RGC MINERAL SANDS LTD & ANOR -v- CONSTRUCTION, MINING, ENERGY, TIMBERYARDS, SAWMILLS, WOODWORKERS UNION OF AUSTRALIA WA BRANCH & ORS [2000] WASCA 162

Jurisdiction:	WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT	Citation No:	[2000] WASCA 162
Case No:	IAC:10/1999	Heard:	1 MARCH 2000
Coram:	KENNEDY J (Presiding Judge) SCOTT J PARKER J	Delivered:	9/06/00
No of pages:	42	Judgment Part:	1 of 1
Result:	Subject to a minor variation in the order of the Full Bench, appeal dismissed
PDF Version

Parties:	RGC MINERAL SANDS LTD WESTRALIAN SANDS LTD CONSTRUCTION, MINING, ENERGY, TIMBERYARDS, SAWMILLS, WOODWORKERS UNION OF AUSTRALIA WA BRANCH THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION OF WORKERS - WESTERN AUSTRALIAN BRANCH and THE AUSTRALIAN WORKERS' UNION, WEST AUSTRALIAN BRANCH, INDUSTRIAL UNION OF WORKERS
Catchwords:	Industrial law (WA) Industrial matter Whether offer of employment can be an "industrial matter" Industrial law (WA) Offer by employer to employ only under a workplace agreement Whether an "industrial matter" within meaning of Industrial Relations Act 1979 (WA)
Legislation:	Industrial Relations Act 1979 (WA), s 7(1), "industrial matter", s 7A, s 7B Workplace Agreements Act 1993 (WA), s 4, s 5, s 6, s 19
Case References:	Board of Management, Princess Margaret Hospital for Children v The Hospital Salaried Officers Association of Western Australia (Union of Workers) (1975) 55 WAIG 534 Coles Myer Ltd v Coppin (1993) 73 WAIG 1752 Coles Myer Ltd v Coppin (1993) 73 WAIG 1754 Federated Miscellaneous Workers Union of Australia (WA Branch) v Nappy Happy Hire Pty Ltd T/A Nappy Happy Service (1993) 74 WAIG 1493 Kounis Metal Industries Pty Ltd v Transport Workers Union (1992) 73 WAIG 14 Kounis Metal Industries Pty Ltd v Transport Workers' Union of Australia (1992) 73 WAIG 14 Kwinana Construction Group Pty Ltd v The Electrical Trades Union of Workers (Western Australian Branch) (1954) 34 WAIG 51 Master Builders and Contractors Association of Western Australia v Wolff & Ors (1938) 41 WALR 59 Re Cram & Ors; ex parte NSW Colliery Proprietors Association Ltd & Ors (1987) 163 CLR 117 Re Cram; Ex parte NSW Colliery Proprietors Association Ltd & Ors (1987) 163 CLR 117 Reg v Commonwealth Industrial Court Judges; Ex parte Cocks (1968) 121 CLR 313 Robe River Iron Associates v Association of Draughting, Supervisory and Technical Employees of Western Australia (1987) 68 WAIG 11 Robe River Iron Associates v The Association of Draughting, Supervisory and Technical Employees of Western Australia (1987) 68 WAIG 11 Robe River Iron Associates v The Metal and Engineering Workers Union Western Australian Branch (1995) 75 WAIG 2478 Robe River Iron Associates v The Metal Engineering Workers Union Western Australian Branch (1995) WAIG 2478 Sakal v T O'Connor & Sons Pty Ltd (1995) 75 WAIG 1509 The Federated Miscellaneous Workers Union of Australia WA Branch v Nappy Happy Hire Pty Ltd T/A Nappy Happy Service (1993) 74 WAIG 1493 The Master Builders and Contractors Association of Western Australia v Wolff & Ors (1938) 41 WALR 59 Totalisator Agency Board v Federated Clerks Union (1980) 60 WAIG 624 ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 Burwood Cinema Ltd v Australian Theatrical and Amusement Employees Association (1925) 35 CLR 528 C & J Clark Ltd v IR Commissioners [1973] 1 WLR 905 Geelong Harbour Trust Commissioners v Gibbs, Bright & Co (1970) 122 CLR 504 Hillview Nursing Home v Hospital Employees' Industrial Union, WA (1974) 54 WAIG 783 John v Federal Commissioner of Taxation (1989) 166 CLR 417 Joyce Corporation Ltd v Lawson (1996) 76 WAIG 1653 Joye v Beach Petroleum NL (1996) 67 FCR 275 Ogden Industries Pty Ltd v Lucas [1970] AC 113 Orange City Bowling Club Ltd v Federated Liquor and Allied Industries Employees' Union, New South Wales Branch [1979] AR 90 Perrett v Robinson (1988) 80 ALR 441 Piper v Corrective Services Commission of New South Wales (1986) 6 NSWLR 352 PMT Partners Pty Ltd (in liq) v Australian National Parks & Wildlife Service (1995) 69 ALJR 829 Queensland v Commonwealth (1977) 139 CLR 585 R v Commonwealth Industrial Court Judges; ex parte Cocks (1968) 121 CLR 313 R v Gaudron; Ex parte Uniroyal Pty Ltd (1978) 141 CLR 204 R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated (1981) 26 SASR 535 R v Moore; ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 University of WA v UWA Academic Staff Association (1979) 59 WAIG 909

JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT CITATION : RGC MINERAL SANDS LTD & ANOR -v- CONSTRUCTION, MINING, ENERGY, TIMBERYARDS, SAWMILLS, WOODWORKERS UNION OF AUSTRALIA WA BRANCH & ORS [2000] WASCA 162 CORAM : KENNEDY J (Presiding Judge)

SCOTT J

PARKER J

HEARD : 1 MARCH 2000 DELIVERED : 9 JUNE 2000 FILE NO/S : IAC 10 of 1999

IAC 11 of 1999

BETWEEN : RGC MINERAL SANDS LTD

WESTRALIAN SANDS LTD

Appellants

AND

CONSTRUCTION, MINING, ENERGY, TIMBERYARDS, SAWMILLS, WOODWORKERS UNION OF AUSTRALIA WA BRANCH

THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION OF WORKERS - WESTERN AUSTRALIAN BRANCH and

THE AUSTRALIAN WORKERS' UNION, WEST AUSTRALIAN BRANCH, INDUSTRIAL UNION OF WORKERS

Respondents

(Page 2)

Catchwords:

Industrial law (WA) - Industrial matter - Whether offer of employment can be an "industrial matter"

Industrial law (WA) - Offer by employer to employ only under a workplace agreement - Whether an "industrial matter" within meaning of Industrial Relations Act 1979 (WA)

Legislation:

Industrial Relations Act 1979(WA), s 7(1), "industrial matter", s 7A, s 7B

Workplace Agreements Act 1993(WA), s 4, s 5, s 6, s 19

Result:

Subject to a minor variation in the order of the Full Bench, appeal dismissed

Representation:

Counsel:

