Pangallo v ACTEW Corporation

[2003] HCATrans 347

[2003] HCATrans 347

IN THE HIGH COURT OF AUSTRALIA

Registry  No C12 of 2002

B e t w e e n -

JOHN PANGALLO

Applicant

and

ACTEW CORPORATION LTD

Respondent

Application for special leave to appeal

McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 12 SEPTEMBER 2003, AT 10.41 AM

Copyright in the High Court of Australia

MR C.M. ERSKINE:   May it please the Court, I appear for the applicant.  (instructed by Ken Cush & Associates)

MR F.J. PURNELL, SC:   May it please the Court, I appear with my learned friend, MR C.B. O’GRADY, for the respondent.  (instructed by Mallesons Stephen Jaques)

McHUGH J:   Yes, Mr Erskine.

MR ERSKINE:   Your Honours, the nub of the decision of the Full Court is contained in paragraphs 33 and 34, which is on the application book at page 40.  In essence, the Full Court held that there was no relevant distinction in the changes that had happened in Workplace Relations Act (1966) that took this case away from the way in which this Court had considered the similar question in respect of awards in Byrne and Frew.

We would begin the submissions at paragraph 34 because, in our submission, paragraph 34 which is where the Full Court considers the consequences of the finding that was just made highlights what we say is the error.  In paragraph 34 the Full Court notes that:

The argument that the remedies provided by the Act are inadequate . . . contrary to the history of enforcement of industrial obligations, as explained by Madgwick J in Wattyl.  The Act has, for some time, reflected the policy of not specifically enforcing industrial obligations, except insofar as express remedies are provided.

Now, your Honours, it is at that point that we say that the error starts to become apparent.  That statement would be entirely understandable and entirely unexceptional if it were the case that the present regime of certified agreements was materially similar or a materially similar development out of industrial law as this country has known it for a century or more.  That is, industrial law based upon, particularly in the federal jurisdiction, the existence of an industrial dispute, to be resolved through the processes of conciliation and arbitration between some fairly powerful players, in many cases - trade unions, on the one hand, organisations of powerful industries on the other.

What has happened since 1996, we say, is that there has been quite a sea change in the regime which now affects the entitlements of employees in many cases in this country.  That sea change is that for many people, including this particular applicant, terms and conditions of employment are now dealt with by certified agreements and the changes that came about in 1996 which are referred to by the Full Court in its reasons indicate that we have moved, certainly in this type of case, well away from a regime in which one could well understand why courts would be reluctant to interfere in the delicate process of discussion, negotiation, conciliation and arbitration between powerful forces in society to a regime in which we now have individual employees in an individual enterprise able to negotiate with their own employer a set of terms and conditions of employment which affect only them.

They do not have to have a union and in many cases, including, we think, this one, the certified agreement is not founded on the constitutional power of conciliation and arbitration, it is actually ‑ ‑ ‑

KIRBY J:   How could that not be?  It is founded on the conciliation power, is it not?

MR ERSKINE:   No, your Honour, with respect, it is founded on the corporations power.

KIRBY J:   If it is founded on the corporations power that is enough.

MR ERSKINE:   Yes.

KIRBY J:   Why would it not be founded on the conciliation power?

MR ERSKINE:   Because, your Honour, there are two types of certified agreements that can now be made under the legislation.  One type of certified agreement is in the traditional form, that is, it is part of the process of settling an industrial dispute.  As to that type of resolution of a dispute, your Honour, with respect, your Honour, is entirely correct, but there is a second type now of certified agreement of which this, we understand, is one in which it is simply necessary that the employer be a constitutional corporation or that it be, in some ways, an emanation of the Commonwealth, the public service, Commonwealth corporations and the like.  There is no need, therefore, for an industrial dispute.  Unions need not be involved in the process at all.  It can simply be a negotiation between a group of individual employees and their employer.

