Federation of Australian University Staff Associations v Academic Salaries Tribunal

[1985] FCA 605

Re: FEDERATION OF AUSTRALIAN UNIVERSITY STAFF ASSOCIATIONS; AUSTRALIAN
NATIONAL UNIVERSITY STAFF ASSOCIATION; FEDERATION OF COLLEGE ACADEMICS;
FRANCIS NEIL HARPLEY
And: ACADEMIC SALARIES TRIBUNAL (THE HONOURABLE MR JUSTICE J.T. LUDEKE);
COMMONWEALTH OF AUSTRALIA
No. VG43 of 1985
Remuneration
13 IR 474

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Evatt J.
Neaves J.
Wilcox J.

CATCHWORDS

Remuneration - Academic salaries - Determination and reports by Academic Salaries Tribunal concerning salaries etc - Request by Commonwealth for report on phasing in recommended increases - Power of Tribunal to vary retrospectively already accrued salaries - Power of Tribunal to conduct inquiry limited to phasing in.

Remuneration Tribunals Act 1973 ss. 12B, 12C, 12D, 12DD.

Australian Broadcasting Tribunal v. Saatchi and Saatchi Compton (Vic) Proprietary Limited (1985) 6O A.L.R. 756 referred to.

HEARING

SYDNEY
#DATE 19:11:1985

ORDER

The appeal be allowed.

Order 1 made by Smithers J.on 12 February 1985 be set aside and in lieu thereof the following orders be made:

"1. Declare that the determination of the

Academic Salaries Tribunal dated 5 June 1984 relating to the salaries per annum to be paid to the academic staff employed within the Australian National University, the Canberra College of Advanced Education, the Australian Maritime College and the Australian Film and Television School is wholly invalid.

1A. Declare that the two reports of the Academic Salaries Tribunal dated 5 June 1984 relating respectively to the rates of salaries of academic staff of institutions of tertiary education other than Commonwealth institutions of tertiary education that should be used as a basis for making grants in respect of recurrent expenditure in connection with those institutions and to the salaries to be paid to Vice-Chancellors, Deputy Vice-Chancellors, Principals and Deputy Principals are each wholly invalid."

The respondent Commonwealth of Australia pay to the appellants their costs of this appeal.

NOTE: Settlement and entry of orders is dealt with in Order

36 of the Federal Court Rules.

JUDGE1

This appeal challenges the validity of what remains of a determination and of two reports made by the Academic Salaries Tribunal (Ludeke J.) in relation to the phasing in, after 17 April 1984, of increases in academic salaries at universities and other tertiary institutions. We say "what remains" of the determination because Smithers J. has held that the determination is invalid insofar as it relates to the period 17 April 1984 to 5 June 1984. There is no appeal from that decision but the appellants, the Federation of Australian University Staff Associations, the Australian National University Staff Association, the Federation of College Academics and Mr Francis Neil Harpley, the President of the first appellant, contend that his Honour should have gone further. They say that he should have held the whole of the determination and both reports to be invalid because they were made without jurisdiction and, in the case of the determination, because what remains is inseverable from the part held to be invalid. The first respondent, the Tribunal, has submitted to such order as the Court may make but the second respondent, the Commonwealth of Australia, has actively resisted the appeal.

1. The Academic Salaries Tribunal is established under Part III (ss. 12A - 12F) of the Remuneration Tribunals Act 1973. The Tribunal is to be constituted by one person appointed by the Governor General on a part-time basis for a maximum term of five years: s. 12B. Section 12C deals with the functions of the Tribunal. It draws a distinction between the making of determinations - which relate to the salaries to be paid to the academic staff of Commonwealth tertiary education institutions - and the making of reports - which concern the salaries to be paid to the academic staff of non-Commonwealth tertiary education institutions. The Commonwealth has a substantial financial interest in relation to such reports because of the direct relationship between such salaries and the size of Commonwealth grants to the States for tertiary education: see, for example, s. 5(3)(d) of the States Grants(Tertiary Education Assistance) Act 1984.

