[2014] FWCFB 5947

The attached document replaces the document previously issued with the above code on 4 September 2014.

Nathan Hill

Associate to Vice President Hatcher

Dated: 1 October 2014

Fair Work Act 2009
s.604 - Appeal of decisions

Director of the Fair Work Building Industry Inspectorate
v
Construction, Forestry, Mining and Energy Union
(C2014/4776)

Director of the Fair Work Building Industry Inspectorate
v
Construction, Forestry, Mining & Energy, Industrial Union of Employees, Queensland
(C2014/4777)

Appeal against decisions [2014] FWCD 1169 and [2014] FWCD 1170 of Mr Enright at Melbourne on 15 May 2014 in matter numbers RE2013/1809 and RE2013/1811.

Introduction

[1] These appeals, for which permission to appeal is required, concern two decisions issued by Mr Chris Enright (the Delegate), acting on delegation under s.625(2)(g) of the Fair Work Act 2009 (the Act), on 15 May 2014. The first of these decisions 1 (First Decision) concerned an application by the Construction, Forestry, Mining and Energy Union (CFMEU) under s.512 of the Act for an entry permit to be issued to Mr Anthony Kong. The Delegate determined that he was satisfied that Mr Kong was a fit and proper person to hold an entry permit, and that he would issue Mr Kong with an entry permit subject to an identified condition and once Mr Kong had completed appropriate training. In the second of the decisions2 (Second Decision) the Delegate dealt with an application by the Construction, Forestry, Mining & Energy, Industrial Union of Employees, Queensland (CFMEIUEQ) under s.512 for Mr Kong to be issued with a permit. The outcome determined by the delegate in the Second Decision was the same as that in the First Decision.

[2] The appeal applications have been made by the Director of the Fair Work Building Industry Inspectorate (the Director), who made submissions to the Delegate that Mr Kong should not be issued with an entry permit in respect of either application. There was no challenge to the standing of the Director to make these appeals, and we will therefore proceed on the basis that they are competent. The two grounds for each appeal were the same, and were as follows:

(1) The Delegate erred in law by holding in paragraph [69] of his reasons for decision that he could not take into account, and then by not taking into account, under s.513(1)(g) of the Act, the history of contraventions of industrial legislation by the CFMEU.

(2) The Delegate erred in law by not imposing a term that the permit holder undertake training approved by the Fair Work Commission on an annual basis in relation to Parts 3-1, 3-3 and 3-4 of the Act for the direction of the permit and that evidence of attendance at such training shall be provided to the Fair Work Commission within two weeks of the training being undertaken by the permit holder in that the delegate failed to take into account in the exercise of his power under s.515 of the Act the history of contraventions of industrial legislation by the CFMEU.

Relevant provisions of the Act

[3] In order to exercise the rights of entry to premises conferred by Division 2 of Part 3-4 of the Act, an official of a registered organisation must hold a current entry permit issued by the Commission. Subdivision A of Division 6 of Part 3-4 concerns the issue, expiry and return of such entry permits. The provisions of the Subdivision relevant to the determination of these appeals are as follows:

512 FWC may issue entry permits

The FWC may, on application by an organisation, issue a permit (an entry permit) to an official of the organisation if the FWC is satisfied that the official is a fit and proper person to hold the entry permit.

513 Considering application

(1) In deciding whether the official is a fit and proper person, the FWC must take into account the following permit qualification matters:

(a) whether the official has received appropriate training about the rights and responsibilities of a permit holder;

(b) whether the official has ever been convicted of an offence against an industrial law;

(c) whether the official has ever been convicted of an offence against a law of the Commonwealth, a State, a Territory or a foreign country, involving:

(i) entry onto premises; or

(ii) fraud or dishonesty; or

(iii) intentional use of violence against another person or intentional damage or destruction of property;

(d) whether the official, or any other person, has ever been ordered to pay a penalty under this Act or any other industrial law in relation to action taken by the official;

(e) whether a permit issued to the official under this Part, or under a similar law of the Commonwealth (no matter when in force), has been revoked or suspended or made subject to conditions;

(f) whether a court, or other person or body, under a State or Territory industrial law or a State or Territory OHS law, has:

(i) cancelled, suspended or imposed conditions on a right of entry for industrial or occupational health and safety purposes that the official had under that law; or

(ii) disqualified the official from exercising, or applying for, a right of entry for industrial or occupational health and safety purposes under that law;

(g) any other matters that the FWC considers relevant.

