CPB Contractors Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union

Federal Court of Australia (Full Court)|2019-05-02|Before: Commission J, Wheelahan JJ

Introduction 24 The parties to this application are CPB Contractors Pty Limited as applicant, and the Australian Workers' Union (AWU), the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), and the Fair Work Commission (FWC) as respondents. The applicant seeks declarations and an order in the nature of certiorari quashing a decision of the Full Bench of the FWC in the exercise of the Court's original jurisdiction under s 562 and s 563(b) of the Fair Work Act 2009 (Cth) (FW Act), s 39B of the Judiciary Act 1903 (Cth), and ss 21 and 22 of the Federal Court of Australia Act 1976 (Cth). 25 On 9 May 2018 a Commissioner of the FWC approved an enterprise agreement titled CPB Contractors NSW Civil Works Enterprise Agreement 2017-2021 (Agreement): CPB Contractors Pty Limited [2018] FWC 2580. On 26 September 2018 this decision was quashed by the Full Bench on appeal under s 604 of the FW Act: Construction, Forestry, Maritime, Mining and Energy Union v CPB Contractors Pty Limited [2018] FWCFB 5773. The Full Bench held, amongst other things, that clause 3.3 of the Agreement, which is a coverage clause, was an unlawful term for the purposes of s 194(ba) of the FW Act. The main questions on this application are whether clause 3.3 of the Agreement was an unlawful term, and whether the decision of the Full Bench should be quashed. 26 The CFMMEU opposed the relief sought by the applicant. The AWU joined the applicant in submitting that clause 3.3 of the Agreement was not an unlawful term, but submitted that for other reasons the decision of the Full Bench should not be quashed. The FWC filed a submitting notice.

The legislation 29 The FW Act draws a distinction between the coverage of enterprise agreements, and their application. Under s 53 of the FW Act, an enterprise agreement covers an employee if it is expressed to cover an employee. Further, s 53(6) provides in the following terms that an enterprise agreement covers an employee in relation to particular employment - (6) A reference in this Act to an enterprise agreement covering an employee is a reference to the agreement covering the employee in relation to particular employment. 30 Section 51 of the FW Act provides that an enterprise agreement does not impose obligations on a person, or give a person an entitlement, unless it applies to the person. Section 52 of the FW Act is concerned with when an enterprise agreement applies to a person, and provides - 52 When an enterprise agreement applies to an employer, employee or employee organisation When an enterprise agreement applies to an employee, employer or organisation (1) An enterprise agreement applies to an employee, employer or employee organisation if: (a) the agreement is in operation; and (b) the agreement covers the employee, employer or organisation; and (c) no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation. Enterprise agreements apply to employees in relation to particular employment (2) A reference in this Act to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment. 31 Section 58 contemplates that more than one enterprise agreement might cover a particular employee at a particular time, and provides that only one enterprise agreement can apply, and provides for criteria to determine what enterprise agreement applies. Relevantly, s 58(2) provides - General rule - later agreement does not apply until earlier agreement passes its nominal expiry date (2) If: (a) an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and (b) another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and (c) subsection (3) (which deals with a single-enterprise agreement replacing a multi-enterprise agreement) does not apply; then: (d) if the earlier agreement has not passed its nominal expiry date: (i) the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and (ii) the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or (e) if the earlier agreement has passed its nominal expiry date - the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again. 32 Sections 52(2), 53(6), and 58(2) all speak of an enterprise agreement covering, and applying to an employee in relation to "particular employment". In relation to s 53(6) which we set out at [29] above, in Aldi Foods Pty Ltd v Shop, Distributive and Allied Employees Association [2017] HCA 53; 350 ALR 381 at [31] the Court (Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ, and Gageler J agreeing) held that the natural meaning of the reference to "particular employment" of an employee, is to the description of the employee's job in the agreement. 33 Paragraph 194(ba) of the FW Act, on which the Full Bench relied to hold that clause 3.3 of the Agreement was unlawful, provides - 194 Meaning of unlawful term A term of an enterprise agreement is an unlawful term if it is: … (ba) a term that provides a method by which an employee or employer may elect (unilaterally or otherwise) not to be covered by the agreement; …

Clause 3.3 of the Agreement 34 As mentioned above, the Full Bench held that clause 3.3 of the Agreement was an unlawful term. In the form approved by the Commissioner, clause 3.3 provided - 3.3 Application This Agreement covers all classifications referred to in Appendix "A" of this Agreement and operates in the State of New South Wales on CPB civil engineering projects and related works other than in relation to tunnelling excavation works on any such project. [The second paragraph is not reproduced because the applicant gave an undertaking to the FWC dated 24 April 2018 that it should have no effect] Provided that any other classifications already included in other existing CPB enterprise agreements (and which cover work outside of the application of this Agreement) cannot be added during the term of this Agreement. Any Greenfields or Project Specific Agreement made by the Company or Joint Venture which the Company is part and which is approved by FWC, will cover the Company and any Employees at that particular Project/site to the exclusion of this Agreement. 35 The last sentence of clause 3.3 is similar to the terms of clause 1.2 of the coverage clause considered by the Full Court in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16; 228 FCR 297 (at [9]), and similar in concept to clause 2(b) of the agreement considered in MI&E Holdings Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2015] FCAFC 15; 228 FCR 483 (at [22]).

