CFMEU v AIRC and Kestrel Coal Pty Ltd M12/2000

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M12 of 2000

B e t w e e n -
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
Appellant
and
THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION (consisting of The Honourable Justice Paul Munro, The Honourable Senior Deputy President Colin Polites and Commissioner Errol Hodder)
First Respondents
KESTREL COAL PTY LTD
Second Respondent

GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 14 NOVEMBER 2000, AT 10.19 AM

__________________

MR S.C. ROTHMAN, SC: If the Court pleases, I appear with my learned friend, MR S.J. HOWELLS, for the appellant. (instructed by R.L. Whyburn & Associates)

MR C.N. JESSUP, QC: May it please the Court, I appear with my learned friend, MR F. PARRY, on behalf of Kestrel Coal Pty Ltd, not a party to the appeal at this stage, but we have filed a notice of motion with which your Honours will be familiar. (instructed by Freehills)

GLEESON CJ: Yes, we will come to that in a moment. Perhaps I should indicate that there is a certificate from the Deputy Registrar to the effect that she has been informed by the Australian Government Solicitor, solicitor for the Australian Industrial Relations Commission, that the Commission does not wish to make submissions and will abide by the decision of the Court save as to costs. There is a certificate from the Deputy Registrar that she has been informed by the solicitors for Gordonstone Coal Management Pty Ltd that that company does not wish to be represented at the hearing of the appeal.

MR D.M.J. BENNETT, QC, Solicitor‑General of the Commonwealth: May it please the Court, I appear with my learned friend, MR S.G.E. McLEISH, for the Attorney‑General intervening. (instructed by the Australian Government Solicitor)

GLEESON CJ: Yes, Mr Jessup. We will deal with your application now.

MR JESSUP: Thank you, your Honour. There is a notice of motion before the Court dated 13 October and there are two affidavits in support of that motion.

GLEESON CJ: What is your attitude, Mr Rothman?

MR ROTHMAN: As set out in the written submissions in reply, we do not oppose the substitution of my learned friend’s client as the second respondent.

GLEESON CJ: What is the position about costs?

GAUDRON J: And, in particular, costs of the proceedings below. Dr Jessup, are you prepared to give an undertaking to abide by any order of this Court as to costs of these proceedings or of the proceedings below, if there should be any alteration in the order?

MR JESSUP: I am bound to say, your Honour, it had not occurred to us that we might be asked to do that and I am not sure what our client’s approach would be to that, your Honour. There were no costs ordered below.

GAUDRON J: Was there not an order. Each party paid its own costs.

MR JESSUP: Yes.

KIRBY J: But in this Court the costs are in the power of the Court. Was that not decided in Cook’s Case, in one of the recent cases that – the costs in this Court are either under the Constitution or the Judiciary Act.

MR JESSUP: Yes. I think that is right, your Honour. If we were to become a party to this appeal then, of course, we would be exposed to any order of costs that the Court might make but I believe that no issue of costs in the proceedings below would arise. There has been no appeal by any party against the disposition of the costs question by the court below.

KIRBY J: But, normally, there is not a specific appeal against the costs order. The costs will follow the event. But, if Mr Rothman is not seeking any disturbance of the costs order below, and that would be the normal order, I think, in industrial relation matters, then, the only cost are the costs in this Court which are in our gift, if you are joined as a party?

MR JESSUP: Yes. We would be in no position to ask your Honours to revisit the costs question below, and we certainly do not propose to do that, even if we are successful on everything which we propose to raise.

HAYNE J: As the notice of appeal presently stands, there is no prayer for any order for costs, at least as I understand it.

MR JESSUP: Perhaps that is part, at least, of the reason why the matter had not crossed our minds, your Honour.

GLEESON CJ: Your application will be granted, Mr Jessup.

MR JESSUP: Thank you, your Honour. I take it your Honours now wish to hear me briefly on the question of the extension of time for filing the

cross-appeal, or do you wish to hear from my learned friend on the appeal first?

McHUGH J: You have to get special leave, have you not, to cross‑appeal?

GLEESON CJ: It is not only a question of time, is it?

MR JESSUP: It is a question of special leave too, your Honour.

GLEESON CJ: Yes.

MR JESSUP: Yes, of course. Accordingly to the Rules, special leave is applied for, as it were, here and now. But that applies in the case of someone who has filed a notice of appeal within time. What we need to do is, first of all, persuade your Honours that we can file the notice of appeal within time.

GLEESON CJ: Why do we not hear what Mr Rothman has to say in support of his appeal, then when we come to you we can deal with your answer to what he has to say in support of his appeal, and then this aspect of your case.

MR JESSUP: If your Honour pleases.

GAUDRON J: Should we change the title of the proceedings?

MR JESSUP: I beg your pardon, your Honour?

GAUDRON J: Should the title of the proceedings be changed?

MR JESSUP: Yes. In our submission that would be appropriate, your Honour.

GLEESON CJ: To substitute the name of your client for the name of the second respondent?

MR JESSUP: We would propose to be the second respondent.

GLEESON CJ: Yes, thank you. Yes, Mr Rothman.

MR ROTHMAN: If the Court pleases, there were written submissions filed by the appellant in relation to the matter relating specifically and only to the appeal of my client and there were written submissions of the appellant in reply which deal with the reply in relation to our appeal and, to the extent necessary, submissions in reply to the leave to appeal out of time, the cross‑appeal and the like.

If I might be so bold, I will assume that the Court has had the opportunity to at least read the appellant’s written submissions although I note that the submissions in reply were filed significantly late, for which I apologise, and I am unaware of whether the Court has had the opportunity to read those.

The appeal itself is an appeal against the issue of prerogative relief by the Full Court of the Federal Court of Australia exercising jurisdiction pursuant to the Workplace Relations Act and on remitter from this Court by consent. The initial proceedings were proceedings in the Australian Industrial Relations Commission. A Full Bench of the Australian Industrial Relations Commission was exercising original jurisdiction, that is, not on appeal, under section 107 of the Workplace Relations Act.

A commissioner, Commissioner Hodder, faced the issues relating to whether there was an underlying industrial dispute in the certified agreement which underpinned the proceedings before the Commission and issues relating to the powers under section 170LW of the current Act or section 170MH of the former Act, heard submissions and the matter was referred to a Full Bench under section 170.

For the purposes of this outline I should point out that the provisions of section 170MH are in identical terms to the provisions of section 170LW of the current Act and unless some specific issue arises in relation to it, I will, for current purposes, refer to 170LW of the current Act.

The Full Bench, the decision for which is found in the appeal book commencing at page 288, consisting of Justice Munro, Senior Deputy President Polites and Commissioner Hodder, found that there was an underlying industrial dispute to the certified agreement, that the agreement was therefore validly certified. It referred back the questions of the proceedings under section 170LW with a statement to which I will take the Court shortly that proceedings under section 170LW were not confined or qualified by the operation of section 89A of the Workplace Relations Act.

There have been no subsequent proceedings in the Australian Industrial Relations Commission, so there have been no orders and no decisions made pursuant to that referral back by the Commission. All that has happened has been – and I do not say this in any way pejoratively, but all that has happened is there has been a decision on whether or not there is an underlying industrial dispute and a decision on whether 170LW is confined by section 89A, but how and in what circumstances 170LW has been enlivened and what matters are before the Commission have not been finally disposed of.

As earlier stated, the prerogative relief was remitted by this Court to the Full Court of the Federal Court of Australia. The Full Court of the Federal Court, in short, took the same view as the Australian Industrial Relations Commission on the validity of the certified agreement and on the underlying industrial dispute to the certified agreement. It, however, took a different view on the operation of section 89A of the Act and it said that section 89A of the Workplace Relations Act qualified the operation of the Commission at least by arbitration, so called, when it was exercising the powers conferred on the Commission by the agreement and the provisions of section 170LW. It said, in short, that it was unable to see any reason to read down the words in section 89A, and that latter matter is the issue in our appeal, that is, whether 89A of the Workplace Relations Act qualifies the operation of section 170LW.

In that regard, the Full Court of the Federal Court found that the Full Bench of the Australian Industrial Relations Commission was in error. They did not discuss whether that error was jurisdictional, but obviously, because they issued prerogative relief, they must have found that it was jurisdictional.

GAUDRON J: Mr Rothman, was there ever any issue about 170LW(a):

to settle disputes over the application of the agreement -

MR ROTHMAN: You mean the words “application of the agreement”, your Honour?

GAUDRON J: Yes.

MR ROTHMAN: No, that was a matter that was referred back to Commissioner Hodder. The Full Bench of the Commission deliberately did not express a view as to what was the totality of the matters that would fit within section 170LW(a), (a) is the only particular part of that section that has application, but left those matters to Commissioner Hodder and to the extent that there ‑ ‑ ‑

GAUDRON J: So we do not really know to what extent matters are still in issue?

MR ROTHMAN: We do not know to what extent.

GAUDRON J: That is to say, it may be that, at the end of the day, whilst we are talking about 170LW and section 89A, at some stage somebody is going to hold that none of these matters are disputes over the application of the agreement.

MR ROTHMAN: That is certainly the case and that, indeed, was one of the arguments raised below - I have to say against myself perhaps, I was not in the proceedings below – but one of the matters raised below in relation to whether or not prerogative relief would issue was that it was not in any way clear that what the Commission would do, having been seized of the decision of the Full Bench, as to whether any matters would fall within the terms of section 170LW at all.

KIRBY J: Would you just remind me. The powers of the Federal Court are the powers of this Court on remitter, is that correct?

MR ROTHMAN: Yes, your Honour. Section 412 ‑ ‑ ‑

KIRBY J: Is that under the Judiciary Act or under the Workplace Relations Act?

MR ROTHMAN: No, your Honour, there is a specific remitter provision in section 412(2) of the Workplace Relations Act which provides that:

For the purposes of section 44 of the Judiciary Act 1903, the Court is taken to have jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought –

et cetera. That is the only jurisdiction to issue prerogative relief against members of the Australian Industrial Relations Commission, or at least such members that are Deputy Presidents. Section 39B of the Judiciary Act, which otherwise gives the Federal Court power to issue prerogative relief, specifically excludes prerogative relief against the Commission. So that section 412(2) is the only jurisdictional basis for the remitter from this Court.

KIRBY J: What is the theory behind that prohibition? It is the coequal status of the Commission and the Court historically?

MR ROTHMAN: To the extent that it is a coequal power, it is probably an historical issue but yes, essentially at the time that 39B was inserted into the Judiciary Act it was, as we understood it and it is our submission, the policy of the Workplace Relations Act or its then equivalent was that the Deputy Presidents of the Commission, arising really out of the separation in 1956, had equal status with members of the Federal Court.

KIRBY J: But in any case, where the application is originally made to this Court and remitted to the Federal Court, my understanding is that under the Judiciary Act the Federal Court picks up whatever powers this Court has under the Constitution. Is that incorrect or correct?

MR ROTHMAN: No, that is correct, your Honour. I think his Honour Justice Mason described it – I have to say I cannot give your Honour a citation, but I think it is a case involving Hamilton Island, in which he said that the Federal Court sits in the jurisdictional shoes of the High Court, which I am sure is a religious analogy which I will not go ‑ ‑ ‑

GLEESON CJ: Perhaps he said “stands in them”.

MR ROTHMAN: I am sorry, your Honour?

GLEESON CJ: It does not matter.

MR ROTHMAN: In any event, it is unclear from the reasoning of the Full Court of the Federal Court why it is said the error was jurisdictional or, indeed, why the proceedings were at a point where prerogative relief would issue.

GAUDRON J: By that do you mean that it was unclear that there would necessarily be an arbitration within the meaning of the Act?

MR ROTHMAN: Yes.

GAUDRON J: That takes us right back to 170LW(a), does it not?

MR ROTHMAN: Yes. Perhaps I should, at your Honour’s invitation, take the Court to 170LW and make some matters clear from the structure of the Act. The Commission in its decision analyses at some length, predominantly in appeal book pages 306 and following, the distinction both historical and current between arbitration on the one hand and conciliation on the other. It is one of the reasons that the Commission comes to the view that the functions reposed in the Commission under 170LW, even if they be arbitral functions – that is, functions for the making of a binding determination – are not functions which are caught within the phrases used in section 89A of the Act. Section 170LW, however, does not deal with arbitration on its face.

GAUDRON J: No.

MR ROTHMAN: Section 170LW enables the Commission, or empowers the Commission:

to do either or both of the following –

and (a) is the only relevant one:

to settle disputes over the application of the agreement.

GAUDRON J: What does the agreement say about the powers of the Commission?

MR ROTHMAN: Relevantly, the agreement can be found at appeal book 290, that is the problem resolution procedure and a subsequent clause headed “Australian Industrial Relations Commission”. The problem resolution procedures, for those familiar with these sorts of procedures, is a procedure taking the issue, or issues, that may be between the parties to various levels from – I do not say this pejorative – from the workplace or lowest level, up through various levels of management and/or the union involved. Paragraph d) says:

Provided the Status Quo that existed prior to the issue continues, then work shall continue as normal while the above procedures are being followed, and no party shall be prejudiced –

The above procedures include, in the second paragraph of Step 3:

Referral to the appropriate Industrial Authority for determination of the matter, provided that the UMW –

which is the letters utilised for the union in this case –

may, prior to referral, refer the matter to a conference involving District Officials and Gordonstone –

et cetera. Paragraph 22, headed “Australian Industrial Relations Commission”, provides:

a) In the event of a dispute where resolution cannot be achieved without the assistance of the AIRC, the parties will exchange positions prior to any hearing taking place.

We say, with respect, that the term “hearing” does not necessarily countenance or involve an arbitration.

b) The parties to this Agreement agree to abide by any decision determined by the AIRC which relates to a dispute at Gordonstone Mine.

And c), relevantly, and most relevantly:

Where it is agreed by the parties to resolve the matter with a mediator of the AIRC, both parties agree to abide by the recommendation of the chairman.

We say, with respect, the agreement enlivens the jurisdiction granted by section 170LW and, in doing so, there is nothing in the agreement, or indeed in section 170LW, which, on its face, provides for the exercise, necessarily, of arbitration. Indeed, we say there is nothing in the statute ‑ ‑ ‑

GAUDRON J: Well, section 89A, in any event, is limited by its purposes. The section only operates for specified purposes.

MR ROTHMAN: Yes.

GAUDRON J: Only one of which might seem to have any relevance:

maintaining the settlement of an industrial dispute –

We are not dealing with an industrial dispute in terms of what comes under section 170LW, are we, as defined?

MR ROTHMAN: That is our argument, that we are not.

GAUDRON J: It might come within (c), it might be “maintaining the settlement of an industrial dispute” then question “by varying an award or order”.

MR ROTHMAN: Well, even if it were maintaining the settlement of an industrial dispute in the broadest sense of that term, it certainly is not doing so by varying an award or order. A certified agreement is not an award to start with. No order is issued. What occurs is there is a decision. That decision is binding only, in our respectful submission, by virtue of the operation of clause 22 of the agreement. In other words, it is only by virtue of the consent of the parties that the determination, if it be a determination, of the Commission under section 170LW is binding on the parties.

It acts no differently than any voluntary arbitration process, in that sense, and 170LW does not itself preclude a process of the Commission, other than arbitration. The procedures of the Commission under section 110 are matters for the Commission itself and does not involve the making of an award or order. It makes a decision. It may mediate. Indeed, it may conciliate and get the parties to agree on the process. All of that is a matter, ultimately, for the member of the Commission exercising the functions under section 170LW.

When the Commission makes a recommendation, such as under section 170LW, and there are other provisions of the Act, section 111AA which refers to “Recommendations by consent” - and indeed the Commission in the Full Bench decision refers to the provisions of section 111AA as support for its view of the way in which section 170LW operates ‑ section 111AA makes clear that the Commission in exercising the powers of conciliation may make a recommendation by consent, which, by the consent of the parties, might be binding on the parties, and we say the process in section 170LW is little or no different to that which is contemplated in section 111AA, and indeed, it may well be a belt and braces provision.

It is appropriate, if I might, to take the Court to the provisions of section 89, as distinct from 89A, which sets out the functions of the Commission. They are:

to prevent and settle industrial disputes…..such other functions as are conferred –

So that the powers of the Commission are not confined to the functions of the prevention and settlement of industrial disputes. Section 91 requires the Commission in, I dare say, mandatory terms:

where it appears practicable and appropriate, encourage the parties to agree on procedures for preventing and settling, by discussion and agreement, further disputes between the parties or any of them, with a view to the agreed procedures being included in an award.

Bearing in mind the provisions of section 89A, to which I will return very shortly, can I take the Court to the fact that the Commission has powers under section 101 and following which deal fairly precisely with what the statutory framework for arbitration, in our respectful submission, in the sense used by section 89A, refers to. Section 101 deals with findings of industrial dispute. Section 102 deals with conciliation thereafter. Section 103 with the completion of the conciliation proceedings and the exercise of conciliation powers. Section 104(1) is in these terms:

When a conciliation proceeding before a member of the Commission in relation to an industrial dispute is completed but the industrial dispute has not been fully settled, the Commission shall proceed to deal with the industrial dispute, or the matters remaining in dispute, by arbitration.

It is that kind of arbitration, that is, an arbitration in what I have called inelegantly in the submissions in reply the constitutional arbitration to which section 89A goes.

GAUDRON J: Section 89A does not go to that. Section 89 goes to what is included in an industrial dispute. Now, that has an impact on arbitration in the making of an award or order, and so forth.

MR ROTHMAN: Yes, your Honour. I have assumed, and I apologise to your Honour, I was perhaps being too loose.

GAUDRON J: You were using shorthand, because ‑ ‑ ‑

MR ROTHMAN: Yes, your Honour, I was, and I apologise.

GAUDRON J: Yes, but it may well be important to an understanding of how these sections operate, if you have regard to what is said there. It says for certain purposes there defined:

an industrial dispute is taken to include only –

and the shorthand phrase there is:

allowable award matters –

I suppose.

MR ROTHMAN: Yes, your Honour. The purposes are threefold – (b) and (c) necessarily require the making of an award order so whether or not the process in 170LW is directly or indirectly preventing or settling or maintaining an industrial dispute matters not because the processes involved in section 170LW will not and cannot result in the making of an award or order. There is no power in section 170LW to vary the agreement or, indeed, to make an award, the effect of which would be to vary the agreement. If there is power to do that then that is a nice issue which, thankfully, we do not have to deal with. If there is power to do that it is not found in section 170LW so the only issue is whether or not the provisions of section 89A(1)(a), where it says, “dealing with an industrial dispute by arbitration” renders 170LW a purpose to which section 89A(1) refers and, in our respectful submission, it is not and I thank your Honour for confining the submissions that I am making.

