Electrolux Home Products Pty Ltd v Australian Workers' Union

[2003] HCATrans 518

[2003] HCATrans 518

IN THE HIGH COURT OF AUSTRALIA

Offices of the Registry
  Sydney  No S245 of 2003
  Adelaide  Nos A211 of 2003 and A212 of 2003

B e t w e e n -

ELECTROLUX HOME PRODUCTS PTY LIMITED

Appellant

and

THE AUSTRALIAN WORKERS’ UNION

First Respondent

AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION

Second Respondent

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF SERVICES UNION OF AUSTRALIA

Third Respondent

JAMES WATSON

Fourth Respondent

DALE OLIVER

Fifth Respondent

ROBERT JOHNSTON

Sixth Respondent

ROBERT GERAGHTY

Seventh Respondent

THE MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS

Eighth Respondent

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

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 10 DECEMBER 2003, AT 10.19 AM

Copyright in the High Court of Australia

MR F. PARRY, SC:   If the Court pleases, I appear for the appellant with MR C.B. O’GRADY.  (instructed by Cutler Hughes & Harris)

MR S.C. ROTHMAN, SC:   If the Court pleases, I appear with my learned friend, MR S.J. HOWELLS, for the respondents.  (instructed by Lieschke & Weatherill, Taylor & Scott, and Moloney & Partners) 

MR H.J. DIXON, SC:   If the Court pleases, I appear with my learned friend, MR M.P. McDONALD, for the Minister for Employment and Workplace Relations.  (instructed by Blake Dawson Waldron) 

GLEESON CJ:   Are the parties in agreement that Mr Dixon’s status is that of a party, not of an intervener? 

MR PARRY:   We have no submissions on that, if the Court pleases.

MR ROTHMAN:   Nor have we, your Honour.

GLEESON CJ:   Yes.  Mr Parry.

MR PARRY:   If the Court pleases, this appeal deals with the operation of Part VIB of the Workplace Relations Act 1996, which provides for the making and certification of agreements. We have filed, in accordance with the practice notes, an outline of submissions and a reply which ‑ ‑ ‑

GLEESON CJ:   We will make an order, sought in the notice of motion, on the basis that the Minister is a party.

MR PARRY:   If the Court pleases.

GLEESON CJ:   Yes, Mr Parry.

MR PARRY:   I do not propose canvassing the detail we have provided in our outline in reply.  As to a brief background of this matter, as the Court will observe, the appellant and the respondent unions were bound by an agreement certified under this Act.  That is referred to in appeal book page 10.  That was an agreement that expired on 30 June 2001.  That agreement continued in operation after that date, under section 170LX of the Act.  Unless terminated under the Act – which is not relevant for current purposes – that agreement continued until it was replaced by another certified agreement.

The parties had been negotiating for a new certified agreement since April 2001.  From the commencement of negotiations, the unions had pursued a number of claims, including a claim for payment of a bargaining agent’s fee.  The bargaining agent’s fee that was being pursued is set out in paragraph 11 of our outline of submissions.  The Court will note that the claim required the employer to advise all employees prior to commencing work that there was a fee of $500 per annum payable, that that was to be paid to the union in instalments and that there was, at the request of the employee, to be a direct debit facility to pay the fee.  In essence, the employer was required to make non‑member potential employees who became employees pay a fee to the union to apparently recognise the union’s services in bargaining.  In late June ‑ ‑ ‑

KIRBY J:   Can I just ask, are we to understand that the $500 – which seems, as I think Justice Merkel said, to be a substantial amount – is that in the nature of an ambit claim?  This was the claim, was it not?  It does not necessarily indicate that that would be what would be either allowed or agreed.

MR PARRY:   That was the claim that was advanced.  There is no evidence that it was agreed.  It was the fee that the union were pursuing in the negotiations.

KIRBY J:   We had the case of Riordan which went over the so‑called paper disputes and the ambit claims about four or five years ago.  In that case we revisited the way in which claims were often much greater than the amounts that were ultimately awarded or agreed.  Is there any indication in the evidence that that is the approach we should take to the $500, or not?

MR PARRY:    There is no indication in the evidence to that effect, your Honour.  The amount of $500 was one that was in effect a static claim throughout and our position is that that was the claim being pursued.

KIRBY J:   The bottom line is can we just assume that, as in all industrial claims, this is the claim but it is not necessarily what people get, either by award or agreement?

MR PARRY:   This case concerns an argument about whether that claim, in essence, pertains to the relationship of employer and employee.  We do not rely on the amount of the claim ‑ ‑ ‑

KIRBY J:   You do not think anything turns on the amount?

MR PARRY:    No, the amount is not relevant for the argument we advance.

KIRBY J:   I only raised it because Justice Merkel I think said it was a substantial amount and that seemed to play on his mind.

GLEESON CJ:    I thought he said it was a substantive claim.

KIRBY J:   I think he did say that he thought it was a significant amount or a substantial amount or something to that effect.  Anyway, do not tally over it, it is not all that important.  I just want to know how this fitted into the old way in which very large claims were made and then ultimately much smaller amounts were awarded or agreed.

MR PARRY:   It is not part of our argument that the amount is decisive of whether the claim pertains or not.

GLEESON CJ:   Was this the only aspect of the claim that Justice Merkel found did not relate to the employer/employee relationship?

MR PARRY:   Yes.  There were a number of claims made.  He dealt with two others, which he found, on analysis, to pertain to the relationship.

GLEESON CJ:   What about the claim referred to on page 156 of the appeal book, between lines 55 and 60, paragraph (c)?

MR PARRY:  

The closure of the Brunswick Chef site and the possible outsourcing ‑ ‑ ‑

GLEESON CJ:   I am not sure exactly what that means, but is that a claim relating to the relationship between employer and employee?

MR PARRY:   It may be, your Honour.  It may well be claimed that that concerns the ongoing employment of employees.

KIRBY J:   Which page is that, I am sorry?

GLEESON CJ:   156, between lines 55 and 60.  At all events, it did not figure in the litigation with which we are concerned?

MR PARRY:   It did not figure in the litigation.  It was not part of my client’s contentions before his Honour Justice Merkel that that claim did not pertain.

KIRBY J:   Did you have a cross‑appeal or notice of appeal before the Full Court?

MR PARRY:   No, there was not.

KIRBY J:   So you accepted all the other determinations as pertaining to the relationship?

MR PARRY:   Yes, we did.

KIRBY J:   Therefore, if we look at those, we will get some sort of a clue as to what you accept to be the genus?

MR PARRY:   We did not challenge other aspects of his Honour Justice Merkel’s decision.  That is simply the fact, your Honour.  Now, during those negotiations, the unions, in June or July, lodged and served bargaining notices.

