The repugnancy point
74 Under this heading, we propose to consider the issue which we have numbered 2(a) in para 10 above, and to do so in the order there implied. It is necessary to commence with the proposition that, ignoring for the moment the prospect that the no further claims provision of cl 4 of the Agreement could itself be removed by variation, that provision would be invalid or void on account of inconsistency with, or repugnancy to, the Act under which the agreement was approved, and which gives it its legal efficacy. In this case, the primary Judge said:
That the hands of the parties to an agreement could be completely tied by their prior agreement so that no later capacity to effectuate an agreed change is available, no matter how beneficial to all that change may be, is not a common feature of any type of agreement making. It is an unattractive notion and a consequence that is not likely to have been intended by the framers of the FW Act. I do not consider that the scheme of the FW Act intends that parties to an enterprise agreement may exclude themselves entirely from the Subdiv A variation process. A provision in an enterprise agreement to that effect would be inconsistent with the FW Act and invalid.
This conclusion by his Honour is challenged by the respondents.
75 As developed on the hearing before the Full Court, there were two main lines of argument deployed by the respondents in support of that challenge. The first was that the FW Act had so comprehensively addressed the question of inconsistency between its own terms and those of an enterprise agreement, and laid down in such detail the circumstances under which the Commission should reject an application for approval of an enterprise agreement, as to leave no scope for the conclusion that inconsistency or repugnancy should be perceived in a provision of an agreement under which the employer agreed not to exercise its right to initiate a variation under Subdiv A of Div 7. The second emphasised the consequences of upholding an interpretation that would allow the provisions of that subdivision to be used as the means of striking down a term of an enterprise agreement that had been made under the more tightly regulated provisions of Divs 2, 3 and 8 of Pt 2-4. We shall give more detail to this second line of argument in due course.
76 Much of the jurisprudence which engaged the attentions of the parties before the primary Judge and again on appeal in connection with the respondents' first line of argument has been developed under regulation-making powers which were expressed in terms of which s 846(1) of the WR Act was a modern example:
The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.
Under such a provision, even where a matter was required or permitted to be prescribed, a regulation had to be "not inconsistent with" the empowering Act. The power given to employers and employees to make enterprise agreements under the FW Act is not subject to any such explicit condition. This provides the base line for the respondents' submission that, in respects not specifically dealt with in the FW Act itself, it must be concluded that the legislature intended that the makers of an enterprise agreement should be able to include in it terms which qualified the operation of that Act.
77 There are two levels at which the FW Act places explicit limits upon the ability of the employer and the majority of relevant employees to make an enterprise agreement: first, by the specification of requirements which must be met by the agreement at the point of approval by the Commission; and secondly, by identifying terms which, if contained in an enterprise agreement, are of no effect.
78 As mentioned previously, it is in ss 186 and 187 of the FW Act that the requirements for approval are set out. Dealing only with single-enterprise agreements in established businesses, and ignoring the special provisions of Subdiv E of Div 4 of Pt 2-4, the requirements are that -
the agreement has been genuinely agreed to by the employees covered by the agreement (s 186(2)(a));
the terms of the agreement do not contravene s 55 of the FW Act (to be found in Subdiv A of Div 3 of Pt 2-1 of the FW Act, entitled, "Interaction between the National Employment Standards and a modern award or an enterprise agreement") (s 186(2)(c));
the agreement passes the "better off overall test" (s 186(2)(d));
the group of employees covered by the agreement was "fairly chosen" (s 186(3));
the agreement does not include any unlawful terms (s 186(4));
the agreement does not include any "designated outworker terms" (s 186(4A));
the agreement specifies a "nominal expiry date" no more than four years after the date of approval by the Commission (s 186(5));
the agreement includes a term which allows for the settlement of disputes of certain kinds (s 186(6));
approval of the agreement "would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation" (s 187(2)); and
if a bargaining representative is required to vary the agreement as referred to in s 184(2), he or she has complied with that subsection and with subsection (3) of s 184 (s 187(3)).
