Re Finance Sector Union of Australia; Ex parte Illaton Pty Ltd; Re Finance Sector Union of Australia; Ex parte Swartz

[1992] HCATrans 187

..

' ,

IN THE HIGH COURT OF AUSTRALIA	•
Office of the Registry

Melbourne	No M64 of 1991
In the matter of -

An application for a writ of prohibition directed to THE

HONOURABLE MR DEPUTY

PRESIDENT MACBEAN, a member

of the Australian Industrial Relations Commission and the

FINANCE SECTOR UNION OF

AUSTRALIA

Respondents

Ex parte -

ILLATON PTY LTD

Prosecutor

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane	No B43 of 1991
In the matter of -

An application for a writ of prohibition against THE

HONOURABLE DEPUTY PRESIDENT

JOHN WILLIAM MACBEAN of the

Australian Industrial

Relations Commission

First Respondent

Illaton 1 24/6/92

FINANCE SECTOR UNION OF

AUSTRALIA

Second Respondent

Ex parte -

MICHAEL GLENN SWARTZ, ROBERT
JAMES NORRIS, NICOLE LESLEY

SCOWN, MARY ANTOINETTE

FEEHAN, MARCIA ANN HAMILTON,

CHERYL ANNE GALL, PAUL MARTIN

PERKINS, GEORGE EDWARD
PATRICK ANTOS, DAWN ANNE

PENNA and ANNE GRAHAM MANSON

Prosecutors

DEANE J

TOOHEY J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 24 JUNE 1992, AT 11.29 AM

Copyright in the High Court of Australia

MR MERKEL, QC:  If the Court pleases, I appear with my

learned friend, MR L. KAUFMAN, for the prosecutor

in the first case, Illaton Pty Ltd.	(instructed by
Ribgy Cooke)

MR J.S. DOUGLAS, QC: If the Court pleases, I appear with my

learned friend, MR G.C. MARTIN, for the prosecutors

in the matter B43 of 1991, Swartz and others.

(instructed by Clayton Utz Henderson Trout)

MR R.W. HINKLEY:  May it please the Court, I appear for the

respondent in both matters, the Finance Sector

Union of Australia.	(instructed by Maurice
Blackburn & Co}

DEANE J: Thank you. Yes, Mr Merkel.

MR MERKEL:  If the Court pleases, if I could hand up three

documents: our outline, also a chronology, which I

hope will be of some help to the Court and,
unfortunately, I think, the first two pages only of
the index appeared in the appeal book, and if we

could hand up the other two pages and apologize for

what has occurred.

DEANE J: Yes, Mr Merkel.

MR MERKEL:	If the Court pleases, the order nisi raises the question of the Deputy President's continuance as a
member of the Full Bench dealing with the three
applications under section 115. The applications
are for certification of agreements entered into
between the employer, Illaton Pty Ltd, and the
staff association, if I can refer to it as that -
it was previously referred to as the Metway Group
Staff Association, more recently when it sought
registration as. an organization in Queensland it
became the Metway Group Industrial Organization of
Employees, but it is the same body. There are
three agreements; one, which appears at page 18,
relates to conditions of employment, including

Illaton 2 24/6/92

wages; the second, at page 73, deals with annual
leave; and the third, which is at page 95, deals

with no extra claims.

I understand one of the reasons for the theory

behind the breakup is that if for some reason one

agreement is not certified it enables the

Commission to proceed to certify the others,

because it is believed it cannot blue-pencil parts

of an agreement and certify only part of an

agreement, so that procedure was followed. The

manner in which it came before the Full Bench was

pursuant to section 115(6) of the Act. That

section requires - - -

DEANE J: Excuse me, Mr Merkel, I have not got a copy of the

Act. Good, I will return it in due course. Thank

you.

MR MERKEL:  The section enables parties to an industrial

dispute to agree on terms of settlement - that is
in subsection (1) - and they can then, under

subsection (3), apply for certification.

Certification is mandatory under subsection (4)

unless the Commission is of the opinion that it

would be contrary to the public interest to

certify. The provision of subsection (6), which

led to this matter being referred to the

Full Bench, provides that:

If, in the opinion of the President, the

agreement is inconsistent with general

Full Bench principles, the powers of the

commission under this section are exercisable

only by a Full Bench.

AI:ld what, in fact, occurred here is the solicitors

for Illaton, when applying, informed the president

that the agreements did not comply with Full Bench

principles and the president then referred the

matter to a Full Bench.

TOOHEY J: But the matter having been referred, Mr Merkel,

the section then would operate equally, would it,

upon the decision to register or not to register?

MR MERKEL:	Yes, Your Honour.
TOOHEY J:	So that subsection (4) would remain operative in the same way?

MR MERKEL: Yes, Your Honour. It just means that the whole

matter must be determined by a Full Bench and the

other relevant subsection is (9), which provides

that:

Illaton 24/6/92

Subsection (4) shall not be taken to require

the Commission to certify the agreement if it

is of the opinion that:

(a) the terms are not in settlement of an

industrial dispute; or

(b) any of the terms is a term that the

Commission does not have power to include in

an award.

So essentially, the matter before the Full Bench,

to whom the proceeding has been referred, involves

two issues. The first is whether there is a

genuine industrial dispute, and the second is
whether it would be contrary to the public interest

to certify the agreements. I should say, before leaving public interest, public interest is also

relevant under section 90(a), which requires the

Commission, "in the performance of its functions"

to "take into account the public interest" and in

that regard have regard to "the objects of this

Act", which are set out in section 3. I will

return to those matters later, but it is relevant

to the application that the two critical matters
which the Commission is required to have regard to
are matters that are not able to be defined or

limited by the parties, they are matters which are

mandatory as far the Commission is concerned,

namely jurisdiction and public interest.

The hearings under section 115 commenced

before the Full Bench and, on 25 October 1991,

Deputy President MacBean, who was a member of that

Full Bench, handed down his decision in another

matter, which was an application under

section lll(l)(g) of the Act, which involved

essentially the same parties, and in that decision

made a number of adverse findings against the

employer and its relationship with the staff

association concerning employment agreements. And

it is the decisions made by His Honour in that

judgment, or in that decision, that have formed the

basis of the order nisi, the application being that

His Honour should not sit further on the Full Bench

dealing with the section 115 applications.