GUMMOW J:   Now, what is the relevant date for the Act?  The Act in what form and what date?

MR PARRY:   The relevant time for the Act is as the Act stood when the industrial action occurred in September 2001.

GUMMOW J:   September 2001.

MR PARRY:   There were bargaining notices that were lodged and served in June and July.  They appear in appeal book, page 65.

GUMMOW J:   What is the last amending Act we can take into account, or the last reprint?  We have to be precise about this.  This Act is continually being amended.

MR PARRY:   The Act has been amended at least twice since September 2001.

McHUGH J:   What we want to know is, what Act was in force on 14, 21 and 22 September, because they are the three days on which the industrial action was taken, was it not?

MR PARRY:   For our purposes, it was the Workplace Relations Act as section 170LI and section 170ML(2) stood at that time.

GLEESON CJ:   What reprint?

GUMMOW J:   The Act has been amended at least five times, it would seem.

KIRBY J:   We just have to be a little careful in the use of statutes, because you can pick up things that were not part of the law at the relevant time.  That is a constant problem.

McHUGH J:   It is becoming a minor irritant in this Court, Mr Parry, that counsel come up here and they cannot tell you what is the reprint of the Act which applies as at the date that is relevant.

KIRBY J:   We have a beautiful glossy version, but it is as at 2003, which may not be the correct version.

MR PARRY:   No.  The version that the Court has, consolidated with 12 May 2003, includes matters within it that were not in the Act in September 2001.

GUMMOW J:   Yes, we know that.

GLEESON CJ:   We know that.  Indeed, it includes a matter directly relevant to this case, but we have to write judgments, and when we write judgments the great trap that exists for us is that this legislation, as has been pointed out, like a lot of other legislation, is constantly being amended.  We need to know what is the form of the legislation with which we are concerned, and that usually involves telling us what is the reprint of the legislation at which we can safely look.

MR PARRY:   It is the sixth edition of this book – this is the seventh edition – but that does not answer your Honours’ questions about the reprint.

KIRBY J:   I have a Reprint 4, which was reprinted as in force at 19 February 2001.  Is that the one, or is there a Reprint 5 that we should be looking at?  Could that perhaps be ascertained and we could be told before this case is over?

MR PARRY:   Yes.

KIRBY J:   Were there amendments to the critical sections that we are concerned with in this appeal?

MR PARRY:   The critical sections that we are concerned with in this appeal are those provisions which fall in Part VIB.  In particular, we are concerned with section 170LI, which has not been amended, and with section 170ML, which has not been amended.  What has occurred relevantly since is that there was an Act passed which amended the Act insofar as it dealt with bargaining agents’ fees, and that Act was – I am reminded that the applicable legislation filed ‑ ‑ ‑

GUMMOW J:   That is bits and pieces.

MR PARRY:   Yes, it is bits and pieces.

GUMMOW J:   Well, we have all been here too long to trust bits and pieces.

MR PARRY:   If your Honour pleases.  There was an amendment that dealt with bargaining and bargaining agents’ fees.  That effected an amendment to section 170LU, and it inserted an LU(2A).  That dealt with objection to the provisions and bargaining agents’ fees were deemed by that amending Act to be “objectionable” matters.

CALLINAN J:   Mr Parry, for my part I do not think I can write a judgment until I have an Act in the form that applies to these proceedings.

MR PARRY:   As your Honour pleases.  We will ‑ ‑ ‑

CALLINAN J:   We do not know what contextually might affect provisions which are left unchanged anyway.  There may be other changes that could affect them but we have to look at the whole Act.

MR PARRY:   Yes.  We will attend to that this morning as best we can, your Honour.  The amendment with regard to bargaining agents’ fees we say is not relevant to this proceeding.

KIRBY J:   Where are objectionable provisions defined so as to – I see, it is 298Z.

MR PARRY:   In the Act that your Honours have, consolidated to 12 May 2003, 298Z has within it 298Z(5), which is a definition of an objectionable provision.

HAYNE J:   Subsection (5)(b) is the relevant limb of that, is it not?

MR PARRY:   That is so.  This was an amendment made after the events that occurred here.  The position is that bargaining agents’ fees are challengeable at two levels.  They are challengeable in that they do not pertain to the relationship of employer and employee.  They are challengeable at another level, that is that they are objectionable in that they contravene Part XA of the Act in that they discriminate against non‑union members.  In this case as it proceeded before his Honour Justice Merkel, both those arguments were advanced.  It was said that the bargaining agent’s fee was a matter that did not pertain.  It was also said that the inclusion of a bargaining agent’s fee would be an objectionable provision.

His Honour dealt with the first argument that it did not pertain.  As to the second argument, at appeal book page 175 his Honour said there that:

In concluding that the bargaining agent’s fee claim does not pertain . . . it has not been necessary to consider whether the claim contravenes the freedom of association provisions –

He went on and expressed some views that it may well be that it was discriminatory in the form it was in.  That appears between AB 175, lines 15 down to 35.  What happened thereafter was that there were amendments made that made clear that bargaining agents’ fees were objectionable.  That is 298Z(5)(b) that I have been referred to.

KIRBY J:   Does that not remove the substance of the legal issue in the case?  I think this was debated at the special leave hearing and I did not quite understand how you defended this from being moot.

MR PARRY:   It is not moot for these reasons.

KIRBY J:   Not moot to your client but for the future.  It seems to have been overtaken by the amendment to the objectionable provisions.

MR PARRY:   To that end we say that it is not moot at all, as these amendments do not bear on the construction of section 170LI, nor on the construction of section 170ML.  If the legislature had come at this from the angle of saying bargaining agents’ fees do not pertain, we may well be in that position.  But the legislature came at it from the other end, that is that they are objectionable.  It cannot be assumed that objectionable matters are automatically ones that do not pertain.  For example, a preference clause may well be a clause that does pertain to the relationship if one follows R v Gaudron, but it would be objectionable.

McHUGH J:   Does not the decision also affect the other point, as to whether or not you can bargain about a term which cannot pertain to the relationship of employees?

GLEESON CJ:   Or whether it is protected action.

MR PARRY:   That is where we say the decision of his Honour Justice Merkel and the Full Court decision are still very relevant, in that they deal with a matter that does not pertain, we say, and we say that the decision of the Full Court leaves open industrial action taken in support of action or matters that do not pertain.  We say that that would be a wrong outcome and inconsistent with the legislative scheme.

KIRBY J:   But their ruling that it is possible that these particular union substitute fees did pertain would, in practice, be overtaken now by the decision of the Parliament that they are to be treated as objectionable provisions and, therefore, the Commission cannot certify them.

MR PARRY:   Yes, but they come at it from a different ‑ ‑ ‑

KIRBY J:   I realise that, but the practical dispute is finished, as far as the future and as far as this particular provision are concerned.