(2) Despite paragraph 85ZZH(c) of the Crimes Act 1914, Division 3 of Part VIIC of that Act applies in relation to the disclosure of information to or by, or the taking into account of information by, the FWC for the purpose of making a decision under this Part.

Note: Division 3 of Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

...

515 Conditions on entry permit

(1) The FWC may impose conditions on an entry permit when it is issued.

(2) In deciding whether to impose conditions under subsection (1), the FWC must take into account the permit qualification matters.

(3) The FWC must record on an entry permit any conditions that have been imposed on its use (whether under subsection (1) or any other provision of this Part).

(4) If the FWC imposes a condition on an entry permit after it has been issued, the permit ceases to be in force until the FWC records the condition on the permit.

(5) To avoid doubt, a permit holder does not contravene an FWC order merely because the permit holder contravenes a condition imposed on his or her permit by order (whether the condition is imposed at the time the entry permit is issued or at any later time).

The submissions before the Delegate and the decisions

[4] Because the Director’s grounds of appeal only concern two specific aspects of the First Decision and the Second Decision, it is not necessary to refer to much of the Delegate’s reasoning concerning the fitness of Mr Kong to hold an entry permit. And because the reasons in each decision concerning the matters challenged in the appeals are expressed in identical terms (with identical paragraph numbering), it is sufficient to refer to the relevant parts of the First Decision.

[5] The Director made two written submissions in each of the matters before the Delegate. The first was described as “General Submissions”, and stated that it dealt with “the principles surrounding the making of a decision under s.512 of the FW Act and some issues that arise from previous decisions concerning permit applications and the history of the CFMEU”. The second was described as “Specific Submissions”, and dealt with matters specific to Mr Kong.

[6] The Director’s General Submissions contained an annexure which set out, in tabular form, court decisions (95 in total) since 2000 in which the CFMEU and/or its officials had been found to have contravened industrial legislation. In respect of each decision, the table identified the case name and citation, the court and judge, the dates of the contravening conduct, a short summary of the nature of the conduct, the date of judgment, and the contraventions found and penalties imposed. The Director submitted in summary that the history disclosed by this annexure “should lead the Commission to approach all applications by the CFMEU with caution and to consider whether to hold hearings for some or all applications made by the CFMEU”. 3 The Director elaborated upon this submission in a section of the General Submissions entitled “History of contravening by the CFMEU”. It was submitted that “The CFMEU's record suggests there is a culture of non-compliance with industrial laws within the organisation, particularly in its dealings within the construction industry”. The following submission was then made:

“31. It is submitted that this appalling record should cause the Commission to consider some or all of the following issues:

a) Can the CFMEU explain the significant number of contraventions?

b) Has the CFMEU shown any genuine remorse or contrition for any of its previous contraventions?

c) Has it taken steps to reduce the incidence of non-compliance by its employees or to address the concerns raised by the Courts about the apparent culture of non-compliance? For example, have its officers or employees been required to pay their fines imposed upon them personally or has the union paid the fines for the individuals?

d) Has the union done anything to sanction, discipline or rehabilitate any of its officers or employees who have contravened industrial laws?

e) What does the CFMEU propose to do in the future to ensure that its officers and employees comply by workplace laws?

32. The overarching issue for the Commission to consider is whether it, or the community, can be confident that the proposed permit holder will receive appropriate training, support and encouragement to exercise his entry powers properly and to meet his obligations as permit holder while exercising those powers.

33. Specific regard should be had to:

a) ss 577, 578, 589 and 590 of the FW Act;

b) the permit qualification matters in s 513(l)(a), (d) and (g);

c) whether any conditions could be imposed under s 515; and

d) the objects of Part 3-4.

