Mid West Port Authority v Construction, Forestry, Maritime, Mining, and Energy Union
[2022] FCAFC 53
•5 April 2022
FEDERAL COURT OF AUSTRALIA
Mid West Port Authority v Construction, Forestry, Maritime, Mining, and Energy Union [2022] FCAFC 53
Appeal from: Construction, Forestry, Maritime, Mining, and Energy Union and Mid West Port Authority [2021] WAIRC 463 File number: WAD 209 of 2021 Judgment of: MORTIMER, BANKS-SMITH AND COLVIN JJ Date of judgment: 5 April 2022 Catchwords: INDUSTRIAL LAW - appeal from decision of Western Australian Industrial Magistrates Court - where enterprise agreement was approved by the Fair Work Commission - where following approval it was discovered that approximately 40% of employees to be covered by the enterprise agreement were not given an opportunity to vote for the enterprise agreement as part of the pre-approval process - whether magistrate erred in failing to conclude that the question of whether an agreement has been 'made' in accordance with s 182(1) is a jurisdictional fact the existence of which is necessary to enliven the Commission's power to approve an enterprise agreement - appeal dismissed Legislation: Fair Work Act 2009 (Cth) ss 52, 53, 54, 172, 180, 181, 182, 185, 186, 188, 565, Part 2-4 Cases cited: ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees Association [2017] HCA 53; (2017) 262 CLR 593
Attorney-General of the Commonwealth v Breckler [1999] HCA 28; (1999) 197 CLR 83
Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135
Director of Housing v Sudi [2011] VSCA 266; (2011) 33 VR 559
Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 607
Gedeon v Commissioner of the New South Wales Crime Commission [2008] HCA 43; (2008) 236 CLR 120
Jacobs v Onesteel Manufacturing Pty Ltd [2006] SASC 32; (2006) 93 SASR 568
National Union of Workers, New South Wales v HP Distribution Pty Ltd [2013] FCA 139; (2013) 210 FCR 250
Tsvetnenko v United States of America [2019] FCAFC 74; (2019) 269 FCR 225
Division: Fair Work Registry: Western Australia National Practice Area: Employment and Industrial Relations Number of paragraphs: 46 Date of hearing: 14 February 2022 Counsel for the Appellant: Mr Y Shariff SC with Mr A Pollock Solicitor for the Appellant: Herbert Smith Freehills Counsel for the Respondent: Mr M Gibian SC Solicitor for the Respondent: The Maritime Union of Australia ORDERS
WAD 209 of 2021 BETWEEN: MID WEST PORT AUTHORITY
Appellant
AND: CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION
Respondent
ORDER MADE BY:
MORTIMER, BANKS-SMITH AND COLVIN JJ
DATE OF ORDER:
5 APRIL 2022
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.There be liberty to apply on or before 12 April 2022 for any orders as to costs, such liberty to be exercised by filing a minute of the orders sought as to costs together with any necessary affidavit and submissions of no more than three pages.
3.Unless otherwise ordered, any application for costs orders shall be determined on the papers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
Part 2-4 of the Fair Work Act 2009 (Cth) provides for the making and approval of enterprise agreements that specify the terms and conditions that apply to employees covered by those agreements. Enterprise agreements do not operate unless and until they are approved by the Fair Work Commission (FWC). The Fair Work Act circumscribes the steps to be taken before an approval is sought for an enterprise agreement. It also requires an approval to be sought when an enterprise agreement is 'made' and specifies when an agreement is 'made'. The Fair Work Act requires the FWC to approve an enterprise agreement if it is satisfied that certain specified requirements are met. An enterprise agreement may be varied or terminated. A variation or termination of an enterprise agreement also must be approved by the FWC.
The 2017 enterprise agreement
In 2017, the FWC approved an enterprise agreement that was intended to cover certain employees of the Mid West Port Authority (MWP). After the approval, it was discovered that in certain respects (not advised to the FWC at the time the approval was obtained) the pre-approval steps taken in relation to the enterprise agreement did not conform to the requirements of the Fair Work Act. In consequence, in the order of 40% of the then employees proposed to be covered were not given an opportunity to vote on whether to approve the agreement. It may be safely assumed that if the FWC was aware of that circumstance at the time of the application to approve the 2017 enterprise agreement then it would not have given its approval.
