Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Industrial Relations Commission
[1999] FCA 804
•30 JUNE 1999
FEDERAL COURT OF AUSTRALIA
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Industrial Relations Commission [1999] FCA 804
INDUSTRIAL LAW – application for writs of prohibition, certiorari and mandamus directed to a Full Bench of the Australian Industrial Relations Commission – proceedings before the Commission for the variation of an award to ensure it dealt only with "allowable award matters" within the meaning of s 89A(2) of the Workplace Relations Act 1996 (Cth) – application for variation made under item 49 of the Workplace Relations and Other Legislation Amendment Act 1996 – nature of Commission's power under item 49 – what is allowable award matter for purposes of item 49 – appeal against refusal to vary award in application made under item 49 – "allowable award matter" - effect of transitional provisions of the Workplace Relations Act – whether reasoning of the Full Bench of the Commission involved material jurisdictional error of a reviewable nature.
Workplace Relations Act 1996 (Cth) s 89A(2) and s 89A(6)
Workplace Relations and Other Legislation Amendment Act 1996 (Cth) items 49 to 51COMMUNICATIONS ELECTRICAL ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES v AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION and ANOTHER
N 126 OF 1999
MOORE, BRANSON AND MARSHALL JJ
SYDNEY
30 JUNE 1999
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 126 OF 1999
REMITTED FROM THE HIGH COURT OF AUSTRALIA
BETWEEN:
COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
Prosecutor/ApplicantAND:
FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CONSISTING OF THE HONOURABLE JOHN MACBEAN, SENIOR DEPUTY PRESIDENT, THE HONOURABLE IAN WATSON, SENIOR DEPUTY PRESIDENT AND LEONARD HINGLEY, COMMISSIONER OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
First RespondentTELSTRA CORPORATION LIMITED
Second RespondentJUDGES:
MOORE, BRANSON AND MARSHALL JJ
DATE OF ORDER:
30 JUNE 1999
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The application is dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 126 OF 1999
BETWEEN:
COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
Prosecutor/ApplicantAND:
FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CONSISTING OF THE HONOURABLE IAIN WATSON, SENIOR DEPUTY PRESIDENT AND LEONARD HINGLEY, COMMISSIONER OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
First RespondentTELSTRA CORPORATION LIMITED
Second Respondent
JUDGES:
MOORE, BRANSON AND MARSHALL JJ
DATE:
30 JUNE 1999
PLACE:
SYDNEY
REASONS FOR JUDGMENT
THE COURT
This proceeding was commenced in the High Court of Australia by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“CEPU”) which, by notice of motion dated 2 December 1998, sought an order nisi for writs of prohibition, certiorari and mandamus directed to three members of the Australian Industrial Relations Commission (“the Commission”). The three members of the Commission constituted a Full Bench which exercised the appellate powers of the Commission under s 45 of the Workplace Relations Act 1996 (Cth) (“the WR Act”). On 5 February 1999 Gummow J ordered that further proceedings in the application be remitted to this Court.
Factual background
CEPU is an organisation of employees registered under the WR Act. Its membership includes employees of the second respondent, Telstra Corporation Limited (“Telstra”). On 2 June 1998 the CEPU made application to the Commission pursuant to item 49 of Part 2 of Schedule 5 of the Workplace Relations and Other Legislation Amendment Act1996 (Cth) (“the WROLA Act”). The CEPU intended by that application to have the Commission vary the Telstra Corporation General Conditions of Employment Award 1996 (“the Telstra award”) so that the Telstra award would only deal with “allowable award matters”. We shall return shortly to what is meant by the expression “allowable award matters” and the proper construction of item 49.
However it should be noted now that item 49 provided one of the means found in Part 2 to alter the contents of awards made under the WR Act to limit the matters an award dealt with and thus limit the extent to which the employment relationship could be regulated by award prescription. In issue, relevantly, in the Commission in the present matter was whether provisions in cls 8 and 9 of the Telstra award should remain in that award having regard to the provisions of the WROLA Act and Part 2 in particular. Simply described these award provisions created an appeal mechanism for an employee to challenge the classification of another employee.