We also say that 89A has to be understood not as a limitation or delineation of the subject matter of a clause of an award but rather the subject matter of the industrial dispute from which the clause of an award may arise and, indeed, there may be various clauses that would not be contained within section 89A(2) that might arise from a subject matter that is contained in section 89A(2) or the incidental provisions that are contained in section 89A(6).

Section 89A, of course, is not simply confined to subsections (1) and (2). There are other provisions. Section 89A(3) provides that:

The Commission’s power to make an award dealing with matters covered by subsection (2) is limited to making a minimum rates award.

It would be extremely odd, if not fundamentally bizarre, if the power to deal with an application for an agreement, which, by definition, would not deal with minimum rates was confined to a decision or the like in which minimum rates was the only outcome.

Similarly, if one looks at 89A(6), the Commission is given the power to:

include in an award provisions that are incidental to the matters in subsection (2) –

The problem from the point of view of looking at section 170LW is that section 89A(6) is confined to the inclusion of a provision in an award. “Award” is now defined not to include a certified agreement so that 89A(6), on its face, if 89A applies to 170LW at all, would mean that the Commission’s power in relation to an arbitration for an award is greater than its power to resolve a dispute over the application of an agreement under 170LW and we say that, and other reasons to which, in part, the Commission goes, are such that the result in the Federal Court is a result which does not stand, either with the history of the legislation or, indeed, with other than an absurd result in relation to the ‑ ‑ ‑

GUMMOW J: Now the crucial reasoning in the Full Federal Court is paragraphs 42 and 43 of their judgment, is it not, dealing with 89A? It is reported in 93 FCR 153.

MR ROTHMAN: The crucial passages in relation to this, your Honour, are in terms of their findings, yes, 42 and 43 and perhaps 44.

GUMMOW J: Yes.

MR ROTHMAN: The Union’s submission is set out in paragraph 40 and there is, with due respect to the Full Court of the Federal Court, given that it was departing from a fairly substantial decision of the Commission, a reasoning process which, in our respectful submission, is flawed. It is a reasoning process which firstly, as I already said, does not deal with the question of jurisdictional error as distinct from error, but does not involve an analysis of how, if at all, the decision or the process in section 170LW is binding. The court’s decision at paragraph 43 refers to the Commission’s:

powers to settle disputes does not deny those powers their arbitral character when what is involved is a binding decision in settlement of a dispute –

Now ‑ ‑ ‑

GAUDRON J: Now, can I take it that the structure of this Act now is such that there are limited matters that can be the subject of an award or an award variation, an arbitration award or award variation, and that the other range of matters, which are industrial matters for the purpose of the Act, can be the subject of certified agreements? Is that how the Act now works?

MR ROTHMAN: Well, shortly, yes, your Honour, save that the term “industrial matters” is a term, of course, that no longer exists in the Act. “Industrial matters” is a terms that your Honour would recall from the Conciliation and Arbitration Act.

GAUDRON J: Yes.

MR ROTHMAN: But matters that are the subject of an industrial dispute or a situation likely to give rise to an industrial dispute can, without qualification, under section 89A, be the subject of resolution, either in whole or in part, by the making of agreements between the parties and your Honour’s shorthand way adequately summarises it, yes, your Honour.

GAUDRON J: Yes, thank you.

MR ROTHMAN: So that the structure of the Act as set out in the Full Bench decision is a structure which is predicated on two almost wholly separate regimes. One is an arbitral regime in which minimum rates awards are made and those minimum rates awards are confined to the resolution of disputes about specified subject matters. That is, in effect, the province of section 89A. On the other hand, there are certified agreements of various kinds, not only between unions and employers, but also between employees collectively and employers and Australian workplace agreements between individual employees and employers which deal with the terms and conditions of employment unconfined by the provisions of section 89A. There is, as I understand it, no argument that section 89A confines any of the agreement making powers, whether they be any kind of agreement that is referred to in the Act.

KIRBY J: But given the radical departure that is involved by the amendments to the Act from nearly a century of the history of arbitration, given the obvious or apparent purposes of Parliament in enacting those departures, what is wrong with the reasoning in 43 that says if you are involved in a binding decision between parties, that is arbitral in character and not conciliatory?

MR ROTHMAN: Your Honour, there are two things fundamentally wrong with it. Your Honour, while there are a number of aspects of the Workplace Relations Act which are, to paraphrase your Honour unfairly, revolutionary in their impact. The division between certified agreement and award is a division which has existed at least since the Industrial Relations Act in 1988. The time at which a section 28, as it then was, award memorandum of agreement were treated in precisely the same way ended really with the demise or the repeal of the Conciliation and Arbitration Act in 1988.

The answer to your Honour’s question is threefold. Firstly, the Act does not make section 170LW decision binding. What makes the section 170LW decision binding is the consent of the parties. Secondly, the Act does not confine section 170LW to arbitration. Section 170LW ‑ ‑ ‑

KIRBY J: Can I just ask you to pause on the first one?

MR ROTHMAN: Yes, your Honour.

KIRBY J: It is binding by the consent of the parties pursuant to an arrangement to which the Commission under the Act must give its approval.

MR ROTHMAN: But in relation to that, your Honour, it has no power to disapprove of that arrangement. It has powers to approve of the arrangement – I am sorry, your Honour.

KIRBY J: The section says “may approve”, does it not?

MR ROTHMAN: No, your Honour – is your Honour referring to my reference to section 91?

KIRBY J: I think so, yes.

MR ROTHMAN: That is a section which encourages the Commission to do certain things. The actual certification process is covered, your Honour, in various sections, but it is covered predominantly in Part VIB and in section 170LJ there is a reference to an employer has the capacity to:

make the agreement with one or more organisations –

Likewise, 170LK with a number of employees and in Division 3 under 170LO “Agreement about industrial dispute”. If the Commission has before it an application, that application is dealt with under section 170LT. If your Honour goes to section 170LT, your Honour will see:

If an application is made.....the Commission must certify the agreement if, and must not certify the agreement unless, it is satisfied that the requirements of this section are met.

KIRBY J: I am sorry, I have taken you off your three answers to my more fundamental question and then you have taken us into the very pleasant task of understanding all these provisions of the Act. I think I will save up that enjoyment to a later stage.

MR ROTHMAN: Perhaps I can put it in generality in this sense, and come back to the three points. There is no discretion, assuming the preconditions set out in the Act, none of which involve a discretion relating to dispute resolution procedures, for the Commission to refuse to certify such an agreement. So that your Honour’s question relating, if I might, to whether or not the Commission has approved – I think that was the term your Honour used – the certified agreement, is correct on its face, but the certification process is not an approval of any particular clause.

Can I take your Honour very briefly – and I will return to the general question – to section 170LT(8). That provides that:

The agreement must include procedures for preventing and settling disputes –

but it does not say what the terms of that dispute settlement procedure must be and it does not say whether or not, as a result of that dispute settlement procedure, if the matter goes to the Commission pursuant to that procedure, the recommendation, determination or adjudication of the Commission is binding. Nothing else in the Act would render section 170LW binding.

KIRBY J: But when these sections were written, presumably it was not essential to draw a sharp distinction between conciliation and arbitration. You could merge one into the other. The obligation to draw the line in the sand comes with the requirements of the Act which are designed to cut down the powers of the Commission in respect of arbitration. Given that high policy of the Parliament which turns around nearly 100 years of practice in this country, why is not paragraph 43 of the Federal Court’s reasoning on page 370 the proper way to look at how this Act is going to operate on these provisions? I mean, it is a very radical departure from 100 years of practice and we just have to get our brains into focus with that departure and into gear with it. You were giving three reasons, and I interrupted you. I apologise for that. If you could just note the other two.

McHUGH J: One reason, I suppose, you would say is that, although earlier the Federal Court had cited Hegarty’s Case, they never applied its logic or its consequences when it came to applying 89A, because what Hegarty shows, does it not, is that when one settles what Justice Mason called the difference, that is a local dispute, it is not an industrial dispute? Its source is the original industrial dispute, but what is determined or settled or conciliated, according to the procedure, is not necessarily an industrial dispute for the purposes of the Constitution.

MR ROTHMAN: Indeed, your Honour. That was the third reason to which I was about to come and I am grateful for your Honour’s exposition of it. We say, with respect, that the industrial dispute underpins the certified agreement.

McHUGH J: But what puzzled me is that the opening words of paragraph 41:

We reject the submission that the agreement is not a certified agreement for the purposes of the Workplace Relations Act.

But that cannot be right, can it? A certified agreement is an agreement certified under Division 4 of Part VIB, but prior to these amendments the certification under section 170MC was in Division 2 of Part VIB.

MR ROTHMAN: Yes, your Honour.

McHUGH J: In one sense it is an irrelevancy, I suppose, but the case really does not turn on this statement in the first sentence of paragraph 41, or at least it does not seem to me at the moment, but it just seems to be ‑ ‑ ‑

MR ROTHMAN: I could inform your Honour, possibly in terrorem, that there are other cases that deal with that particular question in detail and one of them at least will probably come to this Court. The answer to your Honour’s question is this: there can be no doubt that the agreement that was here in place was not a certified agreement for the purpose of the Workplace Relations Act and in that sense was not an award for the purpose of the Workplace Relations Act. The provisions which defined and amended the definition of “award” that were inserted in the Workplace Relations Act and commenced on 31 December 1996 were inserted by Schedule 8 – it is either Schedule 8 or Schedule 11, but I think it is Schedule 8 – and that did not apply to certified agreements in existence at the time under the transitional provisions.

McHUGH J: Is it your submission that sentence is wrong, or do I have it wrong?

MR ROTHMAN: No, your Honour, the sentence is clearly wrong. That is the submission that we put, and it is very much a peripheral matter. It is, indeed, the issue that we raise in paragraph 3 of the issues on the appeal, that is, whether section 89A of the Act is applicable to a certified agreement made before the commencement of the Workplace Relations Act. But I have to say, in terms of the general question, which we are here to argue, it is a very detailed question which is, in some respects, peripheral to the main issues in the proceedings.

I was saying to your Honour that there were three reasons. If I can come back to that. The first of them was the fact that, in our respectful submission, 170LW does not make the process binding; it is the agreement of the parties which makes it binding.

GUMMOW J: Are you saying that is contract, then, are you?

MR ROTHMAN: That is the terms of the certified agreement. It is a nice issue as to whether that is contract. The certified agreement is binding by operation of the statute, but it still requires the consent of the parties. It is certainly not a contract of employment, but for some purposes, it may be included in the contract of employment. That is a matter of fact. But it is certainly consensual in nature. That is, it is the consent of the parties – I hesitate to agree with your Honour that it is contract – but it is the consent of the parties given force by the provisions of the statute which renders it binding. The parties’ consent may be otherwise. The consent of the parties might be that it will be recommended and it will be taken back to certain committees and they will see whether they can get agreement or not. There are provisions, no doubt, of that kind. But ultimately it is the consent of the parties which renders it binding.

GAUDRON J: So, what you say, in effect, is that section 170LW sets up, if you like, by consent of the parties, an institutionalised form of what we would call private arbitration, which has nothing to do with arbitration as used in section 89A.

MR ROTHMAN: Yes, your Honour.

McHUGH J: I think one of the difficulties about understanding the case is that you really cannot fully understand it without understanding what is in the cross-appeal. You really have to determine, or understand, this issue of the constitutionality of 170LW before you really fully understand your argument, I think, in respect of 89A.

MR ROTHMAN: Your Honour, I do not understand that even in the cross‑appeal anyone suggests that Hegarty is wrong.

KIRBY J: What is the constitutional power for the Federal Parliament to enact a law providing for private agreements?

McHUGH J: That is the point: it is only when you understand that, I think, that you really appreciate your argument as to 89A.

MR ROTHMAN: Your Honour, the power of the Constitution in 51(xxxv) enables the Parliament to enact legislation incidental to the conciliation and arbitration for the provision and settlement of industrial disputes, which would give statutory force to an agreement between the parties either to prevent or settle such a dispute. And that ‑ ‑ ‑

GLEESON CJ: Mr Rothman, it is entirely possible that I am misunderstanding what lies behind an issue like this, so correct me if I am wrong, please. But, is one of the reasons why you need a provision like section 170LW that, typically, interstate industrial disputes are settled by an award which contains provisions that are not in such a form as to deny the possibility of future disagreement about what the provision means and how it operates in a particular workplace?

MR ROTHMAN: That is one aspect of it. The other is that the parties do not contemplate an issue that suddenly arises. Probably the most typical example of a matter that arises under dispute resolution would be, say, a classification dispute. Indeed, that is the matter that is raised in Hegarty.

A classification dispute is, let us say hypothetically, one has two classifications, an electrician and a special‑class electrician, a special‑class electrician being a higher paid position than the electrician, and you have a person who is performing parts of the special‑class function and parts of the electrician function and the agreement does not deal with what classification that person will be put into. There may then be a notification to the Commission whereby the Commission is asked, assuming it cannot be resolved in the other steps, to resolve how the agreement applies to this person in terms of its ‑ ‑ ‑

McHUGH J: These matters used to be dealt with by boards of reference.

MR ROTHMAN: Indeed, and 170LW has that as the alternative. 170LW is really ‑ ‑ ‑

McHUGH J: And rightly or wrongly the validity of the board of reference provisions was upheld by this Court long ago.

MR ROTHMAN: Indeed, and recently.

GAUDRON J: Is there not a question about the validity of 170LW itself to the extent that it is based on 51(xxxv)? Now, one sees in the Act, I think it is LI, that there are two alternative streams giving rise to certified agreements. One is the Commonwealth corporations power and the other is 51(xxxv). Now, there may be quite different constitutional considerations depending on the sort of agreement one is concerned with.

MR ROTHMAN: Yes, your Honour, indeed. That is dealt with in the submissions. We say, your Honour, that is one of the reasons that one ought not confine 170LW in the way that is suggested.

GAUDRON J: I can understand that but I am putting to you another proposition. It may be that 170LW is quite valid with respect to an agreement that comes about under LI, the corporations power, but not valid with respect to 51(xxxv) agreements because it may not be concerned with the arbitration of an interstate industrial dispute, threatened or pending or probable, and I suppose also it might not be about conciliation or arbitration with respect to such a dispute. It might be about something else like Chapter III power.

MR ROTHMAN: Your Honour, there is no doubt that there would be different constitutional considerations associated with sections of this statute if they depend and when they depend upon the corporations power under 51(xxxv). Different issues may arise. It is not our submission, indeed, it is our submission to the contrary, that there is any limitation imposed on the power in section 170LW because of the nature of section 51(xxxv). Section 51(xxxv) of the Constitution is a section which deals – I do not need to deal ‑ ‑ ‑

GAUDRON J: Is it common ground between the parties that this is a 51(xxxv) or nothing certified agreement?

MR ROTHMAN: Yes, your Honour.

GAUDRON J: Why is that, just because the procedures were invoked for a 51(xxxv) certified agreement and not the LI provisions?

MR ROTHMAN: There are a number of answers to your Honour’s question, but the simplest one is that it was certified at a time when the corporations power was not utilised for the purposes of the certification of agreements, so, therefore, it must of necessity be a 51(xxxv) agreement. There are other answers to your questions but that will suffice, I think, for the time being.

GAUDRON J: Yes, I am certain it will.

GLEESON CJ: But, Mr Rothman, are the disputes that arise under which section 170LW might have to relate, disputes about the meaning and effect of a pre‑existing agreement or are they or may they include disputes about whether the agreement should be expanded?

MR ROTHMAN: I do not wish to confine them in the way that your Honour has described them but they are not the latter category that your Honour has dealt with. In other words, they certainly include matters which deal with the meaning of the agreement as it exists but it is not under 170LW. The Commission, when it is dealing with a section 170LW dispute, is dealing with a dispute between the parties, not necessarily an industrial dispute ‑ ‑ ‑

GLEESON CJ: But it is not being asked to enforce the agreement, I presume.

MR ROTHMAN: No, your Honour, nor is it being asked, in the legal sense, to interpret the agreement. The Court will recall the distinction that the Court drew between the power exercised by the Commission in R v Brack; Ex parte the Operative Painters and Decorators Union when the Federal Court had interpreted an award and the Commission dealing with what it said should have been or was the intention of the parties at the making of the agreement came to a different conclusion as to its meaning and varied the award accordingly.

Whether or not it is an exercise of judicial power has been dealt with on the authorities. It was dealt with in Hegarty. It was dealt with, indeed, in a number of cases. It is not here the exercise of the judicial power but it is a dispute about the application of the agreement, so that one has, necessarily, in the 51(xxxv) sense, an underpinning industrial dispute extending beyond the limits of any one State. To resolve that industrial dispute, either in whole or in part, the parties come to an agreement which is under the statute enforceable.

That agreement may have in it terms which make enforceable a dispute resolution process of the kind that is here in question and they may seek to resolve disputes about the application of the agreement, not about the general industrial dispute.

McHUGH J: Yes, well, that is what is important for present purposes, is it not, that the agreement for procedures and machinery to deal with these differences may envisage and, in fact, usually operate in respect of matters that are not interstate industrial disputes?

MR ROTHMAN: In and of themselves they are not interstate industrial disputes.

McHUGH J: No.

MR ROTHMAN: But they are either incidental to or ancillary or part of the interstate industrial dispute which gave rise to the agreement or the award in the first place.

McHUGH J: When it is convenient to you, it would assist me if you would take us to Hegarty at some stage, because it is the most recent explanation of all this, is it not?

MR ROTHMAN: I can do that as the Court speaks. R v Hegarty 147 CLR 617, your Honour – its full title is R v Hegarty; Ex parte City of Salisbury. In the judgment of his Honour Justice Mason which commences at page 622, and with whom Chief Justice Gibbs and Justice Stephen agreed prior thereto, and the other judges ‑ at 626 – and here I should perhaps by way of introduction make clear that what was the dispute settlement provision contained in the award, and it was an award ‑ it was an arbitral instrument rather than a consensual instrument – was a reference to a board of reference, as such, and the reference in here to “board” is a reference to a board of reference. At the foot of page 626:

The fact that the Board is called upon to discharge its function by way of setting a difference that has arisen does not involve it in the exercise of judicial power.

