Application by the Restaurant and Catering Association of Victoria

[2013] FWC 6705

[2013] FWC 6705

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.608 - Referral of a question of law to the Federal Court

Application by the Restaurant and Catering Association of Victoria
(AM2012/186)

JUSTICE ROSS, PRESIDENT MELBOURNE, 16 SEPTEMBER 2013

Referral of a question of law to the Federal Court- s.608 Fair Work Act 2009 (Cth) - no relevant factual context - application refused

[1] This decision concerns an application by the Restaurant and Caterers Association of Victoria (RCA) for the referral of a question of law to the Federal Court pursuant to s.608 of the Fair Work Act 2009 (Cth) (the Act). At the heart of the application is the interpretation of the model transitional provisions concerning the phasing of loadings and penalty rates in the Restaurant Industry Award 2010 (the Restaurant Award). The background can be shortly stated.

[2] The Fair Work Ombudsman (FWO) has issued a document titled ‘Guidance Note 7’, concerning transitional arrangements in modern awards. The FWO Guidance Note contains a calculation method for phasing ‘non-equivalent’ penalties and loadings in modern awards. The RCA contends that the calculation method in the FWO Guidance Note is inconsistent with the correct interpretation of the transitional provisions in the Restaurant Award and, if applied in practice, requires different and higher transitional payments to be made by employers. In short, there is a difference of view about whether a particular allowance under the Restaurant Award should be phased-in and phased-out simultaneously. It should be noted that this confusion is based on the applicant’s understanding of the FWO’s Guidance Note, and is not based on an actual calculation by the FWO.

[3] In an effort to resolve this issue the RCA made an application as part of the Transitional Review of Modern Awards to vary the transitional provisions in the Restaurant Award. The intent of the application was to give effect to the RCA’s interpretation of the transitional provisions. The RCA sought to vary the Restaurant Award by varying clause A.4 of Schedule A. The existing clause A.4 is in the following terms:

“A.4 Loadings and penalty rates

For the purposes of this schedule loading or penalty means a:

• casual or part-time loading;



• Saturday, Sunday, public holiday, evening or other penalty;



• shift allowance/penalty”

[4] The RCA sought to replace A.4 of Schedule A with the following:

“A.4 Loadings and penalty rates

For the purposes of this schedule loading or penalty means a:

• casual or part-time loading;



• Saturday, Sunday, public holiday, evening or other penalty;



• allowance/penalty




Where a pre-modern award penalty rate is deemed not equivalent to a modern award penalty the new penalty rate shall be “phased in” from zero in five instalments of 20% commencing from 1 July 2010 and the pre-modern award penalty shall be phased out from and no longer apply from 1 July 2010.”

[5] The application was heard by a Full Bench constituted to deal with applications relating to transitional provisions. The Full Bench dismissed the application and held that the RCA’s concerns about the FWO’s Guidance Note were ‘without practical substance’.

“Our conclusion therefore is that the applicants’ stated concerns about paragraphs 9.12-9.14 of Guidance Note 7 are without practical substance. The mathematical method of calculation used by the Fair Work Ombudsman produces results which are consistent with Schedule A, are consistent with the applicants’ original method of calculation, and are correct. There is no anomaly or technical problem requiring resolution.”  1

[6] In the present proceedings the RCA seeks the referral of a question of law to the Federal Court of Australia. The question sought to be referred by the RCA is as follows:

“That the provisions of Part A.5 and A.6 of Schedule A of the Restaurant Industry Award 2010 and the same provisions in all Modern Awards may not be applied simultaneously to any single provision in an award based transitional instrument on the one hand and an equivalent provision in a Modern Award on the other.”

[7] The RCA advances the following grounds in their application:

• There has been a disagreement between the office of the Fair Work Ombudsman (FWO) and the Applicant as to how the transitional provisions in the Restaurant Industry Award 2010 should be applied. The FWO issued a guidance note as to how to calculate phasing in. In their guidelines (Exhibit RCA1 to the application) the FWO use a “phase-in phase out method”. The application of this method results in an aggregate amount that is higher than either the previous award or the modern award.

• The applicant has discussed this problem with the FWO, but has failed to persuade them that the problem they are creating is not a correct application of the modern award transitional provisions.

• In order to overcome this problem the applicant filed the application mentioned above as part of the Modern Awards Review 2012, seeking to vary schedule A.4 of the Restaurant Award. The Full Bench declined to make the variation sought.

• The applicant says the calculation made by the Full Bench is wrong and their understanding of the calculations followed by the FWO is also incorrect.

• The applicant states they made the original application in good faith, believing that the amendment would remove any doubt or any chance of the transitional provisions being applied incorrectly at great cost to an industry made up of substantially small businesses which employ tens of thousands of Australians, young and old. The applicant says ‘it appears the Full Bench have declined to vary the Restaurant Industry Award as it contains what is a standard phasing in provision across all modern awards.’