MR PARRY:   It is still arguable, your Honour, that one could take action in support of a bargaining fee claim and that action could arguably still be protected.

KIRBY J:   Even though an objectionable provision? 

MR PARRY:   Yes.  That would be the same, perhaps, as action taken in support of a preference clause.  It may well be that that is a matter that pertains so you can take action in support of it, but, if it found its way into an agreement, it would become objectionable and then be removed.  Our issue here is that if a matter that does not pertain is contained within an proposed agreement, one cannot make an application for certification.  Now, if an objectionable matter is contained within an agreement and it pertains, then an application can be made for certification, but when the Commission comes to decide whether to certify that agreement or not, it cannot certify the agreement if it contains an objectionable matter.

GLEESON CJ:   If the reasoning of the Full Court of the Federal Court is correct, why does the fact that this is now an objectionable provision remove the protection that the Federal Court held applied?

MR PARRY:   We say it does not remove that protection.

McHUGH J:   Yes, because did not the Full Court say that if the certified agreement as a whole answers the description in section 170LI, then it does not matter that a particular term in the agreement may not answer that description?

MR PARRY:   Yes, they did say that, your Honour.

McHUGH J:   Is that affected by the change of legislation?

MR PARRY:   I would submit not.

GLEESON CJ:   No.  What was at issue in this case was whether or not the protection applied to certain industrial action.

MR PARRY:   That is so, your Honour.

GLEESON CJ:   On the reasoning of the Full Court, that protection would continue to apply, would it not, even though the particular aspect of the claim with which we are concerned is now being treated as an objectionable term? 

MR PARRY:   That is so.  That is my submission.

McHUGH J:   Yes.

KIRBY J:   Just to finish that – it is necessary to sit quietly to read these sections, but you say section 298Z, by the specific provision that Parliament has enacted, would not be construed as taking this objectionable term, by the will of Parliament, out of the matter pertaining to the relationship of employer/employee.

MR PARRY:   No, we would not say that.

McHUGH J:   No, that is not ‑ ‑ ‑

MR PARRY:   We would say, as my example of a preference clause, it would still pertain but it would become objectionable.  In respect of bargaining agents’ fees, we would say they do not pertain and they are objectionable and with regard to the second limb the legislature has now made that clear.

GLEESON CJ:   All the legislature has done is legislate in your favour in relation to the point that Justice Merkel did not decide.

MR PARRY:   That is our submission.  In September there were further bargaining notices issued and they were in a similar form to the earlier bargaining notices and those bargaining notices indicated that the unions sought an agreement under Division 2 of the legislation.  An example of those bargaining notices appears on page 106 of the appeal book.

McHUGH J:   When you talk about Division 2, you mean Division 2 of Part VIB, do you?

MR PARRY:   Yes, your Honour, and Division 2 is that part founded on the corporations power.  Division 3 is another stream which is based on the industrial relations power.  Page 106, your Honours will note at line 28, refers to “Under subsection 170MI(2) of the Act”.  That is the part that deals with bargaining notices.  Here, the Australian Workers’ Union say they intend to try:

(a)  to make an agreement under Division 2 of Part VIB of the Act . . . 

(b)  to have any agreement so reached certified ‑ ‑ ‑

KIRBY J:   Does that have any constitutional significance in that to bring it under Division 3, the industrial relations power, you would import all the baggage of the changing opinions on what is industrial, the so‑called employers’ privilege and matters of that kind?  Whereas, if you bring it under Division 2, you are in a different realm of constitutional discourse and therefore, presumably, a statutory discourse, that all you have to show is that it is something pertaining to a corporation.

MR PARRY:   Yes.

KIRBY J:   You do not have the additional limitation beyond the statutory limitation.

MR PARRY:   That is so and I will come to section 170LI shortly.  If one goes under Division 3 and seeks an agreement there, one presumably has in mind there is either an industrial dispute or an industrial situation that one wants to settle.  It might be said that Division 2 is a preferable route and a more common route, simply because it is a simpler route without, as your Honour has indicated, the baggage of going through the industrial dispute or industrial situation set out in the Act.

KIRBY J:   Perhaps I should not describe the decisions going back to 1904 as baggage.

MR PARRY:   They are not my words, your Honour.

KIRBY J:   But it kept a lot of lawyers busy.

MR PARRY:   To follow on with your Honour’s observations, Division 2 is ostensibly very broad, relying as it does on the constitutional power.  Section 170LI is one that we contend puts a limitation on that and limits the power available under section 170LI.

Now, this Act allows for the taking of protected action and that protected action has its genesis in section 170ML.

GLEESON CJ:   Can I ask you a question about 170LI, before you leave that?

MR PARRY:   Yes, your Honour.

GLEESON CJ:   Subsection (1) says:

For an application to be made to the Commission . . . there must be an agreement, in writing, about matters pertaining to the relationship ‑ 

What if there is an agreement in writing about matters pertaining to the relationship and matters not pertaining to the relationship?

MR PARRY:   Our submission with regard to that is that it is the entire agreement that must be certified and if parts of that agreement contain matters that do not so pertain, then the agreement is not one that pertains to the relationship.

HAYNE J:   That is a submission that seems to me to require starting at the start of this division, going right through it and understanding it all, and that to focus on 170LI and 170ML to the exclusion of the other provisions of the division is apt to lead to serious error – Part VIB.

MR PARRY:   Sorry, your Honour?

HAYNE J:   We have to look at the whole of Part VIB.

MR PARRY:   We would agree that this is a process of construction of that section that requires consideration of the whole of Part VIB.  Now, we contend that if one looks at where Division 2 fits and also the process of certification that it is implicit that an agreement may well be made up of a number of matters and we contend that if a substantive discrete matter does not pertain to the relationship then that means the agreement is not such an agreement as envisaged in section 170LI.

Now, we are assisted in this construction of section 170LI by considerations of two Full Benches of the Australian Industrial Relations Commission that have gone through the detailed analysis that your Honour is referring to.  The first of those is a ‑ ‑ ‑

HAYNE J:   Why do we begin with secondary sources?  Why do we not begin with the Act?

MR PARRY:   Yes.  The term “there must be an agreement” contemplates there being a single agreement.  It is the entire agreement that is certified.  One does not certify parts of the agreement.  When one comes to section 170L ‑ ‑ ‑

GUMMOW J:   The question is whether agreement means a piece of paper or something else which is reduced to writing and put on paper, is it not?

MR PARRY:   The Act requires that the agreement be one in writing.  That is what section 170LI means.

McHUGH J:   But interestingly, there is a comma after “agreement” and a comma after “writing”, which suggests that the agreement is anterior to the writing, but it must be put in writing.