79 In many instances, these provisions refer to other provisions of the FW Act, the detailed terms of which do not require consideration in the present context. As a generalisation, however, it may be said that the provisions bespeak the giving of detailed legislative attention to the circumstances in which an enterprise agreement should not be approved by the Commission because of its tendency to undermine the policy and scheme of the FW Act itself. Section 187(2) in particular should be noted in this respect.
80 Terms of an enterprise agreement which, even if the agreement has been approved by the Commission, are of no effect are the concern of ss 56, 253 and 326 of the FW Act. Section 56 provides that a term of an enterprise agreement has no effect "to the extent that it contravenes section 55", a section which addresses in detail the relationship between the "national employment standards" for which Pt 2-2 of the FW Act provides and, amongst other things, an enterprise agreement.
81 Section 253(1) provides as follows:
A term of an enterprise agreement has no effect to the extent that:
(a) it is not a term about a permitted matter;
(b) it is an unlawful term; or
(c) it is a designated outworker term.
It is not necessary to enter upon the content of para (c) of this subsection, save to note the operation of the provision itself. Section 326 is a division of Pt 2-9 of the FW Act which is concerned with the payment of wages to employees, the scope of permitted deductions, and like matters.
82 With respect to s 253(1)(a), "permitted matters" are the concern of s 172(1) of the FW Act, which provides as follows:
An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:
(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer's employees who will be covered by the agreement;
(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;
(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;
(d) how the agreement will operate.
Note 1: For when an enterprise agreement covers an employer, employee or employee organisation, see section 53.
Note 2: An employee organisation that was a bargaining representative for a proposed enterprise agreement will be covered by the agreement if the organisation notifies FWA under section 183 that it wants to be covered.
The intent of this provision, and of s 253(1)(a), is to confine an enterprise agreement to what might broadly be described as the employment, or industrial relations, setting. The terms of paras (a) and (b) have a deal in common with like provisions in earlier legislation. The terms of para (c) identify a subject as to which there might, by a line of High Court jurisprudence developed under the 1904 Act and the 1988 Act, be some doubt as to whether it was comprehended by the terms of para (a). Because s 253(1)(a) is concerned with the outer perimeter, as it were, of the subject area in which an enterprise agreement might be made, we do not consider that it makes any useful contribution to the resolution of the repugnancy point.
83 Paragraph (b) of s 253(1) is, however, directly relevant to that point. An "unlawful term" is defined in s 194 of the FW Act as follows:
A term of an enterprise agreement is an unlawful term if it is:
(a) a discriminatory term; or
(b) an objectionable term; or
(ba) a term that provides a method by which an employee or employer may elect (unilaterally or otherwise) not to be covered by the agreement; or
(c) if a particular employee would be protected from unfair dismissal under Part 3-2 after completing a period of employment of at least the minimum employment period - a term that confers an entitlement or remedy in relation to a termination of the employee's employment that is unfair (however described) before the employee has completed that period; or
(d) a term that excludes the application to, or in relation to, a person of a provision of Part 3-2 (which deals with unfair dismissal), or modifies the application of such a provision in a way that is detrimental to, or in relation to, a person; or
(e) a term that is inconsistent with a provision of Part 3-3 (which deals with industrial action); or
(f) a term that provides for an entitlement:
(i) to enter premises for a purpose referred to in section 481 (which deals with investigation of suspected contraventions); or
(ii) to enter premises to hold discussions of a kind referred to in section 484;
other than in accordance with Part 3-4 (which deals with right of entry); or
(g) a term that provides for the exercise of a State or Territory OHS right other than in accordance with Part 3-4 (which deals with right of entry).
(h) a term that has the effect of requiring or permitting contributions, for the benefit of an employee (the relevant employee) covered by the agreement who is a default fund employee, to be made to a superannuation fund or scheme that is specified in the agreement but does not satisfy one of the following:
(i) it is a fund that offers a MySuper product;
(ii) it is a fund or scheme of which the relevant employee, and each other default fund employee in relation to whom contributions are made to the fund or scheme by the same employer as the relevant employee, is a defined benefit member;
(iii) it is an exempt public sector superannuation scheme.