Appellants : Mr R L Le Miere QC

Respondents : Ms C J McLure QC & Mr R D Farrell

Amicus Curiae

: Mr R J Andretich

Solicitors:

Appellants : Mallesons Stephen Jaques

Respondents : Derek Schapper

Amicus Curiae

: State Crown Solicitor

Case(s) referred to in judgment(s):

Board of Management, Princess Margaret Hospital for Children v The Hospital Salaried Officers Association of Western Australia (Union of Workers) (1975) 55 WAIG 534
Coles Myer Ltd v Coppin (1993) 73 WAIG 1752
Federated Miscellaneous Workers Union of Australia (WA Branch) v Nappy Happy Hire Pty Ltd T/A Nappy Happy Service (1993) 74 WAIG 1493
Kounis Metal Industries Pty Ltd v Transport Workers' Union of Australia (1992) 73 WAIG 14

(Page 3)

Kwinana Construction Group Pty Ltd v The Electrical Trades Union of Workers (Western Australian Branch) (1954) 34 WAIG 51
Master Builders and Contractors Association of Western Australia v Wolff & Ors (1938) 41 WALR 59
Re Cram & Ors; Ex parte NSW Colliery Proprietors Association Ltd & Ors (1987) 163 CLR 117
Reg v Commonwealth Industrial Court Judges; Ex parte Cocks (1968) 121 CLR 313
Robe River Iron Associates v The Association of Draughting, Supervisory and Technical Employees of Western Australia (1987) 68 WAIG 11
Robe River Iron Associates v The Metal and Engineering Workers Union Western Australian Branch (1995) 75 WAIG 2478
Sakal v T O'Connor & Sons Pty Ltd (1995) 75 WAIG 1509
The Federated Miscellaneous Workers Union of Australia WA Branch v Nappy Happy Hire Pty Ltd T/A Nappy Happy Service (1993) 74 WAIG 1493
The Master Builders and Contractors Association of Western Australia v Wolff & Ors (1938) 41 WALR 59
Totalisator Agency Board v Federated Clerks Union (1980) 60 WAIG 624

Case(s) also cited:

ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460
Burwood Cinema Ltd v Australian Theatrical and Amusement Employees Association (1925) 35 CLR 528
C & J Clark Ltd v IR Commissioners [1973] 1 WLR 905
Geelong Harbour Trust Commissioners v Gibbs, Bright & Co (1970) 122 CLR 504
Hillview Nursing Home v Hospital Employees' Industrial Union, WA (1974) 54 WAIG 783
John v Federal Commissioner of Taxation (1989) 166 CLR 417
Joyce Corporation Ltd v Lawson (1996) 76 WAIG 1653
Joye v Beach Petroleum NL (1996) 67 FCR 275
Ogden Industries Pty Ltd v Lucas [1970] AC 113
Orange City Bowling Club Ltd v Federated Liquor and Allied Industries Employees' Union, New South Wales Branch [1979] AR 90
Perrett v Robinson (1988) 80 ALR 441
Piper v Corrective Services Commission of New South Wales (1986) 6 NSWLR 352
PMT Partners Pty Ltd (in liq) v Australian National Parks & Wildlife Service (1995) 69 ALJR 829

(Page 4)

Queensland v Commonwealth (1977) 139 CLR 585
R v Commonwealth Industrial Court Judges; ex parte Cocks (1968) 121 CLR 313
R v Gaudron; Ex parte Uniroyal Pty Ltd (1978) 141 CLR 204
R v Industrial Commission of South Australia; Ex parte Master Builders Association of South Australia Incorporated (1981) 26 SASR 535
R v Moore; ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470
University of WA v UWA Academic Staff Association (1979) 59 WAIG 909

(Page 5)

1 KENNEDY J (Presiding Judge): I have had the benefit of reading in draft the reasons to be published by Parker J. For those reasons, I agree that this appeal should be allowed only to the extent of amending par 5 of the order of the Full Bench made on 10 November 1999 by deleting the words at the end of the paragraph: "in accordance with the reasons for decision".

2 SCOTT J: In this matter I have had the opportunity of reading the draft reasons to be published by Parker J. His Honour's reasons have been of considerable assistance in preparing these reasons.

3 The two appeals arise out of a clause which the respondents had sought to insert in the relevant award covering employees of the two appellants. That proposed clause provides:

Clause [x] - Freedom of Choice

Preamble

The intention of this clause is to allow future employees of the companies to which this clause applies to decide whether they will be employed on a workplace agreement registered under the Workplace Agreement Act or on a contract of employment to which this award applies.

Operative provisions

1 This clause shall apply to RGC Mineral Sands Ltd and Westralian Sands Ltd and to each subsidiary, whether direct or indirect, and each holding company, whether direct or indirect, of each of them and to each of their successors, assignees or transmittees, whether immediate or not, to or of the whole of (sic) part of either of any of their business ('the employer').

2 Whenever the employer proposes to engage any natural person to perform work which is referred to in, or covered by, wholly or in part, a classification contained in this award the employer shall offer to engage that person pursuant to a contract of employment the terms and conditions of which shall be those on which persons already employed by RGC Mineral Sands Ltd to perform like work are employed. The offer shall not include any

(Page 6)

requirement that there be a registered workplace agreement.

3 Nothing herein shall prevent the employer from also offering to engage the persons referred to in 2 hereof pursuant to a workplace agreement provided that the offer of employment that shall be made to that person pursuant to clause 2 hereof shall be made at the same time as any offer to engage pursuant to a workplace agreement.

4 Where the employer offers employment on the basis of a workplace agreement as well as on the basis set out in clause 2 hereof the employer shall, at the same time, provide a written statement to the person as follows:

'Important Notice to Prospective Employee

You are being offered employment with [insert name of employer] on 2 alternative bases. You have the choice as to which basis upon which you will be employed.

The first choice is employment under a contract of employment to which the Mineral Sands Industry Award applies. The WA Industrial Relations Commission can make orders affecting this type of employment.

The second choice is pursuant to a workplace Agreement to which no award applies. The WA Industrial Relations Commission cannot make orders affecting this type of employment.

This is an important decision for you to make. Your decision will irrevocably affect many matters in your employment for as long as that employment lasts and afterwards.

You should take expert advice as to these 2 different forms of employment before you decide which one to take.

(Page 7)

You can obtain advice from any of the following:

The Australian Manufacturing Workers Union

Telephone: 9481 1511

The Australian Workers Union

Telephone: 9221 1686

The Construction Forestry Mining Energy Union of Australia

Telephone: 0897345600'

5 Where the employer offers employment pursuant to a workplace agreement the agreement offered shall contain a dispute settlement clause which provides for:

5.1 representation of the employee, at the employee's option, throughout the procedure by a person or union of the employee's choice; and

5.2 determination, after no more than a reasonable number of intermediate steps, of any dispute between the employer and employee by an arbitrator constituted by a Commissioner of the WA Industrial Relations Commission appointed by the Chief Commissioner."