The issues as far as Illaton are concerned are

sought to be defined by us in paragraph 1 of our

outline, and that is that His Honour in his

decisions expressed clear views about questions of

fact which constitute live and significant issues

in the section 115 applications and, because of the

manner in which those issues were expressed, we say

that some of the questions that have arisen in

other apprehension of bias cases such as whether it

was a provisional or a tentative view, or a view

Illaton 24/6/92

that may in reality be changed by further evidence,

has no bearing, as a matter of practical reality,

in the present case because, as we have said at

paragraph 5, the hearing that was conducted by

His Honour was an extensive, comprehensive and

indeed exhaustive hearing in respect of all aspects

of the relationship between the employer and the

staff association.

But, if I can endeavour to put those issues in

their correct context and if I can just briefly

take the Court to the chronology and explain

precisely what the issues were in the proceedings

that have arisen. Essentially the contest between

the parties is not altogether dissimilar to that

which arose in the Hoyts case, which was the

subject for judgment in the Polites decision in

this Court. The Metway group of companies, which

carry on banking business, have sought in

Queensland, through the State Commission, and more

recently in the Federal Commission, to have

certification of a voluntary employment agreement,

and then an award in terms of the voluntary
employment agreement, between itself and its staff
association, which is an organization of employees
employed by the Bank or one of its subsidiaries,

and Illaton is a subsidiary of the Bank.

The relevant Union which was formerly the ABEU

sought, initially, to negotiate with the employer,

and then seek a State award after earlier

delivering a log of claims which was to form the

basis of an industrial dispute in the Federal

jurisdiction. So that at the same time one has had

two parallel sets of claims: one between the

employer and its staff association for an award or

an approved agreement under Queensland law that

would govern employment between the employees and

the employer Metway - or within the Metway group;

the other is the banking union which sought to

embrace the Bank's employees as part of a more	general award covering employees in the banking
industry.

If I could now go to the chronology and put

the proceedings in their context. The ABEU served

logs of claims, which are referred to in

paragraphs 1 and 2, in October 1987 and January

1989, and where companies other than Illaton are

referred to they are subsidiaries of the Bank and

no relevant distinctions need be drawn between them

for present purposes. Then the Deputy President,

who heads the banking panel, joined those two

matters together, that is in effect a common log of

claims by the Union against the group, and Illaton

made an application under section lll(l)(g), in the

federal jurisdiction, that the matter not proceed

Illaton 24/6/92

in the federal jurisdiction and it ought to be

allowed to be determined in Queensland, under the
Queensland legislation.

In October 1988 the staff association was

formed and in January and February 1989 voluntary
employment agreements were reached between the
staff and the employer and that was then approved

by the Queensland Commission, under the Queensland

legislation, on 28 April 1989. In 1990 the

Industrial Relations Act repealed the earlier

legislation and employment agreements of the kind

that were approved were only to continue in force

until 30 September 1990. That led to Illaton

applying to the Queensland Industrial Relations

Commission for an award in essentially the same

terms, or similar terms, to the employment

agreement, so that it would be replaced by a State

award, and at the same time the banking union

applied for a State award in its more general and

different log of claims.

TOOHEY J: Mr Merkel, I do not quite follow 6. It says,

"VEA's to continue in force only until 30

September". Why is that?

MR MERKEL:  Your Honour, what had occurred in Queensland is

a different approach and, in effect, the

termination of voluntary employment agreements as a

substitute for awards and under the repealing

legislation there was, in effect, a sunset clause

on all extant employment agreements. So that,

thereafter, matters would proceed back to

determination by State awards as they previously had been. I am not familiar with the details of the Act, but that is the substantive effect of what
occurred. That led to applications in the State

jurisdiction for awards by both Illaton and the

Union and the Commission made an interim award in
September 1990.

The applications under section lll(l)(g)

commenced in May 1990 and concluded in

October 1990, and generally dealt with events,

particularly the relationship between the employer
and the staff association, certainly up to about

June 1990 and probably more or less up to the date on which the hearing concluded, and the Deputy

President reserved his decision.

What is not set out in the chronology, but

appears from the statement of Mr Swartz, who is the

president of the staff association, is that during
the second half of 1990 steps were taken for the

staff association to become a registered

organization in Queensland, so that it would then

have the status to seek an award with its employer

Illaton 6 24/6/92

but, as a result of what has been referred to as

the invalidities legislation, the ABEU, which had

ceased to exist in Queensland, was reinstated, and

early in 1991 the staff association was advised

that it was unlikely that its registration would

succeed in Queensland because the ABEU was, in

effect, covering its area and, as a result of that

advice, it then determined to seek a federal award,

having employees in New South Wales and Queensland

at the Bank, and as a result of that it moved its

contest from the State jurisdiction to the federal

jurisdiction and served a log of claims on Illaton

on 3 June. Those claims were rejected on 4 June and

then agreements were entered into, structurally

along lines similar to the voluntary employment
agreements and the subject of the award - - -

DEANE J:  Can I ask you this: what is the difference between

MGSA and MGIOE?

MR MERKEL:  No significant difference, Your Honour. The

MGIOE was formerly the MGSA; it just made certain

amendments to its constitution to make application

the same body. In serving the log of claims and it being rejected, the parties then entered into an

for registration as a State organization in

agreement on 6 June and they filed three

applications for certification of those agreements,

which were the three agreements I referred to
earlier, on 6 June, and they were filed in the

Commission on 7 June, together with the letter to the President indicating that national wage principles, certain principles were in conflict

with the agreements and that required the matter be

referred to a Full Bench, which His Honour did.

On 19 August the matter came on for mention

before the Full Bench and there was, in effect, a

directions hearing. The parties outlined the

nature of the issues that would arise and

directions were given for the hearing to, in
effect, proceed in two stages: first to deal with

jurisdiction and then to deal with certification,

and directions were given for contentions to be

filed by all three parties, the parties being the employer, Illaton, the staff association, and the

Union, I think which, by now, had become the

Financial Sector Union, or had merged into the

Financial Sector Union.

DEANE J: And, what, the jurisdictional question being

whether there was an interstate industrial dispute?

MR MERKEL: Whether there was a genuine dispute.

