Mrs Terri Collins v Lower Great Southern Family Support Association T/A Lower Great Southern Family Support Association (LGSFSA)
[2014] FWC 3383
•26 MAY 2014
[2014] FWC 3383 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mrs Terri Collins
v
Lower Great Southern Family Support Association T/A Lower Great Southern Family Support Association (LGSFSA)
(U2013/15566)
COMMISSIONER WILLIAMS | PERTH, 26 MAY 2014 |
Termination of employment - jurisdiction.
[1] This decision concerns an application for an unfair dismissal remedy made by Mrs Terri Collins (Mrs Collins) under section 394 of the Fair Work Act 2009 (the Act). The respondent is the Lower Great Southern Family Support Association (Inc) (the Lower Great Southern Association or the Respondent).
[2] The Lower Great Southern Association objects to the application on the grounds that it is not a constitutional corporation to which paragraph 51(xx) of the Constitution applies and so is not a national system employer as defined in section 14 of the Act. If that is correct the Fair Work Commission (the Commission) has no jurisdiction to hear this application.
[3] The parties have provided witness statements and submissions on the Lower Great Southern Association’s objection.
The evidence
Funding
[4] Ms Robyn France, the Chief Executive Officer of the Lower Great Southern Association, has provided a statement and explains that the Respondent is an incorporated association and is registered as a public benevolent institution for taxation purposes.
[5] As the Chief Executive Officer of the Lower Great Southern Association Ms France is responsible to the Board which is overseen by a Chairperson.
[6] The main objectives of the association revolve around assisting individuals with disability or impairment.
[7] The Lower Great Southern Association offers services and programs in the disability service sector. In particular, many of the services offered seek to assist clients by encouraging their greater community involvement and independence.
[8] For the purposes of providing these services, the Lower Great Southern Association relies heavily on funding income (some 99.5% of its entire income) from the Government of Western Australia. This funding income is dispensed through the Disability Services Commission (the DSC).
[9] For the financial year ending 30 June 2012, the income received by the Lower Great Southern Association from the DSC amounted to $2,363,396.
[10] For the financial year ending 30 June 2013, the income received by the Lower Great Southern Association from the DSC amounted to $2,563,025.
[11] The terms and conditions of the funding arrangement between the DSC and the Lower Great Southern Association are contained in a funding agreement.
[12] The funding agreement named The Disability Services Commission and Lower Great Southern Family Support Association (Inc) Service Agreement (2010 to 2015) (the Service Agreement) contains the basis upon which the funding is provided for the delivery of various services and programs.
Services and Programs
[13] Specifically this Service Agreement provides funding for four main programs as follows:
Accommodation Support Service
The objective of this program is to provide personal care, support and/or supervision aimed at enabling people with disabilities to carry out essential activities of daily living. Delivery of this program may vary in duration from a few hours per day to 24 hour support depending on individual need and taking into account out of home day options available to the client.
Alternatives to Employment
The objective of this program is to ensure people with disabilities who have high support needs and require an alternative to paid employment are able to access a range of opportunities to paid employment and are able to access a range of opportunities and activities within their community. Flexible daytime support hours are available through this program.
Intensive Family Support
The objective of this program is to provide support that involves the individual and their significant others in determining, planning and designing support suited to their particular needs, and enable the person with disability to participate in community life in ways that are valued by them, their family/significant others, and the community.
Community Living Plan
The objective of this program is to enhance the client's access/participation within their community. It is comprised of flexible support aimed at teaching/rnodelling life skills to clients which will enable them to live independently and provide support to facilitate their creation of natural support networks.
[14] The Service Agreement which was entered into in 2010 for a five year term followed a process where the Lower Great Southern Association applied to the DSC to be a "preferred service provider." It was granted this status and following this, the Service Agreement was put into place.
[15] In terms of an individual receiving funding from the DSC, the following process is generally adopted:
“(a) an application for funding is submitted to the DSC by the individual concerned;
(b) the DSC makes an assessment of the individuals specific needs and requirements;
(c) if the application is successful, the individual can access the Respondent’s services and programs (provided it has the capacity);
(d) the DSC determines the allocation of funding to be made to the individual concerned;
(e) the schedule of clients in the Service Agreement is updated to include reference to the person accessing the services; and
(f) payment of the funding monies for the individual are then made directly by the DSC to the Lower Great Southern Association.”
