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[2001] HCA 16
appellant. Appeal allowed with costs. The Federal Court's orders of 18 June 1999 were set aside, and the application for certiorari and prohibition was dismissed with costs. Kestrel's application for special...
The High Court held that the Commission could deal with local disputes about how the Agreement applied under an agreed dispute-resolution procedure authorised by the older industrial relations legislation. The later law's s 89A did not restrict that function, because it addressed specified arbitration and award-making functions, not the local dispute-resolution role at issue. The Agreement was not invalid merely because its dispute clauses might extend beyond what could operate as an award. The High Court also confirmed that the statutory costs restriction did not prevent costs being awarded in a constitutional prohibition proceeding.
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2,297 words · generated 05/10/2026
On 13 August 1996, the Australian Industrial Relations Commission (the Commission) certified an agreement between the Construction, Forestry, Mining and Energy Union (the Union) and Gordonstone Coal Management Pty Ltd (Gordonstone). The Agreement replaced the Gordonstone Coal Mine Consent Award 1993 and set terms and conditions for production and engineering workers at the mine ([1]).
6 cited instruments linked from this judgment.
The Agreement included procedures for resolving safety and industrial issues. Clause 22 contemplated Commission involvement where a dispute could not be resolved without its assistance. It required the parties to exchange positions before a hearing, said they would abide by a Commission decision concerning a dispute at the mine, and separately contemplated a mediator's recommendation where both parties agreed to mediation ([2]). Whether, and how, the Commission could determine a dispute under that clause became the central practical question.
In February 1997, the Union notified the Commission of an alleged industrial dispute concerning matters said to be covered by the Agreement's problem-resolution procedure ([9]). Gordonstone argued that the Commission lacked power to deal with the matter, or some of its components, because of s 89A of the Workplace Relations Act 1996 (Cth) (WR Act). The parties accepted that at least some of the matters were not “allowable award matters” ([9]).
The Commission's Full Bench held that the Agreement had been validly certified and that clauses 21 and 22 could confer functions on the Commission, but only for disputes over the application of the Agreement, consistently with s 170MH of the Industrial Relations Act 1988 (Cth) (IR Act). It also held that s 89A did not limit the Commission's relevant powers ([10]). It sent the matter back for further consideration without deciding whether the particular matters actually concerned the Agreement's application.
Gordonstone sought certiorari and prohibition under s 75(v) of the Constitution. The Federal Court issued prohibition, requiring the Commission to proceed on the basis that s 89A applied ([11]). The Union appealed to the High Court. By then, Kestrel Coal Pty Ltd had become the mine's manager and was substituted as the second respondent. Kestrel sought special leave to cross-appeal on certification and the validity of clauses 21 and 22 ([12]).
The High Court allowed the Union's appeal, set aside the Federal Court orders, and dismissed the application for certiorari and prohibition. It also dismissed Kestrel's application for special leave to cross-appeal ([40] and final orders).
The Court addressed certification first. Under ss 170MA and 170MC of the IR Act, agreements could be made by parties to an industrial dispute or industrial situation, and the Commission could certify qualifying agreements. An “industrial situation” was relevantly a situation that might give rise to an industrial dispute if preventive action were not taken ([4]–[5]).
The material included an unresolved interstate dispute arising from a log of claims served in August 1995. There were also negotiations through 1995 and 1996 over claims and counterclaims, and dispute notifications identifying disagreements about the mine's work model ([14], [16]–[18]). Clause 5 provided that the Agreement replaced the Award in its entirety. The Court considered it open to infer that the negotiations concerned terms intended to replace the existing industrial arrangements ([19]). Taken together, those circumstances supported a finding that incomplete agreement might leave the parties differing across industrial relations matters and might lead to an interstate dispute without preventive action. Certification was therefore supportable ([20]).
The Court next considered constitutional authority for the agreed dispute procedure. It distinguished an arbitrated procedure imposed by the Commission from a procedure to which the parties had agreed. A Commission could not use an arbitrated award to give itself powers that Parliament had not authorised or to confer judicial power on itself or another body ([26]). However, the power of private arbitration arises from the parties' agreement. Its decision-maker's authority depends on that agreement, and the resulting award is not binding of its own force in the way a court judgment is ([30]–[31]).
On that reasoning, s 170MH could validly authorise the Commission to participate in agreed procedures dealing with disputes about the parties' legal rights under the Agreement. The Commission would be exercising private arbitral power, not judicial power. The Court treated those procedures as capable of maintaining the settlement reached through an agreement made to prevent an industrial situation from developing into an industrial dispute ([29]–[32]).