34. Without answers to these questions, it is submitted that caution should be exercised before granting an application made by the CFMEU in relation to any person it nominates and that the Commission should list some or all of the applications for hearing to give the CFMEU, the Director and any other interested person an opportunity to be heard in relation to these matters.”

[7] The only references in the Director’s Specific Submissions to the CFMEU’s history as disclosed by the annexure to the General Submissions were the following:

“20. The Commission's prospects of Mr Kong re-offending should also be influenced by the view it forms as to the adequacy of the training, incentives and support he has received and will receive as a permit holder. In this regard, as paragraph [16] of the General Submissions suggest, it is relevant for the Commission to note that Mr Kong is an official of an organisation that appears to have manifested a continuing disobedience of the law. In view of the CFMEU's "propensity" both to transgress and have penalty orders imposed against it, the Commission may reasonably have reservations about the sufficiency of the incentives and training which has been provided to Mr Kong to date.

...

24. The training that Mr Kong has undertaken does not appear to be sufficient in the context of the unlawful conduct the CFMEU has admitted that Mr Kong engaged in. In light of both Mr Kong's and the CFMEU's record, it seems necessary that not only should Mr Kong have received more comprehensive training that was directed to compliance with right of entry, but also training directed at compliance with industrial laws generally.”

[8] The Delegate dealt with the Director’s submissions concerning the CFMEU’s history of contraventions in the following way (noting that the Director is referred to by the acronym “FWBC”):

“History of contraventions by the CFMEU

[66] The FWBC submits that the history of contraventions of industrial law committed by various officials of the CFMEU, particularly officials attached to the Construction and General Division (the Division), is a relevant matter for me to take into account pursuant to subsection 513(1)(g) of the Act. Annexed to its general submissions, the FWBC provided a list of matters in which it was found that that the CFMEU had contravened various pieces of industrial legislation. The FWBC argues that, given this history of contravening conduct, the Commission should exercise caution in determining whether or not to issue an entry permit on the basis of an application made by the CFMEU.

[67] I share the concerns of the FWBC regarding the CFMEU’s history, particularly that of the Division, in contravening various pieces of industrial legislation. As set out in the submissions of the FWBC, the courts have made several observations in relation to this history. For instance, in Williams v Construction, Forestry, Mining and Energy Union (No. 2) [2009] FCA 548, noted that:

“...the history tends to suggest that the Union has, with respect to anti-coercion and similar provisions of industrial laws, what the High Court in Veen described as ‘a continuing attitude of disobedience of the law’...”.

[68] Further in Cozadinos v Construction, Forestry, Mining and Energy Union [2013] FCA 1243, Tracey J remarked that the CFMEU has “...a deplorable record of contraventions of the BCII Act and similar legislation” and in Cozadinos v Construction, Forestry, Mining and Energy Union & Ors [2011] FMCA 284 Reithmuller FM noted its “...unenviable history of breaches as set out in the various cases”.

[69] However, in my view, given the structure of sections 512 and 513(1) of the Act, this history of contraventions of industrial legislation by the CFMEU is not a proper matter to take into account for the purposes of subsection 513(1)(g) of the Act. As noted above, section 512 of the Act provides that the determination required to be made is whether the Commission is satisfied that a particular official is a “fit and proper person to hold the entry permit”. Similarly, the “permit qualification matters” set out in paragraphs (a) to (f) of subsection 513(1) of the Act pertain to matters specifically in relation to such an official. Thus, the inquiry required to be made in determining whether or not to issue an entry permit to a particular official is directed to the status and attributes of that official. Given this, it would not be appropriate to take into account matters not directly involving a particular proposed permit holder for the purposes of subsection 513(1)(g) of the Act. It would not be a proper exercise of the Commission’s discretion pursuant to section 512 of the Act to determine all applications from the CFMEU or the Division with a pre-determined adverse disposition.

