Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union

Federal Court of Australia|2023-04-27|Before: Mr J, Colvin J

On the trial of the preliminary issue it be determined that the applicant has standing.
The interlocutory application for summary dismissal dated 12 April 2022 is dismissed.
There be no order as to the costs of the preliminary issue. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 The Court must determine an arid debate concerning the boundaries of regulatory authority between the Australian Building and Construction Commissioner (ABCC) and the Fair Work Ombudsman (Ombudsman). The debate arises in the following way. The ABCC claimed that the Construction, Forestry, Maritime, Mining and Energy Union (Union) and one of its officers had contravened the Fair Work Act 2009 (Cth). It commenced proceedings seeking the imposition of pecuniary penalties and orders for the payment of compensation. The respondents claimed that the ABCC had no standing to bring the proceedings. They claimed that only the Ombudsman had standing. Orders were made for the question of the standing of the ABCC to bring the proceedings to be determined as a preliminary issue before all other issues. 2 After the hearing of the preliminary issue but before the issue was determined, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Amending Act) was enacted. By item 323(1) of Part 3 of Schedule 1 to the Amending Act, it provided that: If any civil proceedings to which the Australian Building and Construction Commissioner or an inspector is a party were pending in a court immediately before the transition time: (a) the Fair Work Ombudsman is, after the transition time, substituted for the Australian Building and Construction Commissioner or the inspector as a party to those proceedings; and (b) if the proceedings are for an order relating to a contravention of a civil remedy provision - the Fair Work Ombudsman is taken to be an authorised applicant for the order. 3 Thereafter, an order was made substituting the Ombudsman for the ABCC as the applicant in the proceeding. As it was common ground that the proceedings could have been commenced by the Ombudsman in the first instance, one may have thought that good sense would prevail and this Court would not be called upon to resolve an issue which had been overtaken by events. However, the respondents continued to maintain that the proceedings were commenced without authority and went so far as to claim that they are a nullity. 4 The validity of the claim that the proceedings are a nullity may be questioned. This Court has jurisdiction in any matter arising under any laws made by Parliament. It is the existence of the underlying controversy between the parties in respect of such a federal matter that confers jurisdiction. The Court does not lose its authority to adjudicate if it finds that the controversy is properly determined by a conclusion that a party does not have standing to bring the controversy before the Court. There is no analogy between the present case and those cases where proceedings are brought on behalf of a non-existent party such as a deceased person or a deregistered company: see, for example, Deveigne v Askar [2007] NSWCA 45; (2007) 69 NSWLR 327 at [113]-[114] (McColl JA, Hodgson and Giles JJA agreeing). 5 Further, this Court has power to determine that a party be substituted with effect from the date of commencement of the proceedings. An order of that kind could be made on the application of the Ombudsman. It could not be made so as to introduce a claim that was barred by limitation. Otherwise, either by the doctrine of relation back or by express order the Ombudsman could become the applicant with effect from the commencement of the proceedings (even though that is not the effect of item 323(1) quoted above): as to relation back, see my recent reasons in Sydney Subdivision Pty Ltd (in liq) v Chow [2023] FCA 8 at [35]ff. 6 In any event, the Ombudsman is now the only regulatory party who could maintain the claims made in these proceedings. The Ombudsman seeks to maintain the proceedings and could commence fresh proceedings if necessary (that is, if the existing proceedings were to be found to have been commenced without statutory authority to do so). If fresh proceedings were commenced then it would appear that the appropriate costs order would be to the effect that the costs of the present proceedings be costs in the fresh proceedings. Such an order would appear to be appropriate because, in circumstances where the practical significance of an issue has fallen away due to no fault by any party, the court will usually make no order as to costs. 7 Yet, the parties prefer instead to eschew practicality and good sense. They insist upon the adjudication of the question of standing. It appears that they do so because the respondents claim that if they succeed they will be entitled to an order dismissing the proceedings with costs and the ABCC and its successor as applicant, the Ombudsman, are not prepared to take the risk of being exposed to a costs order. 8 For the following reasons, the ABCC had standing to commence the proceedings. The preliminary question must be determined in favour of the applicant. The interlocutory application by which the respondents sought summary dismissal should be dismissed.

