Electrical Contractors Association of New South Wales v Electrical Trades Union of Australia, New South Wales Branch and Anor

PARTIES : FIRST RESPONDENT: Electrical Trades Union of Australia, New South Wales Branch

SECOND RESPONDENT: John Goss Projects Pty Ltd FILE NUMBER: IRC 1994 of 2003 CORAM: Wright J President; Walton J Vice-President; O'Neill C Appeal - Enterprise agreement - Appellant not a party to enterprise agreement submitted to Commission for Approval - Appellant refused leave to appear in proceedings for approval of enterprise agreement - Statutory Construction - s 34(2) of Industrial Relations Act 1996 - Whether appellant had right of appearance in proceedings for approval of enterprise agreement or required the grant of leave - Held appellant had a right of appearance in proceedings for approval of enterprise agreement - Leave to appeal granted - Appeal upheld in this respect. CATCHWORDS : Enterprise agreement - Content of enterprise agreements - Appellant contended four clauses were not capable of being included in an enterprise agreement approved by the Commission - Construction of Part 2 of Chapter 2 of the Act - Whether clauses were conditions of employment - Whether clauses were industrial matters - Meaning of "industrial matter" considered - Held impugned clauses were industrial matters and were capable of being included in an enterprise agreement - Leave to appeal granted - Appeal dismissed insofar as it sought to overturn the approval of the agreement. LEGISLATION CITED : Industrial Relations Act 1996 ss 34 35 38 191 192 Trade Practices Act 1974 (Cth) s 45E A v The Commission of Children and Young People (No.4) (2000) 104 IR 131 Akins v National Australia Bank (1994) 34 NSWLR 155 Allan v Transurban City Link Limited (2001) 208 CLR 167 AMWU v Alcoa of Australia Ltd and Others (1996) 63 IR 138 Australian Tramway Employees Association v Prahran and Malvern Tramway Trust (1913) 17 CLR 680 Big W Discount Stores v Donato (1994) 58 IR 239 Building Workers Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 Campbell's Cash & Carry Pty Limited v National Union of Workers', New South Wales Branch Award (2001) 104 IR 385 Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 106 IR 429 CCH Australia Ltd v Bowen (1998) 79 IR 206 Centurian Constructions Pty Ltd v Beca Developments Pty Ltd (In Liquidation) [1999] NSWCA 457 Club Employees (State) Award [2002] NSWIRComm 362 Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435 Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32 Employers Federation of New South Wales v New South Wales Nurses' Association and Others (1995) 64 IR 194 Federated Clerks Union of Australia v Victorian Employers Federation (1984) 154 CLR 472 Glover v Australian Ultra Concrete Floors Pty Limited [2003] NSWCA 80 In Re Moore, Exparte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 Knowles v Anglican Church Property Trust No.2 (1999) 95 IR 380 Lend Lease Hotel Intercontinental (Stage 1) Project Award [2003] NSWIRComm 314 CASES CITED : Manpac Industries Pty Ltd (formerly t/as Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of New South Wales (Inspector Glass) (2001) 106 IR 435 Metals And Engineering Workers' Union - Western Australia Branch v Robe River Iron Associates (1995) 63 IR 243 National Union of Workers' v Graincorp (2002) 117 IR 136 New South Wales TAFE Commission (Teachers and Other Educational Staff) Salaries and Conditions Award 1996 [1999] NSWIRComm 234 Nominal Defendant v Manning (2000) 50 NSWLR 139 Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 Orr v Holmes (1948) 76 CLR 632 R v Booth, Ex parte Administrative & Clerical Officers' Association (1978) 141 CLR 257 R v Portus, Ex parte ANZ Banking Group (1987) 127 CLR 358 Alcan Australia Limited & Ors Ex parte Federation of Industrial, Manufacturing and Engineering Employees, Re (1994) 181 CLR 96 Laundry Employees (State) Award (No.2), Re (1993) 49 IR 91 NSW Education Employees (Non Continuing Contract Employment) Award, Re (1999) 92 IR 239 Review of Principles for Approval of Enterprise Agreements 2002, Re [2002] NSWIRComm 342 Rothmans of Pall Mall (Australia) Limited (Smithfield Warehouse Employees) Consent Award (1995) 85 IR 149 Teachers - St Lucy's School Ltd Enterprise Agreement 1999 and Others [2001] NSWIRComm 4 Textralian Enterprises Pty Ltd v Perpetual Trustees Victoria Ltd [2000] NSWCA 176 The Queen v Industrial Relations Commission of South Australia, Exparte Master Builders Association of South Australia Incorporated [1981] SASR 535 Townsend v Townsend [2001] NSWCA 136 Transport Workers' Union of Australia, New South Wales Branch v Movers & Shakers Business Relocations Pty Limited (2001) 109 IR 249 Turner v Jupiters Mangement Limited (1989) 29 IR 276 at 277 Victims Compensation Fund Corporation v Sarah Jane Hill [2000] NSWCA 75 Wilson v The Prothonotary [2000] NSWCA 23 HEARING DATES: 04/30/2003; 05/22/2003; 05/29/2003; 07/07/2003; 07/11/2003; 07/29/2003 DATE OF JUDGMENT: 12/02/2003

APPELLANT: Mr P Kite SC with Mr Bennett of counsel INSTRUCTED BY: Electrical Contractors Association of New South Wales

LEGAL REPRESENTATIVES: FIRST RESPONDENT: Mr A Searle of counsel SOLICITOR: Mr D O'Sullivan Turner Freeman

JUDGMENT: - 17 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Wright J, President Walton J, Vice-President O'Neill C Tuesday, 2 December 2003

Matter No IRC 1994 of 2003 THE ELECTRICAL CONTRACTORS' ASSOCIATION OF NEW SOUTH WALES AND ELECTRICAL TRADES UNION OF AUSTRALIA, NEW SOUTH WALES BRANCH AND ANOTHER. Application by the Electrical Contractors' Association of New South Wales, for leave to appeal and appeal against a decision Justice Kavanagh given on 26 March 2003 in Matter No. IRC 1555 of 2003 DECISION OF THE COMMISSION [2003] NSWIRComm 404 1 This matter concerns an application for leave to appeal and, if granted, an appeal by the Electrical Contractors Association of New South Wales ("the appellant"), from two extempore decisions of Kavanagh J delivered on 26 March 2003 in which her Honour firstly denied the appellant the opportunity to appear in the proceedings and then approved an enterprise agreement entitled the John Goss Projects Pty Limited NSW Construction Enterprise Agreement 2002-2005 ("the enterprise agreement").

2 On 18 March 2003, an application was made by the Electrical Trades Union of Australia, New South Wales Branch ("the respondent") for approval of the enterprise agreement it had reached with John Goss Projects Pty Ltd. At the commencement of the proceedings before Kavanagh J, two applications were made to appear in the proceedings. The appellant sought to appear pursuant to section 34(2)(b) of the Industrial Relations Act 1996 ("the Act"), as of right on the basis that they were an industrial organisation which had "members or persons eligible to become members … affected by the agreement". They were not a party to the relevant enterprise agreement. Her Honour refused leave to appear stating: I have before me two applications to be represented at this application for approval of an enterprise agreement. The application before me comes under section 34. Relevantly I cite section 34(2)(a) to (d). The first application is brought by the Electrical Contractors Association of New South Wales. It brings an application under section 34(2)(b). Section 34(2) allows an industrial organisation may appear or be represented if its members or persons eligible to become members are affected by the agreement. Mr Newell on behalf of the association argues its "member", that is John Goss Projects Pty Limited is affected by the agreement and therefore it should have the right to appear or to be represented. Mr Harley is here representing the company John Goss Projects Pty Limited. He is here representing the company as the State Manager New South Wales. I have given Mr Newell an opportunity to argue that other members of his organisation or other persons eligible to become members could be affected by the agreement but he does not so argue. Accordingly, as Mr Harley is here representing the company which is a member of the Electrical Contractors' Association, I do not grant leave to the Electrical Contractors' Association of New South Wales to appear.

3 The second application to appear before her Honour was made by Australian Business Industrial ("ABI"). Her Honour granted leave for ABI to appear, pursuant to section 34(2)(c); that is, leave was granted to ABI to appear as a State Peak Council.

4 In approving the enterprise agreement, her Honour stated: I am satisfied the proposed agreement complies with the relevant statutory requirements including the Anti-Discrimination Act 1977. I am satisfied there is no impingement on the relevant statutory requirements with respect to leave provisions. Some issues when the application for leave was raised were considered by me as to the status of clauses 31, 32 and 33. I did not hear argument related to those clauses but I note they addressed supplementary labour, subcontracting on site and the hiring of apprentices and training. The effect of those clauses seem to me to ensure workers brought on to this site are to be paid appropriate rates of pay. … I have considered the argument of Australian Business Industrial that clause 42, Leave Reserved, is such a clause that the Commission could not be satisfied as to the net detriment test. If the leave reserved clause which in its form before me today addresses bargaining agent's fee suggested that an unknown clause was by this leave reserved clause to be implemented in the agreement ad hoc, I would comply or adopt their argument. However, I do not believe the clause has that effect. The simple words of the clause persuade me to that view, the words being "The company agrees to commence discussions with the union in relation to the future implementation of such a clause". Such clause it acknowledges must at any rate be approved by the New South Wales Industrial Commission. I do not believe that discussions interfere with the net detriment test. Accordingly, I approve the said agreement to have effect from 10 December 2002.

5 As will become apparent as we discuss the course of this appeal, the application by the appellant to appear before her Honour solely concerned its desire to have struck down clauses 31, 32, 33 and 42 of that agreement (although it accepted that the agreement may not be capable of approval if those clauses were rejected).

6 It is convenient then to set out those clauses at the outset of our decision as follows: 31. Supplementary Labour The parties agree that when necessary to meet short term peak work requirements additional labour resources will be sourced from Labour Hire Companies who have an enterprise agreement with the union signatory to this agreement. 32. Subcontracting The parties agree that when it becomes necessary to sub contract work, due to high demands within the industry, the company will endeavour to ensure that the sub contractor has a registered Enterprise Agreement with the Union. The Union commits to only sign an agreement with the same rates of pay contained in this agreement, so as to maintain a level playing field for all companies within the industry. This clause will apply to all those sub contractors who are operating under the Parent Award. 33. Group Training Companies The company when hiring apprentices or trainees from a Group Training Company shall advise the Group Training Company in writing before hiring that:

· They need to have an Enterprise Agreement with the union;

· The apprentices and trainees hired to the company shall be paid at least the rates and conditions of this agreement;

· The Group Training Company shall be notified if a site/project allowance is payable. 42. Leave Reserved The Company agrees to commence discussions with the Union in relation to the future implementation by the Union of a Bargaining Agents Fee, subject to the clause having been approved by the New South Wales Industrial Relations Commission. The course of the proceedings

7 The initial hearing of the appeal occurred on 30 April 2003. Having heard the parties on the question of leave, the application by the appellant to adduce further evidence on appeal and at least some of the submissions on the substantive appeal, the Full Bench announced the following decision: In this matter we have decided to decline to admit the evidence tendered by the appellant on leave to appeal and decided to grant leave to appeal. The Full Bench, however, wishes to take some short further time to determine the outcome of the appeal. We observe, however, that in practical terms the appellant's concerns and interests were limited to four clauses of the enterprise agreement placed before the Commission for consideration and approval, namely, clauses 31, 32, 33 and 42. As to the last of those provisions, the matters relied on by the appellant may be qualitatively different to the matters otherwise raised by it.

We also note that there has been some debate at the hearing today as to the future course of the appeal proceedings in the event that the appeal is upheld. The further time required to conclude our determination of the appeal should therefore be used by the parties for that purpose and we will direct them to confer and provide them a short amount of time for that purpose with a view to their attempting to reach agreement, or to limit their differences in that respect. We envisage a period of at least seven, but no more than fourteen days, for that purpose.

8 The operation of the four impugned clauses was stayed. The matter again came before the Full Bench on 22 May 2003. At the commencement of the hearing that day the Full Bench made the following statement: Since the matter was last before the Full Bench on 30 April 2003 when leave to appeal was granted, the appellant has provided, in accordance with directions made, a program for filing further materials for the finalisation of these proceedings. The Full Bench has listed the matter today as it has not considered that the program filed is appropriate for its intended purpose. The parties are therefore directed to confer again to redraft the programme to provide a significantly shorter time frame to finalise the matter .

The Full Bench also advises the parties that it has decided to uphold the appeal in part and the Full Bench considers upon a preliminary basis that the Full Bench should hear further submissions as to the final orders that should be made on appeal and that the Full Bench should also hear further argument, and if appropriate take further evidence, as to the orders to be made in the primary proceedings.

9 Further, the Full Bench identified that it would:

1. proceed to determine what were the appropriate orders that should have been made at first instance: see s 192(1)(a); 2. take further evidence, but its ultimate use, if appropriate, would be determined in the ultimate decision in the matter.

10 As such, the issues which fall for determination in this decision include whether Kavanagh J was correct in her Honour's construction of s 34 (2)(b) of the Act, the admission of further evidence on the appeal, and finally, in light of the conclusion reached as to further evidence, the substantive merits of the application for approval of the enterprise agreement within the context of this appeal. The proceedings before the Full Bench went forward on the basis.

11 Shortly thereafter, on 29 May 2003, the Full Bench dealt with the issuing of summonses to third parties. At the conclusion of the argument on the matter, the Full Bench delivered the following decision: The Full Bench, to the extent necessary, directs pursuant to r 91(1) that summonses in terms of Ex A not be issued to the persons, firms, companies etc listed in Ex B.

The Full Bench intends to reserve its reasons for doing so, which will be provided with the final decision in the proceedings. However, we should indicate, as presently advised, we have doubts whether the client of Mr Kite SC can be said to be a party for the purposes of r 91(1) in proceedings for approval of an enterprise agreement and whether the items sought could reasonably be said to be relevant for an appropriate forensic purpose in these proceedings.

12 Rule 91(1) of the Industrial Relations Commission Rules is in the following terms: On the request by a party, the Registrar must, if authorised by the Act and unless the tribunal otherwise orders, issue a summons for production or to give evidence.

13 The Dictionary contained in the Act does not provide any assistance in discerning the meaning of the word "party" in the relevant rule, stating only that a "party to an industrial instrument includes the successor of a party to the instrument". The appellant submitted that "party" referred to a party to the relevant proceedings in the Commission, and that in the present case the appellant was a party to the appeal. We note that the Act refers variously to a "party to the agreement" (for instance, s34(2)), a "party to the proceedings" (for instance, s166), and simply to a "party" (for instance, r91). In our view, there are substantial doubts as to whether the appellant should be considered a party to proceedings for approval of an enterprise agreement where it is not a party to the agreement itself.. However, in the context of an application for leave to appeal and appeal against a decision of the Commission, we are inclined to agree with Mr Kite that the appellant in the present case is a party to the appeal (although it does not follow that summonses would issue in an appeal in the ordinary course because of the restrictions applying to the receipt of further evidence in such matters: see s 191(2)).

14 Nevertheless, we are not satisfied that there exists an appropriate forensic purpose for the issuing of 38 summonses to third parties for the purpose of obtaining evidence regarding their agreements with the respondent or that there would be any probative value in any evidence so obtained. The appellant's submissions in this regard focused on the existence of a "pattern agreement" which, according to the appellant, firstly provided evidence of an "acquisition situation" which breached the Trade Practices Act and secondly demonstrated the effect of clause 42 of the agreement.

15 We are not satisfied that any agreements or arrangements the first respondent may have with third parties, either express or implied, have any relevance to the matters presently before this Court. The appellant asserted that evidence of similar agreements and their effect are relevant to the question of "consistency across the board", that is, what happens in respect of one agreement should be seen as an aid to understanding what another agreement in similar terms seeks to achieve. This argument must fail on any objective assessment. The requirements for the approval of enterprise agreements by the Commission are clearly set out in s 35(1) of the Act. There is no warrant for regard to be had to any matters outside those specified in s 35(1)(a) to (d).

16 The appellant conceded that there is no prohibition in the Act on the approval of a series of identical or about identical agreements. Whether a particular enterprise agreement offended the Trade Practices Act or fails to meet the requirements for approval as stipulated in s 35(1) must be determined having regard to the terms of the enterprise agreement itself and not by reference to any presumed or alleged effect on similar agreements at other enterprises.

17 The grounds of the appeal in the Application for leave to appeal and appeal were, in summary, as follows:

a. Her Honour erred in her construction of section 34 and her subsequent failure to permit the appellant to appear in the proceedings;

b. Her Honour erred in approving the enterprise agreement in so far as her Honour held that Clause 31 (Supplementary Labour), Clause 32 (Subcontracting), Clause 33 (Group Training Companies) and Clause 42 (Leave reserved for Bargaining Agent's Fee) were clauses which could or should be contained in an enterprise agreement approved by the Commission.

c. Her Honour erred in failing to follow or apply the decision of the Commission in TWU v Movers & Shakers Business Relocations Pty Ltd (2001) 109 IR 249.

18 Before embarking any further on discussion of the relevant issues on appeal, it necessary to deal first with the respondent's submission that the appeal was incompetent as the appellant had no standing to bring it.

19 The appellate scheme under the Act is provided for in Part 7 in Chapter 4 of the statute. The key provisions for the purposes of this appeal are ss 187, 188 and 190 to 192. For present purposes, the provision of particular importance is s 187, which provides: 187. Appeal to Full Bench from decision of Commission The following may appeal to a Full Bench of the Commission against a decision of the Commission constituted by a single member: (a) a party to the proceedings in which the decision was made,

(b) an industrial organisation, or an association registered under Chapter 6, affected by the decision,

(c) the Minister if the Minister considers that the public interest is, or is likely to be, affected by the decision,

(d) the President of the Anti-Discrimination Board if that President considers that the decision is inconsistent with the principles contained in the Anti-Discrimination Act 1977 .