[70] The appropriate vehicle for pursuing such matters may in some instances be provided by s.508 of the Act. That provision provides that the Commission may restrict the right of entry powers otherwise exercisable under Part 3-4 of the Act if it is satisfied that a particular organisation or an official of such an organisation has misused those powers. Such restrictions may include suspending, revoking or imposing conditions on entry permits, requiring some or all of the entry permits issued in relation to a particular registered organisation to be issued subject to specific conditions, banning the issue of entry permits in relation to a particular registered organisation for a specified period and any other order the Commission considers appropriate.”

[9] In connection with the submission earlier quoted concerning the degree of training which Mr Kong should receive, the Director in his Specific Submissions proposed that if, contrary to his primary submission that Mr Kong was not a fit and proper person to hold an entry permit, Mr Kong was issued with an entry permit, the following condition should be imposed upon it:

“The permit holder must undertake training approved by the Fair Work Commission on an annual basis in relation to Parts 3-1, 3-3 and 3-4 of the Fair Work Act 2009 (Cth) for the duration of the permit. Evidence of attendance at such training shall be provided to the Fair Work Commission within 2 weeks of the training being undertaken by the permit holder.

If any findings are made or penalties imposed that are relevant to the permit qualification matters at s 513(a)-(f) of the Fair Work Act 2009, or proceedings commenced that may lead to findings made or penalties imposed that are relevant to the permit qualification matters at s 513(a)-(f) of the Fair Work Act 2009, then the permit holder is to notify the Fair Work Commission within 2 weeks of the finding being made, the penalty imposed or the proceeding commenced.”

[10] The Delegate made a general determination that Mr Kong should receive further training should he be issued with a permit, but not training to the extent of that sought by the Director:

“[49] Subsection 513(1)(a) of the Act refers to “appropriate training” specifically regarding the “rights and responsibilities of a permit holder”. I am of the view that should I decide to issue Mr Kong with a right of entry permit, that he undertake new appropriate training prior to the issue of a new permit. However I am not persuaded by the FWBC’s reference that “appropriate training” should be extended to embrace training beyond such “rights and responsibilities” as contained within Part 3-4 of the Act.”

[11] Having satisfied himself that Mr Kong was a fit and proper person to hold an entry permit, the Delegate then went on to impose a condition upon the entry permit to be issued to Mr Kong which took up the second paragraph of the Director’s proposed condition but omitted the first. His reasons were as follows:

“[98] However, for the reason given above at paragraph [49] of this decision, I require Mr Kong to first undertake new appropriate training prior to the issue of a new permit.

[99] Furthermore, due to the action and involvement taken in FWBII v CFMEU & Anor, I am concerned that such conduct may be repeated. For those reasons, I will impose a condition on the permit.

…

[101] The Explanatory Memorandum to the Act states that the decision to impose conditions on a permit is “entirely at the discretion of [the FWC]”. Since my concern is that similar conduct may occur in the future I have decided to apply a condition in the following terms:

“If any findings are made or penalties imposed that are relevant to the permit qualification matters at s.513(a)–(f) of the Fair Work Act 2009, or proceedings commenced that may lead to findings made or penalties imposed that are relevant to the permit qualification matters at s.513(a)–(f) of the Fair Work Act 2009, then the permit holder is to notify the Fair Work Commission within 2 weeks of the finding being made, the penalty imposed or the proceeding commenced.”

[102] Once the requirement in paragraph [98] concerning new appropriate training has been met, and presuming no other matters that are relevant to my consideration of the permit qualification matters arise in the meantime, I will grant a right of entry permit to Mr Kong with the condition referred to in paragraph [101].”

Appeal submissions

[12] In relation to the first ground of appeal, the Director submitted that the Delegate erred in the exercise of his discretion in both matters, in that by failing to take into consideration the CFMEU’s history of contraventions, as detailed in the annexure to the General Submissions, as a relevant matter under s.513(1)(g), he acted on a wrong principle and did not take into account a material consideration. In this respect, the Director pointed to the following matters as demonstrating why the CFMEU’s history of contraventions was a necessarily relevant matter:

(a) the CFMEU had made the applications for entry permits;

(b) the applications were made for the purpose of obtaining entry permits for a CFMEU official;

(c) the CFMEU had the legal status of a body corporate and as such could only conduct its affairs and enter premises through the agency of officials such as Mr Kong;

(d) that as an employee of the CFMEU Mr Kong was presumably bound to follow directions from his employer as to the discharge of his functions as an official; and

(e) the ultimate owner or beneficiary of the permit sought by the CFMEU was the CFMEU itself, and by directing its employee the CFMEU could significantly control and influence the manner of its use.

