We have previously reported1 on the decision of Commissioner Smith of FWA (FWA) where the Commissioner refused to approve an enterprise agreement for Woolworths because the agreement did not contain a compulsory arbitration procedure to settle disputes about matters arising under the agreement.

Woolworths appealed that decision and a full bench of FWA granted its appeal today, 26 February 2010.

The Full Bench decision2 concluded that the Fair Work Act (FW Act) does not require disputes procedures in agreements to provide for arbitration. This is consistent with the long established principle that a dispute settlement provision in an agreement need only contain a procedure for preventing and settling disputes, not one which guaranteed a settlement in each case.

In its decision, the Full Bench relied upon the previous Full Bench decision in Ampol, which was decided in February 1998. They concluded that if the legislature had intended to alter the effect of the decision in Ampol, it could have easily made that intention explicit.

During the hearing of the appeal, the Full Bench heard argument from various parties and interveners, including the ACTU, ACCI and AIG. Importantly, counsel for the Minister for Workplace Relations also appeared and supported the contention that the legislation did not alter the longstanding practise of voluntary arbitration in this area.

Today’s decision is important because it provides bargaining parties with much needed certainty as to FWA’s requirements for approval of agreements, especially given that a dispute settlement procedure is mandatory in all enterprise agreements.