Public Service Association and Professional Officers' Association Amalgamated of NSW v Director of Public Employment

Case [2012] HCA 58

HIGH COURT OF AUSTRALIA

FRENCH CJ,
HAYNE, HEYDON, CRENNAN, KIEFEL AND BELL JJ

THE PUBLIC SERVICE ASSOCIATION AND
PROFESSIONAL OFFICERS' ASSOCIATION
AMALGAMATED OF NSW  APPELLANT

AND

DIRECTOR OF PUBLIC EMPLOYMENT & ORS                 RESPONDENTS

The Public Service Association and Professional Officers' Association Amalgamated of NSW v Director of Public Employment
[2012] HCA 58
12 December 2012

S127/2012

ORDER

Appeal dismissed with costs.

On appeal from the Industrial Court of New South Wales

Representation

D F Jackson QC with A A Hatcher SC and M Gibian for the appellant (instructed by W G McNally Jones Staff Lawyers)

M G Sexton SC, Solicitor-General for the State of New South Wales with J G Renwick SC and A M Mitchelmore for the first to fourth respondents (instructed by Crown Solicitor (NSW))

Submitting appearance for the fifth respondent

Interveners

M G Hinton QC, Solicitor-General for the State of South Australia with
J C Cox intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor (SA))

S G E McLeish SC, Solicitor-General for the State of Victoria with
K E Foley intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)

S G E McLeish SC, Solicitor-General for the State of Victoria with
G J D del Villar intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Law (Qld))

G R Donaldson SC, Solicitor-General for the State of Western Australia with F B Seaward intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor (WA))

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

The Public Service Association and Professional Officers' Association Amalgamated of NSW v Director of Public Employment

Constitutional law (Cth) – Judicial power of Commonwealth – Constitution, Ch III – Institutional integrity of State court vested with federal jurisdiction – Section 146C(1) of Industrial Relations Act 1996 (NSW) provides that Industrial Relations Commission of New South Wales must "give effect to any policy ... that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission" when making or varying any award or order – Commission comprises judicial and non-judicial members – Judicial members of Commission sit as Industrial Court of New South Wales to exercise specific functions of Commission – Industrial Court is superior court of record and may be invested with federal jurisdiction – Whether s 146C(1) impairs institutional integrity of Industrial Court by requiring judicial members when sitting as Commission to comply with regulations when making or varying any award or order.

Words and phrases – "institutional integrity", "policy".

Constitution, Ch III.
Industrial Relations Act 1996 (NSW), Ch 4, s 146C(1).
Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 (NSW).

FRENCH CJ.

Introduction

  1. Section 146C of the Industrial Relations Act 1996 (NSW) ("the IR Act") requires the Industrial Relations…

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Public Service Association and Professional Officers' Association Amalgamated of NSW v Director of Public Employment [2012] HCA 58
Case
[2012] HCA 58
Decision Date

CaseChat Overview and Summary

The Public Service Association and Professional Officers' Association Amalgamated of NSW (PSA) appealed to the High Court of Australia against the Director of Public Employment. The dispute concerned the constitutional validity of section 146C(1) of the *Industrial Relations Act 1996* (NSW), which required the Industrial Relations Commission of New South Wales (the Commission) to give effect to government policy declared by regulation when making or varying awards or orders. The PSA argued that this provision impaired the institutional integrity of the Industrial Court of New South Wales, which comprises judicial members who also sit as part of the Commission.

The High Court was required to determine whether section 146C(1) of the *Industrial Relations Act 1996* (NSW) impermissibly infringed upon the institutional integrity of the Industrial Court of New South Wales. Specifically, the Court had to consider whether the requirement for judicial members of the Commission to comply with government policy, as declared by regulation, when exercising their functions as part of the Commission, created an unacceptable incompatibility with their roles as members of the Industrial Court, a superior court of record that could be invested with federal jurisdiction. The Court also had to construe the meaning of "policy" within the context of section 146C(1) and consider the constitutional character of regulations made under that provision.

The High Court reasoned that the term "policy" in section 146C(1) referred to principles or courses of action adopted by the government, rather than specific directions dictating the outcome of particular proceedings before the Commission. The Court noted that section 146C expressly did not apply to the Industrial Court itself, and that the legislative framework created two related but distinct bodies. The Court concluded that the operation of section 146C and the relevant regulation did not give rise to an impermissible incompatibility between the judicial members' functions as part of the Commission and their functions as members of the Industrial Court. The appeal was dismissed.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