The Court did not accept that clauses 21 and 22 were wholly invalid simply because they might cover more than s 170MH authorised to operate as an award. It explained that an agreement could have effect under the general law even where a provision could not have the effect of an award under the legislation. The clauses could operate to the extent they concerned disputes over the Agreement's application, and the Court noted that no argument had been made that the general law rendered them wholly invalid ([33]–[35]).
The decisive point about s 89A was its defined scope. It limited what counted as part of an industrial dispute for three stated purposes: dealing with a dispute by arbitration, making an award or order to prevent or settle a dispute, and varying an award or order to maintain its settlement ([36]–[37]). The disputes before the Commission were local disputes about applying an Agreement confined to the Gordonstone mine. The Commission was not being asked to vary an award or order ([38]). The Court held that the specified purposes did not apply, so s 89A did not limit the Commission's s 170MH functions ([39]).
Finally, the Court rejected the Union's submission that s 347(1) of the WR Act prevented costs being awarded. It reasoned that a prohibition proceeding under s 75(v) concerns the constitutional right to require a Commonwealth officer to observe the limits of their authority, and the corresponding duty arises under the Constitution. That remained so even where the asserted limits were found in legislation ([42]–[44]).
The judgment explains the statutory setting as it stood at the relevant time. When the Agreement was certified in 1996, the IR Act allowed agreements made by parties to an industrial dispute or industrial situation. Section 170MC required an agreement to include procedures for preventing and settling disputes about matters arising under it. Section 170MH then allowed approved procedures to empower the Commission to settle disputes over the agreement's application or appoint a board of reference ([4]–[5]).
Section 170MH was repealed with effect from 31 December 1996, but transitional legislation preserved its effect for agreements certified under the IR Act. The Commission's current functions were located in the WR Act, including s 89(b), which recognised other functions conferred by that or another Act. The Court read those provisions together: s 89(b) enabled the Commission to exercise the relevant preserved functions under s 170MH ([6]).
The judgment's key clarification is that s 89A was not a general restriction on all Commission powers that might be described as arbitral. Its text confined matters for specified arbitration and award-related purposes. That statutory limit did not extend to the particular function of resolving local disputes under an agreed process preserved through s 170MH ([36]–[39]).
The decision also clarifies the constitutional analysis. The Court treated private arbitration differently from compulsory determination by an arbitrated award. Consent mattered: the private arbitrator's authority depended on the parties' agreement, while judicial power is exercised independently of the affected person's consent and produces a judgment binding of its own force ([30]–[32]). The judgment did not say that parties could confer every public function on the Commission by agreement. Its holding concerned the statutory authority to participate in the kind of agreed procedure before it, within the limits of s 170MH.
The judgment notes that the WR Act had other agreement-making provisions, including ss 170LI, 170LO and 170LP, but it does not analyse their operation in this dispute (footnote 2). Nor does it provide a comprehensive account of subsequent legislative change. The “after” position established by this decision should therefore be stated narrowly: for the preserved IR Act agreement at issue, s 89A did not limit the Commission's function under s 170MH to deal with local disputes over the Agreement's application.
At [23], the Court relied on the Industrial Relations Act Case, which said there must be a relevant connection between an agreement's terms and the dispute or situation that gave rise to it. In plain English, the industrial power did not support an agreement wholly unrelated to the industrial circumstances behind it. At [20], the Court applied that connection-based reasoning to the unresolved interstate dispute and negotiations over replacing the Award.
At [28], the Court discussed R v Hegarty; Ex parte City of Salisbury. The principle it drew from that decision was that a dispute-resolution process can help make an industrial settlement effective and enduring, even if an individual difference dealt with under the process is not itself an interstate industrial dispute. Put simply, the process may be part of implementing a settlement, rather than a separate interstate dispute in its own right.
At [30]–[32], the Court distinguished private arbitration from judicial power. The passage at [32] is especially important: s 170MH authorised participation in private arbitration where the parties had agreed to submit their dispute. In plain English, the Commission's decision-making role in that setting depended on the parties' agreement, rather than operating as a court judgment imposed independently of consent.
At [38]–[39], the Court identified the precise reason s 89A did not control the case. The matters were local disputes about the application of an Agreement applying only at one mine, and the Commission was not being asked to vary an award or order. The statutory restriction therefore did not reach the function being exercised.
At [43], the Court explained the costs point. A party seeking constitutional prohibition invokes a right under s 75(v) to require a Commonwealth officer to stay within their authority. In plain English, the source of the proceeding was constitutional, even though the limits on the Commission's authority were identified by reference to legislation.
The decision is most directly relevant where an agreement certified under the former IR Act includes an agreed process for resolving disputes about the agreement, the Commission is asked to participate under s 170MH, and a party argues that s 89A of the WR Act restricts that role. The judgment's answer turns on the functions listed in s 89A(1) and the distinction between those functions and the preserved function under s 170MH ([6], [36]–[39]).