2. Section 12C reads as follows:
   
   

"12C. The functions of the Tribunal are -

(a) to inquire into, and determine, the salaries to be paid to the academic staff of Commonwealth institutions of tertiary education; and

(b) to inquire into, and report to the Minister on -

(i) the rates of salaries, in relation to the academic staff of institutions of tertiary education other than Commonwealth institutions of tertiary education, that should be used as a basis for making grants in respect of recurrent expenditure in connection with those institutions; and

(ii) the dates as from which those rates of salaries should be so used."

1. Section 12D of the Remuneration Tribunals Act deals with inquiries by the Tribunal and the making of determinations and reports. Relevantly, it provides:
   
   

"12D.(1) The Tribunal shall, whenever it thinks it desirable to do so, make, at the one time, determinations and reports in relation to all institutions of tertiary education as mentioned in section 12C.

(2) Where the Tribunal inquires into the matters referred to in section 12C -

(a) the Tribunal may also inquire into, and report on, any matter that is, or is considered by it to be, significantly related to any of the first-mentioned matters;

(b) if the Minister, by a notice in writing given to the person constituting the Tribunal, requests the Tribunal to inquire into, and report on, a matter specified in the notice, being a matter that is, or is considered by the Minister to be, significantly related to any of the first-mentioned matters, the Tribunal shall inquire into, and report on, the matter specified in the notice; and

(c) the Tribunal may also inquire into and report on -

(i) the salaries that should be paid to Vice-Chancellors, Principals or other chief executive officers, and other senior officers, of Commonwealth institutions of tertiary education and the dates as from which those salaries should be paid;

(ii) the rates of salaries, in relation to Vice-Chancellors, Principals or other chief executive officers, and other senior officers, of institutions of tertiary education other than Commonwealth institutions of tertiary education, that should be used as a basis for making grants in respect of recurrent expenditure in connection with those institutions and the dates as from which those rates of salaries should be so used; and

(iii) ..."

1. Sections 12DA, 12DB and 12DC are not presently material. Section 12DD is important. It deals with the coming into operation of the Tribunal's determinations - but not reports - and the laying of determinations and reports before Parliament. The section reads:
   
   

"12DD.(1) A determination of the Tribunal shall be in writing and shall come into operation, or shall be deemed to have come into operation, on such date as the Tribunal specifies in the determination.

(2) The Tribunal shall furnish to the Minister a copy of every determination made by the Tribunal.

(3) The Minister shall cause a copy of a determination or report by the Tribunal to be laid before each House of the Parliament within 15 sitting days of that House after the report or determination is received by him.

(4) If either House of the Parliament, within 15 sitting days of that House after a copy of a determination has been laid before that House, passes a resolution disapproving of the determination, then -

(a) if the determination has not come into operation - the determination shall not come into operation; or

(b) if the determination has come into operation - the determination shall not have any force or effect in respect of a period on or after the day on which the resolution was passed.

(5) Salaries to which a determination that is in force applies shall, notwithstanding the provisions of any law of the Commonwealth or of a Territory, the provisions of any instrument having effect by virtue of such a law or the provisions of any contract, be paid in accordance with the determination."

1. Section 12E empowers the Tribunal, in the performance of its functions, to inform itself in such manner as it thinks fit, to receive written or oral statements and to proceed informally and without being bound by the rules of evidence. Section 12F deals with fees and allowances.

2. In December 1983 the first three appellants, and other organisations representing persons holding tertiary academic appointments, made application to the Tribunal for an inquiry into academic salaries. Leave to intervene was granted to the Commonwealth and to the Australian Council of Trade Unions. The Tribunal conducted a preliminary hearing at which it decided that a full inquiry should be held.

