The Full Bench decision under challenge
54 The central question before Deputy President Asbury, as I earlier remarked, was whether 21 particular employees were entitled to vote for or against the proposed 2013 Agreement because they were persons, employed at the time, "who will be covered by the agreement".
55 Section 181(1) of the FW Act provides:
181 Employers may request employees to approve a proposed enterprise agreement
(1) An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.
56 Section 182(1) of the FW Act provides:
182 When an enterprise agreement is made
Single-enterprise agreement that is not a greenfields agreement
(1) If the employees of the employer, or each employer, that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.
(Emphasis in original.)
57 The Full Bench granted permission to appeal, and upheld the appeal, because it was satisfied that Deputy President Asbury had made two particular errors in the reasons expressed in her decision of 4 October 2013. The Full Bench said in its conclusions:
[26] We are satisfied that the Deputy President erred in her interpretation of the expression 'will be covered' by the agreement, in s.181(1), and in having regard to anteriorly derived notions of fairness in construing the coverage of the Agreement. On that basis we will grant permission to appeal, uphold the appeal and quash the Deputy President's decision to approve the Agreement.
58 Identification of those two errors persuaded the Full Bench that it was not necessary to deal with other challenges raised by the appeal.
59 It is relevant to note that the Full Bench did not decide that the 2013 Agreement could not (or should not) be approved even though some of the additional challenges, if upheld, may have had that consequence. The Full Bench confined itself to upholding two specific challenges to Deputy President Asbury's reasons and to deciding that the reasons she had given did not, in view of the errors it found, provide a sufficient basis for approval. As I earlier remarked, it seems to follow from this reasoning that the 2013 Agreement should not have been approved when it was. Despite any possible uncertainty about that issue, the order which was made was not (and was not to be) in any way provisional. It was clearly intended to cancel the approval, place it at nought and require consideration of whether the 2013 Agreement should be approved to be undertaken again.
60 Before I refer to, and set out, the Full Bench reasoning which has been challenged by Teys as disclosing jurisdictional error it is convenient to make some further points about the statutory scheme, as these will be relevant to a proper appreciation of the effect of the order made by Deputy President Gooley on 25 March 2014.
61 Section 54(1) of the FW Act has the effect that an enterprise agreement comes into effect seven days after it is approved by the FWC (or on a later date of operation as specified in the agreement). The consequence of setting aside an approval will often be, therefore, that the statutorily assigned commencing date (seven days after approval) has been affected. This may have consequential effects for the life or duration of an enterprise agreement because s 186(5) of the FW Act prescribes the following requirement:
186 When the FWC must approve an enterprise agreement - general requirements
…
Requirement for a nominal expiry date etc.
(5) The FWC must be satisfied that:
(a) the agreement specifies a date as its nominal expiry date; and
(b) the date will not be more than 4 years after the day on which the FWC approves the agreement.
…
62 That assessment must be made at the time that approval is being considered.
63 The facility for parties to make an agreement for up to four years may also have other consequences. Although enterprise agreements may continue in force after their nominal expiry date has passed, the period until the nominal expiry date has passed carries with it particular consequences. For example, a later enterprise agreement cannot begin to apply (s 58(2)(d)(i)). Industrial action which is not "protected" industrial action is unlawful (s 417).
64 The statutory arrangements, therefore, contemplate defined and definite commencing and expiry dates and a known and fixed nominal life for enterprise agreements.
65 These matters are all, obviously enough, well known to the FWC. They are fundamental to the work which it does. They must be borne in mind in assessing what the Full Bench intended as the consequence of the exercise of its own powers.
66 The Full Bench reasoning about the two errors which it found were made is set out in the following paragraphs of its decision:
[13] The first issue raised by the appellant ((i) at paragraph [7] above) is directed at paragraph [47] of the decision subject to appeal in which the Deputy President says:
"[47] The AMIEU essentially submits that the term "will" has a fixed intent and purpose. I do not accept that submission. In my view, the use of the term "will" is to ensure that employees who are reasonably identifiable at the time the ballot is conducted, and who will, or will likely be, covered by the Agreement during its operation, have an opportunity to vote and to be afforded the other rights pursuant to the pre-approval process for the agreement."
[14] The appellant submits that the Deputy President made an error in deciding that employees who 'will likely be covered by the Agreement during its operation have an opportunity to vote'.
