[2010] FWAFB 8437

Download Word Document



Fair Work Act 2009
s.604—Appeal of decision

Boral Resources (NSW) Pty Ltd
Transport Workers’ Union of Australia



Appeal against decision [2010] FWA 6249] of Commissioner Harrison at Sydney on 3 September 2010 in matter number B2010/2884.

[1] This is an application by Boral Resources (NSW) Pty Ltd (Boral) for permission to appeal and, if permission is granted, an appeal against a decision and determination of Commission Harrison 1 in a private arbitration, conducted pursuant to s.240(4) of the Fair Work Act 2009 (FW Act).

[2] Boral and the Transport Workers Union (TWU) are in negotiations for a new enterprise agreement to cover certain of Boral’s employees. The TWU has been seeking a dispute resolution procedure in the proposed enterprise agreement that will allow not only for the resolution of disputes “arising under the agreement”, but also for the resolution of disputes over “matters pertaining to the employment relationship”. It also seeks a consultation clause that will include a requirement that Boral notify the TWU of any proposal for major change. Boral objected to each of these features, in particular on the basis that they were not permitted by the FW Act for inclusion in an enterprise agreement.

[3] The parties referred their bargaining dispute to Fair Work Australia (FWA) pursuant to s.240 of the FW Act.

[4] The parties agreed to Commissioner Harrison arbitrating their bargaining dispute. The questions submitted to the Commissioner for determination were in the following terms:

[5] It may be noted that Boral was not obliged to agree to the arbitration. It was within Boral’s rights under s.228(2) of the FW Act to simply refuse to agree to the inclusion of the terms sought by the TWU, albeit that Boral would have remained exposed to the risk that the TWU would seek to take protected industrial action in pursuit of its claim for those terms.

[6] The Commissioner found in favour of the TWU and determined that the dispute resolution procedure and consultation clause to be included in the proposed enterprise agreement should be in the terms proposed by the TWU.

[7] Boral’s case on appeal is founded on a contention that the FW Act, on its proper construction, does not permit the clauses proposed by the TWU to be included in the proposed enterprise agreement.

Dispute Resolution Procedure

[8] The FW Act regulates the content of enterprise agreements by specifying in s.172, in general terms, the “permitted matters” that may be included in an enterprise agreement. Section 172(1) of the FW Act provides:

[9] For practical purposes, the general authorisation in s.172 to include “permitted matters” is subject to various qualifications, most notably that “unlawful terms”, as specified in s.194, may not be included because FWA must withhold approval of an enterprise agreement if it contains any “unlawful terms”. 2

[10] The dispute resolution procedure proposed by the TWU relevantly includes the following:

[11] Boral’s case is founded primarily on the terms of s.186(6) of the FW Act. Section 186 relevantly provides:

[12] Boral contends that s.186(6), on its proper construction, confines the operation of a dispute resolution procedure that may properly be included in an enterprise agreement to disputes of the sort described in s.186(6)(a)(i) and (ii). The dispute resolution procedure proposed by the TWU, in allowing for the resolution of disputes about “matter[s] pertaining to the relationship between the employer and employees covered by [the proposed Agreement]”, travels beyond the scope of disputes specified in s.186(6)(a)(i) and (ii) and is therefore not permitted. The TWU contends, in effect, that s.186(6) specifies a minimum requirement only and does not prevent the inclusion of a dispute resolution procedure with an operation that is greater than that specified in s.186(6).

[13] The issue, then, is whether s.186(6), on its proper construction, does no more than specify a minimum requirement that must be met by a dispute resolution procedure in an enterprise agreement or whether it also imposes a restriction and prevents the inclusion in an enterprise agreement of a dispute resolution term that, although a permitted matter within the meaning of s.172, allows for the resolution of a broader range of disputes than those specified in s.186(6)(1)(i) and (ii).

[14] We must construe s.186(6) in the context of the FW Act as a whole. Section 595 sets out FWA’s power to deal with disputes generally and sections 738 and 739 regulate when and how FWA may deal with a dispute referred under a dispute resolution procedure in, relevantly, an enterprise agreement. Those provisions are relevantly as follows:

[15] Section 738(b), on the plain meaning of its words, contemplates that an enterprise agreement may contain a term that provides a procedure for dealing with disputes that goes beyond the requirements of s.186(6). This is unambiguously suggested by the explication that commences with the word “including”. We think that this is a conclusive indication that the Parliament intended s.186(6) to operate only as a minimum requirement and not as a restriction on the inclusion of dispute resolution procedures that, although, within the ambit of “permitted matters” as specified in s.172, have an operation outside the categories specified in s.186(6)(i) and (ii).

[16] This construction is supported by a consideration of the objects of the FW Act, in particular, the object s.3(e) which refers to “enabling fairness and representation at work by ... providing accessible and effective procedures to resolve grievances and disputes ...”. It is a matter of common experience that disputes can arise between an employer and employees bound by an enterprise agreement that manifestly pertain to the employment relationship but are about matters that are not dealt with, or otherwise regulated in the enterprise agreement, typically because the circumstances giving rise to the dispute were not contemplated at the time the agreement was made. The construction advanced by Boral would leave such disputes without any mechanism by which they could be addressed by denying parties to a proposed agreement the option of including a term in their agreement that allows Fair Work Australia to resolve such disputes by whatever means therein agreed.

