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Fair Work Act 2009                                                    






s.739 - Application to deal with a dispute


United Firefighters' Union of Australia


Fire Rescue Victoria





10.00 AM, TUESDAY, 30 AUGUST 2022


Continued from 29/08/2022



THE ASSOCIATE:  The Commission is now in session.  Matter C2022/2043, section 739 application by United Firefighters' Union v Fire Rescue Victoria, for hearing.


THE COMMISSIONER:  Good morning parties.  Yes, Mr Borenstein?


MR BORENSTEIN:  Can I just raise to matters that I've indicated to my friends we wanted to draw attention to this morning?  Firstly, we wish to hand up to you a further amendment that we would propose to make to clause 16, which can, without admitting the validity of the proposition, seeks to address one of the propositions that Mr O'Grady made about the effect of the currently drafted clause 16, in terms of the continuation of the contract for an indefinite period.  And the intent of this additional proposal is to limit the need for the UFU to agree to a termination so that it's only required up until the time - while the current agreement remains in operation.


I don't think it's a secret to say that there are, presently, negotiations on foot for a replacement agreement, so it offers that comfort.


Then the other thing that I wanted to draw attention to, Commissioner, is that overnight we gave some further thought to the proposed order, which we handed up and which you marked as UFU3.  You may recall that in the submission I made yesterday I drew attention to the fact that there was some items in the schedules that still needed to be filled in, like insurance details and that sort of thing.


So in order to cover that off, we have proposed a variation of that order and it's been emailed to you.  I don't know if you have access to the email but, essentially, what we've done is to include some words in the order which make the reference to the contract which will be signed by FRV, under the order, as being subject to the completion of the details in Schedules 1 and 3.  We've provided our friends with that amended order and we thought we should do that first so they can say whatever they have to say about it.  Thank you.


THE COMMISSIONER:  All right, thank you, Mr Borenstein.  The first document you handed up, the insertion of 16.2(a), I will mark as UFU5.



Then the amended proposed order I will mark at exhibit UFU6.



MR BORENSTEIN:  Thank you.


THE COMMISSIONER:  Thank you very much.  Now we turn to Mr Harding, I think?


MR HARDING:  Yes.  Commissioner, perhaps, just by way of housekeeping, if I could tender the statement of David Catanese, which is in the court book, at page 130, and the annexures thereto.


THE COMMISSIONER:  All right, thank you.  The statement of David Catanese, with one attachment, will be marked as exhibit FRV1.



Do you want me to mark the outline of submissions as well?




THE COMMISSIONER:  The respondent's outline of submissions will be marked as exhibit FRV2.



MR HARDING:  Thank you, Commissioner.  The only additional things that I need to say are to indicate that the FRV doesn't oppose the amended order handed up by Mr Borenstein, you marked it UFU6 or UFU5, the amendment to clause 16.2.  Further, the UFU doesn't oppose - FRV does not oppose affirmative answers to the questions 1 and 2 contained in paragraph 2 of the applicant's outlie of submissions.




MR HARDING:  Subject to any questions you have, Commissioner, that's the position of the FRV.


THE COMMISSIONER:  What do you say to the proposition advanced by the Minister that these are not matters pertaining - sorry, the clauses are not matters pertaining and the relief is not matters pertaining?


MR HARDING:  The FRV has proceeded on the basis that those clauses are matters that pertain to the employment relationship and as the agreement indicates, the FRV agreed to include those clauses therein, on that basis.


THE COMMISSIONER:  Thank you, Mr Harding, they were the only questions I had.


So, Mr O'Grady?


MR O'GRADY:  Yes, thank you, Commissioner.


In the light of the submissions of the FRV, I may be a little bit longer than the estimate that I gave you yesterday.  I don't anticipate much longer, but I had anticipated that the FRV would, perhaps, be more forceful in their submissions, but I'll be as brief as I can.


Can I start, Commissioner, with the proposed orders and make the following points?


Insofar as the proposed order still provides that the length of the contract will be for the life of the 2020 agreement.  We would submit that that is still problematic for the reasons that I'll develop in due course.


There is no certainty to when the 2020 agreement will come to an end.  It may be that the negotiation referred to by my learned friend progress, it may be that they don't.  But, as the Commission would be aware, that agreement will continue in force until it's replaced by another agreement (indistinct) under the Act.


In the meantime there may be a number of developments that might occur, in respect of the statutory Fire Registration Board, that was touched on yesterday, that we would submit would give rise to a potentially unworkable situation.


As I indicated in submissions yesterday, my instructions are that the Statutory Fire Registration Board has significantly progressed - - -


MR BORENSTEIN:  Commissioner, there's no evidence about this and we object to our friend putting these things from the Bar table, without evidence.


THE COMMISSIONER:  Thank you, Mr Borenstein.


Is that not the case, Mr O'Grady?


MR O'GRADY:  It is the case that there's no evidence to that effect, Commissioner, but the Commission does have before it, or does have access to, the FRV Act.  The Commission has been taken to the provisions of the FRV Act that contemplate a Fire Registration Board.


Now, it is true, as my learned friend said yesterday, that the Fire Registration Board contemplated by that Act focuses upon (indistinct) at section 149 I think, Commissioner, of the FRV Act.


The point I would simply seek to make is that the FRV Act contemplating a Fire Registration Board and setting out a mechanism for that board to come into being, albeit one that is confined to CFA secondees, clearly has the potential to give rise to a situation where the FRV is subject both to the Fire Registration Board contemplated by the FRV Act, and the Fire Registration Board that is sought to be put in place through this service agreement.


As I'll develop, in due course, that raises, in my submission, very real questions of fettering the powers of FRV, as well as the utility or appropriateness of the Commission making the orders that are sought by the UFU.


THE COMMISSIONER:  Can I just pause there, please, Mr O'Grady, just for my own understanding about how the Minister sees the Act, the FRV Act?




THE COMMISSIONER:  The submissions made yesterday, by Mr Borenstein, it's always dangerous to paraphrase, I apologise, but as I understand it, the section 148, which establishes the Firefighters' Registration Scheme and then there's section 149, which potentially establishes the board.  Now, in understanding what Mr Borenstein had to say, I came to the view, I guess, that the culmination of the board and the scheme was a necessary limited thing and potentially somewhat more limited than the board now, which is the subject of this dispute, or even the interim board, which the FRV has established?


MR O'GRADY:  It is more limited in this respect, Commissioner, namely, the scheme and the board, and this is apparent from section 148 of the FRV Act, is confined to the registration of officers and employees of Fire Rescue Victoria, proposed to be made available to the Country Fire Authority.


So to the extent that Fire Rescue Victoria has officers and employees that are not proposed to be made available to the country fire authority, under a secondment agreement, then the scheme, as currently framed in the Act, would not extend to them, as we understand the situation.


The potential, of course, Commissioner, is that that scheme can change.  The government of Victoria could amend this Act so that it put in place a broader scheme.  The vice that I'm attempting to point to is that if the government of Victoria did that, then you would have, in effect, dual schemes, both applying to Fire Rescue Victoria.  One created by the orders that my learned friend seeks to put in place and one created under the Fire Rescue Victoria Act, even if the Act wasn't amended.