MR PARRY:   Yes, it may well be that the agreement is anterior to the writing.  It may well be that there is an agreement between a union and an employer with the shake of a hand, but ultimately that agreement has to be reduced to writing and it is that instrument that is then certified.

GLEESON CJ:   You assert – and your assertion may be correct but it is rather important that we check it – that the context in which section 170LI appears demonstrates or indicates that the words “there must be an agreement . . . about matters pertaining to the relationship” mean that there must be an agreement about those matters and no other matters.  You may be right, but what is it about the context of Part VIB that leads to that conclusion?

MR PARRY:   This, your Honour, that this is an Act that deals with the relations of employer and employees.  Its objects in section 3 clearly articulate that, that it is dealing with employer and employees, and I think the primary object in 3(b) refers to:

the primary responsibility for determining matters affecting the relationship between employers and employees –

So it is this concept of the relationship between employer and employee which underpins the Act.

KIRBY J:   Where was the primary responsibility; which section is that?

MR PARRY:   Section 3(b).

KIRBY J:   Of the whole Act, is it?

MR PARRY:   Yes, of the whole Act.

KIRBY J:   You see, you live with this Act and I think I have only had the pleasure of looking at this part once before, and I would like to have some idea of what the policy of the Parliament was in enacting this part and enacting these provisions so that we can see the section in its full context.  Section 3(b) is a good starting point.

MR PARRY:   The primary objects have 3(b) which refers to the:

responsibility for determining matters affecting the relationship between employers and employees . . . 

(c)  enabling employers and employees to choose the most appropriate form of agreement . . . 

(e)  providing a framework of rights and responsibilities . . . which supports fair and effective agreement‑making –

You then have a Commission constituted in Part II and then, leaving aside the unfair dismissal provisions, there is the substantive part of the Act which was the dispute prevention and settlement.  That focuses on the prevention and settlement of industrial disputes and it is the position that industrial disputes are defined in section 4 as ones that pertain to the relations of employer and employee.  So the dispute settlement role of the Commission is focused at this stage on settling industrial disputes that pertain to the relationship of employer and employee.

KIRBY J:   Was that expression “pertaining to employer/employee” a relic of the 1904 Act?

McHUGH J:   Yes, it was in the 1904 Act.

MR PARRY:   It has a very long history.

KIRBY J:   Was it designed to, as it were, be equivalent to the constitutional notion of “industrial”?

MR PARRY:   No, it is a more narrow concept.  Arguably, the constitutional power is broader than that.

KIRBY J:   It became broader.  It was not broader originally.

MR PARRY:   Yes, I think in the Alcan decision of your Honours, this distinction between the constitutional industrial power and the term “pertaining to” was dealt with.

GLEESON CJ:   I am not suggesting that what I am putting to you is right, but could you explain to us why it is that any matter that an employee wants the employer to agree to and the employer refuses to agree to is not, on that account alone, a matter pertaining to the relationship between employer and employee? 

MR PARRY:   Because the term “pertaining to the relationship of employer and employee” has a significant history in this Act.  It has been the subject of a number of High Court determinations.  It has dealt with, for example, shop trading hours in Kelly’s Case, with the deduction of union dues in Alcan, with union badges in Archer’s Case, and so forth.  So there is a long history attached to the phrase “pertaining to the relationship of employer and employee” – and also considered in the Shell Case, in respect of superannuation.

Now, when this Act was passed in 1996, the legislature has used the same phraseology again, “a matter pertaining to the relationship of employer and employee”.  We submit that when the legislature has reused the term such as that, that is consistent with bringing in the history and the past in respect of that Act.

Secondly, as I was submitting, this is an Act that deals with the prevention and settlement of disputes, in large part, which must pertain to the relationship of employer and employee.  You have an agreement stream set up, one level of which allows for settlement of industrial disputes, uses the disputes power, again, we say, constrained clearly by the need for matters to pertain to the relationship of employer and employee.

GLEESON CJ:   So a demand by employees that their employer contribute a certain sum to a political party in support of its election campaign would not be a matter relating to the relationship?

MR PARRY:   We so submit, yes.  Then you have the other stream, which is utilising the corporations power, which is obviously designed, in our submission, to cover intrastate disputes and so forth – so where there is not the necessity to have the prevention or settlement power utilised.  It is to open up, I suppose, this area to other employers that do not have to go through the stage of having an industrial dispute or an industrial situation pertaining to them.  Then we have section 170LI put in there.  Without section 170LI, the section would simply, on its face, utilise the whole corporations power, presumably.

McHUGH J:   But does not your description of the Act omit two important segments, namely, waterside workers and flight officers, the jurisdiction over which depends upon the trade and commerce power and not section 51(xxxv)?  If they were independent contractors, the Commission would have jurisdiction over them, would it not?  Neither by the description, unless it has changed – it used to be just waterside workers and flight officers, flight crew officers.  They do not have to be employees.  They usually are, but they do not have to be, do they?  They could be independent contractors.

MR PARRY:   Your Honour, I think, is referring to section 5 of the Act, where there is a reference to “Specific industrial issues”.  Section 5(1) says:

this Act also has effect as provided by this section.

Section 5(3) says:

the following are industrial issues:

(a)  matters pertaining to the relationship between waterside employers and waterside workers –

and then it has the phrase –

so far as those matters relate to trade or commerce –

So it starts off, your Honour, with the phrase:

pertaining to the relationship between waterside employers and waterside workers ‑ ‑ ‑

McHUGH J:   Yes.  It uses the word “workers”, which is not necessarily the same as an employee.

MR PARRY:   Yes, that is true, and “waterside worker” is defined in the Act.  It has a meaning given to it in clause 1 of Schedule 1.  Your Honours, in Schedule 1, there is a definition of “waterside worker” and it is to mean:

a person who accepts, or offers to accept, employment for work in the loading or unloading of cargo into or from ships ‑ ‑ ‑

McHUGH J:   Yes.  Did not Victoria refer its industrial powers to the Commonwealth?  Are employees in Victoria still covered by this legislation, whether they ‑ ‑ ‑

MR PARRY:   Yes, they are.  What has happened in Victoria is, there is a division, a later part in the Act, at the very end of it, which is section 490.  What that section refers to is the transfer of powers, and, in substance, what it means is that one does not need an interstate industrial dispute in Victoria.  Provided it is an industrial dispute and pertains to the relationship, your Honour, then one does not need an interstate industrial dispute.  Section 494, in particular, refers to agreements and it says:

In addition to the effect that Division 2 of Part VIB and related provisions of this Act have in relation to agreements about matters pertaining to the relationship between:

(a)  an employer . . . and

(b)  employees . . . 

that Division and those provisions also have effect as mentioned in this section.

So it makes it crystal clear that matters that pertain, that are dealt with in agreements, have effect and operation in Victoria.