Control exerted by the DSC over the Service Agreement and how funding is used
[16] The DSC has considerable control over how the provisions of the Service Agreement are enacted and how the funding monies are actually used. In that respect, the following information is relevant:
“(a) theoretically, the funding allocated for a particular individual or program can only be used for that purpose;
(b) the DSC has complete control over how much funding is allocated to a particular person. The Lower Great Southern Association can (on behalf of a service user) apply to the DSC for an increase in funding allocated. However, there is no guarantee that the amount of funding will be increased;
(c) if at the end of the financial year, all of the funding allocated is not expended, the DSC can request that the monies be returned to it; and
(d) the Lower Great Southern Association does not render invoices for the services provided. Rather, as stated above, the DSC sends the association funding in quarterly increments as follows:
- 30% payment in July;
- 25% payment in October;
- 25% payment in January; and
- 20% payment in April.”
[17] In this manner, funding is often received in advance of the services being provided to the individual concerned.
[18] The Lower Great Southern Association does not provide any services to clients that necessitate their payment of a fee to the organisation on top of the funding provided by the DSC.
[19] All families that wish to vote at the Annual General Meeting of the Respondent pay a nominal annual membership fee to the organisation of $5.00.
[20] In her statement Mrs Collins relevantly says that the Lower Great Southern Association’s financial reports show sizeable surpluses with which the Senior Management team were contemplating purchasing new premises and respite facilities that would become a basis for a secondary income stream. With the arrival of the New Business Manager Ms Carolyn Condor in January 2013 her role was to look into all areas of business trying to source other possible revenue for the Lower Great Southern Association.
[21] The Lower Great Southern Association has also changed its name to Ilink formerly LGSFSA as part of the strategic plan and steps to make more revenue for the organisation.
[22] A property was purchased in September 2013 at 7 Neptune Rise, McKail, Albany WA 6330 listed as selling for $410,000.00. The property is used for client respite for which the Lower Great Southern Association charges a fee. A client also resides at the property and pays rent to the Respondent. With the interest generated on an annual basis this is new revenue that will generate another income stream for the Respondent. Coupled with existing revenue Mrs Collins believes in this 12 month period this will constitute more than 5% of overall income.
[23] The Lower Great Southern Association owns a Hyundai Getz and Ford Transit which the organisation hires out to clients for day trips and respite for a fee.
[24] The Lower Great Southern Association holds community groups which include art and music and they require the clients to pay a fee to attend.
Submissions
[25] The Respondent submits that the Lower Great Southern Association is an incorporated association pursuant to the Associations Incorporation Act (1987) (WA) and is a public benevolent institution for taxation purposes with gift recipient status. The Lower Great Southern Association has a registered taxation exemption for income tax, goods and services tax (GST) and fringe benefits tax purposes.
[26] The Lower Great Southern Association is engaged in the disability services sector. The organisation is constituted by a board comprising nominated and elected board members who are presided over by a Chairperson. At the operational level, the Lower Great Southern Association’s programs are managed by a Chief Executive Officer and Senior Management team.
The Constitution of the Respondent
[27] The Constitution of the Respondent sets out the various objectives of the Respondent in attaining its purposes of service delivery in the disability services sector.
[28] The objectives contained are plain on their face. On that basis, it is evident on a reasonable construction of the terms of the Constitution that the primary purpose for the establishment and operation of the Respondent’s organisation is as follows:
(a) to initiate, implement and operate community service programs which are able to be utilised by individuals with varying levels of disability or impairment in society; and
(b) to promote, encourage and foster greater community inclusion of individuals with disability by virtue of their participation in services and by benefiting from directly receiving funding themselves. Accordingly, the individual suffering from the disability is equipped with the facilities to gain greater independence in living in the community.
[29] Despite not being an entirely determinative factor, it is also important to note that the other objectives identified in the Constitution of the Respondent centre entirely upon social welfare ends being achieved and not, for example, in the alternative, for the purposes of increasing income through traditional commercial means. For example, the provision of goods and services for a fee.