That is your Honour the Chief Justice’s question.

Indeed, it tends to suggest that the Board is acting in the capacity of an arbitrator and this impression is reinforced by the provision made in clause 27 for the constitution of a Board of Reference which is to consist of two persons appointed –

et cetera. Over the page at page 627, in the first full paragraph:

I accept that the decision of the Board binds the parties, except as to the interpretation of the Award. Clause 27 proceeds on the footing that the decision of the Board on a classification issue is binding unless and until it is set aside on appeal. But it is not, and could not be, suggested that this of itself gives rise to an exercise of judicial power.

If the Court goes to page 629 - and I will deal with all of the passages which are on the point your Honour Justice McHugh raised - continuing the judgment of his Honour Justice Mason, as he then was, in the first full paragraph:

Where there is an interstate industrial dispute as to the means by which differences as to the classification of employees are to be determined, that dispute may be validly settled by an award which provides that all future such differences shall be resolved by a Board of Reference, so as to bind the parties to the dispute. Such an award is a settlement of the original dispute. The settlement is the more effective and enduring because it provides procedures and continuing machinery for the resolution of classification issues, the mode of resolution being germane to the original interstate dispute.

And at about point 8 on the page:

What is to the point is that the provisions constitute the settlement of an interstate industrial dispute and that the procedures and machinery prescribed for the resolution of a person’s classification are designed to ensure that the settlement of that dispute is effective and enduring.

McHUGH J: If you stick that in the first sentence, that is important, is it not?

It is not to the point that the difference between the prosecutor and Tyler is not in itself an interstate dispute ‑ ‑ ‑

MR ROTHMAN: I apologise, your Honour, but I am grateful to your Honour, thank you.

McHUGH J: - - -

or that the Award is so expressed that a Board of Reference is authorized to deal with that difference.

MR ROTHMAN: Yes, your Honour. Without seeking to read great slabs of the judgment, at page 630 his Honour Justice Mason continues:

Some assistance is provided by the decisions of this Court in connexion with the power to vary awards. That power extends to variations, not only to correct or improve upon the provisions of the original award independently of change of circumstances, but also to meet altered conditions so as to maintain the award in an expedient and satisfactory form. What can be done by variation, can plainly be done by the original award. It can be so shaped as to provide for eventualities that will or may arise in the future.
The prosecutor’s argument seems to proceed on the unspoken assumption that there is a constitutional prohibition against any exercise of the power conferred by section 51(xxxv) which would result in the settlement of an intrastate dispute. There is no such prohibition. The power conferred by section 51(xxxv) is of course circumscribed by reference to industrial disputes extending beyond the limits of one State. But this does not prohibit an exercise of the power which will result in the settlement of a dispute on a one-State basis.

His Honour then refers to the SECV Case and disputes being decided “in a piecemeal fashion”, which is dealt with in a number of judgments of this Court since, and his Honour then says:

The underlying principle is that once an interstate industrial dispute arises so as to give the Commission jurisdiction, the Commission in the exercise of that jurisdiction may settle part of the dispute which, taken in isolation, does not extend beyond one State and, further, may vary an award settling that part of the dispute.

Now, your Honour, that, of course, deals with variation, but his Honour there was dealing with an argument by analogy. His Honour Justice Murphy is to like effect. There is also, your Honour, a passage in the ‑ ‑ ‑

McHUGH J: If I understand your argument, let me see if I understand what your argument is. Is it this, that the machinery in section 170LW authorised was machinery which was in settlement of an industrial dispute, but in so far as it may give rise to particular differences at the Gordonstone plant, it was not an industrial dispute which would attract 89A. Is that the basis of your argument?

MR ROTHMAN: Your Honour, our argument is as simple as that and also it has more complex aspects. We say, your Honour, that section 170LW is constitutionally valid because it is incidental to the power given in section 35 to conciliate. It is a provision which allows the greater effectiveness of a settlement of an industrial dispute, and it is incidental to the conciliation power that section 170LW is inserted, assuming for the purposes that we are talking about a 51(xxxv) agreement and that the source of power is 51(xxxv) at all. We say that section 170LW does not require arbitration, it is any procedures that the Commission thinks appropriate and the statute does not ‑ ‑ ‑

McHUGH J: Does it make any difference if it does?

MR ROTHMAN: Well, no, your Honour, but, if you like, the next point really is this, that the statute properly construed does not render section 89A as a qualification on section 170LW because the purpose and effect of section 89A is fundamentally different to that to which section 170LW goes. We also say that section 170LW, if it is argued as I understand it is, that if it is an arbitration process, then it is dealing with an industrial dispute by arbitration in terms of section 89(1)(a), that that is not a proper description of the process, even if it be arbitration in section 170LW because there is a leap in that argument from the necessity to have an interstate industrial dispute to underpin the certified agreement and a dispute between the application of the parties. Of course, the resolution by the Commission in relation to the application of the parties must be a resolution that ultimately is within the ambit – if ambit is still the process – but within the ambit of an interstate industrial dispute.

But the Commission, if it is dealing with a 170LW application, is not dealing with the industrial dispute. It does not say, for example, that the parties were wrong, that there should not be a classification of electrician special class, as they used before, or a seniority provision. It says, “There is a dispute about the way this seniority clause works or the way this classification system works and I recommend it will be resolved in this way”. That is a resolution of that which the parties have agreed is the settlement, partially or wholly, of the interstate industrial dispute which underpins the certified agreement. That essentially is the argument that we put. It is a very short point.

KIRBY J: But it is a resolution which the parties are bound to accept under the agreement, which are the hallmarks of arbitration.

MR ROTHMAN: Only if the parties themselves agree to be so bound. Even if one looks at 22(c), it is set out at page 290 of the appeal book ‑ ‑ ‑

KIRBY J: But why can one not classify this and say that under the conciliation power, under the Constitution, the parties have bound themselves in certain eventualities to proceed to arbitration under the Constitution?

MR ROTHMAN: No, your Honour. You cannot classify it that way, with respect, for this reason: because, if it were arbitration under the Constitution, then the Commission would be entitled to say, “We the Commission don’t accept that the parties were correct in resolving their industrial dispute by having clause X at all”. The Commission is not entitled to do that. The Commission is entitled only to say, “There’s a dispute about the application of clause X or the application of the agreement in relation to clause X and I’m going to resolve that dispute between the parties”. While the parties have agreed during the conciliation process to bind themselves ultimately to the resolution that the Commission may recommend, that is a matter that the parties themselves can either agree or not agree to.

HAYNE J: Does that invite attention to the breadth of 21(a) of this particular problem resolution procedure at appeal book 290? The introductory words in 21(a) seem, on their face, to be very wide in their reach. Does any significance attach to the width of that or does it not?

MR ROTHMAN: Not in this case, your Honour. The Commission was very careful to make clear that they were not suggesting that everything that might arise under 21(a) would necessarily be a 170LW problem or come within the meaning of the term application about – sorry, a dispute about the application of the agreement and therefore ought not – I will take your Honours to the actual passage. The Commission at page 302 of the appeal book, line 35, says:

The Commission is a creature of statute. Its powers arise only out of the statute. The power in the Commission to “settle disputes” under a dispute settlement procedure is expressed in section 170MH(a), although it requires a provision such as clause 22 of the Agreement. It follows in our view that clause 22(b) must be read as operating to enliven the power under section 170MH(a) only to the extent of enabling the settlement by decision of disputes that are disputes “over the application of the agreement”. That is the only power relevantly conferred by the former Act.
In our view the expression “disputes over the application of the agreement” includes disputes about matters arising under the Agreement, and perhaps is not merely co‑extensive with that formulation.

Then they go on to say that they are not going to finally decide that question.

GAUDRON J: Can I just take you back a minute? You do not contend for any wider validity of 170LW in so far as it is based on section 51(xxxv) of the Constitution than would be if it were read down to the situation where there was a dispute about dispute settlement procedures.

MR ROTHMAN: Disputes arising under dispute settlement procedures or about dispute settlement procedures?

GAUDRON J: No, no. Prima facie, section 170MW would operate to give effect to the agreement of the parties, even though there had not been a dispute about dispute settlement procedures.

MR ROTHMAN: Yes, I am sorry, your Honour. We do not need to go to that point; that is not an issue, as I understand it, in these proceedings. It may be that it falls within ‑ your Honour will recall, and the reference is given in the written submissions to the passage in Wooldumpers and, indeed, in Vista, as to that which has a rational or natural tendency to resolve the issues in dispute, or is incidental to resolution of the matters in dispute. It may be that it falls within that; nothing arises in relation to that in this case. There is clearly, in our respectful submission, an interstate industrial dispute from which the settlement of disputes procedure arose and it was a valid enactment. That is not part of the appeal and, as I understand it, was not an issue. There was an issue as to whether there was an industrial dispute at all, but ‑ ‑ ‑

GAUDRON J: If there was, that dispute included ‑ ‑ ‑

MR ROTHMAN: The settlement of disputes provision.

GAUDRON J: Yes.

KIRBY J: You remember about an hour ago you were giving three explanations. You got to 1, Justice McHugh gave 3, but I am still puzzling over what 2 was. Do you remember what it was?

MR ROTHMAN: Your Honour, I vaguely remember.

KIRBY J: If you think of it, just let me know. This is why we do not approach the matter giving full force to the radical change which the Parliament has enacted.

MR ROTHMAN: That was a different aspect; it was not one of the original three, your Honour. The second of the three, if I may deal with it that way, was that 170LW itself was not confined to the process of arbitration. So that 170LW, almost the underlying assumption in the Federal Court decision, is that 170LW is an arbitration process. There is no necessity for that in the provisions of 170LW or, indeed, in the process conferred under clause 22. Section 170LW merely empowers the Commission to settle disputes, and it may do so, in terms of clause 22, by mediation, by conciliation, or indeed, ultimately by arbitration. But at this stage, we do not know, because the matter has not come back before the Commissioner, what, if any, process will be involved, or if any of them or if all of them will be.

KIRBY J: Is there any relevance in the recent decision of the Court in Coal & Allied v The Commission 2074 ALJR 1348, relevant to the jurisdictional error point?

MR ROTHMAN: Can I deal with the jurisdictional error point – I apologise, your Honour, can I deal with it very shortly.

KIRBY J: Yes, you deal with it in your own time.

MR ROTHMAN: Otherwise I will lose sight of the question that your Honour asked me earlier. Your Honour referred to the Workplace Relations Act as being a significant departure from history in terms of the delineation between conciliation and arbitration. It is not a submission that we make. In our respectful submission, there has been a delineation between conciliation and arbitration, perhaps stricter than the Constitution requires, for many, many years. That is brought out by the judgments of this Court, and indeed, the decisions of the Commission to which the Commission refers in its decision.

The process that is included in section 101 through to 106 of the Act and to which I briefly took the Court earlier is a process which has been in the Act in one form or another almost since 1904 and the process has always been conciliation when it is completed and unsuccessful, then arbitration. The Act has always allowed and, indeed, still allows if during the course of arbitration something occurs that it can be resolved by reverting back into the conciliation process, but while there are significant historically revolutionary aspects to this Act, that is, the Workplace Relations Act, that is not one of them.

GUMMOW J: Now, Mr Rothman, on this jurisdiction question, what I cannot find at the moment in the Full Court judgment is any isolation by them of the section which relevantly conferred jurisdiction on the Commission. They start talking about 89A but does not one start with ordinary old 89? You say this is 89 ‑ ‑ ‑

MR ROTHMAN: They do not ‑ ‑ ‑

GUMMOW J: They do not do that, do they?

MR ROTHMAN: They do not do that.

GUMMOW J: But do you not say this is old 89(b) ‑ that is their submission ‑ and that picks up ‑ ‑ ‑

MR ROTHMAN: Yes, your Honour. 170LW.

GUMMOW J: That is right and that is the end of it.

MR ROTHMAN: Yes, your Honour.

GUMMOW J: Simple as that.

MR ROTHMAN: Yes, your Honour, and if there is an error – we say there is not – if there is an error, it is an error of law within jurisdiction.

GUMMOW J: Yes, and 89A is really a further treatment of the old 89(a). It is qualifying that function there in 89(a).

MR ROTHMAN: Yes, your Honour.

GUMMOW J: You now read that with 89A, but you do not read (b) with it, (b) just stands there and makes sense.

MR ROTHMAN: Yes, your Honour. It is as simple as that. We otherwise rely on the written submissions, both in‑chief and in reply. If the Court pleases.

GLEESON CJ: Thank you. Yes, Dr Jessup.

MR JESSUP: If the Court pleases, the notice of motion for an extension of time perhaps ought to be dealt with first as a matter of logic because until we have an appeal which we could have filed or may be treated as having filed in time, there is no point in considering special leave but the considerations which lay behind our client’s decision or desire to agitate the matters which are proposed in the cross‑appeal are similar to those to which your Honour Justice McHugh adverted about 20 minutes ago, that it is simply difficult and probably verging on impossible to appreciate the jurisprudential issues which arise ‑ ‑ ‑

GUMMOW J: Jurisprudential might be a rather rarefied term, I think, to describe this sort of ‑ ‑ ‑

MR JESSUP: Yes. Well, legal and constitutional then, your Honour, issues which arise on the appeal because in the way it has been demonstrated by the exchange your Honours have had with my learned friend one does go back to the underlying dispute. One does go back to the Constitution, not necessarily to question any established part of constitutional law but at least to understand it and to understand its significance to the appeal.

Now, so far as procedure is concerned, our present client came into this matter only very recently. As the affidavits show, they were granted a contract to manage the mine, which was the subject of the appeal, only at about the time of the Full Court judgment. They were not involved in the application or proceedings for special leave and it was only in February of this year that special leave was granted. In March the notice of appeal was filed and served.

It was in June of this year that our instructing solicitors, who were not involved in the proceedings below, although my learned friend and I were – it was in June of this year that our instructing solicitors requested the files from the solicitors for Gordonstone and they were provided in July, and then, regrettably, the wrong course was taken. A notice of change of practitioner was filed which ought not to have been and when the appropriate course was identified, we filed the notice of motion and the affidavits in support. Now, in our submission, once it is established as it is by consent that we are an appropriate party to stand as the second respondent to this appeal ‑ ‑ ‑

GUMMOW J: Yes, now, does that come about through section 170MB?

MR JESSUP: Section 170MB, probably not, your Honour, in relation to this ‑ ‑ ‑

GUMMOW J: Is it some other section?

MR JESSUP: ‑ ‑ ‑ in relation to this particular agreement because I believe section 170MB applies to certified agreements within the meaning of the Act your Honour has open in front of you.

GUMMOW J: Yes.

MR JESSUP: Whereas this agreement was made and certified under, or should I say, prior to the most recent amendments, and the effect of the transitional provisions is that the new provisions do not operate with respect to this agreement.

GLEESON CJ: May I interrupt you to ask a question of your opponent. Is the extension of time, as distinct from the special leave to cross-appeal, opposed, Mr Rothman?

MR ROTHMAN: It is, your Honour.

GLEESON CJ: Thank you. Yes, go ahead.

MR ROTHMAN: It is dealt with in paragraphs 234 and 5 of the appellant’s ‑ ‑ ‑

KIRBY J: Your solicitors never made a little slip?

MR ROTHMAN: I am instructed no.

KIRBY J: But why can we not go to the substance of the matter? We are all here, the issues are before us, you have your special leave, they want to see if they can get it. Surely this is not going to go off on a matter of time, really? Anyway, you oppose it.

MR ROTHMAN: I put what I have put in the application. We say, with respect, that they have taken over the management of the mine before the judgment of the Full Court and no other reason is given.

GLEESON CJ: I gather you do not want to add anything to what you put in your written submissions?

MR ROTHMAN: No, your Honour.

GAUDRON J: Perhaps, Dr Jessup, could you give a brief reference to the transitional provisions that make this agreement binding on you. It just may affect ‑ ‑ ‑

GUMMOW J: One has to write a judgment. I mean, I am not going to say that you both agree, I am going to say the Act requires it.

MR JESSUP: Yes, yes. First of all, if your Honours have this blue volume, I think that is the only way I can describe it, the dark blue volume, your Honour, or a purple one or a green one. I am afraid I have a ‑ ‑ ‑

KIRBY J: I have a purple one, is there any relevant reference?

MR JESSUP: The purple one would be even better, your Honour.

KIRBY J: Are you sure?

MR JESSUP: Yes, your Honour, that is very regal. Would you turn to the notes to the Workplace Relations Act, which should be at the start of the volume. They set out the transitional provisions and there is a paragraph in bold on about the third page of the notes, paragraph 5, “Transitional Provisions from Sch 8 to the Workplace Relations and Other Legislation Amendment Act”, those are ‑ ‑ ‑

GAUDRON J: I am lost.

KIRBY J: Yes, so am I.

HAYNE J: It is at page 30,233 of the consolidation to 18 August 2000, column 2 and about the 10th‑last line.

MR JESSUP: That would be right, your Honour, yes.

GUMMOW J: What does that tell us, relevantly?

MR JESSUP: It was Schedule 8 of the Amendment Act which introduced the changes which related to certified agreements, including changing the definition of “certified agreement” or that might have been in Schedule 11, but Schedule 11 was dealt with in tandem with Schedule 8 and your Honours will see from item 23(1) that:

the amendments made by this schedule apply to:
(a) an agreement made after the commencement of this Schedule –

and the instant agreement is not such an agreement. Now, that ‑ ‑ ‑

McHUGH J: That is subrule (2), it is not, 23(2):

If:
(a) an agreement was entered into before the commencement of this Schedule –

MR JESSUP: Yes, yes, now it was from that that the present appellant made a submission which, in our submission, was misconceived in the proceedings below that in some way section 89A did not operate with respect to this agreement. But what is clear is that the certified agreement provisions of the Act are those which pre-existed on 1 January 1997 because this agreement was certified towards the end of 1996. Therefore, the successorship provision is the one which is to be found in the earlier Act, the same Act, but the earlier provisions and that is in section 149(2) of the aqua coloured volume.

CALLINAN J: Dr Jessup, there is no disagreement between you and the other side about this?

MR JESSUP: No.

CALLINAN J: Well, why do you not give us a written memorandum by agreement which sets it all out?

MR JESSUP: We could do that, your Honour, yes.

KIRBY J: It is such fun though to go through all this. Is there anything else that you want to take us to?

MR JESSUP: Well, that was in answer to her Honour’s question about the successorship provision.