THE COMMISSIONER:  But couldn't that not be the case with anything that the Victorian parliament chose to do.  They could even repeal the legislation and refer their powers to the Commonwealth.  There are many things the parliament can do, it's a sovereign entity.


MR O'GRADY:  I accept that, Commissioner, but the vice that I'm seeking to highlight, in my submission, flows from the fact that here you have an Act that contemplates a statutory scheme, albeit not as broad as the corporate scheme that is being contended for here, but there is clearly an overlap.  If the statutory scheme was put in place, even in respect of CFA secondees, you're going to have a clear tension, in my respectful submission, between the statutory scheme and the corporate scheme, with FRV being, one would have thought, obliged to comply with both and there may well be inconsistencies.


The point can be illustrated in this way.  Let's assume, for a moment, that there was a comprehensive statutory scheme put in place, FRV would remain obliged to pay for and comply with the corporate scheme, for as long as the 2020 agreement remained in operation.  In my submission, that does pose some very real issues, in respect to fettering, that I'll need to address in due course.


So, in my submission, whilst it is clear that the order put forward by my learned friend, or the amended order put forward by my learned friend, addresses part of the problem associated with the UFU being involved in any decision to terminate the agreement, it doesn't remove the entirety of the problem.


The second point I'd seek to make concerns the completion of tee details in Schedules 1 and 3.  It may be that that is innocuous, it may be that it isn't.  At the moment, of course, we don't know exactly what changes are to be made, in respect of those schedules and I accept that, on their face, a number of the matters in Schedule 1 that need to be filled out, like insurance and the like, would, one would have thought, appear to be uncontroversial.


Schedule 3, of course, is the schedule that deals with the fees.  It's not entirely clear, from the proposed order, that those fees couldn't' be subject to amendment or that the timing for the payment of those fees might pose some difficulties that would need to be engaged with.  So whilst I appreciate that my learned friend has noted that the contract that's been set out at Attachment A isn't complete and will need to be completed, I would caution against making orders in the terms of those suggested by my learned friend, simply because we just don't know what the final form of the contract would be.


Could I then turn to the more general submissions?  Obviously, Commissioner, we rely upon what we've put in writing and you received into evidence, or received yesterday, as MINISTER 1, but can I expand upon a number of the points that were made in those submissions?


The first submission that we would put is that the obligation contained in clause 42 has been discharged and that the parties, having turned their mind to the subject matter of the Fire Registration Board and having made specific provision for that board, have not left any scope for the making of these orders, pursuant to the broader parts of the dispute resolution clause and, in particular, clause 21.1(3) which, as I understand it, was relied upon by my learned friend yesterday and we would say also 21.1(4).


To expand upon that, could I ask the Commission to have regard to the terms of, relevantly, clause 42.1?  You'll see there that it provides:


FRV endorses the establishment of a Fire Registration Board and FRV will demonstrate this by letter of endorsement to the UFU secretary.


Now, my learned friend, as I understood it yesterday, was suggesting that there were, in effect, two limbs to the clause.  There was the endorsement of the establishment of a Fire Registration Board and the demonstrating of that by letter of endorsement to the UFU secretary.


Even if that be right, there is nothing in that clause that requires FRV to participate in the establishment of a Fire Registration Board.  In my submission, the effect of the clause is that the parties, having turned their minds to what is going to be the position, as required by this agreement, in respect of a Fire Registration Board, have gone no further than saying we want FRV to endorse the establishment of such a board and we want FRV to demonstrate that, through a letter to the secretary.


There is, in my submission, nothing left, in respect of that subject matter, that can be the subject of a dispute arising under this agreement because, as we've said in writing, to the extent that clause 42.1 put in place obligations, those obligations have been satisfied, through the sending of the letter by the Fire Rescue Commissioner.  And in respect of the broader aspects of the dispute resolution procedure, in clauses 21.13 and 21.14, the parties should not be seen through those provisions, in my respectful submission, to empower the Commission to, in effect, impose new obligations in respect of a subject matter that has already been dealt with.


The reason for that is that for the Commission to do that would be, in effect, for the Commission to vary the terms of the agreement, through the dispute resolution procedure, in conflict with the no extra claims clause that is contained within the agreement.  And we've set that out in our submissions.


Now, there's an authority that's on point that I need to take the Commission to, in some detail, the MFB decision, and we've got copies for the Commission.  This is the decision of Metropolitan Fire and Emergency Services Board v United Firefighters' Union of Australia (Victorian Branch) the citation is [2012] FWAFB 9555, and it was a decision handed down by Kaufman SDP, Hamilton DP and Gregory C, on 13 November 2012.


The Commission will see that there is some similarity between the issues that were the subject of consideration in this case, and this matter.  The Commission will see that, in paragraph 3, on 23 September, there was an application, under section 539 of the Fair Work Act, to deal with the dispute.  The dispute was said to be about MFB's Accident and Illness Policy and, specifically, the provision of income protection insurance to operational staff.


The MFB characterised this as a dispute over UFU's claim that Metropolitan Fire and Services Board funded income protection insurance policy for all operational firefighters and Roe C described the dispute as:


The dispute relates to the MFB's Accident and Illness Policy and the UFU seeks income protection insurance for operational staff employed under the agreement as a resolution to the dispute.


In paragraph 7 you'll see that on 20 July Roe C published a decision determining that the MFB would be required to contribute to the income protection insurance policy, with a number of modifications, and the Commissioner determined that he had jurisdiction.


There was then an appeal.  You'll see that the clauses that were seen to be pertinent to the appeal were the dispute resolution clause, and this is set out in paragraph 13 of the decision.  There was a provision, in respect of allowances and, in effect, there was a reserving, by the parties, of the subject of allowances for further determination by the Commission, and that appears from clause 42.3 of the allowances clause.  Then there was a no extra claims clause.


Ultimately, what the Full Bench determined, and this appears at paragraphs 20 through to 24, is that - sorry, 22 through to 25:


Section 172(1) provides that an enterprise agreement may only be made about matters that pertain. Clause 19, the dispute resolution clause only allows disputes about matters that pertain to be dealt with under its terms. Ergo, the dispute settlement clause is a clause that pertains to the relationship between employer and employee.


Albeit this might have the effect that the settlement of pertaining disputes results in the creation of new rights and obligations, as is the case here, that is a result of the parties specifically agreeing that disputes that extend beyond matters dealt with by the Agreement are amenable to resolution under the dispute settlement procedure in the Agreement. Whilst section 186(6) requires that an enterprise agreement provide procedures for the settlement of disputes arising under the agreement, section 172(1) makes it clear that the clause need not be so limited, as long as it pertains to the relationship. Despite MFB's submissions that we should find that it was wrongly decided, we agree with the conclusion of the Full Bench that so found in Boral Resources.