KIRBY J:   But does not the ACTEW Corporation Enterprise Agreement have some status within the Australian Industrial Relations Commission?

MR ERSKINE:   It has to be certified under the Act, yes.

KIRBY J:   That being the case, one would think that the general principles stated in Byrne still apply.  I cannot see why they would be distinguished.

MR ERSKINE:   Your Honour, in Byrne and Frew it is our contention that while this Court began its discussion, relevantly, at this part of the argument by looking at a principle of construction, namely, that where a statute creates a new right and also creates a remedy that there is a presumption, if you like, that that was to be the sum total of means of enforcement.

This Court also went on to say that in effect it buttressed its conclusions on the presumption point by pointing to the many public interest considerations which relate to industrial awards and they are in fact referred to in some of the extracts that your Honours will see in page 36 of the appeal book where there are extracts from this Court’s decision in Byrne and Frew – 36 and 37.

What we would say in respect of those, your Honours, is – and the Court notes that this is so in paragraph 33 at the bottom of page 39 is that many of those public interest considerations apply either not at all or to a lesser extent than was the case in the case of industrial awards.  What the Court then goes on to say in paragraph 33 on page 40 is that notwithstanding those those are not relevant points of distinction for the purposes of the construction point that this Court relied upon at the outset of its reasons in Byrne and Frew.

What we say in response to that is that, with great respect to the Full Court, the difficulty with that is that we are now in a regime in which we are not dealing with the sort of background that one had in the industrial regime where one had – or the traditional industrial law regime in which one has powerful players where arbitration is the most appropriate way to respond to disputes between them.

KIRBY J:   But I just do not see that point because powerful or weak you go before a federal industrial tribunal which has a specialist jurisdiction, specialist members and is independent of the parties, headed by a federal judge, not likely to be overborne by the power or weakness of the parties.  I would hope not.  After all, the Arbitration Commission and the Industrial Relations Commission are but a few months junior in age to this Court.  They were founded in 1904.  We were founded in 1903.

MR ERSKINE:   Indeed, your Honour.  In the submission that I make I hope I was not being ‑ ‑ ‑

KIRBY J:   No, you have not.  I am looking at Byrne and the principle of restraint which is expressed in Byrne and of realism about the capacity of general courts to deal with these matters still applies to workplace or enterprise agreements.

MR ERSKINE:   Your Honour, perhaps I could address that by coming at it from another direction.  Amongst the employees who have now found their terms and conditions of employment regulated by certified agreements are a large number of public sector employees.  In significant parts of their terms and conditions of employment prior to certified agreements they were regulated by statutory or quasi‑statutory instruments and judicial review remedies were available.

We have in our authorities simply given as examples a number of cases and the cases multiply in the Federal Court jurisdiction, in particular, in which the Federal Court, we say with respect, correctly, never thought that there was a principle of restraint or never thought that it was inappropriate, as a matter of principle, for remedies such as judicial review declaration and the like.

KIRBY J:   Yes, but they were responding to specific judicial review applications made, presumably, under the Administrative Decisions(Judicial Review) Act and they had a clear jurisdiction and it was provided by another federal statute, but here you are claiming, as it were, a common law right in a court of general jurisdiction to enliven the declaratory jurisdiction of that court where there is a federal statute which specifically provides a mechanism in a federal industrial tribunal which is independent, has a long history of independence and is headed by a judge.

MR ERSKINE:   Indeed.  As I said, your Honour, we are not in any way casting aspersions upon the Commission.

KIRBY J:   No, if your client is entitled to go to the general courts, well, that is his entitlement, but we have to look at it from the point of view of what this Court said in Byrne and see whether this fits with what was said in that case.

MR ERSKINE:   Yes.

KIRBY J:   The only basis you have suggested is, we are in a new ball park, there are now lots of these workplace agreements, enterprise agreements, and that in some way that – and the different constitutional foundation for them distinguishes them from the principle in Byrne, but I do not see the distinction.

