FEDERAL COURT OF AUSTRALIA MI&E Holdings Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2015] FCAFC 15 Citation: MI&E Holdings Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2015] FCAFC 15 Appeal from: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and others v MI&E Holdings Pty Ltd [2013] FWCFB 2142 Parties: MI&E HOLDINGS PTY LTD v COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA, CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS' UNION and FAIR WORK COMMISSION File number: WAD 199 of 2013 Judges: BESANKO, BUCHANAN AND BARKER JJ Date of judgment: 24 February 2015 Catchwords: INDUSTRIAL LAW – application for judicial review of a decision of the Full Bench of the Fair Work Commission ("FWC") – where the Full Bench set aside a decision of a Deputy President approving an enterprise agreement – whether the group of employees covered by the agreement was fairly chosen under s 186 of the Fair Work Act 2009 (Cth) – whether the agreement was validly made – whether enterprise agreement expressed to cover employees covered by an existing greenfields agreement – whether existing greenfields agreement ceased to apply Legislation: Fair Work Act 2009 (Cth), ss 3(f), 51, 52, 52(1)(b), 53, 53(1), 54, 54(3), 58, 58(2), 58(2)(a), 171, 171(a), 172, 172(2), 172(2)(a), 172(2)(b), 172(4), 172(6), 180(2), 181(1), 182(1), 186, 186(1), 186(2), 186(3), 186(3A), 187, 578(a), 604, 607(3)(a) Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Sch 3 Items 2, 30(2) Cases cited: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and others v MI&E Holdings Pty Ltd [2013] FWCFB 2142 MI&E Holdings Pty Ltd re MI&E Holdings Pty Ltd Western Division Enterprise Agreement 2012 [2012] FWAA 9791 Re MI&E Holdings Pty Ltd [2012] FWA 9503 Date of hearing: 11 August 2014 Place: Perth Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 52 Counsel for the Applicant: Mr KM Pettit SC Solicitor for the Applicant: Kelly Hazell Quill Lawyers Counsel for the First, Second and Third Respondents: Mr MT Ritter SC Solicitor for the First, Second and Third Respondents: WG McNally Jones Staff Lawyers Counsel for the Fourth Respondent: The fourth respondent submitted save as to costs IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION WAD 199 of 2013 ON APPEAL FROM THE FAIR WORK COMMISSION BETWEEN: MI&E HOLDINGS PTY LTD Applicant AND: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Second Respondent AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS' UNION Third Respondent FAIR WORK COMMISSION Fourth Respondent JUDGES: BESANKO, BUCHANAN AND BARKER JJ DATE OF ORDER: 24 February 2015 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The application be allowed. 2. A writ in the nature of certiorari issue quashing the decision by the Full Bench of the Fair Work Commission dated 11 April 2013, in the matter of Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and others v MI&E Holdings Pty Ltd [2013] FWCFB 2142. 3. A writ in the nature of mandamus issue directing the Fair Work Commission to hear and determine according to law the appeal filed by the first, second and third respondents on 23 November 2012. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION WAD 199 of 2013 ON APPEAL FROM THE FAIR WORK COMMISSION BETWEEN: MI&E HOLDINGS PTY LTD Applicant AND: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Second Respondent AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS' UNION Third Respondent FAIR WORK COMMISSION Fourth Respondent JUDGES: BESANKO, BUCHANAN AND BARKER JJ DATE: 24 february 2015 PLACE: PERTH REASONS FOR JUDGMENT BESANKO J: 1 I have had the advantage of reading in draft the reasons for judgment of Buchanan J. I agree with those reasons and with the orders which his Honour proposes. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate: Dated: 24 February 2015 IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION WAD 199 of 2013 ON APPEAL FROM THE FAIR WORK COMMISSION BETWEEN: MI&E HOLDINGS PTY LTD Applicant AND: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Second Respondent AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS' UNION Third Respondent FAIR WORK COMMISSION Fourth Respondent JUDGES: BESANKO, BUCHANAN AND BARKER JJ DATE: 24 february 2015 PLACE: PERTH REASONS FOR JUDGMENT BUCHANAN J: The application to this Court 2 The present application is brought in the original jurisdiction of the Court. It seeks orders of certiorari and mandamus against the Fair Work Commission ("the FWC"), arising from a decision of a Full Bench of the FWC on an appeal from a member of the FWC (Deputy President McCarthy). 3 Deputy President McCarthy approved an enterprise agreement made by the applicant and four of its employees. He did so in two stages. First, for reasons given in a "Decision" dated 6 November 2012 ([2012] FWA 9503), Deputy President McCarthy decided that the enterprise agreement should be approved if stipulated undertakings were given. Secondly, by a "Decision" dated 19 November 2012 ([2012] FWAA 9791), Deputy President McCarthy approved the enterprise agreement which (as he there recorded) commenced to operate seven days thereafter (Fair Work Act 2009 (Cth) ("the FW Act"), s 54). The union respondents challenged the 6 November 2012 decision on appeal to the Full Bench. The Full Bench granted permission to appeal (FW Act, s 604), allowed the appeal and quashed Deputy President McCarthy's decision (FW Act, s 607(3)(a)). No separate appeal appears to have been brought (at least in a formal way) against the approval decision itself. 