2021 WAIRC 00463
WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT


CITATION : 2021 WAIRC 00463

CORAM
: INDUSTRIAL MAGISTRATE D. SCADDAN

HEARD
:
THURSDAY, 27 MAY 2021

DELIVERED : FRIDAY, 13 AUGUST 2021

FILE NO. : M 126 OF 2020

BETWEEN
:
CONSTRUCTION, FORESTRY, MARITIME, MINING, AND ENERGY UNION
CLAIMANT

AND

MID WEST PORT AUTHORITY
RESPONDENT

CatchWords : INDUSTRIAL LAW – Determination of preliminary issue – Alleged breach of enterprise agreement – Validity of enterprise agreement – Approval of enterprise agreement by Fair Work Commission – Consequence of any invalidity on the application of Mid West Ports Authority Maintenance & Marine Specialist Enterprise Agreement 2017 (Cth) to a particular class of employees – Jurisdiction of the Industrial Magistrates Court – Requirement by an employer to pay an amount under a fair work instrument or the Fair Work Act 2009 (Cth)
Legislation : Fair Work Act 2009 (Cth)
Instruments : Mid West Ports Authority Maintenance & Marine Specialist Enterprise Agreement 2017 (Cth)
Indomitable Pty Ltd Enterprise Agreement 2011 (Cth)
Port Authorities Award 2010 (Cth)
Geraldton Port Authority (Moorings & Maintenance Staff) Certified Agreement 2012 (Cth)
Mid West Ports Authority Maintenance Operator & Marine Specialist Enterprise Agreement 2018 (Cth)
Case(s) referred
to in reasons: : One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77
Tulloh v Chief Executive Officer of the Department of Corrective Services [2018] WASC 105
Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; (2019) 264 CLR 421
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Maribyrnong City Council v Australian Municipal, Administrative, Clerical and Services Union [2019] FCA 773
Result : Preliminary issue determined
REPRESENTATION:

CLAIMANT : MR M. GIBIAN (OF COUNSEL) AS INSTRUCTED BY THE MARITIME UNION OF AUSTRALIA
RESPONDENT : MR A. POLLOCK (OF COUNSEL) AS INSTRUCTED BY HERBERT SMITH FREEHILLS

REASONS FOR DECISION
1 The Construction, Forestry, Maritime, Mining and Energy Union (the Union), on behalf of seven employees, are seeking the payment of an amount for overtime payments it says Mid West Ports Authority (MWP) failed to pay in accordance with cl 20.3 of the Mid West Ports Authority Maintenance & Marine Specialist Enterprise Agreement 2017 (EA 2017) (the Claim).
2 The Union further seeks, amongst other things, the payment of civil penalties to it for an alleged contravention of s 50 of the Fair Work Act 2009 (Cth) (FWA).
3 In the ordinary course of the work of the Western Australia Industrial Magistrates Court (IMC) a claim of this type is unremarkable. However, the circumstances surrounding the negotiation of EA 2017, and its consequences, take the Claim outside the realms of the ordinary.
4 The genesis of the Claim, lodged on 25 August 2020, arises from the approval of two enterprise agreements, and a controversy over which applies to seven MWP employees. The Union argues EA 2017 is the applicable agreement notwithstanding it engaged in negotiations to remedy a common understanding that EA 2017 may not operate in the manner intended. Unsurprisingly, MWP contends every other applicable fair work instrument, other than EA 2017, applies, not least because it was commonly understood EA 2017 did not.
5 MWP’s response to the Claim is that EA 2017 is an invalid agreement, because:
(a) principally, it was not validly made within the meaning of s 182(1) of the FWA, thus the application for approval under s 185(1) of the FWA was also invalid, which, according to MWP, renders the Fair Work Commission’s (FWC) approval of EA 2017 a nullity where it had no jurisdiction to approve EA 2017; and
(b) alternatively, the FWC could not have properly formed the requisite state of satisfaction that EA 2017 had been ‘genuinely agreed’ within the meaning of s 186(2)(a) of the FWA, thus the approval of EA 2017 under s 186(1) of the FWA was invalid, again rendering the approval a nullity.
6 As the facts show, MWP’s position on EA 2017 is not merely in response to the Claim. While initially it thought otherwise, MWP changed its view on the application of EA 2017 shortly after it was approved by the FWC. That is a view it shared with the Union, and which prompted the parties to engage in further negotiations for the purposes of approving a new enterprise agreement to resolve concerns about the application of EA 2017.
7 It is MWP’s response to the Claim which now sees the IMC going beyond its ordinary work to determine a preliminary issue in the form of three questions. Whether this resolves the controversy remains to be seen.
Preliminary Issue
8 The three questions forming the preliminary issue are these:
(1) Was EA 2017 validly made in accordance with s 182(1) of the FWA?
(2) Was EA 2017 validly approved by the FWC?
(3) If the answer to questions 1 and 2 is no, is the consequence of an invalidly made or invalidly approved EA 2017 that it does not apply to MWP, the Union or the MWP’s employees identified in the Claim?
9 The purpose of determining the three questions ultimately goes to resolving whether there is a requirement for MWP to pay an amount under, relevantly, a fair work instrument.
10 The IMC, as an ‘eligible State or Territory court’, is limited in the orders it may make. Relevant to the Claim, pursuant to s 545(3) of the FWA, the IMC ‘may order an employer to pay an amount to, or on behalf of, an employee of the employer if the court is satisfied that: (a) the employer was required to pay the amount under … a fair work instrument’ (emphasis added). I note the Claim seeks at 16(d) an order for MWP to pay damages to be assessed by the IMC to the effected employees for the loss sustained as a result of the alleged contravention. The IMC has no power to make this order, which is contained in s 545(2)(b) of the FWA and is referrable to the Federal Court of Australia and the Federal Circuit Court of Australia.

11 If MWP’s responsive argument is successful, there is no requirement to pay an amount for overtime, or any amount at all, as no obligation arises for it to do so, under the fair work instrument relied upon by the Union, EA 2017. It also follows that if EA 2017 does not apply (for whatever reason) to the seven employees nominated by the Union, there can be no contravention of EA 2017, and thus no contravention of s 50 of the FWA or a civil remedy provision for the purposes of s 545(3)(b) of the FWA.

