FWAFB 4337
FAIR WORK AUSTRALIA
Fair Work Act 2009
s.604—Appeal of decisions
JUSTICE GIUDICE, PRESIDENT
MELBOURNE, 11 JUNE 2010
 This is an appeal by Australian Industry Group (AiGroup) against a decision made by Commissioner Ryan on 22 February 2010. 1 In that decision the Commissioner granted an application made pursuant to s.185 of the Fair Work Act 2009 (Fair Work Act) by Pacific Brands Limited t/as Dunlop Foams (Dunlop Foams) for approval of an enterprise agreement. The agreement is known as the Dunlop Foams (NSW) Collective Agreement 2009 (the agreement). The appeal is based on the contention that the Commissioner should not have approved the agreement because it contains an unlawful term.
The statutory provisions
 Sections 185 and 186 of the Fair Work Act specify the requirements for approval of an enterprise agreement. We are concerned in this appeal with only one of those requirements, the one specified in s.186(4). Section 186(4) provides:
“(4) FWA must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).”
 The meaning of the expression “unlawful term” is dealt with in s.194. The relevant paragraph in this case is s.194(f). It reads:
A term of an enterprise agreement is an unlawful term if it is:
(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)”
 Part 3-4 of the Fair Work Act is entitled Right of Entry. It deals with the rights of an official of an organisation who holds a permit to enter premises for purposes related to their representative role under the Fair Work Act and for other purposes. The relevant provisions of Part 3-4 are ss.481 and 484. It is desirable to set those sections out. Section 481 deals with entry onto premises to investigate a suspected contravention. It reads:
(1) A permit holder may enter premises and exercise a right under section 482 or 483 for the purpose of investigating a suspected contravention of this Act, or a term of a fair work instrument, that relates to, or affects, a member of the permit holder’s organisation:
(a) whose industrial interests the organisation is entitled to represent; and
(b) who performs work on the premises.
(2) The fair work instrument must apply or have applied to the member.
(3) The permit holder must reasonably suspect that the contravention has occurred, or is occurring. The burden of proving that the suspicion is reasonable lies on the person asserting that fact.
Note: A permit holder who seeks to exercise rights under this Part without reasonably suspecting that a contravention has occurred, or is occurring, is liable to be penalised under subsection 503(1) (which deals with misrepresentations about things authorised by this Part).”
 Section 481(1) provides that a permit holder may enter premises for the purpose of investigating suspected contraventions of workplace laws, subject to some conditions. Section 484 provides that a permit holder may enter premises for the purposes of holding discussions with employees, also subject to some conditions. It reads:
A permit holder may enter premises for the purposes of holding discussions with one or more employees or TCF outworkers:
(a) who perform work on the premises; and
(b) whose industrial interests the permit holder’s organisation is entitled to represent; and
(c) who wish to participate in those discussions.”
 It follows from the operation of ss.186(4) and 194(f) that before approving an enterprise agreement Fair Work Australia must be satisfied that the agreement does not include a term that provides for an entitlement to enter premises for a purpose referred to in s.481 or to hold discussions of a kind referred to in s.484 other than in accordance with Part 3-4 of the Fair Work Act.
The agreement term
 The agreement for which Dunlop Foams sought approval in this case contained a provision dealing with right of entry. The provision reads:
“44 Right of Entry
An authorised NUW representative is entitled to enter at all reasonable times upon premises and to interview any employee, but not so as to interfere unreasonably with the Employer’s business.”
 It can be seen that cl.44 entitles an authorised representative of the National Union of Workers (NUW), a registered organisation of employees, to enter Dunlop Foams’ premises at all reasonable times to interview employees but not so as to interfere unreasonably with the employer’s business. The question which arises is whether cl.44 is an unlawful term within the meaning of s.194(f). Commissioner Ryan found that it is not. AiGroup contends that the Commissioner’s decision is wrong and that cl.44 purports to provide an entitlement to enter premises for a purpose referred to in s.481 or to hold discussions of a kind referred to in s.484, other than in accordance with Part 3-4.
Is the appeal competent?
 A preliminary issue arises concerning the competence of the appeal. The Fair Work Act provides that an appeal may be made by a person who is aggrieved by a decision. The relevant section is s.604(1)(a). The question in this case is whether AiGroup is “aggrieved” by Commissioner Ryan’s decision to approve the agreement. AiGroup relies on the following matters:
(a) it is a major registered organisation which represents employers in a wide range of industries;
(b) it is a “peak council” as defined in s.12 of the Fair Work Act;
(c) the proceedings affect thousands of AiGroup members who have received a notice by a union official to enter their premises or who are parties to or may bargain for enterprise agreements; and
(d) the outcome of the appeal will have a direct and substantial impact on a large number of AiGroup’s members.