4 The ground for the present application is that the Full Bench made a jurisdictional error (or errors) so that its decision should be set aside. If that case is established it would follow that the appeal against the decision of Deputy President McCarthy remains outstanding (putting aside any procedural limitation on the appeal). 5 In my view, a case of jurisdictional error has been established. I shall return to the procedural aspects in due course. Background facts 6 The applicant is an electrical construction and maintenance contractor. Some of its operations are in Western Australia. The work which it undertakes is largely project based. Deputy President McCarthy referred to some of the evidence before him, given as an explanation for the terms of the enterprise agreement in question , in these terms: [21] The business initiative of MIE in WA was to move away from project only based employment to employing a permanent workforce and looking at continuous short term contracts and work which could be performed by MIE employees. The aim was to employ this permanent workforce on projects and bring them back into the Bibra Lake workshop for short periods of time in between projects. [22] MIE thus established a facility and yard in Bibra Lake which was able to accommodate a small permanent workforce at the facility for short periods of time performing pre-fabrication work, along with testing and tagging and project support. The Manager Mr Lou Lazzari thus sought to have rates and conditions to be able to employ employees for this work and to have a permanent workforce that he could deploy at different sites and if there wasn't any work at other sites to be able to that [sic] bring them back to Bibra Lake. [23] MIE had greenfields agreements that were in operation at the time of making the Agreement, at two different projects. Those projects were the Shenton Park Project and the Worsley Project. MIE explained that employees at those projects were not included as the work was nearing completion at the time of making the Agreement and the expectation was that they would soon finish their employment with MIE. 7 Only four employees were then employed who would be within this proposed workforce. However, the applicant proposed terms for the enterprise agreement which would accommodate its commercial objectives into the future. The applicant drafted a proposal which included over 70 classifications and requested the four employees to approve it. After the agreement was made, and by the time of the proceedings before Deputy President McCarthy, a further 200 persons had been employed in various classifications. 8 Those circumstances, amongst others, led the union respondents to argue that the "group of employees" covered by the agreement was not "fairly chosen". For reasons which will become clear it is not necessary in the present case to deal with this contention, except as part of the background to the present application. 9 Deputy President McCarthy rejected the argument that the group of employees covered by the agreement was not fairly chosen. The Full Bench appeared to uphold the point, although as will be seen, a good deal of reasoning in the Full Bench decision seemed to involve the anterior, and different, question of whether the enterprise agreement was validly made because a large number of employees who would be covered by it were given no opportunity to vote on whether it should be made. The legislative scheme 10 Under s 172 of the FW Act an enterprise agreement may be made either with employees or with an employee organisation (or organisations). Different requirements apply to each situation. An agreement may only be made with an employee organisation if the agreement relates to "a genuine new enterprise" and no employees necessary for the normal conduct of the new enterprise have yet been employed (s 172(2)(b)). Such an agreement is known as a "greenfields agreement" (s 172(4)). The agreement in the present case was not a greenfields agreement. 11 An agreement which is not a greenfields agreement must be made with employees who are employed at the time the agreement is made who will be covered by the agreement (s 172(2)(a)). Such an agreement may now be made only with two or more employees (s 172(6)) and it may be made with two or more employers. At the time, it was not inconsistent with the statutory scheme to make an agreement with four employees. 12 Section 53 of the FW Act dictates when an enterprise agreement will "cover" an employee. Section 52 of the FW Act states when an enterprise agreement "applies" to an employee. 13 It follows from the legislative arrangements that an employee might be covered by the terms of more than one agreement. The legislative arrangements, however, do not permit more than one such agreement to apply to the employee at the same time (s 58). 14 Sections 51, 52 and 53 of the FW Act provide: 51 The significance of an enterprise agreement applying to a person (1) An enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person. (2) An enterprise agreement does not give a person an entitlement unless the agreement applies to the person. 