4 The two appellants are merging their operation in what was described by counsel as a "reverse takeover". In the end result, redundancies will be created at RGC Mineral Sands Ltd ("RGC"). Westralian Sands Ltd ("WSL"), the second-named appellant has employment opportunities available, some of which may be taken up by the redundant employees of RGC. It is common ground, however, that WSL has a policy that it will only engage employees on the basis of workplace agreements and not otherwise. The proposed clauses which the respondents seek to insert in the awards would have the effect of overriding the WSL policy, so as to give proposed employees the choice of employment either on the basis of workplace agreements or under the award.
(Page 8)

5 As outlined in the reasons to be published by Parker J, the matter came before the Industrial Commission originally for injunctive relief as well as for variation of the award.

6 The substantive applications have not been disposed of, but the argument that brings the matter before this Court is whether the Industrial Commission has jurisdiction to deal with the proposed award amendments.

7 The point at issue is one of fundamental importance and considerable complexity.

8 Commissioner Parks, who originally heard the application, concluded that the Industrial Commission did not have jurisdiction to deal with the application. The Full Bench, comprising the President, the Chief Commissioner and Commissioner P E Scott (dissenting) allowed the appeal and concluded that the application was within the jurisdiction of the Industrial Commission. It is from that decision that the appellants appeal.

9 The grounds of appeal are:

"1 The Full Bench erred in law in finding that the subject of the application was an industrial matter. The subject of the applications to the Commission was 'to vary the Mineral Sands Industry Award 1991 to give effect to freedom of choice in relation to employment within the award system and pursuant to a workplace agreement as the [employer appellants] were employing labour only on the basis of workplace agreements thereby depriving prospective employees of the right to choose employment on the award system'.

2 The Full Bench erred in law in holding that an offer by the employer appellants to employ a person under a workplace agreement pursuant to the Workplace Agreements Act 1993 (WA) is an industrial matter. An offer to employ a person under a workplace agreement does not relate to any future or potential employee as defined in the Act and, therefore, is not an industrial matter."

(Page 9)

10 The Minister for Labour Relations was granted leave to appear as amicus curiae and, broadly speaking, supported the submissions of the appellants, as will be discussed later in these reasons.

11 The Workplace Agreements Act 1993 ("the WPA Act") by its long title is said to be:

AN ACT to provide for the making of agreements between employers and employees as to their respective rights and obligations, for the registration of such agreements by a public official, for the effect of such agreements, and for their enforcement, to confer qualified immunity for certain industrial action relating to such agreements, and to provide for related matters."

12 By s 4 of the WPA Act, it provides:

"4 This Act has effect despite any provisions of the

Industrial Relations Act 1979

13 A corresponding provision in the Industrial Relations Act 1979 ("the IRA") provides in s 7A:

This Act subject to

Workplace Agreements Act 1993

Without limiting the other provisions of this Part, this Act has effect subject to the Workplace Agreements Act 1993."

14 Thus it can be seen that the legislative scheme was that the WPA Act was designed to take precedence over the IRA so that the IRA must be read as subject to the WPA Act.

15 When the Workplace Agreements Bill was before the Legislative Assembly, the Minister for Labour Relations in the Second Reading Speech said at Hansard 8 July 1993 page 1450:

"The Bill is an essential ingredient of the Government's pre-election commitment to better management of the State's economy and more jobs. The Government holds that only by providing workers and employers with choices and freeing them from the rigidity of the present industrial relations system will genuine opportunities for increased productivity and wealth creation occur. Such stimulation is essential if real and lasting jobs are to be developed. … The essential themes underpinning this industrial relations legislation are: to enable better co-

(Page 10)

operation and communication between employers and employees; to provide for a simpler and more efficient system; to establish a greater protection of individual rights; and to ensure a clearer recognition of collective rights and responsibilities. The effect of the legislation will be to provide, for the first time, a real choice for employers and employees as to the industrial relations system governing their relationship by establishing a new stream, based on workplace agreements, which will sit alongside the existing award system. … This Bill, then, will establish the alternate system. It will not do so by abolishing the old. Employers and employees will be able to chose the system they prefer."

16 In furtherance of those objectives, the IRA was correspondingly amended to provide in Part IA, the part dealing with the effect of the WPA Act by s 7B and s 7C:

7B Definitions of 'employer' and 'employee' limited

Where any employer and any employee are parties to a workplace agreement, they are not, in relation to one another, within the definitions of 'employer' and 'employee' respectively in section 7(1).

7C Definition of 'industrial matter' limited

(1) Where any employer and any employee are parties to any workplace agreement, a matter that is part of the relationship between that employer and that employee-

(a) is not -

(i) an industrial matter; or

(ii) capable of being agreed to be an industrial matter,

for the purpose of the definition of 'industrial matter' in section 7(1);

(b) is not capable of being determined under section 24(1) to be an industrial matter; and

(Page 11)

17 Other provisions are contained with Part IA of the IRA but it is not necessary to refer to them in the course of these reasons.

18 Significantly, also, by s 26A, the IRA was amended to provided:

Workplace agreements not to be taken into account

In the exercise of its jurisdiction the Commission shall not -

(a) receive in evidence or inform itself of any workplace agreement or any provision of a workplace agreement; or

(b) award particular conditions of employment to employees who are not parties to a workplace agreement merely because those conditions apply to any other employees who are parties to a workplace agreement."

19 It is common ground that in relation to the employment opportunities which WSL is offering to prospective employees, no workplace agreement has come into effect. Appropriate applicants will need to be selected and will need to agree to enter into workplace agreements. They may, of course, choose not to be employed on those terms at all, or may seek to negotiate with WSL for employment on different terms and conditions. However, it is common ground that in relation to the present application, the policy of WSL is to employ staff only on the basis of workplace agreements.

20 The real difficulty that has arisen in this case, and as outlined in the evidence before the Commissioner who heard the matter at first instance, was that it was said that it would be inappropriate for fellow employees to be working alongside one another, some employed on the basis of the award and others on the basis of workplace agreements, with the potential consequence that people doing exactly the same work may be subject to different terms and conditions of employment.

21 Senior counsel for the appellants sought to argue that the structure of the IRA was to artificially exclude parties to a workplace agreement from the effect of that Act by effectively deeming them not to be employer and employee within the respective definitions in that legislation (see s 7B of the IRA).

(Page 12)

22 It was contended that whilst at common law such employers and employees would be within the ordinary meaning of that term, the statutory scheme was to exclude them from the operation of the legislation. It followed, so counsel said, that in the present circumstances where the appellants sought to employ its workforce on the basis of workplace agreements, that they could not come within the provisions of the IRA so as to be subject to its provisions. In consequence therefore, the Commission would have no jurisdiction to determine the present dispute.

23 The fundamental point of departure between the judgment of Parker J and these reasons arises from the way in which the issues emerge. In my opinion, the Industrial Commission has jurisdiction to regulate in certain respects the offering of employment to potential employees.