20 The application for leave to appeal and appeal identified the appeal as having been brought in reliance upon s 187(a) and (b) of the statute. The reliance upon s 187(a) is misplaced as the appellant did not become a party to the proceedings at first instance. The substantive issue as to competence of the appeal is whether the appellant is an industrial organisation "affected by the decision" for the purposes of s 187(b). That matter was addressed in Employers Federation of New South Wales v New South Wales Nurses' Association and Others (1995) 64 IR 194 in dealing with an appeal on the construction of that phrase as it appeared in s 382(2) of the Industrial Relations Act 1991.

21 In that case, the Full Bench, having referred to Re Laundry Employees (State) Award (No.2) (1993) 49 IR 91, emphasised that there must be a "sufficient interest in the proceedings themselves or in the outcome of the proceedings", before continuing: These cases illustrate the need to have regard to the statutory scheme and the nature of the alleged effect upon a claimant of a right to appeal. It seems to us, assisted by these authorities, that the correct view is that in order to be affected in the relevant sense there must be some prejudice or detriment attaching to the organisation and its representative capacity or attaching to its members. That prejudice or detriment cannot be fanciful or remote and must be related to or caused by the decision with respect to which the appeal is instituted. Such prejudice or detriment may be contrasted with mere disappointment at the outcome of the proceedings.

22 In our view, this question may be simply resolved. The issue largely depends on whether the appellant had a right of appearance before Kavanagh J. As we will explain in one moment, we are satisfied that Kavanagh J was in error in concluding that the appellant required leave of the Commission in order to appear in the proceedings below. In having been refused the opportunity of appearing at first instance, the appellant had clearly suffered relevant "prejudice or detriment attaching to the organisation and its representative capacity" that was "related to or caused by the decision", in a manner that was not merely "fanciful or remote" in terms of the discussion in the Laundry Employees case. This was not a case in which the appellant was merely disappointed at the outcome of the proceedings. If, as we have found, the appellant was entitled as of right to appear at first instance it must follow that it was an organisation 'affected' by the decision of Kavanagh J in that its right of appearance was refused.

23 Turning then to the substantive issues raised on appeal, it is convenient to approach the resolution of the issues in two stages; the first relating to the operation of s 34 of the Act and in particular whether her Honour was correct in her construction of that provision, and secondly, giving consideration to the substantive merits of the application for approval of the enterprise agreement (as the second aspect of the appeal, in essence, challenges the decision at first instance to approve the agreement).

24 We propose to provide our reasons at this point for upholding the appeal in respect of the first ground of the appeal on 22 May 2003. We are satisfied that leave to appeal should be granted in that respect as the appeal raises important issues of practise and procedure in relation to the approval of enterprise agreements.

25 This issue essentially involved the construction of s34 of the Act. Section 34 is in the following terms: 34. Application for approval of enterprise agreement (1) Application for approval of an enterprise agreement may be made by lodging the agreement with the Industrial Registrar in accordance with this Part and the rules of the Commission. (2) At proceedings of the Commission relating to any such application for approval, the following may appear or be represented: (a) any party to the agreement, (b) an industrial organisation, if its members or persons eligible to become members are affected by the agreement, (c) a State peak council (but only with leave of the Commission), (d) the President of the Anti-Discrimination Board (but only with leave of the Commission). (3) The Commission is to deal with any such application for approval within 28 days, unless it requires additional time to do so because of the special circumstances of the case.

26 The appellant contended that Kavanagh J was in error in concluding that leave was required in order for it to appear, as that organisation was an "industrial organisation [with] members or persons eligible to become members … affected by the agreement". Her Honour's decision in that regard was said to be in conflict with the decision of Peterson J in Transport Workers Union of Australia, New South Wales Branch v Movers & Shakers Business Relocations Pty Limited (2001) 109 IR 249.

27 In Allan v Transurban City Link Limited (2001) 208 CLR 167 (at [15] - [16]), the majority of the Court (Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ), made the following observations on the "standing" provisions in the Administrative Appeals Tribunal Act 1975 (Cth) (footnotes omitted): The expression "affected by" and cognate terms appear in a range of laws of the Commonwealth. This is not the occasion for a disquisition on that topic. It is necessary to answer the questions posed above in respect of s 119(1) of the Authority Act by reference to the subject, scope and purpose of that statute , rather than by the application of concepts derived from decisions under the general law respecting what has come to be known as "standing". "Standing" is a metaphor to describe the interest required, apart from a cause of action as understood at common law, to obtain various common law, equitable and constitutional remedies. In Re McHattan and Collector of Customs (New South Wales) , Brennan J stated that "[a]cross the pool of sundry interest, the ripples of affection may widely extend". However, as Davies J pointed out in Alphapharm Pty Ltd v SmithKline Beecham (Australia) Pty Ltd , Brennan J "did not propose that any ripple of affection would be sufficient to support an interest". A particular statute may establish a regime which specifically provides for its own measure of judicial review on the application of persons meeting criteria specified in that statute. The present case involves such a statute. The starting point, as indicated by several authorities in the Full Court of the Federal Court, is the construction of the Authority Act with regard to its subject, scope and purpose. (emphasis added)

28 Kirby J, whilst in dissent in the ultimate result, took a similar approach as to this issue, stating (at [53] - [54], footnotes omitted): The question presented by the appeal, both in this Court and in the Federal Court, could thus be described, in general terms, as one concerned with the right of the appellant both to request the DAA to reconsider its decision (under s 119 of the DAA Act) and to make application to the AAT for review of the decision of the DAA (under s 120 of the DAA Act and s 27 of the AAT Act). However, with all respect to the second Full Court, it was not correct to regard the "starting point" for the resolution of the problem presented by the appeal as the decision in Boyce v Paddington Borough Council or the holdings of this Court concerning the general law of standing in Australian Conservation Foundation v The Commonwealth , Onus v Alcoa of Australia Ltd , Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (SA) or Bateman's Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd as their Honours appeared to have thought. The true starting point for analysis was a close examination of the legislation in question. In this respect I agree with the approach adopted by the joint reasons. There is a contemporary tendency, noted in other cases, to avoid or postpone such statutory analysis out of a preference for the general observations of judges concerning identical or analogous legislative provisions or principles of the common law. In a case such as the present the correct answer is likely to be masked by such an approach. (emphasis added)

29 His Honour emphasised that "the solution to the problem [of standing] in a particular case must always take as its starting point the language and structure of the legislative prescription in question". See also the similar approach taken by Wright J, President in Commissioner of Police v SAS Trustee Corporation [2002] NSWIRComm 31 at [38] to [52].

30 In our view, a literal reading of the provisions of s34(2)(b) clearly confirms that the appellant had a right to appear at first instance. The provision, unlike sub-clause 34(2)(c) and (d), does not have a leave requirement, and limits the right of appearance "at proceedings of the Commission relating to any [application for the approval of an enterprise agreement]" to industrial organisations whose eligibility rules extend to persons affected by the enterprise agreement. (We note there was no issue that the appellant met that description). The word 'may' appearing in this sub-section, when read in context, is plainly not intended to confer a discretion on the Commission but rather affords a right of appearance to an industrial organisation, if it chooses to do so, provided the criterion in in s32(2)(b) is met.

31 The same conclusion may be reached by adopting a purposive approach to the construction of the provision; that is, by having regard to the "subject, scope and purpose" (Allan v Transurban City Link Limited at [15]) of the Industrial Relations Act and the role of industrial organistions in its administration and operation. We note, in this respect, the observations of the Full Bench as to the role of industrial organisations in the administration of the Act, and in particular, the observations as to "strong collective themes" in the Act, in Re Club Employees (State) Award (2002) 123 IR 272 (at [82] - [84]): 82 In adopting a purposive approach to the interpretation of s 6(2)(i) we observe that the provision exists in the context of a remedial statute that has as one of its objects the following: 3. Objects

(d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies, ... 83 Moreover, whilst the Industrial Relations Act contains extensive provisions dealing with the rights of the individual (for example, Ch 2 Pt 6 - Unfair dismissals, Ch 2 Pt 9 - Unfair contracts, Ch 5 Pt 1 - Principles of association) it has a strong collective theme running through it. That is, embodied in the statute is a system of industrial relations that relies for its operation on collective representation through registered bodies of employers and employees. This is manifested in the fundamental processes for dealing with industrial disputes and the making of awards and enterprise agreements.

84 Given the object of the Act expressed in s 3(d) and the importance, perhaps necessity, of representative bodies to the machinery of industrial relations in this State, an award provision enabling payroll deductions for the purpose of facilitating the payment of an employee's union membership fees could not be said to be inconsistent with either the Act's object or the policy framework in which it operates. Indeed, such a payroll deduction facility may be seen as a means of directly encouraging representative bodies of employees.

32 It was "this context" in which the Commission turned to consider s 6(2)(i) of the statute. The Full Bench emphasised the collective theme in the statute at [104] and following in this way: 104 These matters are of significance, on Mr Shaw's submission, as the Act expressly recognised that organisations of employees and employers are "fundamental to the purposes of the Act" and ought be encouraged. The Commission, would be acting in accordance with its "legislative charter" if it positively encouraged not only the formation of such bodies but their vibrant, lively and continued existence by facilitating ease of membership and the maximum migration of membership. We agree. 105 We have earlier referred to the strong collective theme which underlies the Act. Whilst Mr Shaw took us to a number of authorities dating to the earlier parts of last century in support of his construction of the Act: see Australian Tramway Employees Association and Brisbane Tramways Company Limited (1912) 6 CAR 35, Australian Builders Labourers Federation v Archer (1913) 7 CAR 210, Australian Ship and Wharf Workers Association v Waterside Workers' Federation of Australia (1919) 13 CAR 4, Federated Clothing Trades of the Commonwealth v Archer (1919) 13 CAR 647, Federated Clerks Union of Australia v Altona Petrochemical Company Pty Limited (1973) 150 CAR 387, it is not necessary to embark upon a detailed historical analysis to determine the object or purpose of the current statute. 106 Although we have had regard to those authorities and the dicta in them as to positively facilitating and encouraging registered organisations, or as to taking such aspects into account in the exercise of the tribunal's functions and jurisdiction , and readily recognise that observations upon the construction of statutes in similar form may be of assistance to our task, we would emphasise, in accordance with our observations on the appropriate construction of statutes, the Commission must relate the exercise of its jurisdiction to the statutory mandates and limitations in the Industrial Relations Act.

33 In our view, the provisions of s 32(2)(b) reflect the intention of the legislature to encourage collective organisation in industrial relations (for the representation of both employers or employees) by providing that such organisations are to be heard in relation to the approval of enterprise agreements affecting the interests of persons eligible to be members. Second Stage of the Appeal

34 The remaining aspect of the appeal concerned the second primary contention of the appellant; namely, that the impugned clauses must be rejected (for various reasons), and therefore, the Commission should not have approved the enterprise agreement. We note, in this respect, that the parties sought that the Full Bench examine the question on the appeal rather than, as might otherwise be appropriate, by remittal to a Member of the Commission.

The Appellant's Submissions 35 The fundamental starting point for the appellant's submissions was that the impugned clauses "seek to restrict the engagement of outside labour to companies which have an enterprise agreement with the ETU". On its submission, this "can only mean" an enterprise agreement in terms of the "pattern bargain" which the ETU has adopted. From that proposition, the appellant contended the agreement should not be approved as the "Commission cannot be satisfied that … the agreement is an enterprise agreement within the meaning of the Act, … [that] the agreement complies with all relevant statutory requirements (or the principles established by the Commission) … [that] the effect of the agreement is understood by the parties … [or] that the agreement does not provide a net detriment to employees".

1. Includes matters that are not conditions of employment; 2. Is contrary to ss35 (1) and (3), 146 (2)(a), 209 and 210 of the Industrial Relations Act and s45E of the Trade Practices Act 1974 (Cth).

3. Is contrary to the principles established by the Commission in respect of the approval of enterprise agreements and in particular, Principle 4.

37 The appellant drew attention to the matters identified in Re Review of Principles for Approval of Enterprise Agreements 2002 (2002) 121 IR 144 and in particular, the observations of the Full Bench at [28] sub-paragraphs (1), (3) and (4), contending that those matters are relevant to the consideration of any provision in an enterprise agreement - namely, "whether each clause is a condition of employment and whether there has been a process of ensuring sufficient information to all employees to be covered".

38 The appellant submitted, "for that reason, the history of the process of negotiation of the agreement must be considered". In that regard, the appellant contended that the enterprise agreement was a "pattern agreement", that is, a "standard agreement [sought by the union] with all employers in the industry". On the appellant's submission: It is a concomitant of this that the process of negotiation is conducted at a higher level than the individual enterprise.

39 The appellant's submissions then involved into a recitation of the evidence contained in the evidence of Gerard Boyce and the history of the negotiations surrounding this agreement. In particular, the submissions directed attention to the signing of a "Memorandum of Understanding" (the MOU), which was to operate side by side with the enterprise agreement. On the appellant's submission, this MOU included a "full bargaining agents fee clause" together with the other clauses challenged in the appeal. It is this approach by the respondent, involving as it does, reliance upon the MOU, which on the appellant's submission enlivens the observations of the Full Bench in Rothmans of Pall Mall (Australia) Limited (Smithfield Warehouse Employees) Consent Award (1995) 85 IR 149 at 153 - 156.

40 On the appellant's submission, there are "three clear principles" to be extracted from the Full Bench's reasoning in Rothmans:

1. The parties seeking the Commission's approval have a duty to disclose the full terms of their agreement to the Commission; 2. The Commission, when exercising its functions, is to have regard to what is in substance the entirety of the agreement; and 3. The Commission will not approve agreements which are contrary to public policy and thereby the public interest.

41 The appellant's submissions were then directed to the impugned clauses, dealing firstly with the leave reserved clause. In the appellant's submission, the title of the leave reserved clause was a misnomer and the clause itself was unnecessary, having regard to the purpose of a leave reserved clause as discussed in New South Wales TAFE Commission (Teachers and Other Educational Staff) Salaries and Conditions Award 1996 (1999) 123 IR 360 and the purpose of a no extra claims clause discussed in Re NSW Education Employees (Non Continuing Contract Employment) Award (1999) 92 IR 239, as s 43 permits an enterprise agreement to be varied at any time by a further enterprise agreement. If the respondent can secure the agreement of the employer to a new enterprise agreement during the operation of the award, then it can be varied. The appellant contended from that analysis that the clause had an ulterior purpose - that purpose being the "implementation of a bargaining agents fee". So much, in the appellant's submission, is clear from the terms of the MOU; for the MOU to operate otherwise, would result in a breach of s 119 of the Act.

42 The appellant also contended that a breach of s119 was "not excused by any authority in an industrial instrument or executed by an employee". It was submitted that ss118 and 119 were directed to "different subject matters": s118 dealing with authorised deductions and s119 dealing with directions by the employer as to how an employee spends the employee's remuneration. Even if an employee were to authorise the deduction of a bargaining agents fee, the inclusion of such a provision within an enterprise agreement would remain a breach of s 119 of the Act as such a provision is a direction by an employer as to how an employee will spend his remuneration. It is the fact that the direction of the employer forms part of the conditions of employment that is objectionable.

43 It was submitted the legislation required that the parties to the agreement understand the effect of the agreement. In this respect it was the parties' understanding that was relevant. The appellant contended that, if the Commission's construction of the agreement differed from the understanding of the employees, then the agreement "cannot be approved".

44 The appellant contended that the bargaining agents fee clause was a "manipulation" that is contrary to public policy, when regard is paid to s 209 of the Act, and also that it is contrary to s 210(1)(b) insofar as it requires a non-union member to pay the fee.

45 Moreover, on the appellant's contention, a bargaining agents fee may affect the operation of the "no net detriment test" although no submission was directed specifically to how the net detriment test may be effected by the existence of such a clause.

46 Finally, as to the bargaining agents fee, as indeed with the other remaining challenged clauses, the appellant contended that they did not contain or relate to a "condition of employment".

47 As to the other challenged clauses, the appellant contended that each clause comprehends "the acquisition of additional labour from external suppliers" and each "in substance", restrained the company from acquiring services from companies "other than those which have an enterprise agreement with the ETU".

48 These provisions, on the appellant's submission, do not go to the "security of employment" for the relevant employees - when the impugned provisions are compared to those in previous agreements, "they go to securing a relationship between the suppliers and the ETU".

49 In addition to not being conditions of employment, the appellant contended that these provisions were in breach of s 45E of the Trade Practices Act. The clauses amounted to "contracts, arrangements or understandings between [the company], the first person, and the ETU, an organisation of employees, the purpose or purposes of which are or include preventing or hindering [the company] from acquiring or continuing to acquire services from the second person (the labour hire company, subcontractor or group training company)". Further, given the existence of the clauses in the agreement, it can "confidently be assumed" that the company is "accustomed" to acquiring supplementary labour from time to time.

50 On the appellant's submissions, the agreements are "clearly unlawful" and as such are contrary to s 35(1)(a) and "are contrary to public policy and therefore the public interest": see s 146(2)(a). The agreements should not be approved.

51 ABI, although a respondent to the appeal, adopted the submissions of the appellant.

52 ABI also contended that the leave reserved clause made the relevant agreement "uncertain" in that it "suggests that provisions already agreed to by the parties, … will be the subject of discussions regarding their future implementation". Those provisions are not before the Commission and have not been subject to the considerations identified in Re Review of Principles for Review of Enterprise Agreements 2002. Further, ABI contended that, in the absence of being "fully informed by the parties in relation to the contents and effect of an enterprise agreement," the requirements of the Act and the principles could not be properly considered.

Respondent's Submissions 53 The respondent, having emphasised the nature of an appeal under the provisions of Pt 7 of Chapter 4 of the Act by reference to Re Solicitors State Award (No.3) (1997) 72 IR 225, Haynes v C.I & D Manufacturing Pty Ltd (194) 60 IR 147 and King v State Bank of New South Wales (No.2) [2002] NSWIRComm 353, and, in particular, emphasising that "the powers of the Full Bench are not at large in the exercise of power in an appeal but are directed towards the decision that is the subject of the appeal", contended that as the appeal was an appeal stricto sensu, the appellant must demonstrate "a material error of fact and/or law such that the decision reached could not, or at least should not, have been reached had the error not been made".