McHUGH J:   Section 494 rather suggests that the persons who are referred to in 170LI are employees.  Section 170LI(1)(b) does not refer to them employees, does it?  It just simply says “all persons . . . employed in a single business”, which is wide enough to cover independent contractors, but 494 suggests that those persons are employees in the common law sense.

MR PARRY:   In my submission, section 170LI(1) clearly contemplates the persons as being employees.  If the Act uses the definition of “independent contractor” elsewhere – in Part XA, for example, there is references to independent contractors.  It is referred to ‑ ‑ ‑

McHUGH J:   Yes, but the word “employed” is ambiguous.  I cannot recollect the name of the case for the moment, but there is a famous judgment of Learned Hand in the United States where he held “employed” was wide enough to cover the case of the independent contractor.  It was a beneficial construction, but the fact that the legislation refers to all persons who are employed in a business does not really tell you whether their employees are independent contractors, but you say the context of the Act, and particularly 494, suggests that they are?

MR PARRY:   Yes, your Honour, we ‑ ‑ ‑

HAYNE J:   What about section 170LH?  Does that not put the point beyond doubt, at least in respect of Division 2 agreements?

MR PARRY:   We would so submit.

KIRBY J:   The non‑unions members are not independent contractors of your client, are they?  They are just employees who happen not to want to be union members?

MR PARRY:   There is no suggestion anywhere that they are not persons that intend becoming employees.

KIRBY J:   Can I go back to the question the Chief Justice asked you.  He asked, if a union asks for a benefit which will burden employees, why does that not of its nature, by reason of that demand, become a matter pertaining to the relationship of employer/employee.  You said you have to look at this because of its history in the context of a lot of law on the marginal cases and where they fell in and out of that description, but we are dealing here with something which is relatively new, the issue of statutory provisions designed to protect people from compulsory unionism, I suppose it could be put.  Even if you do not say it is enough that the demand is made, why is it not enough if the demand relates to some fee to be paid by employees who are not union employees, but for those benefits which non‑union employees gain inevitably from the activities of unions, so that, as it were, they are not riding on the coattails of the people who are union members?  Why is that not pertaining to the relationship of employer/employee?

MR PARRY:   Your Honour, when one looks at the phrase “pertaining to the relationship” and Manufacturing Grocers and Alcan, it says when the phrase “pertaining to the relationship of employer and employee” is used, it pertains to the relationship of the employer as an employer and to the employee as an employee.  That requires a direct relationship between that matter, not a consequential one.  That is, I think, what Manufacturing Grocers says.

KIRBY J:   Please do not assume that I keep Manufacturing Grocers, Alcan, Kelly and all those other cases in my head.  They may be in your head but they are not in mine.  If you want to put them there, you will ultimately have to do so to take us to what the Court has said and how you draw the lines in these cases.  Not necessarily now, but at some time, because I do not carry them around in my head.  You are answering in terms of principle, what the Court has said is the principle that is to be applied here.

MR PARRY:   One considers, in my submission, whether what is affected in the relationship affects, for example, the employee as an employee and the employer as an employer.  For example, in Alcan, the demand was that the employer collect union dues and remit them to the union.  The Court said that did not relate to the employer in his role as an employer.  That made the employer, in effect, collecting a debt and remitting it to the union.  The employer was then acting as an agent in effect of the union in so remitting the matter.

We similarly say here the bargaining agent’s fee is a fee that is demanded or required that non‑union members pay, that is, forcibly deducted from their salary and remitted to the union.  Again, we would say that that puts the employer not in the position of an employer but rather an agent for the union in collecting a fee.  In our submission, following on from Portus – and I think I have referred to that in our outline of submissions – we say that that puts the employer and the employees affected in a different position than in respect of their direct relationship as employer and employee.

McHUGH J:   Did we not say in Alcan, following Manufacturing Grocers, that the matter must be connected with the relationship in the sense that it is between the employer in its capacity as an employer and the employee in his or her capacity as an employee?  Did we not use the word “capacity”?

MR PARRY:   That is almost directly from Manufacturing Grocers I think as well, your Honour.

KIRBY J:   What is wrong with the argument that if you are an employee who, declining to join a union, nonetheless takes the benefit as employee of activities which unions perform, that that is something that pertains as such to your activities and identity as an employee and therefore to your relationship with your employer?  That the conditions say in the staff canteen or in other attributes, danger and so on, that trade unions are involved in, inure to your benefit qua employee and therefore it is not a collecting agency; it is related to your work conditions even though you are not a member of the union.

MR PARRY:   Your Honour, I think it is also in the Financial Sector Union Case, where it is plain ‑ ‑ ‑

KIRBY J:   Another case I do not have in my head, I am afraid.

MR PARRY:   Well, the issue is the union is claiming on behalf of, in effect, its members and future potential members, and it can claim in respect of non‑members, but it must claim in respect and in a way that relates to their actual members.  That is very much from the Financial Sector Case. 

Here, where there is a claim made which is really to the benefit of the union – and I note your Honours’ comments that it benefits the non‑employees – that might be a matter of debate as to whether the union acting as a bargaining agent necessarily benefits them – I do not think we would take that as automatically read – but, in effect, this only concerns those non‑members.  It only concerns a claim that has to be made by those non‑members, and we say that a demand that is directed to the non‑members that they pay money to a union of which they obviously are not members does not pertain to them as employees, but, rather, it pertains to them as being in some relationship with the union.  In effect, they are hiring the union to act as agent in the negotiation of agreements.

McHUGH J:   What about Portus’ Case, which no doubt favours you immensely, but ought we follow Portus today?  Because in Portus this Court held, did it not, that a demand by a union on an employer that the employer deduct from an employee’s wages union fees and transmit it to the union was not within the relationship, did not pertain to the relationship.  Is that right?  That is what it decided, did it not? 

MR PARRY:   Yes, that is so.

McHUGH J:   Well, it seems to me very strongly in your favour, but that was decided in the early 1970s.  Would you see it the same way today?

MR PARRY:   It was seen the same way.  It was seen as good law.  Perhaps if I could take the Court to Alcan (1994) 181 CLR 96.

McHUGH J:   We refused to reconsider it in Alcan, did we not?

MR PARRY:   I think the Court went a bit beyond that, your Honour.  It said, on page 107, at point 3, that: 

there is no reason to think it is in any way affected by error. 

GLEESON CJ:   I would have thought your argument goes beyond that.  You say, do you not, that legislation enacted in 1996, using a term of art that has been construed by this Court as recently as 1994, would ordinarily be understood as using the term in the sense in which it had been construed?

MR PARRY:   Yes, your Honour.

GLEESON CJ:   What is the best case that is authority for that proposition as a matter of statutory construction?  Perhaps you could let us have a reference to it after the adjournment.

