Re Australian Railways Union; Ex Parte Public Transport Corporation

[1993] HCA 28

HIGH COURT OF AUSTRALIA

MASON CJ, DEANE, DAWSON, GAUDRON AND McHUGH

RE AUSTRALIAN RAILWAYS UNION AND ORS

(1993) 117 ALR 17

20 October 1993

Orders

Order nisi for a writ of prohibition made absolute.

Decision

MASON CJ, DEANE, DAWSON, GAUDRON AND McHUGH JJ Towards the end of 1992 the Victorian government decided that the Public Transport Corporation ("the PTC") should significantly reduce the number of its employees. The PTC sought expressions of interest in voluntary departure packages ("VDPs") from eligible employees. Under a VDP certain payments are made to employees who resign their employment. Apprentices employed by the PTC are not eligible to receive VDPs.

2. On 1 February 1989, a number of persons had entered into Indentures of Apprenticeship with the State Transport Authority, the predecessor of the PTC. Each of them later signed a document headed "Employment conditions for training as an apprentice, State Transport Authority". That document contained the following two paragraphs:

"I understand and agree that: ... (d) I am not eligible to enter the Superannuation Scheme and that I am not guaranteed employment on completion of my apprenticeship.

(e) However, on completion of my apprenticeship, should a vacancy exist in my trade, I will be eligible to apply for permanent employment and Superannuation."

Some 70 of the apprentices who had entered into Indentures of Apprenticeship on 1 February 1989 were sent a letter dated 21 October 1992 which implied that they might not be offered employment with the PTC at the completion of their apprenticeships. They were told by the PTC in early December 1992 that they would not be offered employment and this was confirmed by a letter dated 8 December 1992.

3. The PTC notified the Australian Industrial Relations Commission ("the Commission") in December 1992 pursuant to s.99 of the Industrial Relations Act 1988 (Cth) ("the Act") of a dispute concerning bans imposed in protest at the PTC's decision not to offer the apprentices continuing employment. The Australian Railways Union ("the ARU"), the Australian Services Union ("the ASU") and the Metals and Engineering Workers' Unions ("the MEWU") notified the Commission in January 1993 pursuant to s.99 of the Act of disputes concerning the decision to reduce the number of PTC employees. The notifications given by the unions referred generally to the proposed reduction of employees by the PTC and only the notification given by the PTC referred specifically to the decision not to employ the 70-odd apprentices when their apprenticeships ended.

4. The notification given by the ARU was listed before Commissioner O'Shea on 26 January 1993 together with a dispute (C No.21624 of 1991) which had been found to exist on 26 September 1991 following the failure of a number of employers, some of them interstate, to accede to a log of claims served upon them by the ARU. The PTC was one of those employers. That log of claims contained demands relating to commencement, termination and reinstatement of employment and redundancy and retrenchment. The ARU relied upon it to characterize the particular dispute over the reduction in PTC employees as part of a wider interstate dispute. On 26 January 1993 appearances were announced before Commissioner O'Shea for the ARU, the ASU, the MEWU and the PTC. The ARU proposed that, pending a final award dealing with the redundancy of PTC employees, the Commission make an interim award preserving the status quo. It also applied pursuant to s.107 of the Act to have the matter dealt with by a Full Bench of the Commission. The ARU drew attention to the particular problem of the apprentices whose apprenticeships were to terminate on 29 January 1993, that being the effective end of their four year term.

5. The ASU announced that it also sought an interim award in almost identical terms to that proposed by the ARU and sought to have the matter heard before a Full Bench. For the same reason that the ARU relied upon a finding of an earlier dispute, the ASU relied upon a dispute (C No.37719 of 1989) which had been found to exist on 21 January 1990 following the failure of a number of employers, including the PTC, to accede to a log of claims served upon them by the ASU or its predecessor. The MEWU also announced that it would be seeking an interim award in the same terms as that sought by the ARU. The Commissioner announced that he would refer the applications for a hearing before a Full Bench to the President of the Commission and adjourned the proceedings.