The basis for the claim by the ABCC that it had standing to commence the proceedings 9 The position of the ABCC was that it maintained that it had standing to commence the proceedings by operation of s 111(1) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (BCI Act). It provided that if a provision of the Fair Work Act authorises a 'Fair Work Inspector' to make an application to the Fair Work Commission or make application in a court 'the provision is also taken to authorise an inspector [under the BCI Act] to make such an application in any case … where the application or proceedings relates to a matter that involves … a building industry participant; or … building work'. There is no issue between the parties that a Fair Work Inspector had authority to institute proceedings against the ABCC of the kind commenced by the ABCC. The issue is whether the ABCC could do so. 10 The ABCC relied upon the authority conferred to commence proceedings in any case where the application relates to a building industry participant and not upon the separate authority that relates to building work. It maintained that the Union was a building industry participant (and that circumstance was sufficient to confer authority). The union officer was alleged to be a representative of the Union as a building industry participant. 11 The ABCC was established by the BCI Act. The main object of the BCI Act 'is to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively, without distinction between interests of building industry participants, and for the benefit of all building industry participants and for the benefit of the Australian economy as a whole' (emphasis added): s 3. 12 The term 'building work' is defined in s 6 of the BCI Act by listing various activities of a kind that would usually be included in the use of that term as a matter of ordinary parlance. Certain identified activities are expressly excluded from the definition. In particular building work does not include the extraction of minerals or the drilling for, or extraction of, oil or natural gas. There is also provision for further prescription by rules of other activities that are to be included or excluded from the definition. In short, the BCI Act has quite detailed provisions as to precisely what is encompassed by the term building work for the purposes of the legislation. 13 Many provisions of the legislation (including s 111(1)) deploy the term 'building industry participants' as a means of circumscribing the ambit of provisions in the BCI Act. The singular of the term is defined in s 5 of the BCI Act to mean any of the following: (a) a building employer; (b) a building employee; (c) a building contractor; (d) a person who enters into a contract with a building contractor under which the building contractor agrees to carry out building work or to arrange for building work to be carried out; (e) a building association; (f) an officer, delegate or other representative of a building association. 14 Most of the terms used in the definition of building industry participants are themselves defined. For present purposes, it may be noted that the definition of 'building employer' operates by reference to the definition of 'building employee' which is defined to mean: (a) a person whose employment consists of, or includes, building work; or (b) a person who accepts an offer of engagement as an employee for work that consists of, or includes, building work. 15 The term 'building work' is also used to qualify the scope of the term 'building contractor'. 16 The term 'building association' is defined to mean: an industrial association whose rules allow membership by members of at least one of the following groups: (a) building employers; (b) building employees; (c) building contractors; whether or not those rules also allow membership by other persons. 17 Therefore, by deploying the terms 'building employers', 'building employees' and 'building contractors', the term building association is defined by reference to a membership of persons involved in 'building work'. However, of particular significance for present purposes are the final words of the definition which make clear that an association whose rules allow membership by other persons is still a building association. 18 Unsurprisingly, it is common ground that the Union is an industrial association. It is also common ground that the Union has many members who are employees whose work does not consist of or include building work. There can be no significance to the fact that some members of the association (even many members) are not involved in building work. The definition of building association is not confined in any way to industrial associations of members all of whom have some specified connection to building work. It is expressed in broad terms that apply whether or not the rules of the association allow membership by persons who are not building employers, building employees or building contractors. It is the term building association that assumes considerable significance for present purposes. 19 It was the position of the ABCC that the Union is a building association, therefore it is a building industry participant, therefore by operation of s 111(1) of the BCI Act any application that could be brought against the Union by a Fair Work Inspector under the Fair Work Act could be brought against the Union by the ABCC. The ABCC does not claim that the present proceedings have anything to do with undertaking building work or conduct in the building and construction industry. It says that it has statutory authority to bring the proceedings because the members of the Union include employees who undertake building work. In effect, it claims that the statutory authority conferred extends to the conduct of an industrial association that has employment in undertaking building work as a qualification for membership. 20 The Union says that matters of context and purpose support a construction that would confine the authority conferred by s 111(1) to instances where the alleged contravention of the provisions of the Fair Work Act 'relate to the building and construction industry'. The necessary premise for the Union's position is that the involvement of an industrial association whose qualifications for membership include employment in undertaking building work is an insufficient foundation for the conduct of the Union to be said to relate to the building and construction industry. The Union's case would mean that the ABCC would have authority over the activities of an industrial association only to the extent that its activities might be said to relate in some necessary respect to the building and construction industry, that is the activities involve or relate to building work. 21 A considerable difficulty for the Union's position is the fact that s 111(1) provides for two qualifying circumstances. One where 'the application or proceedings relates to a matter that involves … building work' and the other where it involves 'a building industry participant'. The two qualifying circumstances are expressed to be alternatives each of which is sufficient. The case as to standing advanced by the Union would require that the matter involves building work. Yet, it is plain that the legislation is not so confined and the involvement of a building industry participant is a separate circumstance in which the ABCC has authority to bring an application or proceeding.