12 It is on this basis, and this basis alone, the IMC concerns itself with the status of EA 2017.
Background
13 The parties agreed on the evidence each relied upon, and agreed most, if not all, of the facts surrounding the Claim.
14 The relevant factual background may be summarised as follows:
Negotiation and approval of EA 2017
15 MWP commenced bargaining a proposed new enterprise agreement by issuing a notice of employee representational rights to relevant employees on 2 July 2015. Exhibit 4 – The Union’s Response to Invitation to Admit filed 2 November 2020 (RITA) [4](a).
Between 21 July 2015 and 12 July 2017, MWP met and bargained with the then-Maritime Union of Australia (MUA), the Australian Maritime Officers Union (AMOU), and various employee representatives. RITA [4](b).

16 On 11 May 2017, the Western Australia Government issued the Public Sector Wages Policy Statement 2017 (Policy). RITA [4](c).
The Policy purported to require that increases in industrial agreement wages and associated conditions for public sector employees be limited to $1,000 per annum. RITA [4](d). The Union admits that the Policy purported to impose those requirements but does not admit that the Policy had that legal effect.

17 On 2 June 2017, MWP requested a dispensation from the application of the Policy for the purpose of finalising the bargaining. RITA [4](e).

18 On 21 June 2017, the Minister for Transport, Planning and Lands purported to grant MWP a dispensation subject to the bargaining for EA 2017, and two other MWP enterprise agreements, being finalised by 29 July 2017. RITA [4](f). The Union admits that the Minister for Transport, Planning and Lands purported to grant the dispensation but does not admit that it had that legal effect.

19 Between 13 July 2017 and 14 July 2017, David Geldart (General Manager of Corporate Service for MWP), Jeff Cassar (Assistant State Secretary of the then-MUA) and Meghann Papa (Industrial Officer of the AMOU) corresponded by email about the voting method for the proposed EA 2017. During that email exchange, Mr Cassar stated that the voting method should be a ‘[s]how of hands’, RITA [4](h).
and that he would conduct discussions with employees and conduct the vote. RITA [4](i).

20 On 18 July 2017, MWP commenced an access period by sending an individual email message to 19 maintenance employees (the Included Group) which attached the final copy of the proposed EA 2017 and provided information as to the process and details of the voting method, day and time. RITA [4](j).
Mr Cassar was copied into this email and from that was able to determine which employees were included (or not included) on the recipient list. RITA [4](k).

21 Also, on 18 July 2017, Mr Cassar attended the Geraldton port and discussed the EA 2017 with MWP’s maintenance employees. RITA [4](l).

22 At various times, between 18 July 2017 and 26 July 2017, MWP purported to provide the Included Group with an explanation of the terms of the EA 2017 and the effect of those terms. The parties agree that the explanation:
(a) was not given to all the employees employed at the time who would be covered by the EA 2017; and
(b) could not have met the requirements of s 180(5) of the FWA.
23 On 26 July 2017, voting for approval of EA 2017 commenced and closed on that day. The Included Group who cast a vote on 26 July 2017 did so by a show of hands and 73.6% of the employees who cast a valid vote, voted to approve EA 2017. RITA [4](n) - (p).

24 On 3 August 2017, MWP applied for approval of EA 2017 using the Form F16. RITA [4](q); Exhibit 3 – Respondent’s tender bundle, RT - 10, 76.
MWP filed a Form F17 statutory declaration together with the approval application executed by the relevant officer for MWP. RITA [4](r); Exhibit 3, RT - 11, 82.
In the Form F17 statutory declaration, MWP declared that it had taken reasonable steps to give notice to employees who could be covered by EA 2017 of their right to be represented by a bargaining agent and explained the steps it had taken to ensure that:
· relevant employees were given a copy of EA 2017 and other relevant materials;
· notified of the place and time at which the vote was to occur; and
· that EA 2017 would cover 19 maintenance employees (being the Included Group). RTIA [4](r); Exhibit 3, RT - 11, 83 - 84, 86.

25 On 15 August 2017, the Union filed a Form F18 declaration indicating that it:
· was a bargaining representative for employees who are covered by EA 2017;
· supported the approval of EA 2017; and
· agreed with the Form F17 statutory declaration filed by MWP. RITA [4](s); Exhibit 3, RT - 13, 111 - 112.

26 The FWC subsequently approved EA 2017 by decision dated 1 December 2017. RITA [4](t).
Deputy President Gostencnik indicated in the decision [2017] FWCA 6379 [3].
that he was ‘satisfied that each of the requirements of ss 186, 187, 188 and 190 as are relevant to this application for approval have been met’. Mid West Ports Authority Maintenance & Marine Specialist Enterprise Agreement 2017 [2017] FWCA 6379; Exhibit 3, RT - 32, 368.
EA 2017 commenced operation seven days after it was approved in accordance with s 54(1) of the FWA and cl 2.2 of EA 2017, and was expressed to reach its nominal expiry date on 1 December 2020.
Insourcing of the bulk handling facility
27 On 30 March 2017, MWP announced its decision to insource its maintenance, electrical and operations work. Exhibit 2 – Affidavit of Vickie Suzanne Williams [8], annexure ‘VW-1’.

28 On 30 June 2017:
(a) eight employees (comprising maintainer mechanical employees, and a store person) formerly employed with Maicon Engineering Pty Ltd (Maicon) transferred their employment to MWP as a result of the insourcing of the bulk handling facility (Maicon Employees). Exhibit 2 [9], RITA [12](a) - (b).
MWP applied the Indomitable Pty Ltd Enterprise Agreement 2011 (Indomitable EA) to the Maicon Employees from the time they commenced employment with MWP. The Indomitable EA had previously applied to their employment with Maicon; Exhibit 2 [9](a); RITA [12](a)(i), [12](b)(i).