It also matters where there is a challenge to certification on the basis that the parties were not parties to an industrial dispute or industrial situation. Relevant indicators in this case included an unresolved interstate dispute, negotiations about claims and counterclaims, notifications about potential or emerging disagreement, and an agreement intended to replace an award ([14], [17]–[20]). The Court held that this combination could support the finding of an industrial situation. It did not establish that any negotiation, standing alone, is enough.
The decision may also be relevant where a certified agreement contains a dispute clause whose wording is broader than the Commission's statutory authority. The Court rejected the assumption that possible excess necessarily invalidates the whole clause. It treated the provision's operation as potentially divisible: the clause could operate as an award to the extent authorised by statute, while any wider effect depended on the general law ([33]–[35]).
The constitutional distinction may be relevant where a third party is asked to decide legal rights under an agreed procedure. The judgment focuses on whether the decision-maker's authority depends on consent and whether the decision is binding of its own force, rather than on its label alone ([30]–[32]). It does not determine the validity of every contractual or statutory dispute-resolution arrangement.
The supplied judgment contains no decisions after 15 March 2001 discussing how later courts treated this case. It would therefore be unsupported to state whether later courts followed, distinguished, narrowed or otherwise applied it.
The cases discussed within this judgment are earlier authorities, not later treatment of this decision. The High Court applied and explained the Industrial Relations Act Case in considering the constitutional connection between industrial agreements and the dispute or situation behind them ([23], [29]). It applied Hegarty in discussing procedures that maintain an industrial settlement ([27]–[29]). It also applied the reasoning in Re McJannet concerning costs in proceedings for constitutional prohibition ([43]–[44]). Those relationships explain the reasoning in this judgment but do not establish how subsequent courts have treated it.
The Court expressly left open whether clauses 21 and 22 were designed to do more than maintain the Agreement. It assumed that possibility for the purposes of analysis and held that it did not make the provisions wholly invalid ([33]). The extent to which any operation beyond s 170MH could have effect under the general law was not decided.
The Court also did not decide whether the particular matters notified by the Union were, in fact, disputes over the application of the Agreement. The Commission's Full Bench had referred the proceedings back without resolving that question ([10]). The High Court addressed the legal framework, not the eventual characterisation or merits of each underlying workplace dispute.
The judgment did not determine how its reasoning would apply to materially different statutory schemes or agreements made under provisions enacted after the relevant events. It recorded that the WR Act contained other agreement-making provisions, but did not interpret them in this appeal (footnote 2). Those questions require the applicable legislation and later authorities to be examined.
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Source: the High Court of Australia (www.hcourt.gov.au). Converted to plain text by ZoeLaw. Not the official version.
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ
CONSTRUCTION, FORESTRY, MINING AND APPELLANT
ENERGY UNION
AND
THE AUSTRALIAN INDUSTRIAL RELATIONS RESPONDENTS
COMMISSION & ANOR
Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission
[2001] HCA 16
15 March 2001
M12/2000
ORDER
1. Appeal allowed with costs.
2. Set aside the orders made by the Full Court of the Federal Court of Australia on 18 June 1999 and in place thereof, order that the application for certiorari and prohibition be dismissed with costs.
3. Application for special leave to cross-appeal dismissed with costs.
On appeal from the Federal Court of Australia
Representation:
S C Rothman SC with S J Howells for the appellant (instructed by R L Whyburn & Associates)
No appearance for the first respondents
C N Jessup QC with F Parry for the second respondent (instructed by Freehills)
Intervener:
D M J Bennett QC, Solicitor-General of the Commonwealth with S G E McLeish intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission
Industrial Law (Cth) – Australian Industrial Relations Commission – Certified Agreement – Dispute over application of Agreement – Local dispute – Whether s 89A of the WR Act operates to limit the powers exercisable by the Commission in discharging its functions under s 89(b) of the WR Act and s 170MH of the IR Act.
Industrial Law (Cth) – Agreed dispute resolution procedure – Difference between agreed and arbitrated dispute settlement procedures – Certified Agreement containing provision for procedures relating to resolution of disputes – Provisions extend beyond s 170MH of the IR Act – Whether provisions wholly invalid.
Industrial Law (Cth) – Whether certification valid – Unresolved interstate industrial dispute – Negotiations with respect to terms and conditions to replace those contained in Award – Whether industrial situation under s 4 of the IR Act.
Costs – Whether statutory disentitlement to costs under s 347(1) of the WR Act has application to a proceeding for the issue of prohibition under s 75(v) of the Constitution.
Industrial Relations Act 1988 (Cth) s 170MA, s 170MH.
Workplace Relations Act 1996 (Cth) s 89(b), s 89A, s 347(1).