[13] The CFMEU, the Director submitted, had a demonstrated propensity to utilise its officials in a manner which contravened the law. In that circumstance, it was necessary in assessing Mr Kong’s fitness to hold an entry permit to consider the extent to which he would be willing or able to resist a direction by the CFMEU to engage in conduct which contravened the law. It was, the Director submitted, fundamentally important that the record and reputation of the employer of the proposed permit holder, and the capacity or otherwise of the employee to refuse to participate in unlawful conduct at the behest of the employer, be taken into account. The Delegate’s failure to do so caused the exercise of the discretion to miscarry. The Delegate’s reference to remedies available under s.508 where an organisation or its officials had misused entry permits was not to the point, since ss.512 and 513 are concerned with whether permits should be issued in the first place, whereas s.508 was concerned with the use of permits after they had been issued.

[14] In relation to the second appeal ground, the Director submitted that the Delegate’s failure to consider the CFMEU’s history of contraventions meant that he erred in his determination of the nature of the conditions to be imposed on Mr Kong’s permit when issued. The imposition of the more stringent training requirements sought by the Director were necessary to significantly reduce the risk of Mr Kong not resisting the CFMEU’s directions to engage in unlawful conduct. Because the Delegate had not taken the CFMEU’s history into account, it was submitted, the existence of that risk was not considered in the context of determining the appropriate training requirements and the exercise of the discretion thereby miscarried.

[15] Finally, the Director submitted that permission to appeal should be granted because the appeal raised important and novel issues concerning the task of assessing the critical issue of whether a particular union official was a fit and proper person to hold an entry permit, and those issues were of significance to the public interest.

[16] The CFMEU/ CFMEIUEQ submitted that the Director’s appeal could only succeed if he established that the Delegate was bound to take into account the CFMEU’s history of contraventions. In determining what the Delegate was bound to take into account, it was submitted, regard had to be had to the specific words of the Act and empowering provisions including the subject matter, scope and purpose of the Act. The permit qualification matters identified in paragraphs (a)-(f) of s.513(1) were all concerned with the personal attributes of the prospective permit holder; paragraph (g) was to be read eiusdem generis as also concerned with the personal attributes of the prospective permit holder and not with some broader category of matters. The criterion of “fit and proper person” confirmed this approach because it directed attention to the personal characteristics of the person for whom the issue of an entry permit was sought; the fact the application for an entry permit was made by an organisation did not alter this position. Similarly, it was submitted, the fact that permit holders might be bound as employees to follow the directions of their employer might be assumed but did not inform the subject matter, scope or purpose of the Act’s provisions. The Act in provisions such as ss.507 and 508 dealt with the obligations of organisations and their responsibility for the acts of their officials separately. Therefore, the CFMEU/CFMEIUEQ submitted, the Delegate was not only not bound to take into account the CFMEU’s history of contraventions, but was positively prohibited from doing so.

[17] In relation to the second ground of appeal, it was submitted that the terms of any condition placed upon an entry permit was quintessentially a discretionary matter, and that the Director had merely contended for a different outcome rather than identifying any error in the exercise of the discretion.

Consideration

Permission to appeal

[18] We consider that permission to appeal should be granted. Traditionally, applications for entry permits have been determined in an entirely administrative manner in circumstances where such applications were rarely if ever contested. That meant that it was not usually necessary to give detailed consideration to issues concerning the interpretation and application of the relevant provisions of the Act or the equivalent provisions in predecessor legislation. That position has recently changed, in that the Director is now taking an active interest in the issue of entry permits to union officials operating in the building and construction industry generally, and in a number of instances has made submissions opposing particular officials being issued with an entry permit. Those submissions, and decisions made in relation to entry permit applications which have been contested by the Director, have given rise to a number of important and/or novel legal issues. The two applications here are an example of this. In this context, it is appropriate for permission to appeal to be granted in the public interest so that such issues may be resolved authoritatively and guidance provided for the benefit of future decision-making concerning contested entry permit applications.

