FWC can order employers to comply with its arbitrated rulings

An enterprise agreement will often include a procedure for dealing with disputes, which involves referral to the Fair Work Commission (FWC) for private arbitration.

The scope of powers that the FWC is able to exercise in the performance of its arbitral function is primarily defined by the dispute-resolute procedure term in the agreement. If the relevant enterprise agreement is silent about the nature of the powers the FWC is able to exercise, the assumption is that it is able to exercise its usual powers and will adopt its usual procedures.

In SC Hydro Pty Ltd v Construction, Forestry and Maritime Employees Union (2026), the FWC resolved a dispute referred to it by the relevant union about the proper classification of employees under the enterprise agreement. When the employer ignored the decision, the union approached the FWC for orders requiring the employer to implement the decision by properly classifying the employees and making back payments of wages.

The employer argued the FWC’s job as a private arbitrator was completed once a final and binding award had been made, and thereafter the FWC had no further power to deal with the dispute. However, the FWC considered that it still had power to deal with the dispute in this matter.

The FWC noted its determination bound the employer, and the employer could not challenge the determination simply on the basis it disagreed with the conclusion. To comply with the enterprise agreement, the employer was required to treat and pay the identified employees at the correct work classification. To the extent it continued to fail to do so, it was contravening the agreement. The identified employees and the union could commence proceedings in the Federal Court or Federal Circuit and Family Court to recover underpayments or for pecuniary penalties to be imposed with respect to the apparent non-compliance.

As the employer was openly and consciously defying the determination of the FWC, the FWC saw merit in the original decision being varied to make orders that more clearly articulate steps that the FWC considers should be taken to resolve the dispute and that those steps should be taken at a particular time to bring the dispute to an end. Therefore, the FWC made the orders sought by the union requiring the employer to implement the decision by properly classifying the employees and making back payments of wages.

The decision is interesting given the fact that contravening an order issued by the FWC, subject to certain exceptions, is a criminal offence attracting a maximum penalty of imprisonment for 12 months.

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