3. It is not necessary to set out all of the matters canvassed at the resultant inquiry. The applicant organizations sought an increase in academic salaries of the order of eight per cent. The Commonwealth, having failed to secure a postponement of any decision until after the decision of the Australian Conciliation and Arbitration Commission on anomaly claims by public sector unions, contended that, as adjustments had been made to academic salaries in the light of the May 1982 national wage decision, there ought to be no increase at that time. In the result, the Tribunal reached the conclusion that there ought to be an increase in salaries of five per cent. On 17 April 1984 the Tribunal furnished to the Minister four documents: a determination made under s. 12C(a) of the Act determining the salaries payable to academic staff at specified Commonwealth tertiary academic institutions as from the first pay period commencing on or after that date, a report made under s. 12C(b) of the Act making recommendations in relation to the rates of salaries of the academic staff of non-Commonwealth tertiary education institutions as from the first pay period commencing on or after that date that should be used as a basis for making recurrent expenditure grants in connection with those institutions, a report made under s. 12D(2)(c)(i) and (ii) recommending the rates of salaries that should be paid to Vice-Chancellors, Deputy Vice-Chancellors, Principals and Deputy Principals as from the first pay period commencing on or after that date and a lengthy statement of reasons which concluded with the following:
   
   

"In my opinion, academic salaries will be established on a firm and equitable base by an increase of five per cent and I determine and recommend accordingly. This decision will be effective from 17 April 1984."

1. The reasons indicated that the Tribunal envisaged that the salary levels approved would operate, subject to national wage case adjustments, until October 1985.

2. The effect of the determination in respect of Commonwealth institutions was automatically to increase salaries by five percent from 17 April 1984: see s. 12DD(1),(5). It was not necessary that the determination be first laid before Parliament although, if either House of Parliament disallowed the determination, it would not thereafter have any force or effect: see s. 12DD(4). The responsible Minister, the Special Minister of State, did not immediately lay either the determination or the reports before Parliament. Consideration was given to the determination and reports and, on 31 May 1984, the Minister wrote to the Tribunal a letter reading as follows:
   
   

"In accordance with the Remuneration Tribunals Act 1973 I request the Academic Salaries Tribunal to inquire into and report on the phasing-in of the 5% increase determined and recommended by the Academic Salaries Tribunal on 17 April 1984 to apply from that date."

1. There was enclosed with the letter a submission on behalf of the Commonwealth. That submission referred to the economic strategy being pursued by the Government, to the need for expenditure restraint in the 1984-85 Commonwealth Budget and to the adoption by the Government of the recent recommendations of the Commonwealth Tertiary Education Commission report for the 1985-87 triennium in which it was recommended that funding for tertiary education for 1985 be increased by $158 million, substantially to provide additional resources including additional staff. The submission estimated the annual cost to the Commonwealth of the five per cent increase determined and recommended by the Tribunal at $47 million and stated that "the Budget realities are such that payment of this amount in increased salaries means that there will be $47 million less available to meet the pressing needs of increased participation and improved resources in our tertiary education system." The submission went on to argue that the "first instalment" of the recommended increase - being two-fifths of the five per cent - should be implemented from 17 April 1984 and that the remainder - a "second instalment" of three fifths of the five per cent - should be implemented from 17 April 1985. The submission did not address the question of the Tribunal's power to amend its determination at that stage so as to achieve that result. It did emphasise the urgency of the matter, stating that the period of 15 sitting days within which the Minister was required to lay before Parliament the determination of 17 April 1984 would elapse on 6 June 1984. The tabling in Parliament of the reports was not mentioned but the position must have been the same in respect of those documents: see s. 12DD(3). The submission concluded:
   
   

"The Commonwealth submits therefore that it would be appreciated if the Tribunal could report on this issue before 6 June 1984.

In conclusion, the Commonwealth accepts the Tribunal's determination and recommendation that an increase in academic salaries is justified. However, in response to considerations pertaining to its economic and budgetary strategies and the important initiatives in tertiary education policy, the Government submits that in the public interest the increase of 5% be phased in."