The decision of the Full Bench 36 The contentious feature of clause 3.3 of the Agreement is the last paragraph, and its provision for greenfields or project-specific agreements to cover the applicant and any employees at a particular project or site to the exclusion of the Agreement. There are two elements of the Full Bench's reasons that are material. First, the Full Bench held that the last paragraph of clause 3.3 purported to exclude the coverage of the Agreement in favour of a later agreement for a specific project or site, and that this feature offended s 58(2) of the FW Act. The Full Bench stated at [16] that - It is clear, we consider, that the final paragraph of clause 3.3 of the Agreement, properly construed, offends s 58(2)(d)(i). In the terms in which the paragraph is expressed, it operated before as well as after the nominal expiry date of the Agreement. It provides that a later enterprise agreement approved by the Commission will cover CPB and its employees at a particular project or site "to the exclusion of this Agreement". The provision is premised on the proposition that such a project or site is one which falls within the coverage of the Agreement as set out in the first paragraph of clause 3.3, since the rationale of the provision is plainly to resolve a situation in dual coverage. The final paragraph purports to exclude the coverage of the Agreement (being the earlier agreement) in favour of the later agreement for a specific project or site. As earlier explained, an agreement cannot apply to employees unless it covers them. The intended effect of the final paragraph of clause 3.3 is therefore that the later agreement will apply and the Agreement will not at the specific project or site in question. While the Agreement remains within its nominal term, that is a result which is directly contrary to that mandated by s 58(2). (emphasis in original) 37 We take the Full Bench's statement that clause 3.3 offended s 58(2) to mean that the Full Bench considered that clause 3.3 was inconsistent with, or repugnant to s 58(2) of the FW Act: Toyota Motor Corporation Australia Ltd v Marmara [2014] FCAFC 84; 222 FCR 152 at [74], [94]-[97]. The Full Bench did not in terms state that clause 3.3 would therefore be void for the reason it was inconsistent with s 58(2), but held that clause 3.3 would be rendered unlawful by s 194(ba) of the FW Act, which is the second material element of the Full Bench's reasons. The Full Bench held that the last paragraph of clause 3.3 provided for a method by which the applicant and a sub-set of employees might elect not to be covered by the Agreement, which rendered the term unlawful. At [18] of its reasons the Full Bench stated - Section 194(ba) could not, of course, be understood as proscribing a term which merely contemplates the making, in accordance with the FW Act, of a new enterprise agreement which overlaps in coverage with an existing agreement and has application after the nominal term of the existing agreement has passed in accordance with s 58 of the FW Act. That would not constitute a method for an election not to be covered by an agreement, but simply the taking of a course expressly permitted by the FW Act under which an existing agreement may wholly or partially be replaced in its operation by a new agreement made in accordance with the FW Act once its nominal expiry date has passed. However, the final paragraph of clause 3.3 does something different: it uses the mechanism of the making and approval of a new project or site/specific enterprise agreement as a means by which CPB and a subset of employees covered by the Agreement may cease to be covered by the Agreement before its nominal expiry date. This would clearly involve a mutual election not to be covered on the part of CPB and the relevant employees (effected, in the case of CPB, by proposing a new agreement and, in the case of the relevant employees, by voting to approve the new agreement). That an election under a method proscribed by s 194(ba) may be mutual is made clear by the words "unilaterally or otherwise" in the provision. 38 The Full Bench determined that the unlawful nature of the last paragraph of clause 3.3 could be remedied by an undertaking by the applicant to remove, or to treat the last paragraph as being of no effect, and that the appropriate course was to quash the decision, and to remit the application for approval to another Commissioner for rehearing, on which occasion the applicant would have the opportunity to offer such an undertaking.