MR PARRY:   Yes, your Honour.

KIRBY J:   Just picking up Justice McHugh’s question though, and I take the force of your submission, but my general recollection is that in the course of the last 30 years this Court has gradually given a larger content to the constitutional notion of “industrial”.  That is the, as it were, umbrella under which “pertaining to the relationship of employer and employee” operates.  I appreciate you say it is a narrower concept but it is, as it were, the outer circle within which the statutory phrase exists.  Some of the same forces that have led to the larger interpretation of the constitutional power would perhaps be relevant to the construction of the statutory ‑ ‑ ‑

McHUGH J:   Could I add to that that it is not merely that the notion of “industrial” has increased, but it is really that the notion of what pertains to the relationship of employment has increased.  That comes out very clearly in the workers compensation cases.  In Whittingham’s Case back in 1927 this Court held that an injury sustained playing cricket during the lunch hour was not an injury sustained in the course of employment.  The Court held to the contrary in Oliver’s Case (1962) 107 CLR.  So it is an expanding notion of employment.

KIRBY J:   Can I add a footnote to that, then I will keep quiet.  The whole notion of employment today is changing.  There is much more part‑time employment, there is a lot of non‑union employment and there are ‑ ‑ ‑

GUMMOW J:   There is fewer employees.

MR PARRY:   Yes.

KIRBY J:   And they are engaged in different ways, so that the notion is fluid at the moment.

MR PARRY:   Your Honour, might I make these submissions.  Firstly, the employment relationship is one well known and understood in the common law and has been for quite some number of years.  I do not understand the pronouncements by the Court to have expanded the notion of what is an employee or not.  That is a well‑known and well‑established relationship.

McHUGH J:   I do not know.  Have you read Hollis v Vabu?

MR PARRY:   Yes.  It followed fairly well, in my submission, established tests in that area, so it did not ‑ ‑ ‑

McHUGH J:   Yes, it did, but it applied it in – at least, I perceive it as extending the application.  The same principles were applied but they seemed to have a further scope.  At least, that is how I saw it.

MR PARRY:   We would say that is a case on its facts and your Honours obviously made the findings with regard to it, but we say following the well‑established tests.

GLEESON CJ:   Is this expression “matters pertaining to the relationship” construed as though before the word “relationship” there appeared the word “employment”?

MR PARRY:   It is probably so construed, but we do not submit that that word needs to be there.  We say that the Manufacturing Grocers test about employment and employee, as such, and an employer, as such, necessarily means that that employment relationship is the one being considered.  It should not be assumed that simply because an employer and employee agree on something that that becomes part of the employment relationship.  I think that is almost where some of the debate has gone ‑ ‑ ‑

GLEESON CJ:   Now, the Full Court decided this issue against you, did they not?

MR PARRY:   Yes, they did.

GLEESON CJ:   How did they distinguish the line of authority on which you are relying?

MR PARRY:   They distinguished it on a couple of bases.  They ‑ ‑ ‑

GLEESON CJ:   Where do we see them?

GUMMOW J:   It is reported in 118 FCR 177.

MR PARRY:   They started to consider section 170LI at 223, halfway down the page.

GUMMOW J:   Paragraph?

MR PARRY:   It is the third paragraph on the page, line 32.

GUMMOW J:   Paragraph number?

MR PARRY:   I am sorry, it is 98 in the court judgment.

GLEESON CJ:   It will be 98 everywhere.  That is a media neutral citation.

MR PARRY:   Yes, I was referring to the appeal book, your Honour.  They started to consider this concept of each individual term.  They go on, in paragraph 99, and, firstly, they say that:

S 170LI(1) does not refer to the terms of an agreement.

That is, there seems to be a suggestion that since the words “the terms” do not appear ‑ ‑ ‑

GUMMOW J:   Is that not a complaint, particularly by the Minister, I think, in his submissions, that they did not refer to these authorities?

MR PARRY:   Well, they did not.

GUMMOW J:   So the answer to the Chief Justice is, they did not?

MR PARRY:   Yes.

HAYNE J:   To revert a moment to the question you were asked at the beginning of the series of questions about whether the broader approach of section 51(xxxv) might have some effect on the understanding of “pertain”, that argument is considered and rejected in Alcan (1994) 181 CLR 96 at 105, lines 5 and following. Now, I do not suggest you stay there, but the point is put and rejected. As the Court there points out, the question is one of statutory construction, not one of determining the ambit of constitutional power. At some point, we might actually get to look at the words of the Act.

MR PARRY:   We do not rely on the scope of the constitutional power, your Honour.  Our argument is based on section 170LI and its words.  Your Honour asked earlier about the Act and its context and why we should read the words “the agreement” as containing – if it contains within the agreement matters that do not pertain, that takes the agreement outside being one of so pertaining.  I have taken the Court to Part VI and the industrial disputes power.  We then have a provision which allows agreements to be made in settlement of industrial disputes that necessarily must pertain.

Then we have another stream, the stream based on the corporations power.  It, in our submission, would potentially have very broad scope, but we submit that the legislature has brought the scope of those agreements in general line with the scope of the rest of the Act, that is, with regard to the scope of the industrial disputes power.  We say, broadly, that is what has occurred.

Now, for that to occur and for section 170LI to be interpreted such that an agreement might contain some parts that do pertain and significant parts that do not pertain would, in our submission, be inconsistent with that structure of the Act.  It would immensely broaden the scope of Division 2 agreements.  Division 2 agreements would then cover matters that did not pertain on their own, such as shop trading hours, such as donations and the list we have set out in our written submissions.

We would say that outcome would significantly broaden the scope of Division 2 agreements.  It would have an outcome that we submit would be inconsistent with the statutory scheme and would be inconsistent with the system set up in Part VIB for the certification of agreements.  It would result in agreements being certified that contained non‑pertaining matters.  Those non‑pertaining matters would be enforceable under section 178 of the Act and they would be matters which might be the subject of the Commission’s powers in a dispute‑settling procedure, if there was a debate over the application of the agreement.  It would have very far ranging consequences if section 170LI was interpreted to allow non‑pertaining matters to form part of these agreements.

HAYNE J:   You said it would be inconsistent with Part VIB.  You have pointed to 170LI.  Is there any other provision of VIB to which account must be given in respect of this branch of your argument?

MR PARRY:   In respect of my submissions with regard to the scope of Division 3 agreements, they are dealt with in section 170LO and section 170LP.  They make clear the scope that those agreements can cover.

HAYNE J:   For example, do we take any account of what appears in Division 8?  Do we take account of 170MI and the procedures it sets up, and, in particular, do we take account of MJ and MJ(c)?

MR PARRY:   Section 170MI allows for the commencement of the bargaining period and parties can simply articulate in 170MJ what they would want dealt with by the agreement.