[30] The Constitution of the Respondentin clause four (4) “Objects” details the primary objectives of the Respondent’s operations, the very purpose for which it exists and functions. Those goals of attainment are as follows:
“The objects for which the Association is established are:
(a) to enable people with developmental disabilities to remain within their families without compromising the quality of family life;
(b) to build individual, family and community self sufficiency;
(c) to give families control over the range, frequency and timing of services/supports arranged through the association;
(d) to assist families to develop services/supports tailored to their needs and circumstances;
(e) to secure such services and supports as are necessary to carry out any of the objects of the association;
(f) to offer advice to government and non government bodies and to promote family support for persons with developmental disabilities and the rights of people with developmental disabilities to remain within their families and communities;
(g) to monitor current policies and procedures in family support;
(h) to promote access to existing community services for people with disabilities;
(i) to invest and deal with the money of the association immediately required in such manner as the Board thinks fit and may be permitted by law for the investment of funds;
(j) to make arrangements and enter into contracts to provide and supply services or work on goods, equipment, appliances and other things which the association may deem necessary or desirable for the purpose of carrying out its objects; and
(k) to solely apply the income and property of the association whence so ever derived, toward the promotion of the objects of the association.”
[31] It is the Lower Great Southern Association’s submission that in facilitating the enactment of those aforementioned objectives under the Constitution, it relies heavily on State Government funding through the DSC.
[32] Some of the programmes which are run by the Lower Great Southern Association include the following:
(a) accommodation support service;
(b) alternatives to employment;
(c) community support program; and
(d) community living plan.
[33] The great majority, in fact over 95% of total income received by the Lower Great Southern Association (in the last two financial years) is derived through the DSC.
[34] The terms and conditions pertaining to the provision of funding from the DSC are reduced to writing and contained in theService Agreement.
[35] The Service Agreement with the DSC was struck on or about 15 June 2010(for a five year term)and essentially contains the terms and conditions upon which the DSC will provide the Lower Great Southern Association funding to facilitate its various programmes.
The terms and conditions pertaining of the Service Agreement
[36] In respect of funding amounts that appear in the Lower Great Southern Association’s Annual Reports (for the financial years ending 30 June 2012 and 30 June 2013 respectively) Profit and Loss Statement (Income) under the heading “Disability Services Commission,” the following information is relevant:
“For the financial year ending 30 June 2012, income received by the Respondent from the DSC was in the amount of $2,363,396 (see Profit and Loss Statement under heading “income”);
For the financial year ending 30 June 2013, income received by the Respondent from the DSC was in the amount of $2,563,025 (see Profit and Loss Statement under heading “income”);
It is clear on a construction of the Profit and Loss Statements annexed to the Respondent’s financial reports for the last two financial years, that the bulk of the income received by the association is through the DSC.”
[37] Accordingly, in the Lower Great Southern Association’s submission, classifying other nominal income (most notably categorised as interest, donations, and sundry income) as a trading or non-trading activity would be immaterial and have no bearing on whether the Commission determined that the Lower Great Southern Association was or was not a national system employer, for the purposes of the Act. This is simply because the proportion of income received from the DSC is so high comparatively speaking.
[38] Accordingly, it is the Lower Great Southern Association’s case that the question to be determined by the Commission is whether in fact the agreement for funding struck between the Lower Great Southern Association and the DSC is “commercial in nature” and thus may be categorised as a trading activity, deeming the Lower Great Southern Association a constitutional corporation.
The Constraints Imposed on the Respondent by the Service Agreement
[39] The Service Agreement is executed by the parties once on average every three (3) to five (5) years. The document contains schedules (specifying the services provided) and the names of individuals who benefit from the service and the amount of funding allocated to each of those individuals specifically based on the hours estimated to be utilised by the service user benefiting from the relevant program.
[40] The Lower Great Southern Association applies to the DSC for a variation of the schedules as individuals cease using a service or, in the alternative, as they commence using a service.
[41] The funding allocated by the DSC for a particular program can only theoretically be used for the services intended.