[8] Section 608 of the Act is in the following terms:

s.608 Referring questions of law to the Federal Court

(1) The President may refer a question of law arising in a matter before the FWC for the opinion of the Federal Court.

(2) A question of law referred under subsection (1) must be determined by the Full Court of the Federal Court.

(3) The FWC may make a decision in relation to the matter even if the Federal Court is determining the question of law, except if the question is whether the FWC may exercise powers in relation to the matter.

(4) Once the Federal Court has determined the question, the FWC may only make a decision in relation to the matter that is not inconsistent with the opinion of the Federal Court (if the FWC has not already done so).

(5) However, if the FWC has made a decision in relation to the matter that is inconsistent with the opinion of the Federal Court, the FWC must vary the decision in such a way as to make it consistent with the opinion of the Federal Court.

[9] Section 608 confers a discretion on the President as to whether a question of law arising in a matter before the Commission should be referred for the opinion of the Federal Court. Subsection 608(1) imposes two conditions on the power of the President to refer a question for the opinion of the Court: first, the question must be one ‘of law’; and second, the question must be one ‘arising in a matter before the Commission’.

[10] As currently framed the matter sought to be referred is put in the form of a submission, rather than a question of law. The underlying question of law concerns the proper construction of the provisions of Part A.5 and A.6 of Schedule A of the Restaurant Award. Even if an appropriate question of law can be drafted, there are two other matters which have led me to conclude that the referral application should be dismissed.

[11] The first matter concerns whether the question sought to be referred is one ‘arising in a matter before the Commission’. In Hamzy v Tricon International Restaurants and another 2 the Full Federal Court held that a question does not ‘arise’, within the meaning of what is now s.608(1), ‘unless it pertains to an issue that actually exists’. The Court cited a statement by Isaacs J in Australian Commonwealth Shipping Board v Federated Seaman’s Union of Australia3 in support of this proposition:

“It is manifestly impossible for this Court or any other Court to ‘hear and determine’ a question so as to give it the character of a conclusive judgment, unless that question ‘arises’ so as necessarily to enter into the legal determination of the matter upon the facts stated. Remote or merely possible relation of the question of law to the facts is not enough to make the question ‘arise’ in a legal sense. To say that it may arise is not the same as saying it does arise, which is the meaning of ‘arising’.”

[12] This statement was applied by the Full Court of the Federal Court in Re Alcoota Land Claim No 146. 4

[13] I accept that it is at least arguable that the referral question can be said to be a question ‘arising in a matter before the Commission’, on the basis that the proper construction of the transitional provisions in the Restaurant Award was a matter before the Full Bench. But, of course, that matter has been determined by the Full Bench, albeit not in the manner contended for by the RCA. Indeed the RCA submits that the calculations made by the Full Bench are wrong and that is one of the reasons it advances in support of the referral application. Viewed in this way it is apparent that the referral application constitutes a collateral attack on the Full Bench decision. I am not persuaded that the discretion in s.608 should be exercised to facilitate a collateral attack on a Full Bench decision. If the RCA wishes to challenge the Full Bench decision then it should do so by seeking judicial review, rather than by means of a collateral attack through the referral of a question of law.

[14] The application faces a further, more significant, impediment. The RCA seeks to refer what might be regarded as a ‘bare question of law’, i.e. a legal question absent any factual context. In Hamzy the Court made it clear that any referral of a question of law must comply with Order 50 of the then Federal Court Rules (Order 38 of the current Federal Court Rules). At [18] and [19] the Court said:

“However, procedural difficulties quickly became apparent. Order 50, r 1(1) of the Federal Court Rules 1979 (Cth) provides that "a question ... to be referred for the consideration of the Court ... must be in the form of a special case". Order 50, r 1(2)(b) and (c) require the special case to "state the facts concisely" and to "annex all documents necessary to enable the Court to decide the questions raised by the special case". So far as referrals of questions by the Commission are concerned, Order 50, r 2 provides that, in the usual course, the special case shall be prepared by the party having carriage of the proceeding after consultation with the other parties concerned, shall be settled by the Commission and transmitted by it to the Registry at the proper place. Order 50, r 4 provides that, if a question is referred to the Court by the Commission, any party who requested the reference is the party having carriage of the proceeding for the purpose of r 2.

In the present matter, none of the provisions of Order 50 had been complied with. That technical problem might have been overcome, if the Full Bench had made findings of fact: see O 1, r 8 of the Federal Court Rules. However, neither the Full Bench's reasons for its decision, nor its document setting out the questions, stated relevant findings of fact or annexed relevant documents. The Court was presented only with a list of questions.”

