[2024] FWCFB 330

Fair Work Act 2009

s.604 - Appeal of decisions

Opal Packaging Australia Pty T/A Opal Fibre Packaging

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)

Appeal against decision [2024] FWC 1116 of Commissioner Perica at Melbourne on 30 April 2024 in matter number C2023/6934 - permission to appeal granted - failure of the parties to assist the Commission - inevitability of further disputes - whether appellant denied procedural fairness - whether outcome determined by Commissioner foreseeable - whether construction of agreement correct - appeal allowed - Commissioner answer the question posed - decision varied.

[1] Alex Tran is a forklift operator employed by Opal Packaging Australia T/A Opal Fibre Packing (Opal or the appellant) at its work site in Brooklyn in Melbourne's western suburbs. He was described by the Site Manager as having an impeccable employment record. However, on 29 August 2023, Mr Tran was operating a forklift stacking pallets in an area referred to as the "Heavy Duty Area" when he stuck a fire sprinkler line with the forklift. As a result of the incident, the fire alarm was set off prompting the attendance of two fire trucks, water was spread throughout the workplace and electrical repairs were required on machinery in the area.

[2] On 31 August 2023, Opal issued Mr Tran with a first and final warning as a result of the incident. The warning was recorded in a pro forma document which contained the following notation:

This warning will cease to have effect for the purpose of disciplinary action 12 months from the date of issue and be removed from the employees personnel file, and archived.

[3] Mr Tran's union, the Australian Manufacturing Workers' Union (AMWU or respondent), disputed the imposition of the first and final warning. The dispute was eventually referred to the Commission for resolution in accordance with clause 16 of the Opal Fibre Packaging National Enterprise Agreement 2022 (the Agreement). The referral occurred by way of an application filed by the AMWU under s 739 of the Fair Work Act 2009 (Cth) (the Act) on 13 November 2023.

[4] The application was dealt with by Commissioner Perica. The dispute was subject of unsuccessful conciliation and was then programmed for arbitration. The parties ultimately informed the Commissioner that they consented to the matter being determined on the papers. The parties jointly asked the Commissioner to resolve the following question in arbitration:

"Was the final warning in the terms it was issued on 31 August 2023 to Alex Tran because of his involvement in the forklift incident at Opal's site in Brooklyn Victoria on 29th August 2023 an appropriate disciplinary penalty consistent with Appendix D.1(a) of the Agreement?"

[5] The Commissioner handed down his decision on 30 April 2024.[1] Having set out the factual background to the dispute, the Commissioner described the disciplinary regime established by the Agreement. Among other things, the Commissioner observed:

[84] The role of a warning under the Agreement is firstly an opportunity to correct errant behaviour as well as to punish. A final warning is a last chance opportunity to correct the behaviour which is the subject of the warning.

[85] The requirement in Appendix D.3(d) under the heading "Records/documentation" that "disciplinary records cease to have effect for disciplinary action purposes twelve months from the date of issue and shall be removed... and archived" is obviously designed to prevent the existence of 'zombie' warnings or verbal counselling. Without such a provision, an ancient warning or verbal counselling could be revived years later in a disciplinary procedure against an employee.

[86] I interpret the words of Appendix D.3(d) as a mandatory obligation on the employer that the disciplinary action be removed from the employee's personnel file after the expiration of twelve months. D.3(d) does not mandate that a warning must be kept on the personnel file for twelve months. The effect of the plain words is to denude the disciplinary action of effect after twelve months. The twelve-month time period acts as a maximum length for a disciplinary action to have effect.

[6] The Commissioner found that the cause of the incident was that Mr Tran failed to follow the Standard Operating Procedure for operating the forklift and that the incident had serious consequences in that it led to the shutdown of the plant, remedial costs and lost production.[2] The Commissioner took into account that the Heavy Duty Area was not Mr Tran's normal work area and that he was not familiar with the layout or differences from his usual place of work. Notwithstanding these matters, the Commissioner accepted that a first and final warning was an appropriate way to send a message concerning safety at the Brooklyn site.[3]

[7] In light of Mr Tran's exemplary employment record, the Commissioner considered that the prospect of recidivism seemed remote and, if the purpose of the warning was to send a message that safety was important, the issue of the final warning which had been in effect for 8 months was sufficient.[4] The Commissioner then concluded as follows:

[131] Given the prospects of Tran engaging in further dangerous conduct is low, what purpose does it serve for the warning to be on his personnel file for twelve months? It is not in my view a constructive approach in the circumstances of this case to have the final warning run its full term of effect.