MR ERSKINE:   Your Honour, if I develop that very slightly, what we now have, we would say, is a regime in which the focus is very much upon an individual employee seeking to assert the entitlements that they may have under a certified agreement and that that, in our submission, takes this much closer to the kind of – if I can call it the general legal environment in which most people live in this country.

KIRBY J:   I understand your point.  You say if the law moves to the point of individual contracts it should not be surprised that the contract turns up in the court that normally deals with contracts, namely, the general courts.

MR ERSKINE:   I cannot take that last step, your Honour, and say that we yet have certified agreements equated with contracts, but what I can say in the submissions, your Honour, is that we have now moved much closer to that situation than we did with awards and the reasons being, amongst the things that we have pointed to, the fact that it starts to become a system in which quite small enterprises sometimes can negotiate agreements which might differ radically from the previous award regime.

While it is not relevant to this case we can note, also, the existence of workplace agreements – AWAs – which allow individual employees now to negotiate agreements which can be certified by the Commission with individual employers in which you have a precise individual employer relationship.

Our contention, your Honour, is that certified agreements which in a sense bridge the gap between an award on the one hand and an Australian Workplace Agreement on the other are in their substance much closer to the creation of individual entitlements rather than some group dispute, group resolution and a major public interest component which is of course contained in awards.

So, your Honour, with respect, that is the nub of the point we make that certified agreements do have this relevant point of distinction and it comes from ‑ ‑ ‑

KIRBY J:   It is still linked by the umbilical cord to the Australian Industrial Relations Commission by the certification process which is envisaged in the federal statute.

MR ERSKINE:   Indeed.  The certification process itself, your Honour, does not involve a number of the same considerations that applied to awards.

KIRBY J:   Yes.

MR ERSKINE:   I am not suggesting it is a rubber stamp process by any means.  It is not.  But, the sort of factors that the Commission can take into account are substantially more limited and the Full Court itself noted this in the earlier paragraph to which I took your Honour in deciding whether or not to certify an agreement.  We would say that gives support, also, to the proposition we put forward which is that certified agreements are in effect coming very close to creating individual rights and entitlements.

If that be the case, your Honours, then we would submit that it is a surprising result that which is set out at paragraph 34.  I hasten to say there is an inevitable result if the Full Court is correct in paragraph 33 at application book 40, but we would step back from that and say it is a surprising result.  If it is a surprising result, it may lead into question whether the finding that has led to it may have some error contained in it.  We say the error is as I have outlined.

Your Honours, I do not know that there is much more that can be said to highlight ‑ ‑ ‑

KIRBY J:   It is a short point and we have read the written submissions and you have made it clear.

MR ERSKINE:   It is a short point, your Honour, yes. The only other matter that I am obliged to note, your Honours, at paragraph 37 because this would have to form part of an appeal were we to be given special leave and it is simply the question of whether the Full Court was correct below in considering that this was a costs issue that lay outside section 347 of the Act. We say this is much closer to the Polites situation than it is the McJannet or CFMEU.

KIRBY J:   Has this Court not said that once you get to this Court, you are not in the regime of the Workplace Relations Act, you are in the regime of the Judiciary Act?

MR ERSKINE:   I think that is right, your Honour, yes, but ‑ ‑ ‑

KIRBY J:   If that is so, then the costs will follow our regime rather than any – and depending on the language, I mean, if there is a valid Federal statute that says no costs shall be ordered in industrial relations matters involving the Workplace Relations Act, that is one thing, but what is the actual language of 347?

MR ERSKINE:   The language of section 347, your Honour, is that it must be “a matter arising” under the Workplace Relations Act and the point of distinction ‑ ‑ ‑

KIRBY J:   Is it your point that it is a bit of a catch-22.  If the respondent succeeds, it succeeds because it arises under the Workplace Relations Act and, therefore, it is not entitled to its costs.

