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[2020] FWCFB 3611
appellant. Permission to appeal granted; appeal on impermissible variation grounds upheld; that part of Deputy President Asbury's decision concerning the variation contention quashed; matter remitted to the...
The Full Bench held that an enterprise agreement cannot be varied except by the statutory processes in Division 7 of Part 2-4 of the Fair Work Act 2009 (following Teys). The Full Bench reversed the earlier Deputy President decision which had allowed variation outside those statutory processes. The Full Bench explained the difference between (a) changing working arrangements within the parameters the agreement already sets (which is not a variation) and (b) changing the agreement itself (which must follow Division 7). The case was sent back to the Deputy President to decide whether the employer's roster proposal was a permitted intra-agreement change or an impermissible variation.
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1 cited instrument linked from this judgment.
1,899 words · generated 09/08/2026
This Full Bench decision (Deputy Presidents Gostencnik, Colman and Saunders) allowed an appeal by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) against part of a decision of Deputy President Asbury dated 28 February 2020. The original dispute concerned a roster change proposal advanced by Smit Lamnalco Towage (Australia) Pty Ltd under the Smit Lamnalco Towage (Australia) Pty Ltd and MUA Gladstone Enterprise Agreement 2016. The CFMMEU contended the roster proposal was, in substance, a variation of the Agreement and so could only be effected by processes set out in Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act). Deputy President Asbury rejected that contention. The Union appealed. The Full Bench granted permission to appeal (accepting the issue's public importance) and held the Deputy President erred in law by concluding that an enterprise agreement could be varied by means other than Division 7 (permission to appeal at [11]; principal reasoning at [12]-[21]). The Full Bench quashed that part of the earlier decision and remitted the matter to the Deputy President to determine whether the roster proposal is a permitted intra-agreement change or an impermissible variation requiring Division 7 processes (orders at [28]).
The Full Bench reached two central conclusions:
The Full Bench therefore allowed the appeal on the limited legal ground that the Deputy President incorrectly concluded Div 7 was not a statutory code for variation and remitted the question of characterisation back for determination.
Two linked legal propositions underpinned the Full Bench’s decision.
Enterprise agreements are statutory artefacts and Division 7 is the statutory route for variation.
Characterisation is decisive: variation versus intra-agreement change.
Additionally, the Full Bench made several observations about limits on intra-agreement variation clauses. It noted that unconstrained unilateral variation clauses would be unlikely to pass the better off overall test (s 193) and so remain constrained in practice (paragraph [15]).
For those reasons the Full Bench overturned that part of the Deputy President’s decision which held an enterprise agreement could be varied by other means, and remitted the factual and legal characterisation question back to the Deputy President for determination in light of the proper legal principles (orders at [28]).
Before this Full Bench decision:
After this Full Bench decision:
The critical legal shift is not that Div 7 was newly recognised as exclusive, but that the Full Bench emphasised Teys and required decision-makers to apply it and to distinguish properly between permitted intra-agreement changes (operating inside the agreement) and true variations (changing the agreement).
Paragraph [16]:
Paragraph [17] (quoting Teys):
Paragraph [23]:
Paragraph [15]:
This Full Bench's reasoning and its reliance upon Teys becomes central whenever:
In short, any dispute over whether a proposed change alters the statutory instrument (the agreement) or simply operates within it will trigger this precedent and require the characterisation exercise mandated by the Full Bench.
This judgment itself applies Teys and does not catalogue later treatment by other authorities. Within the text, the Full Bench notes that Teys was not cited to Deputy President Asbury and that Teys is decisive on the proposition that Div 7 is the route for variation ([17], [18]). The Full Bench does not discuss subsequent authorities applying its ruling, because this decision is an instance of applying the Full Court’s Teys authority. To see how later tribunals or courts treat this Full Bench decision, one must check post-2020 decisions and practice, this judgment does not contain that material.
The Full Bench leaves important questions to be decided on remittal rather than resolving them in this interlocutory appeal:
The Full Bench has therefore established the legal framework and sent the core factual question back for decision under that framework.
This is general legal information only, not legal advice. I can make mistakes. Before you rely on this analysis, act on it, or use any draft documents that might follow from it, get a qualified Australian lawyer to check everything.
s.604 - Appeal of decisions
Construction, Forestry, Maritime, Mining and Energy Union
Appeal against decision [2020] FWC 1115 of Deputy President Asbury at Brisbane on 28 February 2020 in matter number C2019/6161.