First appeal ground

[19] The initial observation we would make about the Director’s first appeal ground and the submissions made in support of it is that they represent a case on appeal which is significantly different to the case which the Director presented in his written submissions to the Delegate. The primary feature of the Director’s case on appeal was that the CFMEU’s history of contraventions was highly relevant and should have been taken into account by the Delegate because it went to Mr Kong’s susceptibility to comply with directions from his employer to engage in unlawful conduct. It is difficult to discern any expression of such a proposition in the Director’s submissions to the Delegate, the relevant part of which we have earlier set out. The proposition put to the Delegate seems to have been a somewhat different one, namely that the CFMEU’s history put into question its capacity or willingness to provide Mr Kong “appropriate training, support and encouragement to exercise his entry powers properly”.

[20] The usual principle is that a party will not be permitted to raise merit arguments on appeal which were not advanced at first instance. 4 However, for the same reasons which have caused us to grant permission to appeal, we will notwithstanding this consider the point raised by the Director in his appeal.

[21] The determination under ss.512 and 513 of the Act as to whether a particular union official is a fit and proper person to hold an entry permit necessarily involves an assessment of the suitability of the official to properly discharge the functions and exercise the rights and privileges associated with the holding of an entry permit, as was explained by the Full Bench in The Maritime Union of Australia 5:

“[23] As is apparent from the above, the relevant question, in determining whether the Commission is permitted to exercise the discretion to issue an entry permit to an official of an organisation under s.512, is whether the official “is a fit and proper person to hold an entry permit”. The description “fit and proper person” in s.512 is not defined and standing alone, it carries no precise meaning. Generally though, the description is used as a measure of suitability to perform or carry out a particular function, to be appointed to a particular position or to be given a particular right or privilege. However, the description will take its meaning from its context, from the activities in which the person to be assessed is or will be engaged and the ends to be served by those activities. Taking into account context, the structure of s. 512 and the activities to be engaged in by an official if an entry permit will issue, it seems to us clear that that description is to be applied by reference to the suitability of the official “to hold the entry permit”.

[24] The permit qualification matters in s.513, which must be taken into account in deciding whether an official is a fit and proper person, must therefore be considered and applied in a way that assists in answering the question posed by s.512, namely whether the official “is a fit and proper person to hold the entry permit”. The permit qualifications matters are not matters to be considered at large without reference to the question that needs to be answered in s.512. They are not matters to be considered to determine whether a person is a “fit and proper person” per se. Rather the permit qualification matters must be taken into account to decide whether an official of an applicant organisation is a fit and proper person to hold the entry permit that has been applied for by the organisation.

[25] A holder of an entry permit is empowered to exercise entry rights and rights associated with entry, such as inspections and employee interviews. Those rights are exercisable subject to conditions, such as notice and purpose. They are also subject to limitations, such as on times for entry and places for interview, and responsibilities such as complying with site occupational health and safety requirements and not hindering or obstructing a person. The question of whether an officer is a fit and proper person to hold an entry permit will therefore necessarily require a consideration of the rights the holder of an entry permit may exercise, the limitations on and conditions attaching to the exercise of those rights, and the responsibilities that must be discharged in the exercise of those rights. These are all to be found in Part 3-4 of the Act.”

[22] Thus the “fit and proper person test” is necessarily concerned with the personal characteristics of the person for whom the issue of an entry permit is sought. The large number of cases concerned with the use of the “fit and proper person” criterion in a variety of statutory contexts have consistently taken that approach. In the South Australian Supreme Court Full Court decision in Teachers Registration Board of South Australia v Edwards 6, Anderson J said:

“[103] The cases show in my view that although the expression “fit and proper person” takes its meaning from the content of the legislation, there are nevertheless certain consistent notions which emerge in the relevant decisions.

