Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Opal Packaging Australia Pty Ltd

This Full Federal Court case concerned the meaning of a dispute resolution clause in an enterprise agreement and whether it stopped Opal Packaging Australia from changing the operation of random alcohol and drug testing while a dispute was on foot. The key wording said that while the dispute resolution procedure was being followed, work shall continue normally and the status quo remain, with further wording about work in the affected area remaining as it was at the initiation of the dispute and no change to duties, shift, occupation or income during the process.

The appeal was dismissed, so Opal succeeded overall. But the Court did not simply endorse the primary judge's reasoning. The available reasons show the Court considered the clause had been misconstrued below and that both parties had also advanced incorrect constructions. For businesses, the practical point is that these clauses need close reading. You cannot safely assume that a disputed operational change is either always frozen or always allowed.

Opal operated a recycling, paper and packaging business, including box manufacturing sites at Scoresby, Brooklyn and Launceston. It acquired the business from Orora in May 2020. Before the acquisition, Orora had an alcohol and other drugs policy that provided for random testing. The policy wording said the testing provider would determine the process for selecting the random sample of team members and or sites and shifts for testing.

Although the policy referred to random testing, the actual practice under Orora had been to randomly select a site and then test all covered employees at that site. The judgment refers to this as blanket testing. In early April 2020, random testing was paused because of operational constraints associated with COVID-19 public health orders. When Opal took over the business, it adopted the same policy and continued the suspension for a considerable time.

The enterprise agreement later approved for the business contained a dispute resolution clause in clause 16.3. On 23 October 2023, Opal emailed employees saying random testing would recommence within the next month and that testing would be randomly selected from team members on site at the testing time. In the same communication, Opal consulted on three proposed changes to the policy. Those proposed changes concerned self-testing facilities, stand-down after a non-negative screen test, and Medical Review Officer review in cases involving a Pharmaceutical Fitness for Work Assessment.

Disputes were then initiated at various sites covered by the agreement. On 23 January 2024, Opal advised employees that after considering feedback it would proceed with the three proposed changes immediately. The AMWU objected on 25 January 2024. It said the dispute resolution procedure was still engaged and clause 16.3(b) meant work in the affected area had to remain as it was when the dispute began. The union also said the introduction of 10% random sampling was a change.

Opal replied the same day. It said the policy had always provided for random testing and was silent on the method of selection. On that basis, Opal argued that using a different sampling method from Orora's historical approach was not itself a change to the policy. Opal then conducted random testing of a sample of the workforce on 13 February 2024 at Scoresby, 14 February 2024 at Launceston and 15 February 2024 at Brooklyn.

The union applied to the Fair Work Commission on 14 February 2024 for the dispute to be dealt with under the agreement. It also commenced Federal Court proceedings on 7 March 2024 alleging that by conducting the February testing, Opal had contravened section 50 of the Fair Work Act by failing to comply with clause 16.3 of the enterprise agreement.

The dispute centred on clause 16.3 of the Opal Fibre Packaging National Enterprise Agreement 2022. The clause sat within a broader dispute resolution procedure that applied to disputes about matters under the agreement, workplace industrial policy, practice or procedure, proposed amendments to workplace policy or procedure, awards and incorporated instruments, and the National Employment Standards.

Clause 16.3 said:

First, while the dispute resolution procedure was being followed, work shall continue normally and the status quo remain, subject to health and safety concerns about imminent risk. Second, while the procedure was being followed, work in the affected area would remain as it was at the initiation of the dispute. Third, for the avoidance of doubt, no employee's duties, shift, occupation or income would be changed during the process.

The union argued that this wording preserved the relevant pre-dispute state of affairs, including policies and practices connected to the dispute. On that view, Opal could not resume random testing in the new way while the dispute remained unresolved. Opal argued that the clause was directed to work continuing normally and did not freeze policies or practices more generally.

The Court identified two issues on appeal. The first was the correct construction of clause 16.3. The second was whether, if the union's construction were correct, Opal had contravened the clause on the February 2024 testing dates.

The Full Court dismissed the appeal. That means Opal succeeded overall. However, the available reasons show the Court did not simply accept the primary judge's approach. The Court said there had been a misconstruction of the clause below. It also said both parties had put forward erroneous constructions.

The Court rejected the union's argument that the clause necessarily froze the whole state of affairs relevant to the dispute, including all practices and policies in the broad way the union contended. But it also rejected Opal's argument that the clause was concerned only with the performance of work and not with policies or practices. The Court said neither side had given sufficient attention to what each subclause of clause 16.3 was directed to achieving and what the clause, read both individually and as a whole, was directed to.

