Gribbles v Health Services Union

[2003] HCATrans 531

[2003] HCATrans 531

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M69 of 2003

B e t w e e n -

GRIBBLES RADIOLOGY PTY LTD

Applicant

and

HEALTH SERVICES UNION OF AUSTRALIA

First Respondent

MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS

Second Respondent

Office of the Registry
  Melbourne  No M74 of 2003

B e t w e e n -

MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS

Applicant

and

GRIBBLES RADIOLOGY PTY LTD

First Respondent

HEALTH SERVICES UNION OF AUSTRALIA

Second Respondent

Applications for special leave to appeal

McHUGH J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 12 DECEMBER 2003, AT 1.58 PM

Copyright in the High Court of Australia

__________________

MR J.L. BOURKE:   If the Court pleases, I appear on behalf of Gribbles Radiology.  (instructed by Clayton Utz)

MR R.R.S. TRACEY, QC:   If the Court pleases, I appear with my learned friend, MR M.P. McDONALD, for the Minister in both matters.  (instructed by Australian Government Solicitor)

MR M. BROMBERG, SC:   If the Court pleases, I appear with my learned friend, MR D.C. LANGMEAD, for the Health Services Union of Australia in both matters.  (instructed by Health Services Union of Australia)

McHUGH J:   We might start with you, Mr Bromberg.

MR BROMBERG:    If the Court pleases, there are four or five matters I want to deal with in relation to the decision below and then a couple of matters as to public importance.

Can I start with the fact that what the court below correctly did was identify the purpose of section 149(1)(d) and we say that taking account of the purpose of the provision and the ordinary meaning of the word “successor”, the Federal Court properly construed section 149(1)(d).  The purpose of the provision has been clearly identified and enunciated in particular in George Hudson and the purpose of the provision, we would respectfully say, is well settled.  It is to extend the settlement of a dispute to the ever‑changing body of persons within the area of the industrial disturbance, and I there refer to the words of Justice Starke in George Hudson at page 455 and the decisions of Justices Isaacs and Higgins were equally strong on that issue.

That purpose has been referred to and relied upon in each of the recent Federal Court decisions dealing with the provision and there are a number of Full Courts involved.  Firstly, the decision in North Western, the decision in Employment National, the decision in CFMEU v Australian Industrial Relations Commission, and the decision of Justice Mansfield in Torrens Transit.

The Full Court below correctly, in our respectful submission, concluded that the purpose of maintaining the settlement and preserving the industrial peace was satisfied in the circumstances of this case where the same activities relating to the same class of employees performing the same functions at the same location were taken over by a new employer.  Can I add to that that we are dealing here as well with the same kind of customers or clients or patients ‑ ‑ ‑

HAYNE J:   That is to say, the question becomes whether the successor provision extends to any person who enjoys any of the goodwill formerly enjoyed by an employer?

MR BROMBERG:    Your Honour, it is probably more than simply goodwill.  It is in part goodwill but it is also an employer who takes over that bundle of commercial activities - in this case we are dealing with people ‑ ‑ ‑

HAYNE J:   In the place, doing the job, connected with the health clinic, et cetera, the goodwill is what seems to have gone across.  Do the successor provisions engage?  Is that not an important question?

MR BROMBERG:    It is a well-settled question, in our respectful submission, because a broad view of the expression “successor, transmittee or assignee” has been accepted, your Honour, I think by at least four Full Courts of the Federal Court.  What seems to be between us, your Honour, is whether one can have a succession without a disposition.  That seems to be the issue and, in our respectful submission, it is not an issue in which it can be said that the court came to the wrong conclusion and it is not an issue that ought to entertain the Court.

HAYNE J:   It would mean, would it not, that there would be succession if a retailer operating at premises ceased operating on expiration of the lease, simply went out of business, and a new retailer set up under a new lease in the same premises doing pretty much the same sort of retail outlet?  That would amount to succession, would it not?

MR BROMBERG:    No, your Honour, not necessarily.

HAYNE J:   What is different from this?