DEANE J:	Yes .
Illaton	24/6/92
MR MERKEL:	And I will come back to the factual substratum for that in a moment, if I may. That matter
proceeded and evidence was called and the parties
presented their case and then the Deputy President
announced that he was handing down his decision, which he did on 25 October, on the section 111
application, and in that decision His Honour made
adverse findings against the staff association and the employer and that led to an application that
His Honour disqualify himself from further sitting
as a member of the Full Bench and then His Honour
declined to do that and that led to the order nisi
being granted on 19 December 1991,
TOOHEY J:	So there were two packets of proceedings in the

Federal Commission: there were those that were

initiated back in 1987 and 1989, which were the

subject of a section lll(l)(g) application, and the

applications for certification of agreements?

MR MERKEL:  Yes, Your Honour. They are the two extant

proceedings for current purposes within the Federal

Commission, and if I can now seek to identify the

relationship between the two proceedings to

indicate why it is that we contend that

His Honour's decision on the section 111

application in effect is predetermining of a number

of live and significant issues which the Bench must
consider and deal with on the section 115

certification.

DEANE J: Could the two sets of proceedings have been

consolidated?

MR MERKEL:  No, Your Honour, not strictly, because one

relates to certification under section 115 and the

other relates to, in effect a new award between the

banking Union and the Metway Group, and that may be

coincident with other awards which it has, in

effect, with other banks.

DEANE J: But is it not really much the same question?

MR MERKEL: Yes, Your Honour.

DEANE J:  I mean, if you certify the agreement you would be

unlikely to make the award. If you make the award

you would be unlikely to certify the agreement.

MR MERKEL: That is precisely the case, Your Honour, and I

must say the proceedings have not been simple, and numerous applications. If Your Honour will just

excuse me for a minute, there may have been such an

application. I am told, Your Honour, there was an

application, at one stage, to have the section 111

application referred to a Full Bench and to be

Illaton 24/6/92

heard together with section 115, but that did not

occur; it was refused. But, what Your Honour says

is absolutely correct, and indeed it is the point

we make.

DEANE J: Well, taking you to what would seem to be the

heart of it: if the second proceedings were not

being heard by a Full Bench, would it not be

obvious that Mr MacBean was the person who should

hear them?

MR MERKEL: Yes, Your Honour, if the second proceedings were

not referred to a Full Bench and - - -

DEANE J:  I mean, if Mr MacBean, just having determined the

section 111 proceedings after a long hearing, and

given the decision, was then allocated
the 115 proceedings, would it not, to put it

strongly, be lunacy, for anyone else in the

Commission to hear them?

MR MERKEL: 

I think, Your Honour, that that is what counsel

for Illaton sought, and I may stand corrected
because I do not have the familiarity with all the
procedural steps, but I understand that

Mr Ian Douglas sought to have the section 111, in

effect, dealt with the section 115 application for
the very reason Your Honour has said, because the
decision in one ultimately becomes the reverse side

of the coin for the other. But that did not occur

and the Deputy President could have determined the

section lll(l)(g) application on a very narrow

ground.

DEANE J: 

No doubt what I put to you did not come over

correctly, Mr Merkel, and it is my fault. What I

put to you is: assume that Mr MacBean has dealt

with, as he has, the section lll(l)(g) and the

question of who is going to deal with the

section 115 application then arises. What I

suggested to you was that it would be lunacy for

anyone other than Mr MacBean to deal with them.

MR MERKEL:  Your Honour, that requires two steps. The first

is, if that was to occur, they ought to have been

heard together because evidence in one ought to be

evidence in the other, for reasons we will come to,

but that was refused. That not having occurred,

the answer to Your Honour's question becomes

entirely dependent upon the findings that he has

made that would disqualify him from following the

course that Your Honour has put. In other words,

had the matter just stopped before decision and the

evidence in the section 111 been treated as the

evidence in the section 115 proceedings and the

Deputy President continued to sit, what Your Honour

said would have obviously been a sensible course

Illaton 9 24/6/92

but, for reasons I cannot identify, His Honour
determined to sit individually on the section 111

application and make findings on that application

on that evidence which we say are now

predeterminative of significant facts in issue that

are required to be determined by the Full Bench in

a section 115 application.

TOOHEY J: But in terms of chronology the section lll(l)(g)

proceedings apparently ended in October 1990, at

which time the application for certification of

agreements was not before the Commission - - -

MR MERKEL: That is correct.

TOOHEY J:  - - - and did not come before the Commission

until some eight months later.

MR MERKEL:  Yes.

TOOHEY J: So, what is it that is suggested, that while

judgment was pending on the section lll(l)(g)

application, that somehow Deputy President MacBean

should have been brought into the applications for

certification?

MR MERKEL:  Your Honour, I understand it was called back on

for that purpose and that was not pursued but that,

in effect, is the unfortunate sequence that creates

the present problem. The present problem is really

simply this, that, are the findings by His Honour,

in effect, determinative of significant and live
issues of fact on the section 115 applications, and

we say they are, and that is the issue that arises

on the order nisi. And it is a situation, in a

sense, that was avoidable in one of two ways. It

would have been avoidable had His Honour dealt with

the two together and the Commission worked out a

procedural basis for that to have occurred.

Alternatively it was avoidable if His Honour had

not handed down his decision because we could not

or, to put it more accurately, we did not object

to His Honour having heard the section 111 evidence

and being a member of the Full Bench.

TOOHEY J: Well, that is what I was going to ask you,

because the potential for the problem that arose

was always there, was it not?

MR MERKEL:  The potential for the problem was there

hypothetically, depending on what his findings

were.

TOOHEY J: Surely.

MR MERKEL:  We are not suggesting for one minute that he was

disqualified from sitting on the Full Bench because

Illaton 10 24/6/92

he heard evidence on the section lll(l)(g) and he

could have determined the section 111 application

on a number of grounds that would not have been

relevant to, or determinative of, in effect, the

section 115 application.

TOOHEY J: But they might have been if he had heard them

both together.

MR MERKEL:  Your Honour, that was a good reason for

His Honour, even in these events, possibly

consolidating or having the evidence dealt with in

the section 111 application taken in as evidence on

the section 115 application.

TOOHEY J: And you would have no complaint about that had

that been done?