[42] If it is the case that at the end of the financial year any surplus is remaining by way of the provision of services (through the use of DSC funding), the DSC can request those monies be returned to it, or it may in some circumstances, grant the Lower Great Southern Association permission to retain the funds for use in future programmes, as directed entirely by it.
[43] Additionally, the Lower Great Southern Association does not have any influence over the DSC in respect of how the department quantifies the funding allocated to each service user or the amount of funding received in total for each financial year. In that manner, the Lower Great Southern Association had limited, if no, scope to negotiate with the DSC as concerns the funding allocated because the level of funding is contingent entirely upon the individual’s level of disability and their capacity for self-care.
[44] To that end, the following processes adopted are relevant:
(a) an application for funding may be submitted by the individual to the DSC for assessment;
(b) the application is put before a panel (comprising DSC personnel) who determine whether the Applicant has an “eligible” need (for example, the Applicant has aging parents or no natural support networks;
(c) if the Applicant is unsuccessful, the application may be re-submitted in the next funding round;
(d) if the Respondent is chosen to provide the requisite services, an Estimate Requirement Staffing Support Instrument (“ERSSI”) is compiled which effectively seeks to clarify and determine the individuals specific needs in terms of annual hours of support and forms the basis for the funding allocation. In this manner, the output hours of support per annum is multiplied by the scheduled hourly rate to determine the annual funding available for that person;
(e) at this time, the Respondent is also liaising with the DSC regarding the allocated amount of funding for the individual;
(f) a funding plan is thereafter submitted to the DSC after being executed by the Respondent and the Applicant and/or their family. An application is then made to the DSC to amend the schedule to the abovementioned Service Agreement to include the individual’s name and the amount of funding allocated to them. The amendment to the schedule is formalised through a ‘variation to Service Agreement’ executed by the DSC and the Respondent;
(g) the Applicant can choose to cease using the Respondent’s services and access another provider at any time. If this occurs, another suitable candidate is found to replace the individual and the necessary amendments are made to the schedules of the Service Agreement via a ‘variation to Service Agreement;’ and
(h) the Respondent does not receive payment from individuals directly, rather, from the DSC on behalf of individuals concerned.
[45] The Lower Great Southern Association can, on behalf of the service user make an application for review of funding received from the DSC by the individual concerned. However, this is generally speaking an arduous process, with no guarantee of increase and involves various third party stakeholders.
[46] In most cases, where the DSC cannot accommodate an increase in the funding received, the gap in the amount of monies required by the service user may be filled by the Lower Great Southern Association or in the alternative, by the individual’s family and friends.
Constraints on the terms of the Service Agreement impacting on the ‘commerciality’ of the Agreement for Funding
[47] It is the Lower Great Southern Association’s submission that the Service Agreement (and the scope of the Lower Great Southern Association to act freely within its terms) is heavily regulated and monitored by the DSC.
[48] The Lower Great Southern Association (prior to the 2010 executing of the Service Agreement) submitted a tender to the DSC for funding but in reality, has little or no bargaining power when it comes to a determination being made as to the level of funding received. In the main, this quantifying of the amount of funding received is entirely contingent and reliant upon the needs and personal circumstances of the Lower Great Southern Association’s service users.
[49] Further, the Lower Great Southern Association does not issue the DSC with invoices once the services have been rendered. In the alternative, the funding from the DSC for all programmes is received in a lump sum payment by the Lower Great Southern Association on a quarterly basis. That is a 30% payment in July, a 25% payment in October, a 25% payment in January and a 20% payment in April.
The Law
[50] A “constitutional corporation” is defined by Division 2 of the Act as “a corporation to which paragraph 51(xx) of the Constitution applies.” Essentially, this means one or more of the following:
“(a) a foreign corporation within the meaning of paragraph 51 (xx) of the Constitution; or
(b) a body corporate that is, for the purposes of paragraph 51 (xx) of the Constitution, a financial corporation formed within the limits of the Commonwealth; or
(c) a body corporate that is, for the purposes of paragraph 51 (xx) of the Constitution, a trading corporation formed within the limits of the Commonwealth; or
(d) a body corporate that is incorporated in a Territory; or
(e) a Commonwealth authority.”