The CEPU’s application was heard by Commissioner Lewin on 9, 19 and 22 June 1998. On 30 June 1998 Commissioner Lewin decided to vary the Telstra award pursuant to subitem (1) of item 49. He issued summary reasons for doing so, and on 17 July 1998 published reasons in full. In the reasons for decision published on 17 July 1998, Commissioner Lewin indicated that, in his view, cls 8 and 9 of the Telstra award dealt "with allowable award matters as set out in section 89A(2)(a) and (d)" of the WR Act. Consistent with this view, the Commissioner had earlier, on 30 June 1998, made an order to vary the Telstra award. The variation did not delete the text of cls 8 and 9 but combined them into one clause which was in the following terms:
9 – ADVANCEMENT/PROMOTION APPEALS
Selection criteria
(1)Selection for advancement/promotion or temporary performance shall be on the ground of relative efficiency or equal efficiency and seniority.
Right of appeal
(2)Subject to this clause, an employee (except for executive level classifications) may appeal against:
(a)The provisional promotion of an employee provided the appellant is of a lower classification than that to which the provisional promotion is made;
(b)a direction for temporary performance by an employee provided the appellant is available and both employees are of lower classification than that prescribed for the duties to be performed; or
(c)the selection of an employee to undertake a course of training at the completion of which an employee is promoted, except where the selection is based solely on the result of a competitive examination.
Appeals in relation to paragraph 9(2)(a) and (c) must be received by the Promotions Appeal Board on the 21st calendar day following formal notification of the provisional promotion. The appeal must be received prior to 4.00 p.m. Melbourne time irrespective whether it is Eastern Standard or Daylight Saving Time in Melbourne.
Grounds of appeal
(3)An appeal against a provisional promotion and temporary performance may be lodged by an employee on the ground of superior efficiency or equal efficiency and seniority.
Determination of appeal
(4)Upon appeal(s) being made, a promotions appeal board shall make a full enquiry into the claims of the appellant or appellants and the claims of the employee, and determine such appeal(s). The corporation shall take such action as necessary to give effect to the promotions appeal board determination.
Promotions appeal boards
(5)(a) There shall be established, as required, promotions appeal boards whose function will be to hear and determine appeals in accordance with procedures agreed between the parties.
(b)A promotions appeal board shall be constituted by:
(i) A Chairperson, being a person selected in accordance with procedures agreed between the Corporation and the staff organisation whose membership includes the largest number of employees of the Corporation.
(ii) an employee nominated by the corporation for the purpose of the appeal; and
(iii) an employee nominated by the appropriate staff organisation prescribed under clause 36 of this award.
Conduct of inquiries
(6)A promotions appeal board shall exercise its power having regard to the principles of natural justice including procedural fairness.
It was the appeal from the decision and order of Commissioner Lewin that led to the decision and order of the Full Bench which is challenged by the CEPU in these proceedings. We discuss the reasons for decision of Commissioner Lewin and the Full Bench shortly. However it is convenient first to set out the legislative context in which these decisions were made.
The legislative context
The WROLA Act introduced significant changes to the industrial relations system created by laws of the Australian Parliament. It renamed and substantially amended the Industrial Relations Act 1988 (Cth) (“the IR Act”). From 25 November 1996, the IR Act became known as the WR Act. On 1 January 1997 certain significant amendments to the WR Act became operative. The most significant, for the purposes of the present application, was the introduction of s 89A into the WR Act by item 11 of Sch 5 to the WROLA Act.
Section 89A of the WR Act provides as follows:
89AScope of Industrial Disputes
(1)Industrial dispute normally limited to allowable award matters
For the following purposes an industrial dispute is taken to include only matters covered by subsections (2) and (3):
(a) dealing with an industrial dispute by arbitration;
(b) preventing or settling an industrial dispute by making an award or order;
(c)maintaining the settlement of an industrial dispute by varying an award or order.
(2) Allowable award matters
For the purposes of subsection (1) the matters are as follows:
(a) classifications of employees and skill-based career paths;
(b)ordinary time hours of work and the times within which they are performed, rest breaks, notice periods and variations to working hours;
(c)rates of pay generally (such as hourly rates and annual salaries), rates of pay for juniors, trainees or apprentices, and rates of pay for employees under the supported wage system;
(d) piece rates, tallies and bonuses;
(e) annual leave and leave loadings;
(f) long service leave;
(g)personal/carer’s leave, including sick leave, family leave, bereavement leave, compassionate leave, cultural leave and other like forms of leave;
(h) parental leave, including maternity and adoption leave;
(i) public holidays;
(j) allowances;
(k) loadings for working overtime or for casual or shift work;
(l) penalty rates;
(m) redundancy pay;
(n) notice of termination;
(o) stand-down provisions;
(p) dispute settling procedures;
(q) jury service;
(r)type of employment, such as full-time employment, casual employment, regular part-time employment and shift work;
(s) superannuation;
(t)pay and conditions for outworkers, but only to the extent necessary to ensure that their overall pay and conditions of employment are fair and reasonable in comparison with the pay and conditions of employment specified in a relevant award or awards for employees who perform the same kind of work at an employer’s business or commercial premises.