It follows that we do not accept the MFB's submissions, at pages 6 to 8 of its written submissions, that the construction and context of the Act leads to the conclusion that a dispute settlement clause that allows for the imposition of new obligations under an enterprise agreement travels beyond what is permitted by the Act.


It is thus not necessary for us to determine whether the claim for a disability insurance scheme could properly be characterized as a new allowance and thus able to be the subject of arbitration pursuant to clause 42, as the Commissioner found. We observe however, that, in our view, a contribution by an employer to an income protection insurance scheme for its employees sits somewhat uneasily with the notion of the payment of an allowance.


So the Full Bench, as we read it, is saying there that the general aspect of the dispute resolution, clause, the equivalent of clause 21.1(3), does enable new obligations to be imposed.  But the point that we would seek to emphasise is that those were new obligations, in respect of a subject matter that either wasn't dealt with in the agreement or, to the extent it was dealt with in the agreement, left the issue of the allowances to be determined, in due course, by the Commission.


So the parties had, in effect, had either not turned their mind to the particular issue in question so it wasn't, if you like, regulated by the agreement and therefore there was room for new obligations to be imposed or, to the extent they had and they were dealing with allowances, they had made express provision for those matters to be dealt with in due course.


That, in our submission, is a fundamentally different situation to that created by clause 42.1, where the parties had turned their mind to the subject matter, they have imposed obligations on FRV, in respect of that subject matter and they have indicated, through those obligations, that that's it.  This is what you have to do in respect of this subject matter.  Therefore, to the extent that Fire Rescue Victoria has done what 42.1 required it to do, we say, there can be no dispute in respect of that clause and in respect of that subject matter, in our submission, the parties having decided to impose particular obligations but not others, cannot be said to have left it open for there to be an application of this type, because any variation of the agreement to deal with such a claim, in our respectful submission, would be directly inconsistent with clause 29.1.


The other point I'd made about this decision, before departing from it, is that, in our submission, it is fatal to the suggestion that there should be an order made that, in any way shape or form, binds the corporate entity.  This was a matter that was dealt with at paragraph 43 of the decision. At 43 they say:


The Commissioner was alive to the difficulties occasioned by the insurer being a third party, not a party to the Agreement, and therefore not amenable to the jurisdiction of Fair Work Australia. No order can bind the insurer. In addition to the potential consequences for all firefighters, and in particular the AXA Scheme employees, we consider this to be a powerful reason not to impose the scheme, or indeed any disability insurance scheme upon the MFB.


Likewise, for the reasons identified by the Commissioner, we do not consider, in the exercise of our discretion, that it is appropriate to impose the MFB's leave bank proposal on the parties.


Having come to the conclusion that we have, it is not necessary to decide whether the Order was beyond jurisdiction by providing that the UFU was to be the insured. The MFB contended that because it and its employees were the only contributors to the Scheme, the Order, insofar as it provides that the UFU is to be the insured, does not pertain to the relationship between the MFB and the UFU, and that neither section 172(1)(b) of the Act nor clause 19.1.3 of the Agreement founded a jurisdictional base for the making of the order.


And you'll see, at paragraph 47, they allow the appeal and quash the order and decision below.


In respect of these issues, we rely upon the approach that was described by the High Court, in Project Blue Sky.  If I could provide a copy of Project Blue Sky to the Commission and the parties?  In that to the extent that my learned friend submits that clause 21.13 or 21.14 empowers the Commission to make orders that, in effect, would impose new obligations on the parties, in respect of the subject matter that is dealt with in clause 42.1, we would submit that those provisions need to be reconciled, particularly given the way in which clause 42.1 is expressed, and the existence of the no extra claims clause, in clause 29.1.


The High Court had to consider a similar issue, in Project Blue Sky, and they dealt out their views as to the way in which these matters are dealt with, at paragraph 69 through to 71 of the decision.  They provided:


The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute.  The meaning of the provision must be determined 'by reference to the language of the instrument viewed as a whole'.  In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed'.  Thus, the process of construction must always begin by examining the context of the provision that is being construed.


A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals.  Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions.  Reconciling conflicting provisions will often require the court 'to determine which is the leading provision and which the subordinate provision, and which must give way to the other'.  Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.


Now, applying that approach here, in our submission, the leading provisions are what is said in clause 42.1, because that's the clause that specifically deals with the subject matter here under consideration, namely, the establishment of a Fire Registration Board and, of course, clause 29.1, which says, 'There can be no extra claims'.  And to the extent necessary, we would submit that the breadth of the language in clause 21.13 and 21.14 needs to b read down to reflect that because otherwise, to pick up one of the points that my learned friend said yesterday, what would be occurring is a variation of the agreement by stealth.  It would be impermissibly varying the agreement without complying with the scheme for variation that the Act puts in place.


Further, Commissioner, to the extent that it is said that there was an obligation in clause 42.1 to actually create and actually establish a Fire Registration Board, that too is something that has been discharged.


Whilst my learned friend used the term 'interim Fire Registration Board' on a number of occasions yesterday, we note, (a) that that's not necessarily the language that was used by Fire Rescue Victoria in the correspondence concerning its creation but, be that as it may, to the extent that there was some obligation on Fire Rescue Victoria to actually participate in the establishment of a Fire Registration Board, that has happened.


The fact that the Fire Registration Board, according to my learned friend, fell into abeyance is, with respect, by the by.  There is nothing, in our submission, in the agreement that imposes any further obligation on Fire Rescue Victoria in respect of it.


In that regard could I take the Commission to some of the correspondence, particularly at court book page 48?  Now, this is in exhibit LC3, to the affidavit of Ms Campanaro.  She notes that this is a letter from Fire Rescue Victoria to Mr Marshall.  You'll note, in the first paragraph:


I'm pleased to inform you that at it's meeting on 15 August 2021, the Fire Rescue Victoria leadership team endorsed and I have approved the immediate establishment of the project Victorian Professional Career Firefighters' Registration Board, in accordance with the attached terms of reference that were agreed upon by the operational consultative committee, in February 2021.


Then further steps are set out.


Then, if one goes to what appears at exhibit LC4, which is at court book page 50, the Victorian Professional Career Firefighters' Registration Board came into existence and met.  So, in our submission, FRV's obligations, having been discharged, it's not necessary to consider whether clause 42.1 and 49.1 could alternatively have been satisfied by FRV endorsing the statutory board, the committee or some other version of a Fire Registration Board.


To the extent that the UFU seek, by way of relief in the dispute, for FRV to establish a registration board, in accordance with the FRV IO Agreement 2020, for the reason I've already said, that's not what, with respect, clause 42.1 of Division A and clause 49.1 of Division B require.  Furthermore, to the extent there was such an obligation, that has been met.


I've touched on the issue of variation, we've dealt with that in our written submissions, I don't need to say anything further than the obvious, that there is a comprehensive scheme for the variation of agreements.  In our respectful submission, this application can't be used as, if you like, a backdoor means of effecting a variation of the agreement, without complying with the requirements that are contained in that part of the Act.