CALLINAN J: Although I must say I would find an agreement, a memorandum upon which you agree, helpful.

MR JESSUP: Yes.

GUMMOW J: The answers, you say, are section 149(2), inserted by Act 109 of 1992, which commenced on 23 July 1992, but which was repealed by ‑ ‑ ‑

GLEESON CJ: Act No 60 of 1996.

GUMMOW J: Yes.

MR JESSUP: But not in relation to pre‑existing agreements, your Honour.

GUMMOW J: Because of the transitional provision you took us to.

MR JESSUP: Exactly, yes.

GUMMOW J: Yes, thank you.

GLEESON CJ: Yes, you have the extension of time.

MR JESSUP: Thank you, your Honour. Your Honours, can I now deal with the issue of special leave? I will only make the submissions once We will not spend a great deal of time upon the cross‑appeal points and we will ask your Honours to conclude that the criteria for special leave are granted in the special circumstances of the case in which this is a cross‑appeal, not simply an appeal standing in its own right.

The submissions which we have made in connection with the cross‑appeal have been filed. They are headed “Written Submissions of the Proposed Second Respondent in Relation to its Notice of Motion Dated 13 October and the Proposed Cross-Appeal”. We have dealt with some of the relevant facts. We wish to draw your Honours’ attention to some, at least, of those facts.

There was some question which arose in my learned friend’s submissions as to the extent of the power of the Commission in proceedings enlivened by section 170LW, whether it be conciliation or arbitration. Of course, it could be conciliation, but in the facts of this case conciliation had been tried and had failed and the Commissioner had, in fact, held a conference with the parties and had said that there was a gulf between them. Our client was saying, “You cannot proceed any further because of section 89A”. The Union said, “Well we are not here under section 89A. We are here under clauses 21 and 22 of the Agreement”.

Our client said, “Well, that is the first we have heard of that, but let us have a look at how far they take you, including the questions of whether they are valid and so forth”. The Union then felt that those were matters which ought to go to the Full Bench and up they went to the Full Bench. The Full Bench’s proceedings were specifically to address the extent of its own jurisdiction and specifically in contemplation of non-consensual proceedings thereafter, because the parties had had all the conferences in the world, in addition to which, under clause 21 itself of the Agreement, you have to go through three steps before you get to the point of referring it to the Commission, and all of those steps had, on the Union’s case, not achieved anything.

So, as a matter of reality in the proceedings which led to this appeal, the parties are at the doorstep, as it were, of arbitration and these proceedings flow out of a determination by the Commission of its own jurisdiction. The other general point we should make at this stage is to say that although my learned friend rightly says that section 170LW was in the same terms of section 170MH, section 170MH of the legislation in its earlier form was the section which, in fact, was relevant and operated, not section 170LW. The reason for that is that those sections authorise the making of a particular kind of provision in a certified agreement.

It is under the provision, as so authorised, that the Commission might later have a function in settling disputes under that agreement, but the point at which those sections, whether it be MH or LW, operate is the point at which the parties have included their agreement, have included the relevant term in the agreement and it is certified. Now, of course, at the time when the parties did this under section 170MH there was no section 89A and whatever powers the Commission had at that time could have proceeded in accordance with the principles in Hegarty’s Case.

Then later section 89A came along and said arbitration is something that has limits, and it is our case that it said that in relation to every form of arbitration which the Commission may undertake in accordance with the terms of section 89A itself, including those which the Commission may be involved in pursuant to a certified agreement dispute settling clause. We say also that section 170MH is, or was and relevantly is, subject to constitutional limitations. The legislature ‑ ‑ ‑

GUMMOW J: What does that mean?

MR JESSUP: Well, I am telling your Honour.

GUMMOW J: Does that mean it has to be read down in some way?

MR JESSUP: Yes, it might mean that, your Honour.

GUMMOW J: Otherwise it means nothing. Otherwise we just construe it. We do not read every Commonwealth Act with the Constitution in the other hand. Life would be intolerable.

MR JESSUP: It may be that that is the answer, your Honour. Your Honour, there are some things ‑ ‑ ‑

GUMMOW J: We read it according to its ordinary meaning and if it has to be read down because someone takes a point so be it, or if you take that point.

MR JESSUP: So be it may be the point, your Honour. It is not section 170MH which is relevant to the determination of this proceeding, it is section 89A. Whether or not the Commission was authorised to play a role about the application of the agreement, if it otherwise comes within the terms of section 89A, then 89A must be applied and, necessarily, it will qualify whatever might be the Commission’s more general powers, whether they be under section 89 or 170MH or 170LW or wherever else it might be found. Now, your Honour Justice Gummow, what I was saying with respect to the constitutional underpinning of all of this is that ‑ ‑ ‑

GUMMOW J: That is true of every Act, that is all I am saying to you. We do not worry abut constitutional underpinings if we are construing the Bills of Exchange Act. In this jurisdiction it seems to haunt everybody.

MR JESSUP: With respect, your Honour, one needs to understand what type of situations the legislature was addressing when it used the expression “disputes over the application of the agreement”.

GAUDRON J: It did not call them industrial disputes.

GUMMOW J: Exactly.

MR JESSUP: Whether they be industrial disputes or terminological disputes or whatever, your Honour, the Commission can only be empowered to do something which is either conciliation or arbitration for the prevention or settlement ‑ ‑ ‑

GAUDRON J: I do not see why that should be so. Assuming what Mr Rothman conceded, that there is a dispute about a dispute settlement procedure and the Act authorises the Commission to be involved, I do not see why the Commission cannot do it by tossing a coin, holding a Dutch auction, or even a foot race between the parties.

GLEESON CJ: Or just pleading with the parties to be sensible.

MR JESSUP: Your Honour raises an interesting point which was anticipated by ourselves and, we had thought, assumed in our favour by the Full Court. There is a distinction between a dispute settling clause in an agreement or an award which is made in settlement of interstate industrial matters of a mainstream or general sense, on the one hand, and an award which settles an interstate dispute about the settlement of local disputes, on the other hand. I think that is what your Honour was putting to me. It seems to be established law that you cannot have, under section 51(xxxv), an interstate dispute, the subject matter of which is the settlement of local disputes.

GAUDRON J: Why not?

MR JESSUP: Well, because of R v Commonwealth Conciliation and Arbitration Commission; Ex parte Melbourne Tramways Board and R v Portus; Ex parte City of Perth, your Honour.

McHUGH J: I will have to refresh my recollection of those cases, but they are not dealing with it in the context of boards, are they?

MR JESSUP: In the context of a?

McHUGH J: In the context of a board or a mechanism for determining the dispute. Were they not disputes – they were, in fact, primary disputes?

MR JESSUP: Yes, your Honour. This is the distinction we seek to make between a Hegarty situation, which you can have, a board of reference or even the Commission further settling or perfecting or adjusting or doing things to the underlying dispute. We accept that. But what you cannot have is an industrial dispute whose subject matter is not wages, not hours, not leave, but the settlement of local disputes. In other words, to put it in its crudest form ‑ ‑ ‑

GAUDRON J: Why not?

MR JESSUP: I will tell you in a moment. To put it in its crudest form, a demand made on an interstate basis that said, “Any local dispute hereafter arising, whether it be in Queensland or Victoria or wherever, shall be resolved by the following procedure”, if rejected, would not give rise to a 51(xxxv) dispute. That is the proposition. Your Honour says, “Why not?”. Well, I do not know why not, except that it has been so held.

McHUGH J: It has also been held that if a dispute is within the original dispute, then you can settle it that way. That is what boards of references do.

MR JESSUP: Yes, and that is exactly this case.

McHUGH J: Is it?

MR JESSUP: Yes.

McHUGH J: At the moment I just do not see that. Your whole argument seems to depend upon the proposition that in dealing with the procedure under the agreement that the Commission would be dealing with an industrial dispute.

MR JESSUP: Yes. I thought that was what your Honour was putting to me, with respect, that that is why the Commission can validly proceed. If it is not dealing with the underlying dispute in the Hegarty sense ‑ ‑ ‑

McHUGH J: Yes, it can, but that is different from what 89A does, is it not? Section 89A says that:

For the following purposes, an industrial dispute is taken to include only matters covered by subsections (2) and (3) ‑ ‑ ‑

MR JESSUP: Yes.

McHUGH J: But what is being done under this agreement is not determining the original industrial dispute ‑ that has been determined ‑ but it is facilitating what is being done.

MR JESSUP: With respect, your Honour, not according to Hegarty. As we have said in our second set of written submissions, there are two questions which arise under section 89A(1)(a). The first question is, “Is the Commission dealing with an industrial dispute?”.

McHUGH J: That is a dispute extending beyond the limits of any one State.

MR JESSUP: Exactly, your Honour, and your Honour is putting to me that it is not.

McHUGH J: That is right, yes.

MR JESSUP: Our case is that it is and we say that ‑ ‑ ‑

McHUGH J: Yes, I know. So you have to characterise this settlement procedure under the procedures arrangement as, in effect, a continuation of the original industrial dispute.

MR JESSUP: Your Honour, with respect, that is exactly what Justice Mason said. If your Honour will turn to Hegarty 147 CLR at 629 at about point 6 on the page, halfway through that short paragraph:

What is to the point is that the provisions constitute the settlement of an interstate industrial dispute and that the procedures and machinery prescribed for the resolution of a person’s classification are designed to ensure that the settlement of that dispute is effective and enduring.

McHUGH J: Well, it is a question of how you read it but I read it as supporting what I was putting to you, rather than what you put to us, Dr Jessup. The machinery settles the dispute, but when it swings into action and you make particular determinations under that machinery, it does not mean, if it happens to be the Commission that is involved, that it is dealing with an industrial dispute by arbitration.

MR JESSUP: That is the question, your Honour, with respect.

McHUGH J: Yes.

MR JESSUP: I suppose there is a point beyond which we cannot go other than to assert that.

McHUGH J: I know. Well, exactly. It is a question of judgment, I suppose, of characterisation.

MR JESSUP: Your Honour, it cannot be an exercise of judicial power ‑ that is established ‑ so what it has to be is an adjustment of the original settlement, a making better of the original settlement. There might have been some ambiguity or gaps left in the original settlement so the Commission fixes it up.

GAUDRON J: I do not see that that is right at all. The original settlement is the dispute settlement procedure. Now we have it might be a dispute about whether a man is to be issued steel‑capped boots or not to be issued steel‑capped boots in Mount Isa pursuant to the terms of the award. It might really be a question about the meaning of the award. If the parties agree to have that dealt with by a private arbitration or a private conciliation, what difference does that make? Or, if they agree to have it dealt with by tossing a coin which the Commission is to toss, what difference does that make?

MR JESSUP: Your Honour, there are a number of issues rolled up in that, with respect. May we say in the first place that it was not argued below that the exercise by the Commission of this power could be upheld as though it were a private arbitration.

GAUDRON J: Why not?

MR JESSUP: I do not know why it was not so argued, your Honour. We were certainly prepared to meet such an argument, but that was not argued and you will not find any suggestion to that effect ‑ ‑ ‑

GAUDRON J: You are now looking for special leave to cross-appeal or to resist the appeal. The issue has now arisen.

McHUGH J: In fact it has arisen earlier, because I put it squarely to Mr Rothman earlier as to why he did not concede the question of arbitration would still be outside 89A. But you are absolutely right: he seems to want to back away from it and put the whole thrust of his argument on this conciliation argument. It is now in Court. I think you have to ‑ ‑ ‑

MR JESSUP: Your Honour, may we say this: this arises on the respondency to the appeal, not on the cross-appeal, with respect.

McHUGH J: Yes.

MR JESSUP: There would be much that we would want to say about the propriety, the legality, of the Commission, as it were, acting as though it were not the Commission at all with its powers and authority but rather as though it were a coin‑tosser or a purely private arbitrator.

GAUDRON J: If the Parliament has given it powers to do that ‑ ‑ ‑

McHUGH J: Which it appears to have under 89(b).

GAUDRON J: - - - what is the difference?

MR JESSUP: Your Honour, the Parliament gives the Commission all sorts of powers and, as was pointed out, I think, by one of your Honours earlier, section 89(b) says that the Commission has whatever other powers are given “by this or any other Act”. So, of course they are powers given to the Commission – we do not back away from that – but they are powers given to it qua Commission and, if they are, they must be given to it constitutionally.

GAUDRON J: But the Commission’s powers, no matter what its style or title at various times, have never been confined simply to 51(xxxv). The Commission has existed by virtue of the executive powers, trade and commerce, territory powers, and now they appear to exist by virtue also of the corporations power. Somewhere in the Act it says the Act is to be construed as though every power that could be brought to bear was to be brought to bear. Once you have a body set up under a range of constitutional powers, why cannot the Parliament say it can be a coin‑tosser?

MR JESSUP: It can, your Honour.

GLEESON CJ: Because tossing a coin is a well recognised method of resolving disputes.

MR JESSUP: Yes. Parliament could not say that the Commission could toss a coin unless Parliament took the view that that was either conciliation or arbitration or unless one of the other powers applied.

GAUDRON J: It does not have to. Once you get into, let us say, the powers which permit regulation of the public service or the Territories or interstate trade and commerce or the flight crew officers who came under interstate trade and commerce, the Parliament does not say you have to conciliate and arbitrate. The Parliament can say “You can rubber stamp agreements that were reached in Kuala Lumpur” if it wants to, with respect to the Malaysian air pilots or the like.

MR JESSUP: Yes, your Honour, I accept that, with respect, but that is not this case.

GAUDRON J: No, but exactly. Once the Commission is seen to have in existence, independently of 51(xxxv), why can it not be a private arbitrator if the parties agree and the Parliament authorises it to be?

MR JESSUP: Well, it can be if the circumstances in which it is privately arbitrating have a lifeline back to a relevant constitutional power which is not 51(xxxv).

HAYNE J: Well, does not the argument that has just been transpiring invite attention to what may be two premises in your submission which need exposure? It seems to me that at least part of your argument, perhaps the whole of the argument you have just been advancing, proceeds from two premises: one, that the particular certified agreement we have in issue here got into the system only via a gateway of 51(xxxv); and, secondly, under 170MHA, when the power of the Commission is a power to settle disputes over the application of the agreement, are you wrapping up in the notion of “application of the agreement” something that is said to flow from what I earlier identified as the “gateway” through which this certified agreement got into the system?

MR JESSUP: Yes, your Honour, those premises are both premises which are inherent in our argument and may we expose them further by going back to the first issue in the cross‑appeal, which was that the certification of the agreement at the start was not validly done because there was no interstate industrial dispute underpinning it. That requires me to ask your Honours to look at the aqua volume and to go to section 170MA, which was the certification provision under which this agreement was certified, and this was the only certification provision in the Act at the time, and your Honour will see that it is a provision which relates to the settlement or the prevention of the “matters in dispute” or “further industrial disputes”.

The procedure for the making of such an application for certification was governed by the rules of the Commission at the time, and they are also in the same volume on page 37,061 of the CCH book, and from rule 30A(1) your Honours will see that:

An application to the Commission under subsection 170MA(4) –

to which we have referred, had to be:

(a) in accordance with Form R6;

and had to be supported by statutory declarations on behalf of:

Each party to the agreement.....in accordance with Form R6AA –

and those forms appear on page 37,126 and particularly Form R6AA, goes on for a number of pages, and on page 37,133 Part 6 of the form directs the parties to:

Identify the dispute in settlement, part settlement or prevention of which the agreement is made.

So the link with section 51(xxxv) was explicit and the parties in this case made statutory declarations in accordance with that form and they identified a dispute or a situation which had not interstate dimension. One of those statutory declarations appears on page 130 of the appeal book. On page 135, at the top of the page, you get the identification of the two disputes required by the rules. On page 138 you get the commencement of the second statutory declaration made by the other party. On page 139, at about line 32, you have the identification of the disputes, “in part settlement of which the agreement is made”. They are the same disputes as were referred to in the other statutory declaration.

Those disputes in turn are referred to in the material at page 142, and that is a dispute by Gordonstone. Your Honours will see from the first paragraph of the notification:

The dispute involves the failure of the parties to reach agreement on the operation of the mine site work model in the Coal Preparation Plant.

GAUDRON J: When did the Coal Industry Tribunal go out of existence, Dr Jessup?

MR JESSUP: Prior to any of this, your Honour. I think it was about ‑ ‑ ‑

GAUDRON J: What is the constitutional underpinning of coal now? Is it just 51(xxxv)?

MR JESSUP: It always was, your Honour, in Queensland. In Queensland there always had to be an interstate dispute, even in that tribunal. So that is one of the notifications on page 142. The other one is on page ‑ ‑ ‑

GAUDRON J: And it is a notification of a potential industrial dispute, suggesting there that, at least in the opinion of Gordonstone, they thought it had the capacity to transmute into an interstate industrial dispute.

MR JESSUP: Your Honour, that is not how it reads, in our submission. They are saying that there is a failure of the parties to reach agreement on the mine site work model which gave rise to a potential dispute at the site. Unless one gives the words “industrial dispute” in the notification their technical meaning and carries in the statutory concept of “interstateness” ‑ ‑ ‑

GAUDRON J: And then it refers to the consent award 1993, which presumably was made in settlement of an interstate industrial dispute by the Coal Industry Tribunal.

MR JESSUP: Exactly. Might I say, that that is what the Full Court pointed to. That is the case against us, that here is – back there somewhere – undoubtedly an interstate dispute. The other notification is on page 164. Your Honours will see that that is in substantially the same terms, at least in point of substance, even if not in wording.

So that is, in a nutshell, our first point on the cross‑appeal, that although you do have the dispute underlying the 1993 award and although you do have a more recently created dispute to which the Full Court referred by an interstate log of claims, neither of those disputes was the dispute in ostensible settlement of which this application for certification was made.

McHUGH J: But this agreement was under section 170MA(2), was it not? That is that:

If the parties to an industrial situation, or any of them, agree on terms for preventing the situation from giving rise to an industrial dispute between them, they may make a memorandum of the terms agreed on.

And that is the relevance of the potential industrial dispute. Did I not see somewhere that there had been negotiations going on between the parties in 1995 and 1996?

MR JESSUP: I am not sure, your Honour, whether it was a situation or a dispute.

McHUGH J: At 135:

Identify the facts on which it is asserted that…..is for preventing the situation from giving rise to an industrial dispute…..in an attempt to resolve a number of claims and counter claims by the parties.

MR JESSUP: Yes.