[1] The Appellant, the Construction, Forestry, Maritime, Mining and Energy Union, applies for permission to appeal and if granted, appeals a decision of Deputy President Asbury made on 28 February 2020[1] rejecting the Appellant's contention that a roster change proposal purportedly to be implemented pursuant to provisions of the Smit Lamnalco Towage (Australia) Pty Ltd and MUA Gladstone Enterprise Agreement 2016 (Agreement) was in essence invalid because it amounted to a proposal to vary the Agreement other than in accordance with the provisions of Division 7 of Part 2-4 of the Fair Work Act 2009 (Act). In October 2019 the Appellant applied under s.739 of the Act for the Commission to deal with a dispute about a roster change proposed by the Respondent, Smit Lamnalco Towage (Australia) Pty Ltd, in accordance with the dispute settlement procedures of the Agreement.
[2] The Appellant raised two objections to the Respondent's roster change proposal. Relevantly, the Appellant contended that the roster change proposal amounted to a proposal to vary the Agreement which could only be accomplished by processing the variation in accordance with the provisions of Division 7 of Part 2-4 of the Act. The application, together with two other dispute applications concerning the Respondent's roster change proposal prosecuted by other unions under separate but substantially similar enterprise agreements, were allocated to Deputy President Asbury and dealt with concurrently.
[3] The Deputy President determined to deal with certain issues raised by the other unions in connection with their applications as "threshold/jurisdictional issues" in a hearing on 15 November 2019. She also determined to deal, in the same hearing, with the Appellant's contentions as to an 'impermissible variation' (variation contention) described by the Deputy President as a "broader issue" and later as "the jurisdictional objection advanced by" the Appellant.
[4] As to the Appellant's variation contention, the Deputy President determined, relevantly, that:
[5] Accordingly, the Deputy President rejected the Appellant's variation contention and left for consideration in later proceedings the issue whether the Respondent's roster change proposal was authorised by the provisions of the Agreement.
[6] The notice of appeal contains 10 appeal grounds. These may conveniently and broadly be grouped as follows.
[7] Grounds 1-5, 8 and 10 (impermissible variation grounds) variously contend error in the Deputy President's conclusion that an enterprise agreement (and relevantly the Agreement) could be varied including that:
[8] The Appellant's central contention is that the Deputy President's conclusions are erroneous and contrary to law. It says that, contrary to the Deputy President's conclusion, an enterprise agreement cannot be varied other than by recourse to Division 7 of Part 2-4 of the Act. As to these appeal grounds the Respondent says that although it accepts that an enterprise agreement may only be varied through the mechanisms in Division 7 of Part 2-4 of the Act, there is no principle that an employer cannot pursue change in a manner provided for in an enterprise agreement. It contends that this is what the Deputy President determined.
[9] Grounds 6, 7 and 9 (agreement construction grounds) variously contend that the Deputy President erred in construing the Agreement as permitting a variation to rosters established by Appendix 1 of the Agreement.
[10] For reasons that will shortly be made clear, it is necessary only to deal with the first category of appeal grounds.
[11] We accept, as the Appellant contends, that the appeal grounds raise important questions about the manner in which an enterprise agreement might be varied and whether a variation of an enterprise agreement outside the scheme that Division 7 of Part 2-4 of the Act establishes is permitted. We also consider that the impermissible variation grounds advanced by the Appellant establish an arguable case of appealable error. We are therefore satisfied that it is in the public interest that permission to appeal be granted, and we do so.
[12] We consider the Appellant has made good the errors for which it contends and that underpin the impermissible variation appeal grounds. Our reasons for that conclusion follow below.