Could I then turn to what my learned friend said about matters pertaining, and I can be relatively brief, in respect of - sorry, before doing that, I've made the point, based upon the MFB decision, that a third party, i.e., the company here in question, can't be the subject of a dispute resolution procedure, or can't be the subject of an order, sorry.  We would say that flows, particularly in the case of a dispute resolution procedure, we note that that's one of the things that my learned friend seeks, by way of relief, here.


In our submission, section 735 makes express provision that the purpose of Part 6(2) is to deal with disputes between an employer and employee and here, of course, the proposed disputes procedure would extend beyond employers and employees and, indeed, employer organisations, to, in effect, a third party that is involved in a service agreement with FRV.  In our submission, that is not something that is contemplated by the provisions in section 735.


The submissions that my learned friend put yesterday, in effect, seem to be couched in terms that this is just a means of resolving the dispute by forcing FRV to enter into a particular contract and, in effect, to preserve the resolution of that dispute by binding FRV to maintain that contract, at least during the currency of the current agreement.


In our respectful submission, for the reasons that I've already stated, that is inherently problematic because it, necessarily, involves an order that is going to affect somebody who is a third party, namely, the corporate entity that is the subject of the service agreement.


To the extent my learned friend says, 'Well, this isn't our doing, this is what FRV were putting forward', that overlooks a number of things, in my respectful submission.  Firstly, it overlooks the fact that where as FRV may, subject to its Act, enter into contracts with various entities, for the supply of goods and services and/or the provision of goods and services, if it receives permission from the Minister.


The nature of the instrument is transformed, in our respectful submission, if it is the subject of an order from the Commission requiring FRV to enter into and maintain that agreement.


The second substantive difference, with respect, Commissioner, is that the proposed - sorry, the agreement that is the subject of the proposed order is very different from the initial proposal that FRV were putting forward, including by way of its involvement of the UFU in both the - as a party to the agreement, in respect of the consultation provisions, in respect of the dispute resolution provisions and in respect of the termination provisions.


One doesn't, with respect, overlook those substantive and, we would submit, fundamental changes in the characterisation of this dispute.


Could I then turn to the issue of the Minister's consent and, again, Commissioner, we have dealt with that in some detail in writing.  If I could perhaps engage in some of the points that my learned friend has made, in respect of it.


The starting point, Commissioner, is section 25A of the Fire Rescue Victoria Act, do you have a copy of that Act?




MR O'GRADY:  That section, as my learned friend indicated, in subsection (1), gives, 'Subject to this Act', so there's a clear limitation on subsection (1), gives Fire Rescue Victoria the power to do all things necessary or convenient to be done for or in connection with the performance of its duties and functions.


Then, in respect of a number of matters, there are additional requirements.  Relevantly, subsection 25(2)(b) says:


Subject to subsection (3), enter into agreements or arrangements with any person or body for the provision of goods or services by Fire Rescue Victoria.


Then, also:


Subject to subsection (3), form, participate in the formation of, or be a member of a body corporate, association, partnership, trust or other body.


The Minister relies upon both of those provisions but notes, at the outset, that there is no limit on what is means by, 'The provision of goods or services by Fire Rescue Victoria', and, further, that the language in subsection 25(2)(e), we would submit, is couched in extremely broad terms.


It is not confined to FRV forming or being a member of a body corporate, association, partnership, trust or other body; it extends to FRV participating in the formation of such a body.


In our submission, it is clear, from the submissions that were made yesterday and, indeed, the affidavit filed by the UFU in support of this application, that FRV has so participated, when one has regard to the chronologic - - -


THE COMMISSIONER:  Mr O'Grady, I notice that the - it's obviously an amendment to the main Act and it was made in 2019, were the amendments subject to any explanatory memorandum?


MR O'GRADY:  There was an explanatory memorandum and there was extensive second readings features.  I'm afraid I can't assist you with what they say about this particular topic.


THE COMMISSIONER:  Well, if they say anything I'd be interested in understanding what they do say.


MR O'GRADY:  Yes.  Off the top of my head, I don't know - - -


THE COMMISSIONER:  No, no, I appreciate that.


MR O'GRADY:  - - - but if I am given leave, we can prepare a note and we can file a note, with your permission, by the end of the week.  I just haven't looked at it, I'm sorry.


THE COMMISSIONER:  All right.  No, that's okay.


MR O'GRADY:  Sorry, Commissioner, if you are looking for the explanatory memorandum it might be an explanatory memorandum for the Fire Rescue Victoria Act, it will be an explanatory memorandum for the long title.


THE COMMISSIONER:  When I saw the date I thought it might be part of quite a significant body of work.


MR O'GRADY:  Yes.  The scheme, as I understand it, and I'm sure my learned friend will correct me, is when the reforms were made to the Fire Services the mechanism the parliament adopted was to amend, quite significantly, the MFB Act, in a number of respects, including amendments made to what MFB, which then became FRV, could and couldn't do, in respect of transitional provisions and in respect of presumptive rights, in respect of firefighters falling ill.  I think the title of the Act is something along the lines of The Presumptive Rights Act.  As I say, given leave, we will be happy to provide a short note as to what - - -


THE COMMISSIONER:  Perhaps I can put it that way, as an invitation, generally, to counsel, which is if anyone can assist on the subject of the meaning of those subsections, then that would be of great assistance.


MR O'GRADY:  Yes, thank you, Commissioner.  And it may be, of course, that these were provisions that were, in effect, in the MFB Act that were, simply, in effect, brought across but I just don't know the answer.


MR BORENSTEIN:  I think that's right, Commissioner, having a look at the amendment, it's substituted the name.


THE COMMISSIONER:  Sure.  Maybe we could do it by, if there is anything beyond that to be said, if you do say it, then if not I won't die wondering.


MR O'GRADY:  Yes, thank you, Commissioner.


Then turning to section 25A(3), there is the requirement that FRV obtain the written consent of the Minister before entering into any agreement or arrangement with any person or body for the provision of goods or services by Fire Rescue Victoria, or forming, participating in the formation of or becoming a member or a body corporate association, partnership, trust or other body.


Again, we would submit that those terms are very broad and that 'participation in the formation of', are words of what might be said to be the broadest import.


If one then goes to - but dealing with them in turn, whether or not Fire Rescue Victoria is entering into an agreement or arrangement, again we would suggest the breadth of those alternative formulations, so it's an agreement or an arrangement for the provision of goods or services by Fire Rescue Victoria, and looks at what Fire Rescue Victoria is required to do, in respect of Schedule 1 item 5.


We note that item 5 purports to impose obligations on FRV.  It's headed, 'FRV's obligations'.  So this is not something that FRV has any discretion about, or does at its own convenience, or if and when it wants to, this is something that FRV is required to do.  The obligations are, we would submit, extensive.


We have to or:


FRV has to provide to the contractor a list of FRV recruits who have successfully completed the Fire Recruit Course at no later than one month following the recruit course graduation date.  It has to provide to the contractor a list of all FRV firefighter officers who have successfully completed a Promotional Course, no later than one month follow the course graduation date.  And it will provide to the contractor a list of all FRV firefighters every six months.