1. Ludeke J. responded to this submission by arranging a sitting of the Tribunal - of which all the parties to the earlier inquiry were notified - on 4 June 1984. A number of those parties, including the first and third appellants herein, were represented on that day. The Tribunal heard submissions both as to its jurisdiction to accede to the request to phase in the increase and as to whether, assuming it had the necessary jurisdiction, it should do so. Counsel for the first and third appellants submitted that the inquiry initiated by the Tribunal had been completed and a determination made and that the Tribunal lacked jurisdiction to amend its decision by varying the date of implementation. Counsel acknowledged that the Tribunal could embark upon a new inquiry, the ultimate decision in which would supersede its decision of 17 April, but that "any such inquiry could not be confined to some specific matter such as phasing in". Counsel for the Commonwealth argued that s. 12D(2)(b) conferred upon the Tribunal jurisdiction to inquire into, and report upon, phasing in. This proposition is plainly untenable. That paragraph simply requires and enables the Tribunal to accede to a request by the Minister, made during the course of an inquiry under s. 12C, to inquire into and to report upon a specified matter related to the matters the subject of the inquiry. In this Court - both before Smithers J. and before us - counsel for the Commonwealth have not relied upon s. 12D(2)(b) as a source of power to report on phasing in the increases already granted on 17 April 1984.

2. Upon the following day, 5 June 1984, Ludeke J. announced the decision of the Tribunal in relation to the application. That decision identified the subject task as being "to inquire into and report on the phasing in of the 5% increase determined and recommended by the Tribunal on 17 April 1984, to apply from that date". The decision referred to the argument on jurisdiction and to the Commonwealth's reliance upon s. 12D(2)(b) of the Act but it did not expressly indicate the perceived source of the Tribunal's power to inquire into phasing in. Ludeke J. stated his conclusion in a negative form:
   
   "The staff associations have not shown that the
   

Tribunal lacks power to inquire into the matter of implementation of the salaries determined and recommended on 17 April 1984. I reject the associations' submissions going to jurisdiction."

1. Ludeke J. went on to consider the merit of the Commonwealth's submission and to say that it had "introduced a new element into the considerations I must take into account." He granted the Commonwealth's application. On that same day the Tribunal issued a formal determination - said to be made pursuant to s. 12C(a) and s. 12D(2) of the Act - in which it determined the salaries to be paid to the academic staff employed within the specified Commonwealth institutions
   
   "as hereunder:
   
   

1. The salaries ... and the differentials and loadings set out in ...the Determination dated 17 April 1984 as being operative on and from the first pay period commencing on or after 17 April 1984 shall be set aside.

2. The salaries ... set out in...the Determination dated 17 April 1984 as being operative on and from the first pay period commencing on 6 April 1984" - that is the old rate - "shall be increased by two-fifths of 5% with effect from the first pay period commencing on or after 17 April 1984.

3. The salaries as at 17 April 1985 ... shall be increased by three-fifths of 5% of the salaries set out in... the Determination dated 17 April 1984 as being operative on and from the first pay period commencing on or after 6 April 1984. These salaries shall have effect from the first pay period commencing on or after 17 April 1985."

1. Paragraphs 4 and 5 went on to deal with rates of differentials and loadings, in a manner similar to the course taken in paras 2 and 3 in respect of salaries. Paragraph 6 provided for further adjustment in accordance with future national wage case decisions.

1. The Tribunal also issued a report - said to be made pursuant to s. 12C(b) and s. 12D(2) of the Act - which contained recommendations in terms similar to the content of the determination in relation to the salaries of the academic staff of non-Commonwealth tertiary institutions and a further report - said to be made pursuant to s. 12D(2) of the Act - containing similar recommendations in relation to the salaries of Vice-Chancellors, Deputy Vice-Chancellors, Principals and Deputy Principals.