54 The appellant's contention that it was denied an opportunity to be heard was, it was contended, an "insufficient basis" on which to set aside or otherwise interfere with the decision at first instance, even if it be concluded that the appellant had a right to be heard. On its submission, the Full Bench would need to conclude that that failure led "directly to the agreement not conforming to the legislative requirements".

55 This conclusion, it was submitted, flowed from the "mandatory language" of s 35(1) of the Act - in that "there is no discretion reposed in the Commission regarding the approval of enterprise agreements once the preconditions in s 35(1) have been met". The respondent supported the submission that the provisions relating to enterprise agreement were mandatory, by contrasting the language in s 35 with the permissive "may" in ss 10 and 11 of the Act relating to awards. 56 The respondent contended that the "purpose of clauses 31 to 33 of the enterprise agreement is to maintain the integrity of industrial standards that apply in the industry pursuant to enforceable industrial instruments created under the Act, and to do so through the process of industrial negotiation and agreement" - that is, "that workers brought onto the site are to be paid the appropriate rates of pay", although the respondent did concede that cl 31 was in "directory language".

57 Clause 32, only required, it was submitted, the relevant company to "endeavour" to take certain action, and clause 33 merely required the giving of a notice, prior to engaging a relevant employee. There is no specific clause of employment or term of employment identified in the provision. Moreover, the second aspect of clause 33 was identified by the appellant as being a desirable industry practice - there is "no indication that the union proposes or has proposed any alteration to this industry practice".

58 It was submitted that, leaving aside clause 31, "there is nothing in these clauses to suggest … that they in any way restrain the signatory company from acquiring services from companies other than those with agreements with the union". Further, on the respondent's submission, "the sole purpose of all the clauses is to protect industrial standards". There is nothing, on the respondent's submission, from which it could be inferred that "any agreement will be in identical terms to that of the instant agreement". Whilst the respondent conceded that it is "committed to pattern bargaining in the industry" its submissions emphasised "that does not mean it is necessarily wedded to this particular agreement indefinitely or in every circumstance".

59 As to the appellant's submission that the relevant clauses are not "conditions of employment", but go to "commercial relationships between John Goss and external suppliers", the respondent contended the appropriate characterisation of the impugned clauses was that the clauses were "directed to, and have as their subject, the conditions under which the individual workers engaged by John Goss, both directly and indirectly as employees and as hired labour …, perform work under the agreement". The Commission has recognised the need to protect the conditions of workers sourced through labour hire arrangements: see Oang Nguyen v ANT Contract Packers Pty Ltd & Theiss Services Pty Ltd [2003] NSWIRComm 1006.

60 Further, as to the alleged breach of the Trade Practices Act 1974 (Cth), the respondent contended the "situations covered by clauses 31 to 33 are not, on their face, an acquisition situation within the meaning of the trade practices legislation". Moreover, the purpose to which the agreement is directed is not "preventing or hindering [the] acquisition of labour", although it was conceded that "it may be arguable that this could be an effect of the clauses". Further, it was contended, "there is no evidence that John Goss is accustomed to acquiring supplementary labour from time to time, other than the hiring of apprentices". Section 45E only "covers customary acquisition or supply as defined" - that is, "regular", the "latest acquisition" and an acquisition within "the immediate preceding three months" (see s 45(8) of the Trade Practices Act).

61 It was submitted that to establish a breach of the relevant provision, the Full Bench would both need to be satisfied that the circumstances are, prima facie, within the terms of the particular statutory provision, but also that it does not fall within the exemption in s 45E(4). To establish such a breach, the appellant needs to identify a "specific second person" - insofar as this relates to clause 33, the appellant has not done so.

62 On the respondent's submission, "the clauses are part of a pattern agreement. Not every clause will be relevant to every employer at the precise moment of approval. Clauses may seek to address a situation present in the industry generally. Their presence in the agreement may seek to address a situation or concern to ensure there is a mechanism to address a matter in the agreement if it arises in the future". Further, it was submitted that cl 33 does not prohibit or restrict John Goss from acquiring apprentices from any source.

63 As to the leave reserved clause, the respondent submitted that the clause "means what is says on its face". It provides for discussions. It cannot provide for the implementation of the clause, until that clause has been ratified by the Commission. The appellant's submissions are directed to something other than the leave reserved clause and are irrelevant to the issue which falls to be determined - that is, whether the enterprise agreement should have been approved.

64 Finally, in relation to the alleged unlawfulness under Part 10 of Chapter 2 and Part 1 of Chapter 5, it was submitted that the appropriate action, if there be alleged unlawfulness, is an action alleging breach. Further, such an assertion "cannot be correct" having regard to the observations of the Full Bench in Re Principles for the Approval of Enterprise Agreements 2002 at [26], where it was stated there was no "provision of the Industrial Relations Act or principle of law which, per se, would prohibit the inclusion of a provision in an enterprise agreement which would permit the payment of a fee by employees to a third party involved in the negotiating of or maintenance of an enterprise agreement". Similarly, the contention that such a provision cannot be a "condition of employment" again fails to recognise the decision of the Full Bench in Re Principles for the Approval of Enterprise Agreements at [25]. The determination of such an issue must be made by reference to the individual clause.

65 In relation to the supposed principles derived from the Rothman's Principle decision, it was submitted that the decision was "not authority for the three propositions advanced" by the appellants. There is "no principle of law or prohibition in the legislation on collateral agreements operating side by side with registered industrial instruments". The relevant award in Rothmans was refused not because the full terms of the agreement were not disclosed, but because the total agreement contained a provision that was contrary to law. The decision in Rothmans is distinguishable, in that the issue there discussed does not arise unless the Commission otherwise concluded that the relevant clauses are "contrary to law".

66 As observed earlier, the remaining issues requiring resolution in this decision may be identified as, firstly, the admission and use of further evidence, and, secondly, whether the agreement should have been approved by her Honour, having regard to the issues raised about the enterprise agreement in these proceedings. The appellant raised several arguments against the approval of the agreement and it will be convenient to deal with each of those in turn. Before doing so, it is necessary to determine the factual matrix in which that assessment will be made.

67 The issue of further evidence on appeal is significant in these proceedings, for two reasons. Firstly, having regard to the respondent's submissions, it would appear that there has not been a decision of the Commission on the meaning to be attributed to "special grounds", as provided in s 191(2) of the Act. Secondly, how does the admission of further evidence on appeal affect the nature of an appeal to the Full Bench of the Commission, in particular, having regard to s 191(3)? It is useful to briefly turn to the parties submissions at this point.

68 As for what may constitute "special grounds", the appellant contended that further evidence should be admitted on the appeal as it was not afforded the opportunity of being heard below - these circumstances, if for no other reason, ought fall within the meaning of "special grounds".

69 The respondent referred to King v State Bank of New South Wales (No.2) and CCH Australia Ltd v Bowen (at 210) as highlighting the "difficulties for the appellate bench" which may arise when the traditional appeal principles are to be applied to a case in which further evidence is to be admitted. From that submission, the respondent contended that it became "necessary" to determine "whether this appeal is an appropriate case for the Full Bench to receive further evidence".

70 Having referred to Big W Discount Stores v Donato (1994) 58 IR 239 at 243, Turner v Jupiters Mangement Limited (1989) 29 IR 276 at 277 (this latter decision having been adopted by the Full Bench of this Court in Bowen at 211) and Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 143 (again adopted in Bowen at 213 and noting that Bowen itself was later approved by the Full Bench in Knowles v Anglican Church Property Trust (No.2) (1999) 95 IR 380), the respondent submitted that the appellant needed to demonstrate "special grounds" that would warrant the admission of further evidence, and that for the appellant to succeed in this regard it must demonstrate "to the comfortable satisfaction of this Full Bench that the evidence sought to be adduced, if received, would result in at least the real possibility that the aspect of the primary decision to which the evidence relates would not be overturned". On the respondent's submission, the appellant had not satisfied the test established in Bowen.

71 In the alternative, the respondent contended that it was not sufficient for the Full Bench to come to the conclusion that there was a "real possibility" that a different outcome would be achieved if the evidence were admitted. On its submission, "the plain words used in s191(2) [make it] clear that the legislature intended this mechanism to be used only sparingly and in the situation of most need".

72 The term "special grounds", on the respondent's submission, had not been the subject of "authoritative pronouncement in this jurisdiction", and sought to draw parallels between the phrase "special grounds" in s191(2) and the "special case" concept: referring to Re Kellogg (Australia) Pty Ltd v Federated Millers and Mill Employees Association of Australasia, NSW Branch (1990) 39 IR 1 and AMWU v Alcoa of Australia Ltd and Others (1996) 63 IR 138. On the respondent's submission, for a matter to be identified as a "special case" it must have "some particular or unusual feature". In the determination of what constitutes "special grounds" for further evidence on appeal, the respondent contended that an appellant "would need to show that there is some feature or circumstance that takes it out of the ordinary course. A special feature that affords for modifying or departing from the usual rule" (see Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576 at 578 - 579; Springfield Nominees v Bridgelands Securities (1992) 38 FCR 217 at 223 and Re Australian Federation of Principals Employed in Cahtolic Schools (1993) 49 IR 1 at 4 and decisions from this jurisdictions including Re Ambulance Employes (State Award) (1988) 25 IR 38; Corrections Health Service Nurses' (State) Award (No.2) (2002) 112 IR 402 and Storeworkers - IGA Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156.

73 There was, on the respondent's submission, "nothing that is reasonably capable of satisfying the description of "special" as it is understood in this jurisdiction such as would warrant the exercise by the Full Bench of its discretion under s191(2)". Further, on the respondent's submission, the material sought to be adduced could not reasonably be said to be relevant for an appropriate forensic purpose in this proceeding.

74 The leading authority on the admission of further evidence in this jurisdiction is the judgment of the Full Bench in CCH Australia Ltd v Bowen (1998) 79 IR 206 (noting it was adopted by the Full Bench in Knowles v Anglican Church Property Trust No.2 (1999) 95 IR 380). We also note that in Manpac Industries Pty Ltd (formerly t/as Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of New South Wales (Inspector Glass) (2001) 106 IR 435, the Full Bench refused to admit further evidence as it would not have "further[ed] a determination of the essential issue" on appeal: see [4] - [6].

75 In Bowen, having been referred to decisions including Orr v Holmes (1948) 76 CLR 632 and Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435, the Full Bench held (at 211): We have a concern that the authorities in the High Court to which we were referred as to the tests to apply in considering whether to allow further evidence on appeal were all in the context of applications for a new trial. Having in mind the terms of s 191(2) of the Act, and the powers on appeal available under s 192(1) thereof, we would not wish it to be taken as our view that for further evidence to be heard on an appeal it must necessarily be of such a nature as would make it almost certain that an opposite result would have been reached if the evidence had been adduced at first instance. As Dixon J said in Orr v Holmes (at 642) - ''But the evident purpose (of the applicable tests) is to ensure that new trials will not be granted because of fresh evidence unless it places such a different complexion upon the case that a reversal of the former result ought certainly to ensue'' (emphasis added). Given that each case requires consideration in light of its own particular circumstances, it seems to us only open to hold, as the Full Commission did in Donato (at 243), that the purpose of fresh evidence is to avoid ''a miscarriage of justice'' and, as Northrop J said in Turner (at 277), that the power to allow further evidence on appeal ''is exercised rarely and in exceptional circumstances only''. Our opinion is that the potential mischief if the evidence not be admitted must be sufficiently operative on the challenged decision and as would cause real prejudice to the party seeking to lead such additional evidence if it were not given. We would emphasise, however, that if the further evidence would likely lead to disputed questions of fact or involve the credibility of witnesses then ordinarily it should not be heard by the Full Bench itself but by a single member pursuant to the courses on appeal available under s 192(1), either the member who made the challenged decision or another member sitting alone depending upon the circumstances involved.

76 The Full Bench observed that the further evidence in issue in that matter was not evidence that had arisen following the determination of the first instance decision, and referred to the observations in Quade, to the effect that in circumstances where evidence had only come to light following a decision on the merits, "considerations of public interest support [the requirement that such evidence only be admitted in exceptional circumstances] in that it is desirable in the public interest that there be finality in litigation in other than the truly exceptional case". That position was contrasted with the position then before the Full Bench, that is, where "the unavailability of the evidence at first instance resulted from a significant failure by the successful party", in which case: [T]he application of the general rule admitting fresh evidence if it was ''almost certain'' (see Orr v Holmes ) or ''reasonably clear'' (see Cowan ) that the opposite result would have occurred would not, particularly where the failure was deliberate or unexplained, serve either the demands of justice in the individual case or the public interest in the administration of justice generally.

77 The Full Bench then set out the observations of the High Court in Quade at 142 - 143, where the Court emphasised that, in such circumstances: It is neither practicable nor desirable to seek to enunciate a general rule which can be mechanically applied …. The most that can be said is that the answer to that question in such a case must depend upon the appellate court's assessment of what will best serve the interests of justice, 'either particularly in relation to the parties or generally in relation to the administration of justice' (cf, eg, McDonald v McDonald (1965) 113 CLR 529 at 533, 542) … [taking into account] a variety of possibly competing factors …While it is not necessary that the appellate court be persuaded in such a case that it is 'almost certain' or 'reasonably clear' that an opposite result would have been produced, the question whether the verdict should be set aside will almost inevitably be answered in the negative if it does not appear that there is at least a real possibility that that would have been so.'

78 As can be gleaned from the above passages in Bowen, the Full Bench was clearly not seeking to provide any exhaustive analysis of what may constitute "special grounds" for the purpose of s 191(2), but rather was emphasising that the admission of further evidence, in circumstances akin to those then before the Commission, "must depend upon the appellate court's assessment of what will best serve the interests of justice". It is instructive that the further evidence was ultimately refused. Of course, those observations were made in the context of an appeal from an unfair dismissal matter which sought to challenge the discretionary relief that had been afforded the applicant at first instance. They are markedly different from the circumstances pertaining to the present appeal.

79 We agree with the observation of the Full Bench in Bowen that the resolution of an issue relating to further evidence on appeal "must depend upon the appellate court's assessment of what will best serve the interests of justice" and that the approach to the admission of further evidence may be different, depending upon the circumstances in which the further evidence came to light.

80 Whilst there are clearly differences in the nature of the appellate scheme, particularly having regard to s 75A (5) and (6), it is useful to have regard to the way in which the Court of Appeal has approached the issue of further evidence on appeal, under s 75A of the Supreme Court Act 1970. Section 75A provides: 75A. Appeal (1) Subject to subsections (2) and (3), this section applies to an appeal to the Court and to an appeal in proceedings in the Court. … (5) Where the decision or other matter under appeal has been given after a hearing, the appeal shall be by way of rehearing. (6) The Court shall have the powers and duties of the court, body or other person from whom the appeal is brought, including powers and duties concerning: (a) amendment, (b) the drawing of inferences and the making of findings of fact, and (c) the assessment of damages and other money sums. (7) The Court may receive further evidence. (8) Notwithstanding subsection (7), where the appeal is from a judgment after a trial or hearing on the merits, the Court shall not receive further evidence except on special grounds. (9) Subsection (8) does not apply to evidence concerning matters occurring after the trial or hearing. (10) The Court may make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made or which the nature of the case requires.

81 A leading authority on what may constitute "special grounds" (for the purpose of s 75A(8) is the judgment of Clarke JA in Akins v National Australia Bank (1994) 34 NSWLR 155, where his Honour stated at 160: Although it is not possible to formulate a test which should be applied in every case to determine whether or not special grounds exist there are well understood general principles upon which a determination is made. These principles require that, in general, three conditions need to be met before fresh evidence can be admitted. These are: (1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible.

82 That passage has been adopted on numerous occasions, including Nominal Defendant v Manning (2000) 50 NSWLR 139, Textralian Enterprises Pty Ltd v Perpetual Trustees Victoria Ltd [2000] NSWCA 176, Wilson v The Prothonotary [2000] NSWCA 23, Victims Compensation Fund Corporation v Sarah Jane Hill [2000] NSWCA 75, Centurian Constructions Pty Ltd v Beca Developments Pty Ltd (In Liquidation) [1999] NSWCA 457 at [39], Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 and has recently be applied in Glover v Australian Ultra Concrete Floors Pty Limited [2003] NSWCA 80 at [35].

83 We would also note the observations in Wilson v The Prothonotary [2000] NSWCA 23 at [47], where, having approved of the three pronged test in Akins, the Court of Appeal stated: The tests are general principles, or conditions applying to the generality of cases, but the statutory discretion is capable of being exercised even if the tests are not all satisfied although such an exercise might only occur in exceptional circumstances: Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 140 Similar observations were made in Textralian Enterprises Pty Ltd v Perpetual Trustees Victoria Ltd at [101].

84 We would also note the observations of the Court of Appeal in Townsend v Townsend [2001] NSWCA 136, where, having adopted the principles in Akins, the Court stated (at [64]): These conditions are only guides, and special grounds may be made out in particular circumstances ( Commonwealth Bank v Quade (1991) 178 CLR 134 at 140), but the public interest in the finality of litigation calls for some "insistent demand of justice" ( Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435 at 444). 85 Having regard to the submissions of the respondent, we would also refer to the observations of the Court of Appeal in Victims Compensation Fund Corporation v Sarah Jane Hill [2000] NSWCA 75, where, in discussing s 38(3) of the Victims Compensation Act 1996, (noting that it too referred to "special grounds" being required for further evidence on an appeal), and having stated that there was "no reason why those principles should not apply to s38(3)" the relevant principles from Akins, the Court stated: 32 The test of " special grounds " applied by Judge Garling, as already indicated, was one taken from the decision of Judge Delaney in Hately v The Victims Compensation Fund Corporation (1 April 1999). According to the formulation in that decision " special grounds " "requires the applicant for compensation to show to the learned Member of the Tribunal information which was in terms of the words 'special grounds, out of the ordinary or not connected with a failure to act'". It would be wrong to treat this formula as an exhaustive statement of "special grounds ".

