powers of the Commission.

• [18] The ASU submitted that MAB has correctly identified Berri as summarising the principles relevant to the proper construction of enterprise agreements. The ASU also agrees with MAB's reference to Amcor and that it is appropriate to keep in mind the desirability of a construction, if it is reasonably available, that will operate fairly towards both parties, that avoid inconvenience or injustice, and that will promote harmony.

• [19] The ASU submitted that clause 8.3 identifies three processes to be utilised by the Commission: mediation, conciliation and consent arbitration. The ASU submits that while the parties "may" agree on the process to be utilised by the Commission, there is nothing in clause 8.3 that requires the parties to agree to conciliation or mediation before the Commission can exercise those powers. The ASU accepts that arbitration is only available by consent and submits that the use of the word consent in relation to arbitration is deliberate and reflects the operation of ss.595(3) and 739(4) of the FW Act.

• [20] The ASU submitted that the Agreement should not be construed in a way that arrives at unjust or absurd outcomes and that MAB's construction is inconsistent with the plain meaning of clause 8.3.

• [21] MAB submits that the ASU's interpretation of clause 8.3 gives no meaning to the words "the parties may agree on the process to be utilised by the Fair Work Commission." MAB submits that had the intent been to allow the Commission to exercise conciliation and/or mediation powers without the parties agreement, clause 8.3 could have simply stated that the parties may refer the matter to the Fair Work Commission for mediation, conciliation and consent arbitration.

• [22] MAB submits that the ASU's construction leads to a result that the Commission is given the same powers with or without the agreement of the parties, other than arbitration.

• [23] MAB submitted that the Full Bench in Ampol made a principle of general application to dispute settlement clauses in enterprise agreements that there is no requirement to include a mechanism that will guarantee settlement. MAB submitted that the parties to an enterprise agreement are free to limit the Commission's powers in any manner they choose which is consistent with s.739. MAB submitted that the parties in this case have limited the Commission's power to resolve disputes to only being available where the parties have agreed to the process to be utilised.

• [24] The issue to determine at this stage of the proceedings is whether the Commission has the power to deal with dispute under clause 8 of the Agreement in the absence of the parties agreeing that the Commission may mediate, conciliate or, by consent, arbitrate the dispute.

• [25] The source of power for the Commission to deal with a dispute arising under an enterprise agreement is found in the terms of the Agreement. Where the parties to an enterprise agreement agree that the Commission may deal with a dispute, ss.595(1) and 739(4) of the FW Act authorise the Commission to act upon the parties' agreement.

• [26] It follows that the resolution of the issue for determination turns on the proper construction of the dispute settlement procedure.

• [27] Both parties referred to the principles set out in Berri as the correct approach that the Commission should take to the construction of enterprise agreements. Those principles were summarised by the Full Bench as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from: (i) the text of the agreement viewed as a whole; (ii) the disputed provision's place and arrangement in the agreement; (iii) the legislative context under which the agreement was made and in which it operates.

1. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

1. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

1. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

1. The FW Act does not speak in terms of the 'parties' to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are 'covered by' such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement 'with the employees who are employed at the time the agreement is made and who will be covered by the agreement'. Section 182(1) provides that an agreement is 'made' if the employees to be covered by the agreement 'have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement'. This is so because an enterprise agreement is 'made' when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

1. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

1. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

1. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

1. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

1. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

1. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

1. Evidence of objective background facts will include: (i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement; (ii) notorious facts of which knowledge is to be presumed; and (iii) evidence of matters in common contemplation and constituting a common assumption.

1. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

1. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties' intention or purpose was.

1. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.

• [28] In Workpac Pty Ltd v Skene[7], the Full Court of the Federal Court restated the principles as follows:

"The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation "...turns on the language of the particular agreement, understood in the light of its industrial context and purpose ...". The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a "practical bent of mind" and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced."

• [29] These principles were repeated by the Full Court of the Federal Court of Australia in James Cook University v Ridd[8], as follows:

(i) The starting point is the ordinary meaning of the words, read as a whole and in context.

(ii) A purposive approach is preferred to a narrow or pedantic approach - the framers of such documents were likely to be of a "practical bent of mind". The interpretation "turns upon the language of the particular agreement, understood in the light of its industrial context and purpose".