Section 58(2) of the FW Act 39 There are two difficulties with the reasoning of the Full Bench in relation to the suggestion that the last paragraph of clause 3.3 was inconsistent with or repugnant to s 58(2) of the FW Act. First, clause 3.3 is concerned with coverage, and not application. By operation of s 53(6), coverage under an enterprise agreement is coverage in relation to particular employment, which directs attention to the job description in the enterprise agreement: Aldi at [31]. The last paragraph of clause 3.3 expresses an objective intent that future greenfields or site specific agreements will cover the applicant and any employees at that particular project or site to the exclusion of the Agreement. That objective might be achieved by the use of job descriptions in a greenfields or site-specific agreement that identify the employment which is the subject of coverage under that agreement as being specific to the relevant project or site, as the last paragraph of clause 3.3 would suggest. Any such agreement would be subject to the approval of the FWC, which must be satisfied that a group of employees covered by the agreement is fairly chosen, taking into account whether the group is geographically, operationally or organisationally distinct: FW Act, s 186(3), (3A). On the assumption that such a greenfields or site specific agreement might thereby cover different jobs, it is an error to suppose, as the Full Bench did at [16] of its reasons, that employment at such a project or site would otherwise fall within the Agreement. This is particularly so when clause 3.3 specifically contemplates that such employment would not be covered by the Agreement. 40 The second difficulty, which is related to the first, is that without knowing the terms of any greenfields or site-specific agreement, and without examining the circumstances of any particular employees, there was no proper foundation for the Full Bench's conclusion that clause 3.3 offended s 58(2)(d)(i). As senior counsel for the AWU submitted, if a new employee commenced employment at a greenfields site that was subject to a greenfields agreement, then because that employee would be excluded from coverage under the Agreement by clause 3.3, no question of coverage by the Agreement would arise, and the circumstances contemplated by s 58(2) could not arise. This is the type of situation to which Buchanan J (with whom Besanko J agreed, and Barker J generally agreed) referred in MI&E Holdings at [42] - The enterprise agreement applied (subject to cl 2(b)) to an identified range of employees in Western Australia. In the case of persons who were to be employed at a new project, but had not yet been engaged, the enterprise agreement could not apply to them until they became employed. If, before then, a valid greenfields agreement was made which covered their employment I see no reason at present why cl 2(b) would not be effective. The condition in s 58(2)(a) (that the earlier agreement applies) would not be engaged in relation to such employees. At the time of employment the greenfields agreement would apply and the enterprise agreement would not cover them. Section 58 would not operate in those circumstances. 41 In relation to existing employees of the applicant who might transfer to a site or project that becomes subject to a site-specific or greenfields agreement, the question of coverage will turn on whether the particular employment, that is, the job description is the same. In MI&E Holdings Buchanan J referred to this type of situation at [43] - The Full Bench assumed that the intention was that employees would be transferred between sites and potentially into and out of the application of different agreements. It is true that s 58 would not permit that to occur; only one enterprise agreement can apply to an employee in relation to particular employment. However, the consequence is not that cl 2 (or the enterprise agreement) is invalid but rather that the state of affairs assumed by the Full Bench could not be effected. If employees to whom the enterprise agreement applied were transferred to another site the enterprise agreement (and not a new site or project agreement) would apply to them if the transfer was made in the same (and not new) employment. But that left an effective operation for cl 2(b) in the case, as I have said, of new employees at a site or project. 42 In this case, it appears that the Full Bench at [16] of its reasons made a similar assumption to that referred to by Buchanan J in the first sentence of the passage set out above. In the absence of any proven circumstances, that was not a valid assumption. 43 For the above reasons, the Full Bench was in error in stating that the last paragraph of clause 3.3 offended s 58(2) of the FW Act.