52 When an enterprise agreement applies to an employer, employee or employee organisation When an enterprise agreement applies to an employee, employer or organisation (1) An enterprise agreement applies to an employee, employer or employee organisation if: (a) the agreement is in operation; and (b) the agreement covers the employee, employer or organisation; and (c) no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation. Enterprise agreements apply to employees in relation to particular employment (2) A reference in this Act to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment. 53 When an enterprise agreement covers an employer, employee or employee organisation Employees and employers (1) An enterprise agreement covers an employee or employer if the agreement is expressed to cover (however described) the employee or the employer. Employee organisations (2) An enterprise agreement covers an employee organisation: (a) for an enterprise agreement that is not a greenfields agreement—if the FWC has noted in its decision to approve the agreement that the agreement covers the organisation (see subsection 201(2)); or (b) for a greenfields agreement—if the agreement is made by the organisation. Effect of provisions of this Act, FWC orders and court orders on coverage (3) An enterprise agreement also covers an employee, employer or employee organisation if any of the following provides, or has the effect, that the agreement covers the employee, employer or organisation: (a) a provision of this Act or of the Registered Organisations Act; (b) an FWC order made under a provision of this Act; (c) an order of a court. (4) Despite subsections (1), (2) and (3), an enterprise agreement does not cover an employee, employer or employee organisation if any of the following provides, or has the effect, that the agreement does not cover the employee, employer or organisation: (a) another provision of this Act; (b) an FWC order made under another provision of this Act; (c) an order of a court. Enterprise agreements that have ceased to operate (5) Despite subsections (1), (2) and (3), an enterprise agreement that has ceased to operate does not cover an employee, employer or employee organisation. Enterprise agreements cover employees in relation to particular employment (6) A reference in this Act to an enterprise agreement covering an employee is a reference to the agreement covering the employee in relation to particular employment. (Emphasis in original.) 15 For present purposes it is relevant to note s 53(1) – namely that an enterprise agreement covers an employee if it is expressed to do so. 16 Employees who are to be covered by an enterprise agreement are entitled to vote whether to accept its terms. Various procedural steps are prescribed for that purpose. The "relevant employees" (see s 180(2)) are those employed at the time who will be covered by the agreement. 17 To have statutory force an enterprise agreement must be "approved" by the Fair Work Commission, which must approve the agreement if the requirements in ss 186 and 187 are met (s 186(1)). One requirement in s 186 is stated by s 186(3) and (3A) as follows: 186 When the FWC must approve an enterprise agreement—general requirements … Requirement that the group of employees covered by the agreement is fairly chosen (3) The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen. (3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct. … The reasons for approval 18 In the present case, the applicant proposed the enterprise agreement to four employees who were to be part of a permanent workforce capable of being deployed as required to projects for which the applicant was engaged. This appears to have been a departure in some respects from the applicant's practice of engaging project-based workforces at projects for which its services were engaged. 19 At the time the enterprise agreement was proposed over 200 employees were engaged under the terms of agreements with unions at the Shenton Park Solid Waste Treatment Plant Project ("the Shenton Park Project") and the Worsley Efficiency and Growth Project ("the Worsley Project"). Work at those projects had been completed or was coming to an end. At two other major construction sites (the Wheatstone Project and the Macedon Project) 200 other employees were engaged after the enterprise agreement was made and they became covered by the enterprise agreement. They had been employed before the approval proceedings were heard. 20 There was no suggestion, of course, that the 200 employees engaged at the Wheatstone and Macedon projects should have voted on the terms of the enterprise agreement; they were not employed when the terms of the agreement were accepted. However, one argument was that at least the employees at the Worsley Project should have voted because they were still employed by the applicant when the agreement was made. 21 The terms of the enterprise agreement proposed to the four employees who accepted it excluded from its coverage employees already covered by union-based or greenfields agreements, as well as employees who might be covered by such agreements in the future. It was therefore intended that employees at projects with existing agreements with unions, at least, would not be covered. 