When MWP and the bargaining representative for the employees, the Construction, Forestry, Maritime, Mining and Energy Union (Union), became aware of the issue, they entered into negotiations for a new enterprise agreement which culminated in the approval by the FWC of a new enterprise agreement in 2018. It appears that MWP and the Union took those steps because of their shared view, at that time, that the 2017 enterprise agreement was not valid by reason of the circumstances in which it was made. There were communications to that effect to the FWC when approval was sought for the 2018 enterprise agreement. However, the 2017 enterprise agreement was not terminated in accordance with the provisions of the Fair Work Act.
The Union has pursued claims for overtime payments under the terms of the 2017 enterprise agreement on behalf of seven employees of MWP. It has also sought the payment of civil penalties. Those claims have been brought in the Western Australian Industrial Magistrates Court (WAIMC). MWP responded to those claims by maintaining that the 2017 enterprise agreement was invalid either (a) because it was not made in accordance with the provisions of the Fair Work Act and therefore could not be validly approved by the FWC; or (b) the FWC could not have properly formed the requisite state of satisfaction under the Act that the enterprise agreement had been 'genuinely agreed' which also meant that the approval by the FWC was invalid.
Section 182(1) of the Fair Work Act provides that an enterprise agreement like the 2017 enterprise agreement is 'made' when a majority of those employees that will be covered by the agreement cast a valid vote to approve the agreement.
Determination of preliminary questions by the magistrate
Orders were made by WAIMC for the determination of three questions as preliminary issues. They were to the following effect:
(1)Was the 2017 enterprise agreement validly made in accordance with s 182(1) of the Fair Work Act?
(2)Was the 2017 enterprise agreement validly approved by the FWC?
(3)If the answer to (1) and (2) is no, is the consequence of an invalidly made or approved 2017 enterprise agreement that it does not apply to MWP, the Union or the seven employees?
The learned industrial magistrate reached the following conclusions (at [111]-[113] of the magistrate's reasons) (referring to those who were invited to vote on whether to approve the enterprise agreement as the Included Group):
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.
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 information before the FWA, EA 2017 was validly approved.
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.
(original emphasis)
The grounds of appeal
MWP now brings an appeal against the decision of the magistrate. The appeal is brought pursuant to s 565 of the Fair Work Act. Three grounds are advanced. They are to the following effect:
(1)The magistrate erred by failing to decide whether the FWC lacked jurisdiction to deal with the application to approve the 2017 enterprise agreement.
(2)Alternatively to (1), the magistrate failed to give adequate reasons for concluding that the FWC had jurisdiction.
(3)Having found that the 2017 enterprise agreement was not validly made within the meaning of s 182(1), the magistrate erred in concluding that a valid application to the FWC for approval of an enterprise agreement was not dependent upon the agreement having been validly made and therefore the 2017 enterprise agreement continued to apply until its nominal expiry or until set aside, quashed or terminated.
Ground (1) alleges a failure to decide the point advanced by Ground (3). Ground (2) alleges a failure to give adequate reasons for concluding that the FWC did have jurisdiction. Therefore, the real point in the appeal is that expressed in Ground (3). It relies on the undisputed finding by the magistrate that the 2017 enterprise agreement was not 'made' in the manner provided for in Part 2-4. In short, the claim by MWP is that (a) the FWC's authority to approve depended upon the existence of an enterprise agreement that had been 'made' in accordance with Part 2‑4; (b) the 2017 enterprise agreement had not been 'made' in conformity with the pre-approval provisions of the Fair Work Act; and (c) therefore, the approval of the 2017 enterprise agreement was beyond the jurisdiction of the FWC and invalid.