[emphasis added]
[51] Division 2 of the Act refers directly to paragraph 51 (xx) of the Commonwealth Constitution, which stipulates, inter alia:
“foreign corporations and trading or financial corporations formed within the limits of the Commonwealth.”
[52] It is clear that the Lower Great Southern Association is not a “constitutional corporation” as defined in paragraphs 4 (a), (b), (d) and (e) above. Therefore, to be considered a “constitutional corporation” under the Act, The Lower Great Southern Association would need to satisfy the definition in paragraph 4(c) above.
[53] As the Lower Great Southern Association has been incorporated under the provisions of the Associations Act, it would be considered to have been formed within the Commonwealth.
“Trading Corporation”
[54] The question of what is a “trading corporation”has been dealt with by the Courts and Industrial Commissions on a number of occasions over a great period of time. In essence, the intention, primary functions or objectives have become less important over time, and the Court or Commission will determine whether “trading is a substantial and not merely peripheral activity.” 1
[55] A corporation’s activities, rather than the purpose of incorporation, would be taken into account when ascertaining whether a corporation was a trading corporation, and the trading must be substantial or not a peripheral activity.
[56] In considering whether a corporation's trading activities are “significant” or “peripheral” it is irrelevant that those activities do not constitute “the predominant part” of its overall activities. 2
[57] In deciding what is “substantial” or “not insubstantial”, the Courts and Commissions have relied on both proportions of overall activities, as well as the actual amounts received, in determining whether a body corporate is a trading corporation.
[58] Each case has depended on its own particular facts. And to that end, Chief Justice Gibbs in the decision of Fencott v Muller 3made comment to the effect that in deciding such a question, all of the evidence relating to the operations of the corporation must be examined in totality.
[59] The Courts have interpreted “trading” broadly to mean to produce rewards for goods or services. “(I)t is the acts of buying and selling that are at the very heart of trade.” 4
[60] In 2008, the Western Australian Industrial Appeal Court rejected an appeal (from a full bench decision of the Western Australian Industrial Relations Commission) by the Aboriginal Legal Service (the ALS), which contended it was a trading corporation on the basis it tendered for government grants received and provided legal services for a fee 5.
[61] President Steytler (at paragraph 68 of the reasons for decision), provided the following principles, based on existing case law authority, in deciding whether an entity could properly be described as trading:
“(a) A corporation may be a trading corporation even though trading is not the predominant activity.
(b) However, trading must be a substantial and not merely a peripheral activity.
(c) In this context, ‘trading’ is not given a narrow construction. It extends beyond buying and selling to business activities carried on with a view to earning revenue and includes trade in services.
(d) The making of a profit is not an essential prerequisite to trade, but it is a usual concomitant.
(e) The ends which a corporation seeks to serve by trading are irrelevant to its description.
(f) Whether the trading activities of an incorporated body are sufficient to justify its categorisations as a ‘trading corporation’ is a question of fact and degree.
(g) The current activities of the corporation, while an important criterion for determining its characterisation, are not the only criterion. Regard must also be had to the intended purpose of the corporation, although a corporation which carries on trading activities can be found to be a trading corporation even though it was not originally established to trade.
(h) The commercial nature of an activity is an element in deciding whether the activity is in trade or trading.”
[62] Ultimately, the Appeal Court found that ALS was not a trading corporation for a number of reasons.
[63] These included the fact ALS was established to “perform what is best described as public welfare services” (at paragraph 70), there was no suggestion that ALS undertook any other duties (at paragraph 71), the funding received by the ALS was to “ensure that indigenous Australians have access to high quality and culturally appropriate legal aid services so as to enable them fully to exercise their legal rights as Australian citizens” (at paragraph 72) and a very small percentage of the ALS’ clients were charged for the services provided.
[64] In the Federal Court of Australia decision of Bankstown Handicapped Children’s Centre v Hillman 6 (Bankstown), it was held the organisation provided ‘services to the state’ (see paragraph 54 of the reasons for decision), by using government funding received through the New South Wales Department of Community Services (DOCS) to establish and operate a number of community based programmes geared toward assisting disabled individuals.