GAUDRON J: But I take it what was happening at that stage was that one or other of the Union or the company wanted to move outside the award and one can well understand in that situation that the movement out of the award could lead to an industrial dispute extending beyond the limits of any one State.

MR JESSUP: I would not so describe it, your Honour. The dispute was about a mine site work model. The parties were trying to develop a new work model and the kind of work ‑ ‑ ‑

GAUDRON J: What is that? That is not a new mine, is it? It means something other than determined by the award.

MR JESSUP: Well, your Honour, that is a classic Hegarty situation. If your Honour will turn to ‑ ‑ ‑

GAUDRON J: I do not understand. What is a “work model”?

MR JESSUP: Well, your Honour, I can only point out what the agreement ultimately said about it. It is in the ‑ ‑ ‑

McHUGH J: But you have only got to look at the table of contents in the agreement to show that it went beyond the work model, do you not?

MR JESSUP: It is in appendix 3 to the agreement which appears in the appeal book at page 29 and it goes over a number of pages. It would seem, your Honour, that the work model is a scheme which relates to remuneration in one way or another to broad levels of responsibility and work performance. On page 32 your Honours will see different levels.

CALLINAN J: It was designed, was it not, to provide for multiskilling and special remuneration for people could demonstrate that they could do a number of different tasks. That is the principal thrust of it, is it not?

MR JESSUP: Certainly that was a significant part of it, your Honour, yes.

GAUDRON J: And so that was to set up a system different from the award which had been in existence since 1993 and had been made in settlement of an interstate industrial dispute.

MR JESSUP: Yes.

GAUDRON J: And both parties saw that as having the potential to give rise to an interstate industrial dispute?

MR JESSUP: No, but I will not convince your Honour of that.

McHUGH J: Was there not more to it than that? Look at page 91. It was the CFMEU log of claims in August 1995.

MR JESSUP: Yes. That is the other proceeding to which the Full Court referred.

McHUGH J: Yes, I appreciate that but it shows the general background, does it not?

MR JESSUP: No, it does not. It shows that there was a log of claims and there was a dispute arising out of it but that was not the dispute in settlement of which the agreement was certified. Your Honour, I think if I could ‑ ‑ ‑

GAUDRON J: One has certainly seen documents which do not necessarily disclose the true basis of jurisdiction. This is what the parties said but the parties themselves talk in terms of a potential industrial dispute. Both sides saw it as such: your predecessor notifying - where was that page – of a potential industrial dispute, the Union notifying of a proposed agreement which may lead to an industrial dispute. The parties say that. Why is not the Commission entitled to form the opinion that there was a situation likely to give rise to an industrial dispute in consequence of which he or she could certify an agreement? Notwithstanding that you are a party, why should you be heard to controvert what the parties saw as the position at the time?

MR JESSUP: Well, we do not seek to do that, your Honour. We seek to illuminate what the parties saw as the position.

GAUDRON J: I would have thought that the parties saw it as a situation likely to give rise to an industrial dispute and the Commission saw it in the same way.

MR JESSUP: But the Full Court did not, your Honour.

GAUDRON J: Well, that is beside the point, is it not?

MR JESSUP: Not in so far as we are cross-appealing, your Honour.

GAUDRON J: Excuse me, it is, because am I not right in thinking you have to establish jurisdictional error somewhere along the line for you to get anything other than what the Full Bench of the Arbitration Commission gave you?

MR JESSUP: Yes, well, we had to in the Full Court and we succeeded ‑ ‑ ‑

GAUDRON J: And we are still ultimately dealing with, albeit it has transmuted into an appeal, your application for prerogative relief. You now want to say, by means of a cross-appeal, there was jurisdictional error because there was no interstate industrial dispute.

MR JESSUP: Yes.

GAUDRON J: What difference does it make if there was one which provided a jurisdictional foundation but it was not the one upon which the Commission or the Full Bench relied?

MR JESSUP: Your Honour, with respect, if your Honour’s reading of the parties’ notifications is sound, then, of course, we do not have a leg to stand on.

GAUDRON J: That is because of 89. One has to assume, does one not, that in certifying the agreement, the Commission proceeded on the basis of, is it section 89 in the blue book – I am lost again - section 89?

MR JESSUP: Section 170 MA, your Honour.

GAUDRON J: Section 170MA, yes, thank you, which was an industrial situation.

MR JESSUP: Or an industrial dispute, yes.

GAUDRON J: Yes, well, if we have got an industrial situation, that being what the parties described as a potential industrial dispute, is that not sufficient jurisdictional foundation for what has subsequently happened?

MR JESSUP: Your Honour, what the Commission was doing when it certified is easy, with respect, because the parties told the Commission in their statutory declarations of the file numbers identifying the disputes or situation to which the agreement was addressed. That, with respect, your Honour, is the easy part. Your Honour was asking me, once you go back to those file numbers or the notifications underlying them, you see the kind of language that your Honour has just referred to. Now, it is at that level that we say those notifications, in essence, are referring only to local disputes. Now, if we are wrong about that, then ‑ ‑ ‑

GAUDRON J: We are talking about a potential industrial dispute, in one case referring to section 99 of the Act, which I presume is the equivalent of the old section 25, which would refer you back to the meaning of industrial dispute which takes you to the definition section and, if need be, to the Constitution.

MR JESSUP: I know all of that, your Honour, that is the case against us. We do not want to say that those things are not points that can be validly made, but in our submission, when you read the notifications fairly, in substance rather than saying, “Well, they were referring to this section of the Act, or that definition”, or so forth, the problem they were referring to was a local one.

McHUGH J: Well, I know you throw the weight of your argument on the notification of 142 as “a failure of the parties to reach agreement on the operation of the mine site work model”, but these matters go on and on. When you look at the table of contents of the enterprise agreement at page 16 of the book, you see it is dealing with all sorts of matters that go beyond the mine site work model and, to my mind – which is also of importance – is that this enterprise agreement got rid of the earlier award.

MR JESSUP: Well, it did not get rid of it, your Honour: quite what it did to it is perhaps something I will not trouble your Honour with. I do not know the answer to that, but your Honour’s reasoning, with respect, is to say that unless it was valid, then none of those provisions would have been validly there. That is our point ‑ ‑ ‑

McHUGH J: I know, but it indicates, does it not, that so far as the parties were concerned, by the time they came to bring this up for certification, there had been discussions and matters going on which went beyond what appears on 142. That is one view, and obviously the Commission took it.

MR JESSUP: Yes. Your Honour, that is what the Commission held. All we can submit is that if you read those notifications fairly, they were local. I do not want to take up any more of your Honour’s time about that, and I think I have gone as far as I can go, forensically, to persuade your Honours away from any other view that you might have.

CALLINAN J: Dr Jessup, I would like to ask you a couple of questions about it. Do you rely upon that proposition in Caledonian Collieries, 42 CLR – I am looking at page 553 in the judgment of Justices Gavan Duffy, Rich, Starke and Dixon, where their Honours said:

But upon this conception of an industrial dispute, it cannot extend beyond the limits of any one State unless in each of two or more States, at one time, the disagreement exists between people or groups who stand in some industrial relation.

There was no dispute of that kind, beyond Queensland, in relation to the mine site model, is that correct?

MR JESSUP: That is correct, your Honour, yes.

CALLINAN J: And is it also your submission that, unlike in the Vista Paper Products Case, which is on somebody’s list, there was no evidence anywhere of any potential for a dispute out of Queensland with respect to a matter of that kind?

MR JESSUP: That is exactly the case, your Honour, yes.

CALLINAN J: Well, let me just ask you one further question in relation to that. Did the log of claims which had earlier been served upon Gordonstone - and there had been, had there not, a log of claims served before this agreement was made?

MR JESSUP: Yes, in August 1995, your Honour.

CALLINAN J: Well, did that log of claims deal, or purport to deal, with any of the matters, or matters of the type with which the certified agreement dealt?

MR JESSUP: I would not pretend to have ticked them off one after the other, but I would accept that it did. I would accept that it was a broad log of claims and the agreement itself was fairly broad.

CALLINAN J: Well, in those circumstances, why is it not possible to say that the certified agreement was in partial settlement of the interstate dispute which had been created by the delivery of the log of claims upon your client and indeed your client’s predecessor and upon many, many other mine owners, I would have thought, throughout Australia? I take it there is no question that it was served on mine owners and operators outside Queensland?

MR JESSUP: That is the case, your Honour.

CALLINAN J: That question I asked you, can you answer that?

MR JESSUP: The answer is because the parties specifically stated what were the disputes or situations in settlement of which the agreement was made and that was not one of them.

CALLINAN J: But it does not matter what the parties state. If we look at the certified agreement and we look at the log of claims, why is it not possible to say that the certified agreement does, in fact, settle some of the matters put in dispute, albeit that it may only do it in relation to Gordonstone, but put into dispute by the log of claims and the resistance to it by Gordonstone?

MR JESSUP: Your Honour, with respect, that is to advert to the effect of the certified agreement rather than to its validity. It does matter what the parties say.

CALLINAN J: But its validity may depend upon its effect.

MR JESSUP: It may do, your Honour, but not relevantly to the point which we seek to make. It does matter, in our submission, what the parties say because section 170MA says the parties may make an agreement in “settlement of” any “matters in dispute” and so it is to what they were consciously directing their minds that matters, that is, the purpose and the extent of the validity of what they did.

CALLINAN J: But except, as Justice Gaudron put to you, the parties described it as an industrial dispute.

MR JESSUP: The parties described their earlier notifications in those ways compendiously but if you actually read them you will see what they are talking about.

McHUGH J: But we have, in effect, concurrent findings of fact in this matter, both by the Full Bench and by the Federal Court, and you are out of time. Why should we give you special leave to appeal on what is a question of fact?

MR JESSUP: Your Honour, I think I would be hard‑pressed to submit we should get special leave on this point if it were not in association with the other parts of the proceedings and I really wanted to move on to that and to say that the first thing you do is to identify the dispute in settlement of which the agreement was made. You then ask whether the inclusion of clauses 21 and 22 were validly part of that settlement and then you get to the point of the appeal, which is a question of what can a Commission do under those clauses if otherwise they are validly within the ‑ ‑ ‑

McHUGH J: But you are at no disadvantage in terms of dealing with 89A, are you, if one accepts that the agreement was validly made and that clauses 21 and 22 are valid? Then it is a question of applying them under the umbrella of 89A.

MR JESSUP: That is so, your Honour.

McHUGH J: Yes.

MR JESSUP: But you cannot forget why they were validly made. In our respectful submission, they were validly made because they were in settlement of a dispute. That brings us back to Hegarty, of course.

GAUDRON J: Or a situation.

MR JESSUP: Or a situation, quite, your Honour, yes. Your Honours, I did want to just refer you to something which may be more of assistance than anything else. But if your Honours would turn to page 19 of the appeal book, one does not have to talk about “electrician special class”. Page 19 has clause 13 of the agreement in it. You will see that clause 13 contains minimum rates of pay in subclause (a)(iv) and yet nothing in clause 13 tells you who is a Level 3, rather than a Level 2. In order to do that, you have to go to the work model which, as I said, is on page 29 and, relevantly, the levels are set out on page 32 of the appeal book. You will see that there is a degree of imprecision in the identification of the levels and there may be, from time to time, an issue as to whether someone should be a Level 2 or a Level 3.

Now, without transgressing the judicial, or the limits of parliamentary judicial power of the Commonwealth an arbitral official, whether that be a member of the Commission or a member of a board of reference, could say, “Well, having looked at all of the duties and responsibilities of this position this is, in essence, a Level 2 position not a Level 3 position, or vice versa”. That would be a Hegarty‑type settlement and would be valid, but the reason it is valid is because the agreement itself incompletely settles the dispute or at least in an insufficiently precise way ‑ ‑ ‑

McHUGH J: No, it settles the dispute in respect of the need for the settlement procedure. That is what is settled. And, the parties want – they dispute as to whether they should have such a mechanism and that creates an interstate dispute, but they get something to settle their dispute, then it just simply applies to particular provisions, so long, of course, as everyone agrees, the matter in dispute would still be within the range of the terms of the original dispute about wages or whatever the case may be.

MR JESSUP: Yes. I think my learned friend accepts that if it were not within the four corners of the original dispute the Commission could not be there at all, but somehow he says that notwithstanding that and notwithstanding that it is a non-consensual process, it is not arbitration for the further settlement of the original dispute. That is a distinction which we submit would not appeal to your Honours. It is altogether too sophisticated and really does not withstand examination. Either the Commission is dealing with the original dispute or it is not. If it is not dealing with it then it does not has jurisdiction to be there. If it is dealing with it, then it is under section 89A.

GLEESON CJ: Is that a convenient time, Dr Jessup?

MR JESSUP: Yes, it is, your Honour.

GLEESON CJ: We will adjourn until 2.15.

AT 12.42 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

GLEESON CJ: Yes, Dr Jessop.

MR JESSUP: The second of the matters which we seek to raise on the proposed cross-appeal, if we have leave, relates to the validity of clauses 21 and 22 and that is dealt with in our original outline on the cross-appeal in paragraphs 35 and following. We say that, on the face of them, those clauses in the agreement set up procedures for the settlement of local matters only and that if there were nothing more, that would be fatal to their validity within a certified agreement. Now, that proposition which we put, we accept, may be answered as the Full Court did, by reference to Hegarty’s Case, which inevitably involves a reading down of those clauses as referable to the foundational dispute.

In the passages to which my learned friend took your Honours this morning, included in which was the passage set out in the Full Court decision in Hegarty’s Case, we find that the Commission can by award, and presumably the parties can by certified agreement, set up a procedure, whether it be a board of reference or some other procedure involving the Commission, which would settle disputes, but if it is to stay away from the exercise of judicial power then, otherwise to be relevant, it must be to perfect or adjust or complete the settlement of the foundational dispute, and that is the way we read Justice Mason in Hegarty’s Case.

GAUDRON J: Is that any different from saying there must be ambit?

MR JESSUP: Yes, apt, your Honour.

GAUDRON J: It is?

MR JESSUP: Yes.

GAUDRON J: Well, then I do not understand it.

MR JESSUP: You do not understand the submission, your Honour?

GAUDRON J: No, if by that you mean to suggest something other than the necessity for ambit.

MR JESSUP: Your Honour, it is in part an ambit point, but it is in part also an apt point, if I can put it that way.

KIRBY J: It is a constitutional point, is it not?

MR JESSUP: Yes, it is.

KIRBY J: Does that raise any problems from the point of view of 78B? You gave notice, did you not?

MR JESSUP: From the point of view of?

KIRBY J: Section 78B of the Judiciary Act.

MR JESSUP: Probably not, your Honour. I think that our 78B notice, or 75B notice, was given ‑ ‑ ‑

KIRBY J: On this point, or not? Because as I understand it, what you are saying is that the source can never rise higher than the stream, that Parliament cannot confer power on the Commission to do something which the Constitution does not permit, and what is purported to be allowed goes beyond the ambit of the constitutional powers. Is that correct?

MR JESSUP: Yes. There is no real argument about the extent of the constitutional power, as we understand it. All we are saying, your Honour, is that in order to make an award or to certify an agreement, it has to be in prevention or settlement of a dispute, or apt or appropriate, or whatever it might be, for that end. Now, a disputes settling clause answers that description only if it is understood in the way adumbrated by Justice Mason.

The second point on the cross‑appeal, the validity of the clauses, if you like, is an argumentative point along the way to responding to the appeal itself in the sense that the only way to, we would submit, overcome the points which we make on pages 9 and 10 of our first outline is to say, “But this is a Hegarty‑type clause with Hegarty‑type operation”.

Now, once you say that, we come back to the second of your Honour Justice Hayne’s two premises, namely, that the power under section 51(xxxv) is, indeed, the gateway to what may be done, what may be done in the agreement and what may be done under the agreement, and if we may then pick up something your Honour Justice Gummow put to my learned friend this morning, that this whole case falls for resolution under section 89(b) of the Act, relevantly to the facts of this case, your Honour, both that provision and section 170MH itself must come within section 51(xxxv) and in that sense it is metaphorically a gateway.

Now, it is true that the Commission is given lots of functions by this Act which are not conciliation and arbitration as such. In part it is given those functions in the way that your Honour Justice Gaudron developed this morning, that is, other constitutional heads of power. In part it is given them under the incidental power because the Commission has a lot of functions with respect to registered organisations, for example, the changing of rules of organisations and challenging of elections and all those sorts of things. The whole set of provisions of the Act in that regard are incidental to 51(xxxv) legislation in the direct sense.

So far as 89(b) is concerned, we accept that there would be many functions which the Commission might validly be given which are not conciliation and arbitration as such. However, for the purposes of this case, none of those possibilities is legitimately open. For the purposes of this case, if the agreement is validly to have a provision in it which provides for the settlement of disputes, those disputes must really be an adjunct of or a part of the foundational dispute in settlement of which the agreement was made. Now, if that is so, and if we may now turn to our outline with respect to the appeal itself ‑ ‑ ‑

McHUGH J: Just before you do, is there not a difficulty which I think Chief Justice Mason highlighted in Wooldumpers about rigidly applying the ambit doctrine to the prevention issue? In other words, it is one thing to apply the ambit doctrine when you are talking about an existing industrial dispute, but it is less easy to apply when one is talking about a potential industrial dispute, is it not?

MR JESSUP: I accept that, your Honour. Our submission does not rely upon ambit in any way. Our submission is concerned with quality rather than quantity of what the certified agreement dealt with. Let us say this, the provision in the certified agreement was intended to prevent disputes and the disputes resolution clause has that character. Nonetheless, when later the Commission comes to exercise non‑consensual powers under that clause, it is arbitrating and, in the words of 89A(1)(a), it is dealing with the industrial dispute or an industrial dispute understood so as to extend to apprehended or likely industrial disputes.

Now, when we come to our outline in response to the appeal dated 8 November, we submit, as we have in paragraph 12, that the two questions with respect to 89A are whether the Commission would be dealing with an industrial dispute, and we have just submitted that it would be, and if so, would it be doing so by arbitration. Now, it is not that 89A, at least in paragraph (a), is referring to the Commission as such. It is referring, rather, to the dispute which is the subject of the Commission’s attention and the dispute is simply statutorily deemed not to contain certain subject matters. And, to go back to what your Honours were mentioning this morning with respect to private arbitration, that would apply just as much if the parties had chosen a private arbitrator as if they had chosen the Commission.