It's hard to see why those obligations fall outside of the provision of services by Fire Rescue Victoria.  It is providing material to the contractor so that the contractor can use it.  To the extent that that obligation does require the provision of a service to the contractor then, consistent with the terms of section 25A(3), the Minister's consent is required and there's no dispute that the Minister has indicated, in forthright terms, that she does not provide that consent and also the concerns that she has, in respect of providing such consent.


There is an exception to the obligation imposed by section 25A(3)(a), in section 24A(4), in that section 25A(4) says that:


Subsection (3)(a) does not apply to an agreement or arrangement for the provision of goods or services by Fire Rescue Victoria to a unit or group of units or to a person acting on behalf of a unit or group of units.


That, we would say, would have no application.  And:


where the provision of those goods or services falls within the general duties and functions of Fire Rescue Victoria.


And, again, we would submit that that carve out has no function.  The reason for that is that an agreement for the provision of information by FRV to support the performance of a firefighter registration function, by a body corporate which his not contemplated anywhere in the FRV Act would not be understood as an agreement for the provision of goods or services, within the general duties and functions of FRV.


Turning to the second limb, I've already emphasised the breadth of the language, 'Participating in the formation of', and could I take the Commission to the affidavit filed by the UFU, and particularly at paragraphs 19, 20 and 21, which is at court book 27?


You'll see there that what's described are a number of things that FRV did, on 22 May, 4 May and then the letter was sent by Hall & Wilcox, also on 4 May.  The important thing about that chronology, in my respectful submission, is that the matters that are described in paragraph 19 and, indeed, the earlier matters, are all matters that preceded the formation of the corporate entity here in question.


If one goes to the tenor of the replies that are discussed in the document that's being referred to, in paragraph 19, which is also in the court book at page 57 and 58, you'll see that, in paragraph 3 of the request for commitments, the UFU requested that FRV confirm, by 3 May, whether it commits to:


Enter into an agreement with the company as soon as it is registered to establish a firefighter system of the type that's being discussed.


And the answer to that was set out in paragraphs 7 and 8, that:


While FRV does not rule out entering into an agreement with the company to establish a firefighters registration system of the type that's being discussed, it does not commit to do so at this time.


And it sets out the things that motivated it not to do so at that time, including:


The details of the company have not yet been finalised.  The details and nature and substance of the agreement to be entered into are not known.




To the extent FRV may require the written consent of the Minister, under 25A(3) prior to entering an agreement with the company.


What is clear, however, from paragraph 20 of the affidavit, is the next day, after receiving that response from FRV, the company was formed.  The company was formed, as its constitution makes clear, for the express purpose of entering into an agreement with FRV for the provision of services, in respect of a Fire Registrations Board.


It is, we would submit, untenable to suggest that were it not for FRV's involvement in the discussions leading to the formation of the company before May 2022, that company would have been formed in the way that it was formed.  It was formed as a vehicle to provide fire registration services to FRV, in a process which has been described in the affidavit filed by the UFU, of which FRV was heavily involved, both in respect of the immediate leader, as set up in paragraphs 19 through to 20 of the affidavit, but also prior to that, with the steps taken to set up the Fire Registration Board, in 2021.


So then one, in our submission, asks whether FRV's conduct falls within the very broad language of 25A(3)(b), namely, participating in the formation of it.  Where you've got a company that has been formed expressly, we would submit, for the purposes of providing services to FRV, where FRV's involved in discussions about the company and what it will do and is indicating that whilst it's not prepared to - while it doesn't rule out entering into an agreement with the company, it doesn't commit to do so at this time, because it doesn't have the details.  We would submit that the requirement of participation in the formation is amply satisfied, giving rise to the requirement that there be consent of the Minister, with such consent not being provided.  So we rely on that alternative limb as well.


In terms, what we submit is you can't disaggregate the service agreement from the formation of the company or FRV's involvement in the development of the Fire Registration Scheme which is now to be conducted by the company.  The fact that a different registration model was initially adopted doesn't mean that.  What FRV did in that respect meant that it has not participated in the formation of the company, for the purposes of these provisions.


So in those circumstances we would submit that the Minister's consent is required.  Absent such consent, FRV, on either basis, can't enter into the service agreement that is the subject of the application.


Can I then turn to the issue in - - -


THE COMMISSIONER:  Can I just ask this question, please, about that submission?  I understand the basis upon which it's put and I understand you to say, in respect of these proceedings, that the consent is not given and thereby the order should not be made by the Commission.  But then what does that mean, in respect of the next step within the FRV?  Are they obligated not to sign the document?


MR O'GRADY:  We would say yes.


THE COMMISSIONER:  All right.  Okay.


MR O'GRADY:  I have to, of course, be careful about this because, as I think I mentioned yesterday, it does get very complicated, Commissioner, in my submission, where one has the interaction between Commonwealth laws and state laws, but we would submit that for FRV to sign the agreement, it would be acting beyond power and, in effect, ultra vires.


If I can put it in the alternative, whether that be right or wrong, because of the complexity of it, the fact that that is, we would submit, a very real possibility is a reason in itself for the Commission not making orders of the type that are being sought by the UFU.  To put FRV in a position where it might, potentially, be acting beyond its jurisdiction in order to comply with an order of this Commission, in respect of the resolution of a dispute, we would submit, is an undesirable position and, in the exercise of the Commission's discretion, one would have thought the Commission would be disinclined to put FRV into that position.


THE COMMISSIONER:  I wonder about that submission.  I heard this morning, as you heard, from Mr Harding, that the FRV, I should chose my words carefully, affirms the possibility of an affirmative answer to each of the questions.  Now, where does all that leave me?


MR O'GRADY:  Well, obviously Mr Harding is acting on his instructions, but, in my respectful submission, the fact of those instructions doesn't, in any way shape or form, undermine the force of the points that I'm seeking to put forward.  Ultimately, it's a question of law as to whether or not consent is required, in respect of these matters.  The Minister has clearly expressed her view that it is and, further, she's indicated that she's not prepared to grant such consent.


THE COMMISSIONER:  All right, I'll let you develop your submissions.


MR O'GRADY:  Yes, thank you, Commissioner.


For similar reasons - sorry, I will withdraw that.  There is a similar consequence associated with the notion of fettering, in our respectful submission.  So there are, in effect, three discrete bases upon which the Minister says FRV would be acting beyond power if it was to enter into this agreement.  The first basis is providing goods and services, the second basis is that it's being involved in the formation of a company, and the third basis is that of fettering.


The issue here, Commissioner, in a nutshell, is that the FRV Act reposes certain powers on FRV, in respect of the discharge of its functions.  FRV cannot, impermissibly, fetter itself, in respect of the way in which it is to discharge those powers.  I'll develop it in due course, but to the extent that FRV can enter into this agreement would so fetter itself, then it would be acting beyond power.


I've already touched on, perhaps, the example of the tension that would arise if parliament did either finalise the Statutory Fire Registration Board, as contained in the Act, in respect of CFA secondees, or, as I also postulated, amend the FRV Act to provide a comprehensive Fire Registration Board.


