Construction, Forestry, Mining and Energy Union v Hamberger and Another

The Construction, Forestry, Mining and Energy Union (CFMEU) sought to challenge a decision of the Full Bench of Fair Work Australia (FWA) which approved an enterprise agreement between Newlands Coal Pty Ltd and its employees. The CFMEU argued that the agreement was invalid because it contained a clause that allowed employees who were initially covered by the agreement to later opt out of it. This dispute reached the Federal Court of Australia, where the CFMEU sought a writ of certiorari to quash the Full Bench's decision and a writ of mandamus to compel the Full Bench to redetermine the appeal. The central legal issues were whether the opt-out clause was consistent with the requirements of the Fair Work Act 2009 (Cth) and whether the Full Bench had correctly interpreted the "Better Off Overall Test" (BOOT) and the phrase "employees who will be covered by the agreement".

The court found that the Full Bench had correctly interpreted the provisions of the Fair Work Act and had not erred in its decision. The Full Bench held that the opt-out clause did not render the agreement invalid as long as the employees who were initially covered were fairly chosen and the employees who remained under the agreement would be better off overall. The court reasoned that the role of the Commissioner in approving the agreement was limited to determining whether a valid application had been made, which involved verifying that a majority of valid votes were cast. The court rejected the Commissioner's concern that the opt-out clause could lead to uncertainty about who would be covered by the agreement, stating that such uncertainty was not uncommon in enterprise agreements due to changes in employee numbers and operational changes. The court also clarified that the term "will" in the context of the agreement denoted an intention rather than a certainty, meaning that employees who made the agreement would be covered by it, although they might not remain so.

Ultimately, the Full Bench determined that the application for approval of the agreement should be granted, subject to certain undertakings. The Federal Court of Australia upheld the Full Bench's decision, affirming that the opt-out clause did not invalidate the agreement provided that the employees who remained under the agreement were better off overall. The court ordered that within seven days, the parties were to bring in short minutes giving effect to these reasons and any application for costs be made by notice of motion.