That is what, in our respectful submission, the Full Court correctly observed in paragraphs - whatever they were – I think 42 and 43 of their judgment, that on its terms 89A(1)(a) does apply to the situation which was before the Commission in this case. If we persuade your Honours that the Commission was embarking upon a procedure whereby it would be dealing with an industrial dispute then there can be no doubt, we submit, but that it would be doing so by arbitration because it was about to embark upon a procedure in which it would hear the parties in the conventional sense, listen to what they had to say and then make a decision. And, we submit that it would answer the description of arbitration, in that sense, whether the proceedings got there by an order of the Commission or by the parties’ own consent or agreement.

So that, to come to a point that my learned friend was making this morning, he says that this dispute settling clause was part of an agreement between the parties. That is to say, the parties by their own consent agreed in advance of the event that they would abide by any order which the Commission made in resolution of these disputes. So be it. The fact is they were agreeing to a process of arbitration and, as the appellants themselves said in the original outline, I think, 51(xxxv) is not itself concerned only with an arbitration by the Commission or by any government functionary. Section 51(xxxv) covers arbitration by any means and whether the parties have here chosen to provide for an arbitration or whether the Commission is exercising powers under the Act, the question is whether it is a dispute and whether it is an arbitration.

GUMMOW J: How does the prohibition order at page 377 fit in with the various ways of putting your case? It seems to be limited to 89A but I am not sure you would say that was all that was involved.

MR JESSUP: That is the subject matter of our cross-appeal. If your Honours are minded to uphold the cross-appeal, then your Honours would delete the words “otherwise than on the basis”, et cetera, but otherwise dismiss the appeal. If your Honours dismiss both the appeal and the cross-appeal, then your Honours will leave the order in its terms.

GUMMOW J: But suppose the relevant basis of the jurisdiction is 89(b) plus the other section?

MR JESSUP: Your Honour, 89A applies just as much to a matter which, if it meets that description, comes within the Commission’s functions under 89(b) as it does under 89(a), in our submission. In our submission, the Full Court adequately identified the limits of the Commission’s jurisdiction in circumstances where it was proposing to proceed in defiance of those limits.

GUMMOW J: They would be proposing to proceed under, well, it was section 170MH.

MR JESSUP: Your Honour, it does not proceed under those sections at all. Those are the sections which authorise the inclusion in the agreement of a provision which provided for recourse. If there is anything under which the Commission proceeded it would have to be the clauses in the agreement itself.

GUMMOW J: I am just wondering what the theory is of the prohibition, that is all.

MR JESSUP: What is the?

GUMMOW J: What is the theory of the order for prohibition?

MR JESSUP: The theory, your Honour?

GUMMOW J: Yes. What is the legislative boundary which is being crossed and how does one define the legislative boundary? I do not find it defined in the order at page 377, that is my problem.

MR JESSUP: Yes. The legislative boundary is the limit ‑ ‑ ‑

GUMMOW J: Section 89A qualifies something else; what is the something else that lays down the line?

MR JESSUP: Section 89A, your Honour, does not qualify any other specific provision of the Act; 89A redefines the industrial dispute for whatever purpose under the Act that may arise. Now, as my learned friend ‑ ‑ ‑

HAYNE J: What is the relevant purpose then?

MR JESSUP: Under the Act, your Honour?

HAYNE J: The relevant purpose under the Act that is engaged in a way to generate the prohibition that we see in paragraph 1 of the Order.

MR JESSUP: Well, that may be a question, your Honour. It may be ‑ ‑ ‑

GUMMOW J: Well, would there be an answer.

MR JESSUP: Well, your Honour, it is not really our case that the Commission has jurisdiction anywhere, with respect. It is our case that if the Commission is proposing to make an order of a non-consensual or coercive kind, then it can only do so with respect to an industrial dispute and, at that point, 89A steps in.

GAUDRON J: But you say of a non-consensual or coercive kind, which rather begs the question. I mean, if one is talking about the making of an award by compulsory arbitration for the settlement of an interstate industrial dispute to which the parties are in vigorous disagreement, that is one thing, but here you have got a situation where the parties have agreed on a procedure if they cannot agree. So when you are talking about non‑consensual, you have to identify the level at which it is non‑consensual, and the level at which it is coercing and, in a sense, it is not really coercive if the parties have agreed.

MR JESSUP: I only intended to use that word to avoid begging another question, namely, that this was arbitration. I really intended to indicate that, generically, the proceedings would be arbitration proceedings, however they got to that point.

GAUDRON J: That does not seem to me to be the question. Let it be assumed that they are arbitration; the question is whether it is a dispute with respect to the application of the agreement or an industrial dispute or a situation likely to give rise to an industrial dispute, they being on the other end of the spectrum.

MR JESSUP: Yes, all of those things might be answered in a way adverse to ourselves. All we propose to contend here, at least in our respondency to the appeal, is that they are dealing with the industrial dispute, or likely industrial dispute.

HAYNE J: That is, is the submission you are making that the subject matter described in 170MH(a), settle disputes over the application of the agreement, is a subject matter which is necessarily a subset of industrial dispute, actual or threatened?

MR JESSUP: Yes, your Honour, necessarily.

HAYNE J: Can I just follow out what seems to be the underpinning of that contention? First, 170MH in the introductory rubric talks of an agreement empowering the Commission to do certain things. Do you say that that provision is apt to fall within 89(b) as a function conferred on the Commission? True it is with an anterior agreement of parties, but in that event, conferred on the Commission by the Act.

MR JESSUP: Yes, your Honour, it does meet that description, but may I just add very compendiously, that does not mean that it does not also meet the description in 89A(1) or (2).

HAYNE J: And the argument, as I would understand it so far, that invites attention to 89A is an argument that says 89A applies wherever there is an industrial dispute. Is that right?

MR JESSUP: Yes.

HAYNE J: And there is necessarily, as I understand your contention, an industrial dispute because MH(a) is a subset of those and that is exemplified or is to be understood from the way in which 170MA operates.

MR JESSUP: Exactly, your Honour, yes.

HAYNE J: Does that chain involve a movement – I do not say a slide, yet – from the proposition that in MA there is reference to agreement:

on terms for:
(a) the settlement of all or any of the matters in dispute, or
(b) the prevention of further industrial disputes –

to an equation with, or reading down of, MH(a) and the phrase “settle disputes over the application of the agreement”, as being an expression somehow synonymous with industrial dispute?

MR JESSUP: No, your Honour, there is no chain and I certainly hope there is no slide.

HAYNE J: There is different language, at least ‑ the bridge between the differently chosen language is not self‑evident to me, at least as the argument thus far has developed.

MR JESSUP: Your Honour, all of the provisions have to be read as though they are giving effect to the constitutional basis of them. Section 170MH itself would not be valid unless it were in or incidental to conciliation or arbitration for the prevention or settlement of a dispute. The expression “the application of the agreement” has to be understood in that sense.

Now, generally speaking, if an agreement itself had terms which settled or part settled an industrial dispute in the constitutional sense, and if a little while later there was a dispute about the application of one of those terms, then necessarily the arbitrator who dealt with that dispute would be, and 89A uses very broad terms, “dealing with” the foundational dispute.

HAYNE J: Is a dispute about whether worker A is Level 1 or Level 2 qualified a dispute within 170MH(a) as it applies to this particular agreement?

MR JESSUP: Yes, your Honour. Our submissions proceed on the assumption that that is so because our submissions take their constitutional assumptions from Hegarty’s Case. We read that case to be saying, in effect, that a provision like 170MH will only be permissible, that is legislatively permissible, if it provides for the Commission to be authorised to refine or adjust or perfect in some way the original settlement.

HAYNE J: If a dispute about whether worker A is Level 1 or Level 2 is within 170MH(a), how is section 89A engaged in respect of that – I use the term neutrally – difference between employer and either Union or individual employee?

MR JESSUP: Because such a dispute is evidence of the fact that the original dispute in settlement of which the agreement was made was not completely settled and I think this comes back to something your Honour the Chief Justice said earlier, that some of these agreements are made in a way which does not always deny the possibility that there might be later differences as to what they mean or as to whether they comprehensively cover all the range of fact situations that arise.

Now, to give your Honour Justice Hayne a concrete example, if you had an award which specifically defined the entitlement of someone to a particular rate of remuneration the award might simply say someone who holds a trade classification as a plumber, so all the person has to do is to say, “Here’s my technical school certificate that says I’m a plumber”, or whatever it may be, then that would be a complete settlement of the dispute.

On the other hand, if you have the wage rates provisions of the kind to which we have referred here, clause 13 and Schedule 3 in the work levels, then the settlement of the dispute as encapsulated in the agreement only goes so far. It will work if there is no disagreement but, on occasions, there might be, so what has to happen is it has to go back to the arbitrator or to the parties or to an arbitrator to move further along the spectrum between uncertainty and precision towards the precision end and, in that sense, you are shifting the sliding scale of settlement, which was originally affected by the parties’ agreement and, in that sense, your Honour, dealing with the dispute within the meaning of 89A.

I think that probably throws as much light upon the matters that we are able to orally, the matters that in other respects are adequately covered by our written outlines.

GLEESON CJ: Yes, thank you.

GAUDRON J: Do you go so far as to say, do you, that the only conclusion that is open is that there was to be an arbitration of these matters, notwithstanding that the Commission had not embarked upon any proceedings in relation to them?

MR JESSUP: Your Honour, the position had been reached where there was to be an arbitration. If you look at the factual summaries which we have set out in our outline, you will see ‑ ‑ ‑

GAUDRON J: Yes, I have noticed those, but it seems to me you have to go a bit further than that. You have to say it could not be the position that at some stage a member of the Commission said, “Look, I am going to sit you two people down to talk”, and that an agreement then emanated, because assuming you are otherwise right in all respects, it is a question of how prohibition would be framed.

MR JESSUP: Your Honour, the Full Court considered that question and made a judgment which in our ‑ ‑ ‑

GAUDRON J: Yes, I know, but it does not seem to have addressed the question.

MR JESSUP: Subject to appeal it has, your Honour. If the appeal is unsuccessful, then the question will be redressed. It is not suggested that at the level of the Commission that that matter cannot be resolved. We go back to the Commission and we then say, “Well, you can deal with this by conciliation if you want to ‑ by arbitration. You cannot deal with, for example, union right of entry onto the site which is a non‑section 89A point”, and a matter which was quite vigorously in dispute at the local level.

Your Honour, it really is not rocket science once you resolve the legal issue of whether 89A applies to this proceeding. With respect to your Honour’s question as to whether the only possible way that the Commission could have proceeded is by arbitration, once the Commission says, “Well, we are going to hear the parties on this because they cannot agree”, then that is arbitration, they have embarked upon arbitration. May it please your Honours.

GLEESON CJ: Thank you. Yes, Mr Solicitor.

MR BENNETT: If the Court pleases, the only issue which I needed to say a few, and hopefully very few, words about is the issue concerning the extension of Hegarty’s Case which may be involved in the present situation. The problem, as we see it, is this: let us suppose that there is an industrial dispute or situation which gives rise to a certified agreement or award and that dispute or situation does not involve any controversy as to the method of dispute resolution, but the resulting certified agreement or award does contain a general provision as to dispute resolution.

Now, it is our respectful submission that the absence of any dispute as to procedure, or anticipated dispute as to procedure, does not prevent the rule in Hegarty’s Case from operating, so that in that situation a subsequent dispute which may be totally intrastate may be dealt with by whoever it is referred to in whatever manner it is referred to that body.

The second leg which has to be distinguished from that one is the problem which arises where there is a further degree of distance from the original dispute. Let us suppose the original dispute is over issues ‑ or situation – is over matters A, B and C. One of the provisions that goes into the resulting certified agreement or award is an arbitration clause of this type, or provision for dispute resolution. In our respectful submission, that can validly extend, even under 51(xxxv), to a dispute over area D, E or F, even though that dispute was not involved in the original industrial dispute or industrial situation. And, the reason we say that is that in all the cases I have put to the Court part of the resolution of what was an industrial dispute, or the prevention of what might have been an industrial dispute, has involved the setting up of a mechanism.

If that mechanism cannot operate then at the time of the original discussions a means of settlement is unavailable to the parties or the body imposing the settlement on the parties. So, in order to give full effect to the ability of the parties to prevent or settle a dispute ‑ ‑ ‑

GAUDRON J: That is right if you ignore industrial, so you have to give a meaning to industrial, do you not?

MR BENNETT: Yes. If the dispute is over something which is so different and so foreign to the workplace relations as not to be characterised as industrial ‑ ‑ ‑

GAUDRON J: But, you have got to characterise it as industrial in a context in which it has an interstate element or the potential to have an interstate element, do you not?

MR BENNETT: As to the initial dispute, yes, your Honour, or situation.

GAUDRON J: No.

MR BENNETT: I would submit not, your Honour, because when one deals with – one gets to it in the two stages. One starts by looking at it solely at the time of the original dispute or situation. At that time, of course, there must be an interstate element, it must be industrial, there must be a dispute or situation so that one activates the word “prevention” in the Constitution.

GAUDRON J: No. Let us go, to analyse your argument, to 170LW. Just for convenience take that one. If it read “Procedures in an award may” and forget about “if the Commission so approves”:

empower the Commission…..to settle disputes over the application of the agreement –

Full stop. Leave it there. Could that be done?

MR BENNETT: Yes, your Honour, so long as the award itself arose out of an industrial prevention or ‑ ‑ ‑

GAUDRON J: But that would not depend on the consent of the parties, would it?

MR BENNETT: No.

GAUDRON J: And, a dispute over the application of the award?

MR BENNETT: The same, your Honour, so long as the original ‑ ‑ ‑

GAUDRON J: It is not, necessarily, an industrial dispute, it may be a legal dispute.

MR BENNETT: Your Honour, it may be, but that would not affect the constitutionality.

GAUDRON J: Why would it not?

MR BENNETT: Because the constitutional nexus is provided by the original dispute or situation.

GAUDRON J: That I do not understand. That I thought you had omitted from your analysis. Let us assume there is a dispute about hours, wages and annual leave.

MR BENNETT: An interstate dispute?

GAUDRON J: Interstate, yes. Section 170LW says the Commission may make an award empowering the Commission to settle disputes over the entitlement of a person to annual leave under this award. You say that can be done?

MR BENNETT: Yes, your Honour.

GAUDRON J: Why?

MR BENNETT: Because, your Honour, the nexus is in what gave rise to the award.

GAUDRON J: And what gave rise to the award?

MR BENNETT: An industrial dispute or ‑ ‑ ‑

GAUDRON J: As to what the entitlement should be, not what the entitlements are. There is a long line of authority that says what you are talking about at one level is what the entitlement should be. That brings it within the notion of 51(xxxv). What the entitlements are brings it within Chapter III.

MR BENNETT: Your Honour, Chapter III, I am not really ‑ ‑ ‑

GAUDRON J: Exactly, because a dispute as to entitlements is not an industrial dispute as such.

MR BENNETT: I am sorry, your Honour, I had best start again. The argument I am putting is this, that one starts with what gives rise to the award or certified agreement.

GAUDRON J: Yes, I follow that.

MR BENNETT: That, leaving aside the other placita of section 51, must fall within 51(xxxv), and we assume it does. It concerns a limited interstate dispute or prevention of a limited interstate dispute, limited by reference to subject matter. The parties or the person imposing the settlement, as the case may be, takes the view that the best way to settle this dispute, or possible dispute, is to have a certified agreement or award containing a 170LW clause of general application.

GAUDRON J: This is exactly where you lose me, Mr Solicitor. An arbitrator might well take the view that rather than provide for annual leave, for example, that the best way to settle the dispute with respect to annual leave is to determine on a case by case basis what the annual leave entitlement should be. That I follow exactly.

MR BENNETT: No, your Honour, I am taking a much further case than that.

GAUDRON J: I know. You are going to the point where the arbitrator says, “Every person is entitled to four weeks annual leave, or six, but in case any dispute arises as to the entitlement of the person, the Commission will determine how the award applies”.

MR BENNETT: Yes. Or even more broadly: any dispute arises between employer and employee in a broad case.

GAUDRON J: As to the entitlement to annual leave.

MR BENNETT: As to anything, your Honour, we submit.

GAUDRON J: Well, that cannot be right. Let us start at the other end. Let us say any dispute between employer and employee shall be determined by the Commission, and the employee says, “I want you to cut your greenhouse gas emissions”.

MR BENNETT: Yes.

GAUDRON J: Well, yes?

MR BENNETT: Your Honour, so far as constitutionality is concerned, which is all we are discussing at the moment ‑ ‑ ‑

GAUDRON J: Yes, you say that is perfectly ‑ ‑ ‑

MR BENNETT: Yes, your Honour, because so far as constitutionality is concerned, the person imposing the settlement, or the parties agreeing to the settlement ‑ ‑ ‑

GAUDRON J: No, we will just deal with “imposing” the settlement for the moment, because I can see quite different bases for an agreement. But you are putting it on the 51(xxxv) connection without reference to agreement.

MR BENNETT: Yes, so far as 51(xxxv) is concerned, so long as one of the matters used to settle the situation or agreement is the imposition of a future dispute resolution procedure, however general ‑ ‑ ‑

GAUDRON J: Yes, well, you say “however general”. You say whether it is about greenhouse gas emission, whether it is about deducting for pay as you earn tax, whether it is about entitlement to the benefit of workers’ compensation or accident compensation legislation, anything you say.

MR BENNETT: So far as power is concerned, yes, your Honour.

McHUGH J: Why? Surely it has to be confined to industrial matters. I can understand that you can have an industrial dispute as to a procedure for settling differences as to industrial matters generally, but it seems to me that your award would be invalid, at least invalid under 51(xxxv), if you sought to set up a dispute resolving machine for determining any dispute that existed out in time and space. It would have nothing to do with 51(xxxv). Surely it has to be confined to industrial matters.

MR BENNETT: Well, your Honour, it has to have this much connection, that it must have sufficient connection with the industrial dispute at the time, that part of the settlement imposed or agreed ‑ ‑ ‑

McHUGH J: No, but when you say that, Hegarty makes clear that what – what was the relevant interstate industrial dispute in that case was a dispute as to the provision of machinery for settling differences as to classifications. It was very concrete. I have no problem about saying that in 51(xxxv) you can have a dispute concerning machinery for settling or determining industrial matters, but you seem to want to go beyond that. It seems to me that if you do, then your machinery is invalid from the beginning.