It should be noted that the Fair Work Act does not in terms provide for the manner in which an enterprise agreement must be 'made'. Rather, it specifies certain pre-approval steps that must be taken (being steps concerned with disclosing the terms of a proposed agreement and the taking of a vote to approve of the agreement or the signing of the agreement) and then specifies that the agreement is 'made' when the concluding steps have been taken. It then requires approval to be sought when an agreement is 'made'. These matters are considered further below.
At certain points in its submissions, the case for MWP flirted with propositions to the effect that the magistrate ought to have concluded that the FWC's approval was invalid by reason of reviewable error in the content of the reasoning by the FWC (in the way that a court on an application for review for alleged jurisdictional error might so conclude). However, ultimately it was accepted that the claim to that effect depended upon a contention that on the facts as they objectively existed (rather than as known to the FWC when it approved the 2017 enterprise agreement) there was error in the way the FWC approached its deliberative task because it could not approve what was said to be an enterprise agreement that was 'invalidly made'. Therefore, in the result, the case reduced to the single proposition that the magistrate ought to have concluded that the FWC's approval was invalid because the 2017 enterprise agreement had not been 'made' in the required manner. Consequently, it is not necessary to consider whether MWP, in the proceedings before the magistrate, could mount a collateral attack upon the approval based upon a complaint about the way the FWC reasoned to its conclusion to approve the 2017 enterprise agreement.
Otherwise, both parties proceeded on the basis that collateral review of the validity of the 2017 enterprise agreement of the kind asserted by MWP could be sought in the proceedings before the magistrate. There is support for such an approach: Attorney-General of the Commonwealth v Breckler [1999] HCA 28; (1999) 197 CLR 83 at [94] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ); Jacobs v Onesteel Manufacturing Pty Ltd [2006] SASC 32; (2006) 93 SASR 568; and Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 607 at [30] (Besanko J); see also the consideration of the authorities in a different context in Director of Housing v Sudi [2011] VSCA 266; (2011) 33 VR 559. However, the extent to which there may be collateral review before the magistrate depends upon the nature of the jurisdiction being exercised by the magistrate and the nature of the authority to approve entrusted to the FWC.
As we are of the view that the contention by MWP should not be accepted (see below), it is not necessary to form a concluded view as to the extent to which, if at all, it is appropriate for a collateral attack on the validity of an enterprise agreement to be brought in the course of proceedings before an industrial magistrate to enforce an approved enterprise agreement.
MWP's case alleges a jurisdictional fact
MWP's case depends entirely upon the proposition that the FWC has no jurisdiction unless there exists objectively an enterprise agreement that has been 'made' in conformity with the relevant pre-approval steps provided for in the Fair Work Act. It is a claim that such conformity is a 'jurisdictional fact'. As explained by the High Court in Gedeon v Commissioner of the New South Wales Crime Commission [2008] HCA 43; (2008) 236 CLR 120 at [43], the expression jurisdictional fact is generally used 'to identify a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question. If the criterion be not satisfied then the decision purportedly made in exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker'.
It is a question of statutory construction as to whether an evaluation that must be undertaken in order to determine whether a statutory power arises is entrusted to the repository of the power or whether it is a precondition that must be satisfied before the jurisdiction of the repository is enlivened: Tsvetnenko v United States of America [2019] FCAFC 74; (2019) 269 FCR 225 at [28] (Besanko, Banks-Smith and Colvin JJ). Where a matter is a jurisdictional fact, it is a matter for the court to determine whether the relevant criterion is satisfied: Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135 at [48] (Gleeson CJ, Gummow, Kirby and Hayne JJ).
The key statutory provisions
In considering whether to approve an enterprise agreement such as the 2017 enterprise agreement, the FWC is performing the statutory duty entrusted to the FWC by s 186(1) which is expressed in the following terms:
If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
The requirements set out in s 186(1) include that the FWC must be satisfied that 'the agreement had been genuinely agreed to by the employees covered by the agreement': s 186(2)(a).
The Fair Work Act specifies in considerable detail what is meant by the term 'genuinely agreed'. In that regard, s 188 provides:
(1)An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a)the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i)subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii)subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b)the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c)there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(2)An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a)the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b)the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
(non-italicised emphasis added)
Again the language used refers to a state of satisfaction on the part of the FWC as to the matters listed. It requires an evaluative task to be undertaken, on the basis of evidence, as part of the process of determining whether to approve the enterprise agreement.