(b) MWP offered employment to two former GCo Australia sub-contractor employees (who performed the role of maintainer electrical) as part of the broader restructuring of the bulk handling facility (GCo Employees). MWP applied the terms of the Port Authorities Award 2010 (Port Award) to the GCo Employees from the time they commenced employment with MWP, and entered into individual flexibility arrangements (IFAs) with those employees which preserved their previous over-award terms and conditions; Exhibit 2 [9](b) - (c).
and
(c) MWP also engaged an additional electrician (who had not previously worked for either Maicon or GCo Australia) (Electricians). MWP applied the terms of the Geraldton Port Authority (Moorings & Maintenance Staff) Certified Agreement 2012 (Geraldton Port Agreement) to the Electricians from the time they commenced employment with MWP. Those terms were supplemented by further terms and conditions contained in letters of offer. RITA [12](d)(ii).

29 The Maicon Employees, GCo Employees and Electricians are the ‘Excluded Employees’ to which the controversy applies surrounding the EA 2017 approval by the FWC, and seven of the Excluded Employees are included in the Claim.
Exclusion of the Excluded Employees from EA 2017 voting pool
30 The work performed by the Excluded Employees falls within the scope of the EA 2017’s coverage clause. RITA [20]. Note that the RITA defines the Excluded Employees as the ‘Insourced Employees’.

31 MWP did not take any steps to:
(a) ensure that, during the access period for EA 2017, the Excluded Employees were provided with (or had access to) a copy of EA 2017 or any incorporated materials; RITA [13](a) - (b).

(b) notify the Excluded Employees by the start of the access period, the vote’s time, place, or voting method; RITA [14].
and
(c) ensure that the terms of EA 2017, and the effect of those terms, were explained to the Excluded Employees (and, it follows, that those terms were explained in an appropriate manner). RITA [15](a) - (b).

32 The Excluded Employees:
(a) were not provided with an opportunity to vote on EA 2017; RITA [16].
and
(b) did not vote for EA 2017, RITA [17].
and would have represented some 36.667% of the voting pool, if they were included in the voting cohort with the 19 employees that were invited to vote. RITA [18].

33 Previously, on 30 May 2017, Mr Cassar emailed Mr Geldart asking him to ‘confirm that the proposed Agreement will be distributed to the incoming ex-contractor employees’ on the basis that they will be employed under classifications covered by the proposed EA 2017. Mr Geldart replied stating that MWP would be engaging the insourced employees ‘under the Modern Award with an IFA’ and that the ‘M&M Agreement does not cover these individuals’. RITA [10]; Exhibit 1 – Affidavit of Jeff Cassar [16], ‘JC1’.
Mr Geldart subsequently advised Mr Cassar that MWP’s position was based on legal advice. Exhibit 1 [17].

Events after approval of EA 2017
34 While it is difficult to determine exactly when, but shortly after the commencement of EA 2017 the parties engaged in discussions concerning the scope and application of EA 2017. Exhibit 3 RT 34, cl 2.4.

35 In or around February 2018, Mr Cassar met with Vicki Williams (General Manager, Sustainability, Culture and People for MWP) to discuss concerns previously raised by him and Mr Geldart about the ‘2017 Enterprise Agreements [sic] validity’. Exhibit 1 [21]; Exhibit 2 [16].
One of the means of resolving the concerns discussed was to engage in ‘Interest-Based Bargaining’ to negotiate a replacement agreement. Exhibit 1 [22].

36 On 16 March 2018, MWP, or its legal representative on its behalf, applied to the FWC to participate in Interest-Based Bargaining. MWP’s primary purpose in engaging in Interest-Based Bargaining was to make a new and valid enterprise agreement which would:
(a) replace the Geraldton Port Agreement and the Indomitable EA;
(b) be of identical scope to EA 2017; and
(c) begin to apply to the employees it would cover immediately upon commencing operation. Exhibit 2 [17], [18]; Exhibit 3, RT 35.

37 MWP’s Form F10 briefly details the dispute as ‘about the application of the enterprise agreement [EA 2017], specifically its scope. The area of the business in contention is the bulk handling area where a small number of employees were engaged at a late stage of negotiations for the agreement’. Exhibit 3 RT 34, cl 2.1.

38 MWP’s Form F79, filed under cover of an email dated 16 March 2018, identifies three agreements covering the workplace: EA 2017 (which MWP regards as having no force or effect), the Geraldton Port Agreement, and the Indomitable EA. At cl 1.5, MWP sets out the basis for the application, namely by agreement to assist in replacing the Geraldton Port Agreement and the Indomitable EA, and MWP considers EA 2017 to be invalidly made ‘due to technicalities involving the vote’. Exhibit 3 RT 35, cl 1.5.

39 On 30 November 2018, MWP applied for approval of Mid West Ports Authority Maintenance Operator & Marine Specialist Enterprise Agreement 2018 (EA 2018) using the Form F16. Exhibit 3 RT 26.
MWP filed a Form F17 statutory declaration together with the approval application executed by the relevant officer for MWP. Exhibit 3 RT 27.

40 In the Form F16, at cl 1.3, the FWC is informed of other agreements, including EA 2017, which also provides ‘(However, this Agreement was invalidly made, and therefore is not in effect)’.
41 Similarly, in the Form F17 statutory declaration, at cl 1.3, the deponent informs the FWC of other agreements, including EA 2017, and states ‘(However, this Agreement was invalidly made, and therefore is not in effect)’. At cl 2.10 of the Form F17 statutory declaration, the number of employees covered by EA 2018 is 73 (as opposed to 19 referred to in the Form F17 statutory declaration for EA 2017).
42 On or around 14 December 2018, the Union filed a Form F18 declaration indicating that it was a bargaining representative for employees who are covered by EA 2018, that it supported the approval of EA 2018 and that it agreed with the statutory declaration filed by MWP. Exhibit 3 RT 28.

43 On 13 March 2019, the FWC approved EA 2018. Exhibit 1 [22]; Exhibit 2 [19]; Exhibit 3, RT 33.

44 In Mid West Ports Authority Maintenance & Marine Specialist Enterprise Agreement 2018, [2019] FWCA 1632.
Deputy President Binet recites, at [2], a brief background to EA 2018, confirms, at [3], the endorsement of EA 2018 by a workplace ballot and, relevantly, at [5], states:
I am hopeful that the spirit in which this agreement was reached, consistent with the goals of the New Approaches initiative, leads to more efficient resolution of workplace disputes…
45 At [9], Deputy President Binet approves EA 2018 and states that, in accordance with s 54 of the FWA, it will operate from 20 March 2019 with a nominal expiry date of 8 December 2020 (one week post the nominal expiry date of EA 2017). Exhibit 3 RT 33.