24 The first reason for reaching that conclusion is that the definition of "industrial matter" contained within s 7(1) of the IRA provides:

industrial matter'

means, subject to section 7C, any matter affecting or relating to the work, privileges, rights, or duties of employers or employees in any industry or of any employer or employee therein and, without limiting the generality of that meaning, includes any matter relating to -

(c) the employment of children or young persons, or of any person or class of persons, in any industry, or the dismissal of or refusal to employ any person or class of persons therein;"

25 In my opinion, that section, of itself, is sufficient authority to permit the Industrial Commission to exercise jurisdiction over offered terms of employment.

26 If further authority is required for that proposition, it is to be found in previous decisions of the Industrial Commission and other appellate courts: see Kounis Metal Industries Pty Ltd v Transport Workers' Union of Australia (1992) 73 WAIG 14 per Owen J at 19; Master Builders and Contractors Association of Western Australia v Wolff & Ors (1938) 41 WALR 59; Re Cram & Ors; ex parte NSW Colliery Proprietors Association Ltd & Ors (1987) 163 CLR 117 per Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ at 135.

27 In Re Cram, seven Justices of the High Court held at 135:

(Page 13)

"A dispute about the level of manning is a good example. It has a direct impact on the work to be done by employees; it affects the volume of work to be performed by each employee and the conditions in which he performs his work. So also with the mode of recruitment of the workforce. The competence and reliability of the workforce has a direct impact on the conditions of work, notably as they relate to occupational health and observance of safety standards. Employees, as well as management, have a legitimate interest in both these matters."

28 This case, however, is to be distinguished from those authorities because, if any of the prospective employees of the appellants enter into a workplace agreement with the appellants they would not become employees for the purposes of the IRA. That flows from s 7B of that Act set out earlier in these reasons. Whilst at common law and in common parlance, employees of the appellants employed on workplace agreements would ordinarily be regarded as employees for the purposes of the law, the effect of that section is to deem them not to be employees for the purposes of the statute. In the end result, therefore, they would not become employees for the purposes of the IRA. It follows that if the appellants do engage those persons on workplace agreements, they would not be employees for the purposes of the Act so as to be governed by its provisions. As a consequence, the conduct of the appellants in offering employment on the terms discussed, (that is on the basis of workplace agreements), would not be conduct which relates to future employees in the sense that the term is used in the IRA. In Kounis Metal Industries Pty Ltd (supra), Owen J said at 19:

"In my view, the judgments in

Pepler

suggest that the decision rests upon a point of principle, namely, that jurisdiction depends on the present or future existence of the employer/employee relationship. Unless, at the time when the application is made, the relationship actually exists, or is expected to come into existence in the future, or did exist and is to be restored, the key element of an 'industrial matter' is missing. The very language of the judgments carries this implication".

See also

Coles Myer Ltd v Coppin

(1993) 73 WAIG 1752. These authorities support the proposition that where, as here, the offer of employment by the appellants to prospective employees on a workplace agreement basis would not create nor necessarily lead to the establishment of an employer/employee relationship, the jurisdictional basis of the Industrial Commission is absent. In my opinion, that is the way in which

(Page 14)

Parliament intended the WPA Act to operate in circumstances such as these. In that respect it is to be noted that the Industrial Relations Commission is given express powers to determine matters involving workplace agreements by

inter alia

s 7D; s 7F; s 7G of the

IRA

29 In my opinion it is not to the point to argue that on the expiration of a workplace agreement an employer/employee relationship may spring into existence and be governed by the award. Should that happen, then that is a product of the termination of the workplace agreement relationship and is a contingency which need not be contemplated for the purposes of these reasons.

30 It is similarly to be noted that s 10 of the WPA Act would enable an employee (within the meaning assigned to that term in the IRA) to cease to have that status by entering into a workplace agreement.

31 Senior counsel for the respondents sought to rely upon the decision of The Federated Miscellaneous Workers Union of Australia WA Branch v Nappy Happy Hire Pty Ltd T/A Nappy Happy Service (1993) 74 WAIG 1493 in support of the proposition that the existence of an employer/employee relationship is not a necessary fact grounding jurisdiction.

32 That case followed and explained the decision in Robe River Iron Associates v The Association of Draughting, Supervisory and Technical Employees of Western Australia (1987) 68 WAIG 11 ("Pepler's" case). It is to be emphasised that both of those cases involved matters that arose at the termination of an employer/employee relationship. The problem that arose in Pepler's case was that at that time, the IRA did not enable the Industrial Commission to award damages for wrongful dismissal. That has since been changed. The difficulty since that decision has been to determine the true ambit of its application, although it has been followed in many decisions since that time: see Robe River Iron Associates v The Metal Engineering Workers Union Western Australian Branch (1995) WAIG 2478 (Coombes' case) and the authorities mentioned therein.

33 Those cases establish that the continuation of a contract of service is not a jurisdictional fact and the authorities to which I have earlier referred and the terms of s 7 of the IRA now make that clear. As I have said, s 7 of the IRA contemplates that an industrial matter may arise where there is a refusal to employ any person or class of persons prior to the creation of the employer/employee relationship. Similarly, an industrial matter may arise after that relationship has been terminated, as now provided by statute. Those cases do not reflect upon the present problem which arises

(Page 15)

out of the express provisions of the WPA Act and the relationship between that Act and the

IRA

34 In my opinion, the primary issue for determination in this case is whether the clause, as formulated by the respondents for insertion into the award, is within the jurisdiction of the Industrial Commission.

35 In this case it is not a matter of using the connecting words within the definition of s 7 of the IRA to determine whether the proposed clauses affect or relate to the "work, privileges, rights, or duties of employers or employees in any industry", but rather whether the effect of the WPA Act and its effect upon the proposed clause is to take the dispute outside the jurisdiction of the Industrial Commission.

36 The clause which has been reproduced earlier in these reasons directly focuses upon the obligations of the employer to provide to prospective employees the options of employment, either under the terms of the award or under a workplace agreement. To the extent that the clause focuses upon the obligations of the employer, insofar as it concerns the policy of the employer to employee only on the basis of workplace agreements, it is my view that the clause is outside the jurisdiction of the Industrial Commission. That is not to exclude the possibility that a clause properly fashioned could achieve the same ends and be within the jurisdiction of the Industrial Commission. The difficulty with the clause as formulated is that it purports to govern the basis upon which workplace agreements can be offered to the appellants' workforce. In my opinion, s 26A of the IRA, set out earlier in these reasons, would exclude any evidence being received by the Industrial Commission as to the terms of the proposed workplace agreement. It follows, in my opinion, that the intention of the legislature was to exclude from the effects of the IRA proceedings that have reference to the WPA Act except where expressly provided otherwise.

37 In my opinion, the policy of the appellants, which give rise to the dispute, is not that the appellants refused to employ prospective employees on an award basis. The policy of appellants is to employ their staff solely on the basis of workplace agreements. The issue that is central to this case, in my opinion, is whether that policy of the appellants constitutes a "refusal to employ any person or class of persons" within the meaning of "industrial matter" in s 7(c) of IRA. In my opinion the policy cannot have that construction.