The available reasons show the Court placed particular weight on clause 16.3(b) and (c). Those subclauses revealed that the clause was concerned with preserving the circumstances in which work was undertaken at the initiation of the dispute and ensuring there be no change in working conditions, specifically duties, shift, occupation or income, during the process. The Court also rejected what it described as the artificiality of Opal's submission that 'the work' was purely about contractual terms and could be differentiated from policy or practice. The extract indicates the Court accepted that a policy or practice may bear on how work is undertaken.

Even so, the appeal failed and Opal's notice of contention was upheld. The visible part of the judgment does not include the complete final reasoning explaining exactly why Opal's February 2024 testing did not amount to a contravention on the Court's preferred construction. That is an important limit on how far the case can be taken as precedent in a short public explainer.

This case is best read as a warning against shortcuts. If your business is covered by an enterprise agreement, the dispute clause may operate as a real control on implementation timing. That is especially true where the proposed change affects how work is carried out in practice, even if management believes the written policy already allows the change.

The Court's reasoning, as far as it is available, shows that the analysis is not limited to the text of the policy. It can also involve the actual workplace practice before the dispute began. Here, that mattered because random testing had been suspended for a long period and the historical practice under the previous owner had been blanket testing, even though the policy itself referred to random testing and left the selection process to the testing provider.

For employers, the practical question is often not 'Do we have a policy right?' but 'What was the position at the initiation of the dispute, and does the proposed step alter the circumstances in which work is undertaken in the affected area?' If the answer is unclear, there is litigation risk in moving ahead.

This is particularly relevant for safety-sensitive systems such as alcohol and other drugs testing, but the same reasoning may matter for rostering, allocation methods, site access procedures, monitoring systems, attendance controls, or other operational practices. The exact words of the agreement remain critical. A different clause may produce a different result.

Several pieces of evidence were central to the dispute described in the judgment. First was the wording of the AOD policy itself, especially the provision that the testing provider would determine the process for selecting the random sample of team members and or sites and shifts for testing. Second was the historical practice under Orora, which had been to select a site and then test all covered employees there. Third was the fact that random testing had been paused in early April 2020 and remained suspended for a considerable time after Opal took over.

Also important were Opal's October 2023 email announcing that random testing would recommence and that testing would be randomly selected from team members on site at the testing time, the consultation materials identifying the three proposed policy changes, the January 2024 communications about implementation, and the union's objection that clause 16.3 prevented the changes while the dispute remained active.

For businesses, this is a reminder that disputes of this kind are often won or lost on records. Courts and tribunals may need to compare the written policy, the actual historical practice, the timing of the dispute, and the exact conduct implemented during the dispute period.

If your business is considering a workplace change while a dispute procedure is running, treat the agreement as part of the operational decision-making process. The safest approach is to slow down and map the issue carefully before implementation.

Start by identifying the clause that governs disputes and any wording about work continuing normally, the status quo, the affected area, or no change to duties, shifts, occupation or income. Then identify the exact date the dispute was initiated and what issue was actually in dispute. Next, document the pre-dispute position in practical terms. Ask what employees were actually doing, what management was actually doing, and whether any relevant practice had been paused, varied or applied differently over time.

After that, compare the proposed change against that baseline. If the change affects how work is undertaken, who is selected for a process, where work is performed, or the practical conditions under which work continues, there may be a real argument that the status quo has been disturbed. If the agreement wording is broad or unusual, legal review is sensible before implementation.

The Full Court judgment is dated 1 May 2026. The appeal was from a 2025 Federal Court decision. The available reasons also record that the Fair Work Commission approved the enterprise agreement on 23 January 2023, with effect from 30 January 2023. The October 2023 email announced the recommencement of random testing and consultation on proposed policy changes. The disputed testing occurred on 13, 14 and 15 February 2024. The union's Fair Work Commission application was made on 14 February 2024, and the Federal Court proceeding was commenced on 7 March 2024.

The public explanation here remains under review because the visible judgment text is incomplete. The available material is enough to explain the dispute, the clause, the broad reasoning and the result, but not enough to state the Court's final reasoning in full detail.

Source: Federal Court of Australia, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Opal Packaging Australia Pty Ltd [2026] FCAFC 54, judgment dated 1 May 2026. The available judgment text identifies the parties, the appeal outcome, the relevant enterprise agreement clause, the factual background, the issues on appeal and substantial parts of the Court's reasoning.

The visible text is truncated before the end of the reasons. Because of that, this page should be read with care and should not be used as a substitute for reading the complete judgment where precise precedent analysis is required.