46 The Claim does not detail any particulars of the alleged contravention by MWP, save that it claims MWP failed to make payments required by cl 20.3 of EA 2017 when requiring maintenance employees to perform work between 6.00 am to 6.00 pm, and on weekends (and identifying the seven employees who form part of the Excluded Employees). During the hearing, the counsel for the Union stated the time period of the alleged contravention included before and after 20 March 2019; that is, as understood, from June 2017 to 20 March 2019 and from 21 March 2019 to the lodging of the Claim on 25 August 2020.
47 While not the subject of direct evidence, MWP says that up to 20 March 2019 it applied the Geraldton Port Agreement, the Indomitable EA, and the Port Award to the Excluded Employees (including the seven employees referred to in the Claim), and supplemented rates of pay as applied under EA 2017 on an over agreement basis. Supported by reference to Exhibit 2 [10]; Exhibit 3 RT 15, RT 20, RT 35.
This was not challenged in the hearing.
48 Since 20 March 2019, MWP has applied EA 2018 to the seven employees referred to in the Claim. Exhibit 2 [20].

Determination
Preliminary question one
49 The first preliminary question concerns the validity of EA 2017. The resolution of this question is, in the first instance, a matter of statutory construction, and, in the second instance, an application of the facts to the preferred construction (if there is a preferred construction).
50 MWP’s argument in respect of question one has two limbs, with the first limb being the MWP’s primary argument and the second limb its alternative.
First Limb
51 MWP’s primary argument is that EA 2017 was not ‘made’ within the meaning of s 182(1) of the FWA, where MWP says a number of employees were omitted (albeit mistakenly) from the requirements in s 180 of the FWA. Therefore, there was never a valid agreement capable of an application under s 185 of the FWA such that it could have been approved by the FWC under s 186.
Second Limb
52 MWP’s alternative, and conceded weaker, argument is that the FWC could not have formed the requisite state of satisfaction under s 186(2)(a) of the FWA, where MWP says EA 2017 had not been genuinely agreed by the employees covered by EA 2017.
53 The parties referred to several cases, including One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77. One Key comprehensively outlines the relevant legislative provisions for enterprise agreements at [7] - [26] and [28] - [33]. I cannot take this any further, save that I will also refer to s 58, s 587, s 603, s 604 and s 607 of the FWA. These sections are replicated in full in Schedule 1.

54 Pursuant to s 182(1) of the FWA, for ‘a proposed single-enterprise agreement that is not a greenfields agreement … the [enterprise] agreement is made when a majority of those employees who cast a valid vote approve the agreement’.
55 Prior to an enterprise agreement being voted upon by employees, several procedural steps must occur (referred to as the agreement-making process). It is common ground that MWP did not comply with the pre-approval procedural steps in s 180(2), s 180(3) and s 180(5) of the FWA as it relates to the Excluded Employees, where it did not take any steps to:
(a) ensure that, during the access period for EA 2017, the Excluded Employees were provided with (or had access to) a copy of EA 2017 or any incorporated materials;
(b) notify the Excluded Employees by the start of the access period, the vote’s time, place, or voting method; and
(c) ensure that the terms of EA 2017, and the effect of those terms, were explained to the Excluded Employees (and, it follows, that those terms were explained in an appropriate manner).
56 MWP’s non-compliance with s 180(2), s 180(3) and s 180(5) of the FWA also meant that the Excluded Employees did not vote to approve EA 2017 pursuant to s 181(1) of the FWA. MWP says that in those circumstances EA 2017 could not be made because the majority of the MWP employees, being the Included Group and Excluded Employees, covered by EA 2017 did not cast a valid vote to approve the agreement.
57 The number of Included Group and Excluded Employees covered by EA 2017 was 30, Nineteen Included Group and 11 Excluded Employees.
whereas MWP’s Amended Form F17 provides that there were 19 employees covered by EA 2017, 16 of which cast a valid vote and 14 of the 16 voted to approve EA 2017. Exhibit 3 RT 12, 101.