By s 195, a term of an enterprise agreement is a discriminatory term "to the extent that it discriminates against an employee" because of any one of a number of listed personal characteristics or circumstances. By s 12, a term is an "objectionable term" if it requires, or has the effect of requiring, permits, or has the effect of permitting (or purports to do so in either case), a contravention of Pt 3-1 of the FW Act or the payment of a "bargaining services fee". At this stage, it is not necessary to enter upon the detail of these matters, but the former of them will be relevant in a later section of these reasons.
84 As with ss 186 and 187, s 194 in part bespeaks the giving of detailed legislative attention to the circumstances in which an enterprise agreement should be of no effect because of its tendency to undermine the policy and scheme of the FW Act itself; in its other dimensions the section does, of course, address the issue of contrariety of an enterprise agreement with other policy objectives, not directly the concern of the FW Act.
85 The respondents pointed out that the FW Act is silent on the question whether a provision of an enterprise agreement may be inconsistent with the ability of an employer and its employees to make a variation to the agreement under Subdiv A of Div 7 of Pt 2-4 of the FW Act, or, specifically, with the ability of the employer to request its employees to approve a proposed variation under s 208. Taking the no further claims term in cl 4 of the Agreement as including a prohibition upon making such a request, the existence of the prohibition would not have stood in the way of the Commission approving the Agreement: indeed, given the terms of s 186(1), the Commission would have had no option but to approve the Agreement notwithstanding the prohibition. Neither, it was pointed out, does s 253 render this part of cl 4 of no effect. In a statutory setting in which so little is left to implication, the legislature must be taken to have intended, or at least assumed, that an agreement containing a prohibition of this kind could and should be approved, and that the prohibition could and should be effective according to its terms.
86 We accept the broad thrust of the respondents' submission that the FW Act has addressed, in great detail, the matter of the terms that are permitted in an enterprise agreement, and has also given attention to the consequences of a term which is not so permitted finding its way into such an agreement. For the most part, however, the legislative indications on which the respondents rely are indirect ones. As it happens, the clearest, and most relevant, indication of legislative intent is to be found on the terms of Subdiv A itself, specifically those of ss 207 and 208. It is there provided that an employer and its relevant employees may jointly make a variation of an enterprise agreement, and that the employer may request the relevant employees to approve such a proposed variation. That a provision of an agreement which prohibited - either in terms or within the scope of a more generally-expressed prohibition - the making of such an agreement or request should be regarded as inconsistent with the statute is a proposition to which, in our view, there could be no answer.
87 The respondents sought to extract themselves from the inevitability of that conclusion by proposing that s 208 of the FW Act was merely "facilitative", in that it gave the employer a facility which it was at liberty to take up or not as it chose. If the employer does not take it up, that could not be regarded as inconsistent with the section, or with the statutory scheme of which the section forms a part. From there, it is but a short step to propose, as the respondents did, that the situation arising under cl 4 of the Agreement is no different from one in which a party to a contract agrees, for consideration, not to exercise a right which he or she has under the general law.
88 We do not accept that premise, or the appropriateness of the contractual analogy. Under the FW Act, an enterprise agreement is an agreement in name only. Those who, by s 172(2), are empowered to "make" an enterprise agreement are the employer and "the employees who are employed at the time the agreement is made and who will be covered by the agreement". A contract lawyer would assume that those persons would be parties to the agreement, and that the assent of all of them would be necessary for the agreement to be "made". But the lawyer would be wrong on both counts. The FW Act does not identify the employer, or any employee, as a "party" to an enterprise agreement. Further, notwithstanding the specific empowering terms of s 172, it is not necessary for all the employees who are employed at the time an agreement is made and who will be covered by the agreement to assent to the terms of the agreement. Once a majority of those employees have agreed by voting, the agreement must be sent to the Commission for approval and, if approved, thenceforth applies to all the employees in the relevant group, even those who did not agree, and even those, subsequently taken into employment, who were not part of the relevant group at the time the vote was taken under s 182.