2. On 6 June 1984 there were tabled in both Houses of Parliament the determinations and reports of 17 April 1984 - described by the respective Ministers as "the Academic Salaries Tribunal 1984 review" - and the determination and reports of 5 June 1984 - described as relating to an "inquiry into the phasing-in of increases in academic salaries."

3. By an order nisi granted on 1O October 1984, proceedings were instituted pursuant to s. 39B of the Judiciary Act 1903 to challenge the validity of the determination and reports of 5 June 1984. They sought writs of prohibition and/or certiorari, together with declaratory and injunctive relief. In a judgment delivered on 12 February 1985, Smithers J. upheld the attack upon the power of the Tribunal to vary retrospectively its decision of 17 April 1984. After referring to the scheme of the legislation his Honour commented:
   
   "Thus, according to this statutory scheme,
   

subject to disallowance by one of the Houses of Parliament a determination comes into operation and has the force of law giving entitlements to salaries provided for therein as from the date specified in it as the date of its coming into operation. That is the end of the matter so far as that determination is concerned. There is no provision for appeal or reconsideration. The law is, according to the Act, that the salaries provided for in the determination shall be paid. If the date of operation of the determination precedes the date of the matter coming before Parliament, then, even if one House passes a resolution disapproving the determination, salaries payable pursuant to it prior to the date of the resolution are nevertheless payable pursuant to the determination.

Thus on 5 June 1984 the determination of 17 April 1984 had already by the force of law been in force since that date and irrevocable entitlements to salaries in accordance therewith had arisen. Those entitlements were either paid or ought to have been paid.

But of course a determination as to the salaries to be paid indefinitely as from a particular date or for a specified period from such a date does not affect the performance by the Tribunal of its function to inquire into and determine salaries to be paid from the date of a determination so made. In othe words a later determination may supersede an earlier determination. If the determination of 5 June 1984 is in the nature of a determination made in the exercise of the function of the Tribunal to inquire and determine salaries pursuant to s.12C of the Act then it superseded the determination of 17 April 1984."

1. Smithers J. proceeded to consider whether the determination of 5 June 1984 answered that description. He held that an inquiry must always precede a valid determination but said that:
   
   "the Commonwealth's request based upon the
   

specified grounds stated therein constituted, in the circumstances, a request for an inquiry as to the salaries to be paid to the relevant academic staff. The fact that the discussions may have preceeded on the basis that what was in issue was a possible review of the earlier determination did not preclude the proceedings and the Tribunal's consideration of the issues from being a sufficient inquiry to justify, if thought fit, the making of a new determination. There was, in my opinion, in the circumstances, a sufficient inquiry to support a new determination. And of course the Tribunal adopted the course of making a new determination."

1. His Honour concluded that, to the extent that the provisions of the determination of 5 June 1984 departed from those of the determination of 17 April 1984, it superceded that determination but that it could not affect salary entitlements during the period between the date upon which the earlier determination became effective (17 April 1984) and the date upon which the later, superceding determination became effective (5 June 1984). Consequently, his Honour held that the determination of 5 June 1984 was invalid insofar as it purported to affect salaries prior to 5 June 1984 but that the invalid provisions were serverable from the remainder of the determination, which validly fixed lower salary levels in respect of pay periods after that date. Taking the view that the reports of 5 June 1984 - as distinct from the determination - did not directly affect legal rights to salaries, his Honour confined the relief granted by him, in substance, to a declaration that the determination of 5 June 1984 was invalid insofar as it purported to reduce the salary entitlements of members of the academic staffs employed in the specified Commonwealth institutions.