FRENCH CJ HAYNE, CRENNAN, KIEFEL AND BELL JJ HEYDON J
Definitions of the terms "guaranteed minimum conditions of employment", "employee-related costs" and "employee-related cost savings" are set out in the Regulation[47].[47]Regulation, cll 7, 8 and 9.The decision of the Industrial Court It is no disrespect to the careful reasoning of the Industrial Court to observe that the essential steps in that Court's reasons for dismissing the PSA's motion were:.The motion required consideration of the effect of the Amendment Act on the functions of the Industrial Court and whether the impugned legislation would lead to an identification of the Court in the exercise of its functions with the Executive Government of New South Wales[48]..The IR Act provides for the creation of two related but distinct bodies, the Industrial Court and the Commission. Section 146C expressly does not apply to the Industrial Court. That is a complete answer to the suggested invalidity of the Amendment Act[49]..As to the validity of the Regulation, it is sufficiently authorised by s 146C[50], which prescribes the field of operation to which the Regulation needs to be connected in order to be valid[51].[48][2011] NSWIRComm 143 at [27] per Walton J, Vice-President, Kavanagh and Backman JJ.[49][2011] NSWIRComm 143 at [49] per Walton J, Vice-President, Kavanagh and Backman JJ.[50][2011] NSWIRComm 143 at [60] per Walton J, Vice-President, Kavanagh and Backman JJ.[51][2011] NSWIRComm 143 at [66] per Walton J, Vice-President, Kavanagh and Backman JJ.The grounds of appeal By its Notice of Appeal to this Court, the PSA challenged the proposition that the exclusion of the Industrial Court from the application of the Amendment Act answers its complaint that the Amendment Act undermines the institutional integrity of the Industrial Court. The PSA contended that the Industrial Court erred in failing to consider whether the requirement imposed upon judicial members of the Commission to give effect to government policy, when sitting as the Commission other than in Court Session, undermines the institutional integrity of the Industrial Court having regard to the closely intertwined composition, operation and functions of the Commission and the Industrial Court. The PSA also asserted that the Industrial Court and the Commission are a single body constituted in different ways so as to exercise particular functions. The Industrial Court was said to have erred in finding that incompatibility or repugnance could only arise as a result of non-judicial functions conferred on a judge persona designata.Industrial tribunals in New South Wales The PSA, in its submissions, emphasised the close connection between the functions conferred on the Commission and the Industrial Court, including the Court's jurisdiction to enforce orders and awards of the Commission. It pointed to the dual functions of judicial members of the Commission. The organisational overlap of the Commission in its non-judicial and judicial characters and the involvement of judicial members in the non-judicial work of the Commission was the foundation for the PSA's argument that s 146C provides impermissibly for the Commission, including its judicial members, to be subject to direction and control by the Executive Government from time to time. It is desirable to put that argument in context by reference to the variable proximity of non-judicial and judicial functions in the history of labour market regulation in New South Wales. So much is indicated by reference to the relevant legislative history.

Ratio Decidendi

Legal Principle Established

Established by: FRENCH CJ, HAYNE, CRENNAN, KIEFEL AND BELL JJ, HEYDON J

There is no suggestion in this case that, apart from s 146C itself, the IR Act creates a relationship between the Commission and the Industrial Court which gives rise to any impermissible incompatibility between the exercise by the judicial members of their functions as members of the Commission and their functions as members of the Industrial Court. As appears from what follows, s 146C does not give rise to any such incompatibility.The operation of s 146C and the Regulation The operation of s 146C and the nature of the Regulation determine the disposition of this appeal. It was submitted by the PSA that s 146C(1) requires the Commission, in making or varying an award or order, to give effect to any policy on conditions of employment of public sector employees that is declared by the regulations. The declaration, it was submitted, amounts to an instruction to the Commission by the Executive, requiring it to comply with the identified policy of the Government. It was said to be immaterial that the direction takes the form of a regulation. The PSA also pointed to the express application of s 146C to pending proceedings and the application of any policy declared by regulation to proceedings pending at the time of the making of such regulation. The PSA submitted that the capacity to direct the Commission in pending proceedings permits the Government to alter or dictate the outcome, or require the acceptance of the Government's own submissions, in those proceedings. The PSA submissions require attention to be given to the following questions:.What is the proper construction of the term "policy" in s 146C?.What is the constitutional character of a regulation of the kind referred to in s 146C – in particular, does it require the Commission to respond to a direction of the Executive Government? As to the first question, the relevant ordinary meaning of the word "policy" is "a course or principle of action adopted or proposed by a government, party, business, or individual"[85]. The first limb of that definition sits awkwardly with the requirement that the Commission "give effect to" the relevant policy. Section 146C(1), however, readily accommodates the concept of "policy" as a principle or principles adopted or proposed by government. That meaning of the word "policy", particularly in a context in which it gives content to delegated legislation, does not extend to a policy which is ambulatory. That is to say, it does not extend to a policy which requires compliance with future variations of its terms or with future ministerial directions.[85]The Australian Oxford Dictionary (1999) at 1045, "policy", sense 1. The word "policy" has a range of possible applications, from the specific to the general. An example of the constructional choice which that range may present was considered by the Full Court of the Federal Court in Leppington Pastoral Company Pty Ltd v Department of Administrative Services[86]. The scope of a "policy" which could be stated in a ministerial pre-acquisition declaration under s 22(5) of the Lands Acquisition Act 1989 (Cth) defined a field of enquiry from which the Administrative Appeals Tribunal was precluded in reviewing the declaration. The Full Court rejected a construction of "policy" in s 22(5) which would extend to a proposal to acquire a particular parcel of land. The Court observed[87]:"As one progresses downwards on the scale of generality, into the realm of considerable particularity, the less apt becomes the use of the word 'policy', as that term is normally understood in the Australian political context."Analogical arguments about the construction of terms taken from one statutory context and applied to another must be treated with caution. Nevertheless the observation of the Full Court in Leppington is consistent with general usage of the word "policy" in relation to the executive branch of government. It supports the conclusion that as used in s 146C(1), "policy" does not extend to a direction as to the outcome of a particular matter before the Commission which leaves the Commission with nothing to do but to translate the direction into its order. The term does, however, encompass principles of the kind embodied in the Regulation.[86](1990) 23 FCR 148.[87](1990) 23 FCR 148 at 158 per Lockhart, Wilcox and Hill JJ.