(3) The Commission’s power to make an award dealing with matters covered by subsection (2) is limited to making a minimum rates award.
(4) Limitations on Commission’s powers
The Commission’s power to make or vary an award in relation to matters covered by paragraph (2)(r) does not include:
(a)the power to limit the number or proportion of employees that an employer may employ in a particular type of employment; or
(b)the power to set maximum or minimum hours of work for regular part-time employees.
(5)Paragraph (4)(b) does not prevent the Commission from including in an award:
(a)provisions setting a minimum number of consecutive hours that an employer may require a regular part-time employee to work; or
(b)provisions facilitating a regular pattern in the hours worked by regular part-time employees.
(6)The Commission may include in an award provisions that are incidental to the matters in subsection (2) and necessary for the effective operation of the award.
(7) Exceptional matters may be included in industrial dispute
Subsection (1) does not exclude a matter (the exceptional matter) from an industrial dispute if the Commission is satisfied of all the following:
(a)a party to the dispute has made a genuine attempt to reach agreement on the exceptional matter;
(b)there is no reasonable prospect of agreement being reached on the exceptional matter by conciliation, or further conciliation, by the Commission;
(c) it is appropriate to settle the exceptional matter by arbitration;
(d) the issues involved in the exceptional matter are exceptional issues;
(e)a harsh or unjust outcome would apply if the industrial dispute were not to include the exceptional matter.
(8) Anti-discrimination clause
Nothing in this section prevents the Commission from including a model anti-discrimination clause in an award.
(9) Interpretation
In this section, outworker means an employee who, for the purposes of the business of the employer, performs work at private residential premises or at other premises that are not business or commercial premises of the employer.
It can be seen that, in terms, s 89A narrows the scope of an industrial dispute with which the Commission might come to deal. It does so by limiting, by statute, the class of matters that can be treated as in dispute and thus that can be the subject of an award made in settlement or prevention of the dispute.
Item 1 of Sch 5 to the WROLA Act inserted into s 4(1) of the WR Act a definition of “allowable award matters” in the following terms: "allowable award matters means the matters covered by sub-section 89A(2)”.
Part 2 of Sch 5 to the WROLA Act, which is headed "Transitional Provisions" includes items 49 to 51 which provide as follows:
49 Variation of awards during the interim period
(1)If one or more of the parties of an award apply to the Commission for a variation of the award under this item, the Commission may, during the interim period, vary the award so that it only deals with allowable award matters.
(2)For the purposes of this item, an exceptional matters order is taken to relate wholly to allowable award matters.
(3)Special consent provisions cannot be varied under this item before the termination time for those provisions.
(4)The Commission may only deal with the application by arbitration if it is satisfied that the applicant or applicants have made reasonable attempts to reach agreement with the other parties to the award about how the award should be varied and the treatment of matters that are not allowable award matters.
(5)If:
(a)the award provides for rates of pay that, in the opinion of the Commission:
(i)are not operating as minimum rates; or
(ii)were made on the basis that they were not intended to operate as minimum rates; and
(b)the application under this item seeks to have such rates of pay varied so that they are expressed as minimum rates of pay;
the Commission may vary the award so that it provides for minimum rates of pay consistent with sections 88A and 88B of the Principal Act and the limitation on the Commission’s power in subsection 89A(3) of that Act.
(6)If the Commission varies the award under subitem (5), it must include in the award provisions that ensure that overall entitlements to pay provided by the award are not reduced by that variation, unless the Commission considers that it would be in the public interest not to include such provisions.
(7)The Commission must, if it considers it appropriate, review the award to determine whether or not it meets the following criteria:
(a)it does not include matters of detail or process that are more appropriate dealt with by agreement at the workplace or enterprise level;
(b)it does not prescribe work practices or procedures that restrict or hinder the efficient performance of work;
(c)it does not contain provisions that have the effect of restricting or hindering productivity, having regard to fairness to employees.