89 In his reasons, the primary Judge said that "Toyota contended and it was not disputed, that an enterprise agreement made under the FW Act is a form of delegated legislation". It appears that that contention was made in the context of Toyota's submission based on s 46 of the AI Act to which we have referred. However, although the FW Act provides that an enterprise agreement is "made" otherwise than by the Commission, the Act does more than merely impose conditions upon, and give additional legal effect to, an agreement made between private parties. The effect of the legislation is to empower the employer and the relevant majority of its employees to specify terms which will apply to the employment of all employees in the area of work concerned. The legal efficacy of those terms will arise under statute, not contract, and, as mentioned above, will be felt also by those who did not agree to them. Someone, such as an employee subsequently taken on, who had nothing to do with the choice of the terms or the making of the agreement, will be exposed to penal consequences under s 50 if he or she should happen to contravene one of the terms. When viewed in this way, it is not difficult to share in the perception that an enterprise agreement approved under the FW Act has a legislative character.
90 An enterprise agreement is a statutory artefact made by persons specifically empowered in that regard, and under conditions specifically set down, by the FW Act. It is enforceable under that Act, and not otherwise. There is, in the circumstances, no reason to approach the question of legislative intent with a predisposition informed by notions of freedom of contract.
91 We add two further observations on this subject. The first relates to a section in the reasons of the primary Judge where his Honour noted that it was not uncommon for delegated legislation which purported to restrict the ordinary right of a person to have a matter reviewed by a court to be struck down unless such a restriction were clearly authorised by the relevant enabling Act. His Honour considered, however, that the "access provided by the Subdiv A variation process" was manifestly distinguishable from the exclusion of a person's rights of access to the courts. His Honour then gave attention to the question whether Subdiv A did involve a "right" the exercise of which was compromised by cl 4 of the enterprise agreement. He said:
There is no right given by the Subdiv A variation process to any person to have a variation of an enterprise agreement made just as no one is given a right by the FW Act to have an enterprise agreement made. Access to the variation process depends upon consent. As s 207(1) provides, the parties to an enterprise agreement "may jointly make a variation of an enterprise agreement". Employees have no right to insist upon the consent of the employer. There is no right conferred upon employees to require the employer to even consider whether the employer is prepared to consent. Nor is any equivalent right conferred upon an employer. The capacity given by s 208(1) for an employer to request affected employees to vote on a proposed variation is procedural and not, in my view, intended to confer upon the employer a right not correspondingly provided to the affected employees.
92 While we agree with his Honour that the ability of an employer to request the affected employees to approve, by voting, a variation to an enterprise agreement is not analogous to the right of a person to make an application to a court, it is a right given by statute nonetheless. There is a sense in which the right arising under s 208(1) of the FW Act may be seen as "procedural", but so to describe that right is, in our view, to take an unduly limited view of its significance in the scheme of Div 7. Further, we consider that his Honour was in error in stating that s 208 is not "intended to confer upon the employer a right not correspondingly provided to the affected employees". There is no doubt but that s 208 has precisely that effect. So do ss 181(1) and 220(1). Absent a provision having the effect which his Honour attributed to cl 4 of the Agreement in the present case, it would be both incontrovertible and uncontroversial that the employer bound by an enterprise agreement has a right to make a request of its employees under s 208(1) of the FW Act. There may be a view that it is somehow inappropriate for Div 7 to operate in this way, but to propose that s 208 was intended to give this right to the employer alone is to recognize a fundamental, and undeniable, feature of the provisions in question.
93 The second observation relates to the scope of the legislative policy, as discerned by the primary Judge accepting submissions made on behalf of the respondents, that an employer and its employees, having bargained with a view to reaching agreement, and having finally reached agreement in the form of an enterprise agreement, should be held to their bargain, at least until the arrival of the nominal expiry date. It was, his Honour considered, in harmony with such a policy that the makers of the agreement should be allowed, consensually, to make their bargain a more enduring one by mutual promises to make no further claims. While there is a superficial attractiveness to considerations of this kind, in the setting of the dispute presented by the facts of the present case, they do, in our respectful view, beg the question. Subdivision A of Div 7 expressly permits the employer and the "affected employees" to vary the original bargain. That they should be held to that bargain, or bound by the existing terms of the agreement which they seek to vary to hold to that bargain, cannot be viewed as harmonious with the apparent policy of the subdivision: to the contrary.