 After reference to relevant authority AiGroup submitted that the decision under appeal prejudicially affects the interests of AiGroup and its members and that AiGroup’s interest is above that of an ordinary member of the public.
 A Full Court of the Federal Court of Australia considered the meaning of the term “person aggrieved” in Tweed Valley Fruit Processors Pty Ltd v Ross and others. 2 It may fairly be said that the term “person aggrieved” is capable of extending beyond persons whose legal interests are affected by the decision in question and extends to persons with an interest in the decision beyond that of an ordinary member of the public.3 The statutory context is not relevantly different in this case.
 We have concluded that AiGroup, for the reasons it advanced, is a person aggrieved by the Commissioner’s decision. We are influenced in particular by the considerations that AiGroup is a large organisation of employers with eligibility to enrol members in a wide range of industries and that the issue with which the appeal is concerned is one of significance for employers generally.
Permission to appeal
 Section 604(1) of the Fair Work Act provides that permission is required to appeal. Section 604(2) provides that Fair Work Australia must grant permission if it is satisfied that it is in the public interest to do so. Because the appeal relates to the operation of s.194(f) and the extent to which right of entry may be dealt with in enterprise agreements we think that it is in the public interest that we grant permission to appeal and we do so.
 As already indicated, the Commissioner found that cl.44 of the agreement is not an unlawful term. As we understand it, the Commissioner found that cl.44 only deals with situations in which an employer has invited a union representative to enter premises. This interpretation was broadly consistent with what Dunlop Foams and the NUW put to him. The Commissioner characterised ss.481 and 484 as regulating the position where a permit holder enters premises without an invitation or, being invited, for a purpose beyond that for which the invitation was made. He concluded that cl.44 does not provide for entitlements of the kind specified in ss.481 and 484 and therefore s.194(f) does not apply.
 AiGroup submitted that the Commissioner’s decision is wrong because, among other things, the interpretation of s.194(f) he adopted means that the right of entry provisions in the Fair Work Act do not operate at all in relation to a person, including a union official, who enters premises pursuant to an invitation. On that basis the conditions specified in ss.481 and 484 would not apply in the case of invitees. AiGroup pointed to a number of consequences of this interpretation which it submitted Parliament could not have intended. It submitted, for example, that on the Commissioner’s interpretation a union official who enters premises pursuant to cl.44 can hold discussions with employees whether the employees wish to participate or not. In those circumstances the protection afforded to such employees by s.484(c) would be lost.
 AiGroup also submitted that there are other relevant provisions in Part 3-4 which provide important protections for employees and employers in connection with entry onto premises. It referred to ss.500, 503 and 504 in particular. Section 500 provides that a permit holder must not intentionally hinder or obstruct any person or act in an improper manner. Section 503 deals with misrepresentations. Section 504 deals with unauthorised use or disclosure of information or documents obtained pursuant to provisions of Part 3-4. It is unnecessary to set all of these provisions out.
 AiGroup also submitted that this is not a case in which an undertaking should be accepted. Section 190 of the Fair Work Act provides for the giving of an undertaking if Fair Work Australia has a concern that an agreement does not meet the requirements in ss.186 and 187. AiGroup relies on s.190(3)(b) which provides that an undertaking may only be accepted if the undertaking is not likely to result in substantial changes to the agreement.
 Dunlop Foams, despite its earlier support for approval of the agreement, supported AiGroup’s submissions, as did the Australian Chamber of Commerce and Industries (ACCI). The Australian Mines and Metals Association (AMMA) also supported the appeal. It should be mentioned that AiGroup and ACCI relied upon some of the Parliamentary materials, including a Senate inquiry, which preceded the passage of the Fair Work Act.
 The Australian Government also supported the appeal. It submitted that cl.44 confers an entitlement to enter Dunlop Foams’ premises in broad terms which includes entry for a purpose referred to in s.481 and to hold discussions of the kind referred to in s.484, yet the clause does not require that entry be in accordance with Part 3-4. The submission gave examples of restrictions included in Part 3-4, but not in cl.44. They included the requirement that entry be confined to a permit holder, the requirement in s.487 for notice of entry, the requirement in s.489 for production of an authority and the requirement in s.492 to comply with reasonable requests in relation to the location of the discussions.
 For these reasons the Government submitted that cl.44 is an unlawful term. It was further submitted that Part 3-4 is an exclusive code in relation to enforceable rights to enter premises for the purposes set out in Part 3-4.
 While the Australian Council of Trade Unions (ACTU) opposed permission to appeal, it submitted in the alternative that on appeal a Full Bench should inquire whether the conclusion that cl.44 was not an unlawful term was affected by an error amounting to an error of jurisdiction. It was submitted that in this case there was no such error.