(iii) Context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to "... the entire document of which it is a part, or to other documents with which there is an association".

(iv) Context may include "... ideas that gave rise to an expression in a document from which it has been taken".

(v) Recourse may be had to the history of a particular clause "Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form...".

(vi) A generous construction is preferred over a strictly literal approach, but "Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties".

(vii) Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.

• [30] In subsequent decisions, the Commission has applied the principles as set out by the Full Court.[9] As observed by Anderson DP in United Workers' Union v Blowflex Mouldings Pty Ltd T/A Bega Dairy and Drinks[10], those principles largely reflect the principles summarised by the Full Bench in Berri.

• [31] Having regard to those authorities, the resolution of a disputed construction of the Agreement will turn on the ordinary meaning of words of the Agreement, having regard to the context and purpose in which they appear. Before turning to the ordinary meaning of clause 8, it is necessary to address the legislative context under the Agreement was made and in which it operates.

• [32] The Agreement was made under Part 2-4 of the FW Act. Sections 186 and 187 set out a range of general and additional requirements that must be met for an enterprise agreement to be approved by the Commission. One of those requirements is that the Commission must be satisfied that an agreement provides a procedure that requires or allows the Commission (or another person who is independent of the employers, employees, or employee organisations covered by the agreement) to settle disputes about any matters arising under the agreement and in relation to the National Employment Standards.[11] If the Commission is not satisfied that an agreement provides such a procedure, and no undertaking is given to address that,[12] the agreement is not capable of approval.

• [33] In assessing whether a particular procedure "requires or allows" the Commission to settle or deal with a dispute, it is relevant to identify the meaning of "requires" and "allows" as those words appear in ss.186(6) and 739(1).

• [34] In Project Blue Sky Inc v Australian Broadcasting Authority[13], the plurality stated:

...the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.[14]

• [35] I cannot identify any contextual basis to assign a meaning to the words "requires" or "allows" other than their ordinary grammatical meaning.

• [36] The ordinary grammatical meaning of the word "require" includes:[15]

To call on authoritatively, order, or enjoin (a person, etc.) to do something: to require an agent to account for money spent.

To call for or exact as obligatory: the law requires annual income tax returns.

• [37] The ordinary grammatical meaning of the word "allow" includes:

To grant permission to or for; permit: to allow a student to be absent; no smoking allowed.[16]

• [38] Having regard to ordinary meaning of those words, the Commission's jurisdiction to deal with a dispute will be enlivened if the dispute settlement procedure in the enterprise agreement obligates or permits the Commission to do so.

• [39] Returning to the proper construction of clause 8 of the Agreement, clause 8.2 of the Agreement provides that if all appropriate steps under clause 8.1 of the Agreement have been taken, "a party to the dispute may refer the dispute to the Fair Work Commission." (emphasis added).

• [40] The ordinary meaning of the word "refer" includes:

To hand over or submit for information, consideration, decision, etc.: to refer a cause to arbitration.[17]

• [41] Having regard to ss.186(6), 595(1) and 739(1), the ordinary meaning of the word "refers" in clause 8.2, and the legislative context and purpose of the dispute settlement procedure, it is my view that once a party to a dispute refers the dispute to the Commission under clause 8.2, that is the point at which the Commission's jurisdiction to deal with the dispute is enlivened. In other words, the referral of the dispute under clause 8.2 requires or allows the Commission to deal with the dispute.

• [42] What powers can the Commission then exercise? Section 595(2) of the FW provides that the Commission may deal with a dispute (other than by arbitration) as it considers appropriate, including by mediation or conciliation or by making a recommendation or expressing an opinion. Section 595(3) of the FW Act provides that the Commission may deal with a dispute by arbitration only if it is expressly authorised to do so by, or under, another provision of the FW Act. Importantly, s.739(3) provides that in dealing with the dispute, the Commission must not exercise powers limited by clause 8.

• [43] Clause 8.2 does not limit any powers of the Commission, nor does it expressly authorise the Commission to arbitrate the dispute. Accordingly, if the Commission is dealing with a dispute upon referral under clause 8.2, only the powers set out under s.595(2) are available to it.