94 There does not appear to be any real doubt about the proposition that a subordinate instrument made pursuant to statutory power which is inconsistent with the Act under which it is made will be invalid and void to the extent of the inconsistency. In his reasons in the present case, the primary Judge referred to the dictum of French CJ in Plaintiff M47/2012 v Director-General of Security (2012) 292 ALR 243, 262 [54]:
Regulations made under s 504 [of the Migration Act 1958 (Cth)] must be "not inconsistent with" the Migration Act. Even without that expressed constraint delegated legislation cannot be repugnant to the Act which confers the power to make it.
The Chief Justice's authority for that proposition was Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582. That case concerned the validity of an ordinance made for the government of the Australian Capital Territory under a provision which originally read "until the Parliament makes other provision for the government of the Territory, the Governor-General may make ordinances having the force of law in the Territory." The passage which we have underlined had since been repealed. Sitting as a single Justice of the High Court, Dixon J said (42 CLR at 588):
It is almost impossible to treat the repeal of the limitation with which it began, as anything less than an express declaration that the making of other provision for the government of the Territory shall not impair the power to make ordinances. But even with such an express declaration the power to make ordinances could not, in my opinion, be read as authorizing the Governor-General to make ordinances repugnant to a Commonwealth statute. It is one thing to say that the legislative power of the Governor-General shall continue although Parliament shall establish a means of governing the Territory, and another thing to say that that legislative power may be exercised in a manner incompatible with a law made by Parliament itself.
95 Laristan Building is the only High Court case which the conduct of the present appeal has brought to attention where the power to make a subordinate instrument of regulatory effect was not conditioned by a formula along the lines of that set out in para 76 above. Whether by reference to the need for a regulation to be "necessary", "convenient", "expedient" or the like - as in Grech v Bird (1936) 56 CLR 228 and Shanahan v Scott (1957) 96 CLR 245 - or by reference to that need, coupled with a requirement that the regulation be not inconsistent with its empowering Act - as in Carbines v Powell (1925) 36 CLR 88; Gibson v Mitchell (1928) 41 CLR 275; Broadcasting Company of Australia Pty Ltd v The Commonwealth (1935) 52 CLR 52 and Morton v Union Steamship Company of New Zealand Ltd (1951) 83 CLR 402 - the other cases do not deal directly and squarely with a situation where there is no such formula of any kind. In the present case, we were assured by counsel for Toyota that it was uncontroversial as between the parties that the test for the invalidity of the further claims aspect of cl 4 of the Agreement was that articulated by Hayne J in Plaintiff M47, namely, "whether the regulation in question varies or departs from (in other words alters, impairs or detracts from) the provisions of the Act" (292 ALR at 290 [174]), but the fact is that the regulation-making power under consideration in that case was expressly conditioned by the "not inconsistent with" formula, and his Honour's remark was made in that context.
96 Notwithstanding those qualifications, Laristan Building is authority for the proposition that the power to make a federal ordinance cannot be exercised in a manner incompatible with a law made by the Parliament itself (and, one might add, especially not the law under which such an ordinance would have been made). In Plaintiff M47, French CJ took the view that Laristan Building stood for the general proposition that "delegated legislation cannot be repugnant to the Act which confers the power to make it". And we may see the same general proposition in the reasons of Jordan CJ in Ex parte Reid (1943) 43 SR (NSW) 207, 215.
97 An enterprise agreement made under Pt 2-4 of the FW Act is not, of course, a regulation. But, as stated above, it is something more than a mere agreement in the way of a contract. It is a specific instrument made only under the detailed regime for which Pt 2-4 provides and enforceable only as provided by the FW Act. To this extent, we consider that the general principle applicable to the invalidity of regulations on account of repugnancy with their authorising statute is relevant to the issue presently for resolution. At base, the question which arises under that issue is essentially one of the rule of law. Parliament having said that an enterprise agreement may be varied, and that the employer may put a request to its employees in that regard, a term of the agreement which states, or has the effect, that the employer may not so proceed must necessarily be inconsistent with or repugnant to the FW Act to that extent. Subject to his view as to the significance of Toyota's ability to initiate, and to carry through, a variation of the Agreement by removing the no further claims provision itself, the primary Judge took that view of the matter, and we agree with him.
