Fair Work – jurisdictional error
Federal Court overturns workplace delegates’ rights terms in modern awards, finding that the Fair Work Commission went beyond powers under Fair Work Act 2009 (Cth)
In Construction, Forestry and Maritime Employees Union v Australian Industry Group [2025] FCAFC 187 (17 December 2025), the Full Court of the Federal Court of Australia (Wheelahan, Jackson and Dowling JJ) found that orders made by the Fair Work Commission (Commission) to vary individual modern awards by including a “delegates’ rights term” were affected by jurisdictional error. The Court held that the term impermissibly imposed restrictions on the exercise of the delegates’ rights in ways not provided for in the Fair Work Act 2009 (Cth) (FW Act).
Background
The FW Act requires modern awards made by the Commission to include a term providing for “the exercise of the rights of workplace delegates” (delegates’ rights term) (at [1]).
On 28 June 2024, the Commission made orders varying several modern awards to include this term (at [1]). The modern awards included awards operating in the mining and energy sector and the construction, manufacturing and electrical sectors (at [3]).
The applicants in this matter were:
- the Construction, Forestry and Maritime Employees Union (CFMEU)
- the Mining and Energy Union (MEU)
- the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU).
Arguments
The applicants successfully argued that the Commission orders inserting the delegates’ right term were affected by jurisdictional error (at [1], ([7])) in three ways:
- Error one – the delegates’ rights term “limited workplace delegates to representing employees of the employer of the delegate, rather than all employees in the enterprise” (at [2]).
- Error two – the delegates’ rights term “provided for the delegate to communicate with workers for the purpose of representing their industrial interests specifically, rather than about their industrial interests more generally” (at [2]).
- Error three – it also “imposed restrictions on the exercise of the delegates’ rights not provided for by the [FW Act]” (at [2]).
The Commission’s task, as described by cl 95(2) of sch 1 to the FW Act, was to “make a determination varying the modern award to include a delegates’ rights term”.
A delegates’ rights term is defined by s12 of the FW Act as “a term in a fair work instrument that provides for the exercise of the rights of workplace delegates”. The note to that definition explains that “the rights of workplace delegates are set out in s 350C, and a delegates’ rights term must provide at least for the exercise of those rights” (at [13]).
The note accompanying the definition of delegates’ rights term was contained in the text of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth) as passed by both houses of parliament (at [15]). The Commission was not authorised to limit or detract from the workplace delegates’ rights provided for by s350C (at [18]).
In relation to Error One, an argument made by the respondent Housing Industry Association Limited (HIA) was that the Commission was jurisdictionally entitled to restrict the scope of the delegates’ rights term to employees of an employer covered by the award pursuant to s142(1) of the FW Act (at [56]).
Section 142 of the FW Act is titled “Incidental and machinery terms”. Subsection (1) provides that modern awards may include terms that are:
(a) incidental to a term that is permitted or required to be in the modern award
(b) essential for the purpose of making a particular term operate in a practical way (at [57]).
The HIA argued that the restriction of the scope of the delegates’ rights term to employees of an employer was both incidental to a term that was required to be in the modern award (being the delegates’ rights term) and essential for the purpose of making the delegates’ rights term operate in an enforceable manner (at [58]).
The HIA also argued that whether a term is “essential” under s142(1)(b) is a discretionary matter for the Commission. As such, any error in the Commission’s conclusion is not jurisdictional in nature (at [59]).
Findings
The Full Court did not accept these submissions, or even that s142 was directed to the relevant circumstances. The Full Court highlighted that this dispute was concerned with the adequacy of the required term. The Commission had not purported to make a term incidental to that required term and essential for its practical operation. Instead, the Commission had limited the scope of the required term (at [60]).
Among other things, the Full Court found that Error Three meant that the Commission orders were “fundamentally inconsistent with the grant of rights provided” by the FW Act (at [92]).
For example, the Full Court held that one element of the delegates’ rights term was that the workplace delegate must, when exercising their entitlements, comply with their duties and obligations as an employee. However, the Full Court pointed out that one of the duties of an employee is to act in the interests of the employer (at [93]).
Further, the FW Act provided that the role of a workplace delegate is to represent the industrial interests of employees. Intrinsic to this is that the workplace delegate may act in the interests of the employees rather than the employer. The delegates’ rights term was therefore “at odds with the grant of rights to workplace delegates” under the FW Act, particularly because the Commission required the workplace delegate to comply with their duties and obligations as an employee in an absolute manner rather than “filtered by any reasonableness” (at [93]).
The Full Court was satisfied that by making the orders to vary the modern awards by the inclusion of its delegates’ rights term, the Commission misunderstood its statutory task (at [104]) and misapprehended or disregarded the nature or limits of its functions or powers (at [105]).
Orders
The Full Court issued writs of certiorari to quash the decisions of the Commission varying the modern awards to insert the delegates’ rights term and further issued writs of mandamus to require the Commission to exercise its function according to law (at [113]).