22 Clause 2 of the proposed agreement provided: 2. Coverage and Application of this Agreement (a) Subject to clause 2(b), this Agreement shall apply to; • MI&E Holdings Pty Ltd (MIE) ("the Company"); and • Employees of the Company employed in and performing work as set out in the classifications specified in Schedule 1 - Classifications, of this Agreement in Western Australia. (b) The Company undertakes separate project or site specific work that is regulated by its own site specific terms and conditions. This Agreement does not cover or apply to any employees working at those project sites where any of the following agreements are in operation (whether before their nominal expiry dates or not); a) A greenfields agreement made in accordance with section 172(4) of the Act or predecessor legislation; or b) Any other enterprise agreement made with employees in replacement or, or as a successor to, a greenfields agreement in (a). 23 Deputy President McCarthy found: [29] The facts here are that at the time of the making of the Agreement there was no uncertainty as to who was then covered by the Agreement and who was not. Those covered were the four employees at Bibra Lake. Those excluded were the 200 or so employees at the Worsley Project and the Shenton Park Project. [30] The means of ascertaining the class of employees that will be covered in the future is also clear. It is those employees who are not covered by a greenfields agreement. It is also clear that the type of greenfields agreement is one made under s.172(4) of the FW Act. 24 Deputy President McCarthy gave particular attention to whether the group intended to be covered by the enterprise agreement was geographically, operationally or organisationally distinct. He found that the group had all three characteristics. 25 Deputy President McCarthy also dealt with an objection that approving the agreement would undermine "collective bargaining". Section 578(a) of the FW Act provides: 578 Matters the FWC must take into account in performing functions etc. In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account: (a) the objects of this Act, and any objects of the part of this Act; and … 26 Two of the statutory objectives which must therefore be taken into account by the FWC are those stated in s 3(f) and s 171(a), as follows: 3 Object of this Act The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by: … (f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and … 171 Objects of this Part The objects of this Part are: (a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and … 27 It might be noted that the statutory objectives are concerned with "collective bargaining in good faith". As Deputy President McCarthy pointed out, neither "collective bargaining" nor "good faith" is defined by the FW Act. The FW Act does state a number of "good faith bargaining requirements" (see s 228) which are supported by the possibility that the FWC might make a "bargaining order" or a "majority support determination" or a "scope order" but none of those facilities or possibilities were relevant to the present case. The argument by the unions was a more general one and was connected with the proposition that the group of employees to be covered by the enterprise agreement was not fairly chosen. 28 Deputy President McCarthy recorded: [10] The Objecting Unions devoted almost all of their submissions in support of their contention that the employees who will be covered by the Agreement were not fairly chosen. They assert that choice of the group undermines the Objects of the FW Act and frustrates the rights of employees to be represented or collectively bargain. … [40] The Objecting Unions argue that because greenfields agreements can be established to cover part of the group covered by this Agreement, thereby displacing this Agreement for that later group, that it has the effect of undermining collective bargaining. They argue this is because employees that may be engaged for work on major construction projects will not have the capacity to take protected industrial action. 29 Deputy President McCarthy rejected the objection: [50] The FW Act allows for flexibilities in collective bargaining through a variety of means. One of those means is greenfields agreements. There is no prohibition and few restrictions on collective bargaining at any time either before or after an agreement is made. There are restrictions on the actions that can be taken during the bargaining, one of which is the capacity to take protected industrial action, if the nominal expiry date of the agreement has not passed. [51] The inability to take protected industrial action by future employees or by existing employees transferring to another location is not in itself an undermining of collective bargaining. There is no evidence of any conduct either before the making of the Agreement or after it was made that supports any contention that a purpose was to evade the provisions of the FW Act. It appears to me that MIE were trying to provide for the capacity to have future agreements under the provisions of the FW Act to cover future employees through greenfields agreements which are a common industrial instrument in the industry it is involved in. Conclusions … [53] I find that the employees that will be covered by the Agreement are a group that were fairly chosen on each of the "good test" [geographically, operationally or organisationally distinct] criteria. Even if the group who will be covered by the Agreement are not distinct by any of the "good" criteria I find that the group was fairly chosen having regard to all of the circumstances. The Full Bench decision 30 On appeal, the Full Bench decided that the