[132] In his decision-making, Lercara considered the options he had available to him were a strict binary, either full and final warning or dismissal. He did not consider a third variable, the length of operation of the final warning.

[133] I have no evidence before me of the performance of Tran since the Incident. If it is the case that in the eight months since the warning he has continued to be a good employee and has been under a final warning for that time, the safety message which it was designed to achieve has been achieved. Given his otherwise exemplary service, and taking into account the mitigating factors, I do not consider it to be either constructive nor fair or just for the final warning to continue until 31 August 2024. It is more consistent with a focus on continuous improvement, where mistakes are treated as opportunities to learn and improve, if the length of effect of the final warning is more limited.

[134] The twelve-month expiry set for disciplinary conduct under the Agreement is a maximum. In all the circumstances it would be appropriate if the period of the warning expire nine months from the date it was issued, which is Friday 31 May 2024.

[8] The Commissioner answered the question posed by the parties as follows:[5]

The final warning issued to Alex Tran was an appropriate disciplinary penalty consistent with Appendix D.1(a) of the Agreement in all its terms, except the period of effect of the warning should be reduced to nine months from the date of issue which expires on Friday 31 May 2024. On that date, the final warning should be removed from his personnel file provided he has performed his tasks on the forklift to the best of his ability and in a safe manner up until that date.

[9] Opal seeks to appeal from the decision of the Commissioner to shorten the period of operation of the warning from 12 months to 9 months. Opal's complaint is twofold. First, it complains that it was denied procedural fairness because neither party raised the prospect of the period of operation of the warning being reduced from 12 months to 9 months and that the Commissioner did not communicate to the parties prior to issuing his decision that he was considering that option. Second, Opal submits that the Commissioner misconstrued Appendix D.3(d) of the Agreement and that, properly construed, the Agreement provided for all disciplinary records to have effect for a fixed period of 12 months from the date of issue. Opal says that the Agreement does not allow for the reduction in the period of operation of a disciplinary record below 12 months and the Commissioner's decision is, as a result, inconsistent with the Agreement and exceeded the Commission's private arbitration powers by operation of s 739(5) of the Act.

[10] In its written submissions on appeal, Opal submitted that permission to appeal was not required. At the hearing of the appeal, it retracted that position and accepted that it required a grant of permission to appeal. It was correct to do so.

[11] When dealing with a dispute pursuant to a dispute settlement procedure in an enterprise agreement the Commission is acting as a private arbitrator. The nature and extent of the function to be undertaken by the Commission is dictated by the agreement of the parties, including the availability and nature of any appeal. The parties may agree that there will be a right of appeal or remove or modify the requirements ordinarily applicable to an appeal under s 604 of the Act, including the need for permission to appeal to be obtained.[6]

[12] Whether permission to appeal is required will depend on the proper construction of the provision conferring jurisdiction on the Commission. Clause 16.2(g) of the Agreement provides as follows:

(g) The Company, the employee(s), and the Union agree to abide by any decisions or orders made by the FWC, subject to exercising any right of appeal to a Full Bench.

[13] Similarly worded provisions have been interpreted as referring to the form of appeal available under the Act which includes the requirement to seek permission to appeal.[7] That reasoning applies to clause 16.2(g). The clause does not establish an independent right of appeal, but rather refers to "any" right of appeal. The reference to "any right of appeal" is to be understood as a reference to the avenue of appeal from a decision of the Commission which otherwise exists being that provided for in s 604 of the Act. An appeal under s 604(1) of the Act may only be brought with the permission of the Commission.

[14] The decision on whether to grant permission to appeal was finely balanced, as this is not a matter that would ordinarily warrant permission being granted. This is not, frankly, a case which raises issues of public importance or general application or in which there is a diversity of decisions or uncertainty as to legal principle.[8] Opal conceded that there is little practical utility in revisiting the specific warning given to Mr Tran. Eleven months of the 12-month period initially stipulated by Opal during which the warning had effect have now passed. There is no suggestion of any further conduct by Mr Tran which would attract disciplinary action. At most, Opal says it wishes to clarify the operation of the Agreement.

