FEDERAL COURT OF AUSTRALIA United Voice v MSS Security Pty Ltd [2016] FCAFC 124 File number: QUD 1153 of 2015 Judges: RARES, COLLIER AND RANGIAH JJ Date of judgment: 23 August 2016 Catchwords: INDUSTRIAL LAW – Fair Work Act 2009 (Cth) – appeal under s 607 from decision of Commissioner to Full Bench of Fair Work Commission – where ground of appeal claimed that enterprise agreement failed to satisfy better off overall test under s 186(2)(d) – where parties in Federal Court agreed Full Bench made jurisdictional error by failing to consider ground of appeal as to satisfaction of better off overall test under s 193(1) and that a writ of certiorari issue to quash – where applicant argued that Federal Court should construe enterprise agreement to determine if capable of satisfying better off overall test on application for constitutional writ relief – whether Federal Court should exercise jurisdiction to construe agreement – whether writ of mandamus should issue to Full Bench to hear and determine appeal in accordance with s 607 Legislation: Judiciary Act 1903 (Cth) s 39B Fair Work Act 2009 (Cth) ss 186, 187, 189, 193 562, 563, 607 Cases cited: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2006) 203 CLR 194 Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy (2008) 166 FCR 64 Date of hearing: 23 August 2016 Registry: New South Wales Division: General Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 21 Counsel for the Applicant: Mr WL Friend QC with Mr RE Reed Solicitor for the Applicant: Hall Payne Lawyers Counsel for the First Respondent: Mr RL Dalton Solicitor for the First Respondent: Mills Oakley ORDERS QUD 1153 of 2015 BETWEEN: UNITED VOICE Applicant AND: MSS SECURITY PTY LTD First Respondent FAIR WORK COMMISSION Second Respondent JUDGES: RARES, COLLIER AND RANGIAH JJ DATE OF ORDER: 23 AUGUST 2016 THE COURT ORDERS THAT: 1. A writ of certiorari issue to the Fair Work Commission removing into this Court the decision made in Sydney on 12 November 2015 in proceeding C2015/3752, recorded in United Voice - Queensland Branch v MSS Security Pty Ltd [2015] FWCFB 6923, and quashing that decision. 2. A writ of certiorari issue to the Fair Work Commission removing into this Court the decision made in Sydney on 1 December 2015 in proceeding AG2014/10202, recorded in MSS Security Pty Ltd [2015] FWCA 8318, and quashing that decision. 3. A writ of mandamus issue to the Fair Work Commission requiring it to hear and determine the notice of appeal filed by the appellant on 30 April 2015 in proceeding C2015/3752 according to law. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) THE COURT: 1 This is an application for constitutional writ relief pursuant to s 39B(1) of the Judiciary Act 1903 (Cth), and ss 562 and 563 of the Fair Work Act 2009 (Cth) (the Act) in respect of decisions of the Fair Work Commission at first instance and of a Full Bench of the Commission on the appeal from that decision. Background 2 On about 8 December 2014, the respondent, MSS Security Pty Limited, applied to the Commission for approval of the MSS Security QLD Enterprise Agreement 2014 – 2018 pursuant to Pt 2-4 of the Act. The applicant union, United Voice, opposed the application. The union argued, among other reasons, that the agreement should not be approved because, contrary to the requirement in s 186(2)(d) of the Act, the Commissioner could not be satisfied that the agreement passed the "better off overall test". 3 On 31 March 2015, the Commissioner decided to approve the agreement on the proviso that MSS give an undertaking to audit overtime payments to employees quarterly and to make up the difference, within seven days of completion of the audit, in respect of any loss in comparison to the payments that employees would have received under the relevant award. On 9 April 2015, after MSS gave the required undertaking, the Commissioner made a decision to approve the agreement. 4 The union appealed against the Commissioner's decision. On 12 November 2015, a Full Bench of the Commission set aside the Commissioner's decision because it considered that the undertaking that MSS had given was "inadequate". The presiding member of the Full Bench was a Vice President. The Full Bench said under the heading "Conclusion" at [61]: We are satisfied that it is in the public interest to grant permission to appeal. Permission to appeal is granted and the appeal is allowed. The decision of Commissioner Gregory is set aside. The Agreement will be approved with the amended undertaking provided by the Respondent at the appeal in a separate decision issued by the Presiding Member of this Full Bench. 5 That conclusion seemed to record decisions made by the Full Bench in exercise of its powers under s 607(3) of the Act, even though they were not expressed formally to be its decisions and nor was any separate written statement of the decision made. Section 607(3) provides: (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. 6 The decisions in [61] seem to include a reference, under s 607(3)(c)(ii), of the matter to a Commission member requiring the member to act in accordance with the Full Bench's directions. 