[104] These are that a consideration of whether a person is fit and proper looks to the suitability and eligibility to hold a position. The suitability in turn is viewed against a consideration of the person’s previous conduct and their general reputation.”

[23] Various formulations have been used in the cases concerning the matters relevant to an assessment of whether a person meets the “fit and proper” standard to engage in particular activities; for example in the High Court decision in Australian Broadcasting Tribunal v Bond 7, Toohey and Gaudron JJ referred to a person’s conduct, character and reputation as being part of a non-exhaustive list of considerations, while in the earlier High Court decision in Hughes & Vale Pty Ltd v The State of New South Wales (No 2)8 Dixon CJ and McTiernan and Webb JJ characterised the fitness aspect of the criterion as involving honesty, knowledge and ability. Whatever the formulation, it is clear that the assessment process required by the standard, although one which “give[s] the widest scope for judgment and indeed for rejection”9, necessarily involves assessing the relevant personal characteristics of the individual concerned in relation to the activities for which satisfaction of the standard is required. That position is in no way altered by the fact that, under the Act, it is the organisation which may apply for a particular official to be issued with an entry permit rather than the official personally.

[24] Section 513(1) of the Act requires the Commission, in considering whether an official is a fit and proper person to hold an entry permit, to take into account a number of matters (described as “permit qualification matters”) specified in paragraphs (a)-(g) of the subsection. It is apparent, as the CFMEU/ CFMEIUEQ submitted, that the permit qualification matters in paragraphs (a)-(f) are all concerned with matters personal to the official for whom the issue of an entry permit is sought. Paragraph (g) requires the Commission to take into account any other matters which it considers to be relevant. It is not necessary to apply the eiusdem generis presumption to conclude that the relevance referred to in paragraph (g) is relevance to the question of whether the particular official concerned is a fit and proper person to hold an entry permit, so that for a matter to be considered relevant, the Commission must form the view that it relates to those personal characteristics of the official in question which are pertinent to the discharge of the functions and the exercise of the rights and privileges associated with the holding of an entry permit.

[25] A matter is only required to be taken into account under s.513(1)(g) if the Commission “considers” it to be relevant - that is, the requirement operates upon the opinion as to relevance formed by the Commission. Because the formation of an opinion as to the relevance of a matter to the broad judgment required by the “fit and proper person” criterion will necessarily involve a degree of subjectivity, it is in the nature of a discretionary decision. Therefore in an appeal which challenges an opinion formed for the purposes of s.513(1)(g) it will be necessary for the appellant to demonstrate error in the decision-making process. 10

[26] We do not consider that the Director has demonstrated any error in the process by which the Delegate determined that the CMFEU’s history of contraventions was not relevant to his determination as to whether Mr Kong was a fit and proper person to hold an entry permit. It was reasonably open to the Delegate to conclude, as he did, that there was nothing in the annexure to the Director’s General Submissions which bore upon Mr Kong’s “status and attributes”. 11 There was no suggestion that any of the identified contraventions involved any act or omission on the part of Mr Kong. While it may be accepted that the susceptibility of an official to comply with a direction from his or her employing organisation to engage in unlawful conduct might well be considered to be a relevant matter under s.513(1)(g), there was nothing put to the Delegate at first instance or to us on appeal that suggested that the industrial history set out in the annexure demonstrated anything with respect to any personal susceptibility on Mr Kong’s part in that respect.

[27] That is not to say that past contraventions of industrial or other relevant laws by an organisation can never be relevant to the consideration of an official’s fitness or propriety to hold an entry permit where those contraventions did not involve any direct contravening conduct on the part of that official. If, for example, the facts of a particular contravention or contraventions supported an inference that an official with management responsibility in an organisation omitted to take reasonable steps to ensure that others under his or her control complied with the law, or encouraged or tolerated a general culture of non-compliance with the law, then conceivably that might be considered to be a relevant matter under s.513(1)(g). However in this case it was simply not made apparent that the CFMEU’s history of contraventions said anything about Mr Kong’s personal conduct, character or reputation either as relevant to the exercise of rights of entry under the Act or at all.