86 Finally, we would note that in the decision of the High Court in Quade, adopted in Bowen and relied upon by the appellant in the present case, the Court was at pains to emphasise that the observations it was there making were: … not directed to the case where the trial itself has miscarried "through misdirection, misreception of evidence, wrongful rejection of evidence or other error" or to a case of "surprise, malpractice or fraud". Such cases cannot properly be seen as mere cases of "fresh evidence".

87 This case does not involve any "misconduct" on behalf of the appellant. Nor do the circumstances permit a conclusion that the appellant had failed to apply "reasonable diligence" in ascertaining the evidence in the course of preparing for the proceedings below. Whilst we would, in general, agree with the three-pronged "test" in Akins (noting that these observations are consistent with the approach taken in Bowen and in particular point (2)), such observations are of little utility in the present circumstances.

88 The appellant was not afforded an opportunity to be heard in the course of proceedings below, because the trial judge had erred in respect of the operation of s 34(2)(b). The Full Bench has granted leave to appeal and determined that it ought hear from the appellant, in order to determine whether the decision to grant the application at first instance should be confirmed, quashed or varied: s 192(1)(a). It is important to emphasise our acceptance of the observations of the Full Bench in Bowen (at 211) to the effect that in the ordinary course, such circumstances would warrant the matter being remitted to the trial judge (or the member dealing with the matter at first instance) for determination.

89 However, during the course of proceedings before the Full Bench, we were informed by the parties that there were a number of applications for the approval of enterprise agreements pending before various members of the Commission in which similar issues were raised. As such, we have taken the view that it was appropriate and in the public interest that the merits of the issues surrounding the impugned clauses be determined by the Full Bench (albeit in the context of an appeal which challenged the decision at first instance to approve the enterprise agreement with respect to the relevant clauses). We observe that the parties did not demur from such a course. The circumstances that have arisen are clearly out of the ordinary. We are satisfied that, in these circumstances, there should be a full hearing before the Full Bench. It is appropriate to grant leave to bring further evidence in these appeal proceedings. We consider that for these same reasons, leave to appeal under s 188 of the Act should be granted as the matter is of significance to the general jurisprudence of the Commission in relation to enterprise agreements.

90 That conclusion, however, is not the end of the evidentiary issues. The appellant and the respondent each tendered evidence, both in the form of affidavits and oral evidence. All of the witnesses who gave evidence were cross-examined. The evidence was taken in proceedings before Wright J, President, on behalf of the Full Bench. Various objections were taken to the admission of the evidence in the proceedings before his Honour, the most significant being the relevance of the material to the issues on appeal. In the respondent's submission, the material sought to be adduced by the appellant was simply not relevant to the issues on appeal. The principal issue, on the respondent's submission was, having regard to the nature of an appeal before the Full Bench, whether her Honour had erred in granting approval to the John Goss Enterprise Agreement. On the respondent's submission, such a conclusion was to be reached by reference to the terms of the agreement itself, measured against the relevant matters identified in s 35 of the Act. That section, on the respondent's submission, unlike the Commission's award making power, was mandatory in its language and did not afford the Commission a discretion when the matters identified therein were satisfied. The further evidence, on the respondent's submission, was simply irrelevant for this purpose.

91 The appellant, on the other hand, contended that the evidence would demonstrate that the enterprise agreement before the Commission was not reflective of the entire or real agreement between the parties. On its submission, the identification of the real agreement is an important matter for the Full Bench to consider when approving an enterprise agreement, and in particular when forming a view on whether the entire agreement was contrary to law or otherwise contrary to public policy. The evidence, on the appellant's submission, would show a "manipulation" of the Commission's processes, as denounced by the Full Bench in Rothmans (at 156).

92 Moreover, it was contended that the evidence would demonstrate that the understanding of the parties to the agreement, was not reflected by the language ultimately used in the form of agreement tendered for approval. As such, on the appellant's submissions, the Commission could not be satisfied that "the parties understand the effect of the agreement" as required by s 35(1)(c).

93 There is considerable force in the respondent's submissions as to the tendered material being of little relevance. The matters which fall for determination in the approval of an enterprise agreement are found in s 35(1) of the Act, namely: (1) The Commission is to approve each enterprise agreement lodged for approval, but only if the Commission is satisfied that: (a) the agreement complies with all relevant statutory requirements (including the requirements of this Part and of the Anti-Discrimination Act 1977 ), and (b) in the case of an agreement that covers employees to whom State awards would otherwise apply - the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under the State awards, and (b1) in the case of an agreement that covers employees to whom Federal awards would otherwise apply---the employees are not disadvantaged in comparison to their entitlements under the Federal awards, and (b2) in the case of an agreement that covers employees to whom no State or Federal award would otherwise apply---the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under a State or Federal award that covers employees performing similar work to that performed by the employees covered by the agreement, and (c) the parties understand the effect of the agreement, and (d) the parties did not enter the agreement under duress.

94 Where the relevant matters are satisfied, the Commission "is to approve" the agreement. Whilst there may well be circumstances where it will be appropriate or of utility to receive evidence relevant to the considerations raised by s 35(1)(c) and (d), as a general proposition, and indeed as a matter of general practice, any evidence received would necessarily be limited.

95 The appellant has, however, made serious allegations as to the conduct of the respondent. In particular the appellant has contended that the agreement presented for certification is part of a scheme of "manipulation" of the kind identified by the Full Bench in Rothmans. As will shortly appear, we are not satisfied that this contention has been made out.

96 In Rothmans, an award had been presented for approval by consent, to the Commission, containing a provision for the "cashing out" of sick leave - a matter expressly prohibited as an award provision by s 99A of the Industrial Relations Act 1991. The matter having been raised by the Bench, the parties removed the offensive provision from the draft award. On further questioning by the Full Bench, it became clear that the parties were intending to establish a collateral arrangement for the cashing out of sick leave. In those circumstances, the Full Bench made the following observations (at 156): We consider that there is no room to doubt that the parties intend to adhere to an agreement concerning the cashing out of sick pay prohibited by s 99A of the Act. This necessarily involves taking the terms of the agreement on sick leave in the propsed Award, deleting the clause, as has been done, but retaining a collateral agreement in the same terms formerly intended by the parties in the Award now to be read outside but in conjunction with the Award.

We consider that manipulations of this kind ought not to be countenanced and are contrary to public policy.

97 The Full Bench was clearly concerned to avoid parties coming to collateral arrangements about matters expressly prohibited by the Act. We concur with these observations and would emphasise that "manipulations of [that] kind ought not to be countenanced and are contrary to public policy". However, it is to be emphasised that there is nothing inappropriate per se in parties seeking to have approved an industrial instrument that does not set out every aspect of the agreements reached between them. Such agreements are an entirely ordinary aspect of orderly and efficient industrial relations in the contemporary industrial environment. The appellant's contentions are dependent upon a conclusion that the "entire" or "real" agreement between the parties, of which the enterprise agreement between the parties merely forms a part, is somehow contrary to matters expressly prohibited by the Act. We are not satisfied that there is anything in the material currently before the Commission that can be characterised in this way. Moreover, as we emphasised above, it is to the terms of the enterprise agreement to which we direct our attention for the specific and limited purposes required by the statute.

98 The appellant called further evidence from four witnesses: Mr Gerard Boyce, the Industrial Relations Manager for the appellant and the Refrigeration and Air Conditioning Contractors Association of New South Wales Inc; Mr Barry Dawson, the Group Scheme Manager of NECA Group Training, a registered Group Training Organisation under the Apprenticeship and Traineeship Act 2001; Mr David Madson, the director of Stowe Australia Pty Ltd; and Mr Nigel Tarr, the General Manager of Tyco Electronics Networks Pty Ltd trading as Heyday Group. The respondent brought evidence from Mr Bernard Riordan, the Secretary of the respondent, and Ms Rebecca Mifsud, the respondent's legal officer. It is appropriate here to refer to that evidence.

99 In his evidence in chief, Mr Boyce indicated that around 5 per cent of the appellant's membership had an enterprise agreement with the union, 10 per cent had an enterprise or certified agreement directly with employees, less that 20 members had Australian Workplace Agreements and approximately 80 per cent of members operated "solely" under the relevant State award. On 30 September 2002, enterprise agreements in the construction sector of the electrical contracting industry involving the union, reached their nominal expiry date. The appellant formed an "EBA Group" from about 40 of its members, and represented those members in the course of negotiations with the respondent for a new agreement.

100 On Mr Boyce's evidence, the respondent "pursues pattern enterprise agreements", which he defined in his evidence as: [A]n enterprise agreement that is in identical terms and entered into by an number of employers across an industry. A pattern enterprise agreement is therefore an industry wide agreement that is registered on an individual basis. Thus, despite the registration process being individual, the pattern agreement applies across the industry and across employers. These pattern enterprise agreements all contain the same terms and conditions of employment, including the same wages rates for the various employee classifications covered by the pattern enterprise agreement. The only variation to a pattern enterprise agreement, if any, would be minor.

101 The agreement in issue in these proceedings was, on Mr Boyce's evidence, a pattern agreement.

102 Mr Boyce gave evidence of various negotiations between the appellant, the EBA group and the respondent, surrounding what was described as the respondent's pattern agreement. His evidence referred to the two previous "pattern agreements" one expiring on 30 September 1999, the other expiring on 30 September 2002 and that they had been "identical versions across the industry". Neither agreement contained a clause relating to subcontractors. Copies of the clauses then relating to supplementary labour and group training companies were annexed.

103 The supplementary labour clause in the agreement which expired on 30 September 1999 was in the following terms: The parties agree that when necessary to meet short term peak work requirements additional labour resources are able to be sourced from Labour Hire Companies, ensuring that the relevant rates are paid as per Schedule A.

104 The Group Training Company (then clause 30), similarly provided: The Company when hiring apprentices or trainees from a Group Training Company shall ensure that the relevant rates are paid as per Schedule A. · The Group Training Company shall be notified if special allowances and/or site/project allowance is payable.

105 The supplementary labour clause in the previous agreement, expiring on 30 September 2002, was in the following terms: The parties agree than when necessary to meet short term peak work requirements additional labour resources are able to be sourced from Labour Hire Companies who have an enterprise agreement with the union signatory to this Agreement or alternatively agree to pay conditions equal to that applicable in accordance with this agreement.

106 The group training company provision was in the following terms: The Company when hiring apprentices or trainees from a Group Training Company shall advise the Group Training Company in writing before hiring that: · They have an enterprise agreement with the Union; and · The apprentices and trainees hired to the company shall be paid at least the rates and conditions of this Agreement; and · The Group Training Company shall be notified if a site/project allowance is payable.

107 Significantly, Mr Boyce gave evidence surrounding the instances in which the current "pattern agreement" had come before the Commission.

108 He gave evidence of an enterprise agreement having been filed on 5 December 2002 between the respondent and "Banabelle Pty Ltd"; another "pattern agreement" with "identical" terms to those within the instant agreement "apart from a provision relating to a bargaining agents fee clause … and no leave reserve provision". The matter first came before the Commission on 13 December 2002 when the appellant "sought to appear in the proceedings … to oppose the approval of" the impugned clauses. The agreement was subsequently varied on 31 January 2003, with the respondent advising that "it was varying the disputed clauses in the Banabelle agreement and hence was varying the disputed clauses in the pattern agreement … the clauses in the Banabelle agreement and pattern agreement relating to supplementary labour, subcontracting and group training companies were withdrawn and replaced with a new outsourcing clause". The bargaining agents fee provision was withdrawn and a leave reserved provision included. The agreement was approved on 17 February 2003.

109 Mr Boyce also gave evidence of an enterprise agreement having been filed for certification on 6 December 2002 between the respondent and All State Electrical Services Pty Ltd. Again this was said to be a pattern agreement in terms identical to that in the Banabelle agreement. Again the appellant appeared when the matter was first before the Commission to object to the impugned clauses. That matter has been stood over, presumably to await the outcome of these proceedings.

110 Mr Boyce gave evidence of four further enterprise agreements having been filed for certification on 14 February 2003; all again pattern agreements. This time, in terms "identical … to the John Goss agreement". On 28 February 2003, the appellant appeared "to oppose the approval" of the four impugned clauses. When the appellant was granted the right to be heard by the relevant Commissioner, the agreements were varied to remove the impugned clauses and the agreement were certified. Mr Boyce's evidence continued: As a result of the withdrawal of the disputed clauses in the four agreements, the ETU required the Stowe Australia Pty Ltd, Star Electrical Services Co Pty Ltd, City Electrical Services (Aust) Pty Ltd, Tyco Electronics Networks Pty Ltd trading as Heyday Group enter into a Memorandum of Understanding ["MOU"] containing a full bargaining agents fee provision and the supplementary labour, subcontracting and group training company clauses.

111 A copy of the MOU was annexed to Mr Boyce's affidavit and was in the following terms: The parties agree to the enforcement of the following clauses under this Memorandum of Understanding, as from 10 December 2002 to remain in force until 30 October 2005. This memorandum is to operate in conjunction with the Company Enterprise Agreement registered in the NSW Industrial Relations Commission and the Electrical, Electronic and Communications, Contracting Industry State Award. The parties agree that should this agreement contain any provision found in the New South Wales Industrial Relations Commission, then it will automatically become void. It is not the purpose of this document to bind any third party or to attempt breach section 45D or 45E of the Trade Practices Act. The parties agree that the intent of this document to promote a productive environment for efficiency in the workplace while securing equality of conditions of employment. 1. Supplementary Labour The parties agree that when necessary to meet short -term peak work requirements additional labour resources will be sourced from Labour Hire Companies who have an enterprise agreement with the union signatory to this agreement. 2. Subcontracting The parties agree that when it becomes necessary to sub contract work, due to high demands within the industry, the company will endeavour to ensure that the sub contractor has a registered Enterprise Agreement with the Union. The Union commits to only sign an agreement with the same rates of pay contained in this agreement, so as to maintain a level playing field for all companies within the industry. 3. Group Training Companies The company when hiring apprentices or trainees from a Group Training Company shall advise the Group Training Company in writing before hiring that: · They need to have an Enterprise Agreement with the union · The apprentices and trainees hired to the company shall be paid at least the rates and conditions of this agreement The Group Training Company shall be notified if a site/project allowance is payable. 4. Bargaining Agents Fee The company shall advise all existing employees that a "Bargaining Agents Fee" of $339.00 (or at the rate of the current annual Tradesmen's ticket for that year) is payable to the Electrical Trades Union of Australia, New South Wales Branch (ETU) on or prior to 16 December. This bargaining fee is to be paid annually. The company shall also advise all new employees prior to commencing work for the company that a Bargaining Agent Fee of $339.00 (or at the rate of the current annual Tradesmen's ticket for that year) per annum is payable to the ETU on or prior to the 16 December. The company will provide to all new employees an authority to deduct the Bargaining Agents Fee from their wages before commencement of employment. The relevant employee, to which this clause shall apply, will pay the Bargaining Agents Fee to the ETU on a pro-rata basis for any time, which the employee is employed by the company. By arrangement with the ETU this can be done via instalments throughout the year. If an employee can demonstrate to the ETU that are no longer employed by the company, then they are entitled to apply to have such fees reimbursed on a pro-rata basis.

112 This MOU was said to have been distributed by the respondent to members of the appellant on 10 March 2003, with a direction that "all electrical contractors will need to enter into this MOU if you want an enterprise agreement with the ETU". The MOU was also annexed to a letter sent to members by Mr Riordan, dated 10 March 2003.

113 In cross-examination, Mr Boyce stated that his organisation "had no objectives in respect of the outcome" of negotiations between the respondent and its members, but that it took part in the negotiations merely to "facilitate the negotiation". Whilst it was conceded that some of the members of Mr Boyce's organisation sought a "level playing field", both in relation to the negotiations for this agreement and previous agreements, it was his evidence that it was not a majority and that many of the appellant's members sought to negotiate on their own behalf. He did, however, conceded that his members may have had an input in negotiations surrounding the terms of the pattern agreement.

114 Mr Boyce also indicated in cross-examination that there were already members of his organisation that had enterprise agreements with the respondent, containing the impugned clauses - albeit that they had passed their nominal expiry date. On his evidence, some five members of his organisation had an enterprise agreement with the respondent containing a "service fee clause". He also indicated that NECA Group Training, whilst not a member of his organisation prior to the institution of the appeal, joined the NECA following the commencement of the appeal.

115 Mr Dawson deposed to NECA Group Training being a non-profit organisation, having as it corporate aim, the promotion and supply of quality apprentices for the electrical industry in New South Wales. The organisation was established to redress "declining numbers of apprentices in the electrical industry". The organisation is a member of the appellant.

116 On Mr Dawson's evidence, NECA Group Training employs apprentices and places them with host employers. It employs approximately 250 to 280 apprentices and places those persons with 60 to 80 host employers - the majority, approximately 65 per cent, being placed with companies employing less than 15 persons. Of the persons placed, 60 - 70 per cent of apprentices will stay with the one host employer for the entire apprenticeship period. The remaining employees will need to be moved between host employers and as such a degree of mobility is required when employing apprentices. On his evidence "it is very important to apprentice mobility that NECA Group Training and their apprentices are able to adopt different host employers and host employer conditions of employment from time to time".

117 Under the arrangements between NECA Group Training and its host employers, the apprentices are paid "the rates of pay and provided with the conditions of employment applicable to the Host Employer industrial instrument". He also gave evidence of the need for flexibility in trainee arrangements organised by NECA Group Training, including the fluctuating requirements of the industry and to enable trainees to meet the various mandatory competencies that are required by training providers.