(8)The Commission must also review the award to determine whether or not it meets the following criteria:
(a)where appropriate, it contains facilitative provisions that allow agreement at the workplace or enterprise level, between employers and employees (including individual employees), on how the award provisions are to apply;
(b)where appropriate, it contains provisions enabling the employment of regular part-time employees;
(c)it is expressed in plain English and is easy to understand in both structure and content;
(d)it does not contain provisions that are obsolete or that need updating;
(e)where appropriate, it provides support to training arrangements through appropriate trainee wages and a supported wage system for people with disabilities;
(f) does not contain provisions that discriminate against an employee because of, or for reasons including, race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
(9)If the Commission determines that the award does not meet the criteria set out in subitem (7) or (8), the Commission may take whatever steps it considers appropriate to facilitate the variation of the award so that it does meet those criteria.
50 Parts of awards cease to have effect at the end of the interim period
(1)At the end of the interim period, each award ceases to have effect to the extent that it provides for matters other than allowable award matters.
(2)For the purposes of this item, an exceptional matters order is taken to relate wholly to allowable award matters.
(3)For the purposes of this item, an award that is made under subsection 170MX(3) of the Principal Act is taken to provide wholly for allowable award matters.
(4)If the termination time for special consent provisions is after the end of the interim period, then this item and item 51 apply to the special consent provisions as if a reference to the end of the interim period were instead a reference to the termination time.
51 Variation of awards after the end of the interim period
(1)As soon as practicable after the end of the interim period, the Commission must review each award:
(a) that is in force; and
(b) that the Commission is satisfied has been affected by item 50.
(2)The Commission must vary the award to remove provisions that ceased to have effect under item 50.
(3)When varying the award under subitem (2), the Commission may also vary the award so that, in relation to an allowable award matter, the award is expressed in a way that reasonably represents the entitlements of employees in respect of that matter as provided in the award as in force immediately before the end of the interim period.
(4)If, immediately before the end of the interim period, the award provided for rates of pay that, in the opinion of the Commission:
(a) were not operating as minimum rates of pay; or
(b)were made on the basis that they were not intended to operate as minimum rates;
the Commission may vary the award so that it provides for minimum rates of pay consistent with sections 88A and 88B of the Principal Act and the limitation on the Commission’s power in subsection 89A(3) of that Act.
(5)If the Commission varies the award under subitem (4), it must include in the award provisions that ensure that overall entitlements to pay provided by the award are not reduced by that variation, unless the Commission considers that it would be in the public interest not to include such provisions.
(6)The Commission must, if it considers it appropriate, review the award to determine whether or not it meets the following criteria:
(a)it does not include matters of detail or process that are more appropriately dealt with by agreement at the workplace or enterprise level;
(b)it does not prescribe work practices or procedures that restrict or hinder the efficient performance of work;
(c)it does not contain provisions that have the effect of restricting or hindering productivity, having regard to fairness to employees.
(7)The Commission must also review the award to determine whether or not it meets the following criteria:
(a)where appropriate, it contains facilitative provisions that allow agreement at the workplace or enterprise level, between employers and employees (including individual employees), on how the award provisions are to apply;
(b)where appropriate, it contains provisions enabling the employment of regular part-time employees;
(c)it is expressed in plain English and is easy to understand in both structure and content;
(d)it does not contain provisions that are obsolete or that need updating;
(e)where appropriate, it provides support to training arrangements through appropriate trainee wages and a supported wage system for people with disabilities;
(f)it does not contain provisions that discriminate against an employee because of, or for reasons including, race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
(8)If the Commission determines that the award does not meet the criteria set out in subitem (6) or (7), the Commission may take whatever steps it considers appropriate to facilitate the variation of the award so that it does meet those criteria.
It can be seen that, in terms, item 49 authorised the Commission to vary an award, upon application, so that it only dealt with allowable award matters. If that did not happen then, by operation of item 50, any provision in an award not dealing with an allowable award matter would cease to have effect at the end of the interim period. Item 51 placed an obligation on the Commission to review awards as soon as practicable after the end of the interim period and to vary them to remove provisions that ceased to have effect under item 50. It is plain that item 49 of the WROLA Act itself conferred a power on the Commission and did so apart from the provisions of s 89A of the WR Act. The parties in this matter appeared to accept that if an application was made under item 49 to vary an award (and the award dealt with matters that were not allowable award matters) the Commission had a discretion to vary the award but was not obliged to do so. It is unnecessary for us to decide whether "may" in item 49 creates a discretion or imposes a duty: see s 33(2A) of the Acts Interpretation Act1901 (Cth) and Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 84-5.
