This extract from a decision of the Federal Court deals with the forensic issue of the very nature of the arbitral functions of the Commission, and its constitutional limitations.
“Legal principles
40 It is important to assess the facts set out above while keeping in clear view the nature and ambit of the particular statutory function which the FWC was performing when it made the Arbitral Decision.
41 The judicial power of the Commonwealth is not vested in the FWC: see Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCAFC 231; (2021) 289 FCR 308 (Maersk FC) at [74] (White J), [152] (Banks-Smith and Jackson JJ). Thus, while the FWC may form a legal opinion about a legal matter, it may go beyond its constitutional limits if it does not form the opinion for the purpose of taking some further step within its own power: Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd [2012] FCAFC 87; (2012) 203 FCR 371 at [22]. The FWC cannot contribute a binding declaration on a legal issue: see Wagstaff Piling at [31].
42 One power that the FWC may exercise is the power to determine disputes by exercising arbitral functions that are conferred on it by s 595 and s 739 of the FWA. For that is not an exercise of judicial power, since in that situation the parties have consented to submit disputes as to their legal rights and liabilities for resolution by the FWC. Provisions such as s 595 and s 739 of the FWA and its predecessors authorise the FWC to exercise a power of private arbitration: see Construction Forestry Mining and Energy Union v Australian Industrial Relations Commission [2001] HCA 16; (2001) 203 CLR 645 (Gordonstone) at [30]-[32].
43 However, the arbitral award is not binding of its own force; its effect depends on the law which operates in respect to it: Gordonstone at [31]. While that includes the private law of contract, in the present context it also includes the FWA. Section 739 relevantly applies when an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in s 186(6): s 738(b), s 739(1). This is, relevantly, a term that ‘provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes … about any matters arising under the agreement’. Clause 10 of the Cyan EA is such a term. By it, the parties have agreed that the FWC may arbitrate certain disputes, meaning that s 739(4) of the FWA authorises the FWC to do so.
44 Express limitations on the authority of the FWC appear in s 595, however. Under s 595(1) of the FWA, the FWC may deal with a dispute only if it is expressly authorised to do so under or in accordance with another provision of the Act. Similarly, the FWC may only deal with a dispute by arbitration only if it is expressly authorised to do so under or in accordance with another provision of the FWA and to avoid doubt, the FWC must not exercise that arbitral power in relation to a matter before it except as authorised by s 595: s 595(3), s 595(5). Section 595(4) authorises the FWC, in dealing with a dispute, to exercise any powers it has under Part 5-1 Division 3 Subdivision B, which permits the FWC to exercise statutory powers in the course of a private arbitration: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123; (2015) 235 FCR 305 at [85].
45 The FWC’s arbitral authority is thus expressly circumscribed by the Act. In Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCA 595, Colvin J summarised the limits on the FWC’s arbitral jurisdiction in the following way (citations removed):
[5] If an enterprise agreement, as approved, requires or allows the FWC to settle disputes and an application is made to the FWC in respect of a dispute then it acts as a private arbitrator under the authority conferred by the terms of the enterprise agreement. Absent any statutory provision conferring further private arbitration power, the FWC has no larger authority than the authority to act as a private arbitrator conferred by the enterprise agreement.
[6] Further, the nature and extent of the arbitral appointments that the FWC may undertake are also confined by the extent of the statutory authority to act as arbitrator conferred on the FWC by the Act. Whereas a natural person can accept an appointment to resolve any dispute, the FWC can only do so for the purpose of performance of its statutory functions. In that regard, s 595(1) provides expressly that the FWC may deal with a dispute only if it is expressly authorised to do so under the Act. In particular, it may deal with a dispute by arbitration only if expressly authorised to do so under or in accordance with the Act: s 595(3).
46 Subsequently, in Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (No 2) [2020] FCA 1694 (Maersk (No 2)), Colvin J expanded on these points as follows:
[140] The nature and extent of the arbitral jurisdiction of the FWC was recently considered by Flick J in Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2). It is a jurisdiction that cannot extend beyond the ambit of the dispute that has been the subject of the cl 10 procedure: at [103] …
…
[142] Therefore, the power is a private arbitral power, but the manner in which it may be conferred is regulated by the statute.