(Page 16)

38 The intention of the appellants is not to exclude any particular person or class of persons from the workforce, only to offer employment to persons who are prepared to enter into workplace agreements under the WPA Act. The issue, therefore, that falls for determination is whether the Industrial Commission has jurisdiction to deal with a dispute where an employer is prepared to offer employment only on the basis of a workplace agreement prior to the establishment of a common law employer/employee relationship.

39 In my opinion, the clause as fashioned, does not come within the jurisdiction of the Industrial Commission, although, as I have already indicated, a clause differently formulated, which may achieve the same result, may come within jurisdiction.

40 For these reasons, I would allow the appeal and order that the dispute does not come within the jurisdiction of the Industrial Commission for determination.

41 PARKER J: The appellants, RGC Mineral Sands Ltd and Westralian Sands Ltd, appeal from the whole of the decision of the Full Bench of the Western Australian Industrial Relations Commission which decisions were given in Appeals Nos 345 and 398 of 1999 on 10 November 1999. The appellants seek to have quashed the decisions of the Full Bench, which upheld appeals from the Commission and ordered that the Commission's decisions be suspended and the original applications be remitted to the Commission to be heard and determined according to law in accordance with the reasons for decision of the Full Bench.

42 There were two appeals to the Full Bench which were heard together. The first was in respect of an order dated 22 February 1999 of the Commission by which an interlocutory application by the present respondents for injunctive relief was dismissed. The second was in respect of the substantive application which was dismissed by the Commission on 15 March 1999.

43 The fundamental reason for the dismissal of both applications by the Commission at first instance was the conclusion of the Commissioner that there was no "industrial matter" within the meaning of that term as defined in s 7(1) of the Industrial Relations Act 1979 (the "IR Act") as limited by s 7C. The Full Bench, by a majority, concluded that the Commission was in error in this fundamental respect. Thorough and helpful reasons were published by the members of the Full Bench as well

(Page 17)

as by the Commissioner at first instance. These serve to identify clearly the point of difficulty which this case highlights.

44 In each of the appeals to this Court by the employers there are two grounds of appeal. They are identical. They are:

"1. The Full Bench erred in law in finding that the subject of the application was an industrial matter. The subject of the applications to the Commission was "to vary the Mineral Sands Industry Award 1991 to give effect to freedom of choice in relation to employment within the award system and pursuant to a workplace agreement as the [employer appellants] were employing labour only on the basis of workplace agreements thereby depriving prospective employees of the right to choose employment on the award system".

2. The Full Bench erred in law in holding that an offer by the employer appellants to employ a person under a workplace agreement pursuant to the Workplace Agreements Act 1993 (WA) is an industrial matter. An offer to employ a person under a workplace agreement does not relate to any future or potential employee as defined in the Act and, therefore, is not an industrial matter."

Because of the significance of the fundamental issue leave was sought by, and granted to, the Hon Minister for Labour Relations to be represented on the hearing of the appeal as

amicus curiae

Background

45 The original application arose in the following circumstances. The appellant RGC Mineral Sands Ltd ("RGC") is a wholly owned subsidiary of the other appellant, Westralian Sands Ltd ("WSL"). An award, to which the respondent unions are parties, applies to employment by both RGC and WSL. The appellants are thus each employers engaged in the one industry for the purposes of the definition of industrial matter in s 7(1) IR Act. The companies are merging their operations. As a consequence there will be redundancies at RGC. Some 18 of the existing RGC employees who will become redundant have been offered jobs by WSL as part of a programme of WSL to fill some 35 job vacancies. A term on which WSL has offered the 35 jobs is that those engaged must enter into a workplace agreement. WSL's position, confirmed in evidence before the

(Page 18)

Commission, is that it will not engage an employee unless a workplace agreement is entered into.

46 The application to the Commission was by the unions who are the respondents to this appeal. The application sought an amendment to the award, applicable only to employment with RGC and WSL (and existing or prospective entities related to them) to contain provisions requiring those employers, when offering to employ a person to perform work covered by the award, to offer that employment pursuant to a contract to which the award would apply and which contained specified terms of the proposed employment. It appears that those terms are the existing over-award terms on which some employees of RGC are presently employed. The proposed amendment to the award would also provide that, where such an offer of employment was made, nothing in the award would preclude the employer also offering to employ the proposed employee pursuant to a workplace agreement, provided that the two offers were made at the same time.

47 The intended effect of the proposed amendments to the award would be, inter alia, that WSL could not offer to employ persons only subject to a workplace agreement.

Workplace Agreements

48 A workplace agreement is defined in s 7(1) IR Act as meaning a workplace agreement that is in force under the Workplace Agreements Act 1993 (the "WPA Act"). The IR Act was amended at the same time as the WPA Act was enacted, particularly by inserting Part IA into the IR Act. Part IA is headed "Effect of Workplace Agreements Act 1993 on this Act". Part IA comprised s 7A to s 7H. Section 7A provides:

"7A Without limiting the other provisions of this Part, this Act has effect subject to the Workplace Agreements Act 1993."

Other material provisions in Part IA are:

"7B Where any employer and any employee are parties to a workplace agreement, they are not, in relation to one another, within the definitions of "employer" and "employee" respectively in section 7(1).

7C. (1) Where any employer and any employee are parties to any workplace agreement, a matter that is part of the relationship between that employer and that employee -

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(a) is not -

(i) an industrial matter; or

(ii) capable of being agreed to be an industrial matter,

for the purpose of the definition of "industrial matter" in section 7(1);

(b) is not capable of being determined under section 24(1) to be an industrial matter; and

…

(3) Subsection (1) also applies where -

(a) a workplace agreement has expired; and

(b) an arrangement is in force between the parties to that agreement of the kind referred to in section 19(4)(b) of the Workplace Agreements Act 1993,

except to the extent that the employer and any employee agree that any matter is to be treated as an industrial matter between them."

49 Relevant provisions of the WPA Act include:

"4. This Act has effect despite any provision of the

Industrial Relations Act 1979

5. (1) Workplace agreements are agreements -

(a) made between employers and employees; and

(b) providing for some or all of the rights and obligations that employers and employees have in relation to one another, including rights and obligations that are to take effect after termination of employment.

…

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(3) Nothing in this Act is to be taken to prevent -

(a) any contract of employment and a workplace agreement between an employer and employee being entered into at the same time; or

(b) any contract of employment between an employer and any employee being in the form of a workplace agreement.

6. (1) Where a workplace agreement -

(a) has been made between -

(i) an employer and an employee under a contract of employment; or

(ii) an employer and employees under contracts of employment;

and

(b) has come into force,

no award, whether existing or future, applies to -

(d) the employer or any such employee as a party to any such contract,

so long as the workplace agreement remains in force.

(2) Where a workplace agreement has been made as mentioned in subsection (1)(a), in relation to any contract of employment, and has come into force, any award provision that applied to that contract immediately before that coming into force is not to be implied into, or in any way read as being part of, the workplace agreement unless the agreement expressly so requires.