GLEESON CJ, GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ. On 13 August 1996, the Australian Industrial Relations Commission ("the Commission") certified an agreement ("the Agreement") between the Construction, Forestry, Mining and Energy Union ("the Union") and Gordonstone Coal Management Pty Ltd ("Gordonstone"). The Agreement, which replaced the Gordonstone Coal Mine Consent Award 1993 ("the Award"), specified terms and conditions for production and engineering workers at the Gordonstone Mine in Queensland.
The Agreement contained provision, in cll 21 and 22, with respect to procedures to be adopted for the resolution of safety and industrial issues. Clause 22 of the Agreement is in the following terms:
"AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
(a) In the event of a dispute where resolution cannot be achieved without the assistance of the [Commission], the parties will exchange positions prior to any hearing taking place.
(b) The parties to this Agreement agree to abide by any decision determined by the [Commission] which relates to a dispute at Gordonstone Mine.
(c) Where it is agreed by the parties to resolve the matter with a mediator of the [Commission], both parties agree to abide by the recommendation of the chairman."
Relevant legislative provisions
In 1996, when the Agreement was certified, the IR Act provided for the certification of industrial agreements made by parties to an industrial dispute or parties to an industrial situation1. "Industrial dispute" was relevantly defined in the IR Act to mean an interstate industrial dispute and a situation likely to give rise to an interstate industrial dispute2; "industrial situation" was relevantly defined to mean "a situation that, if preventive action is not taken, may give rise to ... an industrial dispute"3.
By s 170MA(1) of the IR Act, the parties to an industrial dispute might agree on terms for the settlement of the matters in dispute or for the prevention of further industrial disputes between them. And by s 170MA(2), the parties to an industrial situation might agree "on terms for preventing the situation from giving rise to an industrial dispute between them". The Commission was empowered by s 170MC of the Act to certify such agreements. However, by s 170MC(1)(c), the Commission was required not to certify an agreement unless satisfied that it "include[d] procedures for preventing and settling disputes ... about matters arising under the agreement". And s 170MH provided:
" Procedures in an agreement for preventing and settling disputes between employers and employees covered by the agreement may, if the Commission so approves, empower the Commission to do either or both of the following:
(a) to settle disputes over the application of the agreement;
(b) to appoint a board of reference as described in section 131 for the purpose of settling such disputes."
Section 170MH of the IR Act, in the form set out above, was repealed with effect from 31 December 1996. However, by force of Pt 2 of Sched 8 of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth), which came into force on 25 November 1996, s 170MH of the IR Act continues to have effect with respect to agreements certified under that Act. This notwithstanding, the functions of the Commission are now to be found in the WR Act. By s 89(b) of that Act, the functions of the Commission include, in addition to its functions with respect to conciliation and arbitration of industrial disputes, "such other functions as are conferred on [it] by [that] or any other Act". Thus, the WR Act authorises the Commission to exercise those functions that it derives from s 170MH of the IR Act.
The Commission's powers are also to be found in the WR Act. Section 89A of that Act provides:
" Industrial dispute normally limited to allowable award matters
(1) For the following purposes, an industrial dispute is taken to include only matters covered by subsections (2) and (3):
(a) dealing with an industrial dispute by arbitration;
(b) preventing or settling an industrial dispute by making an award or order;
(c) maintaining the settlement of an industrial dispute by varying an award or order."
The matters referred to in ss 89A(2) and (3) have come to be known as "allowable award matters" and it is convenient to refer to them as such. "Industrial dispute" has a defined meaning (except in relation to Pt XA which is not presently relevant) which, leaving aside demarcation disputes, incorporates the need for an industrial dispute to extend beyond the limits of any one State4.
History of the proceedings
On 27 February 1997, the Union notified the Commission of "an alleged industrial dispute" concerning various matters that were said to be "the subject of the problem resolution procedure in the ... [A]greement". When the proceedings came before Hodder C, on 7 March 1997, it was contended on behalf of Gordonstone that the Commission did not have power to deal with the matter or, perhaps, some of the matters in dispute because of the operation of s 89A of the WR Act. In this regard, it should be noted that the parties accept that at least some of the matters in dispute are not allowable award matters. Because of the public importance of the question raised before Hodder C, the matter was referred to a Full Bench of the Commission pursuant to s 107 of the WR Act5.
Three issues emerged in the proceedings before the Full Bench. The first was whether the Agreement was validly certified; the second was the validity and scope of cll 21 and 22 of the Agreement; the third was the operation of s 89A of the WR Act. The Full Bench held that the Agreement was validly certified and that cll 21 and 22 validly operate to confer functions on the Commission, but, in accordance with s 170MH of the IR Act, only with respect to "disputes over the application of the agreement"6. Finally, the Commission held that s 89A of the WR Act does not operate to limit the powers exercisable by the Commission in discharge of the functions derived from the Agreement7. Without determining whether the matters in issue were disputes over the application of the Agreement (a question that is still undetermined), the Full Bench referred the proceedings back to Hodder C8.