Therefore, when an application is made to the FWC to approve an enterprise agreement, a significant part of the deliberative task to be undertaken by the FWC is to determine whether it is satisfied that the employer covered by the agreement complied with the various pre-approval provisions of the Fair Work Act including that the agreement 'was made in accordance with' s 182.
Returning to s 186, there are a number of other matters about which the FWC must be satisfied if an approval is required to be given under s 186(1). They include that the agreement passes the better off overall test, that the group of employees covered by the agreement is fairly chosen and that the agreement includes a term about settling disputes. These other matters could not be said to be jurisdictional in character. The authority of the FWC to approve the enterprise agreement does not depend upon the employees covered being fairly chosen or the agreement passing the better off overall test. Those aspects of the provision plainly entrust to the FWC a jurisdiction to form the required state of satisfaction as to those matters. The validity of an approval that was given after the FWC formed that state of satisfaction could not be challenged by inviting the Court to make its own findings of fact, but only by way of judicial review, as to matters such as whether the employees had been fairly chosen or the agreement passed the better off overall test.
Indeed, the terms in which s 186 and the incorporated explanation of what is meant by 'genuinely agreed' in s 188 are expressed do not suggest that any of the matters about which the FWC must be satisfied must objectively exist before the FWC considers whether to approve or even that the FWC's state of satisfaction about any of those matters is a pre-condition to the FWC considering whether to approve.
The submissions for MWP focussed upon the provisions in Fair Work Act that were concerned with when an application for approval of an enterprise agreement must be made as well as the definition of the term 'enterprise agreement'. MWP claimed that the FWC's power to approve only applied when an agreement has been 'made', being an expression used in s 182.
The Act not only provides for approval, it requires the making of an application for an approval. Section 185(1) provides that if an enterprise agreement 'is made', a bargaining representative must apply to the FWC for approval of an enterprise agreement. Usually, the application must be made within 14 days of the agreement being 'made', although the FWC has power to extend that period in some circumstances: s 185(3) and (4). As has been noted, s 182(1) provides that for an enterprise agreement like the 2017 enterprise agreement, 'the agreement is made when a majority of those employees who cast a valid vote approve the agreement' (original emphasis). Expressed in those terms, it is specifying the point in time when the agreement is made thereby triggering the obligation to seek approval.
The terms of s 185 and s 182 would be an obscure way to provide for a jurisdictional fact of the kind alleged. They do not specify a condition that must be met before there can be an approval. Rather, they are focussed upon requiring an application for an approval to be sought. The making of the agreement is the event that gives rise to that obligation. Indeed, the pre‑approval process to be followed before an agreement is 'made' is specified in other provisions: see s 180 and s 181. Notably, the FWC must be satisfied that those provisions have been complied with as part of its evaluation as to whether the enterprise agreement has been 'genuinely agreed to': s 188(1)(a).
There is no express provision that the application to seek approval is to be brought only when the pre-approval steps have been completed. Nor is the FWC to determine whether that is in fact the case. Rather, the approval task entrusted to the FWC is to evaluate whether it is satisfied, on the basis of material put before it, that the pre-approval steps have been undertaken. If the FWC is satisfied that the agreement has been 'genuinely agreed' and is also satisfied as to the other matters listed in s 188 (such as that the agreement passes the better off overall test and includes a provision to settle disputes) then the FWC must approve the agreement.
Reasons for rejecting claim by MWP of a jurisdictional fact
As has been noted, the argument advanced by MWP is that the FWC has no jurisdiction at all to approve an agreement unless the Court objectively determines itself that the agreement was made in conformance with the pre-approval steps or at least the aspects of those steps that require participation by employees who are proposed to be covered by the enterprise agreement. On that argument, there is no operative deliberative task for the FWC to undertake concerning those steps. It does not matter what its state of satisfaction may be concerning compliance. Any view that it forms may be overtaken by asking a court to substitute its own findings. An approval of an enterprise agreement would always be subject to a claim that the precondition did not objectively exist. The FWC would have no authority to approve unless the very matter about which it must be 'satisfied' has actually happened.