[143] As a result, the authority of the FWC to accept private arbitral appointments is limited by the scope of the statutory provisions that confer authority on the FWC to accept private arbitral appointments. The FWC cannot accept arbitral appointments outside the ambit of the statute. By the terms of s 186(6) of the Fair Work Act, the FWC can accept arbitral appointments to settle disputes ‘about any matters arising under’ the relevant enterprise agreement and by the terms of s 595(3) the FWC may only deal with a dispute by arbitration if expressly authorised to do so under or in accordance with the Act. A purported appointment that conferred broader authority than that conferred by an enterprise agreement (as approved by the FWC) could not be accepted by the FWC and a decision made in the purported performance of such an appointment would exceed the statutorily conferred private arbitral jurisdiction of the FWC.
47 Elsewhere (at [91]), his Honour described what happened when a dispute reached stage four of the dispute resolution clause there, which was relevantly similar to cl 10 of the Cyan EA, as the dispute having ‘crystalized’. These observations were not questioned by the Full Court in Maersk FC, when it upheld the decision in Maersk (No 2).
48 It follows that the scope of the dispute that was capable of reference to the FWC for arbitration under the Cyan EA, and the scope of the dispute that was capable of being determined by it pursuant to its statutory powers and functions, was the dispute that had been left unresolved by the steps taken under the dispute resolution clause prior to the reference: see Maersk FC at [147]. Importantly to the outcome of the present issue, in my view this means that whatever the position might be in a private arbitration conducted by a person who is not vested with statutory powers and functions (see Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245 at [138]), the parties here were not able to expand the scope of the dispute by consent subsequent to the reference. For to do so would be to purport to give the FWC the power to determine the wider dispute in a manner that is binding under the Cyan EA and the FWA, being a power it did not have.
49 The Union submits, contrary to this, that a dispute before the FWC is neither stagnant nor confined to the matters detailed in the initiating application, and that a dispute may be diminished, enlarged or altered in the course of FWC proceedings, including by the evidence filed or submissions made. The Union relies on R v Portus; Ex parte Transport Workers’ Union of Australia (1977) 141 CLR 1 a case where, at 23-25, Jacobs J seemed to accept that a dispute could become ‘crystallized’ in certain terms by the end of a proceeding in the then Australian Conciliation and Arbitration Commission, implying that its scope could change in the course of evidence and submissions. It also relies on a passage in R v Bain; Ex parte Cadbury Schweppes Australia Ltd (1984) 159 CLR 163 at 168 where Murphy J held that an industrial dispute could be ‘diminished or ended or enlarged or altered during the course of the proceedings in the Commission’, and a passage in Re Printing & Kindred Industries Union; Ex parte Vista Paper Products Pty Ltd (1993) 113 ALR 421 at 433 in which Gaudron J applied R v Bain. But the Union did not establish for any of those cases that the legislative provisions under consideration confined the powers of the FWC so as to preclude any consensual expansion of the dispute by the parties, and it does not appear that this point was taken in any of them. And the last two cases, at least, concerned the scope of industry awards made by predecessors to the FWC, which engaged different considerations to those that pertain to a dispute resolution provision of a modern enterprise agreement.
50 The same may be said of Cyan’s reliance on Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers’ Union of Australia (1987) 163 CLR 656, which concerned the distinction between the purported exercise of judicial power, such as determining whether a pre-existing legal obligation has been breached, and the arbitral power of the then Conciliation and Arbitration Commission to create new rights and obligations. I do note, however, that in that case (at 664) the High Court acknowledged that ‘a claim that a right or obligation should exist may be formulated in a manner which requires the Commission to assume powers which it does not possess’.
Identification of ‘the matter and/or dispute’ that the FWC resolved
51 In any given case, identifying the dispute that is the effective subject of the reference is a question of fact. In this case, on a straightforward reading of cl 10, what must be identified is the ‘the matter and/or dispute’ which, by Step 4 of the procedure in cl 10, ‘the preceding steps have failed to resolve’ (or which has not been resolved within 10 days of the initiation of Step 1).