[15] The phrase 'will be covered by the agreement' in s.181(1) does not indicate future likelihood but rather expresses a determinate or necessary consequence. As Katzmann J observed in CFMEU v FWA:
"Objectively, the intention of the legislature in using the expression was to ensure that the employer could only make an agreement with those employees who were named or described in the agreement and whom the agreement purported to cover."
[16] The respondent submits that the Deputy President's reasoning at paragraph [47] of the decision must be read in context:
"Membership of the group or class of employees to be covered, or excluded from coverage, under a particular agreement is fluid and may at a later time result in an employee no longer being covered by an agreement for a number of reasons, such as, for example promotion to a supervisory position. Trainee Supervisors were at the time of voting engaged in the group to be covered - they had neither been offered contracts of employment from the different employing entity, nor were they undertaking management or supervisory work as properly understood under clause 1.3 other than from time to time as trainees with a mere prospect of being offered future employment as a supervisor. The principal purpose for which they were employed in the production operations was to perform work within the classifications contained in the Agreement and they were not excluded from coverage by reason of the exclusionary part of clause 1.3.
The reference in paragraph [47] to 'or will likely be' is thus no more than a reflection of the evidentiary issue before the Tribunal and was not a misapplication of the test. The reasoning in the Decision as a whole is further illustrative of the absence of any error."
[17] The decision subject to appeal must be read as a whole and considered fairly. As Kirby J observed in Minister for Immigration and Ethnic Affairs v Wu Shan Liang:
"The reasons under challenge must be read as whole. They must be considered fairly. It is erroneous to adopt a narrow approach, combing through the words of the decision-maker with a fine appellate tooth-comb, against the prospect that a verbal slip will be found warranting the inference of an error of law."
[18] Giving full force to his Honour's observations we are not persuaded that paragraph [47] of the Deputy President's decision can be characterised as a verbal slip. The Deputy President expressly rejected the AMIEU's submission as to the meaning of the expression 'will be covered by the agreement' in s.181(1) and concluded, erroneously, that "the use of the term 'will' is to ensure that employees who are reasonably identifiable at the time the ballot is conducted and who will, or will likely be, covered by the Agreement during its operation have an opportunity to vote".
[19] The Deputy President's view is confirmed at paragraph [48] where she observes that 'the term 'will' should not be narrowly construed'. Further, the test posited at paragraph [47], that is future likelihood that the relevant employees will be covered by the Agreement, is then applied by the Deputy President at paragraph [57] of the Decision:
"[57] I am also of the view that employees paid and classified as production workers at various levels of the Agreement can be temporarily assigned to perform incidental tasks such as assisting co-workers from non-English speaking backgrounds, at the behest of Teys, by interpreting for those co-workers. The evidence is that the employees engaged in these temporary assignments have now returned to their roles as production workers or will likely do so during the term of the Agreement..." [emphasis added]
[20] It seems to us that the erroneous test adopted at paragraph [47] of the Decision was central to the Deputy President's reasoning process and to her conclusion.
[21] The appellant also submits that the Decision discloses a further error, at paragraph [50].
[22] At paragraphs [49] to [65] of the Decision the Deputy President sets out her reasons for concluding that the Agreement covered all of the employees that the AMIEU submitted were not eligible to vote. Importantly, those reasons include the observation at paragraph [50] that:
"To accept the argument of the AMIEU with respect to the disputed employees would result in a situation where those employees would not be entitled to the benefits of either the Agreement or the Award. Such an outcome would be neither fair nor sensible."
[23] The task at first instance was to determine who 'will be covered' by the Agreement by reference to the terms of the Agreement, and in particular clause 1.3. Anteriorly derived notions of what would be fair or sensible are irrelevant to the task of construing the Agreement. As Madgwick J observed in Kucks v CSR Limited:
"But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning."
[24] It follows that we agree with the appellant's submission and the Deputy President erroneously had regard to what would be a fair or sensible outcome in determining the coverage of the Agreement.
(Emphasis in original.) (Endnotes omitted.)
67 Teys' case is that the Full Bench itself made errors in those passages and that the errors made by the Full Bench were jurisdictional in nature.