2. The contention of the appellants is that the determination and the report relating to salaries in non-Commonwealth tertiary institutions, both of 5 June 1984, are each wholly invalid. They concede that s.12C of the Act empowers the Tribunal at any time to hold an inquiry into, and to determine and report upon, academic salaries and that it would, therefore, have been open to the Tribunal in June 1984 to hold a fresh inquiry, and to make a new determination and a new report; which determination and report would - unless disallowed in Parliament - supersede the earlier determination t. and report. However, they submit that the Tribunal did not in fact hold an inquiry under s. 12C on 4 June 1984 but rather that, in apparent reliance upon s. 12D(2)(b), it carried out an exercise for which there is no statutory warrant, namely an inquiry into the phasing-in of previously determined and recommended salary increases.

3. We are of the view that this submission is correct. As we have pointed out, the request made by the Minister was that the Tribunal conduct an inquiry into phasing-in the previously determined increase. The Tribunal so described the exercise upon which it was engaged. It was because the Tribunal conceived its inquiry to be so limited that it invited and heard argument relating to its jurisdiction to do what the Minister had asked. As was conceded at the time there was never any doubt about its jurisdiction to hold a new inquiry under s. 12C. But nobody suggested that the application upon which the Tribunal was then engaged constituted a new inquiry under s. 12C. As we have mentioned, the Commonwealth sought to justify it by reference to s. 12D(2)(b) and Ludeke J. seems to have adopted this justification.

4. The distinction we have made is of some practical significance. Ludeke J. rejected an application by the representative of one of the parties, the New South Wales Teachers Federation, to call evidence during the following week from economists challenging the wisdom of the budgetary strategy underlying the Commonwealth's submissions. It is arguable that, in any event and having regard to the fact that the Commonwealth's submission for phasing-in depended upon the proposition that the selected budgetary strategy was economically desirable, this application should have been granted. But, although Ludeke J. gave no reason for his refusal of the application, it is clear that his Honour regarded this as an inappropriate course to be taken in respect of an urgent, limited inquiry. The refusal would be indefensible in the context of a full inquiry under s. 12C.

5. In Australian Broadcasting Tribunal v. Saatchi and Saatchi Compton (Vic) Proprietary Limited (1985) 6O ALR 756 - a decision handed down after the decision of Smithers J. in this case - there was discussion regarding the circumstances under which a decision which purports to be made in reliance upon one head of statutory power may be supported by reference to a different power. Although views differed as to the ultimate result in that case, each member of the Full Court agreed that the exercise of power upon a ground different from the stated power should not be upheld where the consequences for the affected person of each exercise of power are different: see per Bowen C.J. at pp. 764-765, per Fox J. at p. 772, per Wilcox J. at p. 778. That principle is relevant to this case. In a case where the parties were, at the time, restricted in their presentation of material to the Tribunal by the understanding, fostered by the Tribunal itself, that the application was not a full inquiry under s. 12C it would be wrong to uphold the decision upon the basis that the application did constitute such an inquiry. Both the determination and report relating to salaries in non-Commonwealth institutions, of 5 June 1984, were invalid.

6. No separate attention was directed - before the Tribunal, before Smithers J. or before us - to the validity of the report of 5 June 1984 relating to the salaries of Vice-Chancellors, Deputy Vice-Chancellors, Principals and Deputy Principals. However, it is clear that the power to make an inquiry into these matters, conferred by s. 12D (3)(C)(i) and (ii), is dependent upon there being a current inquiry under s. 12C. Once it be determined that the application of 4 June 1984 was not such an inquiry, it must follow that the Tribunal lacked power to make the report of 5 June 1984 on those salaries.

7. The primary submission of the appellants should be upheld. The declaration made by Smithers J. should be amended so as to apply both to the determination and to the reports of 5 June 1984 and to provide that each is wholly invalid. The effect of such declarations is of course, that the determination and report of 17 April 1984 have continued in effect, unaffected by the decisions of 5 June 1984, in accordance with the relevant statutory provisions. In the circumstances it is not necessary for us to deal with the alternative submission of the appellants relating to the severability of that part of the determination held invalid by Smithers J. from the remainder of that decision.

8. The Commonwealth must pay the costs of the appeal.