• [44] This brings me to clause 8.3 of the Agreement and whether it limits the powers of the Commission. Clause 8.3 states:

The parties may agree on the process to be utilised by the Fair Work Commission including mediation, conciliation and consent arbitration.

• [45] The ordinary meaning of the word "may" is:[18]

• [46] In the context of clause 8.3, the ordinary meaning of the word "may" refers to the ability for the parties to make an agreement on the process to be utilised, rather than a requirement or obligation that the parties must make an agreement on the process to be utilised. For example, in a particular dispute, the Commission may be proposing to deal with the dispute by making recommendation. But if the parties agree that the Commission utilise the process of conciliation instead, the Commission must act on the agreement of the parties. In this respect, I agree with the submissions of the ASU as to the proper construction of clause 8.3 - that the parties may agree on the process to be utilised, but in the absence of agreement, it is a matter for the Commission to deal with the dispute as it considers appropriate, subject to ss.595(2), 595(3), 739(3), and 739(4).

• [47] I do not accept MAB's submissions that a construction that allows the Commission to exercise powers under s.595(2) in the absence of agreement between the parties requires additional words to be included in the Agreement, and/or that there is no other source of power for the Commission to act. As I have found, clause 8.2 of the Agreement authorises the Commission to deal with the dispute.

• [48] I also do not accept MAB's submission that the ASU's construction leads to a result that the Commission is given the same powers with or without the agreement of the parties (other than arbitration). In the absence of a clause 8.3 agreement, the Commission can exercise the powers under s.595(2). In the event of a clause 8.3 agreement, the Commission must utilise the process agreed between the parties.

• [49] In relation to MAB's reliance on Woolworths and Ampol, I accept there is no requirement for a dispute settlement procedure to contain an arbitration clause or any other mechanism that guarantees a settlement. However, the interpretation that I have arrived at is not inconsistent with either decision.

• [50] Finally, the interpretation advanced by MAB is contrary to the legislative intent and purpose and, if accepted, would place the operation of the dispute settlement procedure in the control of the non-aggrieved party in each dispute arising under the Agreement. In those circumstances, the non-aggrieved party could simply, as MAB has attempted to do in this case, shut down any attempt by the Commission to settle the dispute. Such an outcome would circumvent the legislative provisions to ensure that the Agreement provides a procedure for the Commission (or another person) to settle disputes and would not be fair and just, nor would it ensure the dispute settlement procedure operated fairly towards both parties, as observed by Callinan J in Amcor.

• [51] I have found that the Commission has the power to deal with a dispute referred to it under clause 8.2 of the Agreement. In dealing with the dispute, the powers available to the Commission are set out under s.595(2). If the parties agree that the Commission utilise mediation, conciliation or consent arbitration, then the Commission must utilise the agreed process.

• [52] Of course, the findings and interpretation that I have arrived at have been made on the basis that there are no other jurisdictional issues. As noted at paragraph [3] above, MAB has raised other jurisdictional objections.

• [53] The matter will be listed for conference/conciliation at which the parties can make submissions as to the progress of the application. A notice of listing will be issued separately to this decision.

Australian Municipal, Administrative, Clerical and Services Union: 22 September 2025.

Malaysia Airlines Berhad: 15 and 29 September 2025.

[1] [2019] FWCFB 8252 at [17]- [18].

[2] [2010] FWAFB 1464 at [18]- [23].

[3] [2017] FWCFB 3005 at [114].

[4] [2005] HCA 10.

[6] 43 AILR 3-724; Print P8620.

[7] [2018] FCAFC 131 at [97].

[8] [2020] FCAFC 123 at [97].

[9] See for example _Australian Workers Union v Orica Australia Pty Ltd (_Orica) [2022] FWCFB 90; Fresh Food Management Services Pty Ltd [2023] FWCFB 97; Sydney International Container Terminal Pty Limited t/a Hutchinson Ports v CFMMEU [2023] FWCFB 87.

[10] [2023] FWC 1986 at [76].

[13] [1998] HCA 28.

[14] Ibid at [78] (per McHugh, Gummow, Kirby, Hayne JJ).

[15] Macquarie Dictionary Online (http://www.macquariedictionary.com.au).

[17] Macquarie Dictionary Online (http://www.macquariedictionary.com.au).

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