Consideration - could any of the five unions raise a dispute under cl 28?
56 It is important to have regard to the industrial purpose of the Yallourn agreement and the commercial and legislative context in which it applies when construing it, including cl 28 itself as a whole: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at 249 [13] per Gleeson CJ and McHugh J, 270-271 [96] per Kirby J, 282-283 [129]-[131] per Callinan J, and see too at 253 [30] per Gummow, Hayne and Heydon JJ. Both Kirby J and Callinan J expressly approved (at [96], [129]-[130]) and Gleeson CJ and McHugh J applied (at [13]), what Madgwick J had said in Kucks v CSR Ltd (1996) 66 IR 182 at 184, namely:
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand. (emphasis added)
57 Although that decision concerned an award, Madgwick J's observations have equal application to the construction of enterprise agreements made under the Fair Work Act.
58 An enterprise agreement must be construed in its industrial and legislative context as an agreement made between parties engaged in an employment relationship in which employee organisations, such as the five unions, can, and often will, have a workplace right under ss 341(1) and or 183(1) of the Fair Work Act to play a part, including as a party to it. Those persons may not have been assisted by lawyers in the precise framing and expression of its terms.
59 Here, when the Commission approved the Yallourn agreement it noted, pursuant to s 201(2), in its decision that the agreement once it came into operation under s 54(1) following the Commission's approval, "covered" each of the five unions. That had the consequence that it provided the terms and conditions that governed the rights and obligations of each of the five unions in respect of both Energy Australia, as employer, and its employees who were, or were eligible to be, members of the respective union: cf. Aldi Foods Pty Ltd (as general partner of Aldi Stores) (a limited partnership) v Shop Distributive and Allied Employees Association (2017) 350 ALR 381 at 388-389 [26]-[34], 396 [78] per Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ.
60 An enterprise agreement is a statutory artefact made by persons specifically empowered by the Fair Work Act to do so: Marmara 222 FCR at 180 [90]. It has a legislative character, because it is a fair work instrument, as defined in s 12 of the Fair Work Act. The Act enables an enterprise agreement to be made between an employer and both its employees (by majority vote) and employee organisations, such as the five unions.
61 As noted above, an enterprise agreement is a "workplace instrument" made pursuant to the Fair Work Act for a particular statutory purpose, namely to regulate an employment relationship in which, often, as in the present case, employee organisations will be involved. An employee organisation has a right, under s 540(2), to seek a remedy under Div 2 of Pt 4-1 of the Act "in relation to a contravention … of a civil remedy provision … in relation to an employee only if" the employee is or will be affected by the contravention and the particular union is entitled to represent his or her industrial interests. Each of the five unions had a workplace right, within the meaning of s 341(1)(a), because it had a role or responsibility under the Yallourn agreement and under s 341(1)(b), because it could initiate or participate in a dispute settlement process (within the meaning of ss 341(2)(j) and 186(6)).
62 Each of the five unions, as an employee organisation, could apply to the Court for an order under s 540(2) in relation to a contravention of, among others, s 50 (that prohibits a person from contravening a term of an enterprise agreement) as Energy Australia noted in its written submissions on the appeal and in addition, s 323(1)(a) (that requires an employer to pay an employee in full the amounts due to him or her in relation to the performance of work) (see s 539(2) items 4 and 10). It follows that each of the five unions had a workplace right under ss 323(1)(a) and 540(2) to initiate proceedings relating to compliance with cl 5.3 of the Yallourn agreement under s 341(1)(b), and also had a role or responsibility to enforce compliance with it under s 341(1)(a).
63 Since each of the five unions had a right to initiate proceedings in the Court, s 186(6) required cl 28 to provide a procedure to resolve a dispute that would be litigated in such a matter, because that dispute would arise under the Yallourn agreement, even if no individual employee had initiated a complaint, provided that Energy Australia had contravened its obligations under cl 5.3 in respect of one or more casual employees (see s 540(2)).
64 Here, cll 28.2(e) and 28.3(b) provided that "the Parties" (being the persons defined as such in cl 2) would be bound by the decision of the Commission in an arbitration under that dispute resolution clause. Although the Yallourn agreement appears to have switched freely between referring to all persons who were in a legal sense parties to it (employees, Energy Australia and the five unions) as "parties" and the defined term "the Parties", cl 28.2(e) could not operate to cause a decision of the Commission to bind "the Parties" if the five unions had no right to raise, or be a legal party to, the dispute. That consequence bespoke the importance of providing a dispute resolution process in which disputes involving any one of the five unions, including in disputes between them, could be resolved, as well as disputes involving employees who were members of or eligible to be members of the relevant unions.
65 As s 172(1) of the Act provides, an enterprise agreement can be "about" matters pertaining to the relationship "between the employer … and the employee organisation or employee organisations, that will be covered by the agreement". A dispute about, or involving, that relationship is a subject-matter for which s 186(6) requires a dispute resolution process to be included in an enterprise agreement. However, neither cl 28.1(a) nor par (3) of the model term, in Sch 6.1 to the Regulations, expressly addresses whether a dispute that any of the five unions may have with Energy Australia, arising under the Yallourn agreement as to its interpretation or Energy Australia's compliance with its terms, can be addressed only by discussions between the employer and one or more employees, without the involvement of the union(s) concerned.