58 It is speculative but had the 11 Excluded Employees either not cast a valid vote or voted not to approve EA 2017, EA 2017 would not have been approved by a majority of employees, and would not have been made pursuant to s 182(1) of the FWA.
59 MWP’s says in this circumstance it could not have then applied to the FWC to approve EA 2017 pursuant to s 185(1) of the FWA.
60 The Union refers to One Key, at [103], and says that compliance with s 180 of the FWA is not a jurisdictional fact upon which the operation of an enterprise agreement depends. That is, the operation, and legal effect, of an enterprise agreement depends on its approval by the FWC rather than factual compliance with the pre-approval process. The ‘condition precedent’ to the approval of an enterprise agreement is the FWC’s ‘satisfaction that the employer has complied’ with the relevant pre-approval process (emphasis added).
61 For my part, I accept that MWP did not comply with the pre-approval process as it related to the Excluded Employees, where it considered the Excluded Employees were not covered by EA 2017. To that extent, EA 2017 was not a validly made agreement in accordance with s 180 of the FWA. However, that is not the end of the enquiry.
62 When regard is had to the content of the prescribed forms submitted by MWP and the Union for application of approval of EA 2017, it was open to the FWC to form the requisite satisfaction that MWP had complied with s 180 of the FWA: s 186(2)(a) of the FWA when read with s 188(a)(i) of the FWA. Put another way, there was nothing, or at least nothing relied upon by MWP, in the prescribed forms upon which the FWC relied to form the requisite satisfaction that may have alerted it to a category of MWP’s employees who had been excluded from the pre-approval process.
63 Simply put, the information contained in the prescribed forms submitted as part of the application for approval of EA 2017 had been declared as true by MWP’s and the Union’s representatives. The FWC was entitled to rely upon the authenticity of this information and, without some basis to enquire further, could be satisfied MWP had complied with s 180 of the FWA.
64 The fact that both parties privately raised concerns about EA 2017’s coverage and application to the Excluded Employees was of little assistance to the FWC.
65 Therefore, in my view, and upon reflection, preliminary question one is not strictly amenable to a ‘yes’ or ‘no’ answer. The question seeks to roll back time and involves a degree of speculation, which does not assist to resolve the ultimate question of whether EA 2017 applies to the seven employees that are subject of the Claim.
66 My answer to the preliminary question one is that while EA 2017 may not have been validly made, in that MWP did not comply with the pre-approval requirements set out in s 180 of the FWA before putting EA 2017 to the vote to only the Included Group, the FWC was entitled to rely upon the information contained in the prescribed forms submitted as part of the application for approval of EA 2017 and form the requisite satisfaction that MWP had complied with s 180 of the FWA.
Preliminary question two
67 The answer to preliminary question one, in part, also implicitly answers preliminary question two.
68 The FWC must approve an enterprise agreement if it is satisfied that each of the requirements in s 186 and s 187 of the FWA are met: s 186(1) of the FWA. If the FWC is concerned an enterprise agreement does not meet the requirements in s 186 and s 187 of the FWA, it may still approve an agreement where an undertaking meets the particular concern: s 190(1) and s 190(2) of the FWA.
69 The requirements in s 186 of the FWA relevantly include:
(a) the enterprise ‘agreement has been genuinely agreed to by the employees covered by the agreement’: s 186(2)(a) of the FWA;
(b) the terms of the enterprise agreement do not contravene s 55 of the FWA: s 186(2)(c) of the FWA;
(c) the enterprise ‘agreement passes the better off overall test’: s 186(2)(d) of the FWA;
(d) the enterprise agreement does not contain any unlawful terms: s 186(4) of the FWA; and
(e) the enterprise agreement must contain an appropriate dispute resolution clause: s 186(6) of the FWA.
70 Regard is had to s 188 of the FWA in respect of whether an enterprise agreement has been genuinely agreed to by the employees. That is, the FWC is satisfied if:
· the employer complied with the pre-approval steps in s 180(2), s 180(3) and s 180(5) of the FWA;
· the employer complied with s 181(2) of the FWA; and
· there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
71 Having found that, it was open to the FWC to form the requisite satisfaction that MWP had complied with s 180 of the FWA, and having regard to the prescribed forms submitted with the application for approval of EA 2017, it was also open to the FWC to form the requisite satisfaction with respect to the other factors identified above.
72 Importantly, there was, in my view, no reasonable grounds for believing that EA 2017 was not genuinely agreed to by MWP’s employees, albeit, and unbeknownst to the FWC, this did not include the Excluded Employees.
73 Therefore, upon receiving the application to approve EA 2017 and upon it being satisfied of the requirements in s 186 of the FWA (s 187 of the FWA not being relevant in this case), the FWC was required to approve EA 2017.
74 Accordingly, in that sense, EA 2017 was validly approved.
Preliminary question three
75 According to MWP the approval of EA 2017 should be regarded as no decision at all, and, consequently, could not have applied to the seven employees referred to in the Claim, resulting in no obligation, or requirement, for MWP to pay under EA 2017. Accordingly, EA 2017 does not, or cannot, give rise to a cause of action in the Claim.
76 In response, the Union says even if the jurisdictional error was established in the FWC’s approval of EA 2017, it does not follow that EA 2017 did not commence operation and apply to the parties. The Union refers to s 54(1) of the FWA and says that the legal effect and operation of EA 2017 flows from a decision approved by the FWC, unless and until the decision is set aside or quashed on appeal or judicial review.
77 MWP sets out nine reasons it says the Union’s contention that EA 2017 continues to have legal effect until or unless the FWC’s decision to approve EA 2017 is set aside should be rejected. In summary, MWP:
(1) says the language in the FWA makes clear that no application is valid unless the agreement is ‘made’, and in support of this refers to the Explanatory Memorandum to the Fair Work Bill 2008 (Cth). With respect to MWP, the passage referred to and quoted from the Explanatory Memorandum goes no further than to say that an agreement does not have legal effect until approved by the FWC, meaning parties cannot enter into an otherwise private agreement outside of the FWA, but must be approved within the statutory regime. It does not say anything about the validity or invalidity of agreements;
(2) refers to a hypothetical situation where two employees purport to make an enterprise agreement on behalf of 100,000 other employees. While in theory, this hypothetical situation is possible, in practice it would seem highly unlikely where an employer is to make a declaration of the number of employees covered by the enterprise agreement, and any false declaration may result in criminal proceedings. Further, if this hypothetical situation occurred, the prospect of an application for termination of the enterprise agreement and/or set aside application would be inevitable. However, the corollary of MWP’s hypothetical situation is that if an enterprise agreement was ‘invalid’ and had no effect, arguably an employer may recover monies erroneously paid where it had no obligation to pay or pay at rates provided in an invalid agreement;
(3) says an invalidly made and approved enterprise agreement would deprive all parties otherwise covered by a modern award;