[15] The parties also failed to provide the Commission with the kind of assistance it should expect in proceedings before it. The Commissioner agreed for the matter to be dealt with on the papers no doubt in an endeavour to resolve the dispute in an economical manner. That was a course open to the Commissioner.[9] This was perhaps not a matter that involved disputes as to primary facts which will usually mean that it is not possible or appropriate for it to be determined on the papers.[10] That is not to say there may not have been some benefit in hearing Mr Tran's description of the incident directly.

[16] At least with the benefit of hindsight, however, this was not a matter that should have been dealt with on the papers. During the hearing of the appeal, it became clear there was considerable confusion as to the nature of the question the Commissioner had been asked to resolve and the possible answers the Commissioner might give. The complaint now made by Opal of being denied procedural fairness may not have arisen had a hearing been conducted. If a hearing had been held, there is every likelihood that discussion of the range of possible outcomes would have occurred and the lack of clarity in the question presented would have been addressed.

[17] The difficulties in the conduct of the matter continued on appeal. Opal's primary position on appeal was that the Full Bench should quash the decision of the Commissioner on procedural fairness grounds and remit the matter for redetermination even though it agreed there was no practical utility in doing so. Opal initially resisted the Full Bench determining the question of the construction of Appendix D.3(d) of the Agreement because it said it might wish to put on evidence relevant to the question of construction. As we understood it, Opal suggested that there might be evidence said to suggest a common understanding as to the operation of the relevant provision either derived from historical practice or the course of bargaining which resulted in the making of the Agreement.

[18] However, Mr Hyde, who appeared for Opal, could not tell the Full Bench whether such evidence existed. It was, with respect, unsatisfactory for Opal to inform the Full Bench that it might want to put on additional evidence without, it appears, having undertaken any investigation to ascertain whether that was the case. If it proposed to put on evidence relevant to the question of construction, Opal should have prepared that evidence and sought leave to advance further evidence on appeal.[11] We do not think it is appropriate for Opal to have any further opportunity to put on additional evidence.

[19] We ultimately decided to grant permission to appeal for a single reason. The proceedings revealed a dispute between Opal and the AMWU in relation to the proper application of the disciplinary procedure in Appendix D to the Agreement. The Commission has been required to deal with a series of disputes involving the same parties in recent times in relation to disciplinary processes and outcomes.[12] In referring to these other disputes, we make no comment on the conduct of the parties examined in those matters or the merits of the positions they adopted. We simply observe that, if the present dispute as to the operation of the disciplinary procedure in the Agreement is not now resolved, it appears inevitable that it will arise again. It is in the interests of the parties and of the Commission that the dispute be resolved now rather than being permitted to fester and emerge again at a later time. For that reason, and that reason alone, we have decided to grant permission to appeal.

[20] The first contention advanced by Opal (albeit Ground 2 in the notice of appeal) is that it was denied procedural fairness by reason of the Commissioner determining that the period of effect of the first and final warning given to Mr Tran should be shortened to 9 months.

[21] The contention is straightforward. Opal says that, during the proceedings, no party raised the prospect of the effective duration of the warning being shortened. Unsurprisingly, the position of the AMWU was that Mr Tran should have received no warning at all whereas Opal's position was that the first and final warning it issued represented an appropriate disciplinary penalty. In those circumstances, Opal says it was "blindsided" by the Commissioner's construction of Appendix D.3(d) of the Agreement and the imposition of the shorter period of effective operation for the warning. That, it submits, resulted in a denial of procedural fairness. Had it been on notice of that potential outcome, Opal says it would have submitted that it was not open to the Commission consistent with Appendix D.3(d) to shorten the effective period of the warning.

[22] There is no issue that the Commission is generally required to act judicially and that the principles of natural justice are applicable to proceedings before the Commission.[13] In this matter, the Commission was acting as a private arbitrator pursuant to the dispute settlement provision of an enterprise agreement rather than in execution of its public law functions. Subject to express provision in the relevant enterprise agreement curtailing the procedure to be adopted, the same principles are to be applied in relation to the procedure to be adopted by the Commission, including that the Commission is required to afford procedural fairness to parties before it.