The principles of statutory construction 22 The relevant principles of statutory construction are well established. 23 The task for this Court is to interpret the language used by Parliament. It requires consideration of the text and structure of the legislation to determine contextual meaning having regard to evident purpose. In discerning purpose there must be regard to the legislation as a whole and any relevant extrinsic materials. A blinkered reading of an individual provision is not to be undertaken. In this particular case, the process of construction also involves consideration of express statements of statutory objects contained within the legislation.

The structure of the Union 24 The Union's constituting instruments provide for the Union to operate in divisions, each of which has 'autonomy to decide matters which do not directly affect members of another Division without interference by any other body within the Union, including but not limited to … the industrial interests of its members'. It was common ground that the structure meant that the Union had some members who were building employees and some that were not. One of the divisions had members who were building employees. Another had members who were not building employees. It was accepted by the Union that it was a single organisation. Quite properly, it was not claimed that the divisional structure meant that the BCI Act applied to each division of the Union rather than the Union as the relevant legal entity. 25 No doubt there are many ways in which an industrial association may be constituted. However, the relevant statutory provisions do not operate by reference to such internal aspects. Rather, they operate by reference to building industry participants, a term that is defined to include 'an industrial association whose rules allow membership by members of … building employees … whether or not those rules also allow membership by other persons'. Therefore, the position of the Union must be justified on the basis that, notwithstanding the clear terms of the definition, there is some reason why particular provisions in the BCI Act are to be read down so as to only apply to building industry participants who are industrial associations to the extent that all their members are building employees.