Within the context of provisions that make the operation of an enterprise agreement dependent upon approval by the FWC with such approval being dependent upon the state of satisfaction of the FWC about various matters including the pre-approval process, the provisions of the FWC specifying the pre-approval process are simply stating the matters about which, in due course, the FWC must be satisfied in order for the enterprise agreement to be approved. There is no additional statutory requirement beyond satisfaction of the FWC. The Act does not state that the relevant matters must both have occurred in fact and also that the FWC must be satisfied that they have occurred. Such a construction would render the state of satisfaction of the FWC as to such matters redundant and would undermine the effectiveness of the approval. It would expose all enterprise agreements to the uncertainty of future collateral challenge. At any point in which an enterprise agreement was sought to be enforced, there would be the possibility that a party would return to the circumstances in which the agreement was 'made' and claim that the approval was invalid.
Many provisions of the Fair Work Act concern the obligations of parties to give effect to the terms of an enterprise agreement. Enforcement of those provisions would also invite the possibility of collateral attack. In short, one aspect of the evident purpose of the approval process, which is to determine that an enterprise agreement that has been made has the status of an operative enterprise agreement would be substantially frustrated.
As has been noted, there is no aspect of the language of the relevant provisions that manifests an intention to qualify the effectiveness of the approval in that manner. The fact that it would frustrate the purpose of the approval is also against MWP's claim.
The case for MWP sought to make much of the manner in which the term 'enterprise agreement' is defined in the Fair Work Act. It is defined to mean a single-enterprise agreement or a multi-enterprise agreement. Those terms, in turn, are defined as an enterprise agreement 'made as referred to in' s 172(2) and s 172(3) respectively. Section 172 provides that an agreement (described as an enterprise agreement) that is about certain specified matters may be made in accordance with Part 2-4. Significantly, these definitional provisions do not state that an enterprise agreement is one that is made 'in accordance with' the pre-approval provisions upon which MWP relies. The use of the language 'as referred to in' supports the view that in order for an enterprise agreement to be made in accordance with Part 2-4, what it requires is the approval of the FWC, an outcome that depends on the state of satisfaction of the FWC. Part 2‑4 does not require, in addition, that the same matters in respect of which the FWC must be satisfied are also established in fact (that is, to the satisfaction of a Court as a jurisdictional fact on which the validity of the approval depends).
Therefore, if the process of making the agreement has reached the point where a vote has been taken by employees and a majority of those who cast a valid vote approved the agreement then s 185(1) requires a bargaining representative to apply to the FWC for approval. Views may differ as to whether the pre-approval requirements in s 180 have been met. Views may differ as to whether the 21 day period specified in s 181 has elapsed. What the Act requires is that the application be made if the vote has been taken. Evidence and other materials will then be placed before the FWC so that it can form its own opinion about these matters. This ensures that any issues about the manner in which the enterprise agreement was made are scrutinised by the FWC. It entrusts to the FWC authority to resolve such issues and establish, through the approval process, whether the enterprise agreement is one that will operate in accordance with the legislation.
In that regard, s 52 provides that an enterprise agreement applies to an employee, employer or union if the agreement 'is in operation'. Section 53 provides that an enterprise agreement covers an employee or employer if it is expressed to cover the employee or employer. Section 54 provides that an enterprise agreement approved by the FWC 'operates' from seven days after the agreement is approved (or any later date specified in the agreement).
The coverage of an enterprise agreement does not depend upon its approval and subsequent operation. An enterprise agreement can cover an employee even though it does not yet apply to the employee: ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees Association [2017] HCA 53; (2017) 262 CLR 593 at [25] (Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ). Therefore, it is possible to identify and refer to the coverage of an enterprise agreement at a time before the agreement is approved.