[23] That is so because, unless there is express provision to the contrary, it is assumed that the parties intend to take the Commission as they find it with all the incidents which ordinarily attach to proceedings before it.[14] In any event, an expectation of procedural fairness exists for parties to a private arbitration, although the content of the requirement to afford procedural fairness may be moulded by the agreement under which the arbitration takes place, the nature of the parties and the subject-matter of the dispute. In the context of commercial arbitration, a summary of the common law principles was provided by Fisher J in Trustees of Rotoaira Forest Trust v Attorney-General [1999] 2 NZLR 452 at 463:

The principles which need to be applied in the present case therefore appear to be the following:

(a) Arbitrators must observe the requirements of natural justice and treat each party equally.

(b) The detailed demands of natural justice in a given case turn on a proper construction of the particular agreement to arbitrate, the nature of the dispute, and any inferences properly to be drawn from the appointment of arbitrators known to have special expertise.

(c) As a minimum each party must be given full opportunity to present its case.

(d) In the absence of express or implied provisions to the contrary, it will also be necessary that each party be given an opportunity to understand, test and rebut its opponent's case; that there be a hearing of which there is reasonable notice; that the parties and their advisers have the opportunity to be present throughout the hearing; and that each party be given reasonable opportunity to present evidence and argument in support of its own case, test its opponent's case in cross-examination, and rebut adverse evidence and argument.

(e) In the absence of express or implied agreement to the contrary, the arbitrator will normally be precluded from taking into account evidence or argument extraneous to the hearing without giving the parties further notice and the opportunity to respond.

(f) The last principle extends to the arbitrator's own opinions and ideas if these were not reasonably foreseeable as potential corollaries of those opinions and ideas which were expressly traversed during the hearing.

(g) On the other hand, an arbitrator is not bound to slavishly adopt the position advocated by one party or the other. It will usually be no cause for surprise that arbitrators make their own assessments of evidentiary weight and credibility, pick and choose between different aspects of an expert's evidence, reshuffle the way in which different concepts have been combined, make their own value judgments between the extremes presented, and exercise reasonable latitude in drawing their own conclusions from the material presented.

(h) Nor is an arbitrator under any general obligation to disclose what he is minded to decide so that the parties may have a further opportunity of criticising his mental processes before he finally commits himself.

(i) It follows from these principles that when it comes to ideas rather than facts, the overriding task for the plaintiff is to show that a reasonable litigant in his shoes would not have foreseen the possibility of reasoning of the type revealed in the award, and further that with adequate notice it might have been possible to persuade the arbitrator to a different result.

(j) Once it is shown that there was significant surprise it will usually be reasonable to assume procedural prejudice in the absence of indications to the contrary.

[24] This summary has been described by the Full Court of the Federal Court as "helpful ... but not determinative".[15] It has been emphasised that setting aside an arbitral award on procedural fairness grounds requires demonstration of "real unfairness or real practical injustice" in the conduct of the arbitration.[16] And "[i]f a party has been denied a hearing on an issue, for instance, it is relevant to enquire whether, in a real and not fanciful way, that could reasonably have made a difference." [17]

[25] What is clear from the guidance provided by these authorities is that the Commission, when acting as a private arbitrator, is required to ensure a fair hearing. It is not, however, bound to give effect to the position adopted by one party or the other. That is explicit in relation to the Commission's usual functions.[18] The Commission is able to determine the dispute by way of arbitration in the manner that it considers appropriate subject to the obligation to accord the parties procedural fairness.[19] Where it is suggested that an unanticipated outcome has been arrived at by an arbitrator, it is not sufficient to say that neither party advocated for that outcome. That, in itself, would not result in a denial of procedural fairness.

[26] An appropriate way to frame the question raised is as set out in paragraph (i) of the principles in Rotoaira Forest Trust, namely, whether a reasonable litigant would have foreseen reasoning of a type revealed in the award.[20] In Full Joy Foods Pty Ltd ACN 159 805 857 v Australian Dairy Park Pty Ltd [2020] VSC 672, having referred to the summary of principles in Rotoaira Forest Trust, Niall J said (at [76]):

It emerges from that catalogue that where an issue is obvious or reasonably foreseeable, the arbitrator is entitled to proceed on the understanding that the parties will be alive to the issue and make strategic and tactical decisions as to which items to focus on, and which items to let pass by, in aid of their overall aim in the arbitration.