68 In its written submission, Teys argued:
3. Jurisdictional error on the part of the Full Bench in the First Appeal Decision
3.1 Teys Australia has to demonstrate that the Full Bench fell into jurisdictional error in order to succeed. The Full Bench is only amenable to certiorari for an error of that kind.
3.2 The Full Bench could only exercise its appellate powers under s.607 of the FW Act if there was actual error on the part of the primary decision-maker. The exercise of the Full Bench's appellate powers required the identification of error. The mistaken identification of error when none existed is a jurisdictional error. The Full Bench was not authorised to decide those questions wrongly because the actual existence of error is a precondition to the exercise of appellate powers. The issues of law before the Full Bench being matters of interpretation and construction did not involve the exercise of any discretion, they allowed for only one correct answer, which was either yes or no.
3.3 Teys Australia submits that the Full Bench fell into jurisdictional error on the basis that it identified and acted upon errors in circumstances where no errors existed.
(Emphasis added.) (Footnotes omitted.)
69 Teys relied particularly on the following passages from the High Court judgment in Coal and Allied:
14 Ordinarily, if there has been no further evidence admitted and if there has been no relevant change in the law, a court or tribunal entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on the part of the primary decision-maker. That is because statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error. However, the conferral of a right of appeal by way of a hearing de novo is construed as a proceeding in which the appellate body is required to exercise its powers whether or not there was error at first instance.
…
17 Because a Full Bench of the Commission has power under s 45(6) to receive further evidence on appeal, an appeal under that section is properly described as an appeal by way of rehearing. And because there is nothing to suggest otherwise, its powers under sub-s (7) are exercisable only if there is error on the part of the primary decision-maker. And that is so regardless of the different decisions that may be the subject of an appeal under s 45.
(Footnotes omitted.)
70 Despite Teys' reliance on the judgment of the High Court in Coal and Allied, in my respectful view the submissions set out above are contrary to the statements by the majority judgment in Coal and Allied relevant to this issue. It should be noted that in [14] their Honours (Gleeson CJ, Gaudron and Hayne JJ) referred only to the need for a court or tribunal to be "satisfied" there was error. Although there seems to be a clearer statement in support of Teys' submission in [17], when that paragraph is read in the context supplied by the nature of the appeal as a rehearing it is apparent that their Honours were dispelling the notion referred to earlier (at [15]) that the appeal in Coal and Allied was an appeal where a fresh decision could be made, on further evidence, without a prior conclusion of error (such as in Re Coldham; Ex parte Brideson [No 2] (1990) 170 CLR 267).
71 Their Honours said, in that connection (at [15]):
15 The provision considered in Brideson [No 2] conferred power on the Commission to take further evidence, a provision which is indicative of an appeal by way of rehearing. It also required the Commission to "make such order as it [thought] fit". The latter requirement indicated that the Commission's appellate powers were not constrained by the need to identify error on the part of the primary decision-maker, but, rather, that the Commission was obliged to give its own decision on the evidence before it.
(Footnote omitted.)
72 In Coal and Allied, Gleeson CJ, Gaudron and Hayne JJ went on to say (at [30]-[32]):
30 The Full Court concluded that the Full Bench of the Commission fell into jurisdictional error because it proceeded on the basis that the decision of Boulton J was attended by appealable error when it was not. And it did so, in the view of the Full Court, because of its "fundamental misconception ... of the Commission's role arising from the combined operation of s 170MW(l) and (3)". To misconceive the role of the Commission under s 170MW (assuming that that is what the Full Bench did) does not constitute jurisdictional error on the part of the Full Bench.
31 There would only have been jurisdictional error on the part of the Full Bench if it had misconceived its role or if, in terms used by Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council, it "misunder[stood] the nature of [its] jurisdiction ... or 'misconceive[d] its duty' or '[failed] to apply itself to the question which [s 45 of the Act] prescribes' … or '[misunderstood] the nature of the opinion which it [was] to form'". The Full Bench did none of those things.
32 In his reasons for decision, Giudice J proceeded on the basis that the Full Bench could intervene only if there was error on the part of Boulton J. In this his Honour was correct. Giudice J held that there was error on the part of Boulton J. If he was wrong in that view (a matter upon which it is unnecessary to express an opinion), that was an error within jurisdiction not an error as to the nature of the jurisdiction which the Full Bench was required to exercise under s 45 of the Act. Accordingly, it was not an error in respect of which relief could be granted by way of prohibition or mandamus under s 75(v) of the Constitution.