MR MERKEL: Well, we applied for it, Your Honour.

TOOHEY J: Yes.

MR MERKEL:  As I understand it - I may stand corrected - but

I think what we are saying is that no one really

knew what his findings would be and, obviously,

when they were handed down they were not as

expected certainly on the part of the employer, and just to complete what is not in the chronology, the

employer certainly does not accept His Honour's

findings, and indeed has appealed His Honour's

decision and that appeal has now been heard, but

not yet determined by a Full Bench.	I think it
finished within the last week or so.	So that

His Honour's rulings and His Honour's decision

itself is subject to review by the Full Bench.

Whatever that outcome may be we do not know, but

the problem that was inherent, but hypothetical,

nas now arisen by reason of the decision.

DEANE J: But now the lll(l)(g) application having been

refused, what is the current state of play?

MR MERKEL:  The current state of play, Your Honour, is that

there are - - -

DEANE J:	The two matters are still awaiting hearing?
MR MERKEL:	Yes, two competing matters awaiting final

hearing. As Your Honour has correctly pointed out,

it is one or the other, as a matter of practical

result. The evidence continued on the

jurisdictional question before the Full Bench and

subject to applications - - -

DEANE J: Well, no, I was more concerned with the dispute

created by the Union logs; that is, the matters in

Illaton 11 24/6/92

which the lll(l)(g) proceedings were brought. They

are still awaiting hearing, are they?

MR MERKEL:  Yes. As I understand it, Your Honour, I think

they are subject to the appeal decision so that if
the appeal is upheld that would bring to an end
those proceedings, so that the outcome of
the 111 application has in effect determined when

and if the federal claim by the Union would

proceed.

DEANE J:  Now, can I ask this: would it be argued that

Mr MacBean should be disqualified from dealing with

those two matters because he had dealt

with lll(l)(g) application within them?

MR MERKEL:  By reason of his findings, the answer is, yes,

Your Honour, because for the same reason that his

findings have, in effect, predetermined the
substantive factual issues, or a number of the

substantive factual issues in the section 115

application, by determining those in the way

His Honour has he has inexorably found in favour of

heading towards a federal award on the part of the

Union rather than the staff association.

DEANE J:	I see.
MR MERKEL:	So that is how the problem has arisen, but I

emphasize that apart from making applications to

have avoided the procedural difficulties which

were, in fact, done, there was no basis for asking

the Deputy President to disqualify himself as a

member of the Full Bench merely because he had

heard evidence and participated in a hearing of the

section 111 application, so that the issue only

arose in any relevant sense after His Honour's

decision.

TOOHEY J: And do you say, Mr Merkel, that it arose because

of the decision or because of the way in which the

decision was framed or - - -

MR MERKEL:  Because of the findings of fact in the decision,

Your Honour, not because of the decision. He had a

number of grounds that were open to him to refuse

to, in effect, dismiss the claim of the banks for

an award, but it is really his findings of fact and

his conclusions that are central to our

application.

GAUDRON J:  Mr Merkel, the lll(l)(g) application was based

on subparagraph (iii), was it?

MR MERKEL:  It was based on subparagraph (ii) and (iii),

Your Honour.

Illaton 12 24/6/92

GAUDRON J: Subparagraph (ii) had fallen out though, had it?

MR MERKEL:  No, it had not fallen out because there were

still, at the time His Honour was dealing with the matter, proceedings in the State jurisdiction, but

as a practical matter the proceedings have moved to

the federal jurisdiction and His Honour really did not deal very much with the subsection (ii) point, but it was put on both grounds.

GAUDRON J: And the issue in the 115 proceedings to which

you say the findings may have some significance is

whether or not there was a genuine dispute between

the staff association and the Bank.

MR MERKEL: That is what I have called the jurisdictional

issue, but there is - - -

GAUDRON J:  So it does not bear on any issue other than the jurisdictional issue?

GAUDRON J: Well, no, Your Honour. The facts that are

relevant to that bear very strongly on the public

interest issue. So that even if it was found that

there was technically a dispute created by the

paper, the findings as to how that dispute arose

and possibly the artificiality of it, if

technically a dispute, would bear very strongly on

the public interest question by reason of

His Honour's decision. And one of the criticisms we make, but not the only one, is that His Honour seems to have not been prepared to look ahead,

because the Full Bench is dealing with one

proceeding, not two, and merely because it divides

it into two stages, we say that it is inevitable

that his findings reflect equally on the public

i~terest question.

GAUDRON J: Well, if your agreements had been framed in

accordance with Full Bench decisions, all matters -

that is to say the public interest matter under

section 115, the jurisdictional matter under

section 115 and the issue under lll(l)(g)(ii)

and (iii) - could have been determined by

Deputy President MacBean in consolidated

proceedings.

MR MERKEL: Yes, that was a possibility, Your Honour,

although it could have likewise been referred by

the President, under section 107 or 108, to a

Full Bench, but it could have been heard by the

same body.

GAUDRON J: In the one proceedings - I mean, if the client

is - - -

Illaton	13	24/6/92
MR MERKEL:	Yes.	If I can say, in the one hearing, or one

after the other, or consolidated without being

technical, but in practical result, yes,

Your Honour.

GAUDRON J: Well then, would you have made the same

submission as you are making now, having made the

findings in the proceedings under

section lll(l)(g)?

MR MERKEL:  Yes, Your Honour. His Honour's findings in that

decision are predeterminative of, in effect, the

factual basis for choosing between the staff

association certification or the federal award.	We
say that His Honour has predetermined those matters; not in any interlocutory sense. That is why I said at the outset that this is not a case
where one can say, well, His Honour acted only on
certain limited evidence and dealt with the
evidence as it was then before him.	It was a

comprehensive hearing which really went into and

analyzed every facet of the relationship between

the employer and the employee and made very strong

findings of fact on a final basis, which we say are

not superseded by any other relevant later events.

It is true that there was, in June, the new

log and the rejection and the employment agreements

between the employer and the staff association and,

in a sense, it is true to say that they are new
events which were not before His Honour, but those

events were no more than sequential and following

on from the relationship and the objects which the

staff association and the employer always had and

that the findings in respect of that historical

association and that object must, as a matter of
logic, carry over to the new log and its rejection

~n the new agreement. It is not as if there was a new succession of events that made the old no more

than background events. They are really, in effect
predetermined by the old events.	So that we say

that nothing new occurred in any relevant sense
that would make his rulings or findings of no

significance in the contest between the staff

association award or the Union award.