[27] The question then is whether, in considering if the first and final warning having effective duration for the full 12 months was an appropriate disciplinary measure, it was sufficiently foreseeable that the Commissioner might determine that the warning was appropriate only with a shorter period of effect such that Opal was provided with fair opportunity to address the availability of that outcome.

[28] It is correct to say that neither party expressly contended for the outcome reached by the Commissioner, that is, that the first and final warning should stand but only apply for a shorter period. The initial application to the Commission made by the AMWU raised a complaint that Opal had imposed a first and final warning despite what it considered to be "significant mitigating factors" and that the union had "raised their concerns around the warning as too harsh". The AMWU's outline of submissions it contended that "due to the numerous mitigating factors mentioned above and the significant OH&S issues at the workplace" the final warning was not appropriate and inconsistent with Appendix D.1(a) of the Agreement. Appendix D.1(a) provides as follows:

(a) It is the policy of Opal Fibre Packaging to adopt a constructive approach to the discipline of all employees and to ensure they receive fair and just treatment.

[29] The position advanced by Opal in its response to the application was that the final written warning was "the appropriate outcome in light of the seriousness of the incident". Opal's written submissions maintained that position.

[30] Although no party sought the outcome arrived at by the Commissioner, we do not believe there was a denial of procedural fairness. Three aspects of the manner in which the proceedings were conducted are relevant in that respect.

[31] First, as has been recorded above, the parties agreed the terms of the question to be posed to the Commissioner. That question asked whether the final warning "in the terms it was issued" was an appropriate disciplinary penalty consistent with Appendix D.1(a) of the Agreement. The parties asked the Commissioner to consider, and must have anticipated that the Commissioner would consider, the terms on which the warning was issued. The terms on which the terms on which the warning was issued included that it would have effect for a period of 12 months and then be removed from Mr Tran's personnel file.

[32] The question posed invited consideration of whether the warning with a period of effective operation of 12 months represented an appropriate disciplinary remedy. Having asked the Commissioner to answer a question which included reference to the terms on which the warning was imposed and for the Commissioner to determine the dispute on the papers, Opal cannot now complain that the Commissioner found one of those terms was not appropriate. That outcome was within the ambit of the dispute the Commissioner was asked to resolve.

[33] Second, on hearing of the appeal, Opal accepted that it was open to the Commissioner to decide that the appropriate alternative disciplinary outcome was the imposition of a disciplinary sanction somewhere between the positions of the parties. That is, Opal accepted that, without denying it procedural fairness, the Commissioner could have determined that an outcome of counselling or a first warning rather than a first and final warning was appropriate notwithstanding that no party sought that outcome.

[34] That must be correct. However, in our opinion, it is fatal to Opal's procedural fairness complaint. If Opal anticipated that the Commissioner might decide that a disciplinary outcome not sought by either party was appropriate, it cannot complain that it was not afforded procedural fairness when the Commissioner did so. That might have been a different disciplinary measure. It might also have included that the warning was appropriate, but that the warning have a different period of operation. Given the positions of the parties and the question posed to the Commissioner, it was foreseeable that the Commissioner might consider whether the duration of the warning was not appropriate.

[35] Third, the period of operation of the warning was referred to in Opal's submissions. Among other things, Opal submitted as follows:

17. It cannot be said in our Submission that the issuing of a final warning in these circumstances is at all unjust or unreasonable. Further, it is in our Submission a decision a reasonable person could easily have made. In addition, it is a fair and just outcome. Finally, it must be noted that paragraph D.3(d) giving a disciplinary record an effective life of 12 months is a matter negotiated and agreed by the parties to the Agreement.

21. The final warning only requires that he operate the forklift safely and to the best of his ability for the 12 months. It is no more than what he is required to do in any event subject only to the possibility of further action if he fails to meet that standard.