52 That is a reference to a dispute in fact, understood in the broad pragmatic way fitting for a dispute resolution procedure in this context, and does not import technical notions such as the concept of a ‘matter’ in Australian constitutional law: see Maersk FC at [74], [152]. It is necessary to permit a degree of flexibility and informality in the manner in which a dispute is referred to arbitration under a dispute resolution clause such as cl 10.1 of the Cyan EA: see Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2) [2020] FCA 951 at [60]-[61] (Flick J). Analogously to the approach endorsed by the Full Court in The Transport Workers’ Union v Mayne Nickless Ltd [1998] FCA 1022, it is necessary to ‘review the entire factual background to properly characterize the claim and the power sought to be invoked’.
53 There is little evidence as to the three steps that preceded Step 4 under cl 10 of the Cyan EA in this case. The only piece of evidence prior to the reference itself is the email chain of 4 February 2025. This plainly concerned Mr Ammon’s long service leave entitlement; he appears to have been the one who raised the question with Ms Thorp. Mr Gakis from the Union also expressed disagreement and referred to another dispute, perhaps the ‘Lucas’ one, but nothing in his reply changed the fact that the dispute at this stage was about Mr Ammon’s particular entitlement.
54 No submissions were made to identify which step in cl 10 pertained to this email chain; it is most likely to be Step 2 since the email correspondence seemed to involve ‘the Employee, the Employee’s Union delegate, or other nominated representative and the Master and/or Employer’s nominated delegate, or other nominated representative’. But nothing turns on this as it was common ground that all four steps in the clause had been fulfilled.
55 The clearest evidence as to the scope of the ‘matter and/or dispute’ that was referred to arbitration by the FWC are the Form 10 filed by the Union and the responsive application filed by Cyan. The Form 10 clearly frames the dispute as, in its words, one that ‘arises with respect to the long service leave entitlements for Geoffrey Ammon’. It also sets out matters pertaining to Mr Ammon’s length of service and the long service leave entitlement that he as accrued.
56 While Cyan contended in its responsive application that the Union was seeking an exercise of judicial power, that was not because it characterised the dispute as being about the interpretation of cl 39 at large. The responsive application proceeded on the basis that it was still a dispute about Mr Ammon’s entitlements, and the specific complaint Cyan made was that the Union was seeking a declaration about those entitlements. The Union’s submission that the references to Mr Ammon were merely reflective of a broader disagreement between the Union and Cyan may be correct, but it does not alter the position that a disagreement about Mr Ammon’s particular long service leave entitlement was the dispute that was referred to the FWC.
57 The email from Cyan’s solicitor to the FWC on about 7 March 2024 is consistent with this.
58 The Union, of course, relies on subsequent developments as indicating that the dispute that was the subject of the arbitration had expanded to encompass the construction of the cl 39 in general. There is a hint of this in the FWC’s response to the email of 7 March 2024. But it emerges with the greatest clarity in the questions for the arbitration proposed by the Union on 14 March 2025, accepted by Cyan’s solicitor on 17 March 2025, and confirmed by a direction of the FWC on 18 March 2025. That question was, in terms, a question as to the proper construction of cl 39.2 of the Cyan EA, and made no mention of Mr Ammon.
59 Nevertheless, it does not necessarily follow that the parties and the FWC are to be taken as having agreed on an enlarged dispute about the proper construction of the clause, without reference to Mr Ammon’s circumstances. For the question of construction can equally be understood to be a statement of the one difference of view between the parties that required determination in order to resolve the issue as to Mr Ammon’s entitlements. There was after all no dispute as to the facts, such as how long Mr Ammon had served or how much long service leave he had taken in the past, and there was no apparent difference of opinion about the effect of any provision of the Cyan EA other than cl 39, or about any other matter of law or fact (Cyan’s jurisdictional objection having been earlier withdrawn).