 The ACTU relied upon the use of the word “satisfied” in s.186(4) and submitted that the appeal must fail unless it can be shown that the Commissioner misconstrued s.186(4), acted in bad faith, acted arbitrarily or capriciously, failed to consider matters he was required to consider, took irrelevant matters into account or made a finding that no reasonable person could properly arrive at. Reliance was placed on a number of authorities. 4 The ACTU contended that the Commissioner’s decision was not affected by error of the type described.
 The ACTU also submitted that because AiGroup’s notice of appeal does not recognise these requirements for a successful appeal, it requires amendment, to which the ACTU is opposed. The ACTU submitted in the alternative that the Commissioner was correct to find that cl.44 operates as a conditional invitation only. It also contended that s.194(f) only operates in respect of entitlements to enter premises, and that cl.44 does not confer entitlements. It was submitted that the ground covered by cl.44 is not the same as that covered by ss.481 and 484 because they operate in relation to different types of entry.
The approach on appeal
 It is necessary to say something about the nature of an appeal pursuant to s.604 of the Fair Work Act. In Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission 5 the High Court considered the nature of an appeal pursuant to s.45 of the Workplace Relations Act 1996. That section was in similar terms to s.604 of the Fair Work Act. The majority of the Court held that an appeal under s.45 is an appeal by way of rehearing and that an appeal bench can only exercise its powers if there is error on the part of the primary decision-maker.6 The reasoning applies equally to the exercise of powers by an appeal bench under s.604. Depending on the nature of the decision under appeal, questions may arise concerning the type of error amenable to correction on appeal. With that potential in mind we turn to the nature of the decision in this case.
 On an application for approval of an enterprise agreement, if Fair Work Australia is satisfied that each of the requirements specified in ss.186 and.187 are met, it must approve the agreement. Because the relevant requirements are not expressed in absolute terms, it may be argued that the sections confer a discretion on Fair Work Australia. If that is the case, the principles to be applied in an appeal from a discretionary decision set out in House v R are directly relevant. 7
 Although the relevant passage has been referred to many times, it is appropriate to set it out once again:
“If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.” 8
 It may be observed that the various matters specified in ss.186 and 187 of which Fair Work Australia must be satisfied are not all of the same nature. Some may involve the exercise of a broader discretion than others. Whether an agreement has been genuinely agreed to by the relevant employees, a question posed by ss.186(2)(a) and (b), is a matter on which “no one [consideration] and no combination of [considerations] is necessarily determinative of the result.” 9 By contrast, the question posed by s.186(4) is primarily a question of law. We have no doubt that if a decision involves an error of law a Full Bench may exercise powers under s.604 to correct the error. Accordingly, whether it is correct to describe a decision under s.186(4) as a discretionary one is of no real significance.
 It is desirable to give an indication of the content of Part 3-4. The part is entitled “Right of Entry” It contains some 49 sections, arranged in 6 divisions as follows:
ss.478 – 480
Division 2—Entry rights under this Act
ss. 481 – 493
Division 3—State or Territory OHS rights
ss.494 – 499
ss. 500 – 504
Division 5—Powers of FWA
ss.505 – 511
Division 6—Entry permits, entry notices and certificates
ss.512 – 521
 Section 481 is in Division 2 of Part 3-4. It is part of Subdivision A which is entitled “Entry to investigate suspected contravention”. There are 4 sections in the subdivision, of which s.481 is the first. These sections deal in some detail with what a permit holder may or may not do in relation to entry, inspection and documents in connection with a suspected contravention of the Fair Work Act or a term of a fair work instrument. Section 484 is also in Division 2 of Part 3-4 and is the only section in Subdivision B. Subdivision B is entitled “Entry to hold discussions”.
 Subdivision C of Division 2 of Part 3-4 is entitled “Requirements for permit holders”. It contains 8 sections regulating the times at which and manner in which permit holders may enter particular premises. Section 486 provides, relevantly, that Subdivisions A and B do not authorise a permit holder to enter or remain on premises or exercise any other right if he or she contravenes Subdivision C in exercising that right.
 Division 4, as its name suggests, contains a number of prohibitions in relation to the exercise of rights by a permit holder. The prohibitions deal with hindering or obstruction by or of a permit holder, refusal or delaying the entry of a permit holder, misrepresentations and unauthorised use or disclosure of information obtained, relevantly, on entry to investigate a suspected contravention.
 Division 6 regulates the issue of entry permits and the giving of entry notices. It is not necessary to deal with those provisions in any detail.