98 Turning then to the second main line of argument deployed on behalf of the respondents against Toyota's case on the repugnancy point, the emphasis here was on the different treatments given by the FW Act to the processes of making and varying an enterprise agreement. In the case of the making of an agreement under Divs 2, 3, 4 and 8 of Pt 2-4, the broad principle of majoritarian outcomes had been qualified to ensure that the legitimate industrial interests of minority groups were not suffocated. By contrast, under Div 7 an existing agreement might be varied on the vote of a majority of the affected employees without any such protection. In an extreme case, it might be apprehended that, in order to attract the support of minority groups, an employer and the bargaining agent representing the majority of its employees might make an agreement which is beneficial to those groups, and then, a few weeks after approval by the Commission under s 186, put through a variation which was detrimental to them. As we understand the argument, it is said that the legislature cannot have intended that this would be possible, and cannot have intended, therefore, that, at the point of the making of an enterprise agreement, the makers would be incapable of binding themselves not to have recourse to Div 7 before the nominal expiry date.
99 In a scenario such as that posited in the previous paragraph, there are only two points at which the interests of the minority group might be brought forward for consideration during the process of the approval of a new enterprise agreement which has been recently made. The first is the requirement in s 186(3) that the Commission be satisfied that the group of employees covered by the agreement had been "fairly chosen". That expression is not defined in the FW Act. It seems to have been assumed that there must have been a "choice" by someone as to the range of employees that would be covered, and it may be that this necessarily follows from the highly discretionary definition in the FW Act of what amounts to being "covered" by an enterprise agreement: see s 53(1). Subdivision A of Div 4 seems to be based on an assumption that the initiative for the making of an enterprise agreement will come from the employer, and it may be that s 186(3) should be read against such an understanding. Nonetheless, there are no indications in the FW Act that the Commission should, or even might, regard a group constituted by all of the employer's employees as not having been fairly chosen. Indeed, the terms of s 186(3A) seem to imply that such a group constitution is to be regarded as the norm.
100 Stronger support for the respondents' present argument may be seen in the terms, and significance, of s 238 of the FW Act. Under that section, the Commission is empowered to make a "scope order" specifying the employer that, and the employees who, will be covered by a proposed enterprise agreement. A bargaining representative may apply for such an order if he or she "has concerns that bargaining for the agreement is not proceeding efficiently or fairly" because "the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover". There are several criteria for the making of a scope order specified in s 238, but it may be accepted that it would provide, at least in some circumstances, an avenue for a bargaining representative who has been appointed by a minority group of employees to have the coverage of a proposed enterprise agreement adjusted by the Commission so as to exclude that group. It may also be accepted that, as a practical matter, the employer and the bargaining representative for the majority of employees might, in order to avoid Commission proceedings for a scope order, ensure that the terms of the proposed enterprise agreement were not disadvantageous to the minority group. On the submission of the respondents, the FW Act should not be understood to have excluded the capacity of all - the majority, the minority and the employer - to put their names to a covenant not to use the purely majoritarian provisions of Div 7 to vary the terms of an agreement made in such circumstances.
101 The difficulty with the respondents' argument, in our view, is that it does not speak the language of legitimate statutory interpretation. It goes no further than to identify what might, on one view, be regarded as an anomaly in the way the legislature has treated different processes under Pt 2-4. As a matter of legal analysis, the argument encounters difficulties of the same kind as did the unsuccessful argument of the applicants in JJ Richards & Sons Pty Ltd v Fair Work Australia (2012) 201 FCR 297. However the matter is looked at, there can be no question but that Subdiv A of Div 7 provides for a simpler process, and one which is less set about with qualifications demonstrating a concern for the interests of minority groups, than do the main agreement-making provisions of Pt 2-4. The legislature must be taken to have meant what it said in this respect. However sympathetic one might be to the situation in which a minority group of employees might find itself in the circumstances postulated by the respondents (and we note that there was no suggestion that this represented the facts of the present case), there is not the slightest support in the FW Act for the submission that the legislature not only anticipated a situation of this kind but intended that it might be avoided by permitting the makers of the enterprise agreement in question to insert a term that was directly inconsistent with a provision of the Act itself - a provision which the legislature is known to have adopted and, it must be assumed, intended to be observed.