The issue for determination: the proper construction of s 111(1) 26 The submissions for the Union focussed upon s 111(1) of the BCI Act to which reference has already been made above. It is convenient at this point to set out the provision in full (noting that the references to FW Act in the provisions are to the Fair Work Act): If a provision of the FW Act, the FW Transitional Act, or of an instrument under either of those Acts, authorises a Fair Work Inspector (within the meaning of the FW Act) to: (a) make an application to the FWC; or (b) make an application to, or otherwise institute proceedings in, a court; the provision is also taken to authorise an inspector to make such an application, or institute such proceedings, in any case where the application or proceedings relates to a matter that involves: (c) a building industry participant; or (d) building work. 27 It was submitted for the Union that a construction which allowed the ABCC to bring proceedings in respect of conduct by the Union that concerned employees who were not building employees would give the ABCC authority that extended beyond the evident purpose of the BCI Act. Reliance was placed upon the express statement of statutory objects in s 3(1) of the BCI Act (to which reference has already made). It is expressed in the following terms: The main object of this Act is to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively, without distinction between interests of building industry participants, and for the benefit of all building industry participants and for the benefit of the Australian economy as a whole. 28 The statement of the main object is followed by s 3(2) which is expressed in the following terms: This Act aims to achieve its main object by the following means: (a) improving the bargaining framework so as to further encourage genuine bargaining at the workplace level; (b) promoting respect for the rule of law; (c) ensuring respect for the rights of building industry participants; (d) ensuring that building industry participants are accountable for their unlawful conduct; (e) providing effective means for investigating and enforcing this Act, designated building laws (to the extent that those laws relate to building work) and the Building Code; (f) improving work health and safety in building work; (g) encouraging the pursuit of high levels of employment in the building industry, including by encouraging youth employment with an emphasis on engaging apprentices; (h) providing assistance and advice to building industry participants in connection with their rights and obligations under this Act, designated building laws and the Building Code. 29 It may be observed that in order to achieve the stated statutory objects, one issue that the legislation would need to grapple with was the definition of the scope of the authority of the regulator entrusted with supervising compliance with its provisions. As the present case illustrates, there was the potential for issues to arise as to the degree of connection to building work that might be required in order for a particular party to be the subject of the regulation. Nevertheless, it may be accepted that the objects are focussed upon building work and the manner in which it is carried out by industry participants. 30 In that regard, it may be noted that the stated means of achieving the express statutory object include the provisions in s 3(2)(c) and (d) which are not qualified by language which would confine those means to building industry participants in their conduct relating to building work. The absence of such language manifests an intention to apply the legislative provisions based upon the status of a person as a building industry participant irrespective of whether that person is also a participant in activities and dealings outside that industry, an intention that is supported by the form in which the definitional provisions in the BCI Act are expressed. 31 Indeed, consistently with that approach, there are particular provisions in the BCI Act which are confined as to their operation to the undertaking of building work. Those instances, in the context of the Act as a whole, support a construction to the effect that those provisions which apply to building industry participants were intended to apply on the basis of the terms of the definitional provisions (that is, in the case of an industrial association to any association which has members who are building employees even though it has members that are not building employees). That is to say, where a provision was to be confined to circumstances where a building industry participant was undertaking building work then the BCI Act included an express provision to that effect. Provisions of that kind are to be found in s 109, s 110 and s 112. 32 Tellingly, s 111(1) engages with both building industry participants and building work as distinct concepts that are used to qualify the scope of the provision. The use of the term building industry participants is not itself further qualified by terminology that would limit the scope to such participants insofar as their activities concern building work. A submission was advanced for the Union to the effect that s 111(1)(c) should be read as referring to a building industry participant in its activities involving building work or the building and construction industry. The problem with that construction is that it is contrary to the language of the provision read, as it must be, incorporating the definitional provisions. Further, the activities of an industrial association that has some members who are building employees may be considered to be a participant in the building and construction industry as to all of its activities, even those that do not concern building work and may be regulated on that basis. It is possible for the legislation to approach the scope of regulation on the basis that some provisions apply in respect of all activities of those building industry participants who meet the terms of the express definition and other provisions require, in addition, some stated connection to building work. 33 This is especially so in relation to s 111(1) which is dealing with the extent to which the ABCC can bring proceedings under legislation where there is another regulator who can also bring proceedings. It is not operating to determine the scope of the underlying statutory provisions that may be the subject of the proceedings - those provisions apply broadly irrespective of the industry. Rather, they are concerned with whether the ABCC has statutory authority to bring such proceedings under provisions to which organisations such as the Union are plainly subject. It is understandable that a provision of that kind might confer authority upon the ABCC that is broad enough to encompass the conduct of all building industry participants as defined (irrespective of whether there may be an issue as to whether the conduct concerns building work) as well as also apply to proceedings that relate to a matter that involves building work. 34 Finally, the use of the concept of matter, a term usually deployed in a federal jurisdictional context to refer to the underlying controversy, reinforces a construction of the language of s 111(1) as conferring authority under the ABCC where the controversy involves the activities of any building industry participant including an industrial association whose rules allow for membership by building employees. 