If I could endeavour to now go to the heart of

the matter. In our outline we have sought to

identify what the contentions of the parties were,

and we do that to indicate how the parties treated

the section 111 issues very much as the same issues

that would arise on the section 115 application.

Can I go to firstly the application book, volume 1.

Illaton set out its contentions at pages 241 to

246. At page 241 there is reliance upon the log

and its rejection and an alternative claim in 242

is relied upon for founding jurisdiction that:

Illaton 14 24/6/92

The agreements were made in part settlement of

disputes -

which formed the basis of the federal log of claims

by the banking Union. So that that issue on

jurisdiction raised the matters that were in the

section 111 application. The staff association's

contentions are at pages 143 to 150, and from

p~ge 146 to 148 it related the background to the

association and at page 148, in paragraph 6,

indicated the matters I informed the Court about,

that it:

sought legal advice about the effect that the

Industrial Relations (Protection from

Invalidities) Act -

that it would result in them not getting

registration and then it took steps to issue the

log and create the federal industrial dispute and

it annexes the relevant documents. Significantly,

the Union position has been identified in our

outline at a number of places.	The Union first
stated - - -

DEANE J:  Mr Merkel, I should mention something I should

have mentioned at the beginning and that is that

the Deputy Registrar has certified that she has

received a letter from the Australian

Government Solicitor dated 3 June 1992, advising

that the first-named respondent does not wish to

appear at the hearing of either matter and will

abide by any order of the Court. Thank you,

Mr Merkel.

MR MERKEL:  If I can take the Court to the way in which the

Union has presented the issues: the first statement

appears at page 125, which was on the directions

hearing in volume 1, lines 1 to 25, and in those

three paragraphs my learned friend, Mr Hinkley, on

behalf of the Union made it clear that he was going	to challenge the genuineness of the dispute created
and at line 9 talked of:

a very careful analysis of all the factual

circumstances -

which really, in effect, are a summation of the

whole history of the relationship between the
employer and its staff association. It is also

dealt with next at pages 247 to 250. They are the

contentions which the Union relied upon as

identifying the issues that would arise on just the

jurisdictional aspect and, again, it raised

genuineness in a very general way and said in

paragraph 1, for example, that they were not:

Illaton 15 24/6/92

written demands -

on behalf of employees. And in paragraph 3:

The members of the Committee •.... are not

agents for the members -

of the association, in effect, raising the whole

nature of the relationship between the association

and its employees and the employers and at

paragraph 13 at page 249, indicated that they would

rely upon the facts ascertainable from the -

section 111 -

proceedings -

which they referred to as the "stay" applications,

and at page 250 indicated that they would require -

that all persons being members of the

Committee of the -

staff association to be -

available for cross-examination.

So that it was certainly not put on any narrow

basis.

The other passages that we would seek to take the Court briefly to in respect of the Union

position, was stated firstly at page 260 by my

learned friend. That is in volume 2 and I will not

read those passages, but Mr Swartz, who is the

president, was cross-examined to the effect that
there was a close and cooperative relationship and

at lines 7 to 10, in effect incorporated the

evidence that had been given before the

Deputy President in the section 111 proceedings.

At page 310 in the same volume, Mr Hinkley then, at

the bottom of the page, tendered some of the

evidence before the section 111 hearing in the

challenge to jurisdiction. At page 417 to 418, Mr

Hinkley summarized the substantive challenges he

was making on jurisdiction and particularly the

issue at lines 23 to 25. A main challenge was that

the whole relationship was a contrivance to, in

effect, exclude and in result, exclude the ABEU,

which is precisely the finding that the Deputy

President made on the section 111 application.

He also, without again reading it, at page 418

at line 13, indicates that his case will look at

the historical material in respect of relationship

Illaton 16 24/6/92

between the association and the employer and at

lines 24 to 28 talks of the historical relationship

which became the very subject-matter of the

Deputy President's decision. There are other

references at page 425, where he explains in the top four lines that the claims were a device for
the other purpose. There is also page 431 to 432,

where he says at line 33 that the device created a

dispute which was a sham, and at the bottom of

page 431 talks of all the circumstances which

showed there was cooperation between the two

bodies; refers to the "historical environment"

atline 11 at page 432 and indicates at line 28 at

page 432 that:

the history of the relations between all these

people is not one where one could infer in any

way that there was any sense of the dispute

developing -

looking again at the historical context. And he

makes further comments to similar effect at

page 439 at lines 5 to 12. So that, we say that

the jurisdictional issues as raised by the Union

covered the whole breadth of the relationship and

the inferences that were to be drawn from it. They go to the jurisdictional issues and I had me.ntioned

earlier that even though the Full Bench was not at

that stage dealing with the public interest issues,

we say it is inescapable that the central issue on

public interest will be the issue he decided on the

section 111 application. And we say there is

nothing hypothetical or notional about what may

arise in that regard; that is the issue, and it is

not an issue that can be redefined or narrowed or

tailored in any relevant way by the parties.

Can I now come to the thrust of His Honour's

decision. We have endeavoured to summarize

probably the three critical findings at paragraph 6

of our outline, and His Honour made three basic

findings: the first was that the relationship was a

contrived one for the sole objective of having the

employer remove itself from interference by the

Union and from federal jurisdiction and to prevent

the ABEU achieving a federal award. He then

concluded at page 621 of the appeal book that the

method and procedures adopted were such as:

to tear down the very foundations upon which
the system of conciliation and arbitration is

presently grounded, that is, the existence of

registered organisations of employers and

employees.

Now we say that finding must inevitably

predetermine the Deputy President from finding that

Illaton 17

those procedures which resulted in agreement could

possibly have the benefit of certification under

section 115.

Could I now take the Court briefly to the

findings of fact that we rely upon, which we say

are the sub stratum upon which both the

jurisdictional and the public interest issues will

be required to be determined by the Full Bench.