7 On 1 December 2015, the Vice President, having received a revised undertaking by MSS that the Full Bench had required to provide for monthly rather than quarterly audits, made a decision to approve the agreement. His formal decision recorded that the Full Bench had set aside the Commissioner's earlier decision on the basis that MSS would provide the new undertaking. The union's submissions 8 The union then filed its application to this Court pursuant to ss 562 and 563 seeking orders, first, quashing the decisions of the Commissioner, the Full Bench and the Vice President, and secondly, that the Commission hear the application for approval according to law. 9 The union submitted that the Full Bench made a jurisdictional error in failing to exercise its jurisdiction to consider an issue in the appeal to it. The basis of the union's application is that the Full Bench failed to deal with its submission that the better off overall test had not been passed because cl 4.3.5(a) of the agreement meant that some employees would suffer significant loss in respect of their entitlement to be paid remuneration in comparison with the remuneration that would be payable for the same periods of work under the applicable award. 10 MSS conceded both that the Full Bench made that error and that it was a jurisdictional error. 11 The union also alleged that the Full Bench made a further jurisdictional error, namely that the decision to approve the agreement was not one that could reasonably have been reached, having regard to what the union contended was the proper construction of cl 4.3.5(a) in all the circumstances. MSS submitted that there was no such error. Consideration 12 We are satisfied that the Full Bench did commit the jurisdictional error identified by the parties and, for the following reasons, we should make the orders to which the parties have consented: Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy (2008) 166 FCR 64 at [43] and [51] per French, Weinberg and Greenwood JJ. 13 Section 186(1) of the Act requires the Commission to approve an agreement if satisfied that the requirements of ss 186 and 187 are met. Section 186(2)(d) requires that the Commission must be satisfied that an agreement passes the "better off overall test". That test is set out in s 193(1) and obliged the Commission to undertake an overall comparison of the agreement with the award. 14 The Full Bench failed to deal with the union's argument that cl 4.3.5(a) of the agreement had the effect of reducing the remuneration of some employees in comparison with that payable under the award. Accordingly, the Full Bench failed to undertake the comparison that was required under ss 186(2)(d) and 193(1) of the Act and so failed to apply itself to the question which those sections prescribed. This amounted to a jurisdictional error: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2006) 203 CLR 194 at 208-209 [31] per Gleeson CJ, Gaudron and Hayne JJ. 15 The union's second argument attempts to have this Court, effectively, decide whether the better off overall test is satisfied under the guise of asserting that the Commission could not reasonably conclude that the agreement satisfied that statutory requirement. 16 In our opinion, questions of construction of the agreement, the award and the industrial circumstances involve matters of fact and degree. Moreover, even if the better off overall test were not satisfied, the Commission is not bound to refuse to approve the agreement. That is because s 189(2) allows the Commission to approve an agreement if it is satisfied that, because of exceptional circumstances, the approval of the agreement would not be contrary to the public interest. Those issues are matters that ss 186(2)(d) and 189 require the Commission to evaluate and decide. 17 Even if the better off overall test were not satisfied, the existence of the discretionary power of the Commission to approve an agreement demonstrates that it is not possible for this Court to determine, as the union sought, that the Full Bench could not have approved the agreement in the exercise of its powers under the Act. The Court's jurisdiction that is invoked in this application, under s 39B of the Judiciary Act and for constitutional writs under s 563, is supervisory. 18 The way in which the Full Bench proceeded left unclear what its formal decision was. In what it stated in [61], that we have quoted above, the Full Bench did not formally record any decision, first, to quash or vary the Commissioner's decision under s 607(3)(a) or, secondly, to refer a matter to the Vice President under s 607(3)(c) to deal with the acceptance of the new undertaking. 19 It is incumbent on the Commission, including the Full Bench, to record formally what it decides so that, first, persons affected will be in a position to seek or enforce whatever remedies they may claim to have to challenge or to seek recognition of that exercise of the Commission's statutory powers, and, secondly, in cases of a reference under s 607(3)(c), the person to whom the reference is made has a clear statement of the subject matter of the reference. 20 The union's application to this Court to quash the Commissioner's decision was misconceived. The union had invoked its right of appeal, under the Act, against that decision, but the appeal miscarried for the reasons we have given. It is for the Full Bench, exercising its appellate power under s 607(3)(c), to determine what order should be made in respect of the Commissioner's decision. Conclusion 21 For these reasons, we consider it appropriate that a writ of certiorari be issued to quash the decisions of the Full Bench made on 12 November 2015, and of the Vice President made on 1 December 2015, and that a writ of mandamus should issue to the Commission requiring the Full Bench to hear and decide the union's appeal to it according to law. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares, Collier and Rangiah. Associate: Dated: 12 September 2016