[36] Opal expressly defended the period of duration of the warning on the basis that the effective life of 12 months was negotiated and agreed to by the parties. That submission implicitly acknowledged the potential for the Commissioner to consider whether the effective life of the warning was appropriate. If Opal wished to contend that it was not open to the Commissioner to determine that the warning should have a shorter duration, it should have made submissions to that effect. It was foreseeable the Commissioner might consider shortening the effective period of the warning as a potential outcome.

[37] In these circumstances, Opal was not denied procedural fairness by reason of the Commissioner deciding that the 12-month expiry set for disciplinary outcomes in Appendix D.3(d) is a maximum and that the period of effect of the warning given to Mr Tran should be reduced to 9 months. That conclusion was a reasonably foreseeable outcome of arbitration of the question posed by the parties. Finally, for the reasons below, we reject the contention that any impugned denial of procedural fairness "could reasonably have made a difference" in light of the Commissioner's conclusions about the 12-month warning and the question he was asked to answer. [21] Although we have reached a different view to the Commissioner as to the interpretation of the Agreement, the question of construction raised by Opal does not affect the answer to the binary question posed by the parties.

Did the Commissioner misconstrue the Agreement?

[38] The second contention advanced by Opal was that the Commissioner misconstrued Appendix D.3(d) of the Agreement in finding that the clause does not mandate that a warning must be kept on an employee's personnel file for 12 months and, rather, acts as a maximum length for disciplinary action to have effect.[22]

[39] Relevantly, Appendix D.3 provides as follows:

(a) A written record of interview is to be completed at each stage of the procedure and a copy placed on the employee's personal file.

(b) All counselling/warnings sessions are to be confirmed in writing (within twenty-four hours) with the employee, including details of the corrective action required and the understanding reached by both parties. Form DP 1 is provided for this purpose.

(c) The employee is to be requested to sign all records of interview to acknowledge the accuracy of the documentation. In the event that the employee refuses to sign the document then a note to that effect should be placed on the record.

(d) Disciplinary records shall cease to have effect for disciplinary action purposes twelve months from the date of issue and shall be removed from the employee's personnel file and archived.

[40] Opal submitted that the proper construction of Appendix D.3(d) is that all disciplinary records must have effect for disciplinary purposes for a fixed duration of 12 months from the date of issue and that, at the end of that period, the disciplinary record must cease to have effect and must be removed from the employee's personnel file. Opal submits that there is no discretion to reduce the period of effect of the disciplinary record for disciplinary purposes below 12 months.

[41] The AMWU, on the other hand, contends that Appendix D.3(d) does not mandate that disciplinary records must continue to have effect for the full 12-month period, but only that they must cease to have effect after 12 months. The AMWU submits that nothing in the clause prohibits a record from ceasing to have effect or being removed from an employee's record prior to the end of the 12-month period. On this submission, the only effect of the clause is to prohibit a disciplinary measure having a longer period of operation.

[42] Opal's submissions should be accepted. The effect of Appendix D.3(d) is that a disciplinary record is ceases to have effect for disciplinary purposes after 12 months and is required at that time to be removed from the employee's personnel file. The provision does not contemplate or permit a decision to be made that the disciplinary record is to have effect for a shorter or longer period. The text of Appendix D.3(d) and the scheme for disciplinary action established by Appendix D dictate that conclusion, although we acknowledge that the drafting of Appendix D could readily be improved in terms of clarity and meaning.

[43] Four aspects of the Agreement should be emphasised. First, the text of Appendix D.3(d) is, in our opinion, sufficiently clear. The clause does not refer to a maximum period. The clause simply states that disciplinary records shall cease to have effect 12 months from date of issue. The language of the provision does not permit disciplinary records to have effect for a period other than 12 months. The clause does not allow for a decision to be made that the disciplinary record will have effect for a different period.

[44] Second, properly understood, the regime for disciplinary action in Appendix D contemplates that the decision-maker will decide what form of disciplinary action is to be taken and the period of operation of the disciplinary action is then set by Appendix D.3(d). The available forms of disciplinary action are set out in Appendix D.4 being counselling, first written warning, final written warning and dismissal. Under the heading "General", Appendix D.4 commences by providing in Appendix D.4(i) that:

(i) Disciplinary action may be taken at any one of the following steps, based on any record of disciplinary action (in accordance with this Agreement) during the previous twelve months and/or the severity of the unacceptable performance and/or behaviour.