MR ERSKINE:   Well, we would say that conclusion must follow if the Full Court was otherwise correct below.  But we would also make the point, your Honour, that if our contention is correct, it is still, we would say, very much a matter arising under the Act in that we are seeking to declare rights and entitlements that arise under the Act and solely because of the Act and to that extent ‑ ‑ ‑

KIRBY J:   If you get special leave, it goes on to the Full Court and they can deal with it.  If you are refused special leave, we have to deal with the issue of costs; normally you would have to be ordered to pay costs under the Judiciary Act section 32.  But you say there is a special and particular Federal statute that deals with matters arising under the Workplace Relations Act and if the respondent succeeds, it succeeds because of that Act and therefore is denied costs by force of Federal law?

MR ERSKINE:   Yes, your Honour, but, with respect, I would also want to tack on the proposition that we have from the outset, even in the Supreme Court of the ACT been contending for rights whose source is the Workplace Relations Act and to that extent we would say also it is a matter arising under that Act.

KIRBY J:   Yes.

MR ERSKINE:   So there are, with respect, two ways in which one reaches the same point, namely that in paragraph 37 the Full Court erred on that point.  May it please the Court.

KIRBY J:   You would not be seeking costs if you lost?  You would simply ask that we do not order costs in accordance with 347?  You cannot get your costs if you lose.  For goodness sake, we have not come at that.

MR ERSKINE:   I think I have to have a consistent position, your Honour, so yes.

McHUGH J:   Yes, Mr Purnell, we only wish to hear you on this question of costs.

MR PURNELL:   That is the only matter, your Honour?

McHUGH J:   Yes.

MR PURNELL:   Your Honours, we would say that this application, consistently with the application before this Court in CFMEU v The Australian Industrial Relations Commission where there was an application there for prohibition under the Constitution, McJannet was applied and costs were awarded, we say that an application for a declaration in the

Supreme Court is on all fours in essence with that and we are entitled to costs.

KIRBY J:   Yes.

McHUGH J:   Yes.  Do you want to say anything in reply to that, Mr Erskine?

MR ERSKINE:   Your Honours, only to say that in Polites, where the application was, I think, for mandamus, from recollection, costs were ordered and in the CFMEU decision a distinction was drawn in accepting that Polites was correct between a mandamus which was seeking to enforce existing obligations ‑ ‑ ‑

KIRBY J:   But it is a question of characterising the matter in each case.

MR ERSKINE:   Yes, indeed.

KIRBY J:   Here the matter is the Supreme Court of the Australian Capital Territory had jurisdiction and that is a couple of steps removed from the Workplace Relations Act and therefore the Court’s view seems to have been that once you get into the general courts on these issues, you take the benefits and the burdens?

MR ERSKINE:   Well, we would say, with respect, the matter perhaps more correctly characterised is what arises in the statement of claim for which the jurisdictional point is an interlocutory skirmish.  That, we say, is a matter arising under this Act because it seeks declarations of entitlements under this Act.  But there is nothing more that I wish to say.

McHUGH J:   Thank you, yes. 

In this matter the applicant sought to enforce the ACTEW Corporation Limited Enterprise Agreement 1999 by an application for declaratory relief in the Supreme Court of the Australian Capital Territory.  He has chosen not to utilise the mechanism for enforcement of the agreement set out in the Workplace Relations Act 1996 of the Commonwealth.

In our view, the basic principles applicable in Byrne v Australian Airlines Limited (1995) 185 CLR 410 apply to the circumstances of this case. No changes in the application of the general principles stated in Byrne have been occasioned by the advent of the new system of workplace or enterprise agreements.  The Full Court of the Federal Court was correct to so decide.  There is no occasion to revisit the applicability of Byrne. Accordingly, special leave must be refused and, in our view, must be refused with costs. The case does not fall within section 347 of the Workplace Relations Act.

The Court will now adjourn to reconstitute.

AT 11.03 AM THE MATTER WAS CONCLUDED