(Footnotes omitted.)
73 I understand those passages to mean that a correct conclusion on appeal, about the existence of an error made by a single member from whom the appeal is brought, is not a necessary pre-condition to jurisdiction. Such an error may well be (and would have been in that case) an error within jurisdiction.
74 I would therefore not accept that the Full Bench would make a jurisdictional error if it wrongly concluded that Deputy President Asbury's decision or reasons disclosed errors in her understanding or application of s 181 of the FW Act or otherwise.
75 To examine whether the Full Bench made a jurisdictional error in relation to the exercise of its appellate powers it is necessary to evaluate the matters about which it was critical by bearing in mind its own task on the appeal. However, in deference to Teys' argument, I propose to first examine whether, as Teys argued, it is apparent that the Full Bench itself made errors of analysis and wrongly found error by Deputy President Asbury.
76 Deputy President Asbury was not exercising a discretion when she approved the 2013 Agreement; she was intending to obey a statutory command. If the persons who were eligible to vote (including the 21 disputed employees, amongst whom were the 17 Trainee Supervisors) were persons who, within the meaning of s 181(1) and s 182(1) were persons who "will be covered by" the 2013 Agreement then Deputy President Asbury was (at least so far as this particular issue is concerned) obliged to approve the 2013 Agreement, notwithstanding the objection of the AMIEU.
77 In my respectful view, when it examined Deputy President Asbury's reasons the Full Bench did not pay sufficient regard to the overall context in which the particular passages it extracted ([47], [48] and [57]) appeared. The reference in those passages to what would "likely" happen during the life of the 2013 Agreement appear to me to be plainly observations about the particular individuals then carrying out the disputed roles. However, equally plainly, the burden of the discussion was focussed (correctly, with respect) on whether those persons fell within the classes of persons to be covered by the 2013 Agreement.
78 Thus, Deputy President Asbury said (at [49]):
[49] Applying the principles of construction relevant to industrial instruments, I am of the view that the Agreement in the present case covers all of the employees that the AMIEU asserts were not eligible to vote. …
and (at [52]-[53]) referring to the Meat Industry Award 2010 as an aid to interpretation of the 2013 Agreement:
[52] Further the Award is expressed at clause 4.3(c) to exclude "employees engaged to undertake managerial duties and responsibilities at the level of foreman and above" (emphasis added). In order to be excluded from the coverage of the Award, employees undertaking managerial duties and responsibilities at the level of foreman and above, must be specifically engaged to do so.
[53] This is consistent with the practice of Teys to enter into common law contracts of employment with Supervisory Staff and to employ such persons under a separate entity to that which employs production employees. In my view, but for the Agreement there would be no question that the Award would cover Trainee Supervisors and the other disputed employees, who are substantively employed as production workers and are undertaking tasks either as Trainees or on a temporary basis.
(Emphasis in original.)
and (at [55]-[56]):
[55] To construe the Agreement as excluding production workers who are being assessed as suitable for promotion to salaried supervisory positions and are being provided with structured training to undertake supervisory tasks, would be contrary to the objects of the Agreement. Similarly a production worker who is undergoing training in workplace health and safety or quality control, is covered by the Agreement.
[56] Further, the use of the term "engaged" in clause 1.3 is consistent with the Award provision referred to above. In my view, unless and until production employees who are in the role of Trainee Supervisors, or undergoing workplace health and safety training, are specifically engaged as Supervisors or Workplace Health and Safety Officers, in accordance with the arrangements customarily used by Teys to engage salaried staff, they are covered by the Agreement.
(Emphasis added.)
and (at [58]-[61]):
[58] The fact that there is no classification for Trainee Supervisors or Interpreters in the Agreement does not change my view. It is trite to say that an employee cannot be removed from the coverage of an industrial instrument by a simple change of title.
[59] A temporary redeployment does not change the employee's substantive classification, particularly in circumstances where the employee can at any time, at the discretion of Teys, be required to perform production work. This is apparent from the evidence that some employees are performing the role of Tutors, and are considered to be covered by the Agreement, notwithstanding that there is no classification for Tutors in the Agreement.
[60] In the present case, a boner or a slicer would not be removed from the coverage of the Agreement by having his or her job designation changed to "knife artisan". Further the fact that Trainee Supervisors wear hats of a particular colour, or carry two way radios, does not change the fundamental nature of their employment.