However, the position in relation to coverage does not alter the plain expression in the Fair Work Act of the position that the operation of an enterprise agreement is dependent upon approval. There is no operative enterprise agreement unless and until it has been approved by the FWC. For that reason, when it comes to the enforceability of an enterprise agreement, it is inapt to inquire whether an enterprise agreement has been validly made at some point before it has been approved. The enforceability of the agreement does not depend upon it having some status prior to its approval which might be described as 'valid'. Enforceability depends upon approval and approval depends upon the state of satisfaction of the FWC as to various matters including whether the agreement has been 'genuinely agreed to by the employees'. The legislation gives no significance to whether, in fact, the agreement has been made in accordance with s 182 or there has been compliance with other provisions of the Fair Work Act that deal with the process for making an enterprise agreement. The operation of an enterprise agreement does not depend upon any view that the Court may take about the way the agreement was made. Rather, the Fair Work Act entrusts the relevant authority to the FWC. Upon approval by the FWC (and the passing of the required number of days after approval) the enterprise agreement is in operation.
Finally, MWP placed reliance upon the reasoning of Rares J in National Union of Workers, New South Wales v HP Distribution Pty Ltd [2013] FCA 139; (2013) 210 FCR 250. In that case, the National Union of Workers (NUW) challenged the validity of an approval of a greenfields agreement. It claimed that the agreement as approved was not a greenfields agreement within the meaning of s 172 of the Fair Work Act. It claimed that the Full Bench of the FWC in approving a greenfields agreement could not conclusively determine that issue: at [23]. NUW submitted that 'the Commission’s power to approve a greenfields agreement depended on the existence of a jurisdictional fact, namely that the agreement met the statutory criteria in s 172(2)(b)': at [24].
Rares J upheld the claim by NUW. In doing so, his Honour held at [29]:
In my opinion, the Commission could only approve an agreement as a greenfields agreement under ss 186(1) and 187(5) if the document satisfied the requirements of s 172(2)(b) or 172(3)(b). That is, the actual existence of the facts necessary for an agreement to meet the statutory criteria for a greenfields agreement was a jurisdictional fact necessary to ground the Commission’s power to approve it. If the agreement were not of that nature, then the only enterprise agreement that the employer could make was one under s 172(2)(a).
It can be seen that the decision in National Union of Workers, New South Wales v HP Distribution Pty Ltd was concerned with a different point. In the present case no issue is raised as to whether the agreement as approved was an enterprise agreement that had the characteristics of the kind of enterprise agreement that might be approved. The 2017 enterprise agreement was unquestionably an agreement of a kind that could be approved. Where an agreement is said to lack the character of something that is capable of being approved, a different question arises. Even if the pre-approval procedures for making an enterprise agreement are followed precisely, the FWC by approving the agreement cannot give it the requisite character if indeed the agreement is not an enterprise agreement of the kind described in s 172. To take an extreme example, an agreement that provided for the terms upon which a labour hire company may provide workers to a particular business would not become an enterprise agreement because the pre-approval steps are taken and it is approved by the FWC.
For those reasons, the decision in National Union of Workers, New South Wales v HP Distribution Pty Ltd does not assist MWP.
It was submitted that the fact that a substantial cohort of employees had been left out of the voting process meant that the approval decision was outside the jurisdiction conferred upon the FWC. The submissions to that effect invited the Court to conclude that the magistrate should have found, in effect, that the FWC had no authority to approve an enterprise agreement if (on facts subsequently discovered) it might be said that it was obvious that the approval should not have been given. However, for reasons that have been given, the authority of the FWC to approve depended only upon the making of the application (which was required to be made once the vote was taken in fact) and the formation of the required state of satisfaction on the evidence and material before the FWC. It would undermine the scheme of the Act if it might be said that the extent of the authority to validly approve depended upon what might be discovered at a later date about the matters about which the FWC was required to be satisfied. Putting to one side issues of active concealment from the FWC which would give rise to different questions, the scheme for approval would be undermined if the extent of the authority conferred upon the FWC was qualified in the manner submitted by MWP.