The construction of s 194(ba) 44 We have set out s 194(ba) of the FW Act under [33] above. The starting point for the proper construction of s 194(ba) is the text of the statute, whilst at the same time having regard to context and purpose: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27 at [47]. The identification of the purpose of legislation involves an examination of the text of the legislation by reference to common law and statutory rules of construction: Lacey v Attorney-General (Queensland) [2011] HCA 10; 242 CLR 573 at [44] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ). 45 In relation to statutory rules of construction, the Acts Interpretation Act 1901 (Cth) as in force on 25 June 2009 applies to the FW Act, and amendments to the Acts Interpretation Act made after that day do not apply: FW Act, s 40A. Under s 15AA of the Acts Interpretation Act as then in force, a construction that would promote the purpose or object underlying an Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object. The choice directed by s 15AA as then in force is not as to the construction which "will best achieve" the object of the Act: cf s 15AA as currently in force. Rather, it is a limited choice between a construction that would promote the purpose or object of the Act, and one that would not: Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249 at 262 (Dawson, Toohey and Gaudron JJ); Lacey v Attorney-General (Queensland) at [46]. 46 As French CJ, Hayne, Kiefel, Gageler and Keane JJ said in Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664 at [23] in relation to s 15AA in its current form - Objective discernment of statutory purpose is integral to contextual construction. The requirement of s 15AA of the Acts Interpretation Act 1901 (Cth) that 'the interpretation that would best achieve the purpose or object of [an] Act (whether or not that purpose or object is expressly stated ...) is to be preferred to each other interpretation' is in that respect a particular statutory reflection of a general systemic principle. For (citing Cabell v Markham (1945) 148 F (2d) 737 at 739, quoted in Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 644 [27]): it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning. 47 In our view, that general systemic principle, which is a quote from a judgment of Judge Learned Hand, is equally applicable to the version of s 15AA with which we are concerned. See also, Weiss v R [2005] HCA 81; 224 CLR 300 at [10]. 48 The statutory rules of construction also include s 15AB of the Acts Interpretation Act, which has not been amended since 25 June 2009. Section 15AB(1) is expressed in permissive terms - (1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or (b) to determine the meaning of the provision when: (i) the provision is ambiguous or obscure; or (ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable. 49 In R v Sharma (2002) 54 NSWLR 300 at [55] Spigelman CJ (with whom the other members of the Court agreed) stated in relation to the phrase "ambiguous or obscure" in the cognate New South Wales provision, that ambiguity often extends to circumstances in which the meaning is, for whatever reason, doubtful. The ambiguity may appear only when a provision is sought to be applied to particular subject-matter, as indicated by the following passage from the reasons of O'Connor J in Bowtell v Goldsbrough Mort & Co Ltd (1905) 3 CLR 444 at 456-457 that was cited by Spigelman CJ at [57] - It has been contended in this case that an ambiguity must appear on the face of a Statute before you can apply the rules of interpretation relating to ambiguities. In one sense that is correct, and in another sense it is not. You frequently find an Act of Parliament perfectly clear on the face of it, and it is only when you apply it to the subject matter that the ambiguity appears. That ambiguity arises frequently from the use of general words. And wherever general words are used in a Statute there is always a liability to find a difficulty in applying general words to the particular case. It is often doubtful whether the legislature used the words in the general unrestricted sense, or in a restricted sense with reference to some particular subject matter. 50 Under common law principles of statutory construction, there are uses that may be made of extrinsic materials other than those authorised by s 15AB of the Acts Interpretation Act. This is indicated by the following passage in CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ) - It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy (47). Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd [(1986) 6 NSWLR 363 at 388], if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent. (emphasis added) 51 It is worth noting that in footnote (47) to the above passage their Honours cited what Mason J said well over thirty years ago in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 519 at 315, in support of it, as follows - On its face [the relevant statutory provision] which is expressed in general terms, contains no limitation on the nature of the claim to damages or other remedy to which it refers. However, to read the section in isolation from the enactment of which it forms a part is to offend against the cardinal rule of statutory interpretation that requires the words of a statute to be read in their context (Cooper Brookes (Wollongong) Pty. Ltd. v. Federal Commissioner of Taxation (1981) 147 CLR 297, at pp 304, 319-320; Attorney-General v. Prince Ernest Augustus of Hanover (1957) AC 436, at pp 461, 473). Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasize the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise. In Prince Ernest Augustus of Hanover Viscount Simonds said ([1957] AC at p.461): … words, and particularly general words, cannot be read in isolation: their colour and content are derived from their context. So it is that I conceive it to be my right and duty to examine every word of a statute in its context, and I use 'context' in its widest sense … as including not only other enacting provisions of the same statute, but its preamble, the existing state of the law, other statutes in pari materia, and the mischief which I can, by those and other legitimate means, discern the statute was intended to remedy. 52 In Catlow v Accident Compensation Commission (1989) 167 CLR 543, Brennan CJ and Gaudron J in a dissenting judgment stated at 549-550 - Whether or not extrinsic material is considered in interpreting a statutory provision, it is clear that the meaning attributed to the statute must be consistent with the statutory text. If the meaning which would otherwise be attributed to the statutory text is plain, extrinsic material cannot alter it. It is only when the meaning of the text is doubtful (to use a neutral term rather than those to be found in s. 15AB( 1) of the Acts Interpretation Act), that consideration of extrinsic material might be of assistance. It follows that it would be erroneous to look to the extrinsic material before exhausting the application of the ordinary rules of statutory construction. If, when that is done, the meaning of the statutory text is not doubtful, there is no occasion to look to the extrinsic material. In our opinion, that is the present case. We do not propose, therefore, to consider matters preliminary to the enactment of the Act. (emphasis added) 53 However, the majority comprising McHugh J, with whom Deane J and Dawson J agreed, had regard to the legislative history of the provision under consideration, including explanatory notes on the draft proposal for a Bill, the terms of the Bill when introduced, and changes to the Bill at the Committee stage: 167 CLR at 563. 54 Saeed v Minister for Immigration and Citizenship [2010] HCA 23; 241 CLR 252 concerned the construction of s 51A of the Migration Act 1958 (Cth). French CJ, Gummow, Hayne, Crennan and Kiefel JJ cited at [32] the following passage from the reasons of Mason CJ, Wilson and Dawson JJ in Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518, which concerned whether a statutory provision concerned with "visiting forces" applied to deserters from the armed forces of the United States - "[T]he Second Reading Speech of the Minister … quite unambiguously asserts that Pt III relates to deserters and absentees whether or not they are from a visiting force. But this of itself, while deserving serious consideration, cannot be determinative; it is available as an aid to interpretation. The words of a Minister must not be substituted for the text of the law. Particularly is this so when the intention stated by the Minister but unexpressed in the law is restrictive of the liberty of the individual. It is always possible that through oversight or inadvertence the clear intention of the Parliament fails to be translated into the text of the law. However unfortunate it may be when that happens, the task of the Court remains clear. The function of the Court is to give effect to the will of Parliament as expressed in the law. (footnote omitted, emphasis added) 55 After citing this passage, their Honours stated at [33] that it was apparent that the Full Court below had not considered the actual terms of the provision in issue, and then cited the dissenting reasons of Brennan CJ and Gaudron J in Catlow v Accident Compensation Commission - As was pointed out in Catlow v Accident Compensation Commission it is erroneous to look at extrinsic materials before exhausting the application of the ordinary rules of statutory construction. 