By the combined operation of s 2(4) and item 46 of Schedule 5, the interim period referred to in Part 2 of that Schedule was a period of 18 months commencing on 1 January 1997.
The reasoning of Commissioner Lewin
The principal relief sought by the CEPU before Commissioner Lewin was “to vary the award, if necessary, so that it only deals with allowable award matters”. Commissioner Lewin found that the WROLA Act evinced “a clear intention that variation of awards so that they deal only with allowable award matters, by the end of the interim period, is a desirable and preferred outcome of the scheme of the legislation.”
Commissioner Lewin was concerned to deal expeditiously with the application before him, noting that:
…… there exists a reasonable prospect that if the award is not varied accordingly, uncertainty on the allowability and application of various terms of the award could lead to disagreement and confusion in the workplace, concerning what terms of the award would be observed and applied by Telstra and in what manner.
The Commissioner held that matters incidental to allowable award matters and necessary for the effective operation of the award were not required to be removed, by variation to the award, by the Commission in an application pursuant to item 49.
Under the heading “clauses 8 and 9”, Commissioner Lewin said:
The next matter in contention is the retention, deletion or variation of the provisions of clause 8 and clause 9. These are lengthy clauses and deal with, types of employment and appointment to levels of the classification structure of employment within the Corporation the promotion and transfer of employees within that structure and provide for an appeal board, where there are disputes about promotion, directions for temporary performance and selection to undertake a training course.
Appointment to various types of employment classifications and positions, the terms of the advancement through the classification structures applicable to employees of the corporation and the settlement of disputes about such matters are the essential characteristics of these provisions.
In my view, the clauses deal with allowable award matters as set out in section 89A(2) (a) and (d) [scilit (p)]. In short the provisions deal with the manner in which employees will be classified in the employment of the Corporation and procedures for settling disputes about advancement through the classification structure, where they arise.
The provisions have a specific historical character which reflects the origins of the Corporation in the Post Master Generals Department. The review under Item 49 paragraphs (7) and (8) will no doubt address the provisions according to the relevant criteria therein. That however is another matter. In the meantime there is no doubt that an award made in settlement of a dispute may deal with the subject of the type of employment, the classification of employees and procedures for settling any dispute which may arise accordingly. These provisions will therefore not be varied.
I also observe in this respect that award provisions dealing with promotion and transfer were considered to be within jurisdiction by the Full Bench of the Commission in the matter of Print Q0116, Australian Education Union re Teachers’ (Victorian Government Schools) Conditions of Employment Award 1995 [Print Q0116]. At page 16 of the decision in that matter the Full Bench provided as follows:
“Classifications of employees and skill based career paths is foremost in the list of allowable award matters. The inclusion of that matter imports an indeterminate subclass of matters incidental to the establishment of any coherent award provision to confer rights in respect of a skill based career path. An award provision about a process associated with promotion, or about access to transfer or compulsory transfer within the classification structure of what has been a career professional service is reasonably incidental to classification and career path matters. Whether the provisions in question in this instance are necessary for the effective operation of the award is best determined on consideration of the merits of the application. In that context, the Commonwealth’s secondary submission as to the impact of the policy reflected in the Act on the scope of awards carries weight. The passage we quote from the Full Bench decision in FSU v CBA at section 3.2.5 below demonstrates how that consideration based upon the requirements of the Act bears upon our determination of the content of a minimum rates award.”
It will be noted that whilst the conclusion of the Full Bench, in the above matter, concerning the terms of the application before it, related to the incidental nature of the processes concerning promotion and transfer. [sic] I have reached a different conclusion on the basis of the award prescription before me. This is because the terms of the award prescriptions sought in the matter of the Teachers’ (Victorian Government Schools) Conditions of Employment Award 1995 were significantly different to those that are contained in the award before me. However, it seems to me that on the basis of the above authority, the provisions before me would at least be incidental to allowable award matters and in my view they are necessary for the effective operation of the Telstra General Conditions award, having regard to its role within the matrix of award regulation applicable to the Corporation and its employees.