60 That understanding of the place of the stated question in the dispute is consistent with the statement of agreed facts that the parties filed on 10 April 2025 (after the FWC stated the question for determination), which included agreed details as to Mr Ammon’s employment. It is also consistent with Cyan’s written submissions to the FWC, which refer to those details while at the same time being devoted mostly to the question of construction.
61 It is true that Mr Ammon is not mentioned at the hearing before the FWC or in the FWC’s reasons for decision expressed in the Arbitral Decision itself. These simply answer the question of construction. Nevertheless, it is possible to understand this, once again, as resolving the only issue that needed resolution, on the basis that the outcome for Mr Ammon’s particular entitlements would follow as a matter of course and would not be in issue between the parties. And the Union’s submission that the references to Mr Ammon in Cyan’s written submissions do not indicate that the dispute was limited to him reverses the practical onus in this situation. Since the dispute referred to the FWC plainly was confined to Mr Ammon’s circumstances, it was for the Union to displace that by establishing that the dispute subsequently broadened. The Union’s reliance on the subsequent notice of appeal to the Full Bench lodged by Cyan is misplaced; whatever Cyan’s understanding of the dispute was at that stage, it could not retrospectively alter the dispute that had been before the FWC at first instance and which remains the only dispute that the FWC has resolved.
62 The Arbitral Decision and the hearing before the FWC may evince a wider dispute, when considered in the context of the question for arbitration that was agreed between the parties and answered by the FWC. But when placed in the broader context I have outlined, it is reasonably open to understand the question as still directed to resolving the dispute about Mr Ammon’s entitlements. While, as the Union submits, the asserted broader dispute hinged on the correct interpretation of cl 39, so did the dispute concerning Mr Ammon.
63 And, crucially, that is the understanding which confines the scope of the arbitration to its proper bounds as set by the statutory limits of the FWC’s power that are addressed above. If the arbitration had expanded in scope to purport to resolve a general question about the construction of the Cyan EA divorced from Mr Ammon’s circumstances it would have been beyond the FWC’s powers in a manner likely to rob it of any legal effect.
64 That is not necessarily because the FWC was purporting to exercise judicial power, by forming an opinion about a legal matter other than for the purpose of taking some further step within its own power: or purporting to make a binding declaration on a legal issue: cf Wagstaff Piling. That point was not argued with any clarity before me. It is simply because the dispute the FWC would have purported to resolve was not the dispute that was referred to it, meaning that the FWC would have strayed beyond the limits to its statutory authority to resolve the dispute found, in particular, in s 595 of the FWA. The Court should be slow to characterise the dispute in a way that robs the FWC’s role of any legal effect when a different characterisation is reasonably open. See by analogy the approach to construing legislation in a manner that renders it valid, which is explained in Residual Assco Group Ltd v Spalvins [2000] HCA 33; (2000) 202 CLR 629 at [28]. That is not to equate the present approach, in an arbitral dispute, to a principle of constitutional law, but they do partake of the same common sense: the Court should be slow to impute an intention which renders ineffective or invalid something which, on another reasonable interpretation, could be effective or valid.
65 Since the latter interpretation is reasonably open here, it is the one that should be adopted. The Arbitral Decision resolved the dispute between Cyan on the one hand and Mr Ammon and the Union on the other as to Mr Ammon’s entitlements, albeit that it did so by expressing an opinion about the construction of cl 39.2. The preliminary question stated in this proceeding will be resolved in terms of answer (b).
66 I do not accept the Union’s submission that characterising the dispute this way will require each employee to bring their own separate claim in a way that will be productive of industrial chaos. The very role of the Union itself as an entity that organises and represents employees whose efforts might otherwise be disparate helps guard against that. But in any event this decision says nothing about the extent to which a claim about the application of an enterprise agreement to covered employees generally might be brought before the FWC. It is a decision to the effect that in this instance, the claim brought was a claim about the application of the enterprise agreement to Mr Ammon’s circumstances.”
Offshore Employers Association Limited v Construction, Forestry and Maritime Employees Union [2026] FCA 134 per JACKSON J delivered 20 Feb 2026
This extract from a decision of the Federal Court deals with the forensic issue of the very nature of the arbitral functions of the Commission, and the constitutional limitations of them.