6. On 27 January 1993 the Vice-President determined that the applications by the ARU in Matter C No.21624 of 1991 and by the ASU in Matter C No.37719 of 1989 should be heard by a Full Bench. On 29 January 1993, the dispute notified by the MEWU was referred by the President, as part of Matter C No.30096 of 1993, to the Full Bench. Although that matter bore the year 1993 it was in fact a continuation of a dispute found to exist on 27 May 1986 following the service of a log of claims and was presumably relied upon by the MEWU for the same reason that the other unions relied upon earlier paper disputes.

7. All three matters, C No.21624 of 1991, C No.37719 of 1989 and C No.30096 of 1993, came on for hearing before a Full Bench presided over by Munro J on 29 January 1993. Counsel for the ARU, the ASU and the MEWU applied for an interim award pursuant to s.111(1)(b) of the Act. Section 111(1)(b) specifically empowers the Commission to make an interim award in relation to an industrial dispute. Counsel said that an interim award was needed to preserve the status quo whilst an appropriate final award was developed. The problem of the apprentices was raised as a matter of specific concern. Counsel for the unions sought to have the apprentices brought within the scope of an interim award which was sought as a matter of considerable urgency given the imminent termination of their apprenticeships. Although the four year terms of the apprenticeships did not expire until 31 January 1993, 29 January was a Friday and it was common ground that they effectively ended on that day.

8. The Commission then proceeded to hear evidence from a number of witnesses directed towards establishing that the apprentices had a justifiable expectation that they would be employed by the PTC as tradesmen at the conclusion of their apprenticeship. When that evidence was completed, counsel for the PTC announced that the case to be put on behalf of the PTC would take the best part of two days. He indicated that the PTC contested the Commission's jurisdiction under the Act to make an award with respect to the apprentices, who, he submitted, were not employees of the PTC. In this context, he also pointed out that their engagement as apprentices ended on that day. Eventually, after some discussion of the difficulty arising from this circumstance, counsel for the PTC gave an undertaking in the following
terms:

"we would be prepared to accept that these people, the 70 odd people concerned, would be as from the end of today on leave without pay for whatever period is necessary with respect to this proceeding being conducted in a full and proper manner. And that during that period the people concerned would be regarded by us as being in the position that they are in right at this moment, whatever that position might be. That is, at 20 minutes to three on Friday, 29 January. So that we freeze the situation at that point and during the intervening period regard the 70, the group of 70 as effectively being on leave without pay. Now, that of course would be without prejudice to the arguments that we would wish to put, but it would place everybody concerned including the commission, in a position where we do not have to struggle today to deal with these significant matters in a way that ultimately may be quite unsatisfactory."

9. The ARU log of claims which was the subject of Matter C No.21624 of 1991 and the MEWU log of claims which was the subject of Matter C No.30096 of 1993 had been served as a result of decisions of the Commission in 1984 which had established standards applicable to termination, change and redundancy ("TCR") ((1) Amalgamated Metals Foundry and Shipwrights' Union v. Broken Hill Pty. Co. Ltd., Whyalla (Termination, Change and Redundancy Case) (1984) 294 CAR 175; (1984) 295 CAR 673.). Awards were made in settlement of the disputes created by those logs of claims and those awards contained TCR provisions. The PTC contended that both the earlier decisions of the Commission in the TCR test cases and the TCR provisions of the awards specifically excluded apprentices as a matter of policy. For that reason, the PTC submitted, unless the Commission were to treat these cases as test cases, the Commission ought not to deal with the redundancy of apprentices when it came to make a final award. It
followed, the PTC submitted, that they should not be the subject of any interim award.

10. In the light of the undertaking given by the PTC, it was decided that the hearing of the matters before the Commission would be adjourned until 3 and 4 February 1993. The PTC announced that upon those days it would provide a document dealing with the issues of consultation, notice and dates which it thought would "go a long way to overcoming the need for a final award". It said that also on those two days it would "concentrate (its) attention on the apprenticeship issue so that ... that matter can be dealt with as a discrete matter by the commission".

11. When the hearing resumed on 3 February 1993, the PTC placed material before the Commission relating to consultation upon the
general restructuring of the PTC. The PTC then turned to the
apprenticeship issue and indicated that:

"what we will put to the commission will relate to ... both the legal standing of apprentices and the commission's lack of power to be able to make an award provision relevant to them whether it be of an interim or final nature and additionally we will put matters of merit to the commission to the effect that there is no substantial reason as to why the commission should in any way interfere with the normal process of the coming to an end of the 70 odd contracts of indenture and these people not being involved in employment in the future with the PTC."