The reasoning of the Full Bench
Telstra sought leave to appeal against Commissioner Lewin’s decision pursuant to s 45 of the WR Act. The Full Bench, which gave leave, dealt with the relevant clause of the award (which was, by then, clause 9)at pp 7 to 9 of its reasons for decision. The Full Bench said:
Dealing with clause 9, we find the Commissioner was in error in concluding that the PAB was an allowable matter under s.89A(2)(a) and (p) of the Act, or incidental to allowable award matters and necessary for the effective operation of the Award. Clause 9 relates to an appeal process regarding the right to be promoted or transferred and provides for a determination which binds the employer. It is not a clause contemplated by s.89A(2)(a), “classifications of employees and skill based career paths”.
In the Award Simplification decision [Print P7500] at Attachment D the Full Bench set out those matters in The Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1995 (the Hospitality Award) which were allowable or incidental and necessary. Under s.89A(2)(a) the Full Bench identified a list of matters from the award which were allowable or incidental and necessary, these were [page 63]:
·“lists of classification and classification structures, covering the definitions of and duties to be performed by each classification;
·competency and qualification standards for classification structures;
·provisions enabling flexibility in the application of the classification structure (such as provisions regarding multi-skilling);
·provisions which enable the employer to broadly determine where former classifications would fit into a new classification structure e.g. translation from old to new structures (as long as they are relevant and automatic progression;
·mixed functions clause;
·higher paid employees may relieve lower paid employees without loss of pay.”
Whilst the decision only dealt with the Hospitality Award, we consider the subject matters identified by the Full Bench are those s.89A(2) is generally intended to encompass and not an appeal process of the type contained in clause 9.
We agree with the submission of Telstra that a mechanism providing appeal rights regarding promotion and transfer and giving a third party the right to make binding determinations on an employer is not about or within classifications. The Commissioner also concluded that the clause was about the settlement of disputes over the terms of advancement through classification structures.
In deciding on whether clause 9 can be characterised as a dispute settling procedure, it is important, as Duncan DP observed in Re Telstra Corporation General Conditions of Employment Award 1996 [Print Q0071] (the Telstra Case), to consider the substance of the clause and “not the form”. In this case, the clause, as we have already concluded, is a mechanism concerning appeal rights and cannot be characterised as a dispute settling procedure of the type which would come within s.89A(2)(p).
The Full Bench in the Award Simplification decision [Print P7500], in considering the relationship between s.89A(6) and s.89A(2) concluded as follows [page 6]:
“Thirdly, the WR Act itself, in s.89A(6), establishes the limits of the category. That subsection makes it clear that the matters specified in s.89A(2) are not to be expanded, but that an award provision which is incidental to one of the matters is permitted, provided it is also necessary for the effective operation of the award.”
This conclusion, together with the terms of s.89A(6), require that an award provision must be both incidental to one of the matters in s.89A(2) and necessary for the effective operation of the award.
In our view, the Commissioner was in error in relying upon the existence of classification structures in other awards to come to his conclusion that clause 9 is necessary for the effective operation of the Award. The existence of classification structures in other awards cannot, having regard to the terms of s.89A(6), make clause 9 necessary for the effective operation of the Award.
Accordingly, we find that the Commissioner erred in finding that clause 9 is necessary for the effective operation of the Award. It is therefore unnecessary to consider whether the Commissioner erred in finding that clause 9 is incidental to the matters in s.89A(2).
As a consequence of our decision on clause 9, clause 36 is to be deleted from the Award.
The Full Bench rejected the submission of CEPU that cl 9 dealt with an allowable award matter under s 89A(2)(a) or (p) of the WR Act. It also concluded that cl 9 was not “necessary for the effective operation of the award in the context of s89A(6)”. Consistent with these views, the Full Bench varied the Telstra award by deleting cl 9.
The proper construction of item 49 and whether the Full Bench erred
Counsel for CEPU submitted, in a well reasoned and presented argument, that the Full Bench had erred in its approach to what was an allowable award matter for the purpose of s 89A(2) of the WR Act and item 49(1) of the WROLA Act. It was submitted that the correct approach when dealing with an application under item 49 entailed an analysis of whether there were provisions in an award which were not in settlement of an industrial dispute limited by s 89A(2) of the WR Act and/or were not incidental and necessary for the effective operation of the award. The Commission otherwise had power to make, and was not obliged to remove, whatever award clauses it considered were appropriate to settle an industrial dispute whose contents were limited by s 89A(2) of the WR Act. It was submitted that under item 49 it was incumbent on the Commission to review the award which was the subject of the application to vary and determine which of the provisions could not be made in settlement of an industrial dispute limited by s 89A(2). It was submitted that the Full Bench erred by approaching s 89A(2) of the WR Act on the footing that it identified clauses of a particular character rather than the subject matter of a dispute. In approaching the matter before it in the way it did the Full Bench proceeded on a false legal premise and committed jurisdictional error.
