These principles must be carefully applied. It has been said that: "... disqualification flows from a reasonable apprehension that the judge might not decide the case impartially, rather than that he will decide the case adversely to a party": Cabcharge at [32]; Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342 at 352 (Mason J).

Needless to say, disqualification of a judge by reason of prejudgment must be "firmly established": Cabcharge at [25]; Re JRL at 352. Judges should not accede too readily to recusal by reason of apprehended bias.

To apply these principles in any given case is a matter of judgment and evaluation depending on the exact circumstances. Undoubtedly, the question of an apprehension of bias requires one to focus on the issues that the judge is called upon to decide - see eg British American Tobacco Australia Ltd v Gordon (2007) NSWSC 109 at [97] per Brereton J. No strict approach should be taken in identifying the legal and factual issues. The issues before a judge sought to be disqualified may well be different in some respects to those issues determined in the earlier proceeding. At the core of the inquiry is an examination of the legal and factual issues on foot and the extent to which previous findings may, in the eyes of the fair-minded lay observer, impact on the judge's ability to decide the matter other than on its merits.

Because the test of apprehended bias involves "a fair-minded lay observer" who is observing a judge, the assumed characteristics of each need to be considered.

A judge is trained and is required "to discard the irrelevant, the immaterial and the prejudicial": see Vakauta v Kelly (1988) 13 NSWLR 502 at 527 (McHugh JA), adopted in Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568 at 584-585 (Toohey J); Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 at [12] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ); and Laurie at [80] (Gummow J); and at [140] (Heydon, Kiefel and Bell JJ).

As to the "reasonable observer", in Laurie at [145], Heydon, Kiefel and Bell JJ affirmed that a reasonable observer would note the possibility of the evidentiary position changing between the previous proceeding and the subsequent proceeding.

In R v Burrell (2007) 175 A Crim R 21; [2007] NSWCCA 79 at [11], McClellan CJ at CL (with whom the other members of the New South Wales Court of Criminal Appeal agreed) stated that:

"The ordinary fair minded person understands that in the exercise of the judicial function it will be necessary, from time to time, for a judge to reconsider matters which have previously been considered or which may have been pronounced upon by that particular judge."

In Sengupta v Holmes [2002] EWCA Civ 1104; [2002] TLR 351, at [35]-[37], Laws LJ (Jonathan Parker LJ agreeing) stated that the fair-minded observer would recognise that a professional judge would be capable of departing from an earlier expressed opinion.

However, as I have indicated, applying these principles will be a matter of judgment and evaluation in the circumstances. The application of these principles to particular facts in earlier authorities, concerning as they do, the particular circumstances that may or may not have lead a judge to be disqualified, are not to be elevated to the "principles" to be applied. Nor is the application of the principles in any given case to be used as a gloss upon those principles. As the authorities demonstrate, including Laurie, the principles are relatively well established, but in the application of these principles reasonable minds may differ as to the result."[20]

[30] We are not satisfied that the Commissioner's reference to a 'smokebomb', seen in context, constitutes grounds for finding that there is a reasonable apprehension of bias. It is clear that the Commissioner was raising the notion that the CFMMEU's submissions about safety could be seen as a diversion from the real issue at stake in the dispute. However it also clear that the Commissioner did in fact take those submissions seriously - most obviously by undertaking the site visit and not making the recommendation sought by Watpac. In all the circumstances, we are not satisfied that a fair-minded lay observer might reasonably apprehend that the Commissioner might not bring an impartial mind to the resolution of the question the Commissioner was required to decide.

[31] We consider the Commissioner's reference to Mr Borg's personal Facebook page in the Decision, at least without giving the parties an opportunity to consider the matter and make submissions about it, was inappropriate and constituted a denial of natural justice. However we are not satisfied that in itself it provides a ground for finding a reasonable apprehension of bias. At most it seems a passing reference of little consequence. In all the circumstances, we are not satisfied that the denial of natural justice could have had any bearing on the outcome of the recusal applications.[21]

[32] In summary we are not satisfied that the Commissioner made any appealable error in refusing to recuse herself on the grounds of a reasonable apprehension of bias. For that reason the appeals must be dismissed.

[33] However we wish to make the following observations.

[34] For many years, the Conciliation and Arbitration Act 1904 (Cth) contained s.22(2), which provided that a Member of the Commission who had conciliated an industrial dispute could not arbitrate that dispute if a party to the arbitration proceedings objected. This enabled a party to object to a given arbitrator if it thought that the arbitrator might have formed an opinion in the conciliation proceedings which could prejudice its case in arbitration.

[35] The 1985 Australian Industrial Relations Law and Systems: Report of the Committee of Review (the Hancock Report) considered whether that provision should be retained. It concluded that:

'...the right of objection should be retained. ...we do not agree with the view that parties should have a choice of arbitrator; but we think it fundamental that a party should be able to object to having its case arbitrated upon by a person who, by reason of his earlier involvement in conciliation proceedings, may have formed an opinion which is prejudicial to its case. We understand Sir John Moore's point that conciliation and arbitration cannot, in practice, be put neatly into separate boxes but... the processes are distinctive and need to be expressed as such in the legislation.'[22]

[36] The provision was retained in the Industrial Relations Act 1988 (Cth) (IR Act) as s.105. It remained unchanged through all the various iterations of the federal industrial and workplace relations legislation until the enactment of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). At that time, most of the specific provisions governing the role of the Commission in the conciliation and arbitration of industrial disputes were removed.

[37] The current FW Act does not contain provisions equivalent to s.105 of the IR Act. The role of the Commission in dealing with disputes that arise under DSPs is dealt with in s.739. That provides as follows:

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

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(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.'