The PTC submitted the apprentices were not employees. As a consequence, it said, the unions lacked capacity to make applications on their behalf, and the Commission lacked constitutional and statutory jurisdiction. In the alternative, the PTC argued that the apprentices were on fixed-term contracts, and it was under no obligation to make any special arrangements for their termination and
redundancy such as a VDP

12. The unions then submitted that the apprentices were in fact employees of the PTC with the result that the Commission could make an interim award continuing the employment relationship beyond the term of their contracts. A witness was called to give evidence that work was available with the PTC for former apprentices. Counsel for the PTC was not in a position to cross-examine the witness and was given leave to cross-examine at a later time if necessary; Munro J observed that "you need to bear in mind that the commission has got before it an application to deal with the subject matter of the interim award, and we propose to deal with that in the time that is available".

13. Munro J then raised the question whether the Commission should not make a final award dealing with the apprentices. Counsel for the unions opposed making a final award because it would probably not deal with the situation in a meaningful way. He observed that, because the PTC did not regard the apprentices as employees, they were deprived of a range of benefits offered to other employees. Munro J then asked:

"Assume it were within power to redress that aspect, the deprival of the range of benefits that were being offered, why is not that the appropriate course rather than, say, having an award that says, whatever happened on 29 January has not happened. Somehow people will be retained in employment doing work that the employer does not want. And let us have some time while we consult further to try and work out what it is we are going to do. Why is it not better to address the matter of the benefits that you say should have been accessible to the employees?"

Counsel for the unions reiterated his opposition to the course suggested by Munro J on the ground that the apprentices should be dealt with alongside the PTC's other employees, and until then the status quo should be preserved by an interim award.

14. The same suggestion was put to counsel for the PTC in the course of his reply upon the apprenticeship issue. He rejected the
suggestion:

"Because my learned friend has not asked for any more than an award that would prevent the PTC from terminating the employment of people. We have not answered a case because no case has yet been made out as to what form of final award is appropriate. My learned friend - the only document we have is the proposal that the PTC not terminate anybody's employment and before the commission were minded or could, in my respectful submission, make a final award, it would have to have evidence and hear submissions going to that question."

And later he added:

"the commission is not, of course, confined to the relief that is sought, and that is clear. But nevertheless, the case has been run on the basis of an application for an interim award, or whatever you call it, an injunction, preventing the termination of any employment of people. If the case is to be run on what form of TCR provision ought to be provided for employees of the PTC, it takes on a different complexion, and different evidentiary material would have been put forward, and different submissions would have been made."

15. The proceedings before the Commission concluded with an observation by Munro J as follows:

"The commission will take into account those considerations that it seems most relevant and itemise them and if you have failed to address to us today the considerations that (you) consider relevant as part of your case, then you need to understand you have missed your opportunity up to this stage of the hearing. Of course, it is probable that the hearing will continue in relation to other matters but we have before us now completed submissions from all parties, as we understand them, as to whether or not we should make an interim award in relation to apprentices and that was what the hearing today and yesterday was allocated to do."

16. On the following day, 5 February 1993, the Commission announced its decision in the following terms:

"We have reached a unanimous conclusion in relation to that part of the matter before us in these proceedings, which pertains to an application for an interim award to operate in respect of some 70 final year apprentices, the term of whose indenture expired on 31 January 1993. We refuse the application for an interim award in the terms proposed in application to those employees. We are satisfied however that in the circumstances and on the merits of the case as put to us, it is expedient for the purpose of settling part of the relevant disputes, and for preventing the exacerbation of them, and that it is within jurisdiction, to award an alternative form of relief. We make an award in terms which are published and which will be available to the parties immediately upon the rising of the Commission. The award made is not expressed to be an interim award, because we do not consider that the form of relief granted is of an interim character. We will publish our reasons for decision as soon as practicable."

