Private arbitrations; their role in the fair work world
“The Power to make Orders in Private Arbitrations
In the extract of the High Court decision in CFMEU v AIRC above it is made clear that the exercise of judicial power results in an order that is binding of its own force. So too is an order made under the Act pursuant to a specific power to make orders of binding force. In the case of private arbitration, however, the arbitrator’s powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator’s award is not binding of its own force. An arbitrator’s decision in a private arbitration should be expressed as a determination because it cannot be enforced under the Act as an order.
In submitting to the contrary the MFB seeks to conflate the terms of s.595 and s.739 of the Act. Such reliance is misplaced. S.595(3) is a limitation on arbitration powers and the issuing of orders in the absence of express authority to do so. S.739 permits the Commission to arbitrate a dispute if the parties have authorised it to do so under a term of an enterprise agreement. The parties cannot confer a statutory power to make orders of a binding force on the Commission. All they can do is agree, as a matter of contract, to accept the outcome of arbitration. The power to arbitrate is created by the parties’ agreement and is enforceable as a matter of contract. The decision of the Full Bench in Victoria University v National Tertiary Education Industry Union  FWCFB 2892 is not inconsistent with these principles.”
See Metropolitan Fire and Emergency Services Board v United Firefighters’ Union of Australia and another (2016) FWCFB 8120 delivered 10 November 2016 per Watson VP, Dean DP and Harper-Greenwell C