56 On its own, the above sentence might be thought to support the idea that reference may not be had to extrinsic materials unless other means of statutory construction have been exhausted: cf, Construction, Forestry, Maritime, Mining and Energy Union v BHP Billiton Nickel West Pty Ltd [2018] FCAFC 107; 280 IR 46 at [26] (Rangiah J). However, it is necessary to have regard to the following paragraph in Saeed where at [34] their Honours state - It may be accepted that the context for the enactment of s 51A was provided by the decision in Ex parte Miah and that s 51A was an attempt to address the shortcomings identified in that decision. Resort to the extrinsic materials may be warranted to ascertain that context and that objective, although it is hardly necessary to do so. But that objective cannot be equated with the statutory intention as revealed by the terms of the subdivision. (emphasis added) 57 While the authorities emphasise the primacy of legislative text in the process of statutory construction, text is not construed in a vacuum. The identification of context is one element of the ordinary rules of statutory construction. Not all context will reside within the text of the statute, but may be informed by legislative history and extrinsic materials. In Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 at [39] the Court stated - The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself. (emphasis added) 58 In SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 347 ALR 405 at [14] the majority (Kiefel CJ, Nettle, Gordon and Edelman JJ) confirmed that context should be regarded at the first stage of construction, and not some later stage - The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected. (footnotes omitted) 59 In the footnote to the second sentence of the above passage in SZTAL the majority cited CIC Insurance Ltd v Bankstown Football Club Ltd, which contains the passage which we have set out at [50] above. In Federal Commissioner of Taxation v Jayasinghe [2016] FCAFC 79; 247 FCR 40 at [6]-[7] Allsop CJ (in dissent, but not as to the applicable principles), rejected a submission that context cannot be examined until after ambiguity is revealed, and stated that the passage from CIC Insurance "has … been cited too often to be doubted", before making extensive reference to subsequent citations of CIC Insurance in decisions of the High Court. 60 It follows that it is permissible to have regard to extrinsic materials in order to identify the context and purpose of a statutory provision, including the identification of any mischief to which a legislative amendment was directed: eg, Li v Chief of Army (2013) 250 CLR 328 at [17]; Construction, Forestry, Mining and Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619 at [59]; Akiba v The Commonwealth (2013) 250 CLR 209 at [31]; Commissioner of Taxation of the Commonwealth of Australia v Unit Trend Services Pty Ltd (2013) 250 CLR 523 at [54]-[55]. The examination of extrinsic material for that purpose may occur at the first stage. We therefore respectfully disagree with the contrary view expressed by Rangiah J in Construction, Forestry, Maritime, Mining and Energy Union v BHP Billiton Nickel West Pty Ltd [2018] FCAFC 107; 280 IR 46 at [25]-[26]. 61 The applicant relied on extrinsic material to identify the purpose of s 194(ba) of the FW Act, and the mischief to which it was addressed. The CFMMEU submitted that s 15AB(1) of the Acts Interpretation Act governed the use of extrinsic materials, such as explanatory memoranda, and that there was no ambiguity or obscurity in s 194(ba) of the FW Act which engaged s 15AB(1)(b)(i) so as to permit recourse to extrinsic materials. However, the Acts Interpretation Act is not the sole source of principles of statutory construction. For the reasons we have given above, the common law principles of construction require that regard is to be had to the context of legislation at the first stage of the process of construction. That context may include extrinsic material that identifies legislative background, and the mischief which the legislation seeks to address. It is not necessary that an ambiguity be identified before that context can be considered. This is not to say that the ordinary meaning of words or phrases should yield to conform to the terms of extrinsic materials. But the process of construction of a provision in a statute often requires the identification of statutory purpose and context so as to determine the legal effect of the text used in the provision. 62 Paragraph 194(ba) of the FW Act was inserted by the Fair Work Amendment Act 2012 (Cth). The explanatory memorandum to the Bill stated - 140. Item 4 amends section 194 to insert new paragraph 194(ba), which provides that a term of an enterprise agreement that would enable an employee or an employer to "opt out" of coverage of the agreement is an unlawful term. This amendment responds to Panel recommendation 23. 63 Panel recommendation 23, which is referred to in the explanatory memorandum, was a recommendation of a three-member panel appointed by the Minister in 2011 to review the Fair Work legislation. The panel prepared a report titled 'Towards more productive and equitable workplaces: an evaluation of the Fair Work legislation' that was presented on 15 June 2012. The panel recommended that the FW Act be amended to prohibit enterprise agreement clauses that permitted employees to opt-out of an agreement. At [6.4.3] of its report, the panel described "opt-out" clauses as those which allowed employees to vote on an agreement and then elect not to be covered by it on an individual basis. A form of op-out clause had been approved by the Full Bench subject to an undertaking in Newlands Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2011] FWAFB 7325 (see also, Construction, Forestry, Mining and Energy Union v Deputy President Hamberger (2011) 195 FCR 74). In Newlands Coal, the op-out clauses were relevantly in the following terms - 2.2 Employees Not Covered This Agreement does not cover: • Employees who are covered by an Australian Workplace Agreement ("AWA"), that has not reached its nominal expiry date; or • Employees who at any time elect in writing not to be covered by the Agreement. 2.3 Employee Decision whether to be Covered All persons proposed to be employed by the Company in the classes of work included in Schedule A Production and Engineering Employees of the Black Coal Mining Industry Award 2010 will be covered by this agreement unless they elect in writing not to be covered by this Agreement. All employees who are covered by an AWA or ITEA shall, following expiry of the nominal term of their AWA or ITEA, be covered by this agreement unless they elect in writing not to be covered by this Agreement. 64 In support of its recommendation that opt-out clauses be prohibited, the panel at [6.4.3] of its report expressed the following concerns - Opt-out clauses are relatively novel, and we are unaware that they have been a feature of more than a small number of agreements. However, we are concerned that as a result of Newlands Coal they may become more common. In the view of the Panel these clauses undermine the collective nature of an enterprise agreement. The Panel is concerned by the potential for opt-out clauses to be used to manipulate agreement making by allowing a range of employees to approve an agreement, only to have a number of them opt out at a later stage. Likewise, operational agreements could be displaced by employees opting out, possibly reopening bargaining. Also concerning is the potential for new and existing employees to feel pressured to opt out of such agreements, thereby relinquishing legitimate rights and entitlements. 65 The FW Act specifically permits, subject to approval by the FWC, site-specific and greenfields enterprise agreements. The word "enterprise" is defined by s 12 of the FW Act in a way that is consistent with the idea that a single employer may have different agreements for different areas of its activities - enterprise means a business, activity, project or undertaking 66 There are a number of ways in which an employee might conceivably cease to be covered by an enterprise agreement, including by a change in the employee's particular employment. That might occur if an employee transfers from one geographically, operationally, or organisationally distinct area of an employer's business to another, in circumstances where there are different enterprise agreements in place which cover different employment: cf s 186(3A) of the FW Act. To cease coverage in this way would not need to depend upon any method of election provided for in an enterprise agreement. 67 Focussing on the text of s 194(ba) in the context of the mischief to which it was directed, and in the context of other provisions of the FW Act, we consider that the provision is directed to a term of an agreement which itself provides the method by which an employee or employer may elect (unilaterally or otherwise) not to be covered by the agreement. The election must be by an employee or the employer. Newlands Coal provides an illustration, where the method provided for by the opt-out clauses in the agreement was an election in writing. In our view, it is essential to engage s 194(ba) that the term itself provide the method by which the employer or employee can make an effective election (unilaterally or otherwise) not to be covered by the agreement. Section 194(ba) is not engaged if there is no method of election provided for by a term of the agreement.