[38] This section mainly sets the scope of the Commission's jurisdiction with regard to disputes under DSPs. It says little about how the Commission should deal with such disputes. For that, one must look to certain provisions of Divisions 2 and 3 of Part 5-1 of the FW Act, which deal with the establishment and functions of the Commission and the conduct of matters before it. These include the requirements in s.577 for the Commission to perform its functions and exercise its powers in a manner that is fair and just, is quick, informal and avoids unnecessary technicalities, is open and transparent, and promotes harmonious and cooperative workplace relations.

[39] While the provisions of s.105 of the IR Act no longer form part of the FW Act, the public policy considerations underlying those provisions remain relevant. In particular, there are good reasons why it will often be inappropriate for a member of the Commission to arbitrate a matter where he or she has previously been involved in conciliation proceedings about the same matter.

[40] While the circumstances of this case focus on comments made by the Commissioner which allegedly gave rise to a reasonable apprehension of bias, a number of concerns can arise where a member of the Commission arbitrates a matter after having been involved in conciliation. This is so even where the member has given no indication of any view he or she may have formed. It would be common, for example, for conciliation proceedings to include offers and counter-offers by parties to settle a matter. Even if the member makes no comment about any such offer or counter-offer, it is conceivable that a member who subsequently has to arbitrate a matter might be influenced by being aware of the content of such negotiations.

[41] Similarly, parties may be willing privately to concede points in conciliation that they would not be willing to concede in an arbitration. Again it is conceivable that knowledge of any such concession might influence a member who subsequently has to arbitrate the matter.

[42] During conciliation conferences, members also commonly have private discussions with one party in the absence of the other. While this is often a very effective mechanism in helping resolve matters by consent, it also means that the absent party does not know what has been said in any such discussion.

[43] These are just some of the considerations that might make it inappropriate for a member to arbitrate a matter that he or she has conciliated.

[44] It is not just a matter of avoiding a reasonable apprehension of bias. Conciliation is a vital function of the Commission. Indeed, most disputes referred to the Commission under the terms of a DSP are resolved by conciliation. Not only is this often the parties' preference, but it is also consistent with the Commission's general obligation to promote harmonious and cooperative workplace relations.

[45] It is essential for the proper functioning of the Commission that parties feel they may speak openly in conciliation, either in plenary session or in private with the member, without fearing that what they say might subsequently adversely affect their interests in arbitration if the matter does not settle. That is one reason why conciliation proceedings are confidential and not recorded.

[46] This is not to say that there will not be cases where the parties themselves prefer a matter to be arbitrated by a member who has been involved in conciliation. However, either party should be free to object to a member subsequently arbitrating a matter which he or she has conciliated.

[47] In our view, once a party to a dispute objects to a member of the Commission who has been involved in conciliating that dispute from undertaking arbitration, that by itself should generally be enough to persuade the member to arrange for the matter to be reallocated to another member for arbitration. This is particularly the case where the member has participated in private discussions separately with the parties in conciliation, the member has expressed views in conciliation about the merits of the dispute, the member has been made aware of without prejudice settlement offers made in conciliation, or one or more parties have made concessions in conciliation which they are not willing to make in a subsequent arbitration.

[48] This can occur without holding the sort of recusal hearing the Commissioner conducted in this case. We note that such hearings are fraught with difficulty.

[49] First, such hearings pose obvious evidentiary challenges. Conciliation proceedings are not recorded, for good reasons. This means, as in this case, that the member has to make findings on what he or she has said or done, based largely on personal recollection.

[50] Perhaps even more fundamentally, such hearings run the risk of undermining the effectiveness of the conciliation process. Hearings such as the one conducted by the Commissioner inevitably expose in open court the content of supposedly private and confidential discussions designed to settle matters by consent. The risk that such a hearing might occur has the potential to discourage the parties from being frank and open in conciliation. This is clearly undesirable from a public policy perspective.

[51] In relation to the matter currently under appeal, it follows that once the Commissioner had finished conciliating the matter (and assuming the matter did not settle), it would be preferable, in our view, for another member of the Commission to conduct any arbitration, including the resolution of any jurisdictional questions.

[52] Because of the important issues these appeals raise in relation to public policy and the Commission's practices, we grant permission to appeal in relation to both matters. We dismiss the appeals against the Commissioner's decisions not to recuse herself and refer the dispute back to the Commissioner. We would encourage the Commissioner however to have regard to the observations we have made in considering whether it would be preferable to arrange for the matter to be reallocated to another member of the Commission for arbitration.

R Reitano, counsel, with J Kennedy, solicitor, for the Construction, Forestry, Maritime, Mining and Energy Union.

T Spence, counsel, with M Giles, solicitor, for Watpac Construction Pty Ltd.

1. [1] [2019] FWC 405.
2. [2] Ibid [14].
3. [3] Ibid [21]-[24].
4. [4] Ibid [27]-[28].
5. [5] Ibid [29].
6. [6] Ibid [32].
7. [7] Ibid [36].
8. [8] Ibid [39].
9. [9] Ibid [60].
10. [10] Ibid [120].
11. [11] Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337.
12. [12] [2019] FWC 405 [128].
13. [13] Ibid [130].
14. [14] Ibid [133].
15. [15] Ibid [143].
16. [16] Ibid [156].
17. [17] Ibid [160]-[165].

[18] [2000] HCA 63, (2000) 205 CLR 337.

[19] [2011] FCA 1144; (2011) 202 FCR 439.

[20] Ibid at [441] - [443], [8] - [23].

[21] City of Stirling v Mr Kevin Emery [2018] FWCFB 2279 at [37]- [38].

1. [22] Commonwealth, Australian Industrial Relations Law and Systems: Report of the Committee of Review, Parl Paper No 236 (1985) 583.

Printed by authority of the Commonwealth Government Printer