(4) says the parties may be subject to civil penalties (including the employees), which they ought to not be exposed to;
(5) says the parties may be placed in the invidious position of having to comply with an invalid agreement and contravening an underpinning award or vice versa;
(6) says the application of an enterprise agreement has broader legal consequences within and beyond the FWA. For example, record-keeping obligations;
(7) says invalidly approved enterprise agreements were treated differently by the Courts under the Workplace Relations Act. Notably, the Court made the requisite declarations in the cases referred to by the MWP, which I note is not the same as the parties treating EA 2017 as ‘invalid’ without any declaration or termination of the agreement;
(8) says it is not required to apply for prerogative relief where the jurisdictional error relied upon renders the FWC decision lacking in legal force whether the decision is set aside or not. However, as will be discussed, the position with respect to the law on the legal consequence of an invalid administrative decision is not as cut and dried as suggested by MWP; and
(9) says the Union’s cause of action relies upon the legal validity of the FWC’s decision to approve EA 2017, but the approval was made outside the jurisdiction and is to be regarded as no decision at all.
78 Notwithstanding the parties’ divergence on the preliminary issues, what appears to be agreed is the following legal principle, which, in my view, was summarised in Tulloh v Chief Executive Officer of the Department of Corrective Services [2018] WASC 105 [28]. Le Miere J, after discussing jurisdictional error and invalidity and relevant cases (cases also referred to, or relied upon, by the Union and MWP), stated:
In my opinion the effect of the authorities is as follows. First, an administrative decision which involves jurisdictional error is legally invalid. Secondly, an administrative decision which is legally invalid does not necessarily have no legal effect unless and until it is set aside or declared to be invalid. Thirdly, whether a legally invalid decision has any relevant legal effect before it is set aside or declared to be invalid depends upon the statutory framework under which and the context in which the decision is made.
79 For my part, this short summary encapsulates what appears to be the real controversy for determination; that is, even if EA 2017 was invalidly made and, consequently, invalidly approved by the FWC, would that necessarily mean it ceased to apply to MWP’s employment of the seven employees identified in the Claim?
80 His Honour, at [36] - [41], referring to Forsyth C, ‘The Theory of the Second Actor Revisited’ (2006) 1 Acta Juridica 209, 215, summarises the conundrum, and states at [38] - [40]:
38 … While a void administrative act is not an act in law, it is an act in fact, and its mere factual existence may provide the foundation for the legal validity of later decisions or acts. In other words, an invalid administrative act may, notwithstanding its nonexistence in law, serve as the basis for another valid decision. Its factual existence, rather than its invalidity, is the cause of the subsequent act, but that act is valid since the legal validity of the first act is not a precondition for the second. The proper inquiry is not whether the initial act was valid but rather whether its substantive validity is a precondition for the validity of the consequent act. If the validity of the consequent act was dependent only on the factual existence of the initial act, then the consequent act will have legal effect for so long as the initial act is not set aside on review.
39 Whether the substantial validity of the first act … is a precondition for the validity of the second act … will depend upon the statutory context. That is consistent with the approach of the Full Federal Court in Jadwan and the cases which have followed it.
40 Sometimes a statute will expressly state what the powers of the second actor are and make it clear whether a precondition for the validity of the second actor’s act is the legal validity of the first actor’s act. More frequently, as in this case, the statute does not deal with the issue expressly.
81 Thereafter, his Honour, at [40], refers to a passage by Professor Forsyth, which suggests principles to assist in deciding the consequence of an invalid act. In particular, and in my view relevant to this case where the FWA does not appear to expressly state the consequence of the invalidity of any act, is the following:
… The crucial point about the second actor theory is that the powers of the second actor are determined by law. This requires an analysis of the express powers of the second actor against the background of the purposes and policies of the relevant statutes. Thus where it is plain from the relevant legislation that the first act is intended to be relied upon by second actors, and that there would be substantial injustice and administrative inconvenience to innocent parties if those second acts were afterwards found to be void because of invalidity of the first act, then the court might infer an intent that the second actor could act validly notwithstanding the invalidity of the first act (220-221).
82 In my view, this passage is consistent with the principle referred to in Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; (2019) 264 CLR 421 [84], referred to by the Union, subject to one additional comment, namely, at [86]:
These two enquiries should not be confused with the anterior issue of whether breaches of a provision of a statute, expressly or impliedly, are to be treated as depriving the decision-maker of power − or, put in different terms, asking whether it ‘was a purpose of the legislation that an act done in breach of the provision should be invalid’. The division in approach between finding whether there was jurisdictional error, and, separately, considering the consequences that flow from a finding of jurisdictional error, is important (citations omitted).
83 Similarly, in Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [97]:
Courts have always accepted that it is unlikely that it was a purpose of the legislation that an act done in breach of a statutory provision should be invalid if public inconvenience would be a result of the invalidity of the act. Having regard to the obligations imposed on the ABA by s 160, the likelihood of that body breaching its obligations under s 160 is far from fanciful, and, if acts done in breach of s 160 are invalid, it is likely to result in much inconvenience to those members of the public who have acted in reliance on the conduct of the ABA.
84 There does not appear to be any dispute that the decision made by the FWC to approve EA 2017, pursuant to s 186 of the FWA, is anything but an administrative decision.
85 I find that in this case, the application of EA 2017 is not dependent on the valid making or approval of EA 2017, but upon the fact that it was approved by the FWC and continued to operate until its nominal expiry date. I do so for the following three reasons:
First reason
86 In summary, the combined effect of s 51, s 52, s 54, and s 58 of the FWA provides that:
(a) only one enterprise agreement can apply to an employee where the enterprise agreement is in operation and covers the employee, employer or employee organisation, and no other provision of the FWA provides or has effect otherwise;
(b) an enterprise agreement does not impose obligations unless the enterprise agreement applies to a person;
(c) an enterprise agreement approved by the FWC operates from 7 days after it is approved or a later day if specified in the enterprise agreement; and
(d) the application of an enterprise agreement does not depend upon the approval process (my emphasis).
87 In this case, no other provision of the FWA had an effect or provided otherwise, or at least no other provision was identified to the IMC.
88 In approving EA 2017, the FWC considered the Form F16, the Form F17 and the Form F18, Exhibit 3.