MR BENNETT: Well, your Honour, it is my submission that so long as the dispute is one that falls within the placitum and so long as the means adopted is a means which either prevents or settles that dispute ‑ ‑ ‑

GAUDRON J: Which dispute?

MR BENNETT: The dispute which is industrial.

GAUDRON J: Yes.

McHUGH J: It has got to be industrial. See, what you are doing is breaking up. What is critical here is the dispute about the procedures and the content of that procedure is, in fact, adjectival. It is not the dispute; the dispute is about the machinery.

MR BENNETT: Your Honour, so long as the dispute is about machinery, really, Hegarty answers it and there is no serious argument against that.

McHUGH J: Yes, but it must be a dispute about machinery to settle disputes of a certain kind, not betting disputes.

MR BENNETT: Well, your Honour, we put both as going further, so far as constitutionality is concerned, because one can ‑ ‑ ‑

GAUDRON J: Well, I might have a different view from Justice McHugh on that; I might think it does go to betting disputes. But what I do not understand is your submission that absent a dispute about a dispute resolution mechanism and absent agreement – as I have said before, there may be quite different things where there was an agreement – the Commission can make an award saying, any dispute as to your entitlement will be determined by the Commission.

GLEESON CJ: Are you putting an argument in support of the words in parenthesis in Hegarty on the bottom of page 633 and at the top of page 634?

MR BENNETT: Yes, your Honour, that is one of the two arguments I am putting.

GLEESON CJ: Was that a point of departure between the other members of the Court and Justice Murphy in Hegarty?

MR BENNETT: Your Honour, the other members of the Court dealt with it at page 629 in the paragraph that I think has been read to your Honours twice. The words which might be thought to be against me, being the word “Such” in the fourth line and being the words “as to the means”, et cetera, in the second and third lines. So the three members of the Court who put that view, or four members really, put it in a way limited to the facts of that case and did not need to go further. Justice Murphy, of course, went further.

GAUDRON J: And you take it further, that I can understand, but what I do not understand in what Justice Murphy has written is what is meant by “operation of the award”.

MR BENNETT: Your Honour, the starting point is ‑ ‑ ‑

GAUDRON J: Unless it is legal operation. Now I understand the legal operation of award, but that I understand to be a legal dispute, not an industrial dispute, and I understand questions about how the award should operate, which I understand to be an industrial question which might require variation of the award, but that does not help you in this area, because of the very strict confining provisions of the section.

MR BENNETT: Your Honour, a great many of these questions may not arise depending on the view your Honour has taken to facts of this case which ‑ ‑ ‑

GAUDRON J: No. You seem to have put an argument that transcends anything within the contemplation of the parties and you are going to answer it if you want to put it.

MR BENNETT: I have answered it, your Honour. I have.

GLEESON CJ: Mr Solicitor, something that is going through my mind is this. I dare say there just seems to be a flavour of it in some of the judgments in Hegarty and it really relates back to a question I asked earlier about the nature of the disputes that arise about some of these awards. Let me give you a specific example. Suppose you had a provision in an award that said a worker is entitled to compassionate leave in circumstances of family necessity. That is all it said. I do not know if that is a silly example but if an award said that I can think of a lot of room for disagreement on a case‑by‑case basis as to the application of that.

Now, if a dispute arose between a single worker and a single employer at a single workplace as to whether the worker was entitled to compassionate leave, would that be a dispute about entitlement or about what the award ought to be?

MR BENNETT: No, your Honour, it would be a dispute about the application of the award in the particular circumstances and that dispute could be determined with the constitutional nexus of the original dispute. What one has to look to, in my respectful submission, is to say this, that if one is going to settle a dispute about A, B and C by, inter alia, either a provision of the type your Honour the Chief Justice puts to me where there is a resolution but one which may give rise to future disputes, or by an adjectival provision specifically dealing with future disputes, in either event one can come later and say, under that original constitutional nexus, the dispute between Smith and Jones Pty Ltd in Tasmania can be dealt with, although it is purely local, because the award or certified agreement provides for that form of resolution and that has to be able to be enforced because if it was not we could not have imposed it to make the original settlement or award.

In other words, in order to enable going back, one to settle the original dispute or prevent it, one needs to put in the clause in question, whether that clause is one like your Honour’s or whether it is an adjectival clause for settlement of disputes, and then that has to be effective because if that is not effective the original means is unavailable or, at least, will be unavailable in the future. That is why there is sufficient constitutional nexus and one does not need to look to any relationship at all between the subject matter of the original dispute or possible dispute and the subject matter of what is now coming before the Commission under the provision.

GAUDRON J: I think there is a fundamental difference. Let me illustrate it this way. Let us assume the award provides for the dismissal of persons on 24 hours notice for misbehaviour. A question arises whether a person has been dismissed. That is, that seems to me, to be a legal question.

MR BENNETT: Yes.

GAUDRON J: A different question, whether the employee should be reinstated, which may well be an industrial matter which the Commission can deal with, providing you can link it to something in the award or the original dispute. But I think you cannot make your argument without distinguishing between the different types of dispute that may arise in relation to the application or, as Justice Murphy says, the operation of an award.

MR BENNETT: Yes. But, your Honour, ex hypothesi, the disputes we are talking about – I am sorry, I withdraw that.

GAUDRON J: Ex hypothesi, I am not too sure what they concern when one looks to the section:

(a) to settle disputes over the application of the agreement –

which is why I think consent is absolutely critical, and your argument is not predicated on consent.

MR BENNETT: I am sorry, your Honour, my argument was not concerned with those words, my argument was concerned with constitutionality.

GAUDRON J: Yes, and it was on the basis that a dispute settlement procedure could be imposed. Now, for the purposes of this argument, the assumption seems to be that the 51(xxxv) connection is the same whether it is imposed or agreed. I am just suggesting to you it may not be.

MR BENNETT: Your Honour, I certainly accept that the section 170LW – well, the whole of it is only concerned with an agreement, it is not concerned with ‑ ‑ ‑

GAUDRON J: It is concerned with the application of an agreement.

MR BENNETT: Yes, yes, it is, your Honour, that is so. So, in a sense, one is not concerned ‑ ‑ ‑

GAUDRON J: It is not concerned with how the agreement should be applied, so prima facie, at least, it does not seem to be concerned, in the

absence of provisions in the agreement about reinstatement, with whether a person should be reinstated, but prima facie it may well be concerned with whether a person has been dismissed.

MR BENNETT: Your Honour, I am not addressing any argument on the construction of 170LW.

GAUDRON J: Oh, well, forget about it then, because that seems to me to be the only matter in issue.

MR BENNETT: Your Honour, I started by saying that what I was putting may not arise, but it arose out of the first question which your Honour asked my learned friend, Mr Rothman, and out of a specific submission made by – your Honour, my concern was the argument which said that in order for there to be a constitutional nexus ‑ ‑ ‑

GAUDRON J: The parties are in furious agreement about that, which I thought might have limited the debate.

MR BENNETT: Well, your Honour, the parties are in agreement and that is why I did not think I would be long. But my submission simply is that one tests constitutionality under section 51(xxxv) by reference to the original dispute or prevention of dispute, not by reference to the nexus between the particular matter which has arisen and section 51(xxxv). That really is the whole of the submission and the reason is the reason I have put to your Honours.

GLEESON CJ: Thank you, Mr Solicitor. Yes, Mr Rothman.

MR ROTHMAN: It may have been my inelegance at the commencement, and I apologise if it was, but I think I have given rise to some confusion in relation to that which is the essential ingredients of the matter that is before the Court and I say that for this reason, that there are two seemingly quite distinct aspects, the first of them is, is section 170LW within power, and it seems from what has been addressed to the Court, there really is no issue that 170LW is in power.

The second is: what is the legislative power that is being exercised? I think your Honour Justice McHugh at one stage suggested I kept concentrating on conciliation. The reason that I kept concentrating on conciliation was that when one is looking at the power, that is, the legislative power, it is our respectful submission that the legislative power which underpins the provisions of section 170LW is the conciliation power. That is, it is a power to make more effective and more enduring the conciliation or the agreement reached through conciliation.

McHUGH J: And it is very difficult to reconcile with the language of 170LW(a), is it not: “to settle disputes”?

MR ROTHMAN: Yes. This is why I say, with respect, that it may have been the way I raised it that has given rise to some confusion. I am not now dealing with whether or not 170LW(a) or 170MH(a) is an arbitration. I am dealing with whether a provision of the kind such as 170LW is a legislative provision in reliance upon that part of 51(xxxv) which is the conciliation power. You have a conciliation which results in an agreement and the legislature is making more effective that agreement by making a provision such as 170LW. That is the only reason that I raised the conciliation power.

McHUGH J: I understand your argument now. I thought your were arguing that 170LW was ‑ ‑ ‑

MR ROTHMAN: No, your Honour. What I then say – put that aside – it is within power. One then goes to 170LW and 170LW on its face involves a whole range of procedures that the Commission may adopt in dealing with a dispute over the application of an agreement. One of them is arbitration. From the submissions that we put, we do not say that the capacity of the Commission to deal with it in a manner unqualified by the provisions of section 89A differs from the procedure that is adopted under 170LW, but we do say – and it is important to understand the distinction – and it gets back to a series of questions I think your Honour Justice Hayne asked and which my learned friend, Dr Jessup, answered – that there is a significant distinction between dealing with an industrial dispute by arbitration and dealing with a dispute between the parties over the application of the agreement.

What my learned friend wishes to do is say that as long as the dispute between the parties is in or in connection with an industrial dispute, it therefore fits within section 89A(1)(a). We say – and that is fundamental to the construction – that 170LW allows the Commission to deal with the matter in whatever way it sees fit but it deals with the dispute between the parties about the application of the agreement.

Certainly, in terms of constitutional power and the constitutional arrangements, there has to be an underlying industrial dispute that gave rise to the certified agreement and there has to be an underlying industrial dispute into which the application dispute, as I call it in the reply, fits.

CALLINAN J: Mr Rothman, does there always have to be a dispute before an agreement can be entered into?

MR ROTHMAN: Your Honour is referring to the prevention power?

CALLINAN J: Well, no, it is just something that you said then. You said that there would have been a dispute, or there must have been an industrial dispute before the agreement came into existence and that the agreement was, in effect, a means of – I may not be using your language ‑ but the means of resolving that dispute.

MR ROTHMAN: No, your Honour. Your Honour, I am using “industrial dispute” in existence in the broadest possible sense and I include in that, as does the Act, that is the statute, a situation likely to give rise to an industrial dispute, so I include, when I say, as I did just then, an industrial dispute in existence, a situation likely to give rise to one.In other words, I include the prevention power as well as the settlement power.

CALLINAN J: Yes.

MR ROTHMAN: Now, your Honour Justice Gaudron, albeit in an excursus that does not seem ‑ that my learned friend the Solicitor-General embarked upon which is probably a excursus unnecessary for resolution in this matter, embarked upon the issue as to whether the dispute over the application of the agreement has to be about an industrial matter, and I think your Honour Justice McHugh raised the same point. Without embarking or endorsing the use of the term “industrial matter” at least following…..it is, in our respectful submission appropriate, and it is set out in our reply at paragraph 12 through to 25, but it is beyond doubt that the application agreement must be within the confines of the original industrial dispute. At least, we do not need to argue any further for the purposes of these proceedings.

However, I should draw attention of the Court, least it not take account of it, that there are a number of judgments. I doubt that there are many in this Court, at least I have not found one, but there are judgments in which your Honour the Chief Justice when sitting on the Court of Appeal, your Honour Justice McHugh on the Court of Appeal and your Honour Justice Kirby on the Court of Appeal dealt with the International Arbitration Act and the Full Court of the Federal Court did likewise, but the one to which I have given reference is a Full Court of the Federal Court consisting of their Honours Justices Beaumont, Branson and Emmett in Hi-Fert v Kiukiang Maritime 159 ALR 142.

The majority judgment is that of his Honour Justice Emmett and at page 154 he deals with the, well, by analogy, with an issue not dissimilar to the one your Honour Justice Gaudron raised about the difference between consent and arbitration, and with the judicial power of the Commonwealth. At about line 5 he says ‑ ‑ ‑

McHUGH J: What page is this?

MR ROTHMAN: I am sorry, your Honour, page 154. I thought I said that. I apologise. At about line 5 in a paragraph starting at about that point:

However, in determining a dispute between the parties to an arbitration agreement, an arbitrator does not exercise the judicial power of the Commonwealth or of a State for that matter. An arbitrator exercises powers conferred by the agreement between the parties to the arbitration agreement. A distinction exists between the powers exercised by an arbitrator to whom the parties have agreed to refer a dispute and powers exercised by a court. Thus, an arbitrator does not have power to make a determination which is directly enforceable in the manner in which an order by a court is enforceable. Where a court makes a determination and judgment is entered or an order is made, that judgment or order will be enforced by the court.
An award by an arbitrator, however, gives rise only to contractual rights and obligations which are enforceable by or against the parties who have agreed to abide by that award. An award is binding on the parties only by force of the agreement since they have agreed that their rights and obligations are to be as stated in the arbitrator’s award.

Now, we say by analogy, this operates in precisely the same way.

McHUGH J: Well, I am not sure it is a valid analogy. After all, you are dealing on the one hand with an arbitrator exercising powers under an agreement, and 170LW authorising the Commission to settle disputes.

MR ROTHMAN: No, your Honour, authorising the parties to empower the Commission to settle a dispute.

McHUGH J: It is true that the agreement does that, but nevertheless, the Commission, a statutory body of the Commonwealth, is given power, if not expressly by 170LW, at least by implication, to settle those disputes. I mean, two parties cannot make an agreement and give the Commission a power to do something ‑ ‑ ‑

MR ROTHMAN: That it does not otherwise have. Yes, your Honour, I accept that.

GAUDRON J: The question may arise as to the effect of the Commission’s decision. I remember one famous case where a member of the Arbitration Commission said, “Well, it cannot be enforced, let them hang in the wind”. There may well be ‑ ‑ ‑

MR ROTHMAN: I can think of a number of cases that probably fit into that category, your Honour.

GAUDRON J: Yes, but there may well be a question as to whether section 170LW – to use that one; I am not too sure if it is the right one – does anything more than relieve the Commission from the bar that would ordinarily be taken to apply, namely, the performance of functions other than those directly conferred by the statute.

MR ROTHMAN: Indeed, and to the extent ‑ ‑ ‑

GAUDRON J: And so there may be no – its decisions, if the parties ‑ they may not give rise to an award and they may have no real effect unless the parties can invoke the assistance of a court of equity or the like.

MR ROTHMAN: Well, without treading that precarious course ‑ ‑ ‑

GAUDRON J: Well, it may be.

MR ROTHMAN: Indeed, your Honour, but may I say that the submission that we made ‑ ‑ ‑

GUMMOW J: That is why we were trying to ask you about these questions this morning.

MR ROTHMAN: ‑ ‑ ‑ initially was that 170LW and the statute does not render anything done by the Commission under 170LW binding. What renders it binding is the agreement between the parties. That is why we say there is a significant distinction between what could be imposed by an arbitrator in the settlement of a dispute in a Hegarty‑type situation and that which could be done by conciliation.

McHUGH J: But you cannot say it becomes binding by what the parties do. That is only a half truth. It becomes binding both because they have agreed to the award and because this Act provides machinery making it enforceable.

MR ROTHMAN: Your Honour, the agreement between the parties may well be enforceable otherwise than by that in accordance with the Act. The fact is the Act makes the agreement enforceable. But, ultimately, what it makes enforceable is an agreement between the parties. It makes enforceable an agreement between the parties because this Court has held, inter alia, in a number of cases that making enforceable an agreement between the parties is an appropriate legislative provision for conciliation and arbitration for the prevention and settlement of industrial disputes.

GAUDRON J: Well, again, that depends ‑ and it may well depend on who the parties are. But let us assume that there is an agreement between the CFMEU and Western Mining that disputes as to the application of the award shall be dealt with in such and such a way involving the Commission. I do not see how that can have any impact on the rights of the individual who says, “I have not been sacked. My entitlements are running. I am entitled to wages for all that period”.

MR ROTHMAN: Your Honour, there are two answers to that question: the first thing, and the one on which we would rely, is that nothing in section 170LW or clause 22 of the agreement with which we are here dealing, denies to any individual their legal rights under the statute and I depart from the Solicitor‑General quite clearly on the question of whether an agreement of this kind could ever involve a dispute about strictly the exercise of judicial power. However, whether it is the exercise of judicial power ‑ ‑ ‑

GAUDRON J: It is not the exercise of judicial power, but certainly, if you are talking about the application of the agreement, you must be talking about legal rights to be determined other than in the exercise of judicial power. I do not know what else you could be talking about.

MR ROTHMAN: Your Honour, without delaying ‑ ‑ ‑

GAUDRON J: I mean, this is quite different from your typical reinstatement dispute, where the question was always whether somebody should be reinstated.

MR ROTHMAN: But, it may well be, without having the authorities here in place, that in settlement of a dispute about, to use your Honour’s earlier hypothetical to the Solicitor, that the award provides for dismissal for misconduct on 24 hours notice, that a dispute about the application of the award may well be a claim that the person be reinstated, firstly because there was not misconduct or that this is not the way the award is supposed to operate.

GAUDRON J: No, unless the agreement goes on to say something like, the employer shall reinstate any person who after being dismissed the Union asks it to reinstate, and in the case of a dispute as to whether or not the person should be reinstated, da-de-da-de-da, but otherwise you are talking about the application of an agreement, which it seems to me gives rise to legal rights and obligations.

McHUGH J: Well, I must say, to keep you out of Chapter III it seems to me that you can never settle a dispute by interpreting the agreement; that you have got to make an award for the future.

MR ROTHMAN: Or a recommendation as to the conduct of the parties for the future.

McHUGH J: The theory of the section has got to be, the parties say I am within it, you are without it, a particular provision, the Commission then says, well, be that as it may, we are now going to declare that you are in or you are out, but it does not do it or it cannot do it, having regard to Chapter III, by interpreting the agreement to the particular set of facts.

MR ROTHMAN: I accept that totally, your Honour. That was the submission we put earlier in reference to The Queen v Brack, Ex parte The Operative Painters and Decorators Union.

GAUDRON J: That is not the way I see it, I have to say. I think that the clause very likely – well, it is a section, forget about the clause – does allow the Commission to interpret the awards and say what it thinks the rights are but that it does not do so in the exercise of judicial power. It does so in the exercise of an independent arbitral function which it could do as Bill Smith but for which there needs to be a special provision allowing it to do it as the Commission.