[45] That clause indicates that disciplinary action can be taken based on any record of disciplinary action during the previous 12 months. Appendix D.4(i) is consistent with disciplinary records having effect for a full 12-month period. It would make no sense for the Agreement to allow for a warning to have effect for less than 12 months from date of issue in circumstances in which Appendix D.4(i) permits further disciplinary action to be taken based on the warning for the whole 12-month period.

[46] Third, with respect to each form of disciplinary action set out in Appendix D.4, the Agreement sets out the matters that must be considered and decided upon by the responsible manager/supervisor and requires preparation of a disciplinary record. Appendix D.3(b) confirms that all counselling/warnings sessions are to be confirmed in writing. In setting out the available forms of disciplinary action, Appendix D.4 does not set the period for which a disciplinary record will have effect or call for the responsible manager or supervisor determine that period. The period is set by Appendix D.3(d) and it is 12 months.

[47] Fourth, the Agreement also contains forms which are required to be used if disciplinary action is taken. In each case, the form prescribed by the Agreement itself contains a notation that the record will cease to have effect after 12 months. With respect to counselling, Form DP 1 states:

This warning will cease to have effect for the purpose of disciplinary action 12 months from the date of issue and be removed from the employee's personnel file, and archived

[48] With respect to a first warning, Form DP 2 states:

This record/warning will cease to have effect for the purpose of disciplinary action 12 months from the date of issue and be removed from the employee's personnel file, and archived.

[49] With respect to a final warning, Form DP 3 states:

This record/warning will cease to have effect for the purpose of disciplinary action 12 months from the date of issue and be removed from the employee's personnel file, and archived.

[50] With respect to a termination interview, Form DP 4 states:

This warning will cease to have effect for the purpose of disciplinary action 12 months from the date of issue and be removed from the employee's personnel file, and archived

[51] The AMWU submitted that these aspects of the forms do no more than paraphrase the effect of Appendix D.3(d). That is correct but does not undermine the significance of those aspects of the forms. The fact that the predetermined aspects of the forms include advice that disciplinary action will cease to have effect after 12 months cannot be reconciled with the responsible manager/supervisor having the discretion to determine that a warning, for example, is to have effect for a shorter period. To give effect to a decision that a particular disciplinary sanction was to have effect for less than 12 months would require the responsible manager/supervisor to depart from or alter the text of the form. The Agreement does not permit that course.

[52] For these reasons, it was not open to the Commissioner to determine that the effective period of the warning issued to Mr Tran be reduced from 12 months to nine months. Section 739(5) provides that the Commission, when arbitrating a dispute, must not make a decision that is inconsistent with the Act or a fair work instrument that applies to the parties. An enterprise agreement is a fair work instrument.[23] The Commissioner's decision was inconsistent with the Agreement in that, for the reasons we have explained, the Agreement did not provide for disciplinary action to have effect for a period other than 12 months.

[53] Although we have reached a different conclusion to the Commissioner in relation to the construction of the Agreement, that should not be taken to involve any criticism of the Commissioner. Opal did not advance the submissions it now makes to the Commissioner. Despite it being foreseeable that the Commissioner may consider whether the effective period of the warning was appropriate, Opal did not inform the Commissioner that its position was that it was not open to the Commissioner to determine that the warning have effect for a shorter period. It is unfortunate that the Commissioner was not given any assistance in relation to that question.

[54] Having determined that the outcome determined by the Commissioner was not available, the appropriate way to dispose of the appeal is not straightforward. The options are essentially for the Full Bench to remit the dispute for redetermination by the Commissioner or to determine the dispute itself. Neither is an attractive proposition given that the period of operation of the warning issued to Mr Tran has almost expired in any event.

[55] In the circumstances, it is sufficient for the Full Bench to indicate that, in our opinion, the Commissioner answered the question posed by the parties, albeit explained by reference to his view that a warning with a shorter period of duration was warranted. The parties asked the Commissioner to determine whether the final warning given to Mr Tran was an appropriate disciplinary penalty in the terms it was issued. It is readily apparent from paragraphs [131] and [133] of the decision that the Commissioner did not regard a final warning having effect for a 12-month period to be a fair, just or appropriate disciplinary outcome. The answer given by the Commissioner to the binary question posed by the parties should have been "No".