enterprise agreement should not have been approved. In particular, the Full Bench found that employees on the Worsley Project should have voted on the agreements. That conclusion was based on a construction of the FW Act to the effect that such employees would, immediately when the new agreement came into operation, be covered by it and it would apply to them: [22] The sections of the Act of particular relevance to the considerations in this appeal are ss.52, 53, 54 and 58. Each of them has been reproduced in an appendix to this decision. We refer to s.58 in particular. It provides that only one enterprise agreement can apply to an employee at a particular time. If there is an earlier agreement applying to the employee in relation to particular employment and another enterprise agreement that covers that employee in relation to the same employment comes into operation then, until the earlier agreement has passed its nominal expiry date, the later agreement cannot apply. When the earlier agreement does pass its nominal expiry date the latter can apply to the employee. At that stage the earlier agreement cannot apply again. The submissions proceeded on the basis that regardless of the type of agreement which was in contemplation they all concerned employment with MI&E in the range of classifications in the Agreement at any location throughout Western Australia. [23] A number of provisions of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (TP&C Act) are also relevant. The TP&C Act contains a number of provisions relevant to collective agreements like the Worsley agreement. In summary, the effect of them is as follows. The Worsley agreement became a collective agreement-based transitional instrument by virtue of the TP&C Act. The concepts of agreements covering and applying to employees were referred to in that act and were subject to a number of other provisions which dealt with the interaction between these transitional instruments and enterprise agreements under the Act. In particular, item 30(2) of Schedule 3 provides that if an enterprise agreement under the Act started to apply to an employee or an employer covered by a collective agreement-based transitional instrument then that instrument ceases to cover (and could never again cover) the employee or the employer. Was the group fairly chosen? [24] Because of the way the clause was drafted the group with whom negotiations were held and who could vote on the Agreement excluded any employees of MI&E other than the four employees at Bibra Lake. But for the exclusion of existing greenfields agreements in clause 2 the Worsley agreement employees would be covered by the Agreement. The Worsley agreement had reached its nominal expiry date but employees remained employed until probably May 2012 (in any event at least throughout the time the Agreement was being negotiated and voted upon). Upon approval of the Agreement it immediately applied to all of those employees. By virtue of the TP&C Act the Worsley agreement ceased to cover and could never again cover them. The clause attempts to continue the time expired greenfields agreement in operation and allow those employees to be excluded from coverage of the Agreement. This is not consistent with the provisions of the TP&C Act. No good reason has been established for excluding this group of employees. The drafting of the clause is such as to attempt to minimise the number of employees who, under s.181 of the Act, were entitled to vote for it. That section required MI&E to request employees who were employed at the time, and who would be covered by the Agreement, to approve it by voting for it. (Footnote omitted.) (My underlining.) 31 I shall return to the proposition in the underlined passage shortly. 32 The reasoning in [22] concerned the operation of s 54(3) and s 58(1) and (2) of the FW Act which provide: 54 When an enterprise agreement is in operation … (3) An enterprise agreement that has ceased to operate can never operate again. 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 single-enterprise agreement replacing a multi-enterprise 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. (Emphasis in original.) … 33 The Full Bench (in [23] and [24]) took a similar view about the operation of certain "transitional" provisions applying to the agreement for the Worsley Project. That agreement was a "collective agreement-based transitional instrument" within the meaning of Item 2 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) and Item 30(2) of that Schedule applied to it. Item 30(2) provided: 30 FW Act enterprise agreements and workplace determinations, and agreement-based transitional instruments … Collective agreement-based transitional instruments (2) If an enterprise agreement or workplace determination (under the FW Act) starts to apply to an employee, or an employer or other person in relation to the employee, then a collective agreement-based transitional instrument ceases to cover (and can never again cover) the employee, or the employer or other person in relation to the employee. Note 1: The fact that a collective agreement-based transitional instrument applies to employees does not prevent those employees and their employer from replacing that transitional instrument at any time with an enterprise agreement, regardless of whether the transitional instrument has passed its nominal expiry date. Note 2: Industrial action must not be taken before the nominal expiry date of an agreement-based transitional instrument, even if it is being replaced by an enterprise agreement (see item 4 of Schedule 13). 