118 On Mr Dawson's evidence, "it is highly unlikely that an apprentice charged out at construction enterprise agreement rates of pay will be accepted by another host employer who operates under the New South Wales common rule award". On his evidence, the "majority", around "80 per cent of host employers "do not have an enterprise agreement and operate under the New South Wales common rule award". On Mr Dawson's evidence "any … enterprise agreement would be a disincentive to Host Employers who currently use NECA Group Training and operate under the Award" as such an enterprise agreement would "invariably build upon or vary the award" - in the order of 20% if the terms were similar to those of the present enterprise agreement. On his evidence, no host employer had ever requested that NECA Group Training obtain an enterprise agreement and "for the above reasons", "it remains impracticable for NECA Group Training to have an enterprise agreement, particularly one in the form of a pattern agreement". Mr Dawson also gave the following evidence: It is my opinion that the effect of the type of requirement being sought in an enterprise agreement in these proceedings relating to group training companies would greatly reduce the number of apprentices in the industry.

119 NECA Group Training had nine apprentices with John Goss Projects Pty Ltd. If NECA Group Training were required by John Goss to have an enterprise agreement, "it would affect all of our apprentices and the likely impact would be that the remaining 65 per cent of our apprentices with small employers would be at high risk of losing their placements due to increased costs". NECA Group Training would "have to withdraw from that sector of the industry in which construction enterprise agreements were in existence".

120 However, in cross-examination, having conceded that there was nothing in the impugned clause 33 that specified the content of an industrial agreement, Mr Dawson gave the following evidence:

Q. It is possible at the present, if the apprentice is lucky or unlucky, to have a number of different placements, that their wage rate would change with each placement, so their wage could go up and it could go down depending on whatever the going rate is at the host employer. Is that correct? A. That is correct.

Q. That is the present situation? A. That is correct, yes.

… Q. The disincentive would only be created, would it not, if there is a legal obligation to pay the apprentices higher than the relevant instrument applicable to the host employer, is that not correct? A. That is correct. The only EBAs I have read are in relation to wages to the award wages. I have never seen an EBA on behalf of the union that mentions the award rates of pay, so I don't know any better.

Q. But you have conceded, have you not, on the face of that document, there is no necessary requirement that the price of apprenticeship labour will go up? A. Looking at that, no. That is correct. It should not go up if you look at it, but it is pretty hard looking at this, without looking at the wage structure.

Q. You have also conceded there is nothing in relation to that clause, nothing on the face of it to indicate a departure from the current industry practice of apprentices being paid the host rate, is there necessarily? A. That is correct.

Q. The clause states on hiring apprentice labour, the employer must notify the group training company that it should or must have an agreement with the union. That is what it says does it not? A. That is correct.

Q. So the host employer has an obligation to tell the apprentice's group training company? A. That is correct, as per this.

Q. There is nothing in the agreement that says if the group training company does not have such an agreement, they won't use them, is there? A. It says in writing - before hiring they need to have an enterprise agreement with the union. That is the way I read it.

Q. It literally says, if they hire they must advise the group training company they must have an agreement with the union? A. That is right.

Q. It does not say, does it, that once an employer has discharged this obligation under the agreement, that is of advising in writing, that if that group training company does not have an agreement with the union, then one cannot in any case proceed to use them? A. That is correct.

Q. There is nothing in that clause, is there, that necessarily forces a group training company to have an agreement with the union, is there? A. Not in the clause itself, no.

Q. The clause itself. Let's put the question of the EBA to one side. My question to you is, there is nothing in that clause that you have before you that says absolutely in every circumstance the price of apprentice labour will go up as a result of that clause? A. No it does not seem that way at all.

Q. Is there anything in that clause that says in the industry practice of apprentices being paid at the host rate, that will necessarily change and will necessarily increase? A. That is correct.

Q. It does not say that does it? A. That is right.

121 Mr Riordan, the Secretary of the respondent, gave evidence of having led the negotiations for the enterprise bargaining agreements for the construction sector since 1997. He deposed that the "supplementary labour" clauses in the 2000 and 2002 agreements were "similar" and that "the intention of the parties was to create a level playing field so that the cost of labour was not used by any company as a commercial advantage". He also gave evidence that this "initiative was originally the idea" of the appellant and referred to a conversation he had had with David Madson, the CEO of Stowe Electrical and the "convenor" of the negotiations on behalf of the EBA group.

122 He gave evidence surrounding how the MOU came into existence and, in particular, of discussions that were held on 28 February 2003 in the context of an industrial dispute between the parties surrounding the negotiation of an enterprise agreement. Mr Riordan gave the following evidence: The MOU's came about as the result of discussions between the representative of Stowe Electrical, Mr David Madison, Hey Day Group, Mr Nigel Tarr, Star Electrical, Mr Robert Sundercombe and the Industrial Officer from City Electrical Services, Mr Andrew Hurt on 28 February 2003, during a break in the proceedings IRC 740 of 2003 in a Meeting Room on level 2 of the Industrial Relations Comission, where I said words to the effect: We are not getting any where today and the Union wants to settle this dispute … in my view there are a couple of options, 1. Withdraw the clause out of the current agreement and have a MOU for the 4 "objectionable" clause. 2. Recommence negotiations for the entire agreement. 3. Simply flow the outcome from the Victorian negotiations and 4. Move to the Federal jurisdiction and the ETU will file bargaining periods and have a protracted Industrial campaign.

Mr Nigel Tarr said words to the effect: We have signed the agreement in good faith, understanding all of those provisions and we are satisfied with the outcome. I intend to honour our agreement and do not want to go back to the negotiating table. The other electrical contractors in the room endorsed his comments.

123 In cross-examination in relation to the MOU, Mr Riordan gave the following evidence: BENNETT: Q. In your affidavit, as I understand it and I may be wrong about this, after the difficulties with those clauses, you had a meeting in the Industrial Commission and dealt with the matter on the basis that there could be a Memorandum of Understanding entered into between the parties which deals with those clauses? A. Yes, that is right.

Q. Indeed, I think you indicated you take the four objectionable clauses out, that was one option, you could recommence negotiations for the entire agreement, you simply float the outcome from the Victoria negotiations or move to the Federal jurisdiction and file bargaining periods to take protracted industrial actions against the company? A. Yes. Q. In other words, you were present for those four provisions, the four disputed provisions in these current proceedings, simply to ignore the province of the Commission and enter into a memorandum of understanding with the company who signed the pattern enterprise agreement? A. No. It was a question an agreement had been reached between the union and the companies, that agreement had been endorsed by the members of the union and the employers of the company in its entirety. If there were to be any changes made to that agreement, then we would have to go back and start the endorsement process all over again.

Q. You appreciate by removing those provisions from the pattern agreement pursuing them by way of a memorandum of understanding, you have taken those provisions away from the oversight of this Commission? A. Yes and No. I think it was discussed at that particular meeting that the MOU would be used for evidentiary purpose. On that basis it would be clear that it wouldn't be without the capacity to be brought back here.

Q. The memorandum of understanding was a device or mechanism to remove those provisions from the scrutiny of the Commission? A. No, I believe the MOU was a device to uphold the integrity of the agreement reached between the parties.

124 The cross-examination returned to the issue of the MOU's later in Mr Riordan's evidence, where , in discussing the meeting in the Commission's conference room surrounding the certification of the Stowe Australia Pty Ltd (Sydney Projects Division) Construction Enterprise Agreement 2002-2005 agreement, he stated: "there were a number of options available to the four main electrical contractors in Sydney and this was the path that they chose". Counsel for the appellant further cross-examined as follows:

Q. They "chose", to use your word, that in the context of you recommencing either negotiations for an entire agreement flowing on the Victorian negotiations or pursuing protected industrial action against those companies. They were basically the options you gave them, didn't you? A. Yes.

Q. So when you say they "chose" - they chose to do that to avoid further protracted industrial action by your organisation? A. That's an assumption that you make. I don't believe there was any protracted industrial action on this occasion. There were a number of single day stoppages that you would hardly regard as being protracted industrial action. … Q …I [put] to you [that] they had no alternative. They did not want to start again and be faced with further industrial action. That was the case, wasn't it? A. I don't believe so. I think it was because the process of negotiation was so drawn out and frustrating.

125 Having confirmed that there had been some industrial action (although not its extent), Mr Riordan gave the following evidence: Q. All those steps would have created a fragile contractual environment for employers, wouldn't they, all that industrial action? A. I don't believe so. I think the industry is mature enough to know that all the unions in the industry have their enterprise agreements expiring at the same time and that traditionally in these sorts of negotiations, they are held in an environment where there is industrial disputation. Under the New South Wales system in which the ETU operates, it's a different rule of law in relation to that whole process but under the Federal jurisdiction that protected action - a day's stoppage here or there or five days over a three or four month negotiation period, I don't believe that would have been excessive, protracted or unusual.

126 Mr Riordan was also asked some questions in relation to the particular MOU documents that had been entered into between a number of companies and the respondent. Firstly, as to the Heyday Group and the Stowe Australia Pty Ltd agreements, Mr Riordan confirmed that the respondent had not "sought approval from the Commission for any of the provisions contained in the memorandum signed by [Stowe Australia], nor [had the respondent] sought enforcement of any of them", despite the fact that to his knowledge they were not following the MOU. On his evidence: Q. So you went about obtaining an agreement which you had not sought to enforce, is that what you are telling the Commission? A. The negotiations between NECA and the ETU and a number of NECA members reached a conclusion, formed an agreement. That was an agreement between the parties. It was a package like every other agreement which is reached in industrial relations.

The parties to the agreement, who negotiated the settlement, have agreed to abide by that agreement. If you were correct in the assertion that you are making that the union should simply withdraw those four provisions, then that no longer forms the basis of the agreement. It's no longer part of the package. The package then fundamentally changes.

127 Mr Riordan was then taken to the MOU's between Dynamite Electrical Sevices, Nicks Electrical Services and Ecstatic Electrical Services and the respondent before giving the following evidence: Q. And each agreement is in the same terms, that being a pattern agreement? A. Yes. It is just simply a question of whether or not the four clauses that you are objecting to are contained in that particular document or not. I am not 100 per cent certain of that. Q. I would suggest to you they are, sir, but what I am putting to you is that despite the leave reserve clause contained in those documents, you have entered into memorandums of understanding with various companies, providing for a bargaining agent's fee with those three companies I have taken you to, Dynamite Electrical Services, Nick's Electrical Services and Ecstatic Electrical Services? A. On the assumption that you are right I can only assume that what has transpired is that when the enterprise agreement was signed by the principals of those three companies, we also took the opportunity to have the memorandum of understanding signed on the basis that NECA had indicated that they would be appearing in all matters of registration and certification while ever those four clauses were contained in the document and it would have been an opportunity to save time to simply have the members sign the memorandum at the same time, so when the four clauses were withdrawn at the Commission proceedings, we would have a signed memorandum. …

Q. You have an understanding that it is not going to apply when you have not spoken to anyone? That's your evidence, is it? A. No. My evidence is that we had them sign basically an unenforceable memorandum of understanding to assist in the process of the registration on the basis that the contractors themselves were fed up and becoming exacerbated (as said) about the time and delay and the deliberate tactics to frustrate the process. All they want to do is put in place an agreement and get on with providing electrical services and hopefully making a-- Q. Sir, how do you say that the material you have just placed before the Commission assists in the registration? A. It assists in the registration on the basis that the parties have an agreement.

Q. Based on a memorandum of understanding? A. No. We have an agreement as a result of the negotiations which took place between NECA and its members, the negotiating committee of NECA and the negotiating committee of the ETU and it may be split into a number of different parts, some of which are registered in the Commission and the other part which is in an unenforceable document, but it spells out quite clearly what the intentions of the parties were and it is based on integrity.

128 Mr Riordan was also cross-examined on the need to alter the terms of the enterprise agreements from the form in which they appeared in the preceding pattern agreement to those of the present pattern agreement. As to the alteration of the group training clause (clause 33), having confirmed that the "tightening" of the provisions was to avoid "profiteering" by some disreputable group training providers, the following evidence was given: Q. The point that I am seeking to make with you, Mr Riordan, is that the 2000 agreement which I have shown you which appears on page 76 of Mr Boyce's affidavit in these proceedings, sets out the position of the union with respect to group training companies at that point in time, that is correct, isn't it? A. Certainly.

Q. And the position or the reason, you say to the Commission, for drafting and proposing the current term is to maintain the integrity of the 2000 agreement? That is your evidence, isn't it? A. It is but the intention of the 2000 agreement was to have the group training companies have an agreement with the ETU. …

Q. So a group apprenticeship company that under the 2000 agreement supplied apprentices to John Goss, for instance, would, while they were working for John Goss in the construction industry, be required to pay them the rates of pay set out in the John Goss agreement? A. That was the intention of that clause but, of course, we had no capacity to enforce it.

Q. The effect of the 2002 agreement is to require the group apprenticeship company to enter into an enterprise agreement with the union, isn't it? A. Yes.

Q. And the enterprise agreement that they would be required to enter into with the union would be that that the union has put out as its pattern agreement? A. No.

Q. Why do you say "no"? A. Because we have not yet signed an enterprise agreement with any group training company in 2002 but when I think back about what has occurred since the making of the 2000 agreement, the largest electrical group training company in New South Wales (which I just happen to be the Chairman of and has joint Board membership of industry and the ETU) pays the rates of pay which are applicable to the host employer and I don't believe that our position, the union's position, will change in this agreement from the last one. 129 After having been further cross-examined on the need to vary the clause of the pattern agreement from the form it took in 2000, the following evidence was given: Q. The only change that you have made to the group training provision between the 2000 agreement and the 2002 agreement is an obligation that group apprenticeship companies have an enterprise agreement with the union, isn't it? A. It is not really an obligation. It is more a case of identifying and advising them of the need to have an agreement. If the group training company then chooses not to have one, there is probably not a great deal we can do about it.

Q. Sir, you say they need to have an enterprise agreement with the union so it suggests that that is imposing upon the group apprenticeship host company or the group apprenticeship company an obligation to have an enterprise agreement with the union. That is the purpose of it, isn't it? A. That is the hope of it.

Q. It is the hope of it and it is the purpose of it? A. It is certainly the desire.

130 In relation to the supplementary labour clause, clause 31, Mr Riordan said: Q. You say in paragraph 7 that the intention of the parties was to keep a level playing field so the cost of labour was not used by any company as a commercial advantage? A. Yes.

Q. And the purpose, therefore, is to require companies to have an enterprise agreement with the union in the terms of the pattern agreement on the basis of this proposition so that they cannot have a commercial advantage? A. Yes. …

Q. So it was the purpose and intent of the union to ensure that labour hire companies and subcontractors who were supplying labour had an enterprise agreement with the union in order to ensure that they had no commercial advantage as against other employers who had an enterprise agreement with the union? A. Yes. It was - initially the idea for that, the concept, that came from the employers and it was a concept that we were happy to support.

Q. The 2000 agreement, insofar as supplementary labour is concerned, is different to the 2002 agreement provision, isn't it? A. Yes. Q. The 2002 agreement cuts out the alternative that is available to labour hire companies, doesn't it? A. Yes.

Q. And it makes it mandatory that those labour hire companies - sorry, the purpose of that clause is to make it mandatory that those labour hire companies have an enterprise agreement with the union? A. Yes. …

Q. You achieved the purpose of requiring them to enter into agreements with the labour hire company by removing the alternative ability to pay conditions equal to the appropriate agreement in the 2000 agreement, that is the case, isn't it? A. Yes, but that does another thing as well, it creates the same level playing field for labour hire companies as sought by the electrical contractors.

131 Mr Riordan emphasised that whilst he was "personally against casual labour", "if the contractors or the Commission find that provision abhorrent, [he was] more than happy to withdraw it from the pattern agreement". A similar concession was made in relation to the sub-contracting clause.

132 The cross-examination continued in relation to the sub-contracting clause (clause 32): Q. Again, the purpose of that clause was to seek to ensure that subcontractors had an enterprise agreement with the union? A. It does not actually say that because we are well aware we can't bind a third party in the agreement, it talks about the company endeavouring to ensure.

Q. The purpose behind that was to seek to have those subcontractors enter into an enterprise agreement with your union, wasn't it? A. It is a desire.

Q. You use "desire" - it is the purpose? A. We have no capacity to bind them. This was the subject of some debate during the negotiations and I think I made my point fairly clear during that process.

133 In relation to the purported "bargaining agents fee", the following evidence was elicited in cross-examination: Q. Can I suggest to you that the leave reserve clause has nothing to do with commencing discussions but is just simply about introducing a bargaining agent's fee and the amount thereof. A. There was a broad agreement during the negotiations that the bargaining agent's fee would be introduced and that was by all the parties, including NECA, and that we would have further discussions in the future about its implementation and the like.

Around that time a decision of the Full Bench into the bargaining agent's fee was handed down and the timing was undoubtedly unfortunate in that regard and this was seen as the best way by all concerned to process the matter. NECA advised us that they would be objecting to the bargaining agent's fee. Australian Business and Employers First had indicated that they were going to appeal the first bargaining agent's fee provision which was registered by the New South Wales Commission and would appeal the matter all the way to the High Court - that was the terminology that was used to me.

134 The bargaining agents fee again arose in the following exchange: Q. If I accept what you said for the moment, and that is that the enterprise agreement on the one hand supplemented by the memorandum of understanding on the other hand was the agreement, that memorandum of understanding provided in it an obligation for a bargaining agent's fee - sir, that is contrary to the leave reserved provision you are seeking to have approved by this Commission, isn't it? A. I believe it has the same application.

Q. Sir, the leave reserve provision provides that the company agrees to commence discussions with the union in relation to future implementation by the union of a bargaining agent's fee subject to the clause having been approved by the New South Wales Commission. Now, there has been no approval sought. You have obtained memorandums of understanding which provide for a sum certain to be paid to your union and that, sir, I suggest to you, is contrary - that practice is contrary to the leave reserve clause. A. I would agree with you if the union had sought to implement the bargaining agent's provision but it has not on the basis that I know that further discussion needs to take place. Obviously, we do not intend to introduce a bargaining agent's fee which may be contrary to the test case provisions as handed down by the Commission. There is no intention of the union to have a different provision in relation to bargaining agent's fee applying to Stowe, Tarr, Heyday, City Electrical Ecstatic or any other.