which were lodged in accordance with s 585 of the FWA (an application to the FWC must be made in accordance with the procedural rules). In my view, nothing in the content of these forms would have, or should have, alerted the FWC that MWP had not complied with the pre-approval agreement making process set out in s 180 of the FWA. Importantly, MWP’s position was reinforced by the statutory declaration signed by the Union’s representative.
89 Therefore, from the FWC’s perspective, there were no reasonable grounds upon which it could have formed a belief that EA 2017 had not been genuinely agreed to by MWP’s employees (albeit this did not include the Excluded Employees for reasons already explained) for the purposes of, relevantly, s 186(2)(a) and s 188(1)(c) of the FWA.
90 On the basis of the information before it, the FWC was, arguably, required by law to approve EA 2017 (s 186(1) of the FWA), where the FWC was satisfied of the factors that it was required to be satisfied of pursuant to s 186 and s 187 of the FWA. That is, the information before the FWC was capable of being accepted on its merits, without the FWC engaging in further enquiries to substantiate the veracity of the information, even if it was empowered to do so.
91 Accordingly, EA 2017 applied to MWP and its employees and operated from 8 December 2017 with a nominal expiry date of 1 December 2020 pursuant to s 51, s 52, s 54, and s 58 of the FWA.
92 Initially, EA 2017 was applied to the Included Group and Excluded Employees. What happened shortly after the approval of EA 2017 is that doubt was raised about its validity such that MWP reverted to other fair work instruments relevant to the Excluded Employees, but the rates of pay relevant to EA 2017 continued to be applied to the Excluded Employees. In that sense, EA 2017 continued to have effect with respect to the Included Group and continued to have a limited effect with respect to the Excluded Employees.
93 EA 2017 was treated by the parties as having some effect until 20 March 2019, whereupon the parties then treated EA 2018 as applying to the Included Group and Excluded Employees.
94 To that extent, EA 2017, while referred to as ‘invalid’ by MWP and the Union, operated to give employment structure to MWP’s employees, albeit on a limited basis to the Excluded Employees.
Second reason
95 The FWC does not have the power to vary or revoke enterprise agreements, with variations to the enterprise agreements generally requiring the approval of a majority of affected employees before the FWC can approve a variation(s): s 207 - s 211 of the FWA. However, an exception to this is an application to vary or remove an ambiguity or uncertainty: s 217 of the FWA and Maribyrnong City Council v Australian Municipal, Administrative, Clerical and Services Union [2019] FCA 773 [54].
96 An enterprise agreement can be terminated during its life if the parties agree to it: s 219(2) of the FWA. The employer can request employees to approve a proposed termination of the enterprise agreement by voting for it: s 220(1) of the FWA. Once agreed, there must be an application to the FWC to approve the termination accompanied by any declarations required by the procedural rules: s 222(1) and s 222(2) of the FWA. The FWC must approve the application to terminate if it is satisfied of the factors in s 223(a) - s 223(d) of the FWA.
97 Section 585 of the FWA provides that an application to the FWC must be made in accordance with the procedural rules. The requisite procedural forms (Form F16, Form F17 and Form F18) are predominantly ‘tick a box’ forms with the ability to provide additional information. Section 586 of the FWA enables the FWC to allow a correction or amendment of any application on terms it considers appropriate. Section 587(1)(a) of the FWA enables the FWC to dismiss an application that is not made in accordance with the FWA.
98 Section 604 of the FWA provides that while a decision under div 4, pt 2 - 4 of the FWA cannot be varied or revoked by the FWC, it can be appealed or reviewed under s 607 of the FWA by the FWC, and, relevantly, quashed or varied or a further decision made or the FWC member be required to deal with the subject matter of the decision. Notably:
(1) a person who is aggrieved by the decision of the FWC may apply to appeal or review the decision; and
(2) section 604(2) of the FWA does not limit the reasons for permission for an appeal or review, but the FWC must grant permission if it is in the public interest for an appeal or review.
99 Pending the outcome of an appeal or review, the FWC may order all or part of a decision be stayed: s 606(1) of the FWA.
100 Section 608 of the FWA enables questions of law to be referred to the Federal Court of Australia. However, the FWC can continue to make a decision even if a question of law is referred, although the FWC must then vary a decision if the opinion of the Federal Court of Australia is inconsistent with the decision.
101 In my view, the combined effect of these provisions indicates that a purportedly invalid enterprise agreement has legal consequences and is not utterly without existence or effect in law. By way of example, a question of law referred to the Federal Court of Australia does not defer decision making by the FWC, suggesting that a purportedly legally invalid decision may continue to have some effect in the meantime. Further, a person aggrieved, not necessarily an employee, employer, or employee organisation, may appeal a decision of the FWC, again suggesting that a purportedly legally invalid decision may continue to have some effect in the meantime. That is, the effect of a decision by the FWC, whether valid or invalid, is not necessarily paused pending another outcome.
102 It is difficult to imagine it was intended that one party to an employment relationship, or perhaps no party, but some other person, decides an otherwise approved enterprise agreement is invalid, and, without more, the terms of the enterprise agreement can be disregarded or subject to uncertainty. This scenario could substantially undermine business efficacy and employee entitlements unless determined by an appropriate forum.
Third reason
103 Employers and employees want certainty as it relates to employment. The Union refers to the parties arranging their practical affairs in compliance with their rights and obligations under an enterprise agreement. Further to that, as acknowledged by both parties the object of the FWA is to ‘provide a balanced framework for cooperative and productive … relations that promotes national economic prosperity and social inclusion for all Australians’ [in a number of ways as outlined in s 3 of the FWA].
104 In addition, the objects of enterprise agreements, as specified in s 171 of the FWA, are, amongst other things, ‘to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level’ and to ensure ‘that applications to the FWC for approval of enterprise agreements are dealt with without delay’.
105 Reliance is placed on the terms of an enterprise agreement by both the employer and the employees. For one party to thereafter decide that a previously approved enterprise agreement is not valid potentially undermines this certainty and the bargaining that may have been undertaken, particularly if the invalidity is of a minor or technical type. Again, this could substantially undermine business efficacy and employee entitlements.
106 By way of example, and as a corollary of the example by MWP, if an employer part way through an approved enterprise agreement decides the agreement is invalid (for whatever reason), without more, it could arguably seek to recover payments made or terminate entitlements that it says it is no longer obliged to give. It is difficult to reconcile this position with the objects of the FWA and the potential injustice suffered by innocent persons (in this example, employees) if one party could determine entitlements contrary to the approval of an enterprise agreement.
Outcome
107 Until such time as EA 2017 is set aside, quashed or terminated it continued to operate to give certainty to the Included Group and, albeit on a limited but important basis, some certainty to the Excluded Employees. At any time leading up to, but certainly at the same time as EA 2018 was approved by the FWC, an application could have been made to terminate EA 2017. This may have been overlooked by the parties and the FWC or, as was the case, the parties proceeded on the common understanding that EA 2017 had no effect. This position was later reneged on by the Union.
108 It is understandable MWP wanted to correct a genuine mistake by negotiating EA 2018 in place of EA 2017. It is further understandable that MWP is aggrieved where the Union in an arguably egregious, and perhaps morally repugnant manner, is now going back on the common understanding and making a claim under EA 2017 for the very employees EA 2018 was designed to assist (and subject of extensive bargaining before the FWC). Further, the Union seeks a civil penalty for an alleged breach of an agreement that it had a hand in approving. Whether this situation gives rise to an abuse of process was not fully argued and was not one of the preliminary questions for determination.
109 However, in my view, it was not open to the parties under the FWA regime to determine the approved EA 2017 no longer applied to MWP’s workforce without formalising what was, in fact, at the time only their respective, albeit combined, opinion.
110 To do so challenges the statutory regime in a manner that, in my view, was not intended under the FWA.
Preliminary Questions Answered
111 I accept EA 2017 was not validly made, in that MWP did not comply with the pre-approval requirements set out in s 180 of the FWA before putting EA 2017 to the vote to only the Included Group. However, the FWC was entitled to rely upon the information contained in the prescribed forms submitted as part of the application for approval of EA 2017 and form the requisite satisfaction that MWP had complied with s 180 of the FWA.
112 Upon receiving the application to approve EA 2017 and upon it being satisfied of the requirements in s 186 of the FWA (s 187 of the FWA not being relevant in this case), the FWC was required to approve EA 2017. Accordingly, based on the information before the FWC, EA 2017 was validly approved.
113 The application of EA 2017 to MWP and its employees is not necessarily dependent on the valid making or approval of EA 2017, but on its approval by the FWC. Once approved by the FWC, EA 2017 continued to apply until its nominal expiry date, or until set aside, quashed or terminated.