34 This has the same effect as s 58(2) of the FW Act. Jurisdictional error 35 In my view, Item 30(2) did not have the effect ascribed to it by the Full Bench in [24] of its reasons; nor did s 58 of the FW Act. 36 The reasoning employed by the Full Bench in relation to each of the statutory provisions (s 58(2) and Item 30(2)) appears to put aside the terms of cl 2 of the agreement as ineffective. The agreement was expressed not to cover or apply to employees working at sites where any greenfields agreement was in operation, or any successor to it, whether its nominal expiry date had passed or not. It was therefore not expressed to cover employees at the Worsley Project (s 53(1)); it was expressed not to cover them. As it did not cover them, it could not apply to them (s 52(1)(b)). 37 The error of construction to which I have referred was an important one. 38 In places the Full Bench stated in conclusory terms that the agreement-making process was invalid as a result of the exclusion of the Worsley Project employees from voting. Thus, referring to cl 2, the Full Bench said: [24] … The drafting of the clause is such as to attempt to minimise the number of employees who, under s.181 of the Act, were entitled to vote for it. That section required MI&E to request employees who were employed at the time, and who would be covered by the Agreement, to approve it by voting for it. and: [35] … Whilst it is not free from doubt as to whether the employees to which the Shenton Park agreement applied, which was still within its nominal life, should have voted (the Appellants submit they should have) in our opinion those on the Worsley project clearly were entitled. … They were persons who under s.181 of the Act would be covered by the Agreement and were employed at the time and therefore should have been requested by MI&E to approve the Agreement by voting for it. and: [36] Had clause 2 been drafted in a manner consistent with the Act the Worley [sic] project employees in employment at the time negotiations commenced (which was in February 2012) would have been entitled to have participated in the negotiations for the Agreement and in the vote for it. This consideration goes to the compliance with the pre-approval steps and whether the Agreement was validly made. … 39 However, the Full Bench also appeared to regard the exclusion of Worsley Project employees by cl 2 of the agreement as unfair, with the result that s 186(3) was not satisfied. Thus, the Full Bench said: [26] In our opinion the exclusion of the Worsley agreement employees was unfair. In finding to the contrary the Deputy President was in error. 40 The Full Bench also appeared to take the view that it would not be possible, despite the terms of cl 2 of the enterprise agreement, for the applicant to make a new agreement (greenfields or otherwise) with respect to a future project. This led the Full Bench to say: [31] … The coverage and application of clause 2 has been referred to numerous times by us. It applies in respect of any employment with MI&E throughout Western Australia of persons in the large number of classifications referred to in the Agreement. The Agreement envisages that work will be undertaken on project sites and contains a site allowance for such work. It envisages that employees may be required to work at the workshop (presumably Bibra Lake) or transfer between locations covered by the Agreement, and when at those other locations they may be paid a higher rate of pay or receive additional allowances. It is not at all apparent how MI&E could enter into any greenfields agreement that would come within the Act's definition of such. [32] In summary, MI&E wished to move its employees between Bibra Lake and any other site in Western Australia where it may have work and then back again to Bibra Lake (or presumably some other site in Western Australia where it had work for the employees to do). Clause 2 was designed to apply to employees when at Bibra Lake and then to allow another agreement (either a greenfields, an enterprise agreement or some other agreement not regulated by the Act, either in or outside of any nominal expiry date) to apply whilst the work was being done and then the Agreement would again apply. It is clear that the Act and s.58 in particular does not allow for this to occur. The suggestion that whilst on specific site work the Agreement application to an employee was somehow suspended or displaced finds no support in the Act. [33] The coverage of the Agreement was not consistent with the Act and the Agreement could not operate in the way MI&E had wished. In our opinion this consideration is also relevant to whether the group of employees covered by it was fairly chosen and weighs against our being satisfied such a finding should have been made. (Footnote omitted.) 41 In my respectful view, this construction of the statutory scheme was also erroneous. I see no reason why a new greenfields agreement for a specific project could not be made, provided the statutory requirements were observed. 