(3) A workplace agreement also has the effects described in sections 7B, 7C, 7D and 7E of the Industrial Relations Act 1979.

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(4) A workplace agreement does not displace the contract of employment between an employer and an employee but while it is in force it has effect -

(a) as if it formed part of that contract; and

(b) regardless of any provision of that contract.

…

10. (1) A workplace agreement may be entered into between an employer and one of the employer's employees.

…

19. (2) Subject to sections 27 and 33, an individual workplace agreement has effect when it has been signed by the parties to the agreement, or from any later day provided for in the agreement.

(3) A workplace agreement must provide for the day on which it expires which cannot be more than 5 years after it was entered into.

(4) On the expiry of a workplace agreement this Act no longer applies to any contract of employment that it governed and that contract then becomes subject to relevant award provisions (if any) unless it becomes subject to -

(a) another workplace agreement; or

(b) some other arrangement between the parties provided for in the expired workplace agreement.

(5) So long as a contract of employment is not subject to award provisions because of an arrangement under subsection (4)(b), sections 6 and 8 continue to apply to that contract as if the workplace agreement had not expired.

…

24. (1) The parties to a workplace agreement may enter into an agreement in writing cancelling the workplace agreement.

…

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(4) On the cancellation of a workplace agreement this Act no longer applies to any contract of employment that it governed and that contract then becomes subject to relevant award provisions (if any) unless it becomes subject to another workplace agreement."

The WPA Act distinguishes in some respects between an individual and a collective workplace agreement. In the circumstances revealed by the evidence in the present case we are concerned only with individual workplace agreements so there is no reason to complicate these reasons by dealing with the legislative distinctions between the two types of agreements. What follows will identify the position with respect to individual workplace agreements.

50 Individual workplace agreements are required to be registered within 21 days and if not so registered they "cease to have effect" (s 27). Registration may be refused in specified circumstances in which case the agreement ceases to have effect from the refusal (s 33). It will be seen from s 5(1) WPA Act that a workplace agreement is an agreement between "employers" and "employees", those terms being defined primarily as having the same meaning as in the IR Act. A workplace agreement provides for some or all of the rights and obligations of employers and employees in relation to one another. By s 5(3) it is expressly recognised that a contract of employment and a workplace agreement may be entered into at the same time, or may be the one agreement.

51 Section 6(1)(b) of the WPA Act provides that when a workplace agreement has come into force no award applies to that contract or those contracts of employment or to the employer or the employee as a party to the contract of employment so long as the workplace agreement remains in force. There is no precise legislative statement as to when an individual workplace agreement "comes into force" but it is the apparent effect of s 19(2) and s 26(3) that this is when it is signed by the parties or from any later date provided in the workplace agreement, although it may later "cease to have effect" if it is not duly registered.

52 By s 19(3) WPA Act a workplace agreement must provide for its expiry on a specified day which cannot be more than five years from the date it was entered into. But despite that provision as to expiry, by s 14(1) where a contract of employment ceases, a workplace agreement that governs that contract no longer applies.

53 Turning to s 7(1) of the IR Act. Employee is defined in part as

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"'employee' means, subject to s 7B -

(a) any person employed by an employer to do work for hire or award including an apprentice or industrial trainee;

(b) any person whose usual status is that of an employee;

…"

Employer is defined as

"'employer' includes, subject to s 7B -

(a) persons, firms, companies and corporations; and

(b) the Crown and any Minister of the Crown, or any public authority,

employing one or more employees."

It is sufficient for present purposes to note the following parts of the definition of industrial matter in s 7(1):

"'industrial matter' means, subject to s 7C, any matter affecting or relating to the work, privileges, rights, or duties of employers or employees in any industry or of any employer or employee therein and, without limiting the generality of that meaning, includes any matter relating to -

(a) the wages, salaries, allowances, or other remuneration of employees or the prices to be paid in respect of their employment;

(b) the hours of employment, leave of absence, sex, age, qualification, or status of employees and the mode, terms, and conditions of employment including conditions which are to take effect after the termination of employment;

(c) the employment of children or young persons, or of any person or class of persons, in any industry, or the dismissal of or refusal to employ any person or class of persons therein;

…"

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54 It will be seen from these provisions that the legislative scheme with respect to workplace agreements inter alia enables an employee who is currently employed subject to an award, and the employer, to enter into a workplace agreement which has the effect, while it is in force, of excluding entirely the operation of the award in respect of that contract of employment and the jurisdiction of the Commission in respect of any issue between the employer and the employee that would otherwise be an industrial matter. Should a workplace agreement expire, and not be replaced by another or by an arrangement as contemplated by s 19(4)(b) WPA Act (see IR Act s 7C(3)), then the contract of employment is once again subject to the award (WPA Act s 19(4)). It is also the case that at the very inception of a contract of employment there may also be a workplace agreement entered into, or the contract of employment itself may be in the form of a workplace agreement (WPA Act s 5(3)), in which cases the award which would otherwise be applicable would not even commence to operate or to have any application in respect of the employment and (subject to earlier termination of the employment) that situation would continue until the expiration of the workplace agreement, where it was not replaced by another workplace agreement or an arrangement as contemplated by s 19(4)(b) WPA Act.

55 It may be thought that there is some awkwardness about the legislature's use of employer and employee in s 5(3) WPA Act to describe parties who have not yet entered into a contract of employment, but the intended meaning is, nevertheless, clear enough. Even more awkward is the use of employer and employee in s 7B of the IR Act. By its terms, an employer and an employee who are parties to a workplace agreement "are not, in relation to one another, within the definitions of 'employer' and 'employee' respectively in section 7(1)." There is no quality about a workplace agreement, as envisaged by the WPA Act, which would have the effect that the parties to the agreement would not be respectively an employer and an employee within the defined meaning of those terms in the WPA Act and in s 7(1) of the IR Act. Indeed, that is necessarily accepted by the WPA Act as s 5(1)(a) defines a WPA as an agreement between employers and employees, those terms being defined in s 3 primarily by adopting by reference the respective definitions in the IR Act. Thus, it cannot be the intention or effect of s 7B, as was submitted, that "employer" and "employee" when first used in that provision have meanings other than the defined meanings. It was submitted the common law meanings of the terms should be implied. Were that the case they could not be parties to a workplace agreement. Rather, in my view, it must be the intended operation of s 7B to except from the definitions of

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employer and employee, for the purposes of the IR Act, as it were by way of an express limitation or an artificial deeming, those who are parties to a workplace agreement which is in force, whilst leaving those parties as employer and employee within the defined meanings of those terms as those defined meanings have been adopted by reference in the WPA Act. Both s 7B and s 7C operate to effect this exception or deeming in cases "where any employer or employee are parties to a workplace agreement". Each section is concerned with the relationship between an individual employee and the employer.

The issues

56 While we have the advantage of extensive and carefully reasoned decisions of the Full Bench and the Commission and of the full submissions of counsel, it is unnecessary to consider every matter which has been raised in these sources.