No doubt there are cases where different views may be formed as to whether the pre-approval provisions have been complied with. No doubt there are instances, likely to be rare, where not all the relevant facts are presented to the FWC when approval is sought. However, the procedures of the FWC (including the availability of an appeal to a Full Bench) are a significant protection against such occurrences. There are also the provisions that allow for variation or termination of an enterprise agreement as well as the statutory limit on how long an enterprise agreement may operate (four years).
The Act depends upon the certainty afforded by the FWC's approval. In order to afford certainty, the evaluative power entrusted to the FWC to determine whether the relevant matters are established to its satisfaction must be determinative. That is why the Fair Work Act requires an application for approval to the FWC and provides for the operation of an enterprise agreement once the approval has been given. The provisions specifying when an agreement has been 'made' establish the point in time when approval must be sought. They do so by reference to the occurrence of the events specified in s 182 (relevantly for present purposes the taking of the vote). The making of a valid application for approval does not depend upon objectively ascertained compliance with the pre-approval procedures. Rather, the evaluation whether there has been such compliance is entrusted to the FWC and it is the state of satisfaction as to those matters, on the evidence presented to the FWC, that determines whether the approval is given and the enterprise agreement commences to operate.
It follows that in order to demonstrate jurisdictional error in the decision of the FWC it would be necessary to demonstrate some respect in which the formation of the required state of satisfaction did not conform to the statutory requirement (such as proceeding on a misunderstanding of the meaning of the statutory provisions about which it was forming the required state of satisfaction concerning compliance or legal unreasonableness). As has been noted, we express no view as to whether a collateral review of that character might be able to be advanced before a magistrate in the course of proceedings to enforce an approved enterprise agreement.
Fundamentally, the case for MWP proceeds upon a false premise, namely that there is some form of validity or invalidity that may arise at the time the enterprise agreement is made. The Fair Work Act neither deploys nor invokes a concept of that character. The operation of enterprise agreements depends upon the approval of the FWC sought and obtained. The approval itself depends upon the state of satisfaction of the FWC as to various matters. Indeed, if the FWC is satisfied as to those matters it must approve. Approval (and consequent operative effect) for an enterprise agreement is a consequence of the state of satisfaction of the FWC. It is not the consequence of some view that might be taken by a Court as to whether there should be an approval or whether, objectively, a Court is persuaded that the matters about which the FWC must form the required state of satisfaction do exist. All the more so, a view formed by the magistrate about whether the relevant pre-approval requirements have been met. Approval depends upon the state of satisfaction of the FWC formed at the time of the application for approval not upon some subsequent view formed by the magistrate.
For the same reasons, submissions by MWP to the effect that there was an invalid application to approve or that the FWC was asked to approve an agreement that was not 'made' or that the statutory force was being given to a contravening instrument are misconceived. The 'validity' of an enterprise agreement depends upon the approval of the FWC which, in turn, depends upon whether it is satisfied as to the matters specified in s 186 including that the employees have genuinely agreed to its terms. Therefore, the first of the questions posed for consideration by the magistrate was misdirected. It proceeded upon the false premise that there was a status to be afforded to an enterprise agreement at the time it was 'made' that might be described in terms of validity. The use of that language suggested (wrongly) that an enterprise agreement that had been made might have some legal status beyond its occurrence as a factual event that triggered the obligation to make an application for approval. Nevertheless, the ground advanced by MWP as to why the ultimate resolution of the preliminary issues was in error has not been made out for the reasons that have been given. It follows that error has not been demonstrated in the ultimate conclusion by the magistrate which was to the effect that the circumstances in which the agreement was 'made' do not lead to the conclusion that the 2017 enterprise agreement does not apply to MWP, the Union or the seven employees.
Conclusion
For those reasons, the appeal should be dismissed. There should be liberty to apply for any order as to costs with the liberty to be exercised by filing a minute of the costs order sought together with any necessary affidavit and submissions of no more than three pages. Unless otherwise ordered, any application for costs orders will be dealt with on the papers.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Mortimer, Banks-Smith and Colvin. Associate:
Dated: 5 April 2022
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