D. SCADDAN
INDUSTRIAL MAGISTRATE

Schedule 1 – Relevant Sections Of The Fair Work Act 2009 (Cth)
58 Only one enterprise agreement can apply to an employee
Only one enterprise agreement can apply to an employee
(1) Only one enterprise agreement can apply to an employee at a particular time.
General rule—later agreement does not apply until earlier agreement passes its nominal expiry date
(2) If:
(a) an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and
(b) another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and
(c) subsection (3) (which deals with a singleenterprise agreement replacing a multienterprise agreement) does not apply;
then:
(d) if the earlier agreement has not passed its nominal expiry date:
(i) the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and
(ii) the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or
(e) if the earlier agreement has passed its nominal expiry date—the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.
Special rule—singleenterprise agreement replaces multienterprise agreement
(3) Despite subsection (2), if:
(a) a multienterprise agreement applies to an employee in relation to particular employment; and
(b) a singleenterprise agreement that covers the employee in relation to the same employment comes into operation;
the multienterprise agreement ceases to apply to the employee in relation to that employment when the singleenterprise agreement comes into operation, and can never so apply again.
587 Dismissing applications
(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:
(a) the application is not made in accordance with this Act; or
(b) the application is frivolous or vexatious; or
(c) the application has no reasonable prospects of success.
Note: For another power of the FWC to dismiss an application for a remedy for unfair dismissal made under Division 5 of Part 32, see section 399A.
(2) Despite paragraphs (1)(b) and (c), the FWC must not dismiss an application under section 365 or 773 on the ground that the application:
(a) is frivolous or vexatious; or
(b) has no reasonable prospects of success.
(3) The FWC may dismiss an application:
(a) on its own initiative; or
(b) on application.
603 Varying and revoking the FWC’s decisions
(1) The FWC may vary or revoke a decision of the FWC that is made under this Act (other than a decision referred to in subsection (3)).
Note: If the FWC makes a decision to make an instrument, the FWC may vary or revoke the instrument under this subsection (see subsection 598(2)).
(2) The FWC may vary or revoke a decision under this section:
(a) on its own initiative; or
(b) on application by:
(i) a person who is affected by the decision; or
(ii) if the kind of decision is prescribed by the regulations—a person prescribed by the regulations in relation to that kind of decision.
(3) The FWC must not vary or revoke any of the following decisions of the FWC under this section:
(a) a decision under Part 23 (which deals with modern awards);
(b) a decision under section 235 or Division 4, 7, 9 or 10 of Part 24 (which deal with enterprise agreements);
(c) a decision under Part 25 (which deals with workplace determinations);
(d) a decision under Part 26 (which deals with minimum wages);
(e) a decision under Division 3 of Part 28 (which deals with transfer of business);
(f) a decision under Division 8 of Part 33 (which deals with protected action ballots);
(g) a decision under section 472 (which deals with partial work bans);
(h) a decision that is prescribed by the regulations.
Note: The FWC can vary or revoke decisions, and instruments made by decisions, under other provisions of this Act (see, for example, sections 447 and 448).
604 Appeal of decisions
(1) A person who is aggrieved by a decision:
(a) made by the FWC (other than a decision of a Full Bench or an Expert Panel); or
(b) made under the Registered Organisations Act by:
(i) the General Manager (including a delegate of the General Manager); or
(ii) the Registered Organisations Commissioner (including a delegate of the Commissioner);
may appeal the decision, with the permission of the FWC.
(2) Without limiting when the FWC may grant permission, the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.
Note: Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).
(3) A person may appeal the decision by applying to the FWC.
607 Process for appealing or reviewing decisions
(1) An appeal from, or a review of, a decision of the FWC, the General Manager or the Registered Organisations Commissioner may be heard or conducted without holding a hearing only if:
(a) it appears to the FWC that the appeal or review can be adequately determined without persons making oral submissions for consideration in the appeal or review; and
(b) the persons who would otherwise, or who will, make submissions (whether oral or written) for consideration in the appeal or review consent to the appeal or review being heard or conducted without a hearing.
(2) The FWC may:
(a) admit further evidence; and
(b) take into account any other information or evidence.
(3) The FWC may do any of the following in relation to the appeal or review:
(a) confirm, quash or vary the decision;
(b) make a further decision in relation to the matter that is the subject of the appeal or review;
(c) refer the matter that is the subject of the appeal or review to an FWC Member (other than an Expert Panel Member) and:
(i) require the FWC Member to deal with the subject matter of the decision; or
(ii) require the FWC Member to act in accordance with the directions of the FWC.