It was common ground that the power being exercised by Commissioner Lewin was the power conferred by item 49. That is, the source of the Commissioner’s power to vary the Telstra award in the CEPU application was item 49 which also identified the basis on which the power should be exercised. Item 1 of Sch 5 of the WROLA Act introduced a definition of “allowable award matters” into the WR Act but it was not expressed to be a definition for the purposes of provisions (including those conferring power) in the WROLA Act. However it was common ground that the definition should be treated (subject to any contrary intention) as establishing the meaning of the expression “allowable award matters” in the WROLA Act itself. We agree. Accordingly, item 49 should be construed on the basis that the expression “allowable award matters” in the item is a reference to “matters covered by sub-section 89A(2)”. Read this way there is a direct legislative link between the matter in the award that might be removed by variation under item 49 and the matters listed in s 89A(2). It is not an indirect link of the type arising in s 89A itself which appears to require consideration of the subject matter of the dispute and the relationship between the subject matter of the dispute and the scope of any particular award provision.
Construed this way, the function of the Commission under item 49(1) should it exercise the power to vary the award so that it deals only with allowable award matters is, in our opinion, clear. It must examine the award in question to determine whether the contents of each operative clause deals with a matter referred to in s 89A(2) of the WR Act. If any operative clause does not, or to the extent that it does not, the clause or the relevant part of it must be removed by variation of the award. We do not view item 49 as requiring the removal of clauses which identify the parties bound, the duration of the award, its title and the like. They do not concern "matters" of the relevant type, that is, substantive provisions regulating the employment relationship.
The only indication that item 49 should be construed contrary to what we consider are its clear terms, is that the powers of the Commission to make or vary an award conferred by s 89A may well be wider. That is, the Commission may well have power under that provision to include in an award, by variation or otherwise, a provision which, because of either s 89A(1) and (2) or s 89A(6) or both, does not directly deal with a matter referred to in s 89A(2) of the WR Act. However this would simply mean that under item 49 (and, if relevant, items 50 and 51) the contents of an award might be pared back to deal only with the matters identified in s 89A(2) but thereafter the award varied to expand its operation, albeit probably only slightly. While there is, we accept, a legitimate argument that s 89A and item 49 should be viewed as creating a scheme which is entirely symmetrical, the language deployed in item 49 is materially different to that found in s 89A. Accordingly the Full Bench was correct in its ultimate conclusion though we have reached that conclusion adopting different reasoning. Any error the Full Bench made in its reasoning was not a material jurisdictional error.
We have refrained from expressing a concluded view about the scope of s 89A as it is not directly in issue and it is unnecessary, in these proceedings, to determine conclusively its effect.
Other Issues
Counsel for CEPU formally submitted first that the appeal before the Full Bench was out of time and secondly that powers to vary derived from item 49 could not be exercised because the appeal was lodged and then determined after the expiry of the interim period. As to the first submission it was not out of time and as to the second the Full Bench could exercise the power.
Counsel for CEPU also submitted that the Full Bench was wrong in its determination that the award clause in question did not concern an allowable award matter. He did so on the basis of the submissions which are referred to in par 19 above. However, he appears to have accepted that had the Commission applied an unquestionably correct legal test then the Full Bench’s judgment about what did or did not answer the description of an allowable award matter could not be reviewed in this Court. We agree with that approach.
It is unnecessary to consider the submissions of Telstra that if the Full Bench committed a jurisdictional error, s 150 of the WR Act operates to make the order of the Full Bench immune from judicial review.
Order
Having regard to the foregoing the application should be dismissed and we so order.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate:
Dated: 30 June 1999
Counsel for the Applicant: Mr R Reitano with Mr P Ginters Solicitor for the Applicant: R L Whyburn & Associates Counsel for the Respondent: Mr Buchanan QC with Mr F Parry Solicitor for the Respondent: Freehill Hollingdale & Page Date of Hearing: 27 May 1999 Date of Judgment: 30 June 1999
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