[28] Nor is it the case that the Act does not provide appropriate remedies for organisation-wide misuse of rights of entry. As the Delegate correctly pointed out, s.508(1) of the Act empowers the Commission to restrict rights of entry exercisable under Part 3-4 of the Act where those rights have been misused by an organisation or its officials. The Commission’s powers in this respect (as set out in s.508(2)) include the revocation or suspension of entry permits, the imposition of conditions upon existing entry permits and/or those to be issued in the future, and the banning for a specified period of the issue of permits in relation to an organisation either generally or in relation to specified persons. Under s.508(3), the Director (being an inspector under the Act) has standing to apply to the Commission for such action to be taken; in addition, the Commission may act on its own initiative.

[29] We therefore reject the first ground of appeal.

Second appeal ground

[30] The Director’s second appeal ground may be dealt with briefly. The power to impose conditions upon entry permits is discretionary in nature, as s.515(1) makes clear. Section 515(2) requires the Commission, when considering whether to exercise the discretion to impose conditions, to take into account the permit qualification matters specified in s.513(1). That necessarily includes the matters specified in s.513(1)(g), namely any other matters that the Commission considers relevant. We do not consider that the Delegate erred in not taking into account the CFMEU’s history of contraventions in rejecting the Director’s proposed condition concerning training, because it was never made apparent that that history demonstrated anything about what degree of training was required to ensure Mr Kong understood and complied with his legal obligations concerning the exercise of rights of entry under the Act.

[31] It is clear from paragraph [49] of the Decision that the Delegate took into account the permit qualification matter specified in s.513(1)(a), namely “whether the official has received appropriate training about the rights and responsibilities of a permit holder”. That matter clearly pertains to the rights and responsibilities of a permit holder under Part 3-4 of the Act. The Delegate dealt with that matter by requiring Mr Kong to undertake new appropriate training concerning Part 3-4 of the Act prior to the issue of a new entry permit. It was open to the Delegate in that context to reject the further requirement urged upon him by the Director that the training extend to other aspects of the Act not connected with rights of entry. No error has been demonstrated in the Delegate’s exercise of discretion in that respect, and indeed we consider that the Delegate’s conclusion was an appropriate one. While it is clear that the Director has a legitimate interest in achieving greater compliance with industrial laws generally within the building and construction industry, we do not consider that the process established for the issue of entry permits under ss.512-515 of the Act is properly to be used as a blunt instrument to that end. The focus must always be upon endeavouring to ensure that the entry rights conferred by Part 3-4 are exercised lawfully. The Delegate’s conclusion concerning the training to be undertaken by Mr Kong is consistent with this approach. The second appeal ground is also rejected.

Conclusion and orders

[32] For the reasons stated above, the Director has not succeeded in demonstrating any appellable error in the Decision. We order as follows:

(1) Permission to appeal is granted.

(2) The appeal is dismissed.

VICE PRESIDENT

Appearances:

A. Herbert of counsel with B. Vallence for the Director of the Fair Work Building Industry Inspectorate

E. White of counsel with L. Tiley for the Construction, Forestry, Mining and Energy Union

Hearing details:

2014.

Brisbane:

6 August.

 1   [2014] FWCD 1169

 2   [2014] FWCD 1170

 3   At paragraph 7

 4   Coulton v Holcombe (1986) 162 CLR 1 at 7; Goumas v Wattyl Australia Pty Ltd (2005) 145 IR 256 at [44]; ASU v Yarra Valley Water Corporation [2013] FWCFB 7453 at [24]

 5   [2014] FWCFB 1973

 6   [2013] SASCFC 80

 7   (1990) 170 CLR 321 at 380-383

 8   (1955) 93 CLR 127 at 156

 9   Ibid at 156, followed in Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board [2007] HCA 23; (2007) 234 ALR 618 at [23]

 10   Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194

 11   Decision at [69]

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