57 In my view two issues emerge as determinative:-

(1) whether the Commission can have jurisdiction to regulate, at least in some respects, the offering of employment to a potential employee by an employer in an industry, before a contract of employment is entered into with the employee,

and if so

(2) whether Part IA IR Act or the WPA Act affect that position in the circumstances of the present application.

Jurisdiction when employment offered

58 Jurisdiction under the IR Act is primarily conferred on the Commission by s 23(1). It confers authority on the Commission to enquire into and deal with any "industrial matter". It is to be noted that unlike the Federal Act and the Industrial Arbitration Act 1912 (WA) jurisdiction is not conferred with respect to a dispute concerning an industrial matter but is conferred in respect of an industrial matter. It is necessary, therefore, to discern whether there is an industrial matter within the terms of the definition in s 7(1) IR Act, rather than to be distracted by questions as to whether or not the parties are in dispute, when considering whether or not the Commission has jurisdiction in any particular matter. One effect of this is that much of the reasoning in decided cases, particularly in the Federal sphere, which give particular weight to the existence of a dispute have no direct application. In the

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context of the IR Act the observation made in

Reg v Commonwealth Industrial Court Judges; Ex parte Cocks

(1968) 121 CLR 313 at 318 that -

"… the subject matter of a dispute will not become an industrial matter simply because employers and employees are sufficiently interested in it to dispute about it." -

takes on an even greater emphasis and significance. For this reason the discussion, in the context of the

Federal Act

, in

Re Cram; Ex parte NSW Colliery Proprietors Association Ltd & Ors

(1987) 163 CLR 117 at 137 as to the prospect of a dispute about a matter which lies outside the concept of an industrial matter developing into an industrial dispute, and similar passages in other decisions, need to be read with caution when considering their application to the IR Act.

59 For the purposes of this appeal, I would focus attention on the following aspects of the definition of industrial matter in s 7(1) IR Act which I reproduce with emphasis added:-

"7 (1) 'industrial matter' means, subject to section 7C, any matter affecting or relating to the work, privileges, rights, or duties of employers

employees in any industry

any

employer or employee

therein

and, without limiting the generality of that meaning,

includes

any matter relating to -

…

(b) … the mode, terms, and conditions of employment …;

(c) the employment of … any person or class of persons, in any industry, or the dismissal of or refusalto employ any person or class of persons therein;

…"

60 Decisions on this definition have emphasised that the work, privileges, rights, or duties are those of employers in any industry or of employees in that industry "in those respective capacities", ie there needs to be an element of mutuality of both employer and employee with regard to the work, privilege, right or duty in question for it to be within the definition.

61 Subject to that, it is expressly made clear by par (c) that the employment of any person or a class of persons or the refusal to employ

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any person or a class of persons in the industry by the employer are within the intended scope of the notions of "work, privileges, rights or duties". Nevertheless, while the supplementary paragraphs in the definition may clarify, it does not appear to me that they expand, the effect of the general introductory part of the definition. That is not material, however, as it is made clear that if the supplementary paragraphs do involve any expansion of the introductory terms of the definition then that is intended by the legislature. In other words it is not the apparent intention from the words used that para (c) and the other supplementary paragraphs should be read down to come within some narrow understanding of the general introductory part. Rather, the supplementary paragraphs are intended to expand the general introductory part where there is any discrepancy between them by which the supplementary paragraph is of wider import than the general introductory part.

62 The refusal, as a matter of policy, of an employer to employ a class of persons, such as members of a union, or to give preference over others to one class of persons, would appear to "relate to" a "refusal to employ" and so be within the ambit of the notion in par (c) of a "refusal to employ" a class of persons in an industry. In turn this would appear to "affect or relate to" the "rights of an employer" to determine the type qualities and qualifications of employees which the employer employed in its industry.

63 In this State it has been settled law, since the decision of the Full Court in The Master Builders and Contractors Association of Western Australia v Wolff & Ors (1938) 41 WALR 59, that the like words in the then definition of industrial matters in s 4 of the Industrial Arbitration Act 1912-1935 would support the jurisdictional competence of the then Industrial Court to include in an award a term requiring employers to give preference of employment to unionists. As Northmore CJ said, Draper J concurring, at 63 - 64

"Preference to unionists is not specifically mentioned in the definition of the words "industrial matters", but in my view the authority to grant such preference is to be found in the general words of the definition, viz 'All matters affecting or relating to the work, privileges, rights and duties of employers or workers in any industry' …."

It is because of that decision that, at times since then, provisions in the

Industrial Arbitration Act

, and now par (k), par (l) and par (m) of the definition of industrial matter in s 7(1) IR Act, have expressly excluded preference of employment to unionists at the time of employment from

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what would otherwise be the scope of the definition of industrial matters. That decision confirms, in my view, the apparent effect of the words of the definition that an industrial matter may include a requirement that an employer employ an individual employee or a class of employees, whether by reference to membership of a union or some other quality. That being so, it would seem necessarily to follow that a refusal by an employer to employ a particular employee or a class of employees in an industry may also be an industrial matter. It is to be noted that, by par (b) of the definition of employee in s 7(1) IR Act, a person need not presently be employed by an employer in the industry to be within the defined meaning of employee.

64 These matters may be seen to affect or relate to the rights of an employer or of employers in the industry to determine whom to employ in the industry. Necessarily, that also affects who may be employees in the industry.

65 The mutuality as between employer and employee of the employer's decisions as to recruitment was considered and accepted by the decision of all members of the High Court in Re Cram (supra) at 133 - 137. In particular, as was confirmed in that decision at 135 - 136, a system of recruitment which gives preference to union labour involves an industrial matter within the definition in s 4 of the Federal Act, the terms of which are set out at 132 of the report. In part, that definition is in substantially similar terms to par (c) of the definition in s 7(1) of the IR Act. This is so even though the industrial matter relates to prospective employment. While it might be thought that par (j) of the definition in the Federal Act, which refers directly to preferential employment, is a material distinction, both the reasoning in the ReCram decision and the passage quoted above from The Master Builders and Contractors decision in this State reveal that is not the case. The reasons in Re Cram also deal with and reject the submission that decisions as to the mode of recruitment of an employer, or as to whom should be preferred for employment by an employer, cannot be industrial matters as they are within what has been called the management prerogative of the employer. While decisions as to employment may be critical to management, as is said in ReCram at 136 - 137, that is a reason for caution by an Industrial Tribunal in the exercise of its jurisdiction (perhaps even extreme caution) but it is not a justification for construing the words of the definition to exclude such matters. Thus, for reasons examined in Re Cram at 133 - 137, in some situations at least, decisions by an employer as to whom to employ or not to employ in an industry relate to the mutual roles of employers and employees as such in the industry. In such situations clearly there would

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be no need to resort to par (c) to find an industrial matter, the general introductory words of the definition would suffice.