“Legal principles
40 It is important to assess the facts set out above while keeping in clear view the nature and ambit of the particular statutory function which the FWC was performing when it made the Arbitral Decision.
41 The judicial power of the Commonwealth is not vested in the FWC: see Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCAFC 231; (2021) 289 FCR 308 (Maersk FC) at [74] (White J), [152] (Banks-Smith and Jackson JJ). Thus, while the FWC may form a legal opinion about a legal matter, it may go beyond its constitutional limits if it does not form the opinion for the purpose of taking some further step within its own power: Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd [2012] FCAFC 87; (2012) 203 FCR 371 at [22]. The FWC cannot contribute a binding declaration on a legal issue: see Wagstaff Piling at [31].
42 One power that the FWC may exercise is the power to determine disputes by exercising arbitral functions that are conferred on it by s 595 and s 739 of the FWA. For that is not an exercise of judicial power, since in that situation the parties have consented to submit disputes as to their legal rights and liabilities for resolution by the FWC. Provisions such as s 595 and s 739 of the FWA and its predecessors authorise the FWC to exercise a power of private arbitration: see Construction Forestry Mining and Energy Union v Australian Industrial Relations Commission [2001] HCA 16; (2001) 203 CLR 645 (Gordonstone) at [30]-[32].
43 However, the arbitral award is not binding of its own force; its effect depends on the law which operates in respect to it: Gordonstone at [31]. While that includes the private law of contract, in the present context it also includes the FWA. Section 739 relevantly applies when an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in s 186(6): s 738(b), s 739(1). This is, relevantly, a term that ‘provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes … about any matters arising under the agreement’. Clause 10 of the Cyan EA is such a term. By it, the parties have agreed that the FWC may arbitrate certain disputes, meaning that s 739(4) of the FWA authorises the FWC to do so.
44 Express limitations on the authority of the FWC appear in s 595, however. Under s 595(1) of the FWA, the FWC may deal with a dispute only if it is expressly authorised to do so under or in accordance with another provision of the Act. Similarly, the FWC may only deal with a dispute by arbitration only if it is expressly authorised to do so under or in accordance with another provision of the FWA and to avoid doubt, the FWC must not exercise that arbitral power in relation to a matter before it except as authorised by s 595: s 595(3), s 595(5). Section 595(4) authorises the FWC, in dealing with a dispute, to exercise any powers it has under Part 5-1 Division 3 Subdivision B, which permits the FWC to exercise statutory powers in the course of a private arbitration: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123; (2015) 235 FCR 305 at [85].
45 The FWC’s arbitral authority is thus expressly circumscribed by the Act. In Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCA 595, Colvin J summarised the limits on the FWC’s arbitral jurisdiction in the following way (citations removed):
[5] If an enterprise agreement, as approved, requires or allows the FWC to settle disputes and an application is made to the FWC in respect of a dispute then it acts as a private arbitrator under the authority conferred by the terms of the enterprise agreement. Absent any statutory provision conferring further private arbitration power, the FWC has no larger authority than the authority to act as a private arbitrator conferred by the enterprise agreement.
[6] Further, the nature and extent of the arbitral appointments that the FWC may undertake are also confined by the extent of the statutory authority to act as arbitrator conferred on the FWC by the Act. Whereas a natural person can accept an appointment to resolve any dispute, the FWC can only do so for the purpose of performance of its statutory functions. In that regard, s 595(1) provides expressly that the FWC may deal with a dispute only if it is expressly authorised to do so under the Act. In particular, it may deal with a dispute by arbitration only if expressly authorised to do so under or in accordance with the Act: s 595(3).
46 Subsequently, in Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (No 2) [2020] FCA 1694 (Maersk (No 2)), Colvin J expanded on these points as follows:
[140] The nature and extent of the arbitral jurisdiction of the FWC was recently considered by Flick J in Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2). It is a jurisdiction that cannot extend beyond the ambit of the dispute that has been the subject of the cl 10 procedure: at [103] …
…
[142] Therefore, the power is a private arbitral power, but the manner in which it may be conferred is regulated by the statute.