The Full Bench's reasons 68 The Full Bench found that the last paragraph of clause 3.3 of the Agreement was unlawful because it provided a method by which an employee or employer may elect (unilaterally or otherwise) not to be covered by the Agreement. The "method" that the Full Bench considered was provided for by clause 3.3, was the mechanism of the making and approval of a new project or site-specific enterprise agreement as a means by which the applicant and a subset of employees covered by the Agreement might cease to be covered by the Agreement before its nominal expiry date. 69 The principal difficulty with the Full Bench's reasoning is that clause 3.3 does not provide for any method of election. Paragraph [18] of the Full Bench's reasons assumes that the making and approval of a new agreement would constitute a mutual election not to be covered by the Agreement. To the extent that the Full Bench intended to include greenfields agreements within this reasoning, there is the problem that an enterprise agreement cannot be made as a greenfields agreement with existing employees: Aldi at [24]. The means by which an employer might enter into a greenfields agreement, and by which parties might enter into a site-specific agreement, are provided for by the FW Act, and in particular by the detailed provisions of ss 172 to 193. In our view these detailed provisions are not to be characterised as a method provided for by clause 3.3 of the Agreement. Further, in order for an enterprise agreement to apply, it must be in operation, which requires approval by the FWC: s 52(1)(a); s 54(1)(a). The requirement of approval by the FWC means that any steps taken by the employer or employees to make an enterprise agreement are ineffective in themselves to bring about an operative agreement. This is a further reason why steps taken to enter into a new site-specific or greenfields agreement should not be characterised as a method of election that is provided for by the terms of clause 3.3 of the Agreement. 70 In addition, there is nothing on the face of clause 3.3 which supports the idea that the making and approval of a greenfields or site-specific agreement would have the effect that the applicant, or any relevant employee, would cease to be covered by the Agreement. More would be required, in that there would have to be an actual change in the particular employment of an employee in order that the employee be subject to coverage under a new agreement, so that coverage under the Agreement might cease. However, whether in those circumstances the Agreement ceased to cover an employee would likely turn on the terms of any future site-specific or greenfields agreement in the form approved by the FWC.