[65] In this manner, (notwithstanding a consideration of the purpose test as outlined above), the Court determined the negotiation for, and execution of, the service agreement between the organisation and DOCS was commercial in nature and therefore, the provision of grants received through DOCS could be classified as a ‘trading activity.’
[66] In coming to making the abovementioned determination, Justices Moore, Mansfield and Perram considered, inter alia, the following:
- the level of control DOCS was able to exert over the manner in which the funding was used;
- the fact the organisation provided DOCS with invoices for the services provided;
- whether unused funding is required (pursuant to the service agreement) to be returned to DOCS; and
- the fact the organisation offered it services to DOCS at prices it dictated.”
“ whether the organisation engaged in competitive tender for the provision of government grants;
[67] The Lower Great Southern Association submits that its greatest source of revenue is through the provision of State funding through the DSC. Further, the Respondent’s position is that, for the reasons stated above, the basis upon which that agreement was arranged and operates in practice, is not commercial in nature. In that manner, the business activities of the Respondent can be distinguished from the employers in Bankstown.
[68] In the Respondent’s submission, the manner in which it has come into receipt of funding from the DSC, cannot be categorised as a trading activity. Primarily, the Constitution of the Respondent makes it clear that its primary purpose is not directed at trading functions.
[69] Secondly, in line with the comments of Senior Deputy President O’Callaghan in the decision of Carolyn Pellow v Umoona Community Council Incorporated 7, there exists a limited capacity for the Respondent to generate significant income through the operation of the services it provides, primarily because if fees are in fact charged, they may be characterised as nominal at best.
[70] In particular, His Honour made the following observations:
“Trading involves buying and selling, or exchanging, of commodities, either by wholesale or by retail (citing the Macquarie Dictionary).
On this basis I have excluded federal and state sourced grant funding where this is directed towards social or civic services which do not involve a charge to the recipients for the provision of that service. It appears to me that such activities are not able to be regarded as trading for these purposes.
There is no capacity through the operation of those activities for the Council to generate any form of income and its functions simply involve the delivery of community services in accordance with a grant of money for a particular purpose.”
[71] Similarly, as aforementioned, the provision of State Government funding through the DSC to the Lower Great Southern Association is completely regulated by it, in terms of the purpose the funding must serve. For the majority of programmes, no fee is charged and little if no surplus is generated.
[72] Accordingly, the objectives of the Lower Great Southern Association, the very purpose for which the organisation exists is to provide assistance and guidance to individuals with disabilities. It is not to engage in commercial activities predominately. In the Respondent’s submission, even though the “purpose test” has become less of a consideration in recent authorities, the ALS decision is authority for the proposition that the purpose for which an organisation exists is still considered by the Courts and in the Respondent’s submission, the ALS authority is still good law in Western Australia.
[73] That being said, the percentage of the Lower Great Southern Association’s operations which can be classified as pure trade are insubstantial and in reality, peripheral to its main non-trading functions.
[74] Further, the Lower Great Southern Association’s agreement with the DSC for the provision of funding from the DSC contrasts to the facts in the Bankstown authority on the following bases:
“(a) in 2010, the Respondent engaged in a limited process of competitive tender;
(b) the DSC exercises complete control over the manner in which the terms of the Service Agreement are effected. For example, in regards to the allocation of funding and financial reporting;
(c) the Respondent does not render to the DSC invoices for the services provided and indeed the funding is received in advance of the services being provided; and
(d) the DSC can request that any unspent monies are returned to it.”
[75] The Lower Great Southern Association is accordingly not a constitutional corporation as per the definition of section 12 of the Actand thus not a “national system employer” within the definition of section 14 of the legislation.
[76] So therefore, Mrs Collins’ application alleging her termination of employment was unfair pursuant to section 394 of the Act, must be dismissed.
Consideration
The question to be determined
[77] This application is made under section 394 of the Act which is contained in Part 3-2—Unfair dismissal.
[78] Sections 379 and 380 of this prescribe that this Part of the legislation applies to national system employees and national system employers. These sections are set out below:
“379 Guide to this Part
This Part is about the unfair dismissal of national system employees, and the granting of remedies for unfair dismissal.
Division 2 sets out when a person is protected from unfair dismissal.