35 For the Union it was contended that there was significance to be found in the 'slightly different type of language' used in s 111(1) to that used in the object provision (s 3(2)). It was submitted that the reference in s 111(1) to a matter that involves building work is a more limited concept in the sense that it must be the matter (described in the submission as the right and duty at issue) that must involve building work. On that basis it was contended that as there was a limitation on the scope of the legal right or obligation at issue in a case where reliance was placed on s 111(1)(d) there was still work for s 111(1)(c) to do if it was to be read as being confined in the manner contended for the Union. I do not accept this submission. It involves too narrow a conception of the word matter. 36 To the extent that examples were advanced to support the submission, the examples presupposed the view that it was not appropriate for s 111(1) to empower the ABCC to be able to bring proceedings where the only connection to the building industry might be said to be that the proceedings were brought against a building industry participant who was within the statutory definition, relevantly an industrial association whose rules allow for membership by building employees. Such an approach is to presuppose the purpose and then construe the legislation on that basis. It is not the correct approach. It is not for the Court to conjure a purpose that is more specific than the context discloses and then use that purpose to construe the legislation: Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross [2012] HCA 56; (2012) 248 CLR 378 at [26]; and Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd [2005] HCA 9; (2005) 222 CLR 194 at [21]. Further, they were not instances of improbable or unreasonable result as to the scope of the application of the legislation because they were not concerned with the scope of operative regulatory provisions in the BCI Act but rather with the scope of regulatory authority to bring proceedings under other industrial legislation of general application, namely the Fair Work Act. 37 Further, in my view, the terms of the operative provisions in the BCI Act as well as provisions that are concerned with the circumstances in which orders and penalties may be sought for contraventions of the operative provisions of the BCI Act do not assist. It is the case that certain of those provisions are confined to cases where the conduct involves building work. However, there are two difficulties with calling those provisions in aid of the contentions advanced in the present case. First, as has been explained, the specific reference to building work in those instances but not in other instances (such as s 111(1)) counts substantially against such a construction. If indeed it had been intended to limit the operation of s 111(1) in the same way then you would expect a similar structure to be adopted in s 111(1). Instead, at that point a different form is adopted which confers authority in matters involving a building industry participant or building work. 38 Second, s 111(1) is concerned with the circumstances in which the ABCC may itself commence proceedings under different legislation, namely the Fair Work Act which is not confined (as to the scope of its operative or remedial provisions) by reference to the nature of the industry in which the conduct is undertaken. 39 Finally, the Union placed reliance upon extrinsic materials. Such materials can only be resorted to for the purpose of resolving an ambiguity. For reasons that have been given, I have considerable difficulty in identifying an alternative construction that is open upon the terms of s 111(1) the resolution of which might be assisted by resort to such materials. Even so, the matter having been argued, I will address the contentions advanced for the Union. 40 The materials relied upon contained statements expressed in terms that might support the view that the ABCC was established as a body to regulate behaviour in the building industry that is the industry in which building work was undertaken. However, statements of that general purport are consistent with the position advanced by the ABCC. The conferral of power of the kind in issue here (to be able to commence proceedings under the Fair Work Act on the basis that an industrial association has members that include members who are building employees) is not a conferral that would be exposed as being inconsistent with an approach of regulating activities in the building industry. As has been explained, the conferral does not concern the scope of the regulating provision of the BCI Act. Rather, it concerns the authority of the ABCC to bring proceedings for contravention of other legislation in factual circumstances where that legislation applies.

Conclusion and orders 41 For the reasons that have been given, the Union's application for summary dismissal must be dismissed. As to costs, at the initial hearing of the preliminary issue both parties submitted that the appropriate order was that there be no order as to the costs of the application. To the extent that the position of the parties has moved since then it concerns the position of the Union in the event that the application is successful. As the application for summary dismissal is to be dismissed and the position of the ABCC is that it does not seek costs in that event, it is appropriate to make an order that there be no order as to costs. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.

Building and Construction Industry (Improving Productivity) Act 2016(Cth)ss 3, 5, 6, 109, 110, 111, 112

Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022(Cth)

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