[17] Any doubt that the construction we have adopted is correct is removed by the Explanatory Memorandum which states:

[18] For completeness we note that under the pre-WorkChoices WR Act, the Australian Industrial Relations Commission (AIRC) had no jurisdiction to deal with a dispute referred, pursuant to a dispute settlement procedure in a certified agreement, unless the dispute was properly characterised as a “dispute over the application of the agreement.” 3 However, that limitation was held to arise from the words of s.170LW of the pre-WorkChoices WR Act.4 Accordingly, it was always necessary for the AIRC, when it was asked to deal with a matter arising under the dispute settling procedure in an agreement, to ascertain the character of the dispute that was before it in order to determine whether the matter was a dispute over the application of the agreement. In National Tertiary Education Union v Charles Sturt University5 a Full Bench of the AIRC, referring to provisions of the pre-WorkChoices version of the WR Act, summarised the position as follows:

[19] The words of limitation in s.170LW and its predecessor were not retained in the WorkChoices version of the WR Act and no such language has been included the FW Act.

Consultation Clause

[20] The Commissioner dealt with the consultation clause issue as follows:

[21] We have already set out s.172(1) of the FW Act dealing with “permitted matters” at paragraph [7] above. Section 172(2) provides:

[22] There is no contest that Boral employs persons who are members of the TWU and that the TWU is entitled under its rules to represent the industrial interests of those members. So much can be inferred by Boral’s acceptance of the TWU as a bargaining representative for the proposed enterprise agreement.

[23] Notification to an employee organisation that will be covered by an enterprise agreement of major changes that may affect members of that employee organisation is manifestly a “matter pertaining to the relationship between the employer and an employee organisation that will be covered by an agreement” and therefore within the class of “permitted matters” specified in s.172(1)(b).

[24] An employee organisation cannot be a party to an non-Greenfields, single-enterprise agreement in the strict sense: s.172(2)(a) of the FW Act only authorises an employer and employees to make an enterprise agreement of that sort (in contrast to a Greenfields agreement which, pursuant to s.172(2)(b), may be made with relevant employee organisations). Rather, the FW Act provides a mechanism by which an employee organisation with an appropriate interest in an non-Greenfields single-enterprise agreement can become covered by the agreement; namely, by giving notice to FWA in accordance with s.183 of the FW Act. 6

[25] Section 183 provides:

[26] However, notice under s.183 can only be given by an employee organisation once the enterprise agreement has been “made”. By virtue of s.182, an enterprise agreement is made on the date on which the voting process by which employees approved the agreement concludes. It follows that the reference in s.172(1)(b) to an employee organisation “that will be covered by the agreement”, a provision concerned with what may be negotiated for inclusion in an enterprise agreement, ought be taken as a reference to the future likelihood of coverage for an employee organisation that is a bargaining representative for the agreement. Any other interpretation would mean that s.172(1)(b) would never have any application in relation to single-enterprise agreements. Parliament ought not be taken to have intended that outcome.

[27] In the present case the proposed enterprise agreement has not yet been “made” in the s.182 sense and, as just explained, the occasion for the TWU to give notice under s.183 has not yet arisen. However, it is the experience of the Tribunal that in the overwhelming majority of cases where an employee organisation is a bargaining representative for an enterprise agreement that is made, the employee organisation gives notice to FWA pursuant to s.183 that it wants the enterprise agreement to cover it. It is highly likely, verging on a certainty, that if the proposed enterprise agreement is made, the TWU will give a notice pursuant to s.183 and, consequently, will be covered by the proposed agreement.

[28] It follows that the disputed consultation term sought by the TWU is a term that is permitted by the FW Act and it was well within the Commissioner’s arbitral discretion to determine that that term should be included in the proposed agreement.

[29] We think it appropriate to note, as was conceded by Senior Counsel for the TWU, that the dispute resolution procedure arbitrated by the Commissioner would not allow for any arbitrated outcome of a dispute referred pursuant to that procedure that was inconsistent with the terms of the proposed enterprise agreement, including the ‘no extra claims’ clause that has apparently been agreed between the parties, because this would be contrary to the prohibition in s.739(5) of the FW Act.


[30] We have rejected Boral’s contentions that, as a matter of law, it was not open to the Commissioner to determine that the two clauses for which the TWU was contending were not permitted by the FW Act. There is an issue as to the extent of the jurisdiction, if any, of a Full Bench to entertain an appeal from a consent arbitration conducted pursuant to s.240(4) of the FW Act in the absence of a term of the arbitration agreement providing for an appeal. However, that issue was not raised by the parties and, in the absence of argument, we should refrain from expressing any view. In any event, we are satisfied that the proper course is to refuse permission to appeal. We are not persuaded that there is any basis to interfere with the Commissioner’s determination which we consider was well open on the material before him. Permission to appeal is refused. Boral remains bound by the Commissioner’s determination by virtue of the arbitration agreement it entered pursuant to s.240(4).



K.G. Bennett, Counsel, for Boral Resources (NSW) Pty Ltd.

A. Hatcher, Senior Counsel, for the Transport Workers’ Union of Australia.

Hearing details:

October 26.

 1   [2010] FWA 6249.

 2   See s.186(1) and s.186(5).

 3   Shop, Distributive and Allied Employees Association v Big W Discount Stores, Print PR924554 (Watson SDP, Kaufman SDP and Foggo C) at [19] - [20].

 4   Ibid.

 5   (2005) 145 IR 319.

 6   Pursuant to s.201(2) of the FW Act, if such notice has been given and FWA approves the agreement, then FWA must note in its decision to approve the agreement that the agreement covers the organisation/s.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR503335>