Shortly after the Full Bench of the Commission handed down its decision, Gordonstone applied to this Court pursuant to s 75(v) of the Constitution for certiorari to quash the decision of the Full Bench and for prohibition to prevent further proceedings in the Commission. The application, which was based on the same three grounds which had been argued before the Full Bench, was remitted to the Federal Court of Australia. It was held by a Full Court of the Federal Court (Black CJ, Heerey and Goldberg JJ) that prohibition should issue to prevent the Commission proceeding otherwise than on the basis that s 89A of the WR Act applies to the proceedings9. From that decision the Union was granted special leave to appeal to this Court.
Certification of the Agreement
It is convenient to deal first with the contention made on behalf of Kestrel that the Agreement was not validly certified. It was argued in this Court, as it had been before the Full Bench of the Commission and, later, before the Full Court of the Federal Court, that the Agreement was made between parties who were neither parties to an industrial dispute nor parties to an industrial situation as required by s 170MA of the IR Act.
The application for certification of the Agreement was supported by two statutory declarations which identified two dispute notifications pursuant to s 99 of the IR Act10, namely, "C No 40206 of 1966, C 40170 of 1996", as "the dispute in settlement, part settlement or prevention of which the agreement [was] made." A statutory declaration filed on behalf of Gordonstone in support of the certification of the Agreement also contains the following question and answer:
"Identify the facts on which it is asserted that the agreement is between parties to an industrial situation, and is for preventing the situation from giving rise to an industrial dispute between them:
NEGOTIATIONS TOOK PLACE BETWEEN THE PARTIES THROUGHOUT 1995 AND 1996 TO DATE IN AN ATTEMPT TO RESOLVE A NUMBER OF CLAIMS AND COUNTER CLAIMS BY THE PARTIES. NO FURTHER CLAIMS ARE PERMITTED FOR THE LIFE OF THE AGREEMENT."
The Full Bench of the Commission proceeded on the basis that neither of the dispute notifications referred to in the statutory declarations in support of certification of the Agreement identified an interstate industrial dispute or a situation that was likely to give rise to an interstate industrial dispute but stated that "it would be obtuse for [it] to not accept that the whole of the Agreement could properly be said to be made between the parties to an industrial situation."11
The finding by the Full Bench that the Agreement had been made by parties to an industrial situation was upheld by the Full Court of the Federal Court12. In this regard, the Full Court noted that when the Agreement was certified, there was an interstate industrial dispute arising out of a log of claims served in August 1995 which was still unresolved and considered that, in that context, the Agreement, which replaced the Award, was a "new means for preventing an industrial situation from giving rise to an interstate industrial dispute"13.
In addition to the unresolved interstate dispute of 1995, a number of matters relevant to the question whether there was an industrial situation to which the Union and Gordonstone were parties are to be discerned from the dispute notifications earlier referred to. The first – a notification by Gordonstone on 29 March 1996 – stated that there was "a potential industrial dispute between [it] and its employees, members of the [Union]" and that it involved "the failure of the parties to reach agreement on the operation of the mine site work model in the Coal Preparation Plant." In proceedings before the Commission with respect to that notification, the potential dispute was said to be "part of award discussions ... that commenced on 7 February 1995."
The second dispute notification, dated 23 April 1996, was a notification by the Union of "the existence of negotiations on a proposed agreement between [the Union] and ... [Gordonstone] which may give rise to an Industrial Dispute". That notification identified the "issue that may give rise to [a] dispute" as "[t]he inability of the parties to reach agreement on that part of the Gordonstone Agreement relating to the Work Model of the Mine."
One other matter relevant to the question whether the Union and Gordonstone were parties to an industrial situation is to be discerned from cl 5 of the Agreement. That clause provides that the Agreement "replace[s] in total the terms and conditions of [the Award]". It is to be inferred from that provision that the claims and counterclaims and the negotiations referred to in the statutory declarations in support of certification of the Agreement related to the terms and conditions which, it was contemplated, might be exhaustive of the industrial rights and obligations of Gordonstone and its employees, in the sense that they would wholly replace those for which the Award then provided.
Validity of cll 21 and 22 of the Agreement
Two related arguments were put in support of the contention that, even if the Agreement was otherwise validly certified, cll 21 and 22 are invalid. The first was that, by reason of s 51(xxxv) of the Constitution, a certified agreement can only validly provide as to procedures for the resolution of disputes which are within the compass of the industrial dispute or situation which led to its making. And as cll 21 and 22 extend to any dispute, it was said, they are wholly invalid. Additionally, it was put that, because cll 21 and 22 extend beyond disputes over the application of the Agreement, they are not authorised by s 170MH of the IR Act and are, thus, wholly invalid.