102 We turn next to the critical consideration by reference to which the primary Judge decided the case in favour of the respondents. Although his Honour accepted that a term of an enterprise agreement which purported to exclude the employer and its employees completely from having access to the process of variation under Subdiv A would be repugnant and invalid, he said:
121 That is not to say however that the scheme of the FW Act has set its face against the prospect that by their agreement, parties to an enterprise agreement may impose restrictions on their capacity to agree to a variation without ousting their capacity to do so. Those restrictions may take the form of a range of required steps. A requisite period of consultation prior to a proposal for variation being pursued provides one possible example. A facility for employees to meet and consult with their union as a prerequisite step may provide another example. So long as, practically speaking, the capacity for parties to access the Subdiv A variation process is not ousted, a term imposing restrictions is not necessarily inconsistent with the FW Act.
122 It is then necessary to consider whether the terms of the no extra claims component of cl 4 foreclose the capacity of the parties to the Agreement to consensually access the Subdiv A variation process. The terms of cl 4 preclude any further claims "in relation to wages or any other terms and conditions of employment". Those terms do not exclude the capacity of the parties to effectuate a variation to cl 4 itself including by removing it. That can be done without breaching the enterprise agreement and if it is done, the parties will have unfettered access to the Subdiv A variation process in relation to desired variations to wages or any other terms or conditions of employment.
Thus the primary Judge took the view that cl 4 had not "ousted the capacity of Toyota or its employees to access the Subdiv A variation process in order to vary wages and other terms and conditions of employment specified by the Agreement". The clause imposed "an extra step in the process of achieving a desired variation, but [did] not foreclose access in either a technical or practical sense to the Subdiv A variation process." His Honour held that there was, therefore, no inconsistency between the no further claims component of cl 4 and the FW Act.
103 For the purposes of considering this point, we are prepared to accept, contrary to the premise upon which the cross-appeal is based, that a claim to remove cl 4 would not be a claim "in relation to wages or any other terms and conditions of employment", and that cl 4 would not, therefore, set up an embargo on a claim for its own removal. Nonetheless, we do not, with respect, consider that this compartment of his Honour's reasons withstands examination.
104 At all relevant times, the no further claims element of cl 4 has been, and remains, part of the Agreement. The question which arose had to be confronted against the facts as they existed. With respect to his Honour, we do not consider that the answer to the question was to be found in an analysis of the law that would be applicable to a different set of facts. There was no proposal to remove the no further claims provision from the Agreement. Had it previously been removed, of course, the question which has occupied the court, both at first instance and on appeal, would never have arisen. However, the provision was there, and the respondents sued on it. If, as the respondents submitted and still submit, the operation of the clause was both absolute and categorical, it is no answer to Toyota's challenge to its validity to propose that Toyota might have, in effect, arrived at the desired destination by a different route, one which involved first requesting its employees to agree to the removal of the provision itself.
105 We also consider that the primary Judge's conclusion that the no further claims term in cl 4 of the Agreement is valid to the extent that it imposes restrictions on (but does not wholly exclude) Toyota and its employees having access to the provisions of Subdiv A of Div 7 cannot stand alongside a line of cases which have struck down regulations which placed pre-conditions to, or qualifications upon, the exercise of rights granted or assumed by the relevant empowering statutes. The principle here, on a reading of the cases, is that the setting up of such a pre-condition or qualification gives rise to repugnancy no less than the imposition of a complete prohibition. This principle has to do with the quality of the inconsistency and is not, in our view, applicable only to statutes which use the "not inconsistent with" formula, the "necessary or convenient" formula, or both.
106 In Wells v Finnerty (1910) 12 WALR 41, it was held that a regulation imposing a requirement to register, within a stated period, a charge or lien which arose under a provision of the relevant empowering statute, and for the charge or lien to lapse if not registered within that period, was beyond power. The case of In re The Metropolitan Abattoirs Acts 1908-1930 [1932] SASR 184 concerned a regulation which required any person who brought meat of a certain description into a particular area to obtain a permit. The empowering statute had dealt with the subject of the sale of meat within the area, but had not required a permit for merely bringing meat into the area. It was held in the Full Court that the regulation was beyond power, Piper J (with the concurrence of Murray CJ) stating ([1932] SASR at 193-194):
It cannot be said that any of the sections now referred to shews any object or purpose justifying interference by regulation with conduct which the Act leaves perfectly lawful - the mere transport of meat into the area, it not being carried "for delivery on sale" and not being exposed for sale, or in possession of a person apparently for the purpose of sale for human consumption.