HAYNE J:   What light, if any, does MJ(c) shed on this problem?  If you tell me it sheds none, so be it, but does it shed any light?

MR PARRY:   We do not submit that it sheds much light.

HAYNE J:   That is straddling a barbed wire fence, Mr Parry.  What light does it shed?

MR PARRY:   It simply is a requirement that parties set out what matters they want in the proposed agreement.  It might be that those are matters that settle the “industrial dispute” referred to in (d), that follows it.  It might be that those matters are matters that go beyond what could be included in an agreement.  Parties might ask for things that they cannot have included in the agreement.  Then there is a process of negotiation and bargaining contemplated in the Act and that is meant to be in good faith – that is section 170MP.  There needs to be bargaining to try and reach agreement before industrial action is taken.

Then we arrive at what happens if the parties cannot agree.  If the parties cannot agree, they are entitled to take industrial action, and that entitlement is predicated on there being what we say is an agreement that can be certified.  That is section 170ML(2).  Again, any other outcome would result in a position where unions or employers could take strike action or lock out employees in support of claims that were not industrial and did not pertain to the relationship.

Your Honour, there are a number of provisions in Part VIB and that is what we say the scheme provides for.  There is nothing in there to suggest ‑ because then you have section 170, powers of the Commission, under 170MX.  That happens “if a bargaining period is terminated” for any particular reason.  The Commission has certain powers to settle and make an agreement, in effect, between the parties.  We would contend that if one goes to section 170MX and MY, that allows the Commission to exercise its arbitral powers to settle the matters in section 170MX(2) that could be covered by the agreement, and that must relate back to section 170LI.

When the Commission comes to exercise those arbitration powers, if what could be included could go beyond the powers, could go beyond matters that pertain, beyond industrial matters, then that contemplates a situation where the Commission would be arbitrating an award which would deal with non‑industrial matters – matters that did not pertain to the relationship.  In my submission, that consequence would be an extreme one, one that the legislation itself gives no indication of, and would be a significant change from the longstanding position of the Commission.

In the absence of very, very clear words, we would submit that when one follows the statutory scheme through, it is very clear that what is contemplated is agreements being reached on matters that pertain to the relationship certified under Division 2 or certified under Division 3.  We say, when you follow the statutory scheme through in Part VIB, that is where you end up.

KIRBY J:   Did I see in the Solicitor-General’s submissions on the special leave that the Commission had refused to follow this decision of the Federal Court?

MR PARRY:   There is a decision of the Full Bench of the Industrial Relations Commission, Atlas Steels (2002) 114 IR 62.

KIRBY J:   I think Mr Bennett referred to about six decisions.

MR PARRY:   He was also including single Commission decisions.

KIRBY J:   Yes, he pointed that out.

MR PARRY:   Yes.

KIRBY J:   But it seems, at least to say the least, an unusual development.

MR PARRY:   The Atlas Steels Case deals with the argument that LI enables agreements to contain matters that do not pertain and it was a Full Bench constituted by the President, the Vice President and a Commission member. 

GUMMOW J:   This is before the Full Court and after Justice Merkel.

MR PARRY:   It was before the Full Court and it set out ‑ ‑ ‑

GUMMOW J:   They were not not following the Full Court.

MR PARRY:   No.

GUMMOW J:   You could say they were not anticipating it.  They were of the same mind as Justice Merkel which was not surprising.

MR PARRY:   Yes.  At pages 66 and 67 they deal ‑ ‑ ‑

GUMMOW J:   It is suggested that since the Full Court decision of 21 June 2002 the Commission has not been following the Full Court.  Are there any such cases?

MR PARRY:   Yes, there is.  There is a decision called Health Minders which is in our list of authorities that we have referred to the Court.  It is a decision in Print PR926554, 1 of 15.  It is a decision in respect of the National Union of Workers handed down on 10 January 2003, a decision of Senior Deputy Presidents Polities and Watson and Commissioner Larkin, and it dealt specifically with bargaining agents’ fees and with union notification clauses.

GUMMOW J:   This is on the basis that the relevant portion of the Full Court decision was obiter.  Is that the idea?

GLEESON CJ:   What paragraphs?

MR PARRY:   It commences at paragraph [13].  They say:

The central point in all of the appeals is the proper construction of s.170LI of the Act.

It then sets out large parts of the Full Court judgment thereafter and then paragraph [22] ‑ ‑ ‑

GLEESON CJ:   Do you mean Full Court or Full Bench?

MR PARRY:   I am sorry, Full Bench.  There is paragraph [20] where they say that the Commission generally does not “depart from previous Full Bench decisions”.  In paragraph [22] they are “not persuaded that Atlas Steels is wrong”.  They describe the “obiter dicta remarks of the Federal Court” and so forth.  Then at paragraph [23] they deal with the argument, the first argument advanced.  I am not going to read that to your Honours.

GLEESON CJ:   No.  Well, I think you have shown us that the decision of the Full Court of the Federal Court in this case was not greeted with applause in the Full Bench.

KIRBY J:   But in the arrangements of the Commission and the court – the court now, as it were, replacing the role that this Court used to play in relation to the Commission – it is an unusual development.  It may not be significant, it may be explained and I will read what was said, but if the decisions of the court are not to be followed, the inevitable result will be applications to this Court and we will be back to where we were.

MR PARRY:   That is certainly the position when matters are remitted.  Matters come to the Federal Court in two ways.  They come via prerogative relief applications from the Commission that are remitted by this Court back to the Federal Court and, certainly, it would be presumed that those cases would be followed, dealing with prerogative matters as they would.  However, there is a second stream, where the Federal Court is dealing with its own powers which the Act sets up.

GUMMOW J:   This is Division 10, is it not?  Part VIB.  Was this not such a case?  170NF?

MR PARRY:   It was an NC case, this one, your Honour, which is that there was coercion – Division 10 of Part VIB, yes, your Honour.

KIRBY J:   That was the course that was followed in these cases, was it?

MR PARRY:   That is so.  This has not been a proceeding that had ever been to the Commission.  There was an originating application in the court in its original jurisdiction.

GLEESON CJ:   But the explanation in terms of precedent of what has happened, whether it is a plausible explanation or not, is simple, is it not?  If you look at paragraph [22], as Justice Gummow pointed out, the question for the Full Bench was whether it would follow the previous decision of the Full Bench in Atlas and the Full Bench took the view, rightly or wrongly, that the remarks of the Full Court of the Federal Court that cast doubt on Atlas were obiter dicta.  That may be right, or it may be wrong, but that is the way they approached it in terms of precedent, is it not?

MR PARRY:   That is so.

GLEESON CJ:   Which is orthodox.

MR PARRY:   Yes, we think that this is an orthodox approach, if your Honour pleases.