In those circumstances FRV would be obliged, pursuant to the terms of the FRV Act, to participate in that statutory process, in respect of the registration of firefighters.  Yet were you to make the orders being urged upon you by my learned friend, FRV would also be obliged to comply with the processes set out in the Services Agreement and, in my submission, for FRV to enter into such an agreement where that might conflict with its obligations under other parts of the FRV Act, would be beyond power.


THE COMMISSIONER:  You would not say, I assume, that the provisions of section 148 and 149 cover the field of registration of firefighters?


MR O'GRADY:  Well, I can't say it would cover the field, in respect of the entirety of the field, because it doesn't deal with FRV firefighters.  In respect of secondees it is, in my submission, a problematic issue, but I don't have - I'm not instructed to put the submission that by virtue simply of those provisions, FRV couldn't enter into an agreement.


What I do, however, seek to put - in circumstances where the board, as contemplated by those provisions, is not yet in place.


What I do, however, seek to put is that when one has regard to the various limitations and restrictions that the Service Agreement would put on FRV, into the future, then those are matters that curtail the other powers that FRV has, in respect of how it treats its firefighters, how it promotes its firefighters, what it does with the money it gets.


As we touched on yesterday, Commissioner, there's a payment of $180 per firefighter per year.  That's money that FRV cannot spend to do other things, because it will be committed, pursuant to this agreement, to pay that money to the company.


Can I then turn to some of the general powers, and we've dealt with section 25A(1), and I've already noted, Commissioner, that that, of course, is subject to the FRV Act, could I also ask you to have regard to section 7(2) of the FRV Act, which provides a general power, or generally all powers necessary to carry out its functions.


In the submission of the Minister each of these powers is subject to an implied limitation derived from a number of features of the Act that prevents them from being exercised in a manner that would fetter FRV's powers, under section 25B, to determine whether a person is suitable for employment by FRV, to promote an employee and suspend or remove an employee and, we would submit, that given those particular powers that are confirmed on FRV, by section 25, the agreement would be ultra vires and void.


If I could as the Commission to go to the court book, at page 123, there, of course, you have Schedule 3 and the amount payable.  Again, as I've already submitted, that's money that FRV can't spend in other ways.


THE COMMISSIONER:  You would concede though that there would be some cost of registration, even if it was done internally?


MR O'GRADY:  I would concede that.  But the problem here, of course, is that this is a cost that is fixed.  It's a cost that FRV has no capacity to - it comes back, in part, to the issue that I raised at the very outset, which is, unlike a normal commercial contract, FRV cannot say to this corporate entity, 'You are not providing value for money, we are terminating upon those'.




MR O'GRADY:  So the fettering argument, in effect, is a combination of two limbs, if I can put it in these terms, Commissioner.  There's a nature of the obligations that the service agreement seeks to put in place and there are limitations on FRV renegotiating and/or terminating that agreement that the amendments that the UFU are contending for are put in place.


In my respectful submission, whilst to an extent the proposed amendment this morning addresses part of that problem, it certainly doesn't address the entirety of that problem.  So here, let's say FRV was to discover that it costs a nominal amount, not the $180.  Under the agreement you're being asked to order FRV to enter into, it has to continue to pay that amount, come what may, unless and until the UFU agree to allow the agreement to be terminated.


Can I take the Commission to a couple of authorities dealing with fettering?  Can I start with the decision of Searle, and we've got copies for the Commission.  Searle v Commonwealth of Australia 100 NSWLR 55.  At paragraph 9, Commissioner, you'll see that Bell P, in effect, provide a general overview of the doctrine of fettering, which, in my submission, is in terms not inconsistent with which I put earlier, which is to the effect that:


A government or public authority may not fetter the future exercise of discretionary powers reposed in the executive or a public authority. Such powers may be reposed through the prerogative of the Crown or by validly conferred legislative authority or some combination of the two. Most legislative grants of power are conferred in broad terms, and for good reason. They typically confer a wide discretion on the repository of executive power. Moreover, section 33(1) of the Acts Interpretation Act 1901 (Cth) and its state analogues provide that 'where an Act confers a power or function or imposes a duty, then the power may be exercised and the function or duty must be performed from time to time as occasion requires'.


There was a similar observation made by his Honour Mason J, as he then was, in Ansett Transport Industries v Commonwealth of Australia & Ors.  The relevant passage commences at page 73 and then moves onto page 74.  So if one looks at the bottom of 73 you'll see his Honour say:


On the contrary and possible consequences of contravening section 92 and the problems associated with the implication of (indistinct) impose an obligation on the Commonwealth not to alter the law and (indistinct) other operators to import aircraft or to use on trunk route airline services, provide a formidable reason for doubting the claim that the parties intended to import a (indistinct) of the kind pleaded or of the kind now in consideration.


I've already referred to the question of whether executive government can, by contract, fetter its powers to make regulations.  A similar question arises in relation to the making of a contract which attempts to fetter the exercise of a discretionary power conferred by a statute or regulation.


There is a general principle of law that a public authority cannot preclude itself from exercising important discretionary powers or performing public duties by incompatible, contractual or other undertakings.


The central question in considering whether the application of the fettering doctrine is whether the contract that is said to fetter the statutory power is permitted or authorised by the statute.


That was dealt with by his Honour Mason J, and I won't take you to the passage, at page 76 and onto page 77 and also in Searle, at paragraph 132, if I can read paragraph 132:


It is very difficult if not impossible to reconcile all of the cases in this area, both within and across jurisdictions and over time. The starting point in any case must involve an examination of the statute (or prerogative) by reference to which the power relied upon to enter the contract is exercised. As Rich J observed in New South Wales v Bardolph, 'when the administration of particular functions of government is regulated by statute and the regulation expressly or impliedly touches the power of contracting, all statutory conditions must be observed and the power no doubt is no wider than the statute contemplates'.


Then at 133 the court, or Bell J, dealt with, 'Where there is an express authorisation by statute'.  Then, in paragraph 134, he continues:


In some cases, the legislation conferring statutory power will, on its proper construction, not authorise a particular contract or will only authorise a decision to which the contract purports to give effect to be made at a particular time or by reference to particular considerations which will only be known at a particular time. When a statute prescribes a mode of exercise of the statutory power, that mode must be followed and observed: and if it contemplates the making of decisions, or the use of discretions, at particular stages of the statutory process, those decisions must be made, and discretions used, at the stages laid down.


There's an illustration of the application of these principles in a case of Peregrine Mineral Sands v Wentworth Shire Council.  This case concerned whether an agreement between a council and a mining company, which purported to fix the mining company's rates, fettered the council's discretion to determine rates from time to time, based upon valuations received by the council.


Now, one might say there's a fixing that occurs here, both in respect of the monetary amounts that I've already touched on, but also the mode upon which FRV can employ and promote its employees.


Peregrine replied upon a number of broad statutory powers conferred on the council, including a power to do all things body corporate may by law do, under section 50 of the Interpretation Act.  Yet, notwithstanding that, the court held that the restrictions were immiscible to the requirements upon the council and the council didn't have power to contract them out.