[56] The decision of the Commissioner should be varied to delete the answer given by the Commissioner set out at paragraph [3] and [137] of the decision and to instead answer the question with the answer "No". There is no utility in the Full Bench considering, or remitting for consideration, whether some other disciplinary action should have been imposed on Mr Tran. Any lesser disciplinary sanction would, as a practical matter, cease to have effect before that consideration could take place and, in any event, it was not a matter that the parties asked the Commissioner to decide.

[57] For these reasons, the Full Bench makes the following orders:

• (a) Permission to appeal is granted;

• (b) The appeal in Matter No. C2024/3220 is allowed; and

• (c) The decision of the Commissioner in [2023] FWC 1116 is varied so as to delete the answer to the agreed question recorded at paragraphs [3] and [137] of the decision and to answer the question as follows:

Question: Was the final warning in the terms it was issued on 31 August 2023 to Alex Tran because of his involvement in the forklift incident at Opal's site in Brooklyn Victoria on 29th August 2023 an appropriate disciplinary penalty consistent with Appendix D.1(a) of the Agreement?

[58] An order reflecting paragraph [57] above will issue concurrently with this decision.

P Lettau, counsel, instructed by A Bonello, industrial officer for the respondent.

[1] "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Opal Packaging Australia Pty Ltd T/A Opal Fibre Packaging [2024] FWC 1116.

[6] Victoria Police Force v Police Federation of Australia [2009] AIRCFB 146, 178 IR 275 at [13]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Silcar Pty Ltd [2011] FWAFB 2555, 208 IR 33 at [28]; Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited T/A Woolworths [2013] FWCFB 2814, 232 IR 255 at [22].

[7] See, for example, DP World Brisbane Pty Ltd v Maritime Union of Australia [2013] FWCFB 8557, 237 IR 180 at [51] and FreshFood Management Services Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2023] FWCFB 97 at [27].

[8] GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343, 197 IR 266 [27].

[9] Fair Work Act 2009 (Cth), s 593(1).

[10] Wyndham Lodge Nursing Home Inc v Reader (No 2) (1996) 65 IR 253 at 258 (Wilcox CJ, Ryan and North JJ); D'Antuono v Minister for Health [1997] FCA 1370; (1997) 80 FCR 226 at 240 (Carr J).

[11] Fair Work Act 2009 (Cth), s 607(2).

[12] See also Farkas v Opal Packaging Australia Pty Ltd T/A Opal Fibre Packaging [2023] 3266; Australian Manufacturing Workers' Union (AMWU) v Opal Packaging Australia Pty Ltd T/A Opal Fibre Packaging [2024] FWC 5; Calovski v Opal Packaging Australia Pty Ltd [2024] FWC 1717.

[13] R v Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 552; Enterprise Flexibility Agreements Test Case (1995) 59 IR 430 at 444; Viavattene v Health Care Australia [2013] FWCFB 2532 at [28].

[14] DP World Brisbane Pty Ltd v Maritime Union of Australia [2013] FWCFB 8557, 237 IR 180 at [47] referring to Electric Light and Power Supply Corp Ltd v Electricity Commission of New South Wales (1956) 94 CLR 544 at 560.

[15] TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd [2014] FCAFC 83, 232 FCR 361 at [141] (Allsop CJ, Middleton and Foster JJ) (TCL Air Conditioner). See also Emerald Grain Australia Pty Ltd v Agropcorp International Pte Ltd [2014] FCA 414, 314 ALR 299 at [45] (Pagone J) (Emerald Grain) but also the caution expressed by Croft J in Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd [2016] VSC 326 at [44]- [49].

[18] Fair Work Act 2009 (Cth), s 599.

[19] See, in a different context, 4 yearly review of modern awards - Fire Fighting [2016] FWCFB 8025 at [21].

[20] Emerald Grain at [46]-[47] (Pagone J).

[21] TCL Air Conditioner at [154] (Allsop CJ, Middleton and Foster JJ).

[22] [2024] FWC 1116 at [86] and [134].

[23] Fair Work Act 2009 (Cth), s 12.

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