[143] As a result, the authority of the FWC to accept private arbitral appointments is limited by the scope of the statutory provisions that confer authority on the FWC to accept private arbitral appointments. The FWC cannot accept arbitral appointments outside the ambit of the statute. By the terms of s 186(6) of the Fair Work Act, the FWC can accept arbitral appointments to settle disputes ‘about any matters arising under’ the relevant enterprise agreement and by the terms of s 595(3) the FWC may only deal with a dispute by arbitration if expressly authorised to do so under or in accordance with the Act. A purported appointment that conferred broader authority than that conferred by an enterprise agreement (as approved by the FWC) could not be accepted by the FWC and a decision made in the purported performance of such an appointment would exceed the statutorily conferred private arbitral jurisdiction of the FWC.
47 Elsewhere (at [91]), his Honour described what happened when a dispute reached stage four of the dispute resolution clause there, which was relevantly similar to cl 10 of the Cyan EA, as the dispute having ‘crystalized’. These observations were not questioned by the Full Court in Maersk FC, when it upheld the decision in Maersk (No 2).
48 It follows that the scope of the dispute that was capable of reference to the FWC for arbitration under the Cyan EA, and the scope of the dispute that was capable of being determined by it pursuant to its statutory powers and functions, was the dispute that had been left unresolved by the steps taken under the dispute resolution clause prior to the reference: see Maersk FC at [147]. Importantly to the outcome of the present issue, in my view this means that whatever the position might be in a private arbitration conducted by a person who is not vested with statutory powers and functions (see Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245 at [138]), the parties here were not able to expand the scope of the dispute by consent subsequent to the reference. For to do so would be to purport to give the FWC the power to determine the wider dispute in a manner that is binding under the Cyan EA and the FWA, being a power it did not have.
49 The Union submits, contrary to this, that a dispute before the FWC is neither stagnant nor confined to the matters detailed in the initiating application, and that a dispute may be diminished, enlarged or altered in the course of FWC proceedings, including by the evidence filed or submissions made. The Union relies on R v Portus; Ex parte Transport Workers’ Union of Australia (1977) 141 CLR 1 a case where, at 23-25, Jacobs J seemed to accept that a dispute could become ‘crystallized’ in certain terms by the end of a proceeding in the then Australian Conciliation and Arbitration Commission, implying that its scope could change in the course of evidence and submissions. It also relies on a passage in R v Bain; Ex parte Cadbury Schweppes Australia Ltd (1984) 159 CLR 163 at 168 where Murphy J held that an industrial dispute could be ‘diminished or ended or enlarged or altered during the course of the proceedings in the Commission’, and a passage in Re Printing & Kindred Industries Union; Ex parte Vista Paper Products Pty Ltd (1993) 113 ALR 421 at 433 in which Gaudron J applied R v Bain. But the Union did not establish for any of those cases that the legislative provisions under consideration confined the powers of the FWC so as to preclude any consensual expansion of the dispute by the parties, and it does not appear that this point was taken in any of them. And the last two cases, at least, concerned the scope of industry awards made by predecessors to the FWC, which engaged different considerations to those that pertain to a dispute resolution provision of a modern enterprise agreement.
50 The same may be said of Cyan’s reliance on Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers’ Union of Australia (1987) 163 CLR 656, which concerned the distinction between the purported exercise of judicial power, such as determining whether a pre-existing legal obligation has been breached, and the arbitral power of the then Conciliation and Arbitration Commission to create new rights and obligations. I do note, however, that in that case (at 664) the High Court acknowledged that ‘a claim that a right or obligation should exist may be formulated in a manner which requires the Commission to assume powers which it does not possess’.
Identification of ‘the matter and/or dispute’ that the FWC resolved
51 In any given case, identifying the dispute that is the effective subject of the reference is a question of fact. In this case, on a straightforward reading of cl 10, what must be identified is the ‘the matter and/or dispute’ which, by Step 4 of the procedure in cl 10, ‘the preceding steps have failed to resolve’ (or which has not been resolved within 10 days of the initiation of Step 1).