GLEESON CJ:   But it depends on the validity of the premise, which was that what was said by the Full Court of the Federal Court was obiter.  Well, we will have to decide that for ourselves.

MR PARRY:   Yes.  Paragraph [35] deals with a decision of Justice Munro in Webforge NSW Certified Agreement.  His Honour Justice Munro was a member of a Full Bench which has subsequently repeated those views and is inconsistent with this decision.  There are other decisions of the Commission that follow Health Minders.  The decision of his Honour Justice Munro is a very recent one and I am not sure that it has been followed at all.

Just one more argument with regard to section 170LI, that is, we would say that certified agreements must pass a “no disadvantage” test.  That means that is a “no disadvantage” test which is set out in Part VIE of the Act and that requires the Commission to look at the agreement overall ‑ section 170XA(2).  So when the legislature contemplates looking at an agreement overall, it says so, and it says fairly expressly that you look at the agreement on balance and make an assessment as to whether it meets the “no disadvantage” test or not.

In our submission, the use of the “no disadvantage” test was not an approach used in respect of section 170LI.  Further, with regard to section 170LI, the “no disadvantage” test would operate, we submit, perversely if the Commission had to weigh up matters that did not pertain to the employment relationship.

KIRBY J:   Forgive me if I am not understanding the structure of the Act well, but given the exclusion now of the certification of these clauses because they are objectionable provisions, is not the structure of the Act that the ambit of what is “about” “matters pertaining to the relationship between employer and employee”, which on the face of things are very broad words of connection, is an outer circle which is very large, but then when you get to where you can slip into the terms of a certified agreement or award, you have the objectionable provisions, which is a narrower circle within the outer circle, and therefore your protection lies in 297Z – that provision, as distinct from saying these very broad words, “about” and “pertaining”, a double indication of generality of connection, are to be read narrowly in this case.

MR PARRY:   Your Honour puts forward the proposition that objectionable matters may be narrower.  Objectionable matters are a group that may pertain to the relationship or may not pertain.  The preference clause would pertain.  We say a bargaining fee does not pertain.

KIRBY J:   I am looking at the structure of the Act.  Is this the way the Act is expected to work, that you can have the agreement about matters pertaining to a relationship, and that is very widely expressed because employment is changing, the type of employment, the numbers of employees, their relationships to unions.  Everything is in flux and therefore that is a relatively broad expression, but when you want to get this particular provision in, Parliament has stepped in and said that you cannot and that that is the way the Act is supposed to – you do not, as it were, strike at it under 170LI; you strike at it under 298Z.

MR PARRY:   Yes.  The concern that we have is the taking of industrial action in support of it.  If an objectionable matter pertains to the relationship, it may well be that industrial action can be taken in support of that and an agreement reached and that agreement – a valid application made and that agreement then not being certified because the Commission says there is an objectionable provision in it.  Then the Commission can excise the objectionable provision and take it out and still accept undertakings and so forth.

KIRBY J:   But did not this Court say in the CFMEU Case that even though these provisions that may be agreed between the parties may not be registrable under the Act, you still can have agreements which are enforceable in the general law, or you may have agreements that are enforceable in the general law.  It is just that they cannot pick up the benefits of the Act.

My learned friend distinguished the Kestrel Case – that is CFMEU v AIRC 203 CLR 644 – on the basis that section 170LI distinguishes it. Section 170LI has existed in its current form since 1996. It was in existence for the purpose of the decision in that case and was in the Workplace Relations Act at the time of that decision and the time that the Court came to deal with it.

Without taking your Honours to it, can I refer your Honours to the Shell Company Case 174 CLR 345 and the principles that are there established. Because of the time, I will not take your Honours to it – the passage and principles I have set out in relation to the relationship between employers and employees. At pages 359 and following – it is a passage predominantly at page 360.

KIRBY J:   What is the principle you are advancing?  I am getting a bit lost now, Mr Rothman.

MR ROTHMAN:   I am sorry, your Honour, I am trying to ‑ ‑ ‑

KIRBY J:   I just wonder if this is the most efficient way to be completing your submission – if, instead of this, we did not have some written material.

MR ROTHMAN:   Your Honours, can I have this indulgence.  It may be appropriate if I can conclude my submissions, say, by Monday of next week in writing?  I am happy to do that. 

GLEESON CJ:   All right, fine.  Can I ask you a question about your submission on section 170NC just before you leave us.  The elements of a contravention of section 170NC are action and intent, correct?  The action is taking industrial action and doing it with a certain intent?

MR ROTHMAN:   Yes, your Honour.

GLEESON CJ:   Those are the elements of the contravention?

MR ROTHMAN:   Yes, your Honour.

GLEESON CJ:   Can you have an intent to coerce another person, within the meaning of 170NC, even though the agreement that you want to force the person to make is not an agreement under Division 2?

MR ROTHMAN:   Your Honour, in my respectful submission, the Act ought be construed consistently and if one can have an intent to coerce into the making of an agreement under Division 2, one would also have a purpose of supporting claims in respect of that proposed agreement.

GLEESON CJ:   You can attempt to do something that is impossible, can you?

MR ROTHMAN:   Only to the extent one can have a purpose of supporting the impossible, your Honour.

GLEESON CJ:   It just occurred to me as a possibility that the argument you make about section 170NC, having regard to the fact that the critical element in it is an element of intent, might get us into that area of attempting to do the impossible.

MR ROTHMAN:   Your Honour, in my respectful submission, 170NC and 170ML have to be read together.

GUMMOW J:   So you get the same work out of “for the purpose of” in 170NL.

MR ROTHMAN:   Yes, your Honour.

GLEESON CJ:   Then you have until close of business on Monday to complete your submissions in writing and Mr Parry and Mr Dixon will have 14 days from today to put in written form any submissions they wish to make in reply.

MR ROTHMAN:   Your Honours, before I depart – and I am grateful to your Honour and I thank your Honour – can I draw attention before going to one passage.  Your Honour Justice McHugh has referred me a number of

times to Alcan 181 CLR.  Can I refer your Honours to the passage in the judgment of the Court at page 104 at about line 4:

In an industrial relations system involving the active participation of trade unions as the recognized representatives of their members, a claim that employers should deduct union dues is, in our view, inherently industrial in character.  Certainly, that is so where the claim is for deductions authorized by individual employees.

Your Honour made the comparison between deduction of union dues and the bargaining agent’s fee and I simply point out that if one is to deal with those areas of the old decisions on industrial dispute in a constitutional context, then the context is not quite as your Honour has put it.

GLEESON CJ:   Very well.  Subject to the additional material we are going to get from the parties, we will reserve our decision in this matter and we will adjourn until 10.00 am tomorrow morning.

AT 4.28 PM THE MATTERS WERE ADJOURNED