Relief 71 As we identified at [28] above, the Full Bench allowed the appeal on two grounds. The Full Bench quashed the decision of the Commissioner and remitted the application for re-hearing on grounds that are not in issue on this application, namely the ground relating to clause 9 of the Agreement to which we have referred. 72 The applicant sought an order in the nature of a writ of certiorari directed to the FWC quashing the orders and decision made by the Full Bench. The function of an order in the nature of certiorari is to remove the legal consequences or purported legal consequences of an exercise or purported exercise of power: Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; 252 CLR 480 at [25]. The orders of the Full Bench by which the decision of the Commission at first instance was quashed and the application remitted for re-determination by another Commissioner were justified by the ground of appeal relating to clause 9 of the Agreement, which was not the subject of challenge in this Court. Therefore, the legal consequences of the Full Bench's orders should not be removed. 73 The applicant also sought declarations, the terms of which were the subject of a number of amendments. By way of supplementary submissions, the applicant sought the following declarations - 1. The Full Bench of the Fair Work Commission misconstrued the provisions of s.58 and 194(ba) of the Fair Work Act 2009 (Cth) in upholding an appeal in relation to the CPB Contractors NSW Civil Works Enterprise Agreement 2017-2021 in their decision [2018] FWCFB 5773. 2. The final paragraph of clause 3.3, Application, of the CPB Contractors NSW Civil Works Enterprise Agreement 2017 - 2021 is not an unlawful term for the purposes of s.194(ba) of the Fair Work Act 2009 (Cth) and does not render clause 3.3 an unlawful term. 3. The final paragraph in clause 3.3, Application, of the CPB Contractors NSW Civil Works Enterprise Agreement 2017 - 2021 is not inconsistent with or repugnant to s.58 of the Fair Work Act 2009 (Cth) either: (a) in respect of new employees who are employed by the Applicant at a new project or site at which a greenfields, project or site specific enterprise agreement applies; or (b) in respect of existing employees of the Applicant employed at a project or site at which a greenfields, project or site specific enterprise agreement applies and to whom the CPB Contractors NSW Civil Works Enterprise Agreement 2017-2021 previously applied in relation to other particular employment. 74 Relief in the nature of declarations was supported by the AWU, although the AWU did not submit that a declaration in the form of paragraph 1 set out above should be made. Because the Full Bench remitted the application for approval of the Agreement to a Commissioner of the FWC for rehearing, the declaratory relief that is sought by the applicant is directed to a live legal controversy between the parties: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582 (Mason CJ, Dawson, Toohey and Gaudron JJ); Plaintiff M61/2010E v The Commonwealth (The Offshore Processing Case) [2010] HCA 41; 243 CLR 319 at [103] (the Court). We do not consider that paragraph 1 of the declarations sought by the applicant is necessary, but we are of the opinion that the Court should make declarations substantially in the form of paragraphs 2 and 3 sought by the applicant, and supported by the AWU. I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices O'Callaghan and Wheelahan.