66 Clearly enough, the literal phrasing of each of par (3) of the model term and steps 1 and 2 in cl 28.1(a) is apposite to cover a dispute that involves only the employer and one or more employees. However, both the model term and cl 28 are intended to provide, as s 186(6)(a)(i) requires, "a procedure that requires or allows [the Commission] … to settle disputes … about any matters arising under the agreement" (emphasis added). Therefore, a literal construction of cl 28 that precluded any of the five unions that are parties to the Yallourn agreement from initiating a dispute about a matter arising under it for which it has a workplace right, would defeat the purpose which the first three paragraphs of cl 28 (preceding cl 28.1) and ss 186(6) and 341(1) required the dispute resolution process in the clause to serve.
67 Energy Australia's argument that the Yallourn agreement did not provide any basis for any of the five unions to raise a dispute under cl 28 must be rejected. That is because, if the five unions themselves could never raise or pursue a dispute about their workplace rights, as employee organisations, covered by the Yallourn agreement within the meaning of ss 53(2), 172(1)(b) and 186(6)(a)(i), then cl 28 would not provide a procedure to settle a class of category 1 matters that could arise under the enterprise agreement. Accordingly, cl 28 would not comply with s 186(6).
68 Clause 28 itself defines category 1 matters as ones "that are in dispute, that go to the application or interpretation of this Agreement" and it states that it "facilitates access to [the Commission] for conciliation and, if necessary, arbitration" for those matters. The clause should be construed to ensure that it achieves that stated objective, and the requirements of s 186(6), in respect of all category 1 matters.
69 The particular provisions of cl 28.1(a) should not be construed so as to read down the general provisions of the introductory part of cl 28 or the facultative operation of cl 28.1(b). The latter permits "the parties" to agree to refer a dispute to the Commission "at any stage" for "speedy resolution". Clause 28.1(b) eschews the meretricious pedantry of Energy Australia's argument, and permits achieving the industrial, commercial and statutory objective of a comprehensive process to resolve all disputes of category 1 matters. It follows that any of the parties (Energy Australia, any of its employees and any of the five unions) between whom a dispute exists in respect of such a matter, can agree that the Commission can resolve it in accordance with the procedure in cl 28.
70 Energy Australia's submission, that it and the five unions would not be bound by any decision of the Commission in an arbitration under cl 28, and that each of it and they were free to commence proceedings in the original jurisdiction of this Court to seek declarations inconsistent with the arbitration decision, is self-evidently untenable and must be rejected. It would be recipe for industrial chaos if none of the five unions was bound by a resolution arrived at in the dispute resolution process even though cl 28 appeared, in its terms, to seek to achieve such a resolution.
71 The consequence of Energy Australia's argument would be that, although the Commission had resolved a dispute between it and its employees in a binding decision given under s 739(4), somehow both it and any of the five unions could evade the result of that statutorily mandated dispute resolution process. Such an absurd outcome would represent the antithesis of a dispute resolution process of the kind required by s 186(6) of the Fair Work Act. Indeed, if Energy Australia's argument were correct, then the Yallourn agreement could not comply with s 186(6) because it would not:
provide[] a procedure that requires or allows the [Commission], or another person who is independent of the employers, employees or employee organisations covered by [it] to settle disputes … about any matters arising under the agreement. (emphasis added)
72 Moreover, the dispute resolution process in cl 28 would be subverted if it were confined solely to matters covered by cl 28.1(a). That is because the introduction to cl 28 provided that category 1 matters included:
matters that are in dispute, that go to the application or interpretation of this Agreement …. this clause facilitates access to the [Commission] for conciliation and, if necessary, arbitration.
73 The evident purpose of the Yallourn agreement was to ensure industrial peace at a large power plant in which there were many employees and five unions, each of whom had, or could have, different industrial and workplace concerns in respect of its own members (or employees eligible to be its members) and the other unions. The dispute resolution process in cl 28 would be pointless if it did not operate so as to bind all of those parties in a way that was certain. Unless all were capable of being bound, the requirement in s 186(6) of the Act, and the object of the parties themselves in agreeing to cl 28, could not be achieved. Instead there would be a chaotic decision-making process in which, on the one hand, the Commission could make binding arbitral awards between employees and Energy Australia, and on the other hand (as Energy Australia argued), both it and the five unions would be free to challenge those awards collaterally by proceedings in the Court.