Division 3 sets out the elements that make up an unfair dismissal.
Division 4 sets out the remedies the FWC can grant for unfair dismissal.
Division 5 is about the procedural aspects of getting remedies for unfair dismissal.
380 Meanings of employee and employer
In this Part, employee means a national system employee, and employer means a national system employer.
Note: See also Division 2 of Part 6-4A (TCF contract outworkers taken to be employees in certain circumstances).”
[79] Section 14(1) defines what a national system employer is as follows;
“14 Meaning of national system employer
(1) A national system employer is:
(a) a constitutional corporation, so far as it employs, or usually employs, an individual; or
(b) the Commonwealth, so far as it employs, or usually employs, an individual; or
(c) a Commonwealth authority, so far as it employs, or usually employs, an individual; or
(d) a person so far as the person, in connection with constitutional trade or commerce, employs, or usually employs, an individual as:
(i) a flight crew officer; or
(ii) a maritime employee; or
(iii) a waterside worker; or
(e) a body corporate incorporated in a Territory, so far as the body employs, or usually employs, an individual; or
(f) a person who carries on an activity (whether of a commercial, governmental or other nature) in a Territory in Australia, so far as the person employs, or usually employs, an individual in connection with the activity carried on in the Territory.”
[80] Considering this definition of national system employer I accept that the question to be determined in this application is whether or not the Lower Great Southern Association is a constitutional corporation as mentioned in section 14(1)(a).
[81] Section 12 of the Act includes the definition of constitutional corporation as follows;
“constitutional corporation means a corporation to which paragraph 51(xx) of the Constitution applies.”
[82] Paragraph 51(xx) of the Constitution reads as follows:
“51. The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: -
….
(xx.) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.”
[83] Considering this definition of constitutional corporation from the Constitution I accept it is not suggested that the Lower Great Southern Association is a foreign corporation or financial Corporation. Consequently what is left to be determined is whether or not the Lower Great Southern Association is a trading Corporation.
Decision
[84] The evidence in this matter is largely not in dispute. I accept the statements of both Ms France and Mrs Collins. I note Mrs Collins has not challenged the submissions of the Lower Great Southern Association as to how the Service Agreement originated and how it operates and the involvement of the DSC in its day to day application.
[85] On the evidence it is clear that the vast majority of funding for the Lower Great Southern Association comes from the DSC. There is a very small percentage of other income generated from fees, rent and other sundry sources which I accept is approximately 5% of the Lower Great Southern Association’s total income per annum.
[86] To the extent that it could be said that the Lower Great Southern Association provides services for reward as Mrs Collins explained the evidence does not support a finding that the Respondent is involved in commercial activity with a view to earning revenue or that anything that could be viewed as a commercial activity is other than a peripheral activity generating minor sundry income.
[87] My conclusion is that the purpose of the Lower Great Southern Association is not to trade, but rather to provide guidance, assistance and services to individuals with disabilities. The Respondent's activities reflect this purpose. I accept the submission and evidence is that the Lower Great Southern Association has limited control over the purpose for which the funding it receives is used and that this is largely directed and decided by the DSC.
[88] My conclusion is that the Lower Great Southern Association is not a trading corporation. Consequently I find that the Lower Great Southern Association is not a national system employer within the meaning of section 14 of the Act. Accordingly there is no jurisdiction for the Commission to consider this application and an order dismissing this application will now be issued.
COMMISSIONER
Final written submissions:
Applicant, 26 March 2014
Respondent, 2 April 2014
1 The Queen v Judges of the Federal Court of Australia: Ex parte WA National Football League (1979) 143 CLR 190
2 The Commonwealth v Tasmania (The Tasmanian Dam Case)(1983) 158 CLR 1 at 240
3 [1983] 152 CLR 570
4 R v Trade Practices Tribunal and Ors; Ex parte St. George County Council (1973-74) 130 CLR 533
5 Mark James Lawrence and The Minister for Consumer and Employment Protection -v- Aboriginal Legal Service of Western Australia (Inc) [No 2] [2008] WASCA 254
6 [2010] FCAFC 11 at paragraph 54
7 [2006] AIRComm 426 at paragraph 28
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