In the first major consideration by the Federal Court of the Fair Work Act’s intractable bargaining regime, a full Federal Court has refused to overturn a finding by a Fair Work Commission Full Bench that no terms had been agreed between the parties, and therefore there were no ‘agreed terms’ which were required to be included in an intractable bargaining determination.
The case was decided on purely legal reasons around the availability of the specific relief sought by the union applicant, and based on how the union (wrongly) framed its application and (mistakenly) ran its case, even when offered the chance to change track.
As a result:
- we are none the wiser what will be ‘agreed terms’, and whether bargaining can be conducted on a qualified no-agreement-till-full-agreement basis; and
- the decision gives the Commission the ability to inform itself on what it considers are agreed matters – many members are likely to apply that power very broadly.
Therefore, until further guidance is provided by the Federal Court, the best advice we can give is that if an employer has any concern it might end up in an IBD process (and perhaps in all bargaining generally) it should:
- expressly qualify, from the commencement, that bargaining (and any ‘post declaration negotiation period’) is conducted on the basis that there is no agreement until the parties reach final agreement on all matters;
- seek advice on the wording it should use in any bargaining meetings, minutes and other communications with the bargaining representatives and its employees; and
- in some cases, be better to frame agreement on any term as being agreed provided the union/s agree to specific matters the employer wants/does not want changed.
The better approach will be circumstantial, and specific advice will depend on the circumstances.
Background
Following a prolonged period of negotiation between the United Fire Union (UFU) and Fire Rescue Victoria (FRV), a Full Bench of the Fair Work Commission issued an intractable bargaining declaration (including directing the parties to engage in a two-week post-declaration negotiation period).
The Commission is yet to issue a determination, but opined in a preliminary decision[1] that there were no agreed matters which must be included in any determination. This was because FRV had always made clear that any consensus on any term was made on an in-principle basis, expressly stating there was no agreement on any terms until agreement was reached on all terms, with FRV communicating during bargaining that the final offer was subject to government approval and therefore had not been ‘agreed’ for the purposes of s 274(3) of the Fair Work Act as it then stood. The Commission agreed. The Closing Loopholes reforms attempted to address this by clarifying the time at which the ‘agreed terms’ must be ascertained, but the Commission’s opinion was issued prior to these amendments taking effect.
In its application for judicial review of the Commission’s opinion, the UFU claimed that all matters where consensus was reached, even qualified matters, were ‘agreed matters’ required to be included in the determination, and sought writs of certiorari and mandamus against the alleged exercise of power by the Commission on the basis that:
- the Commission misconstrued the relevant provisions of the Act; and
- the finding of the Commission that there were no agreed terms was a ‘jurisdictional fact’, and that the Commission had wrongly determined this fact.
Held
The Commission has made a declaration but because the Commission has yet to make a determination on the Union’s application, the reformed s 274(3) regime will apply.
The reformed provision differs from the former provision in that:
- whereas the former provision directed attention to two alternative points in time, the current provision provides for an accumulation of agreed terms at three successive points in time; and
- any terms agreed at the time an application is made, and any additional agreed terms at the end of a negotiating period, are ‘locked in’ for the purposes of the Commission making its determination.
There are three features of the Union’s application that together are dispositive:
- Under the amended law, the legislation under which a determination is to be made by the Commission has been amended, with the result that the opinion expressed by the Commission as to what ‘agreed terms’ exist is the result of applying a different test from the one the Commission must apply when it ultimately comes to make its determination.
- Despite expressing its view as to what ‘agreed terms’ existed under the former iteration of the legislation, the Commission has not yet made a decision that is amenable to a writ of certiorari, as the expression of the Commission’s opinion did not, in and of itself, have any effects on the UFU’s legal rights. However, the Court accepted that the final determination will have an effect on legal rights (and therefore be amenable to judicial review).
- The Union sought no other relevant relief – while the application sought such further or other orders as the Court considers appropriate, the Union did not address the Court on any relief other than its claims for certiorari and mandamus.
The case is United Firefighters’ Union of Australia v Fire Rescue Victoria [2025] FCAFC 16
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