74 Moreover, cl 28.1(b) allowed "the parties" to agree "at any stage" to refer a dispute to the Commission "in the interest of speedy resolution of the dispute". Although cl 28.1(a) provided a process to be followed that, in most cases, fitted the circumstances, the parties had the right to depart from it as provided in cl 28.1(b). Reading the Yallourn agreement as a whole, and giving cl 28 a construction in its industrial, contractual and statutory context, a reasonable person in the position of the parties would have understood that each of the five unions had a right to initiate a dispute about category 1 matters that the Commission could conciliate and arbitrate.
75 Energy Australia's argument that a third party such as a union cannot be a "party principal" to an enterprise agreement must be rejected. As explained above, the five unions have workplace rights under the Yallourn agreement and can enforce them. The proposed enterprise agreement, on which the employees vote, necessarily includes clauses dealing with the role and status in which any party to (or covered by) it can raise a dispute and have it determined in accordance with s 186(6), if the employees or a majority of them vote to approve entry into it and the Commission approves it.
76 Thus, the provisions of the Yallourn agreement, dealing with the five unions and, as cl 2 provided, their status as parties (or "Parties") to it, were voted on and approved by the majority of the employees. If the majority vote against approval of an enterprise agreement under s 182, then, of course, no union will be covered by, or a party to, an enterprise agreement. But that will be because there will not be any such agreement. Conversely, where the employees vote to approve an enterprise agreement that makes provision for a union to have a role as a party, then when the union (which is likely to have had a role as a bargaining representative under s 185(1) in formulating what was put to that vote) gives notice under s 201(2) to seek that it be covered, it will be acting, as both the employer and its approving employees contemplated, to become "covered" and so a party in its own right with all of the rights of a party.
77 Energy Australia argued that, somehow, a union is not a full party to an enterprise agreement that the Commission notes (under s 201(2)) is covered by that agreement. Energy Australia contended that such a union only has the right to bring proceedings in a court under s 539(2) to enforce it, but not to use the dispute resolution procedure (such as cl 28) that s 186(6) requires to be an essential feature of an enterprise agreement. That argument makes no sense. Once the employees (or a majority) have voted to approve an enterprise agreement that provides for a union to be a party (even on the assumption that it must give notice under s 201(2)), both those employees and their employer will have expressed agreement to the union becoming a party to the enterprise agreement, with all the rights of a party and subject to any limitation of those rights as the document provides.
78 As Jessup, Tracey and Perram JJ said in Marmara 222 FCR at 179-180 [89]-[90]:
… although the FW Act provides that an enterprise agreement is "made" otherwise than by the Commission, the Act does more than merely impose conditions upon, and give additional legal effect to, an agreement made between private parties. The effect of the legislation is to empower the employer and the relevant majority of its employees to specify terms which will apply to the employment of all employees in the area of work concerned. The legal efficacy of those terms will arise under statute, not contract, and, as mentioned above, will be felt also by those who did not agree to them. Someone, such as an employee subsequently taken on, who had nothing to do with the choice of the terms or the making of the agreement, will be exposed to penal consequences under s 50 if he or she should happen to contravene one of the terms. When viewed in this way, it is not difficult to share in the perception that an enterprise agreement approved under the FW Act has a legislative character.
An enterprise agreement is a statutory artefact made by persons specifically empowered in that regard, and under conditions specifically set down, by the FW Act. It is enforceable under that Act, and not otherwise. There is, in the circumstances, no reason to approach the question of legislative intent with a predisposition informed by notions of freedom of contract. (emphasis added)
79 The approval mechanism that the Fair Work Act prescribes in ss 186, 187 and 201 does not, and is not intended to, exclude the role of an employee organisation, such as a union, to be a party to an enterprise agreement with the rights of each other party to it. That role, necessarily, is created and defined by the terms of an enterprise agreement and the exercise of any election by the union to give notice under ss 53(2) and 183(1) of the Fair Work Act to seek the Commission's notation in its decision under s 201(2) that it be covered and, so, to have a statutory status as a party to, and with full legal capacity to enforce, it under ss 50-53, 183(1) and 341(1) both in a judicial proceeding and also in accordance with its terms in a dispute resolution process under s 186(6), including in respect of matters referred to in ss 172(1), 341 and 540(2).
80 Although in the above passage, Jessup, Tracey and Perram JJ did not refer to the role of an employee organisation, that was because there no issue about such a role in that matter. The "statutory artefact" will "cover" an employee organisation because ss 182(4) and 201(2) so provide if the Commission makes a decision to note that fact. Indeed, the scheme of ss 50, 51, 52, 53, 172 and 182 is to ensure that an enterprise agreement will apply to or cover two or more of an employer, its employees and employee organisations. And s 183 gives an employee organisation that had been a bargaining representative for the proposed enterprise agreement that, as s 182(1) provided, was "made" when the majority of employees voted for it, the right to give the Commission a written notice that it "wants the enterprise agreement to cover it". The enterprise agreement only becomes operative seven days (or if it so provides on a later date) after the Commission approves it (s 54(1)). Section 51(2) provides that an enterprise agreement "does not give a person an entitlement unless the agreement applies to the person", being (as s 52(1) provides) an employer, employee or employee organisation covered by the agreement.