Q. Sir, can I put this to you? If your answer was as simple and as straight-forward and as truthful as you seem to assert in the witness box, the means of achieving that would have simply been to include that clause in the agreement under a bargaining agent's fee? A. No.

Q. You haven't done that, have you? A. Absolutely not and nor will I do it on the basis that I was advised by three employer organisations that they would appeal the decision to register the agreement and that it would go all the way to the High Court - they would take it all the way to the High Court.

I did not want - nor did I intend to have these agreements held up in litigation for months and/or years. That was quite - that was the reason why this provision was put into a leave reserve clause because we didn't want to be the bunny. We didn't want to see our members disadvantaged due to some political campaign taken on by either AIG, Employers First, NECA or Australian Business.

Q. Sir, the truth of the matter is simply this, the employers told you that they would oppose the agreement with that leave reserve clause in it along with the other clauses. You then sought to take that out of the enterprise agreement that you are seeking approval for and obtained memorandums of understanding implementing them and then serve up to the Commission something which is already a fait accompli in existence, existing between your union and the employers who have signed the memorandum of understanding imposing bargaining agent's fees on employees? A. Well, Mr Bennett, you are wrong and I don't take kindly to you calling me a liar from the Bar table and let me assure you quite categorically, that the employers agreed to that provision. They agreed to the provision in the memorandum of understanding. They agreed to the provision during the negotiations. So I am not a liar and I take umbrage at that. If that is the way you want to conduct this cross-examination, then so be it.

135 The purpose behind the impugned clause in the agreement was again returned to in evidence on 11 July: Q. The ultimate effect of clauses 31, 32 and 33 are to hinder and prevent companies such as John Goss from having the ability to choose the labour they would seek to carry out their job? A. I'm not one hundred percent sure as to what the effect would be. It was certainly not the intention.

136 Mr Riordan was also cross-examined as to the persons with whom he had spoken in forming the basis of the John Goss enterprise agreement: Q. There is also proposed a leave reserved position in the pattern agreement? A. Yes.

Q. That leave reserved provision came as a result, obviously, of an agreement between in this case you and John Goss Projects Pty Limited? A. Yes.

Q. And when you entered into that agreement you spoke to your members? A. Yes.

Q. About that provision. And I suggest to you you didn't speak to any non members about that provisions? A. No, that is not true - well it may not be true. Q. Non members employed by John Goss? A. I think John Goss has electricians who they employ who are either non members of the union or either unfinancial members of the union and they would have been invited to the meetings associated with the endorsement of a John Goss enterprise agreement.

137 Having given evidence that the impugned clauses were approved at a mass meeting of members, and that there had been non-members present at the mass meeting, Mr Riordan gave the following evidence: Q. You have, I take it, as I understand your evidence, never sought any ... of non members to enter into a situation where they are obliged to pay a bargaining agent's fee? A. No, what we have done in relation to the John Goss agreement is gone and spoken to every employee, every electrician employed by John Goss and asked them whether they endorsed, accepted the proposed settlement.

Q. When you say "we have" I take it that does not include you, somebody else has done that? A. That is correct.

138 It is unnecessary to further lengthen this decision by extensive reference to the evidence from Mr Tarr, Mr Madson or Ms Mifsud, it being sufficient to observe that their evidence went largely to what had been said at various meetings throughout the course of the negotiations for the current enterprise agreements. We do not consider that it is necessary to resolve those differences for the purpose of these proceedings.

139 The above evidence demonstrates what seems to be a regular course of negotiations surrounding an application for the approval of an enterprise agreement with one possible exception. The parties negotiated an agreement, in the context of some industrial disputation. There is nothing in the evidence that would permit us, however, to form the view that the hands of the appellant's members were forced to such an extent that we should conclude that there was "duress" as referred to in s 35(1)(d) affecting the making of the enterprise agreement. Indeed, such a contention was not put by the appellant. The evidence of industrial action, such as it was (having regard to its nature, timing, extent and the industry in which it arose), suggests that that action or any threat of such action was not a significant determinant in the enterprise agreement here under consideration or the other enterprise agreements which have been raised in these proceedings

140 There can also be no doubt that parties to the enterprise agreements discussed in evidence reached agreement on various issues and that the applications for approval of an enterprise agreement to the Commission was reflective of only a part, albeit a substantial part, of those agreements. We should emphasise, however, that there was no evidence of John Goss Pty Ltd having entered into an MOU with the respondent.

141 More significantly, the Commission has before it an enterprise agreement which meets the statutory form for approval of enterprise agreements and represents, in its entirety, the terms agreed. It is that instrument (and not other enterprise agreements referred to in the evidence) that we are required to consider under Division 2 of Part 2 of Chapter 2 of the Act. As to the other enterprise agreements discussed in the evidence (which are not before us), whilst there was clearly a broader accommodation reached between the parties there is nothing improper or inappropriate, in our view, in such a course provided that the broader arrangement does not cut across matters either prohibited by the Act or otherwise contrary to law.

142 The exception to characterising the course of negotiations for the current pattern agreement as entirely regular, arises from the terms of the bargaining agents fee clause of the MOU. Whilst we cannot see anything inappropriate in industrial parties reducing in-principle agreements to writing so as to establish a benchmark for further negotiations (whilst an otherwise agreed industrial instrument is put before the Commission for approval), we have some concerns with the language in which the MOU to which we have been taken has been expressed with respect to the bargaining agents fee clause.

143 In the absence of an appropriate term in an industrial instrument, conduct of an employer of the kind referred to in the MOU may have the real potential to impress upon employees that they were bound to make such a payment. It may expose the employer to liability for a breach of the Act. Having regard to the fact that these agreements were not intended to be enforceable, (as the evidence of Mr Riordan demonstrated), such an agreement may well have the potential to mislead in a practical way.

144 We should, however, reiterate that there is no evidence of John Goss having entered into an MOU and so any of these observations as to the use or appropriateness of an MOU are only made to provide some general guidance in relation to the many agreements which we have been advised await the resolution of these proceedings.

145 In the ultimate result, having regard to the fact that the appellant was not afforded an opportunity to be heard at first instance, we have come to the view that it is appropriate to admit the further evidence on the appeal, for all purposes. However, in doing so we would note two matters:

1. As will be remarked upon frequently throughout these reasons, much of the evidence that has been admitted goes beyond the John Goss enterprise agreement and, with respect to some of the issues ventilated by the appellant, goes beyond the John Goss agreement in a significant and material way. Insofar as the evidence tendered goes to the issues that arise otherwise than directly in relation to the John Goss agreement, and in particular the evidence surrounding the MOU, we consider that this evidence is barely relevant to the issues that presently arise in relation to the merits of the appeal. 2. As to the material that travels outside the John Goss agreement, and in particular the evidence surrounding the MOU, we have for the most part adopted the course of admitting this evidence largely on the question of leave to appeal and to provide a factual matrix in which to give consideration to the broader policy issues that arise from the appellant's submissions. These broader policy issues are of particular significance in this matter, having regard to the fact that there are a number of enterprise agreement applications in which a number of similar issues are likely to arise, awaiting the outcome of this decision.

Consideration - The Impugned Clauses 146 The appellant's challenge to the impugned clauses concerned four principal elements:

1. The relevant clauses are not "conditions of employment"; 2. The New South Wales Act does not permit a enterprise agreement to be certified if it contains provisions that are not "conditions of employment"; 3. The impugned clauses are illegal and against "public policy" in that: (i) The impugned clauses would, in practice, prevent or hinder the capacity of a party in an "acquisition situation", giving rise to a breach of s 45E of the Trade Practices Act - as such, the agreement does not meet the "relevant statutory requirements" referred to in s 35(1)(a) and is otherwise against the public interest

4. The enterprise agreement forms one part of a broader agreement which is itself illegal and against public policy. The Commission ought not, and has intimated in the past that it will not, sanction any part of an illegal agreement: Rothmans .

147 It is convenient to deal with these issues in turn. Conditions of Employment

148 The definition of "conditions of employment" in the Act is in the following terms: "conditions of employment" includes any provisions about an industrial matter.

149 Section 6(1) of the Act defines an "industrial matter" as "matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry". Subsection (2) 'extends' the definition by identifying some specific examples of what is to be included within the definition: see Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 53 NSWLR 393.

150 We note that conditions of employment merely "include" provisions about an industrial matter; that is, "conditions of employment" include "matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry". The expression is not, on a plain reading of the statute, limited to industrial matters; the word "includes" normally being interpreted as a term of extension: see Wright J, President in Campbell's Cash & Carry Pty Limited v National Union of Workers', New South Wales Branch Award (2001) 104 IR 385 (at [18] - [19]), expressly adopted by the Full Bench of the Commission on appeal Campbell's Cash & Carry Pty Limited v National Union of Workers' , New South Wales Branch Award (No.2) (at [15]). So much was emphasised by the Full Bench in Re Review of Principles for Approval of Enterprise Agreements 2002 where, having acknowledged that there was some "circuitousness" in the relevant definitions, stated at [20]: As against this, however, we note that, unlike the majority of definitions contained within the Dictionary to the Industrial Relations Act , the definition of conditions of employment is an inclusive one rather than exclusive and that s 6(2) provides examples only of industrial matters. All of this leads on a prima facie basis to a conclusion that the expression "conditions of employment" should be construed according to its ordinary meaning within the context of legislation which is directed in general terms to providing a framework for the conduct of industrial relations and to enhance, in general terms industrial relations throughout New South Wales. This much is clear from s 3 of the Act which sets out its objects.

151 The Full Bench in that decision noted the term "conditions of employment", "may convey different meanings depending upon the context in which it is used" (at [22]), before continuing to emphasise the "breadth" of the definition as it is used in the Act by reference to R v Booth; Ex parte Administrative & Clerical Officers' Association (1978) 141 CLR 257 and Australian Tramway Employees Association v Prahran and Malvern Tramway Trust (1913) 17 CLR 680 at 693.

152 Whilst the Full Bench prefaced these observations by stating it was unnecessary to deal with the definition of "conditions of employment", "in a determinative manner" and emphasising that it "should not do so, in the absence of a relevant factual matrix" (at [20]), we consider that the prima facie conclusion, there expressed, is correct. It is also instructive to have regard to decisions that have adopted the observations in either R v Booth or Tramways: see for example, Ives DP of the Australian Industrial Relations Commission, in National Union of Worker's v Graincorp (2002) 117 IR 136 at [34] - [41], and the Full Bench of the West Australian Industrial Relations Commission in Metals And Engineering Workers' Union - Western Australia Branch v Robe River Iron Associates (1995) 63 IR 243.

153 However, as will be apparent from the following consideration, it is not strictly necessary to consider the breadth of the expression "conditions of employment" as we consider the clauses in question fall within the meaning of the expression "industrial matters", and therefore, in accordance with the statutory definition of the expression "conditions of employment", are conditions of employment.

154 It is thus to the definition of "industrial matters", incorporated as it is within the concept of "conditions of employment", as provided in the Act which we must have regard. The substantive issue is whether the clauses in question can be construed as being "matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employees or employers in any industry". In our view, a condition in an enterprise agreement between a union and an employer relating to "additional labour resources" being obtained so as to meet "short term peak work requirements" (clause 31), a clause that relates to the "rates of pay" upon which an employer "will endeavour" to "subcontract work" when such a need arises "due to high demands within the industry" (clause 32), and a provision that relates to providing "advice" "when hiring apprentices or trainees" (clause 33), are clearly "matters or things affecting or relating to work done or to be done in any industry". They are, in our view, "industrial matters" as defined in the statute. As such, however broad a meaning is to be attributed to the term "conditions of employment", the impugned clauses in these proceedings clearly fall within that definition.

155 Similar observations can be made in relation to the leave reserved clause (cl 42), in that the clause in terms, provides that the "company agrees to commence discussions with the Union in relation to the future implementation [of a particular matter], subject to the clause having been approved by the New South Wales Industrial Relations Commission". To suggest that "discussions" between a union and an employer about a provision in an enterprise agreement that is to be ratified by the Commission is not a "matter or thing affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employees or employers in any industry" is, with respect, not sustainable. Clause 42 is clearly within the definition of an "industrial matter" as contained in s 6 of the Act and as such is included within the meaning of "conditions of employment".

156 Regard must be had to the decisions of the High Court in R v Portus, Ex parte ANZ Banking Group (1987) 127 CLR 358 and Re Alcan Australia Limited & Ors Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96, and the discussion therein of what fell within the definition of an "industrial matter" as identified in the relevant federal statutes - that is, matters that "pertain to the relationship of employers and employees".

157 It is important to emphasise, however, that the actual decision in both Re Alcan and R v Portus, were made having regard to the relevant statutory definitions. So much is clear when regard is had to the discussion of "industrial dispute" in Re Alcan and in particular the distinction drawn between the meaning of an "industrial dispute" (as identified in s 51(xxxv) of the Constitution and as discussed in Re Coldham) and the definition of "industrial disputes" and "industrial matters" as found in the relevant statute: The material with respect to Australian and overseas practice takes on a different light in the context of the constitutional expression "industrial disputes" which, it is now clear, must be given its popular meaning. Even if there were no material on the subject, the popular meaning would, in our view, extend to a dispute as to the deduction of union dues from the wages of employees who authorize that course. That is because trade unions exist to further the industrial interests of their members and to represent them in negotiations with employers and in proceedings in the various industrial tribunals established for the regulation of the industrial relationships of employers and employees (see Jumbunna Coal Mine, No Liability v. Victorian Coal Miners' Association (1908) 6 CLR 309 at 358-360). In an industrial relations system involving the active participation of trade unions as the recognized representatives of their members, a claim that employers should deduct union dues is, in our view, inherently industrial in character. Certainly, that is so where the claim is for deductions authorized by individual employees. The material, at least the Australian material and that relating to countries where trade unions have a similar role, confirms that a dispute with respect to that matter is an industrial dispute within the popular meaning of that expression and, hence, an industrial dispute for the purposes of s.51(xxxv) of the Constitution.

It is arguable, however, that the popular meaning of "industrial disputes" does not extend to a claim for the deduction of union dues unless the deductions are in some way authorized by employees. That is because, prima facie, a union is acting in its own interest, not that of its members as employees, when it pursues a claim for the deduction of dues and it may well be that, even in popular understanding, it is necessary for the employees' interests to be seen as coinciding with the union's if the matter is to be regarded as industrial. On the other hand, if some employees have authorized the deduction of union dues or the union is acting with the support of some employees, there is obvious force in the argument that the dispute is an industrial dispute for the purposes of s.51(xxxv). It is, however, unnecessary to resolve that question for the purposes of the present case. (our emphasis)

Even though a dispute as to the deduction of union dues falls within s.51(xxxv) of the Constitution (at least if it relates to authorized deductions), it will not be an industrial dispute within the jurisdiction of the Commission unless it is also a dispute as defined in the Act. By s.4(1) of the Act, "industrial dispute" is defined, so far as subject matter is concerned, as meaning "an industrial dispute ... that is about matters pertaining to the relationship between employers and employees" and as including "a demarcation dispute". To the extent that the definition requires the subject matter of a dispute to pertain to the relationship between employers and employees (and that is the only part of the definition that is relevant to this case), it is different from the definitions of "industrial matters" considered in R. v. Kelly and, later, in Reg. v. Portus (which were concerned with "the relations of employers and employees") only in the manner of its expression.

158 Having regard to s 6 of the Act, the impugned clauses are, in our view, industrial matters as defined in the Act and as such fall within the scope of what may be included in an enterprise agreement.

159 It may be arguable that, even if this provision contained what has been described as a "bargaining agents fee" it would relate to an industrial matter, noting here there is neither a MOU containing such a clause, nor is there such a clause in the agreement itself. However, that matter does not fall for decision in this case as this matter must be determined having regard to the terms of the clause (as was emphasised by the Full Bench in Re Review of the Principles for Approval of Enterprise Agreements 2002 (2002) 121 IR 144.

160 We now turn to the other challenged provisions. Provisions of this nature have been long recognised as industrial matters within similar or comparable industrial statutes: see for example the observations of King CJ, with whom Mohr J agreed, in The Queen v Industrial Relations Commission of South Australia; Exparte Master Builders Association of South Australia Incorporated [1981] SASR 535, where, having determined that "the strictly literal reading [of the definition of "industrial matters" in the relevant South Australian statute] must be controlled by the context in which the words are found and the evident purpose of the Act", his Honour held: The Act is not concerned with matters which are unrelated to the relationship of employer and employee, but the fact that a matter affects other relationships does not necessarily mean that it is not also concerned with the relationship of employer and employee. The definition of "industrial matter" embraces "any matter, situation or thing … affecting or relating to … the privileges, rights or duties of employers or employees or persons intending to become employers or employees in any industry". The natural meaning of these words is wide and I see no reason to restrict the natural meaning. The Act manifests a clear intention to give the Industrial Commission wide powers to adjudicate upon and to resolve disputes concerning matters which might reasonably be regarded as affecting the employer and employee relationship or which might be the source of disharmony in that relationship. Clearly there may be causes of disharmony between employers and employees which are totally unrelated to the relationship and which could not be regarded as arising from or relating to industrial matters, but, to my mind, the legislature has indicated its will that the Industrial Commission should be a tribunal to which employers and employees can resort to have a decision upon all issues which can legitimately be regarded as industrial issues and which might otherwise result in industrial conflict. If this is the true policy of the Act, as I think it is, it would be quite inconsistent with that policy to place a restrictive interpretation upon the naturally wide meaning of the words "affecting or relating to" in the definition.