Could I go to His Honour's decision on the

section 111 application, firstly to page 590, which

is in volume 3, and this is His Honour's

conclusions on the facts as they were presented to

him as at October 1990. At line 4 His Honour said:

Thereafter Metway put in place a detailed plan
designed to ensure that there could be only
one result: a vote in favour of establishing

the staff association.

That is a stepping stone to saying that the staff

association was a contrivance by the employer to

get compliant employees to have an agreement.

Could I go next to page 593 at line 21.

His Honour, analyzing documents in viva voce

evidence, said that that led him:

to the inescapable conclusion that this

concept of the staff association was

management driven and not the result of any

overwhelming desire of staff.

Could I go next to page 594 at line 5, His Honour

said:

Metway, having already decided they wanted a

staff association and a course of action to

achieve it, seized upon these isolated

comments in a confused self-generated

environment and used them to represent

overwhelming support of staff for the idea of

a staff association. It is clear that the

staff association concept appealed to Metway

and fitted in with the views of Mr Steel that

unions were outside bodies and likely to be a

disruptive influence on internal relations

between staff and management.

If I go next to page 599, His Honour then made

certain findings concerning a ballot of staff
support for the association, and the results are
set out at the top of the page, with a strong vote

of support for the association, and His Honour then

concluded in lines 5 and 6 that the ballot was no

guide to:

Illaton 18 24/6/92

choice on union coverage.

And then His Honour, at line 17, in explaining why

he came to that conclusion, said:

This was not a case of an open, informed

discussion and debate in which the employees

were afforded any opportunity to have all the

competing views and information before them

before a vote was taken.

And he then made certain critical findings of the

employer at the bottom of page 599:

The main ingredients relied upon by

Metway in their campaign to gain support for

the staff association concept were secrecy,

speed, surprise and the denigration of the

ABEU all of which were carried out

successfully by the group of senior management

planners.

Then at page 603, line 10, His Honour then, after

explaining that there was an endeavour to negotiate

with the Union, said at line 10:

it is clear that once these negotiations broke

down Metway set about putting a strategy in

place to prevent the ABEU from gaining a

presence in Metway through the establishment

of a federal award. The evidence establishes

that there was a campaign conceived by senior

staff to portray the ABEU as an organisation

which would be disruptive to the efficient

running of Metway and create difficulties in

the otherwise good industrial relations

environment which existed between staff and

management.

His Honour then at page 604, line 15 said that: The Commission therefore is being asked

to decline to exercise its jurisdiction in

relation to a dispute between Metway and the

ABEU almost entirely on the grounds of the

existence of MGSA. The formation of the MGSA

as I have already concluded was management

driven and employees' support for
the ...•• formation was given in circumstances

contrived by Metway. Metway's sole objective

in promoting the formation of the MGSAwas a
desire to remove themselves from the perceived

interference of outside bodies and from

federal jurisdiction.

The association and the voluntary employment

agreement -

Illaton 19 24/6/92

were seen as a means of achieving this

objective.

If I can stop there, of course what happened in the

first half of 1991 was the move from State

jurisdiction and an employment agreement to the

federal jurisdiction with an employment agreement,

but we say that those moves were based on legal

grounds, but did not produce any different factual
consequence to the findings of His Honour at

page 604. Can I then go ahead to page 613,

line 23. His Honour, after saying that the

finances of the association were contributed to by

Metway, says:

Metway gave birth to the MGSA for the sole

purpose of preventing the ABEU achieving a

federal award with Metway.

That is, I should say, the sole purpose test relied

upon by Mr Hinkley for saying there was no genuine

dispute under section 115.

Metway, in its desire to remain free from the

involvement of the ABEU and a federal award,

has gone to quite extraordinary lengths to achieve this objective even to funding the

complete operations of the MGSA. It is

difficult to understand the continuing policy

and philosophy of Metway which continues to

drive its decisions involving as it does a

significant financial cost.

DEANE J:  Mr Merkel, does this really take the matter any

further than what is said in paragraph 6 of your

wri.tten submissions?

MR MERKEL:· No, Your Honour. It really pinpoints the

factual basis for the conclusions. We say that,

based on this material and evidence and these

findings, His Honour came to these conclusions, but

all of them, individually or cumulatively and

wrapped up in their concluding words, become

predeterminative of what we say are the factual

sub stratum of the section 115 applications. I

have almost finished, Your Honour. I was just

going to say that, at page 616, at line 18,

His Honour found that he thought that the staff

representatives had:

an appalling lack of competence -

in respect of wages; again, supportive of the

suggestion that the whole matter is just a

contrivance. His Honour also made strong findings,

at page 621, which are summarized in paragraph 6 in

the middle paragraph, and page 622, where

Illaton 20 24/6/92

His Honour, in effect, says that once a staff association agreement had been embodied in a

federal award, then the association's existence

would be no longer necessary.

So, we say that those findings compel the

conclusion that the sole purpose of a dispute

created for the purpose of the federal award was no

different from that for the State award, and that

that means the dispute is not a genuine one. His

Honour gave no credence to there being any genuine

demand outside that sole purpose test. Secondly,

His Honour found that, as a stepping stone to that

conclusion, the relationship between the two
organizations was a contrivance for a sole object

of excluding the federal union, that is the banking

union. Likewise, such strong language almost is

predeterminative, but certainly is determinative of

the major issues that underlie the question of

genuineness.

But likewise, we say all of those matters must be equally compelling, particularly his findings

strongly favouring the banking union and critical

of the staff association and the employers, we say

must inevitably lead to the consequence that it

would be contrary to the public interest to certify

the section 115 agreements.

The final matter we want to address is that

raised in paragraph 7 of our outline and that is

that, because we are dealing with jurisdiction and public interest, it is not open to the parties to,

in effect, as they may in a civil proceeding, by

pleading, seek to define or limit the area of

dispute. I understand my learned friend Mr Douglas will be critical of what occurred in the Commission

after the decision was handed down, and indeed in

His Honour's reasons, where His Honour sought to,

in effect, say that the Union had narrowed its

attack and really was saying only the refusal of

the demand was not genuine and therefore had

structured its case, in effect, in a way that would

have retained the Deputy President. We say that is
precisely the kind of circumstance which, in

Livesey's case this Court said, confirms the requirement for disqualification when the parties, in effect, readjust their case so as to retain a

person rather than prevent their disqualification.