As s 170MH of the IR Act authorises the Commission to "settle disputes over the application of [an] agreement", it is convenient to first consider the validity of cll 21 and 22 on the basis that those clauses provide only with respect to disputes of that kind. Essentially, that is the same as asking whether s 170MH of the IR Act exceeds constitutional power. Before turning to that issue, however, it is convenient to note what was said with respect to agreements between parties to an industrial dispute or an industrial situation in Victoria v The Commonwealth (Industrial Relations Act Case)14.
It was held in the Industrial Relations Act Case that it is incidental to the legislative power conferred by s 51(xxxv) of the Constitution for the Parliament to legislate to give effect to agreements by which parties to an industrial dispute or an industrial situation settle matters that are in issue between them, provided that there is a relevant connection between the terms of the agreement and the dispute or situation that gave rise to it15. In that context, it was said that s 170MA of the IR Act was to be construed on the basis "that the Commission [could not] certify an agreement if any of its terms lack[ed] a relevant connection with the dispute or industrial situation which [might] otherwise attract [the Commission's] award-making powers."16 It was further explained that "the Commission [could] certify an agreement if and only if it could have made an award in the same terms."17
Two matters should be noted with respect to what was said in the Industrial Relations Act Case. The first is that that case was concerned with award making powers which were not circumscribed by a provision of the kind now found in s 89A of the WR Act. The second is that the Commission might, under the legislation then in issue, exercise its award making powers to make a consent award. The making of a consent award does not involve the exercise of arbitral power.
Section 89A of the WR Act
It was held by the Full Court of the Federal Court that the Commission's powers which derive from s 170MH of the IR Act are confined by s 89A of the WR Act because of the "arbitral character" of those powers25. For present purposes, it may be accepted that those powers are arbitral in character. Even so, s 89A is not concerned to limit powers which are arbitral in character. Rather, it is concerned to limit the matters which, although the subject of an industrial dispute, may be the subject of arbitration or of an award or order, including the variation of an award or order. It does so by providing that, for specific purposes, an industrial dispute is taken to include only allowable award matters.
As earlier noted, the purposes specified in s 89A(1) are:
"(a) dealing with an industrial dispute by arbitration;
(b) preventing or settling an industrial dispute by making an award or order;
(c) maintaining the settlement of an industrial dispute by varying an award or order."
And as also earlier noted, "industrial dispute" is a defined term which incorporates the need for an interstate element.
The disputes with which the Commission is now asked to concern itself are disputes over the application of the Agreement. Because the Agreement applies only at the Gordonstone mine, they are, necessarily, local disputes to which pars (a) and (b) of s 89A(1) can have no application. Similarly par (c) has no application because the Commission is not being asked to vary an award or order.
Section 89(b) of the WR Act authorises the Commission to exercise those functions under cl 22 of the Agreement which the Commission derives from s 170MH of the IR Act. Section 89A does not limit the powers which may be exercised by the Commission in discharging those functions. Accordingly, the Full Court of the Federal Court erred in issuing prohibition.
Conclusion
Costs
" A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause."
Where the right or duty in issue in proceedings is one that owes its existence to an enactment of the Parliament, the matter is properly described as a matter arising under that enactment26. Thus in Re Polites; Ex parte Hoyts Corporation Pty Ltd, an application for mandamus to compel compliance with a duty imposed on the Industrial Relations Commission by the IR Act was held to constitute a matter arising under that Act. That was because the duty in question owed its existence to the IR Act27. However, it does not follow that all applications under s 75(v) of the Constitution with respect to the powers and duties of the Commission involve matters arising under the legislation by which its powers and duties are governed.
It was pointed out in Re McJannet; Ex parte Australian Workers' Union of Employees (Q) [No 2] that relief by way of prohibition is not relief for the enforcement of a right or duty created or conferred by statute28. Rather, the right in issue when relief is sought by way of prohibition is the right conferred by s 75(v) of the Constitution to compel an officer of the Commonwealth to observe the limits of that officer's power or jurisdiction. The corresponding duty to observe those limits also derives from s 75(v). And that is so even if the asserted limits derive from statute. Accordingly, it was correctly held in McJannet that s 347(1) of the IR Act has no application to a proceeding for the issue of prohibition under s 75(v) of the Constitution29.
Although the Union contended that there was no power in this Court to award costs in the present matter, in the event that its argument in that regard was unsuccessful it sought costs. In accordance with the principles in McJannet, it is entitled to its costs.
Orders
Dismiss the application for special leave to cross-appeal with costs.
Allow the appeal with costs, set aside the orders of the Full Court of the Federal Court of 18 June 1999 and, in lieu thereof, order that the application for certiorari and prohibition be dismissed with costs.