[61] The question of whether an instrument covers an employee requires more than a quantitative assessment of the time spent carrying out various duties. What is determinative is the circumstances in which the person is employed and the principle purpose of the employment. In the present case, the Trainee Supervisors, interpreters and persons being trained to undertake quality control or workplace health and safety, are principally employed as production workers, and Teys has the right at any time to return them to such roles.
(Emphasis added.) (Endnote omitted.)
79 In my view, Deputy President Asbury's principal conclusion was that employees in the disputed roles were production workers, temporarily deployed to particular duties but not substantially engaged in non-production roles, who continued to be covered by the proposed agreement and to whom the proposed agreement would apply unless they were in the future substantively engaged in a different role, at which time the 2013 Agreement would no longer apply to them.
80 It is true that Deputy President Asbury also said, quite early in this analysis (in passages which I passed over in the earlier extracts):
[49] … I have reached this conclusion for the following reasons. …
[50] The Agreement is beneficial in that it delivers wage increases and provides for terms and conditions of employment for production employees. I am satisfied that employees are better off overall under the Agreement than they would be under the Meat Industry Award 2010. To accept the argument of the AMIEU with respect to the disputed employees would result in a situation where those employees would not be entitled to the benefits of either the Agreement or the Award. Such an outcome would be neither fair nor sensible.
81 I doubt that those observations truly merit their description by the Full Bench as "anteriorly derived notions of what would be fair or sensible", but whether or not that is so, they do not seem to me to detract from the effect of the rest of the analysis.
82 That analysis seems to me, with respect, to be one which led directly to the conclusion that the disputed employees were eligible to vote. I do not share the view of the Full Bench that the analysis was based on any apparent error of construction or other legal error. However, even on a correct application of the relevant provisions, evaluation and judgment about the particular work of Trainee Supervisors and others was required. That was another area of challenge on the appeal. Apart from the textual criticisms which I have discussed, the Full Bench did not directly engage with that question; that appears to be amongst the matters put aside as unnecessary to decide.
83 If it was a matter for this Court to decide, I would not agree with the Full Bench that Deputy President Asbury's reasons displayed any misunderstanding or misapplication of the requirements or operation of s 181 of the FW Act. However, that is not the issue at hand.
84 The question is whether the Full Bench made a jurisdictional error in the performance of its own functions on appeal, even if it did (as I would respectfully conclude) make errors in its conclusions.
85 The Full Bench decided that the reasons given by Deputy President Asbury for deciding that the disputed employees were eligible to vote were either insufficient or insufficiently cogent (it does not matter which for present purposes). The Full Bench decided, therefore, that the exercise committed to the FWC under s 186 had not been properly performed. Completion of that task was remitted to Deputy President Asbury.
86 The Full Bench was exercising a supervisory role contemplated by the FW Act. It was entitled to form its own view of the requirements and operation of s 181 for the purpose of carrying out its own functions, even though its opinion would not be legally conclusive (Re Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140 at 148-9). More importantly, assessment by the Full Bench of whether the reasons of Deputy President Asbury constituted a sufficient foundation for her conclusions involved questions of judgment. In my view, it was open to the Full Bench in the performance of its own role on appeal to conclude, even incorrectly, that an adequate foundation for approval had not been established and to remit that question for further consideration. I can see no jurisdictional imperative requiring the Full Bench to take a different course or to dismiss the appeal.
87 Despite my disagreement with the Full Bench's analysis, therefore, I am not able to conclude, as Teys argued, that the Full Bench made a jurisdictional error in the performance of its own functions. If it made an error, then that was an error within jurisdiction in my view.
88 For completion I should observe that in the present proceedings no particular complaint or challenge was made about the fact that the order of 25 March 2014 purported to quash Deputy President Asbury's reasons for decision. No separate attention need, therefore, be given to that feature of the procedure followed by the FWC. Even if, for the reasons given earlier, it was an error for Deputy President Gooley to have ordered that the decision of 4 October 2013 be quashed, and even if that might be regarded as a jurisdictional error, it would not, in any event, provide an occasion for relief in the present case as it had no separate practical consequence from the order to quash the approval decision of 27 September 2013.
89 It follows that the application in QUD 224/2014 should be dismissed.