161 Dealing with the particular provisions challenged here (which we refer to more specifically below) his Honour observed (at 538): The three clauses which the union seeks to insert in the award are designed to prevent an employer or potential employer from procuring work, which would otherwise be performed by employees under the award, to be done by subcontractors for contract prices and under contract conditions less favourable to those performing the work than those prescribed by the award. Such an application seems to me to affect or relate to the employer and employee relationship in a close and obvious way. If employers or potential employers can have work which is covered by the award done by subcontractors at cheaper rates than those prescribed by the award, employees are less likely to be able to obtain and retain employment in the industry. In some cases employees may be rendered vulnerable to pressure to accept less than award conditions thereby creating problems for the policing and enforcement of the award. In other cases, they may be vulnerable to pressure to abandon their status as employees and to accept work under contract on less favourable terms. Considerations such as these must have been present to the minds of the judges of the High Court in In Re Moore; Exparte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470.

162 His Honour commented as to the judgment of the High Court in In Re Moore (at 539): The significance of the case … is that all members of the Bench recognised implicitly the connection which may exist between the employer and employee relationship and the terms and conditions upon which an employer or potential employer can have the work done by persons other than his employees.

163 The clauses challenged in The Queen v Industrial Relations Commission of South Australia were clauses 42, 43 and 44 of the Building Trades (Plasterers and Terrazzo Workers) Construction Award. Clauses 42 and 44 were held to be outside of the Commission's power (largely as a question of form) and need not be further noticed here. However, cl 43 provided: An employer bound by this award (hereinafter referred to as the 'principal') shall not enter into a contract with any other person (hereinafter referred to as the 'contractor') for the contractor to undertake work of a kind mentioned in clause 4 of this award unless such principal's contract with such contractor contains clauses or agreements in respect of such work binding the principal to observe not less than the rates of pay, industrial conditions and requirements as set out in this award.

164 King CJ's succinctly expressed conclusion as to the provision was (at 539): The proposed clause 43 deals with the situation in which a person who is already an employer of labour contracts with another person for that other person to perform work covered by the award. I consider that the Industrial Commission has jurisdiction to insert such a clause in the award if it thinks fit to do so.

165 Whilst these observations were made in the context of a common rule award, they would appear equally applicable when dealing with persons governed by an enterprise agreement and working at a particular enterprise.

166 It is also pertinent to refer to Re Moore; Exparte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 and in particular the consideration there by various members of the Court about whether the then Commonwealth Conciliation and Arbitration Commission had jurisdiction to include in an award a provision in these terms: 5. WORK DONE THROUGH CONTRACTORS, ETC. (a) No employer shall permit any operation or function or employment of any of the classes to which this Award is applicable to be carried on or exercised or entered into by any contractor or other person on behalf of the employer, except in accordance with the terms and conditions of this Award as if the contractor or other person were himself a party to and bound by this Award. (b) No employer shall enter into any contract for the carrying on of any of the work covered by this Award by means of employees unless the contract contains a clause binding the contractor to pay the rates and observe the conditions herein prescribed in respect of the work contracted for, so long as this Award remains in operation."

167 Jacobs J, in delivering the judgment of the majority (Gibbs J and Stephen J agreed with his Honour), held (at 477 - 478): There remains the argument depending on cl. 5 of the draft award. As I understand it, it is not submitted that such a clause can never be part of an award. Whether or not it can be depends upon whether Reg. v. Commonwealth Industrial Court Judges; Ex parte Cocks (1968) 121 CLR 313 has a wider application than the question actually decided in that case, namely, that an issue whether employers should have work done by independent contractors outside their factory or workshop was not an industrial matter within the definition of those words in the Conciliation and Arbitration Act . It is said that in the circumstances of this case, where most, almost all, of those employed in the construction of the mining installations and associated works will be employed by contractors and not by the respondent companies, the insertion of such a clause in the award would be without jurisdiction. However, the presence of a claim in a log of claims, even if it be one which does not involve an industrial matter, does not provide a reason for the grant of prohibition or certiorari. That is sufficient to dispose of the argument based on cl. 5. But it cannot be assumed that under no circumstances could the insertion of such a clause in an award settle a dispute as to an industrial matter. Here the evidence shows that the construction works will be large and extensive. It cannot be assumed that the respondent companies - both the mining and the project companies - will not be exercising continued supervision and co-ordination. It may well be that if the Commission considered it proper in order to achieve a settlement of existing or threatened disputes between the companies and their employees that the same award conditions should apply throughout the work of constructing the mines and their associated installations, it would be open to it to achieve that result by the insertion in the award of a clause along the lines of cl. 5. If the Commission could not do so, it would mean that the respondent companies could largely avoid the effective imposition on what will be in substance their activities of award conditions considered appropriate to construction work in or in connexion with the uranium mining and processing industry . The question should not be determined until the facts are fully explored and the basis of the Commission's decision (if it should be its decision) is known. (our emphasis)

168 Gibbs J made similar observations (at 427 - 473): The prosecutor, as part of its argument, submitted that the claim of the Australian Workers' Union, made in cl. 5 of the log of claims, that no employer shall permit any of the relevant work to be done by a contractor except in accordance with the terms of the award, and that no employer shall enter into a contract for the doing of any of the work unless it contains a clause binding the contractor to observe the conditions of the award, did not raise a dispute as to an industrial matter. This submission was based upon the decision in Reg. v. Commonwealth Industrial Court Judges; Ex parte Cocks (1968) 121 CLR 313 . That case is distinguishable. It decided that a dispute as to whether or not it should be permissible for an employer in a particular industry to employ independent contractors in performing relevant work outside the employer's factory or workshop is not an industrial dispute as defined in the Conciliation and Arbitration Act 1904 (Cth), as amended ("the Act"). However the present dispute, in so far as it relates to cl. 5 of the log of claims, is not as to whether contractors should be engaged, but as to whether, if they are engaged, their employees should be entitled to the benefits of the award, assuming that one is made. The evidence has failed to show that in the circumstances prevailing in the industry in question such a clause could not be capable of being regarded as merely incidental to the settlement of the dispute as to the conditions of employment of workers in or in connexion with metaliferous mining. (our emphasis)

169 In the instant case, the impugned clauses 32 and 33 have the clear purpose of protecting the terms and conditions of those persons engaged in the performance of work at the relevant John Goss enterprise. Similarly, having regard to the nature of the "pattern" agreements pursued by the respondent, it is possible to characterise cl 31 as being directed to a similar purpose. The terms of the provisions themselves, together with the evidence of Mr Riordan and the history and nature of the agreements negotiated by the respondent, clearly identifies the underlying intention of these provisions as being, in essence, to "create a level playing field so that the cost of labour was not used by any company as a commercial advantage". This protection of conditions is established by the "pattern" nature of the agreement and the respondent's attempts to ensure that employers in the relevant section of industry compete equally insofar as labour costs are concerned (noting that the relevant clauses were apparently the same in every such agreement), and the agreements extension to the various clauses in the instant agreement providing equal conditions for both direct employees and external labour working for John Goss.

170 Moreover, as was observed recently by Walton J, Vice-President in Lend Lease Hotel Intercontinental (Stage 1) Project Award [2003] NSWIRComm 314 at [17], " there is jurisdiction to grant the contractor clauses by virtue of an implied power arising from the particular conferral of power on the Commission under s 10", referring to the decision of Wright J, President in A v The Commission of Children and Young People (No.4) (2000) 104 IR 131 at [33] - [39]. Whilst these observations were made in the context of the making of an award, we consider that the reasoning and approach is equally apposite to the jurisdiction to approve an enterprise agreement containing a contractor clause.

171 The appellant contended that the impugned clauses ought be seen as having a different purpose: namely, the establishment of a regime that would mandate a relationship with the respondent union. This, on the appellant's submission, was apparent from the change in language between the previous agreements and the instant agreement.

172 Whilst the parties may seek to ascribe a meaning to the provisions of an enterprise agreement in proceedings for the approval of an enterprise agreement, it may, in certain circumstances, be necessary for the Commission to analyse the provisions of the agreement and consider their appropriate construction before granting its approval. In light of the issue in these proceedings, it is appropriate for the Commission to characterise the clauses and determine what is their intent and practical effect.

173 We consider that clauses 31, 32 and 33 may properly be characterised as having the dominant purpose of establishing a mechanism for the protection of the terms and conditions of the relevant group of employees working under the agreement for John Goss. Clause 32 achieves such a result in terms. Clause 33 may on one view achieve this result in terms. That clause merely requires that John Goss advise a Group Training Company that it have an agreement with the union and that apprentices and trainees are to be paid rates equivalent to those provided by the John Goss agreement. As was conceded by Mr Dawson, there is nothing in the clause that would necessarily result in a change in the current industry practice. Having regard to the history of the clause including the terms in which it had existed in previous agreements, and having regard to the evidence of Mr Riordan as to its purpose, the clause, in our view, is properly characterised as for the protections of the terms and conditions afforded trainees and apprentices working with John Goss. This conclusion also accords with the Commission's knowledge of the industry and the industrial relations environment operating in it.

174 As for cl 31, whilst its terms are somewhat broader, it is to be remembered that the enterprise agreement only operates with respect to labour hire employees to be placed with the particular enterprise. Having regard to the evidence of Mr Riordan, we are satisfied that the broad language of the provision should, in its proper construction, be read down so as to be reflective of an enterprise agreement with the union that is on terms and conditions that are equivalent to those contained within the John Goss agreement. We note that counsel for the respondent conceded as much.

175 The impugned clauses are, in our view, an available mechanism for the protection of terms and conditions of external labour supplied to John Goss Pty Ltd.

Is a State Enterprise Agreement limited to matters that are "conditions of employment"

176 Having regard to our conclusion that the impugned clauses are "conditions of employment", it is unnecessary for this matter to be determined. We would merely note, the starting point for any consideration of this issue must be the well established principle of construction, as discussed by the High Court in Federated Clerks Union of Australia v Victorian Employers Federation (1984) 154 CLR 472 that "the words of a statutory provision must be understood in the context in which they appear". The enabling power to make enterprise agreements is to be found in s 29: An enterprise agreement may be made in accordance with this Act setting conditions of employment for employees. The "form and content" of an enterprise agreement is provided for in s 38(2): 38. Form and content of enterprise agreement … (2) An enterprise agreement must: (a) identify the parties to the agreement and describe the employees for whom it is made, and (b) set all or some conditions of employment for those employees.

177 We note, our preliminary view of s 38, is that it confines the matters which maybe included in an enterprise agreement to "conditions of employment" as defined, although such an agreement need not codify the terms and conditions of the relevant group of employees. We would, however, indicate our agreement with what was said by Walton J, Vice-President in Teachers - St Lucy's School Ltd Enterprise Agreement 1999 and Others [2001] NSWIRComm 4, where, having identified one of the issues which fell for discussion in that matter was "whether the terms of the agreements, being non-prescriptive in nature and merely stating broad objectives for the employment of teachers at the schools, are appropriate for approval", held (at [25]): 25 In my view, provisions incorporated in enterprise agreements, which essentially state broad objectives and which are non-prescriptive in their nature and character, are permissible under the Act and may materially assist in the establishment of co-operative workplace reform and equitable, innovative and productive workplace relations consistent with the objects of the Act (see s3(h) of the Act). So much was recognised by the Full Bench of the Commission in Re Review of Principles for Approval of Enterprise Agreements 2000 (at 73) (albeit in the context of examining provisions in awards) as follows: The expression "conditions of employment" should be construed as meaning the terms of employment which are found within the relevant awards. In modern awards, the terms of the award may not simply constitute traditional prescriptions such as rates of pay, allowances and non-monetary entitlements such as leave entitlements or hours of work. The non-monetary benefits found within awards are often not confined to such terms but also extend to terms which are more general in nature and less prescriptive in effect. Many awards contain consultative provisions, dispute settlement procedures and provisions relating to flexibility which do not confer specific monetary benefits or other entitlement upon employees but which may, in the particular circumstances of employment, nonetheless represent a benefit for an employee which may be taken into account under s35(1)(b). The terms of an award may also include references to the aspirations and objectives of the parties, the establishment of milestones or other achievement goals and the establishment of co-operative work arrangements such as team based structures. All of these terms in awards conform broadly with the objects of the Act in s3(h). That sub-section is in the following terms: "To encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations".

178 The appellant submitted that clauses 31, 32 and 33 of the enterprise agreement (loosely described as the "external labour" clauses) offend s45E of the Trade Practices Act 1974 (Cth) (the "TPA"), rendering the enterprise agreement unlawful and contrary to s 35(1)(a) of the Act. Further, it was submitted the clauses are contrary to public policy, this being a matter of public interest which the Commission should take into account in exercising its functions (s 146(2)(1)). On the appellant's submissions, the agreements should not have been approved.

179 Section 45E of the Trade Practices Act 1974 is in the following terms: Prohibition of contracts, arrangements or understandings affecting the supply or acquisition of goods or services

(1) This section applies in the following situations: (a) a supply situation - in this situation, a person (the first person ) has been accustomed, or is under an obligation, to supply goods or services to another person (the second person ); or (b) an acquisition situation - in this situation, a person (the first person ) has been accustomed, or is under an obligation, to acquire goods or services from another person (the second person ).

Despite paragraphs (a) and (b), this section does not apply unless the first second person is a corporation or both of them are corporations. Note : For the meanings of accustomed to supply and accustomed to acquire , see subsections (5) and (7).

(2) In a supply situation, the first person must not make a contract or arrangement, or arrive at an understanding, with an organisation of employees, an officer of such an organisation or a person acting for and on behalf of such an officer or organisation, if the proposed contract, arrangement or understanding contains a provision included for the purpose, or for purposes including the purpose, of: (a) preventing or hindering the first person from supplying or continuing to supply such goods or services to the second person; or (b) preventing or hindering the first person from supplying or continuing to supply such goods or services to the second person, except subject to a condition: (i) that is not a condition to which the supply of such goods or services by the first person to the second person has previously been subject because of a provision in a contract between those persons; and (ii) that is about the persons to whom, the manner in which or the terms on which the second person may supply any goods or services.

(3) In an acquisition situation, the first person must not make a contract or arrangement, or arrive at an understanding, with an organisation of employees, an officer of such an organisation or a person acting for and on behalf of such an officer or organisation, if the proposed contract, arrangement or understanding contains a provision included for the purpose, or for purposes including the purpose, of: (a) preventing or hindering the first person from acquiring or continuing to acquire such goods or services from the second person; or (b) preventing or hindering the first person from acquiring or continuing to acquire such goods or services from the second person, except subject to a condition: (i) that is not a condition to which the acquisition of such goods or services by the first person from the second person has previously been subject because of a provision in a contract between those persons; and (ii) that is about the persons to whom, the manner in which or the terms on which the second person may supply any goods or services.

No contravention if second person gives written consent to written contract etc.

(4) Subsections (2) and (3) do not apply to a contract, arrangement or understanding if it is in writing and was made or arrived at with the written consent of the second person.

(5) In this section, a reference to a person who has been accustomed to supply goods or services to a second person includes (subject to subsection (6)): (a) a regular supplier of such goods or services to the second person; or (b) the latest supplier of such goods or services to the second person; or (c) a person who, at any time during the immediately preceding 3 months, supplied such goods or services to the second person.

(6) If: (a) goods or services have been supplied by a person to a second person under a contract between them that required the first person to supply such goods or services over a period; and (b) the period has ended; and (c) after the end of the period, the second person has been supplied with such goods or services by another person and has not also been supplied with such goods or services by the first person; then, for the purposes of the application of this section in relation to anything done after the second person has been supplied with goods or services as mentioned in paragraph (c), the first person is not to be taken to be a person who has been accustomed to supply such goods or services to the second person.

(7) In this section, a reference to a person who has been accustomed to acquire goods or services from a second person includes (subject to subsection (8)): (a) a regular acquirer of such goods or services from the second person; or (b) a person who, when last acquiring such goods or services, acquired them from the second person; or (c) a person who, at any time during the immediately preceding 3 months, acquired such goods or services from the second person.

(8) If: (a) goods or services have been acquired by a person from a second person under a contract between them that required the first person to acquire such goods or services over a period; and

(b) the period has ended; and (c) after the end of the period, the second person has refused to supply such goods or services to the first person;

then, for the purposes of the application of this section in relation to anything done after the second person has refused to supply goods or services as mentioned in paragraph (c), the first person is not to be taken to be a person who has been accustomed to acquire such goods or services from the second person.

180 The provision was reinserted into the TPA as a part of the amendments to the Industrial Relations Act 1988 (Cth) and other legislation, by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth).

181 On the appellant's contentions, clauses 31 to 33 amount to contracts, arrangements or understandings between the first person (John Goss) and an organisation of employees (the ETU), the purpose of, or for purposes which include, preventing or hindering John Goss from acquiring services from the second person (the labour hire company, subcontractor or group training company).

182 The appellant's submission hinges on, amongst other things, there being an "acquisition situation" between John Goss and another party, for instance a group training company. This in turn depends upon a number of factors: firstly whether the supply of labour is a "service", secondly whether a labour hire or group training company is a "second person" within the meaning of the TPA, thirdly whether John Goss "has been accustomed, or is under an obligation" to acquire those services from a labour hire or group training company and fourthly whether the present agreement prevents or hinders that acquisition.

183 The starting point for this consideration must be to recognise that the Commission is here considering whether the enterprise agreement is one, having regard to the matters identified in s 35 of the Act, that "is to [be] approve[d]". On the appellant's submissions, consideration of s 45E of the TPA (as with the appellant's contentions as to s 119 of the Industrial Relations Act), arise in two ways: firstly, the clauses are, in terms, "unlawful pursuant to the TPA" and secondly, they are contrary to public policy (see s 146(2) of the Act). These matters are said to be relevant to a consideration of s 35(1)(a) and generally in relation to the exercise of the Commission's jurisdiction: see s 146(2)(a).