Sections 170MA(1) and (2). Note the WR Act now allows, in s 170LI, for agreements to be made with constitutional corporations or with the Commonwealth and, in ss 170LO and 170LP, for agreements between parties to an industrial dispute and parties to an industrial situation respectively. ↩
Section 4(1) of the IR Act provided:"'industrial dispute' means:(a) an industrial dispute (including a threatened, impending or probable industrial dispute):(i) extending beyond the limits of any one State; and(ii) that is about matters pertaining to the relationship between employers and employees; or(b) a situation that is likely to give rise to an industrial dispute of the kind referred to in paragraph (a);and includes a demarcation dispute (whether or not, in the case of a demarcation dispute involving an organisation or the members of an organisation in that capacity, the dispute extends beyond the limits of any one State)". ↩
Section 4(1) of the IR Act. ↩
The definition is identical with that contained in the IR Act set out at fn 2. ↩
Section 107(2) of the WR Act permits "a party ... or the Minister" to apply to have a matter dealt with by the Full Bench of the Commission. Pursuant to s 107(4) all such applications are to be referred to the President. ↩
Construction, Forestry, Mining and Energy Union v Gordonstone Coal Management Pty Ltd (1997) 75 IR 249 at 258-259, 260. ↩
(1997) 75 IR 249 at 262. ↩
(1997) 75 IR 249 at 267. ↩
Gordonstone Coal Management Pty Ltd v Australian Industrial Relations Commission unreported, Federal Court of Australia, 18 June 1999 at 2 [4].
Construction Forestry Mining and Energy Union
Australian Industrial Relations Commission [2001] HCA 16; 203 CLR 645; 75 ALJR 670; 178 ALR 61
(1997) 75 IR 249
(1999) 93 FCR 153
(1996) 187 CLR 416
(1973) 129 CLR 312
(1969) 122 CLR 237
(1981) 147 CLR 617
(1945) 70 CLR 141
(1983) 151 CLR 575
(1991) 173 CLR 78
(1997) 189 CLR 654
Appeal allowed with costs. The Federal Court's orders of 18 June 1999 were set aside, and the application for certiorari and prohibition was dismissed with costs. Kestrel's application for special leave to cross-appeal was dismissed with costs.
After the proceedings in the Federal Court, Gordonstone ceased to be and Kestrel Coal Pty Limited ("Kestrel") became the manager of the Gordonstone mine. By order of this Court, Kestrel was substituted as second respondent to the appeal. At the hearing of the appeal, Kestrel sought an extension of time and special leave to cross-appeal to contest the validity of the certification of the Agreement and, in the alternative, the validity of cll 21 and 22.
Given that Gordonstone and the Union were parties to an unresolved interstate industrial dispute and were negotiating with respect to terms and conditions to replace those contained in the Award, the conclusion is well open that their failure to reach complete agreement might lead to a situation in which the parties differed on all aspects of their industrial relations, which situation might result in an interstate industrial dispute if preventive action were not taken. In other words, it was well open to the Full Bench of the Commission and to the Full Court of the Federal Court to conclude that there was an industrial situation, as defined in s 4 of the IR Act, to which the Union and Gordonstone were parties, and that, in consequence, the Agreement was validly certified. That being so, Kestrel's application for special leave to cross-appeal on this aspect of the Federal Court's decision should be dismissed.
The distinction between arbitral power, on the one hand, and, on the other, the Commission's award making power is important because the question whether the Parliament may authorise the Commission to participate in agreed dispute resolution procedures does not raise the same issues that arise when a party to an industrial dispute seeks the making of an arbitrated award with respect to procedures of that kind.
So far as concerns arbitrated provisions with respect to dispute resolution procedures, it should be noted that a dispute as to the powers the Commission should, but does not have, is not an industrial dispute and will not ground an award by which the Commission gives itself power to do that which it is not otherwise authorised to do19. Moreover, an arbitrated dispute resolution provision will be invalid to the extent that it purports to confer judicial power on the Commission or any one else20. For present purposes, it is sufficient to note that a power to make a binding determination as to legal rights and liabilities arising under an award or agreement is, of its nature, judicial power.
Although the Commission may not arbitrate to give itself either powers or functions that the Parliament has not authorised or to provide for procedures which would involve the exercise of judicial power, it may exercise its arbitral power to provide for dispute resolution procedures. And that is so notwithstanding that the disputes or differences which are the subject of those procedures are not, themselves, interstate industrial disputes. So much follows from R v Hegarty; Ex parte City of Salisbury21.