52 That is a reference to a dispute in fact, understood in the broad pragmatic way fitting for a dispute resolution procedure in this context, and does not import technical notions such as the concept of a ‘matter’ in Australian constitutional law: see Maersk FC at [74], [152]. It is necessary to permit a degree of flexibility and informality in the manner in which a dispute is referred to arbitration under a dispute resolution clause such as cl 10.1 of the Cyan EA: see Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2) [2020] FCA 951 at [60]-[61] (Flick J). Analogously to the approach endorsed by the Full Court in The Transport Workers’ Union v Mayne Nickless Ltd [1998] FCA 1022, it is necessary to ‘review the entire factual background to properly characterize the claim and the power sought to be invoked’.
53 There is little evidence as to the three steps that preceded Step 4 under cl 10 of the Cyan EA in this case. The only piece of evidence prior to the reference itself is the email chain of 4 February 2025. This plainly concerned Mr Ammon’s long service leave entitlement; he appears to have been the one who raised the question with Ms Thorp. Mr Gakis from the Union also expressed disagreement and referred to another dispute, perhaps the ‘Lucas’ one, but nothing in his reply changed the fact that the dispute at this stage was about Mr Ammon’s particular entitlement.
54 No submissions were made to identify which step in cl 10 pertained to this email chain; it is most likely to be Step 2 since the email correspondence seemed to involve ‘the Employee, the Employee’s Union delegate, or other nominated representative and the Master and/or Employer’s nominated delegate, or other nominated representative’. But nothing turns on this as it was common ground that all four steps in the clause had been fulfilled.
55 The clearest evidence as to the scope of the ‘matter and/or dispute’ that was referred to arbitration by the FWC are the Form 10 filed by the Union and the responsive application filed by Cyan. The Form 10 clearly frames the dispute as, in its words, one that ‘arises with respect to the long service leave entitlements for Geoffrey Ammon’. It also sets out matters pertaining to Mr Ammon’s length of service and the long service leave entitlement that he as accrued.
56 While Cyan contended in its responsive application that the Union was seeking an exercise of judicial power, that was not because it characterised the dispute as being about the interpretation of cl 39 at large. The responsive application proceeded on the basis that it was still a dispute about Mr Ammon’s entitlements, and the specific complaint Cyan made was that the Union was seeking a declaration about those entitlements. The Union’s submission that the references to Mr Ammon were merely reflective of a broader disagreement between the Union and Cyan may be correct, but it does not alter the position that a disagreement about Mr Ammon’s particular long service leave entitlement was the dispute that was referred to the FWC.
57 The email from Cyan’s solicitor to the FWC on about 7 March 2024 is consistent with this.
58 The Union, of course, relies on subsequent developments as indicating that the dispute that was the subject of the arbitration had expanded to encompass the construction of the cl 39 in general. There is a hint of this in the FWC’s response to the email of 7 March 2024. But it emerges with the greatest clarity in the questions for the arbitration proposed by the Union on 14 March 2025, accepted by Cyan’s solicitor on 17 March 2025, and confirmed by a direction of the FWC on 18 March 2025. That question was, in terms, a question as to the proper construction of cl 39.2 of the Cyan EA, and made no mention of Mr Ammon.
59 Nevertheless, it does not necessarily follow that the parties and the FWC are to be taken as having agreed on an enlarged dispute about the proper construction of the clause, without reference to Mr Ammon’s circumstances. For the question of construction can equally be understood to be a statement of the one difference of view between the parties that required determination in order to resolve the issue as to Mr Ammon’s entitlements. There was after all no dispute as to the facts, such as how long Mr Ammon had served or how much long service leave he had taken in the past, and there was no apparent difference of opinion about the effect of any provision of the Cyan EA other than cl 39, or about any other matter of law or fact (Cyan’s jurisdictional objection having been earlier withdrawn).