MR BROMBERG:    What we say is important, your Honour, is one needs to be able to demonstrate a connection through the previous employer back to the commercial activities in which the industrial dispute was founded.  To take your Honour’s example, if the retailer is entirely different, if we are dealing with shoes rather than sporting goods ‑ ‑ ‑

HAYNE J:   No, same sort of business.  Retailer 1 goes out of business because it does not have any more lease, will not pay the increased rent, a common enough business event.  Landlord says, “Right, I’ve got a new tenant, new retailer, it will carry on the same business of shoe shop”, whatever it is.

MR BROMBERG:    Then, your Honour, one needs to look at whether there is any temporal interruption.

HAYNE J:   None, 30 June, 1 July, click, over it goes.

MR BROMBERG:    That is another element, your Honour, to show a continuance sufficient to indicate a nexus.  Here you had a situation where, on the very next day, Gribbles takes up doing exactly the same things with nine of the same employees, many of them working the same shifts.  Your Honour, what we had here was a situation where one licensee no longer continues their licence to operate a particular business at particular premises and that licence is taken over by a successor.  There is no interruption in the activities, not temporal, the activities are the same, their character is the same and, in our respectful submission, when you look to the purpose of the provision, what could be more inclined to re‑instigate the industrial disturbance if, despite the fact that nothing changes, all of a sudden the employees doing exactly the same things in exactly the same environment lose the protection of the terms and conditions put in place by the settlement of the industrial dispute.

Your Honour, one can think of a number of examples.  For instance, one can think of the McDonald’s example, it is probably a good one because here you have a franchise operation where an individual is licensed to operate a business in a prescribed manner where everything from the taste of the hamburgers to what appears on the front of the windows is regulated by McDonald’s, the owner.  If there is an award resolving the industrial disturbance at that particular place, why would that industrial settlement be unravelled simply because a new licensee is put in place to perform exactly the same functions and carry out exactly the same things as the prior licensee?

That is not a construction, in our respectful submission, which would encourage and maintain industrial peace.  Looking to the purpose of the provision, we say that the crucial question is whether a business of the same kind and character is now in the hands of the new employer.  The proper focus, in our respectful submission, is upon substance, not form.  What our learned friends say in essence is that one need not look at what is in the hands of the new employer and it does not matter that what is in the hands of the new employer is exactly the same in terms of activities and exactly the same in terms of character.  One need only focus upon the means by which the new employer came to obtain those new activities.

We, in our respectful submission, seek to focus on substance, as the Full Court below did.  Our learned friends seek to ignore the industrial reality of there being no change and essentially hang their argument on the mechanism by which the new activities came into the hands of the new employer.

The word “successor” I said earlier was an expression in relation to which a number of courts have said that it ought not be construed narrowly.  Can I refer your Honours to North Western, Employment National, CFMEU v The Australian Industrial Relations Commission, and also the Full Court below.  One can go to ATOF in this Court, and your Honours might recall in ATOF, a copy of which we have included in our supplementary folder, the Court there concluded, and I am reading from page 230 point 2, that “According to the natural reading of the language” that a department that was now carrying on the activities of a former department was a successor of that former department.

Your Honours, our point there is that in ATOF the Court did not take any narrow view of the word “successor”.  It was sufficient in that case for the Court to have found a department to have succeeded another simply because the department had taken over the activities of that other.

HAYNE J:   It is said against you that there are different considerations in looking at succession of governmental activities from those that apply here.

MR BROMBERG:    It is said against us, your Honour, but there is no basis given as to why that ought be so.  One cannot readily identify from my learned friends’ submissions as to why the word “successor” ought to be read differently in a governmental environment than a private sector environment.

HAYNE J:   The critical expression is “successor of the business or part of the business”, is it not?

MR BROMBERG:    Yes, it is, your Honour, and one can understand ‑ ‑ ‑

HAYNE J:   And of what part of the business formerly conducted by MDIG was Gribbles the successor?

MR BROMBERG:    The part where radiography services were provided to patients.  What happened, your Honour, was that at the Moorabbin premises of Heritage ‑ ‑ ‑

HAYNE J:   I know what happened, but what do you say is the part of business to which Gribbles succeeded or of which it was successor?

MR BROMBERG:    The radiography functions that were conducted at the Moorabbin premises of the Heritage Clinic, your Honour.  I will come to the issue of part of business in a moment; that is one of the matters I want to address.  Just staying with the word “successor”, your Honours, one can understand what this Court, with respect, had to say about the fact that when one interprets the word “business” you need to bear in mind whether the context is governmental or non‑governmental.  This Court in PP Consultants made it clear that in a private sector environment when interpreting the word “business”, it was important not only to look at the activities but also to look at the character of the part or the business in question.