107 We have mentioned these cases specifically because they were not complicated by the presence of either of the now conventional formulae to which we have referred. However, as mentioned above, we do not think that the presence of any such formula affects the principle involved in this aspect of the present case. For cases which did involve a formula of the now conventional kind, we refer to Ex parte Lawes [1908] SALR 130, to IRA, L & AC Berk, Ltd v The Commonwealth (1930) 30 SR (NSW) 119 and to R v Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381.
108 Under a slightly different, but harmonious, line of authority, the no further claims term in cl 4 of the Agreement is to be regarded as repugnant to the FW Act because the Act itself has given detailed, and specific, attention to the matter of the conditions under which a variation to an enterprise agreement may be approved by the Commission. It is true, as the respondents stressed, that the making of such a variation is a much simpler undertaking than the making of an enterprise agreement in the first place. But there are many conditions specified nonetheless: see s 211. On any view, the legislature has given specific attention to the question of the conditions which should be so imposed, and to the discriminations appropriate to be made as between Divs 2, 3, 4 and 8, on the one hand, and Div 7, on the other hand. The situation is, in our view, one in which the approach articulated in Morton v Union Steamship (83 CLR at 813) and Ex p Martin (89 CLR at 406-407) should be taken.
109 In the light of the authorities to which we have referred, we do not, with respect, agree with the primary Judge that "[a] requisite period of consultation prior to a proposal for variation being pursued" is a restriction that could lawfully become part of an enterprise agreement made under Pt 2-4. Such a restriction would too closely intrude into the area governed by s 180 in its application to a proposed amendment under s 211(3) to be regarded as anything other than repugnant to the scheme of the FW Act. The no further claims term in cl 4 of the Agreement is, of course, a fortiori: as construed by his Honour, it goes further than merely to defer the taking of steps otherwise available under Div 7. Subject only to it not having been removed by a separate, anterior, process of variation, it prohibits the taking of those steps.
110 For the above reasons, we take the view that the operation of the no further claims provision in cl 4 in a context in which Toyota proposed no more than that the Agreement be varied under Subdiv A of Div 7 of Pt 2-4 of the FW Act was and is in conflict with the provisions of that subdivision, and pro tanto invalid. The proceeding below should have been dismissed.
111 This conclusion is based on the construction of cl 4 of the Agreement which we have favoured in the previous section of these reasons. Further, it is a conclusion which relates only to so much of the no further claims term as would stand in the way of Toyota and its employees taking advantage of the provisions of the FW Act that deal with the subject of the variation of an enterprise agreement. In other respects, there has been no challenge to the validity of that term, and nothing we have said should be understood as going beyond that context.
112 There is a question whether a consequence of the conclusion we have reached is that the no further claims term in cl 4 should be construed in a way that confined its operation to the area where that operation would be a valid one. That would be consistent with the general principle of construction that it may be assumed that the makers of a statutory instrument intended to exercise their power validly, not invalidly. Imputing to the makers of the Agreement an understanding of the law as we have attempted to explain it in this part of our reasons, could they be taken, objectively, to have intended that the no further claims term would act as a prohibition upon the employer embarking upon a process which went no further than to make a request under s 208 or to distribute to the affected employees an explanatory statement in anticipation of such a request? In our view, construed in the light of what we take to be the correct resolution of the repugnancy point, the no further claims term in cl 4 should not be construed as involving such a prohibition.
113 So far as the disposition of the present appeal is concerned, it does, of course, matter not whether the no further claims term is to be construed as we have proposed above or whether the term, construed otherwise, is invalid on account of its inconsistency with or repugnancy to the relevant provisions of the FW Act. On either approach, the appeal should be allowed and the cross-appeal dismissed.