GLEESON CJ: And in Hegarty the judgments made the point, did they not, turned largely on the point that interpreting agreements and forming a view or declaring existing rights is a common administrative function. Administrators do it all the time. Ministers do it occasionally too. It is not necessarily an exercise of judicial power.

MR ROTHMAN: Yes, your Honour, but that is what I thought his Honour Justice McHugh was going to.

McHUGH J: You can do it in the reinstatement context. You may want to interpret as a step. What I was putting to you, and I think you agreed with, is that you just simply could not interpret and then say, well, they are your rights, full stop.

MR ROTHMAN: You could not exercise a judicial power. You would have to be doing it in some administrative function as part of the arbitral process or whatever. That really is the distinction in Brack.

CALLINAN J: But how do you enforce it then if it is not an exercise of judicial power?

MR ROTHMAN: Your Honour, amongst other things, if, for example, as is the case here, clause 22 of the agreement provides that the parties will be bound by such a recommendation, then not to follow the recommendation would be a breach of the agreement and presumably a penalty would apply, but that is how it would be enforced.

CALLINAN J: Something you could sue on, a breach of contract.

MR ROTHMAN: Yes. I do not know that we have gone as far as to say it is a breach of contract and I thought that was the question I was avoiding of his Honour Justice Gummow a little while earlier.

CALLINAN J: You said a penalty could be imposed. What would be the source of the power to impose the penalty?

MR ROTHMAN: Section 178 of the Act, that is, a breach of the terms of an agreement. The terms of the agreement provide you will comply with a recommendation or a mediation or whatever and, if you do not, then you would be in breach of the agreement and a penalty applies. The authorities – when I say “authorities”, I am mindful of where I am – the Federal Court has taken the view that it is impermissible to enforce by injunctive relief or specific performance the duties imposed by an industrial instrument, being an award or an agreement.

GUMMOW J: Can you recall that, or give us a reference to it later?

MR ROTHMAN: I can give a reference to it later, your Honour.

GUMMOW J: Thank you.

MR ROTHMAN: Yes, Frugalis is one such case but I will give a proper reference to it at a later stage. Your Honour, coming back to the point originally sought to be made, the original dispute is resolved by the dispute resolution procedure. Thereafter, section 170LW or MH is a machinery provision giving statutory facility should the parties reach agreement in the original dispute resolution which involved the Commission, and there is a significant distinction.

My learned friend, Dr Jessup, put the submission that the question of private arbitration, as it has been described, was not put below. If the Court would go to appeal book page 369, paragraph 40. The Full Court of the Federal Court summarised the Union’s submission in the alternative. At line 35:

The Union also submitted that s 170MH contained, in any event, a comprehensive and independent source of power to determine disputes and that it was not intended that s 89A should apply to s 170MH or its counterpart in the Workplace Relations Act, s 170LW.

Now, given that it is a summary of the proposition, it is nevertheless a proposition that section 170MH or 170LW is an independent source of power, that is, it is a source of power obtained by the agreement of the parties for which a facility lies under section 170LW.

Similarly, in relation to that which fell relating to the confines of a dispute about the application of agreement, subject to the issue of the exercise of judicial power of the Commonwealth under Chapter III, we say there is no real distinction between the operation of the award and the application of the award, notwithstanding what fell from your Honour Justice Gaudron, that they both mean in that context the same.

GAUDRON J: I think they do. I did not mean to suggest otherwise.

MR ROTHMAN: I am sorry, your Honour, I must have misunderstood.

GAUDRON J: But I do not think that means the question about what the rights should be.

MR ROTHMAN: Your Honour, we say that within the confines of the utilisation of the original dispute procedure, it can involve both the existing – I hesitate to say “existing legal rights – the application of the agreement as it exists and what it should be, but what it should be in the terms of the contemplation of the parties in reaching the settlement that they reached, not what it should be having regard to the original industrial dispute and some global arbitration of what the Commission feels is right and proper.

GAUDRON J: But section 170LW does not contemplate the variation of the certified agreement, does it?

MR ROTHMAN: No, your Honour, it does not.

McHUGH J: The matter that worries me is the distinction between this case and Hegarty. In Hegarty it was easy to say that the board was not involved in the exercise of judicial power because the council had a duty of classification and the board stood in the shoes of the council, and it was absurd to suggest that the council employer was exercising judicial power. But when you look at the matters that are in dispute and are set out, I think, at 319 of the book, they are not of that sort. They are objective matters. The role of the Commission to settle disputes about these matters is much more akin to a judicial determination unless it is just going to make a fresh beginning. Then, if it is going to make a fresh beginning, query whether or not that is within 51(xxxv).

MR ROTHMAN: Your Honour, at the outset the question was asked by the Court as to whether the Commission had determined what disputes were, in fact, disputes about the application of the agreement. That is unfortunately for another day. That is not a matter that has come up because of the fact that the issues that are now before the Court come up on the prerogative writ application from the Full Bench without having the benefit of what ultimately is the impact of that determination. Perhaps it is just a difference of approach about the wording of 319. I would, with respect, your Honour, suggest that the matters in dispute at 319 are, indeed, almost as far from the exercise of judicial power of the Commonwealth that one could get as to Union meetings, both on site and off site, as a dispute notification, just taking that first issue ‑ ‑ ‑

GAUDRON J: It may not be a matter with respect to the application of the agreement, though.

MR ROTHMAN: Well, it may not be but ‑ ‑ ‑

GAUDRON J: Because these matters have not been dealt with, we have to work by reference to the statutory provisions.

MR ROTHMAN: Indeed, your Honour, but I would submit, with respect, that it would be inappropriate to draw the conclusion from the dot points on paragraph 2 at page 319 that those points involve the judicial power of the Commonwealth without looking through them particularly. “Communication of issues through the problem resolution procedure.” I mean, it would be difficult to envisage that being ‑ ‑ ‑

McHUGH J: What I had in mind particularly was payment for union activities and so on, but I suppose it is quite capable of looking to the future.

MR ROTHMAN: Yes, one would, with respect, not suggest that that was going to be an enforcement of a payment that is otherwise due. What we say in terms of the so‑called constitutional validity of clauses 21 and 22 is that there must be an interstate industrial dispute, the settlement or prevention of which gives rise to a dispute settlement procedure. The Court has, on a number of occasions, dealt with how that can arise and it is not an issue in these proceedings that that can arise and has arisen ‑ ‑ ‑

GAUDRON J: For that purpose, do you rely on the disputes notified and referred to in the statutory declarations which supported the application, rather than the log of claims earlier referred to, because it does not seem to have a dispute resolution clause in it?

MR ROTHMAN: No, it does not, but we rely on the totality of the dispute. We say that in this kind of situation before the Commission, notifications of dispute about certain matters have to be taken in a context of the circumstances in which they are made, and that will include, for example, that there is a pre-existing interstate industrial dispute, be it a paper log or otherwise, that there is regulation by the federal Commission and there is then notifications of particular disputes that fall within or are ancillary to the wider industrial disputes. So, therefore, while we do not rely on the specifics of the log of claims, we certainly do not say that one cannot rely on the log of claims in terms of dealing with the interstate industrial dispute.

But once there is an interstate industrial dispute which gives rise to the dispute settlement procedure, then the utilisation of the dispute settlement procedure to deal with the local manifestation of the subject matter within the ambit of the interstate dispute does not have to be itself interstate and that really is Hegarty. What seems to underpin, with respect to Dr Jessup, his argument is that every aspect and every manifestation of the implementation of the dispute settlement procedure must itself be an interstate dispute.

McHUGH J: Well, except when Justice Mason went on to deal with the variation aspect of the power, he made a statement which would seem to support Dr Jessup if it was intended to apply to what had been said at 629. What I refer to is page 630, about point 8, where his Honour says:

The underlying principle is that once an inter-state industrial dispute arises so as to give the Commission jurisdiction, the Commission in the exercise of that jurisdiction may settle part of the dispute which, taken in isolation, does not extend beyond one State and, further, may vary –

I mean, that is traditional in relation to variation, but is his Honour saying that was the effect of this procedure?

MR ROTHMAN: No, your Honour, and he makes that clear in the earlier page. I read your Honour the passage that your Honour has just referred me to, and indeed the earlier passage. That does no more than say that there must be an underlying interstate industrial dispute. If there is an underlying interstate industrial dispute, that interstate industrial dispute can be settled, for example, by the certification of an agreement with a settlement of dispute provision that applies in one State only. When that settlement of dispute provision comes before the Commission, or a board of reference as was the case in Hegarty, the matter that has been raised, pursuant to that settlement of dispute procedure does not itself have to be an interstate industrial dispute, or a situation likely to give rise to an interstate industrial dispute, as long as that which is raised is in connection with, or within the ambit of – if ambit is the appropriate test – the interstate industrial dispute that initially arose. That is all we say here. On the other hand, we say Dr Jessup says that each manifestation must be a situation likely to give rise to an industrial dispute, and that ‑ ‑ ‑

McHUGH J: No, he does not say that, does he? What he says is that when the procedural mechanism makes a decision, it is enforcing the original industrial - or settling the original interstate industrial dispute, and that means it is dealing with an interstate industrial dispute within the meaning of 89A. That is the way he puts it.

MR ROTHMAN: Indeed, and I apologise for putting it, again, too loosely. But what he is saying is every time you deal with a dispute about the application of a particular settlement, you are dealing with the industrial dispute, and we say that is not the case. That is the simple point in the case.

McHUGH J: Yes, well, that is the point of distinction between ‑ ‑ ‑

MR ROTHMAN: On the jurisdictional issue, can I refer the Court without taking it to it, to appeal book 298, line 40, and appeal book 300. The original of 298, line 40, is at appeal book 135. The appeal book 300 reference is a reference to the first paragraph and lines 36 to 45 in the second paragraph. In the Full Court, can I refer the Court to appeal book pages 361 to 362. In particular, there is there set out the dot points that your Honour referred me to at the original. At page 362, line 15, the reference to the anticipated, or perceived, threat that the company intended unilaterally to introduce changes to these arrangements, which was the subject of the dispute resolution – which is a reference to appeal book 166, point 9 from the original, and appeal book 169 is also the reference at line 25.

We say that, as we say in the written submissions, the finding of the Commission, which is supported and accepted by the Full Court of the Federal Court of Australia is ultimately a finding of fact, it is jurisdictional fact, we do not cavil with that, but it is a finding of fact, it has no general import, leave ought not be granted to deal with that issue and, even if one were minded to grant leave to deal with the issue, the prosecutor has not in any way, shape or form satisfied the fairly high onus on it to overturn the first instance judgment of the Commission that there was a situation likely to give rise to an industrial dispute which underpinned the certified agreement, supported as it was on the facts by the intermediate appeal court.

GAUDRON J: Yes. That is to be inferred, however, from the very certification of the agreement, is it not?

MR ROTHMAN: Indeed, and there are statutory declarations of representatives of the company to the effect that there were in existence industrial disputes which underpinned a certified agreement.

GAUDRON J: Potential industrial disputes.

MR ROTHMAN: Potential industrial disputes; I am using “industrial disputes” in the defined sense.

GAUDRON J: Yes.

MR ROTHMAN: Other than the question of costs, those are the matters that we seek to raise on the cross-appeal and in reply to our appeal. On the question of costs, albeit that it is late in the day and somewhat controversial, we say that, as we say in the written submissions, that the Court was wrong in McJannet on the question of costs. Section 347 deals with a prohibition on the order of costs in a matter arising under the Act. We deal with what that means in paragraph 31 of the submissions in reply.

GAUDRON J: So you do not ask for costs, Mr Rothman?

MR ROTHMAN: We do not ask for costs, your Honour, because we say the Court ‑ ‑ ‑

KIRBY J: Why is it your business to argue this? Why are you concerned to argue this?

MR ROTHMAN: Why am I concerned to argue this, your Honour?

KIRBY J: I mean, if you lose then I suppose the possibility is that, under current doctrine, costs will be ordered against you. If you win, under current doctrine, costs will be ordered for you and you can have private agreements not to enforce the order. You are showing a great want of faith in your case, are you, and you are concerned that costs should be ordered against your client?

MR ROTHMAN: No, I am not doing that, your Honour. I am trying to avoid falling foul of that which I have been criticised for before in this Court, namely, that I ought not assume that the Court would not deal, expressly or otherwise, with the power to deal with costs and I ought be heard on it.

KIRBY J: Well, that is correct. I think if you want to say anything, you should say it now, so I will be quiet.

MR ROTHMAN: Your Honour, I say that that which falls in paragraph 31 of the appellant’s reply is what we wish to say about section 347, that section 347 is a legislative restriction on the power of any court, including this Court, to order costs in a matter arising under the Workplace Relations Act, whether it has been ‑ ‑ ‑

KIRBY J: But why would it be designated as arising under the Act as distinct from arising under the Constitution once it gets here or arising under the Judiciary Act?

MR ROTHMAN: For the same reasons that the High Court held that a matter arising under the Act as it was used in the Conciliation and Arbitration Act reflected or echoed section 76(ii) and that was in Reg v Spicer and for all of the reasons that were set out by the Court in Felton v Mulligan. A reference is given to it but the particular passages are at page 391, 402, 403 and per Justice Menzies at page 382.

KIRBY J: But was not the key to the argument of the Court for the current doctrine that access to this Court is a very important and, indeed, constitutional question and that if Parliament is to impose limits on cost protection to parties, then it ought to be expected to do so very clearly. All that we have is a statute expressed in very general terms which makes no particular reference to this Court and which on the face of things is addressed to the Commission and the Federal Court and not to us.

MR ROTHMAN: Your Honour, with respect, a matter arising under an Act of the Parliament is a matter that turns on the construction or an operation of that law. Whether it is in this Court by way of prerogative relief or in any other court for any other reason ‑ ‑ ‑

GUMMOW J: It is not only a matter - the point has been – it is quite simple. You can have two matters. You have a matter under 75(v). Where is the power in relation to costs taken away for that? You will not answer that by referring to something dealing with a matter arising under 76(ii).

MR ROTHMAN: Your Honour, the jurisdiction of this Court is granted by the provisions of section 75(v) of the Constitution but that does not deny to the nature of the proceeding that is before the Court ‑ ‑ ‑

GUMMOW J: I know, but what Justice Kirby put to you is the point. You are putting it the other way round. What takes away the 75(v) power with respect to costs?

MR ROTHMAN: No, your Honour, with respect, nothing takes away the 75(v) power but the mere fact that jurisdiction is exercised under 75(v) ‑ ‑ ‑

GUMMOW J: Or the section 73 power.

MR ROTHMAN: Whether it is 75(v) or 73, it matters not for the purpose of my argument. The mere fact that jurisdiction is conferred by 75(v) and 73 does not mean that the matter is not a matter arising under the Workplace Relations Act because it turns on the construction operation of the Workplace Relations Act and it turns on questions of right or immunity or defence under that Act. The grant of the jurisdiction is not the same as it being a justiciable controversy arising under the Act.

McHUGH J: Why do you say it arises under the Act, because on one view, there is only jurisdiction under 75(v) if you are outside the Act?

MR ROTHMAN: Yes, your Honour, but it arises under the Act, as is made clear in my respectful submission in Felton v Mulligan, not only if the argument about the power under the Act is right, but also if it is wrong.

McHUGH J: They are 76(i) cases.

MR ROTHMAN: Well, your Honour, this provision has been enacted on a number of occasions since R v Spicer; Ex parte Sportsman and it has been enacted in almost identical terms. It has referred to a matter arising under the Act as being a matter arising under the Act in the same way that 76(ii) was, and in my respectful submission, the clear policy of the Act is that costs in a court in a matter arising under the Workplace Relations Act is not a matter which would be used to inhibit parties coming before this Court or, indeed, any other court.

McHUGH J: I am not sure, and, in fact, to my mind, there is a serious question as to whether or not the Parliament has the power to restrict this Court’s capacity to award costs in a 75(v) matter.

MR ROTHMAN: That is a different issue, your Honour.

McHUGH J: I know it is.

KIRBY J: But it is raised in this matter because this started as a 75(v) matter and it was only by our order that it was referred to the Federal Court and its character as an invocation of the Constitution remains unaltered. It arises under the Constitution.

MR ROTHMAN: Your Honour, it certainly started as a 75(v) matter.

GAUDRON J: Given that it did start as such, do you seek costs if you are successful?

KIRBY J: Surely you would ‑ ‑ ‑

GAUDRON J: Surely you would.

MR ROTHMAN: That is why I raised the point, your Honour. I raised the point deliberately for this reason, that my instructions are that we should put the submission that the Court has no power to grant costs because of the operation of section 347. I have put the submission. If we are wrong in that and our appeal is successful, then we seek costs, yes, your Honour.

GUMMOW J: In this Court.

MR ROTHMAN: In this Court and below, because the only reason we did not have costs below was ‑ ‑ ‑

GUMMOW J: Then there has been a shift.

GAUDRON J: You did not seek that in your notice of appeal which was filed with your application for special leave to appeal and on the basis of which Dr Jessup has come here, and on the basis of which argument has proceeded thus far?

MR ROTHMAN: Well, your Honour, I put nothing further in relation to it, but ‑ ‑ ‑

KIRBY J: If there are any lingering remnants of the old industrial relations club, it is possible that as between parties they will agree that they will not enforce costs, but we have to follow ‑ ‑ ‑

MR ROTHMAN: I would not encourage your Honour in assuming there were any lingering remnants.

KIRBY J: I do not know.

McHUGH J: Your client may be taking a long-term view about this and expect to lose more cases here than will win.

MR ROTHMAN: That is a possible scenario, your Honour. If the Court pleases, those are the matters that we put in relation to the appeal.

GLEESON CJ: Yes, thank you, Mr Rothman. Dr Jessup, do you want to say anything in reply on your special leave application?

MR JESSUP: Only on that last point, your Honour, and that is to do no more than to say that, particularly in the light of the matters Justice Gaudron adverted to a moment ago, in our submission, this is not an appropriate occasion to revisit any of the established principles with respect to the matter of costs. Other than that, we do not wish to say anything in reply.

GLEESON CJ: Thank you. We will reserve our decision in this matter.

AT 4.00 PM THE MATTER WAS ADJOURNED

[2000] HCATrans 676

14 November 2000

Key Legal Topics

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Administrative Law

Employment Law

Statutory Interpretation

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Jurisdiction

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Natural Justice