We say, what is determinative is the width in

which these issues were opened and the width that

the cases have given to the factual inquiry,

underlying both jurisdiction and public interest.

And if I can only give the Court the references to

these cases, the two decisions of this Court,

showing that the inquiry on genuineness is a

Illaton 21 24/6/92

factual one requiring a detailed analysis of all

the background steps that led to the creation of

the dispute, are R v Cohen; Ex parte

Attorney-General for the State of Queensland (1985)

157 CLR 331, and particularly the analysis of
His Honour the Chief Justice Sir Harry Gibbs at
page 337 to 339; R v Ludeke; Ex parte Queensland

Electricity Commission and Ors (1985) 159 CLR 178,

particularly at pages 181 to 183. On the public

interest question, this Court considered that in

the Queensland Electricity Commission; Ex parte

Electrical Trades Union (1987) 61 ALJR 393, but

particularly in the joint judgment of Their Honours

the Chief Justice and Justices Wilson and Dawson,

at page 395, where Their Honours talked of the

public interest under what was the forerunner to

section lll(l)(g), but under this Act really does

involve a wide range of factual matters, and we

also rely upon what the Court said in Polites case

(1991) 173 CLR at page 78, where the Court said

that no narrow view can be taken of factual matters

in a dispute, which is substantially similar to

that in the present case.

So we say that any endeavour to narrow the

issues by either His Honour or the Union really

only seems to make good the point that we make in

accordance with what is said in Livesey's case.

His Honour's decision on disqualification is at

page 685 in volume 3. If I could take the Court

just briefly to that decision; it is a fairly

lengthy one, but His Honour at page 685 sets out

his conclusions after outlining the principles of

law. The decision actually starts at page 677, but

I only want to take the Court briefly to two

passages. At the bottom of page 686, His Honour

said:

The matters that call for determination

in the section 115 jurisdiction proceedings

are not the same as the ones I have made

findings on in the section lll(l)(g) decision.

Then His Honour said:

Whether any matters on which I have made

findings become matters for consideration

under public interest considerations, if

jurisdiction is found to exist, is not known

and cannot be known until the parties set out

the matters on which they intend to rely.

His Honour then, at page 692 at about line 17,

referred to, in effect, a narrowing of Mr Hinkley's

case. He said:

Illaton 22 24/6/92

An examination of the evidence relied upon by

Mr Hinkley does not require me to decide on

any issue currently before the Commission upon

which I decided in the section lll(l)(g)

decision. In other words, Mr Hinkley has

asked this Commission to rely upon the

evidence of the MGIOE in terms of the long

history of harmonious relations between the

staff and Metway and subsequently the MGIOE

and Metway and the single objective of the

MGIOE and Metway in seeking to prevent the FSU

from gaining award coverage, either federal or

State, to support the submission that the

serving of the log of claims was done for no

other purpose than to prevent the ABEU (State

registered) from achieving a State award

following the passage of the Invalidities Act

by the Queensland Parliament.

We say that what happened is that the Union and

His Honour have endeavoured to, in effect, narrow

the ambit of the issues to try and isolate, in

effect, the background facts as if no inferences

relevantly would be drawn from them, but we say, as

was apparent from the passages we took the Court to

at the outset, they were always in the ring and

inferences would have to be and would be drawn from

them. So we say that His Honour has taken a very

narrow view of his role and in effect has

misapprehended the test. It is not a matter of
waiting for a disqualifying fact to arise and then
disqualifying oneself through the hearing. It is a
question of apprehended bias, in respect of the

issues that one can expect, as a matter of

probability or likelihood, will arise. And that is

why I have taken the Court to the definition of the

issues and the matters that must be decided for

showing that His Honour's view is an unduly

restrictive one.

I should also refer the Court to two sections

of the Act. Section 110 makes it clear in

subsection (2)(b) that:

the Commission is not bound to act in a formal

manner and is not bound by any rules of

evidence, but may inform itself on any matter
in such manner as it considers just.

As the judges of this Court have said in Law's case, as well as Vakauta's case, one does not approach this enquiry as a lawyer but as a fair

minded observer, and we would say it is clear from

section 110(2), and less so from section 20, which

obliges the Commission members to:

Illaton 23 24/6/92

keep acquainted with industrial affairs and

conditions -

that it would be not possible, in the light of that

statutory scheme, for a fair minded observer to

expect His Honour to keep out of his mind the

findings he has made on the section 111

application.

On the question of the bias cases, we say that this is a matter that - - -

DEANE J: Assume that somebody else was hearing the

section 115 application. Wouldd not he or she be

entitled to read what Mr MacBean has said and take

account of the fact that after a 45 day hearing he

had reached those conclusions and say to you, "Do

not waste my time. I am not going to go back to

step one and go over all this; Mr MacBean has dealt

with it"?

MR MERKEL:  I think, Your Honour, that there are also

requirements to observe the rules of natural

justice.

DEANE J: But, why is that not in accordance with natural

justice; I mean, why does the Commission have to go

back to stage one at each step involved in a

general industrial matter?

MR MERKEL:  Your Honour, a number of reasons. It does not

have to go back to stage one; it no doubt could

have regard to the evidence and hear argument on

whether that evidence is open, because those

conclusions are open. The appeal from His Honour

is the best example of that. The appeal bench may

xeject His Honour's findings in their totality, but

what -

DEANE J: Well, it may and then a different situation

arises, but assume in the section 115 application

your clients say, "We want to disregard everything

Mr MacBean said and we now want to take up another

45 days of the Commission's time dealing with the

very matters he dealt with". Why would not the

Commission be entitled to say, "Do not be

ridiculous; Mr MacBean has dealt with it, there has

been an appeal from it, we are going to accept what

he said"?

MR MERKEL:  Your Honour, I think that we would give a number

of answers to that. The first is that what he said

are his conclusions or views and they, of

themselves, ought not to be taken as evidence of
the facts themselves. In other words, Your Honour,

that he has formed conclusions or drawn inferences

from facts - clearly much would be said in favour

Illaton 24 24/6/92

of the Commission not rehearing the same evidence,

that is why even in Courts evidence given in one

proceeding can be tendered as evidence in another.