[15] The Full Court’s judgment in Hamzy is consistent with the majority judgment of the High Court in the earlier case of Merchant Service Guild of Australasia v The Newcastle and Hunter River Steamship Co Ltd. 5In the Merchant Service Guild case the High Court was dealing with an application under a legislative antecedent to s.608 (s.31 of the Conciliation and Arbitration Act 1904(Cth) and Barton AJA (with whom Isaacs and Powers JJ agreed) said :

“I think the case to be stated is intended to consist of one or more concrete questions of law arising in the course of the hearing, with a statement of the facts out of which the question or questions of law arise. I know of no instance in which mere hypothesis or assumption has been held to be a sufficient foundation of fact on which to invoke the legal opinion of a superior court. The object of the special case is to obtain an authoritative determination of the legal complexion of conclusions of fact.” 6

[16] The referral application before me does not arise in the context of an actual dispute involving an employer and employee covered by the relevant Award. Rather it concerns a dispute between a registered organisation on the one hand and the FWO on the other, about the correct interpretation of the transitional provisions in the Restaurant Award. No factual context accompanies the referral application.

[17] The referral application is, in practical terms, seeking declaratory relief from the Court concerning the proper construction of the transitional provisions in the Restaurant Award. But importantly, the referral is sought in circumstances where there is no actual dispute and in the absence of any agreement (or findings) in relation to the relevant factual context. Absent an actual dispute a declaration of the kind sought constitutes an impermissible advisory opinion.

[18] The purpose of the judicial process is the final determination of the rights of the parties to an action. 7 It is for this reason that courts have consistently refused to provide answers to hypothetical questions or to give advisory opinions.8 The central difference between an advisory opinion and a declaratory judgement is that an advisory opinion is not based on a concrete dispute and does not amount to a binding decision between parties. As the authors of the text ‘The Declaratory Judgement’ observe, where the dispute is divorced from a factual context it is considered hypothetical and not suitable for declaratory relief:

"If ... the dispute is not attached to specific facts, and the question is only whether the plaintiff is generally entitled to act in a certain way, the issue will still be considered theoretical. The main reason for this is that there may be no certainty that such a general declaration will settle the dispute finally. Subsequent to that declaration a person (the defendant himself or someone else) may be adversely affected by a particular act of the plaintiff. It may then be doubtful whether this act is covered by the declaration. In such a case the affected person will probably be entitled to raise the issue again on its special facts. Indeed, such a declaration will in effect be a mere advisory opinion." 9

[19] This passage was cited with approval by their Honours, Gleeson CJ, Gaudron, Mchugh, Gummow, Hayne, Kirby and Callinan JJ in Bass v Permanent Trustee Co Ltd and Others. 10 Their Honours went on to say at [49]:

“The answers given by the Full Court and the declaration it made were not based on facts, found or agreed, they were purely hypothetical. At best, the answers do no more than declare that the law dictates a particular result when certain facts in the material or pleadings are established. What those facts are is not stated, nor can they be identified with any precision. They may be all or some only of the facts. What facts are determinative of the legal issue involved in the question asked is left open. Such a result cannot assist the efficient administration of justice. It does not finally resolve the dispute or quell the controversy. Nor does it constitute a step that will in the course of the proceedings necessarily dictate the result of those proceedings. Since the relevant facts are not identified and the existence of some of them is apparently in dispute, the answers given by the Full Court may be of no use at all to the parties and may even mislead them as to their rights. Courts have traditionally declined to state — let alone answer — preliminary questions when the answers will neither determine the rights of the parties nor necessarily lead to the final determination of their rights. The efficient administration of the business of courts is incompatible with answering hypothetical questions which frequently require considerable time and cause considerable expense to the parties, expense which may eventually be seen to be unnecessarily incurred.”

[20] In the present matter there is no agreement (or findings) in relation to the relevant factual context in which the question of law is said to arise. In such circumstances I am not persuaded to exercise my discretion to refer the question to the Federal Court.

[21] The RCA’s application is dismissed.

PRESIDENT

Appearances:

T Clarke for the Australian Council of Trade Unions

Shaw B, of Counsel with Parkes G, for Restaurant and Caterers Association of Victoria

Nolan J W, of Counselwith Swancott N forUnited Voice

Hearing details:

2013.

Melbourne and Sydney (video hearing):

12 September.

 1   [2013] FWCFB 4539 at [92]

 2 [2001] 115 FCR 78 at [21]

 3 (1925) 36 CLR 442 at 450

 4 [1998] 82 FCR 391

 5 (1913) 16 CLR 591

 6   Ibid at 607

 7   R v Trade Practices Tribunal; Ex Parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 36 at 374 per Kitto J

 8   Luna Park Ltd v Commonwealth (1923) 32 CLR 596 at 600 per Knox CJ; Australian Commonwealth Shipping Board v Federated Seamen's Union of Australasia (1925) 36 CLR 442 at 451 per Isaacs J; University of New South Wales v Moorhouse (1975) 133 CLR 1 at 10 ; 6 ALR 193 per Gibbs J

 9   Zamir & Woolf, The Declaratory Judgment, 2nd ed (1993) at 132

 10 (1999) 161 ALR 399

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