60 That understanding of the place of the stated question in the dispute is consistent with the statement of agreed facts that the parties filed on 10 April 2025 (after the FWC stated the question for determination), which included agreed details as to Mr Ammon’s employment. It is also consistent with Cyan’s written submissions to the FWC, which refer to those details while at the same time being devoted mostly to the question of construction.
61 It is true that Mr Ammon is not mentioned at the hearing before the FWC or in the FWC’s reasons for decision expressed in the Arbitral Decision itself. These simply answer the question of construction. Nevertheless, it is possible to understand this, once again, as resolving the only issue that needed resolution, on the basis that the outcome for Mr Ammon’s particular entitlements would follow as a matter of course and would not be in issue between the parties. And the Union’s submission that the references to Mr Ammon in Cyan’s written submissions do not indicate that the dispute was limited to him reverses the practical onus in this situation. Since the dispute referred to the FWC plainly was confined to Mr Ammon’s circumstances, it was for the Union to displace that by establishing that the dispute subsequently broadened. The Union’s reliance on the subsequent notice of appeal to the Full Bench lodged by Cyan is misplaced; whatever Cyan’s understanding of the dispute was at that stage, it could not retrospectively alter the dispute that had been before the FWC at first instance and which remains the only dispute that the FWC has resolved.
62 The Arbitral Decision and the hearing before the FWC may evince a wider dispute, when considered in the context of the question for arbitration that was agreed between the parties and answered by the FWC. But when placed in the broader context I have outlined, it is reasonably open to understand the question as still directed to resolving the dispute about Mr Ammon’s entitlements. While, as the Union submits, the asserted broader dispute hinged on the correct interpretation of cl 39, so did the dispute concerning Mr Ammon.
63 And, crucially, that is the understanding which confines the scope of the arbitration to its proper bounds as set by the statutory limits of the FWC’s power that are addressed above. If the arbitration had expanded in scope to purport to resolve a general question about the construction of the Cyan EA divorced from Mr Ammon’s circumstances it would have been beyond the FWC’s powers in a manner likely to rob it of any legal effect.
64 That is not necessarily because the FWC was purporting to exercise judicial power, by forming an opinion about a legal matter other than for the purpose of taking some further step within its own power: or purporting to make a binding declaration on a legal issue: cf Wagstaff Piling. That point was not argued with any clarity before me. It is simply because the dispute the FWC would have purported to resolve was not the dispute that was referred to it, meaning that the FWC would have strayed beyond the limits to its statutory authority to resolve the dispute found, in particular, in s 595 of the FWA. The Court should be slow to characterise the dispute in a way that robs the FWC’s role of any legal effect when a different characterisation is reasonably open. See by analogy the approach to construing legislation in a manner that renders it valid, which is explained in Residual Assco Group Ltd v Spalvins [2000] HCA 33; (2000) 202 CLR 629 at [28]. That is not to equate the present approach, in an arbitral dispute, to a principle of constitutional law, but they do partake of the same common sense: the Court should be slow to impute an intention which renders ineffective or invalid something which, on another reasonable interpretation, could be effective or valid.
65 Since the latter interpretation is reasonably open here, it is the one that should be adopted. The Arbitral Decision resolved the dispute between Cyan on the one hand and Mr Ammon and the Union on the other as to Mr Ammon’s entitlements, albeit that it did so by expressing an opinion about the construction of cl 39.2. The preliminary question stated in this proceeding will be resolved in terms of answer (b).
66 I do not accept the Union’s submission that characterising the dispute this way will require each employee to bring their own separate claim in a way that will be productive of industrial chaos. The very role of the Union itself as an entity that organises and represents employees whose efforts might otherwise be disparate helps guard against that. But in any event this decision says nothing about the extent to which a claim about the application of an enterprise agreement to covered employees generally might be brought before the FWC. It is a decision to the effect that in this instance, the claim brought was a claim about the application of the enterprise agreement to Mr Ammon’s circumstances.”
Offshore Employers Association Limited v Construction, Forestry and Maritime Employees Union [2026] FCA 134 per JACKSON J delivered 20 Feb 2026