If I can take you to paragraphs 151 to 152 and you'll see there there's a rejection of the notion that the general power overcomes the difficulties that were identified the court and sets out a number of the principles, from a decision of Darkinjung and in the circumstances - the position was:


Unless authorised by s 564, which I consider below, an agreement to fix future rates up to 20 years in advance is not one expressly authorised by the Local Government Act. Insofar as the Road Agreement has fettered the ability of the Council properly to consider matters that might in future be required to be considered in relation to the making of rates, as I consider it did, it is incompatible with the legislation. his Honour did not err in so concluding.


Now, I've touched on section 25B of the FRV Act, and you'll recall, Commissioner, that that provides that Fire Rescue Victoria may, from time to time, employ any persons it considers necessary to assist in it carrying out its functions, under this Act or any other Act, and transfer, promote or suspend or remove any employee.  Every appointment of a promotional member or operational staff is to be on three months' probation.


If one then goes to what is contemplated by this service agreement, as per the Constitution, which is set out at court book - sorry go to Schedule 4 of the contract, which is at court book page 124.


It's apparent that it purports to lock in the career progression contained in the enterprise agreement, and that's done by clause 8.  That includes limits on promotion, and that is apparent from clause 10, at court book 127.


Now, it might be said, 'Well, these fetterings occur in the enterprise agreement, so what's the issue?'.  The issue, of course, is that the existence of this service agreement and the enterprise agreement, even with the amendments suggested by my learned friend a moment ago, are not necessarily co-extensive.


The issue here, of course, is whether you should order that FRV enter into an agreement which, in our submission, would fetter the exercise of the broad discretions conferred by the FRV Act.


In essence, Commissioner, we would submit that a contractual arrangement to act consistently with the registration system contemplated by the Constitution would fetter FRV's employment powers, under 25B, in three particular ways.


Firstly, the registration system contemplated by the constitution purports to authorise the corporate board to determine whether a person is suitable for employment by FRV.  For example, if one goes to court book 68, where the Constitution is contained, clause 4(ex) provides that:


One of the functions of the corporate board is to determine, as required, persons suitable for employment as operational firefighters with FRV and other agencies, by agreement with the company.


And clause 6(e), which is at court book page 69 provides that:


The VPCFRB has powers to determine persons suitable for employment as operational firefighters, through the registration process, to ensure that prospective employees have, as a minimum, the qualifications, competencies and operational experiences specified by the FRV operational agreement and the agreed training framework.


Now, all of that, in my submission, can be contrasted with the broad terms of section 25B, which confers the function of determining who is appropriately to be employed by FRV, on FRV.


Even if it be said that those two clauses only contemplate that the corporate board will determine whether persons are suitable for employment in the sense that they are sufficiently qualified, competent and experienced, leaving to FRV the discretion to finally decide, from the class of suitable candidates, whom they employ, which seemed to be the line being put by my learned friend, Mr Borenstein, yesterday.  That would still constitute a fetter, because that's a limitation that is not found within clause 25B(1)(a).


The terms of 25B(1)(a) are, we would submit, clear:


Fire Rescue Victoria may, from time to time, employ any persons that it considers necessary to assist it in carrying out its functions under this Act or any other Act.


To the extent that Fire Rescue Victoria is confined to the pool of persons that have been registered by the company, it cannot exercise that power, in the way that the Act contemplates it to be exercised.


In addition, the system contemplated by the Constitution appears to authorise the corporate board to determine when persons can be promoted.  That's, if one goes to clause 6(g), at court book page 69, that provides that:


The VPCFRB will continually review registration requirements regarding qualifications and standard required.


Clause 17.1(b), at court book page 83 provides that:


The training and qualification framework for professional career firefighters require a prerequisite pathways and minimum times at ranks to ensure experience is gained and skills developed and consolidated.


THE COMMISSIONER:  Sorry, what paragraph was that?


MR O'GRADY:  I apologise, it's 17.1(b), at court book page 83.  Under the heading 'Registration', Commissioner.


THE COMMISSIONER:  All right, thank you.


MR O'GRADY:  Further, some clauses in the constitution suggest that promotions must occur in certain circumstances.  Clause 17.2(a), dealing with firefighters, provides:


Note:  On completion of a recruit training, recruits are promoted to the rank of Firefighter 1.  Promotion to Firefighter 2 is gained after 12 months' career professional service on shift, and Firefighter 3 after 24 months' career professional service on shift and the completion of continued (indistinct) training at the level of Firefighter 2.


Now, this is a direct, in my submission, substantial fetter on section 25B(1)(b) of the Act which simply says:


Fire Rescue Victoria may. from time to time, transfer, promote, suspend or remove any employee.


It can't do that, in the way contemplated by the Act, if it's got to comply with the scheme of registration set out in the Constitution.


Further, to the extent that the system contemplated by the Constitution involves the board proscribing minimal qualifications, competencies and experiences that must be achieved, again there is a fetter and an example of that is at 17.4, at court book page 85, which deals with the requirements of being a commander.


Finally, the system contemplated by the Constitution appears to authorise the corporate board to determine where a person should be deregistered.  For example, at court book page 70, you have clause 6(h), which is a decision of the VPCFRB.  Again, something that impacts upon the broad discretions conferred by section 25B of the Act.


In addition, section 25B(1)(b) includes the power to suspend or remove any employee.  Again, that's a power conferred upon Fire Rescue Victoria, as opposed to some third body.


Not only is there a tension between the provisions of section 25B and the scheme that the Act sets up, but the FRV Act also contemplates that FRV's duties functions and powers, including the power of employment, are subject to advisory and good consultation with an oversight by a number of bodies.  The collaboration that the Act contemplates would be undermined if FRV could fetter its employment powers in the way that the Constitution contemplates.


If I could take you back to section 7, but this time section 7AB of the FRV Act, that requires:


Fire Rescue Victoria must, in performing its functions and exercising its powers, collaborate and consult with Emergency Management Victoria.


Sections 33A to 33G of the FRV Act:


Establish a strategic advisory committee comprised of members appointed by the Minister whose functions include providing advice to FRV on work diversity and flexibility within FRV.  Such advise would likely to be relevant to the manner in which FRV exercises its employment powers, under section 25B.


The existence and role of the strategic advisory committee suggests parliament can be taken to have intended that FRV should not be constrained in making employment decisions in a way contemplated by the Constitution.


For instance, if consideration, such as workforce diversity and flexibility were entirely unaccounted for in the registration system established by contract with the corporate board, the provision of the strategic advisory committee to provide advice on the subject would be of little utility.


Section 34(1)(b) provides that:


The Governor in council may make regulation for the appointment, promotion, probation, transfer, suspension and removal of employees of FRV.


In our submission this evidences an intention that FRV's exercise of its employment powers, in section 25B, is to be carried out in accordance with any requirements imposed by the executive, via subordinate legislation.


The regulations have a number of provisions that we would submit are relevant, and if I can provide a copy of the regulations to the Commission.