[13] The Deputy President began her analysis by summarising the Appellant's contentions, which amounted to two propositions:
". . . On the one hand the Union asserts that the changes to rosters proposed by Smit are so radical that they are beyond the scope of the kinds of amendments contemplated by the provisions of the Agreements. On the other hand, if the CFMMEU's case is taken to its logical conclusion, what the Union is actually asserting is an all or nothing proposition that the terms of an enterprise agreement made and approved under the provisions in Part 2 - 4 of Division 7 of the Act cannot be varied other than by the provisions in Division 7 of that Part and that a provision that purports to allow for such variation is invalid and of no effect."[8]
[14] As to the first proposition the Deputy President observed that it "is one for another day".[9] The Deputy President did not accept the second proposition because:
". . . the proposition that an enterprise agreement cannot be varied other than in accordance with the scheme in Part 2 - 4 of Division 7 of the Act, is inconsistent with the terms of those provisions and the provisions of the Act dealing with the making and approval of enterprise agreements. The provisions in Part 2 - 4 of Division 7 of the Act dealing with variations to enterprise agreements, do not indicate any intent on the part of the legislature that those provisions operate as a code. Rather, those provisions are mechanisms which may be used in certain circumstances."[10]
[15] The Deputy President reasoned as follows:
[16] It is clear from the decision that the Deputy President's reasoning proceeds upon an uncritical acceptance of the underlying premise of the Appellant's contention - that the Respondent's roster change proposal was a variation to the Agreement. This may be because the Respondent did not cavil with that characterisation and instead focussed on its right under the Agreement to make the roster changes.[20] However, the correctness of the premise needs to be determined. If, in truth, the Respondent's roster change proposal amounted to a variation of the Agreement, it could only be made through the agreement variation scheme for which provision is made in Division 7 of Part 2-4 of the Act. If the Respondent's roster change proposal involves a change to working arrangements that are regulated by the Agreement in a manner permitted by the terms of the Agreement, but the terms of the Agreement remain unchanged, this would not be a variation to the Agreement. There is a clear distinction between a variation to an enterprise agreement and a change to working arrangements that occurs pursuant to the terms of the agreement. The latter is not a variation to the agreement.
[17] The proposition, accepted by the Deputy President, that the provisions in Division 7 of Part 2-4 of the Act dealing with variations to enterprise agreements do not indicate any intent on the part of the legislature that those provisions operate as a code is incorrect and inconsistent with authority. As a Full Court of the Federal Court of Australia made clear in Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union:[21]
". . . To the extent, however, that it is suggested that the relevant employer and a union having a sufficient interest could vary a previously approved enterprise agreement without recourse to Subdiv A and that such a "variation" would be effective, the submission must be rejected. An enterprise agreement is a "statutory artefact" (Toyota Motor Corporation Australia Ltd v Marmara [2014] FCAFC 84; (2014) 222 FCR 152, 180 [90]) which takes its form from the instrument approved by the Commission under s 186. It cannot be varied by means for which the FW Act does not provide. Subject to the matter of timing, Div 7 is a comprehensive code with respect to the variation of an enterprise agreement.
It follows . . . from the circumstance that the agreement was a statutory artefact which was not the property, as it were, of particular "parties", that the only way that an enterprise agreement might be varied was in compliance with the specific provisions of the legislation which permitted, and regulated, a variation, that is to say, the provisions of Div 7 of Pt 2-4 of the FW Act."[22] [Emphasis added]
[18] It is unfortunate, to say the least, that neither party referred the Deputy President to the Full Court's judgment in Teys.
[19] It is correct, as the Deputy President noted, that other provisions of the Act operate to vary the terms, or the effect of terms, of an enterprise agreement. An undertaking that is accepted by the Commission as meeting a concern about one or more of the matters in s.186 or s.187 of the Act may have the effect of making changes to an enterprise agreement which are not substantial changes (s.190(3)(b)) and will be taken to be a term of the agreement (s.191(1)). Model flexibility and consultation terms will be taken to be terms of an enterprise agreement if the agreement does not contain complying mandatory terms (s.202(4), s.205(2)). An individual flexibility arrangement made by an employer and an employee pursuant to a flexibility term of an enterprise agreement has effect in relation to the employer and the employee as if the enterprise agreement were varied by the arrangement (s.202(2)(a)). The arrangement is also taken to be a term of the agreement (s.202(2)(b)).
[20] However, these "variations" or changes to an enterprise agreement operate according to the provisions of the Act which permit or give effect to them. The existence of these provisions lends no weight to the proposition that a person covered by an enterprise agreement, whether alone or by agreement with other persons covered by the agreement, can effect a variation to the agreement other than in accordance with Division 7 of Part 2-4 of the Act. This, in essence, is the ratio in Teys - those covered by an enterprise agreement cannot vary the agreement except in accordance with Division 7 of Part 2-4 of the Act.