Secondly, anyone who wished to deal with the

matter would have to give the party against whom

these findings were sought to be used an

opportunity to deal with them, again, subject to
the procedures of the Commission and the control of
the Commission, but most importantly, any person

seeking to rely on them would come with an open

mind, Your Honour, on whether he or she would adopt

them. If they closed their mind because they said,

"I will not hear you on a different application

because Deputy President MacBean has made a
particular finding", subject to rules of issue

estoppal, which are not presently relevant, that

person would not be hearing the case before them

and would be denying natural justice if they

afforded no right to deal with the matter.

DEANE J: So why could they not say, "Well, the starting

point of this is that the Commission has given

45 days of its time to the parties involved here,

has dealt with these issues and made these

findings, that is where we will set out from".

MR MERKEL:  Yes, Your Honour, without endeavouring for one

moment to bind any successor, if they said, "We

would wish to have you respond to why we should not

use this as a starting point" then, subject to

rules of natural justice and questions of inference

and fairness, a member of the Commission may say,

"I would accept this as part of the material I can

act upon". Certainly the Courts have considered at

great length the extent to which judgments can be

used-and ought not to be used, but given the

statutory breadth of what may or may not be

accepted in evidence before the Commission, it may

be put forward as a suggested starting point.	If
it was said to be determinative of the starting
point and you were then required to prove it wrong,

that may itself be a denial, but for my purposes I need go no further than say that, if a decision of

another member of the tribunal were a starting

point, but not the finishing point, then it does

not in any way impede any of the submissions I am

putting. The problem really is that, with the

Deputy President, for the reasons Your Honour has

put, it is the finishing point and that is why we

say that it is not, as a practical matter, open to

him or, more relevantly, open to the fair minded

observer, to conclude that His Honour would be

prepared to, in effect, abandon that and say, "They

are not the conclusions I have reached", because,

as I said at the outset, there was nothing

provisional or tentative about what His Honour did.

Illaton 25 24/6/92

So that we say, for those reasons we submit that

His Honour has made determinations on the very

factual substratum that is determinative of the

applications currently before the Full Bench and

that His Honour was in error in not disqualifying

himself.

I should say that the final matter is:

section 34 of the Act does provide for this kind of circumstance, so that unavailability of an original

member does not inhibit in any sense his now been proceeding for some four months and there
replacement. So that it is not a case where the
will be real harm"; the legislature has provided

for the very problem and dealt with it in

section 34, so that there was no discretionary
basis, if there were an applicable one, which would

be relevant to the present case. So, in our

submission, it is for those reasons that we submit

that the order nisi ought to be made absolute.

DEANE J:  I suppose it is fair enough to say that

Mr MacBean, on your argument, is unavailable.He

certainly does not seem to be saying that himself.

MR MERKEL:  No, he is not saying he is unavailable,

Your Honour, but if the order nisi is made absolute

I think that there may be a proper basis for

suggesting unavailability.

DEANE J: Yes, thank you Mr Merkel. Yes, Mr Douglas.

MR DOUGLAS: If the Court pleases, we have handed up,

through the Court crier, copies of our outline of

submissions. We also - - -

DEANE J: Just give us a moment and we will read them.

MR DOUGLAS:	Yes.
DEANE J: Yes, Mr Douglas.
MR DOUGLAS:	Your Honours, we have also handed up copies of

a recent decision of the New South Wales Court

of Appeal in a matter arising out of the Spedley

litigation called Australian National

Industries Ltd v Spedley and a copy of Ludeke's decision, because they were not referred to in our

outline of submissions. I do not expect I will be

referring to them in any detail though.

My learned friend Mr Merkel has traversed many

of the factual matters which we draw the Court's

attention to in the outline of submissions. What
we wish to concentrate on therefore is some of the

relevant passages in some of the decisions and

Illaton 26 24/6/92

perhaps I can amplify some of the facts by

reference to the matters raised in paragraphs

to the Swartz statement which is from page 1,

through to the page he took you, page 7 set out the

purposes of the association. In the critical
paragraph, at paragraph 38 at page 7, my learned

friend said:

the best way to pursue our purpose, that is,

an award -

What was sought by an award is set out in

paragraphs 1 to 37 which is a continuing history of

an organization seeking to procure better

conditions of employment for its members. What he

did not take you to were the annexures, Hand F, to

that statement which showed that, in fact, that

agreement did win substantial new pay increases and

benefits for the members.

It must be his case that the members did not

want those pay increases and we say that that must

be fanciful. The only basis, he carrying the onus

to show that this log of claims and its refusal was

a contrivance, that he can maintain that is to go

to the reasoning of Deputy President MacBean's

decision to demonstrate that this whole structure

is a sham and that the staff association is but an

arm of the employer.

So that we would submit, with respect, that it

is just wrong to say, as I said at the outset, that

the Union can somehow restructure or structure its

submissions, it matters not, to endeavour to say

that you do not have to look at the history when we

the matter. That is how the case was put by say it is the very history that is determinative of Illaton and the staff association.

The other matter, also, and I took the Court

to it in passages this morning, is in the support of the staff association's aims had resulted in very substantial cost to the employer.

So that to divorce this paper from what, in fact,

it achieved is, with respect, not a realistic

approach to the background circumstances on which

genuineness must be decided.

The final matter is my learned friend took you

to where Mr Ian Douglas had not taken objection to

Illaton 52 24/6/92

Deputy President MacBean not sitting. We said

earlier, and we repeat, there was no basis on which

he could object, his application to, in effect,
join the two matters having failed, there was no

disqualifying factor that could possibly arise from

the Deputy President continuing to sit on both

matters because he had not made a decision that

could be disqualifying. As soon as he did there

was objection and we say that there is no waiver in

any relevant sense, nor is there any necessity or

any discretionary factor that should deny the order

nisi sought. If the Court pleases.

DEANE J: Thank you, Mr Merkel. Mr Douglas?

MR DOUGLAS:  We have no further submissions, if the Court

pleases.

DEANE J: The Court will reserve its decision in this matter

and will endeavour to give a decision at 2.15
tomorrow. There is no guarantee of that but we

would anticipate that we will be giving a decision

at 2.15 tomorrow.

AT 2.50 PM THE MATTER WAS ADJOURNED SINE DIE

Illaton 53 24/6/92