184 We have some doubts that the TPA is a "relevant statutory requirement" as identified in s 35(1)(a). There is a real difficulty in ascertaining the legality or otherwise of a hypothetical "acquisition situation" in the context of approving an enterprise agreement. What is essentially being urged on the Commission is an analysis of a set of circumstances that may arise under an enterprise agreement to determine whether it is accordance with s 35(1)(a) (that is, it complies with all statutory requirements), when the conduct which is said to incompatible with a statutory requirement, has not arisen and may, assuming it did arise, not ultimately be proscribed conduct under that Act (see for example s45E(4) and the giving of written consent). In short, the circumstances said to be proscribed by the TPA have not, as yet, occurred. The appellant's submissions, therefore, never truly rise above an attempt to raise public policy issues in a very broad way. This observation confirms our doubts that these matters arise in terms of our obligations under s 35(1)(a) of the Industrial Relations Act. We shall, however, attempt to deal with the appellant's contentions to the extent feasible.

185 The term "services" is defined in s 4 of the TPA to mean:

"services" includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under: (a) a contract for or in relation to: (i) the performance of work (including work of a professional nature), whether with or without the supply of goods; (ii) the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or (iii) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; (b) a contract of insurance; (c) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or (d) any contract for or in relation to the lending of moneys; but does not include rights or benefits being the supply of goods or the performance of work under a contract of service.

186 This definition has been considered on a number of occasions, and has generally been given a broad interpretation: see for example E v Australia Red Cross Society (1991) 31 FCR 299 where the provision of hospital services (including an operation and blood transfusion) was held to come within the definition of "services". We note that the provision of labour was considered to constitute "services" such as to found jurisdiction in Building Workers Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735. The union in that case, in entering into an agreement with construction companies to prevent the use of contractors supplied by a labour hire company trading as "Troubleshooters Available", was said to have infringed s 45E. The Federal Court of Australia (at 760) confirmed the following finding of the trial judge: In my view, the dealings of Bingham and Harkins with Pomeroys, in concert with each other and with other union officials, constituted interference in the performance of the contract between the applicant and Pomeroys. It also amounted to conduct which hindered Pomeroys acquiring the services of the applicant. By a series of statements and actions, the officials concerned made it clear to Pomeroys that, if it continued to use Troubleshooters' men, it would have industrial problems on its hands. If it ceased to use them, the troubles would all cease.

187 We consider that in the present case the supply of labour (for instance by a labour hire company) to John Goss would fall within the definition of "services" in the TPA.

188 The appellant submitted that "it can confidently be assumed that John Goss is accustomed to acquiring supplementary labour from time to time. If not the clauses will be of no utility or relevance". No evidence was adduced (other than in relation to the supply of apprentices by NECA Group Training) to support this submission, or indeed to indicate the existence of any "second person". It was, however, agreed between the parties that John Goss regularly acquired labour from labour hire firms, engaged subcontractors and sought apprentices from the NECA Group Training Company.

189 There is considerable difficulty in seeking to characterise these provisions as a breach of the relevant provision of the TPA without specifically identifying, and leading evidence in relation to a particular second person and the terms on which they have contracted in the past, particularly having regard to s 45E(3)(b). The respondent submitted that the Full Bench cannot be satisfied that all or some of the clauses contravene s 45E(3) unless the appellant has established that a specified second person has not given written consent to the clauses (see s 45E(4)). In our view, the appellant's argument is somewhat misconceived. The TPA is clear in that the prohibition in s 45E(3) does not apply to a contract, arrangement or understanding which has the written consent of the relevant second person. However, while the written consent of a second person may save a contract which hinders an acquisition situation, once an acquisition situation has been found, it does not follow that consent will be assumed because there is no evidence regarding whether or not such consent exists. The respondent's submissions do, of course, highlight the difficulty in the appellant's contentions.

190 Whilst the difficulties identified earlier make us hesitate in further undertaking this analysis in the way urged by the appellant, we will proceed to further discuss the questions raised by the appellant having regard to the substantive argument advance by both parties. However, it must be emphasised that even if we accepted the appellant's submission that there was in fact a second person so as to properly identify an "acquisition situation" as defined, we do not consider that the existence of those clauses in the agreement can be said to "prevent or hinder" the acquisition of services by John Goss.

191 What relevantly constitutes "prevent or hinder", was considered by the High Court, in the context of s45D of the TPA, in Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32 where Mason CJ, having emphasised that: When a provision in a statute is intended to be protective and remedial and to that end proscribes certain conduct, strong reasons are required to justify an interpretation of the provision which would narrow the scope of the provision and exclude conduct falling within its literal terms. then stated (at 45 - 46): The second reason advanced by the appellants in support of restricting the operation of s 45D(1) through the introduction of the word "directly" was that several other sections in Pt IV of the Act use the words "directly or indirectly" in relation to conduct covered by those sections. From this the Court is invited to infer that the absence of the phrase "directly or indirectly" in s 45D (1) means that the reference in that section to "hinders or prevents" must be a reference to "directly hinders or prevents". While there is some force in this submission, the interpretation is equally open that an unqualified reference to hindrance or prevention means hindrance or prevention of any kind, whether direct or indirect. The evident wide scope of s 45D(1) and the broad interpretation which should be afforded to that section together militate against restricting its terms and provide a strong reason for inclining to the wider interpretation. Further, it cannot be, and indeed was not, suggested in argument that the notion "direct" is inherent in either of the words "hinder" or "prevent". "Hinder" has been construed in England "in the general sense of in any way affecting to an appreciable extent the ease of the usual way of supplying the article" (emphasis added): Tennants (Lancashire) Limited v. C.S. Wilson and Company Limited (1917) AC 495, per Lord Dunedin at pp 513-514; Peter Dixon and Sons Ltd. v. Henderson, Craig and Co. (1919) 2 KB 778, at p 786. What was there said in relation to hindrance of supply would apply with equal force to hindrance of acquisition. The comments of Gibbs J. relating to the words "prevent or hinder" in Reg. v. Bell; Ex parte Lees (1980) 146 CLR 141 , at pp 147-148, must be seen in the context of that case. As his Honour observed, a broad construction would have effected a very drastic interference with ordinary civil rights: at p 148. There is no similar reason for rejecting a broad interpretation of those words in this case. As has been said, such an interpretation is entirely consonant with the purpose of the section.

192 There does not appear to be any basis for construing s 45E differently to the approach of Mason CJ as to s 45D in the above passage; that is, an arrangement will be taken to "hinder" a supply or acquisition situation if it affects "to an appreciable extent the ease of the usual way of supplying the [services]". Section 45E(3)(a) does not apply as none of the relevant clauses prohibit per se the relevant acquisition situation. Taking the appellant's submissions at their highest, the impugned clauses only impose a condition on the acquisition of services and as such could, at most, constitute a hindrance.

193 Each clause must, however, be addressed individually. Clauses 32 and 33 may be dealt with shortly as neither of those provisions can be said to affect to an appreciable extent the relevant "acquisition" situation. We emphasise, it is to the terms of the enterprise agreement that we must have regard. Neither of those provisions places any mandatory requirement on the relevant "second person" - namely, the subcontractor and the Group Training Company (other than an obligation to notify in clause 33). Clause 32 is framed in terms of John Goss Pty Ltd "endeavour[ing] to ensure" that a subcontractor has an enterprise bargaining agreement with the respondent. Clause 33 merely requires the provision of a notice to the relevant Group Training Company; it does not prohibit or otherwise confine John Goss from continuing to hire apprentices from NECA Group Training, or any other organisation that does not have an enterprise agreement with the respondent.

194 Clause 31, however, is more difficult. In terms, it provides that "when necessary to meet short term peak work requirements additional labour resources will be sourced from Labour Hire Companies who have an enterprise agreement with the union signatory to this agreement". As was conceded by Mr Searle, the language of this provision is somewhat more "directory". It would appear that a condition that required the labour hire company to have an EBA with a specific union is capable of hindering the relevant acquisition situation, having regard to the meaning of "hinder" discussed by Mason CJ in Devenish v Jewel Food Stores Pty Ltd.

195 The difficulty with the appellant's submission, however, is that it is, with respect, inherently inconsistent. The relevant "hindrance" was said to arise from the requirement to deal with the respondent union. As Mr Kite conceded: If it was said that the intent of the supplementary labour clause is to ensure labour that comes on to that site and works to the benefit of that particular employer is not paid less than the rates specified in the agreement, we would have no difficulty with that. If the wording was of that kind, we would have no difficulty and our concerns would evaporate … If the intent is to ensure the securing of the rate of pay at that employer's site and, frankly, we see no difficulty so long as the wording does not go beyond that.

196 That is, the appellant would have no difficulty if the clause was limited to the form in which it existed in the agreement that expired in September 2002, requiring either agreement with the respondent or the payment of terms and conditions of employment that were equivalent to those provided in the instant agreement.

197 However the instant agreement, as the evidence makes abundantly clear (and indeed as is not in issue), is a "pattern agreement". The uncontested evidence of Mr Boyce was that the respondent "pursues pattern enterprise agreements", which he defined in his evidence as "an enterprise agreement that is in identical terms and entered into by an number of employers across an industry". As his evidence continued: A pattern enterprise agreement is therefore an industry wide agreement that is registered on an individual basis. … These pattern enterprise agreements all contain the same terms and conditions of employment, including the same wages rates for the various employee classifications covered by the pattern enterprise agreement. The only variation to a pattern enterprise agreement, if any, would be minor.

198 Whilst there was some evidence of variations having been made during the course of negotiating various agreements, the uncontested evidence of Mr Boyce is the only evidence upon which we can determine whether the relevant clause constitutes a "hindrance". Thus, whilst in terms the requirement to have an agreement with a particular union may constitute a "hindrance" to the relevant acquisition situation, having regard to the evidence in these proceedings and in particular having regard to the "pattern" nature of the enterprise agreements entered into by the respondent, there is nothing in the clause which, in our view, could be said to affect "to an appreciable extent the ease of the usual way of supplying the article".

199 Simply put, if the enterprise agreements entered into by the union are always in terms of the "pattern bargain" (save for possible minor amendments), then it makes little difference whether the third party enters into agreements with the union or simply provides terms and conditions that are equivalent to the pattern bargain. The agreement will be in terms of the standard pattern agreement on either view. When looked at in this way, it is clear that the appellant's difficulty with the impugned clauses devolve into what can only be identified as a policy position in having its member (whom it should be noted consented to the terms as presently before the Commission) in dealing with the respondent.

200 Whilst it was agreed between the parties that John Goss regularly obtained labour from labour hire firms, engaged contractors and sought apprentices from NECA Group Training, there was no evidence as to what was the "usual way" or terms of this relevant supply. Insofar as NECA Group Training was concerned, Mr Dawson conceded that there was nothing in the terms of the agreement that would result in an increase in the cost of apprenticeship labour nor was there anything that would result in a change to current industry practice in the cost of engaging apprentice labour. The predecessors to the instant agreement contained clauses which required relevant third parties supplying labour in one form or another, to either enter an agreement with the union or engage on terms no less advantageous than those provided for in the relevant agreement. We would note that there was no restriction on the appellant's capacity to lead evidence from John Goss (noting of course the requirement to have leave to bring the evidence in the same manner with which the other evidence has been lead in these proceedings). Having regard to the pattern nature of the agreement, as disclosed in the evidence of Mr Boyce, Mr Dawson and Mr Riordan, there is nothing from which we could conclude that the agreement would amount to an "appreciable" change in the "ease of the usual way of supplying" the relevant service. On the evidence, there is nothing from which we could conclude that there was a relevant hindrance.

201 Counsel for the respondent conceded that the enterprise agreement did not and indeed could not bind any third party. On his submission, the relevant provisions of the enterprise agreement simply could not have the effect contended by the appellant. This, on the respondent's submission, was entirely consistent with the evidence of Mr Riordan and his recognition that the agreements could not be enforced. Whilst it was the "desire" that these arrangements would lead to relationships with the respondent, there was nothing in the enterprise agreement that could compel such a result.

202 It must of course be firmly kept in mind that the Commission is not currently examining the agreement to determine whether past conduct has lead to a breach of the TPA. We have no evidence specifically identifying a "second person" (other than NECA Group Training, which we have concluded does not "hinder" the relevant acquisition) such as to properly identify an "acquisition situation". Rather we must examine these provisions from a somewhat more conceptual position, looking to what may occur in the future. When looked at in this way, we cannot identify the relevant clauses as "affecting to an appreciable extent the ease of the usual way of supplying the article".

203 The other element of s 45E to which we were taken was the requirement that the "proposed contract, arrangement or understanding" have a relevant "purpose"; namely, preventing or hindering the relevant acquisition. The respondent submitted in relation to clauses 31 to 33 that the relevant question is not whether those clauses have a particular effect, but whether the clauses were designed for a particular purpose or purposes. The question then is whether that purpose or those purposes fall foul of the TPA. Mr Searle submitted that: In relation to the external [labour] clauses, generally, the purpose was said to be to create a level playing field in the industry by ensuring that the proper rates of pay for labour and registered enterprise agreements is applied and that no-one gained a competitive advantage by cutting those rates … That is the evidence that is before this Full Bench if it is received as to what is the purpose of the ETU in pursing the inclusion in the enterprise agreement of those four clauses. (emphasis added)

204 In our view, the evidence before us results in a finding that clauses 31, 32 or 33 have the purpose indicated by the respondent. Indeed, such a conclusion is entirely consistent with the "pattern" approach to enterprise bargaining adopted by the respondent. Whilst Mr Riordan gave evidence that it was part of the purpose or the "desire" of the respondent that the enterprise agreement would lead to other employers entering into enterprise agreements with the respondent, there was nothing in the enterprise agreement that could compel such a conclusion (nor to the extent relevant was there anything in the MOU's which could compel such a conclusion). Clauses 31, 32 and 33 are, in our view, properly characterised as having the purpose of securing the conditions of employment of the persons engaged by John Goss. We should, again reiterate that there is no evidence of an MOU having been entered into between the respondent and John Goss.

205 Insofar as the appellant contended that it would be against "public policy" for the Commission to approve an enterprise agreement, having regard to our conclusion that the impugned clauses are within jurisdiction, there is no basis upon which we consider that the enterprise agreement ought not be approved on this basis.

206 Further, we should observe that it was not contended that a "pattern agreement" was, in and of itself, contrary to public policy. There is nothing in the terms or the apparent intention of the Act which would lead to that conclusion. Moreover, the appellant has failed to identify with any degree of specificity exactly what difficulties are associated with the concept of a "pattern agreement" in respect of this case. Indeed, the entirety of the evidence in this case, both as to the way in which the "pattern agreements" have come forward and the specific evidence of Mr Riordan, make abundantly clear that in the course of negotiations variations will be made if need be. There is, in our view, nothing exceptional in an industrial organisation having particular objectives when approaching a round of enterprise bargaining and pursuing those objectives on behalf of its members.

207 Section 119 of the Act is in the following terms: An employer must not, directly or indirectly, impose as a condition of the employment of an employee any terms as to the place where or the manner in which the person with whom any remuneration paid to the employee is to be spent.

208 The only clause to which s 119 could have any relevance in the present circumstances is cl 42, providing as it does that John Goss Pty Ltd "agrees to commence discussions with the Union in relation to the future implementation … of a Bargaining Agents Fee". The clause continues, however to provide that such "implementation" would be "subject to the clause having been approved by the New South Wales Industrial Relations Commission". The clause, in terms, plainly does not "impose as a condition of employment" that an employee expend the "remuneration paid to the employee" in any particular manner. Moreover, as the evidence of Mr Riordan makes abundantly plain, there has not been, nor in the absence of further discussions and subsequent approval would there be, any enforcement of a "bargaining agents fee". As there is no evidence of John Goss having entered into an MOU with the respondent, issues that may arise involving an MOU of the kind described in evidence do not arise in this matter.

209 The operation of s 119 was considered by the Full Bench in Re Review of the Principles for Approval of Enterprise Agreements 2002 (2002) 121 IR 144 at [25], where, having observed that "a provision requiring an employee to pay a bargaining agents fee may, in appropriate factual circumstances, be a condition of employment", held: If such circumstances exist and a relevant provision is included in an enterprise agreement approved under the Act, such payments may be made notwithstanding the " Truck Act " provisions of s 119 of the Act, since s 118(2)(b) permits an employer to deduct and pay from remuneration payable to an employee any payments which are so authorised by an industrial instrument. The term "industrial instrument" is defined as including an enterprise agreement.

210 The operation of s 119 of the Act does not, in the present circumstances, arise.

211 As we have emphasised earlier in this decision there is nothing inappropriate per se in parties seeking to have approved an industrial instrument that does not set out every aspect of the agreements reached between them. The "manipulations" of the kind identified in Rothmans are those which seek to engage an industrial instrument of the Commission as a feature of an agreement which, when looked at in its entirety, is contrary to matters expressly prohibited by the Act or perhaps otherwise contrary to the public interest. The language of the MOU adopted by the respondent as a part of its negotiations has already been the subject of comment earlier in this decision. As earlier noted, as there appears to be no MOU between John Goss Pty Ltd and the respondent, our concerns as to the terms of the bargaining agents fee do not arise here. The terms of the enterprise agreement currently before the Commission are, in our view, related to "industrial matters" as defined and within the power conferred on the Commission to approve enterprise agreements.

212 Finally, we stress that our decision in this matter is limited to the jurisdictional and related arguments raised by the parties. Generally speaking, we have not considered the "merits" of the provisions challenged on jurisdictional and similar grounds. Enterprise agreements under the Industrial Relations Act are one of the key areas which the legislature has determined should be devolved "clearly to the hands of those most immediately concerned" (see, for example, Re Principles for the Approval of Enterprise Agreements (1996) 94 IR 98 at 117): relevantly, the parties to the enterprise agreement. The Commission's role as to such instruments is limited by the statute and, subject to the terms of the statute and the principles laid down pursuant to its provisions, it is for the parties to the agreement, and not for the Commission or a third party, to determine the terms, or the merit of the terms, of the agreement.

1. Leave to appeal is granted; 2. The decision of Kavanagh J is set aside insofar as her Honour refused the appellant the right to appear and be heard in the application for the approval of the John Goss Enterprise Agreement; 3. The appeal is otherwise dismissed.

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