Manildra Flour Mills (Manufacturing) Pty Limited v National Union of Workers on Behalf of Craig Fahy and Ors

Manildra Flour Mills (Manufacturing) Pty Limited (the employer) brought an application to the Federal Court of Australia seeking to set aside an arbitration award made by Commissioner Platt of the Australian Industrial Relations Commission (AIRC). The award concerned a dispute between the employer and the National Union of Workers (the union) on behalf of its members, Craig Fahy and others, regarding the employer's decision to cease operations at its Port Kembla facility and transfer those operations to its Bomaderry facility. The union had sought and obtained an arbitration award from the AIRC, which directed the employer to reinstate the Port Kembla operations and to cease transferring the operations to Bomaderry.

The central legal issue before the Federal Court was whether the AIRC had the constitutional power to make the award it did. Specifically, the court was required to determine whether the award, which effectively compelled the employer to continue operating its Port Kembla facility and to cease transferring operations, was within the scope of the AIRC's jurisdiction under the *Workplace Relations Act 1996* (Cth) and the Australian Constitution. The employer argued that the award interfered with its managerial prerogative to determine the location of its business operations and that the AIRC had exceeded its powers by making such an order.

The Federal Court, comprising Hayne and Bell JJ, found that the AIRC had indeed exceeded its constitutional and statutory powers. Their Honours reasoned that the power to make an award under the *Workplace Relations Act 1996* (Cth) was limited to matters concerning the prevention or settlement of industrial disputes. While the AIRC could make orders regarding the consequences of a dispute, such as redundancy payments or the terms of retrenchment, it could not, in the absence of a specific legislative grant of power, compel an employer to continue or commence a particular business operation. The court held that the award in question went beyond the scope of preventing or settling an industrial dispute and amounted to an impermissible intrusion into the employer's fundamental right to manage its business.

The Federal Court ordered that the arbitration award made by Commissioner Platt be set aside.