 This summary of the legislative provisions indicates that the Fair Work Act regulates the exercise of entry rights by a permit holder in a comprehensive way. There cannot be any doubt that if cl.44 had been drafted so as to apply to a permit holder it would have been clearly inconsistent with the regime established by Part 3-4. It should be noted, however, that s.194(f) does not strike at agreement terms which deal with a permit holder as such, but at agreement terms which deal with an entitlement relating to particular types of entry to premises.
 In order to be an unlawful term within s.194(f) an agreement term must have three elements. The agreement term must provide for an entitlement, the entitlement must be to enter premises for a purpose referred to in s.481 or to hold discussions of a kind in s.484 and the term must purport to permit entry other than in accordance with Part 3-4.
 We have no doubt that cl.44 provides for an entitlement. Subject to compliance with the prescribed conditions an authorised NUW representative may enter the premises at any time. Provided the conditions are complied, with there is nothing that Dunlop Foams can do to prevent or restrict entry. It is also clear that the entitlement, being unrestricted by reference to purpose, includes entry for the purpose referred to in s.481, namely investigation of suspected contraventions. Equally the entitlement extends to the holding of discussions with employees, the matter dealt with in s.484. Finally it is clear that cl.44 is not limited in its operation by reference to the provisions of Part 3-4. As we have seen, those provisions establish a regime of regulation of entry to premises based on the requirement to obtain a permit and to observe a number of procedures and rules.
 With respect to the Commissioner, in our view the conclusion that cl.44 is not an unlawful term is wrong. The decision approving the agreement must be quashed.
 Some of the submissions dealt with the legal effect of Part 3-4 in relation to the general law concerning entry to premises. Because this appeal is concerned with the application of s.186(4) and the effect of s.194(f) in relation to the terms of an enterprise agreement, it is unnecessary to deal with those submissions.
 The only remaining question is whether the defect in the agreement can be cured by an undertaking pursuant to s.190. Where the tribunal has a concern that an agreement does not meet the requirements in s.186, s.190(2) provides that the agreement may nevertheless be approved if an undertaking given under s.190(3) meets the concern. Section 190 provides as follows:
Application of this section
(1) This section applies if:
(a) an application for the approval of an enterprise agreement has been made under section 185; and
(b) FWA has a concern that the agreement does not meet the requirements set out in sections 186 and 187.
Approval of agreement with undertakings
(2) FWA may approve the agreement under section 186 if FWA is satisfied that an undertaking accepted by FWA under subsection (3) of this section meets the concern.
(3) FWA may only accept a written undertaking from one or more employers covered by the agreement if FWA is satisfied that the effect of accepting the undertaking is not likely to:
(a) cause financial detriment to any employee covered by the agreement; or
(b) result in substantial changes to the agreement.
FWA must seek views of bargaining representatives
(4) FWA must not accept an undertaking under subsection (3) unless FWA has sought the views of each person who FWA knows is a bargaining representative for the agreement.
(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.”
 Section 190(3) provides for undertakings by employers. Subject to what we say in the next paragraph we would be prepared to accept a written undertaking from Dunlop Foams that the exercise of any right of entry conferred by cl.44 of the agreement which involves entry to premises for a purpose referred to in s.481 of the Fair Work Act or to hold discussions of a kind referred to in s.484 of the Fair Work Act will be in accordance with the requirements of Part 3-4 of Chapter 3 of the Fair Work Act. If Dunlop Foams is prepared to give such an undertaking, the undertaking should be in accordance with Regulation 2.07 of the Fair Work Regulations, filed in Fair Work Australia and served on the NUW.
 We are required by s190(4) to seek the views of each person who is a known bargaining representative for the agreement before deciding whether to accept an undertaking. Within 7 days of receipt of the written undertaking of Dunlop Foams the NUW is directed to file in Fair Work Australia and serve on Dunlop Foams its views concerning whether we should accept the undertaking. Should Dunlop Foams provide the undertaking, and, having considered any views of the NUW we decide to accept the undertaking, we are prepared to approve the agreement.
S. Smith with M. Mead for the Australian Industry Group and Pacific Brands Ltd.
T. Clarke for the Australian Council of Trade Unions.
D. Mammone for the Australian Chamber of Commerce and Industry.
G. Bull for the Australian Mines and Metals Association.
P. O’Grady of counsel for the Minister for Employment and Workplace Relations.
1  FWAA 1401.
2 (1996) 137 ALR 70.
3 Ibid at pp. 90 and 91.
4 Pawel v Australian Industrial Relations Commission  FCA 1660, Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259.
5 (2000) 203 CLR 194.
6 Ibid at paras 13 - 17.
7 (1936) 55 CLR 499; Coal & Allied Operations Pty Ltd., op. cit. at paras 19-21.
8 (1936) 55 CLR 499 at 505.
9 Jago v District Court (NSW) (1989) 168 CLR 23 at 76 per Gaudron J cited in Coal & Allied at para 19.
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