17. The award referred to was entitled the "Victorian Public Transport (Post-Indenture Retrenchment) Award, 1993". It was expressed to apply to the apprentices in question who were defined to be the employees covered by the award. They were entitled to make application to the PTC for a VDP by 10 February 1993. A duty was imposed upon the PTC to consider each application upon the basis that the employee was deemed to be an employee whose terms of engagement stipulated that the employee was to be employed on an open-ended continuing basis. An employee covered by the award who did not make application for a VDP or who did not receive or accept an offer for a VDP was entitled to be paid a retrenchment severance benefit as if the employee had been retrenched from employment, being deemed to be employment upon an open-ended continuing basis.

18. On 16 February 1993, the Commission gave reasons for its decision. It said that it rejected the application for an interim award because such an award would impose a duty on the PTC to retain the apprentices as employees. It continued:

"we are not satisfied that there is an arguable case for the Commission to favourably contemplate relief in the form of an award duty to extend the 70 apprentices' employment. The scale of the reduction to the PTC workforce is a consideration which outweighs any considerations favouring any unnecessary extension of the period of employment of the 70 employees, or any relative upgrading of their priority for retention in employment relative to other established employees."

19. The Commission conceded that the TCR test cases in 1984 might be seen as a barrier to granting final relief in the form of an award for severance benefits to apprentices. It acknowledged that the decision in these cases and subsequent awards excluded apprentices and employees engaged for a specific period of time. It recognized that an important reason for exclusion was that otherwise employers might be discouraged from engaging and training apprentices, something which could be regarded as an important social responsibility. However, having regard to the history of the apprentices in the PTC, the
Commission concluded:

"In the circumstances we consider it is open to treat the employees as no longer being in substance apprentices in the sense used in the TCR Case. We consider them to have been equivalent to unattached employees, whose entitlement by custom and practice to progress to and beyond that stage was arrested."

20. It is clear that the relief granted by the Commission in the form of the Victorian Public Transport (Post-Indenture Retrenchment) Award was not the relief sought by any of the parties to the application which was before it. The unions sought an interim award to preserve the status quo generally. The PTC opposed the application. The relief granted was a final award extending only to the apprentices. Of course, in making an order or award the Commission was not confined to relief claimed by the parties. Section 120 of the Act provides:

"In making an award or order, the Commission is not restricted to the specific relief claimed by the parties to the industrial dispute concerned, or to the demands made by the parties in the course of the industrial dispute, but may include in the award or order anything which the Commission considers necessary or expedient for the purpose of preventing or settling the industrial dispute or preventing further industrial disputes." ((2) See also Reg. v. Galvin; Ex parte Amalgamated Engineering Union, Australian Section (1952) 86 CLR 34, at p.40; Reg. v. Holmes; Ex parte Victorian Employers' Federation (1980) 145 CLR 68, at p.76; Re Federated Storemen and Packers Union of Australia; Ex parte Wooldumpers (Vic.) Ltd. (1989) 166 CLR 311, at pp.317-318.)

21. But the wide scope given to the Commission in determining the relief which it will give does not absolve it from an obligation to observe the rules of procedural fairness in exercising its arbitral function. In Re Australian Bank Employees Union; Ex parte Citicorp Australia Ltd. ((3) (1989) 167 CLR 513, at p.519.) this Court pointed out that it was well settled that the Conciliation and Arbitration Commission was bound to act judicially and that the Commission, as its successor, is bound to do likewise. The Court went on to point out that one aspect of the duty to act judicially is the duty to hear a party and to allow him or her a reasonable opportunity to present his or her case and, coupled with that duty, is the duty to consider the case put. And in Re Media, Entertainment and Arts Alliance; Ex parte Hoyts Corporation Pty. Ltd. ((4) (1993) 67 ALJR 389, at p.390; 112 ALR 193, at p.194.) the Court said that the Commission has a duty in considering an application to afford a party a reasonable opportunity to allow his or her case to be put.