MR BORENSTEIN:  Sorry, Commissioner, you gave leave for the intervener to make submissions contained in the written submissions, I don't recall any reference to the regulations in the written outline.


THE COMMISSIONER:  That might be the case.


MR O'GRADY:  Commissioner, as I understood the leave you granted was in respect of the issues raised in the submissions.  We did, of course, raise the issue of fettering, in clear and unequivocal terms, and all I'm seeking to do is point out that in addition to the fettering associated with the contraventions of the core powers in the FRV Act, there are actually fettering, in respect of the regulations.


I don't need to advance it in any event, Commissioner, save to say that the regulations also make provision for the management of employees of Fire Rescue Victoria, in Part 3.  That, in my submission, is a scheme that parliament has put in place in respect of the broad powers of the FRV Act confers on FRV, in respect of employment and to the extent that the scheme that is suggested by the Service Agreement conflicts with that, there is going to be a real question of fettering.  To the extent to which there is such fettering, there is an inconsistency, for the purposes - sorry, Fire Rescue Victoria would be acting beyond power.


The last point I wanted to make, Commissioner, is simply to touch upon what my learned friend said yesterday about Electrolux.  You might recall he handed up only part of the decision, and I don't criticise him for that, it's a long case.


THE COMMISSIONER:  I thought you were about to hand up the whole case.


MR O'GRADY:  Sorry?


THE COMMISSIONER:  I thought you were about to hand up the whole case.


MR O'GRADY:  No, I wasn't, but I'd simply make this point.  The passage that my learned friend took you to was, as I recall, at paragraph 97.  That was, of course - - -


THE COMMISSIONER:  Can you just bear with me one minutes, please?  Sorry, please go on.


MR O'GRADY:  That, of course, was a discussion by his Honour McHugh J, of what happened below and, in particular, a distinction that his Honour Merkel J drew, and then, in paragraph 98, his Honour notes what the Full Court of the Federal Court suggested, and then he continues:


Whether an agreement containing a term that is not a matter pertaining to the relationship between and employer and employees may be certified on a Part 6B depends on the proper construction of section 170LL.  Integral to the construction of this section is whether it is directed to the nature of the agreement post certification and looked at a whole or is a substantive provision by which (indistinct) such an agreement is compromised.  Critical to the operation of section 170LI is at further purposes of certification, there must be an agreement, in writing, about matters pertaining to the relationship between the employer and all the persons who, at the time of the agreement was in operation, were employed by the single business of the employer.  Nothing in Part 6B of the (indistinct) LI should not be giving its plain and literal meaning.  The statutory context of LI appears for the purposes of the certification of the powers of the (indistinct) of the Commission, in respect of certification or legal consequences.  Section LI only permits the certification of agreement where all the terms of the agreement are about matters pertaining to the requisite relationship or about matters ancillary or incidental to those matters or machinery provisions with respect to those matters.


That, of course, picks up part of the distinction that his Honour Merkel J was noting, in paragraph 97.  However, in my submission, this is the conclusion reached by his Honour McHugh J and, in our submission, you could not properly characterise the order that is sought to be made in this case as simply putting in place ancillary or incidental or machinery provisions.


What is being proposed is a substantive obligation on FRV to enter into an agreement with a corporate third party and the UFU for the provision of registration or services.  In my submission, it falls foul of the pertaining test and, for that reason also, the relief sought, as we've said in our submissions, is not something, in our submission, that the Commission has power to order, with respect.


If the Commission pleases, those are the submissions we'd seek to put.


THE COMMISSIONER:  Just bear with me for one moment, please.


Does the Minister say any of that can be remedied?  What I mean by that is that the submissions draw attention to the powers, under the Fire and Rescue Act, they draw attention to the context within which this Service Agreement has been developed and negotiated, but then, if I hear you correctly, the Minister is concerned about, ultimately, matters of governance and transparency and, indeed, the indefinite nature of the arrangement.


Is any of that remedial?  Can it be remedied if there were to be changes to the document?


MR O'GRADY:  Speaking, if you like, without instructions from the Minister, in my submission, the issues that have been raised, in respect of the need for the Minister's consent, are not matters that can be remedied, because the company has now been formed and there was participation in that by FRV, in a way that I sought to outline earlier, and therefore that's fatal, if you like, and can't be fixed, absent the Minister giving consent.


In respect of the fettering issues, to the extent that the restrictions that I've tried to identify, that are contained in the Constitution and the agreement, are scaled back so that they are compatible with FRV retaining a broad discretion of the type referred to in section 25B of the FRV Act and the regulations and the like, then those all right matters that may be capable of being fixed.  But I don't have - with respect, Commissioner, I can't go beyond that in that I just don't know what view the Minister takes of these things, and I'm simply analysing it from a first principles point of view.


THE COMMISSIONER:  All right, thank you.  You've answered the question quite well, from my perspective, so thank you.


Now, Mr Borenstein and Mr Harding, what I propose to do is give you both a right of reply to what Mr O'Grady has said and we can either do that through an oral hearing today or we can adjourn or we can give you the right to provide written submissions at some later stage.  Do you have a preference as to which path you might wish to take, Mr Borenstein?


MR BORENSTEIN:  Commissioner, our preference would be that we get transcript of today's hearing and then we have an opportunity of filing a written submission for you.  We're content to rely on that written submission, unless there are questions that you wanted to ask, having seen that, in which event we're comfortable about coming back and answering those questions for you.


THE COMMISSIONER:  All right, thank you.


MR BORENSTEIN:  We don't know how long it will take to get the transcript, you may have a better insight into that than we do.


THE COMMISSIONER:  Well, with some finger crossing, we think it will be within seven days.  So what I was then going to be proposing is that probably by Friday, 23 September, which is roughly two weeks after the delivery of the transcript, you'll reply will be required.


MR BORENSTEIN:  We're perfectly comfortable with that.


THE COMMISSIONER:  All right.  Does that suit you as well, Mr Harding?


MR HARDING:  Indeed.


THE COMMISSIONER:  Okay, thank you.


Mr O'Grady, I wouldn't propose to give any further response to the Minister, after that time, but nonetheless you know where to find us if there is something that leaps out from those submissions.


MR O'GRADY:  Yes.  If I could simply have leave to, if you like, apply, in those terms, that if there's something that needs to be addressed, of substance, we would write and seek leave.  But other than that, I understand.




MR BORENSTEIN:  Commissioner, without looking to deprive Mr O'Grady of another opportunity, these would be submissions in reply and we would suggest that the proper course is that unless there's something that is new that Mr O'Grady's had his chance.


THE COMMISSIONER:  I expressed myself poorly, but I think that's what I intended, to be honest.


All right, look, on that basis, we'll now adjourn the proceedings and continue on the basis that we've talked.

ADJOURNED INDEFINITELY                                                          [11.47 AM]



EXHIBIT #UFU5 INSERTION OF 16.2(A)........................................................ PN507

EXHIBIT #UFU6 AMENDED PROPOSED ORDER....................................... PN508


EXHIBIT #FRV2 OUTLINE OF SUBMISSIONS............................................. PN515