That, in our respectful submission, has no application to the notion of successorship.  Indeed, when one goes to PP Consultants, the Court can see at paragraphs 14, 15 and 18 that this Court used the word “succeed” synonymously and interchangeably with the expression “taken over”.  It was not used in a technical sense and the focus in PP Consultants was on substance.  It was a focus upon the activities and the character of the two competing businesses or parts, not on some need for a mechanism from which one business is transferred to another.  In our respectful submission, both decisions point to the word “successor” being utilised by reference to its ordinary meaning of a person or entity who succeeds, or follows, or replaces another in relation to the relevant activities or functions in question.

Justice Isaacs in George Hudson, in a reference made to Yzquierdo’s Case, a House of Lords decision, also used the term “successor” with that meaning.  We might add too that the provision in question utilises the phrase “acquired or taken over” and it does it in an inclusive way, where it says:

any successor, assignee or transmittee . . . to or of the business or part of the business of an employer who was a party to the industrial dispute, including a corporation that has acquired or taken over the business or part of the business of the employer –

The use of the phrase “acquired or taken over” - these are not technical terms - supports our proposition that a broad approach need be applied to the phrase in question.  “Acquired” simply means “come into possession of”.

It may be thought that “acquired” required some commercial acquisition but when one looks at the dictionary definition, that is what “acquired” means.  It means “come into possession of”.  We have given the Court these Shorter Oxford definitions and “take over” is defined as “take by transfer of or in succession to another”, so that one has the notion of there being a transfer or a succession in relation to a takeover.

To take over a business is not an act, in our respectful submission, which necessarily requires a transaction between a predecessor and successor.  That is not an essential element.  Even taking a technical approach to the word “succession”, for instance, by reference to a will or intestacy, that occurs absent any transaction between the predecessor and successor.  So in relation to a successor of a title, office or position, that occurs absent any transaction between a successor and his or her predecessor.

We also refer to the term “transmission” and we note that Justice Starke in Wolfson v Registrar‑General, a case we have put in our folder, said that “Transmission in its strictest sense” occurs absent “any direct act of the party to whom the property is transmitted”.  That is at page 311 of that decision.

HAYNE J:   It seems to me, Mr Bromberg, that, yes, you can find lots of judicial and other statements about the meaning of the words “acquired”,

“transmit”, “succeed”, et cetera.  The critical question is what is the part of MDIG’s business that is involved?  MDIG has given up nothing to Gribbles.  What bit of MDIG’s business did Gribbles succeed to?

MR BROMBERG:    Your Honour, if one necessarily associates ownership to the bundle of activities in question, then there is never anything given over to any purchaser even, other than activities disassociated with the previous ownership.  It is not right to say that where this clause refers to business it is referring to business in the sense of those activities being owned by a particular employer.  It is referring to the activities touching employment which were the subject of the industrial dispute.  If those activities move to another entity who comes into the area of the industrial disturbance, be they employer or be they employee, then the purpose of the section is to maintain the settlement.

The part, your Honours, of the business was the radiography functions performed at the Heritage Clinic by MDIG pursuant to a licence granted by the Heritage Clinic for MDIG to perform those functions and operate that part of their business from those premises.  What we say, your Honours, is that here what you have is another licensee coming along to perform exactly the same licence under exactly the same conditions, and we are dealing with the same industrial dispute.

McHUGH J:   Your time is up, Mr Bromberg.

MR BROMBERG:    Can I just conclude, your Honour, by making one further point if I may.

McHUGH J:   Yes.

MR BROMBERG:    Our focus is upon what we say is the touchstone of the provision.  The touchstone, in our respectful submission, is the nexus back to the industrial dispute and to the area of disturbance that the industrial dispute settled.  We say, with respect, that the Full Court was right to find that the nexus here was sufficient, irrespective of the fact that there was no direct transaction.  If the Court pleases.

McHUGH J:   Yes, thank you.  We need not hear you, Mr Tracey or Mr Bourke.

There will be a grant of leave in both these matters.

AT 2.20 PM THE MATTERS WERE CONCLUDED