22. Of course, what is reasonable will depend upon the circumstances of the case. In this instance, the parties were given an adequate opportunity to call evidence and put submissions, but that evidence and those submissions were directed to the issue of whether an interim award should be made and, if so, whether it should include the
apprentices. The PTC, it is true, submitted that because the Commission lacked jurisdiction to make a final award extending to the apprentices and alternatively, that because such an award would be inconsistent with TCR principles, it ought not to make an interim award extending to them. But those submissions and the manner in which they were developed may well have fallen short of the submissions which the PTC would have wanted to make had it appreciated that the Commission was contemplating a final award giving severance benefits to the apprentices. The PTC submitted in this Court that if it had appreciated that the Commission was contemplating the course which it ultimately took, then it would have regarded as relevant evidence material explaining why apprentices and other persons on fixed term contracts had been excluded from the TCR cases and showing how circumstances had not changed. It would, it said, have wished to show that employers would be adversely affected if they were required to provide TCR benefits to apprentices who were not employed at the conclusion of their apprenticeships. This, it said, would discourage employers from shouldering their social responsibility of engaging apprentices, which was one of the considerations which influenced their exclusion from the TCR cases. But, having regard to the events which occurred, the PTC did not have the opportunity of addressing those matters and was not required to turn its mind to them ((5) cf. Pantorno v. The Queen (1989) 166 CLR 466.).

23. True it is that the Commission raised with the parties the question of a final award, but the suggestion was rejected by both the unions and the PTC, and was apparently abandoned by the Commission. The Commission left the matter upon the basis that "we have before us now completed submissions from all parties, as we understand them, as to whether or not we should make an interim award in relation to apprentices". In those circumstances it cannot, in our view, be said that the PTC - or for that matter the other parties - were given a reasonable opportunity to put whatever case they may have wished to put in opposition to the course eventually taken by the Commission. Before making the final award the Commission ought to have alerted the parties to the possibility that it might do so, in order to afford them a reasonable opportunity to put whatever case they might have wished to put in the circumstances.

24. A question arose during argument about the effect of s.150(1) of the Act on an award made in breach of the requirements of procedural
fairness. Section 150(1) provides:

"Subject to this Act, an award (including an award made on appeal): (a) is final and conclusive; (b) shall not be challenged, appealed against, reviewed, quashed or called in question in any court; and (c) is not subject to prohibition, mandamus or
injunction in any court on any account."

25. This Court has considered the effect of a provision such as s.150(1) on a number of occasions ((6) See, for example, R. v.
Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598; Reg. v. Commonwealth Industrial Court Judges; Ex parte Cocks (1968) 121 CLR 313; Reg. v. Coldham; Ex parte Australian Workers' Union (1983) 153 CLR 415.), most recently in O'Toole v. Charles David Pty. Ltd. ((7) (1991) 171 CLR 232.). It is well settled that a provision of
that kind cannot validate an award which exceeds constitutional limits ((8) See generally O'Toole v. Charles David Pty. Ltd. (1991) 171 CLR 232; Reg. v. Coldham; Ex parte Australian Workers' Union (1983) 153 CLR, at pp.418, 421-423.).

26. As earlier indicated, arbitral power must be exercised judicially. One aspect of that requirement is that the parties to the dispute or the proceeding in question must be given an opportunity to put their case. That is no mere procedural or statutory requirement. Rather, as Gibbs J pointed out in Reg. v Moore; Ex parte Victoria ((9) (1977) 140 CLR 92, at p.102. See also Australian Railways Union v Victorian Railways Commissioners (1930) 44 CLR 319, at pp.384-385.), "it is inherent in the very notion of arbitration that there (should) be a hearing of the disputants, and a procedure that produce(s) an award without a proper hearing (is) outside the Constitutional power".

27. Given the nature of the arbitral power, s.150 cannot operate to preclude the PTC from challenging the award in this case upon the ground that the Commission did not act judicially in failing to afford it an opportunity to put a case against the making of a final award. That award cannot, in our view, be regarded as having been validly made.

28. The PTC also sought to challenge the award made by the Commission upon the basis that it lacked jurisdiction because the dispute concerning the employment of the apprentices fell outside the ambit of the earlier logs of claims upon which the unions relied and was therefore a purely intrastate dispute. This does not appear to have been a submission which the PTC pressed before the Commission and it is neither necessary nor appropriate that this Court should deal with it in granting relief. For the foregoing reasons, the order nisi for prohibition should be made absolute.

29. The PTC also sought a direction that, if the matter was to go back before the Commission, a different Full Bench should be constituted to hear it ((10) cf. Smith v. New South Wales Bar Association (1992) 176 CLR 256, at p.269.). But the course which the matter now takes is a matter for the parties and the Commission. No issue of assessment of the credit of witnesses arises and we do not consider it appropriate in proceedings for prerogative relief to give a direction of the kind sought.