Hegarty concerned an award made in settlement of an interstate dispute, which award provided for the review of classifications applicable to individual employees and also provided for the establishment of a Board of Reference to perform various functions, including "to inquire into and if possible settle differences between [the Union party to the award] and any respondent [to the award]"22. It was held in that case that it did not matter that the difference there in question, namely the reclassification of a single employee, was not "in itself an interstate [industrial] dispute ... [if] the [dispute resolution] provisions constitute[d] the settlement of an interstate industrial dispute and ... the procedures and machinery ... [were] designed to ensure that the settlement of that dispute is effective and enduring."23
What was said in Hegarty applies, but with some modification, to an agreement by parties to an industrial situation. As already indicated, it is incidental to the conciliation and arbitration power for the Parliament to permit parties to an industrial situation to agree on the terms on which they will settle the matters in issue between them conditional upon their agreement having the same legal effect as an award24. So, too, it is incidental to that power for the Parliament to give legal effect to agreed procedures for maintaining a settlement of that kind and, also, for it to authorise the Commission to participate in those procedures.
There is, however, a significant difference between agreed and arbitrated dispute settlement procedures. As already indicated, the Commission cannot, by arbitrated award, require the parties to submit to binding procedures for the determination of legal rights and liabilities under an award because Ch III of the Constitution commits power to make determinations of that kind exclusively to the courts. However, different considerations apply if the parties have agreed to submit disputes as to their legal rights and liabilities for resolution by a particular person or body and to accept the decision of that person as binding on them.
Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it.
To the extent that s 170MH of the IR Act operates in conjunction with an agreed dispute resolution procedure to authorise the Commission to make decisions as to the legal rights and liabilities of the parties to the Agreement, it merely authorises the Commission to exercise a power of private arbitration. And procedures for the resolution of disputes over the application of an agreement made by parties to an industrial situation to prevent that situation from developing into an industrial dispute are clearly procedures for maintaining that agreement. Parliament may legislate to authorise the Commission to participate in procedures of that kind. Accordingly, s 170MH of the IR Act is valid.
Although it is by no means clear, it may be assumed, for present purposes, that cll 21 and 22 are designed to ensure more than the maintenance of the Agreement. That, however, does not have the consequence that those clauses are wholly invalid. Nor does it follow that they are wholly invalid because they extend beyond what is authorised by s 170MH of the IR Act.
The parties to an industrial situation are free to agree between themselves as to the terms on which they will conduct their affairs. Their agreement has effect according to the general law. If their agreement is certified, it also has effect as an award. To the extent that an agreement provides in a manner that exceeds what is permitted either by the Constitution or by the legislation which gives the agreement effect as an award, it cannot operate with that effect. But the underlying agreement remains and the validity of that agreement depends on the general law, not the legislative provisions which give it effect as an award.
It was not suggested that the general law operates to render cll 21 and 22 of the Agreement wholly invalid. Nor does s 170MH proceed on the basis that an agreed dispute resolution procedure is valid only if it is confined to disputes over the application of an agreement. That being so, there is no reason why cll 21 and 22 should not operate so far as it is concerned with disputes of that kind. Accordingly, this aspect of Kestrel's argument for special leave to cross-appeal should also be dismissed.
Section 99 of the IR Act relevantly provided that as "soon as an organisation or an employer becomes aware of the existence of an alleged industrial dispute ... the organisation or employer shall notify the relevant Presidential Member or a Registrar." ↩
(1997) 75 IR 249 at 258. ↩
Gordonstone Coal Management Pty Ltd v Australian Industrial Relations Commission (1999) 93 FCR 153 at 161 [27]. ↩
(1999) 93 FCR 153 at 161-162 [28]. ↩
(1996) 187 CLR 416. ↩
(1996) 187 CLR 416 at 537-538 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. ↩
(1996) 187 CLR 416 at 537 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. ↩
(1996) 187 CLR 416 at 537 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. ↩
See s 111(1)(b) of the IR Act. The same is true under the WR Act: see s 111(1)(b). ↩
See R v Portus; Ex parte City of Perth (1973) 129 CLR 312. ↩
See R v Gough; Ex parte Meat & Allied Trades Federation of Australia (1969) 122 CLR 237. See also R v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617 at 625 per Mason J, 632-633 per Murphy J. ↩
(1981) 147 CLR 617. ↩
(1981) 147 CLR 617, cited by Mason J at 624. ↩
(1981) 147 CLR 617 at 629 per Mason J. ↩
(1996) 187 CLR 416 at 538. ↩
(1999) 93 FCR 153 at 164 [43]. ↩
See R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154 per Latham CJ; LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581; Re Polites; Ex parte Hoyts Corporation Pty Ltd (1991) 173 CLR 78 at 93. ↩
(1991) 173 CLR 78 at 93. ↩
(1997) 189 CLR 654 at 657. ↩
(1997) 189 CLR 654 at 657. ↩