[21] As the Deputy President proceeded on the basis that the Respondent's roster change proposal was a variation to the Agreement and concluded the variation could be made without recourse to Division 7 of Part 2-4 of the Act, the Deputy President was in error. The appeal on these grounds must succeed.
[22] In upholding the appeal, we make the following observations. Not every change to the working arrangements that are regulated by an enterprise agreement will amount to a variation of the agreement. Self-evidently, an enterprise agreement may make provision for changes in, for example, working hours and the spread of those hours, or to rostering arrangements. Doubtless this is what the Deputy President had in mind in the example discussed at [121] of the decision.
[23] An enterprise agreement may provide for ordinary hours to be worked within a spread of hours between 6:00am and 6:00pm Monday to Friday. It may also provide that this spread of hours may be altered by one hour either side by agreement with the majority of employees affected or perhaps by an employee affected. That enterprise agreement might also provide that an employer may alter the spread of hours by one hour either side by giving seven days' notice to affected employees of the alteration. Alterations to working conditions of this kind made in accordance with the terms of an enterprise agreement are not a variation to the agreement. Both the status quo and the outer limits of the alteration are known and fixed by the agreement, as is the means by which the alteration is to be advanced. This is not a variation of any term of the agreement. It is a change permitted by the agreement within the parameters established by the agreement. But a term of an enterprise agreement that provides for the agreement to be varied by following a particular procedure will not validly support a variation of the agreement if the variation has not been processed in accordance with Division 7 of Part 2-4 of the Act. Just as a term of an agreement which would preclude the exercise of rights under Division 7 of Part 2-4 of the Act is invalid, so too is a term which permits variation of the agreement without recourse to Division 7 of Part 2-4 of the Act.
[24] The relevant question that required determination here was whether, properly characterised, the Respondent's roster change proposal was an alteration to working arrangements in a manner permitted by the Agreement of the kind discussed above or whether it was a variation which could only be achieved through Division 7 of Part 2-4 of the Act. By accepting the Appellant's premise that the Respondent's roster change proposal was a variation to the Agreement, the Deputy President did not properly engage with the question. In the result the Deputy President erred in her conclusion that a variation to the Agreement could be made without recourse to Division 7 of Part 2-4 of the Act.
[25] The Deputy President observed at [138] of the decision that "...there are issues raised by the CFMMEU in relation to the proposed roster changes such as whether they exceed the scope of changes permitted by the Agreements or whether the change process has been undertaken in a manner that is consistent with the terms of the Agreements..." and that she would leave these issues for another day. However, these issues were central to the question whether the Respondent's roster change proposal is merely an alteration to working arrangements within permissible bounds established by the Agreement or a proposal to vary the Agreement and thus achievable only through Division 7 of Part 2-4 of the Act. This was the essence of the dispute. It required determination.
[26] Given the foregoing it is not necessary to deal with the Agreement construction grounds advanced by the Appellant.
[27] For the reasons stated, the appeal is upheld. In the circumstances we propose to remit the matter to the Deputy President for determination in accordance with these reasons.
1. Permission to appeal is granted in respect of the impermissible variation grounds of appeal;
3. That part of the decision in Construction, Forestry, Maritime, Mining and Energy Union v Smit Lamnalco (Towage) Australia Pty Ltd [2020] FWC 1115 which concerns the CFMMEU's variation contention is quashed; and
4. The matter is remitted to the Deputy President to determine the Appellant's contention that the Respondent's roster change proposal is an impermissible variation of the Agreement, in accordance with our reasons.
By consent, determined on the papers without a hearing.
[1] Construction, Forestry, Maritime, Mining and Energy Union v Smit Lamnalco (Towage) Australia Pty Ltd [2020] FWC 1115
[20] Appeal book 126 at [5] and 128 at [15]-[16]; Appeal Book 90 - 93 at Transcript PN426-PN453
Printed by authority of the Commonwealth Government Printer
Construction, Forestry, Maritime, Mining and Energy Union
Smit Lamnalco Towage
(2016) 247 FCR 394
(2014) 222 FCR 152
Permission to appeal granted; appeal on impermissible variation grounds upheld; that part of Deputy President Asbury's decision concerning the variation contention quashed; matter remitted to the Deputy President to determine whether the roster proposal is an impermissible variation in accordance with the Full Bench reasons (orders at paragraph [28]).