Fair Work Amendment Act 2012(Cth)

Fair Work Act 2009(Cth)ss 40A, 51, 52, 53, 58, 186, 194(ba), 562, 563(b)

Li v Chief of Army (2013) 250 CLR 328 MI&E Holdings Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2015] FCAFC 15, (2015) 228 FCR 483 MI&E Holdings Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2015] FCAFC 15; 228 FCR 483 Newlands Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2011] FWAFB 7325 Plaintiff M61/2010E v The Commonwealth (The Offshore Processing Case) [2010] HCA 41; 243 CLR 319 R v Sharma (2002) 54 NSWLR 300 Re Bolton; Ex parte Beane (1987) 162 CLR 514 Saeed v Minister for Immigration and Citizenship [2010] HCA 23; 241 CLR 252 SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 347 ALR 405 Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664 Toyota Motor Corporation Australia Ltd v Marmara [2014] FCAFC 84; 222 FCR 152 Weiss v R [2005] HCA 81; 224 CLR 300 Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; 252 CLR 480 McCallum, Moore and Edwards, Towards more productive and equitable workplaces: An evaluation of the Fair Work legislation, 2012

FLICK J: 1 On 7 November 2017 the Applicant in the present proceeding, CPB Contractors Pty Limited ("CPB Contractors"), applied to the Fair Work Commission (the "Commission") for approval of the CPB Contractors NSW Civil Works Enterprise Agreement 2017-2021 (the "CPB Enterprise Agreement"). 2 In March 2018 the Commission refused leave to intervene to the Construction, Forestry, Mining and Energy Union (now the Construction, Forestry, Maritime, Mining and Energy Union (the "CFMMEU")). The Australian Workers' Union (the "AWU"), the Commission said, was the "natural 'contradictor'": CPB Contractors Pty Limited [2018] FWC 1796 at [11] to [13]. 3 On 9 May 2018, the Commission approved the CPB Enterprise Agreement: CPB Contractors Pty Limited [2018] FWC 2580. 4 The CFMMEU appealed this decision. Following a hearing on 25 June 2018, the Full Bench of the Fair Work Commission (the "Full Bench") on 26 September 2018 quashed the decision granting approval on two separate bases: Construction, Forestry, Maritime, Mining and Energy Union v CPB Contractors Pty Ltd [2018] FWCFB 5773. 5 One basis upon which the Full Bench allowed the appeal and quashed the decision approving the CPB Enterprise Agreement was that: the final provisions of cl 3.3 of that Agreement was "rendered unlawful" by s 194(ba) of the Fair Work Act 2009 (Cth) ("Fair Work Act"): [2018] FWCFB 5773 at [17]. The other basis upon which the appeal was allowed was that: the Commission had erred in accepting an undertaking concerning cl 9 of the CPB Enterprise Agreement: [2018] FWCFB 5773 at [19]. The Full Bench ordered that the matter be remitted to the Commission for "rehearing". 6 Only the former of these two bases was in issue before this Court. It was thus common ground between all parties to the present proceeding that the Commission was required to "rehear" the application for approval of the CPB Agreement. The divergence between the parties - and the reason for the present appeal - was the extent to which the Commission could revisit the question as to whether the final provisions of cl 3.3 of the CPB Agreement fell foul of s 194(ba) of the Fair Work Act. 7 It is concluded that the Full Bench was in error in concluding that s 194(ba) "rendered unlawful" the final provisions of cl 3.3. A declaration to that effect, it is thus concluded, should be granted such that the Commission can reconsider the application for approval of the CPB Agreement free of the contrary conclusion of the Full Bench on this question. The other issues which were argued on appeal need not be decided. 8 Although concurrence is expressed with the analysis and reasons of O'Callaghan and Wheelahan JJ, which are gratefully adopted, it is considered prudent to add a few short supplementary comments.

The CPB Agreement & the reasoning of the Full Bench 9 Clause 3.3 of the CPB Enterprise Agreement provides as follows: 3.3 Application This Agreement covers all classifications referred to in Appendix "A" of this Agreement and operates in the State of New South Wales on CPB civil engineering projects and related works other than in relation to tunnelling excavation works on any such project. In addition, this Agreement will cover any other construction related classifications that are not expressly referred to in this Agreement other than classifications involved in tunnelling work. Further, the Parties agree that any of these other construction related classifications can be included at any time in this Agreement to allow coverage of any construction work that was not foreseen at the time this Agreement was made. The Parties agree to reasonably ascribe a rate of pay to these classifications. Provided that any other classifications already included in other existing CPB enterprise agreements (and which cover work outside of the application of this Agreement) cannot be added during the term of this Agreement. Any Greenfields or Project Specific Agreement made by the Company or Joint Venture which the Company is part and which is approved by FWC, will cover the Company and any Employees at that particular Project / site to the exclusion of this Agreement. It was the final paragraph to this clause, namely that relating to any future "Greenfields or Project Specific Agreement" which was the primary focus of attention before the Full Bench and this Court. 10 In reaching the conclusion that cl 3.3 offends s 58(2)(d)(i) of the Fair Work Act, the Full Bench ([2018] FWCFB 5773) concluded as follows: [16] It is clear, we consider, that the final paragraph of clause 3.3 of the Agreement, properly construed, offends s 58(2)(d)(i). In the terms in which the paragraph is expressed, it operated before as well as after the nominal expiry date of the Agreement. It provides that a later enterprise agreement approved by the Commission will cover CPB and its employees at a particular project or site "to the exclusion of this Agreement". The provision is premised on the proposition that such a project or site is one which falls within the coverage of the Agreement as set out in the first paragraph of clause 3.3, since the rationale of the provision is plainly to resolve a situation in dual coverage. The final paragraph purports to exclude the coverage of the Agreement (being the earlier agreement) in favour of the later agreement for a specific project or site. As earlier explained, an agreement cannot apply to employees unless it covers them. The intended effect of the final paragraph of clause 3.3 is therefore that the later agreement will apply and the Agreement will not at the specific project or site in question. While the Agreement remains within its nominal term, that is a result which is directly contrary to that mandated by s 58(2). [17] It follows, we consider, that the final paragraph of clause 3.3 is rendered unlawful by s 194(ba) … (emphasis in original)

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