42 The enterprise agreement applied (subject to cl 2(b)) to an identified range of employees in Western Australia. In the case of persons who were to be employed at a new project, but had not yet been engaged, the enterprise agreement could not apply to them until they became employed. If, before then, a valid greenfields agreement was made which covered their employment I see no reason at present why cl 2(b) would not be effective. The condition in s 58(2)(a) (that the earlier agreement applies) would not be engaged in relation to such employees. At the time of employment the greenfields agreement would apply and the enterprise agreement would not cover them. Section 58 would not operate in those circumstances. 43 The Full Bench assumed that the intention was that employees would be transferred between sites and potentially into and out of the application of different agreements. It is true that s 58 would not permit that to occur; only one enterprise agreement can apply to an employee in relation to particular employment. However, the consequence is not that cl 2 (or the enterprise agreement) is invalid but rather that the state of affairs assumed by the Full Bench could not be effected. If employees to whom the enterprise agreement applied were transferred to another site the enterprise agreement (and not a new site or project agreement) would apply to them if the transfer was made in the same (and not new) employment. But that left an effective operation for cl 2(b) in the case, as I have said, of new employees at a site or project. 44 However, it is not necessary to pursue this matter further in the present case. It is the earlier analysis by the Full Bench, and its conclusion that Item 30(2) and/or s 58 had the effect that the employees at the Worsley Project would be covered by the new agreement, and that it would apply to them, as soon as it came into effect which is the point at which the Full Bench initially misdirected itself about the statutory scheme in a way which sufficiently demonstrates jurisdictional error. 45 Neither Item 30(2) nor s 58 has the effect suggested by the Full Bench because the proposed enterprise agreement did not express itself to cover or to apply to the Worsley Project employees. The fact that it may (if drafted differently) have done so might be a reason for examining whether the group of employees covered by the agreement was fairly chosen, but the analysis could not commence with a finding that cl 2 was legally barred, or rendered legally ineffective, by either Item 30(2) or s 58, or that the agreement was, or would be, invalid as a result. In my respectful view, that premise is integral to the reasoning by the Full Bench and cannot be sustained. It shows jurisdictional error. Conclusion 46 In my view, the application should be granted and the decision of the Full Bench set aside. The matter should be remitted to the FWC so that the appeal before the Full Bench may be dealt with according to law. 47 However, a confusion arising from the procedural course taken on the appeal should be mentioned. 48 Deputy President McCarthy's decision of 6 November 2012 gave reasons why the enterprise agreement should, if stipulated undertakings were given, be approved. His decision of 19 November 2012 accepted the undertakings and approved the enterprise agreement. That was the decision upon which s 54 of the FW Act operated to fix a commencing date for the enterprise agreement seven days later. No formal appeal appears to have been brought against that approval decision. 49 Nevertheless, in the penultimate paragraph of its decision the Full Bench said that it quashed the decision to approve the enterprise agreement. 50 I consider that it is not necessary for the Court to resolve the procedural uncertainty which may arise in the FWC from this course of events, nor whether any valid appeal subsists before the Full Bench. The appropriate course is to set aside the decision of the Full Bench for the reasons I have given and remit the matter to the Full Bench to be decided according to law. It will be for the Full Bench to determine, in the first instance at least, whether there is a subsisting appeal before it against the approval decision. Orders 51 I would make the following orders: 1. The application be allowed. 2. A writ in the nature of certiorari issue quashing the decision by the Full Bench of the Fair Work Commission dated 11 April 2013, in the matter of Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and others v MI&E Holdings Pty Ltd [2013] FWCFB 2142. 3. A writ in the nature of mandamus issue directing the Fair Work Commission to hear and determine according to law the appeal filed by the first, second and third respondents on 23 November 2012. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. Associate: Dated: 24 February 2015 IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION WAD 199 of 2013 ON APPEAL FROM THE FAIR WORK COMMISSION BETWEEN: MI&E HOLDINGS PTY LTD Applicant AND: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Second Respondent AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS' UNION Third Respondent FAIR WORK COMMISSION Fourth Respondent JUDGES: BESANKO, BUCHANAN AND BARKER JJ DATE: 24 February 2015 PLACE: PERTH REASONS FOR JUDGMENT BARKER J: 52 I agree, generally for the reasons given by Buchanan J, which I have read in draft that this application should be granted and the decision of the Full Court set aside, and that the other orders proposed by Buchanan J should be made. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate: Dated: 24 February 2015