66 The decision in The Master Builders & Contractors Association case has been applied by decisions of this Court in the Board of Management, Princess Margaret Hospital for Children v The Hospital Salaried Officers Association of Western Australia (Union of Workers) (1975) 55 WAIG 534 and in the Totalisator Agency Board v Federated Clerks Union (1980) 60 WAIG 624. In the Princess Margaret Hospital decision the hospital agreed to employ one Brown as a senior radiographer. The date for Brown to start work was left for further negotiation. Before he commenced work Brown was advised that his services would not be needed. The union sought to raise the question, founding its claim to jurisdiction on what it described as Brown's dismissal. It sought his reinstatement. It was objected there was no jurisdiction as this was not an industrial matter because, at least following the hospital's decision, there was no contract of employment and therefore no employer and employee relationship. In the reasons of the President Burt J, Wickham and Wallace JJ agreeing, at 545 it was said:

"In a case such as the present one where, as I think is the case, there has been a refusal to employ a person, that refusal is an industrial matter clearly within par (c) of the definition … Furthermore, the same conclusion can I think be sustained on a broader ground, it being that the dismissal or refusal to employ a worker is within the general words of the definition of 'industrial matters' as being a matter 'affecting or relating to the work, privileges, rights and duties of employers or workers in any industry'. If this is so, … then again and for the same reasons, if the required relationship to that matter appears, then the employment or the reinstatement of the worker becomes an industrial matter … and an order to reinstate or to employ as the case may be is then seen to be an order within power, being an order made 'determining' the industrial matter in dispute."

67 It will be seen that a refusal to employ a person was regarded as within the definition of industrial matter on two bases, first because of the express words of par (c) and, secondly, because it was within the general introductory words of the definition, thereby echoing the words quoted earlier from The Master Builders & Contractors Association case. In neither case was the absence of an existing employer and employee relationship regarded as material. In particular, it is to be noted that Burt J regarded both the case of a reinstatement following dismissal, and an

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employment following a refusal to employ, as each capable of constituting an industrial matter. The definition being considered was in identical terms for present purposes to the present definition.

68 In the Totalisator Agency Board case unions had sought an order requiring that various government respondents to an award, when employing persons, give preference of employment to persons who were employees of any of the government respondent employers under that award, which employees were under notices of retrenchment on the ground of redundancy. Thus the order sought preference for persons who were presently employees in the industry, but not employees of the employer who was to be required to give preference in employment. It was argued this could not be an industrial matter as that must be taken to rest on the basis of either an existing or a previous master and servant relationship or an agreement to establish a master and servant relationship. In rejecting this argument Brinsden J, with whom Smith J concurred, at 626 - 7 relied on both The Master Builders & Contractors Association and The Princess Margaret Hospital decisions and went on to say at 627:

"Counsel for the appellants contended that there was a vast difference between a preference to unionists clause and the particular clause here. In the first case, a preference to unionists clause operates only when an employer has decided that he wishes to employ somebody but his right to employ whom he wishes is restricted to giving preference to a unionist. In the second case it is pointed out that an employer under cl 6 is being obliged to make an offer of employment. With respect I think that the distinction has something of an air of unreality. The clause contemplates only those employers making offers who in fact have alternative employment available. … What it then says is that any employer bound by the award who has an alternative position available must offer that position to the employee so affected by the redundancy order of another employer bound by the award. In my view that is a matter which affects or relates to the rights or privileges of a worker in an industry, that industry being the industry of the worker, namely the clerks industry."

Wallace J also relied on

The Master Builders & Contractors Association

decision at 625 for coming to the same conclusion.

69 In my respectful view these decisions correctly focus attention on the terms of the definition of industrial matter and illustrate something of the breadth of the true scope of the general introductory words, as well as of

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par (c). The decisions give rise to the following propositions. A refusal by an employer in an industry to employ a person or a class of persons may be an industrial matter even though that person or class of persons is not employed by the employer and has never been employed by that employer in the past. An employer in an industry may be directed to give preference of employment to a class of persons when employing persons. Further, an employer may be obliged when seeking to employ a person in a vacancy to make an offer of employment to a particular person or a class of persons, at least where that person or that class are then employed by some employer in the same industry. The decisions may well stand as authority for more than these propositions, but they are enough for present purposes.

70 It is submitted that these decisions are in conflict with the decision of this Court in Robe River Iron Associates v Association of Draughting, Supervisory and Technical Employees of Western Australia (1987) 68 -WAIG 11 ("Pepler's case") and the line of cases which has applied and developed that decision. It was submitted that this line of cases are authority for the proposition that, in virtue of the definition of industrial matter in s 7(1), the jurisdiction of the Commission depends on the past, present or future existence of an employer and employee relationship so that unless, at the time of the application, that relationship actually exists, or is expected to come into existence in the future, or did exist and is to be restored, the key element of an industrial matter is missing.

71 This line of cases was concerned in part with the jurisdiction of the Commission to order payment by a former employer of financial compensation to a former employee. The compensation sought varied between the cases but included redundancy payments, compensation for unfair dismissal and payment of unpaid benefits under the employment contract. In Robe River Iron Associates v The Metal and Engineering Workers Union Western Australian Branch (1995) 75 WAIG 2478 the order sought was to restrain the former employer from pursuing civil proceedings for negligence against a former employee.

72 Pepler's case itself concerned a claim by his union that Pepler should be (a) reinstated and (b) compensated for lost earnings following his dismissal. The decision of Kennedy J at 17 - 18 and Rowland J at 21, Olney J making a similar assumption but not deciding the point at 19, proceeded on the basis that a claim for reinstatement was an industrial matter as it was a "matter relating to … the dismissal" of Pepler from the industry within par (c) of the definition of industrial matter. Reference was made to the decision in Kwinana Construction Group Pty Ltd v The

(Page 32)

Electrical Trades Union of Workers (Western Australian Branch)

(1954) 34 WAIG 51 where the President, Jackson J said at 51:

"In my view, a claim by a union that a dismissed employee should be reinstated is a matter relating to the dismissal, and it follows that in determining a dispute consequent on a dismissal the Court has power to make an order for reinstatement and such other incidental matters including payment of wages from the time of dismissal as the Court considers just and equitable."

It is to be noted that despite the reference to an order for lost wages, the precise order made in that case made no reference to wages and was for payment of a specific sum; see the discussion of Burt CJ in

The Princess Margaret Hospital

decision at 545 and in

Pepler's

case per Olney J at 21 - 22 and Rowland J at 22.

73 It was the view of all members of the Court in Pepler's case, however, that any jurisdiction to award compensation was only as an incident to an order for reinstatement or re-employment. It is to be noted that this is entirely consistent with the approach of Burt, Wickham and Wallace JJ in the passage quoted earlier from the Princess Margaret Hospital case which identified how reinstatement relates directly to the dismissal and so is an industrial matter in such a case, and an order to reinstate is then within power as it is made to determine the industrial matter (see now s 23(1) IR Act). In Pepler's case, however, because the Commission decided that there should not be an order that Pepler be reinstated or re-employed, it was held that there was no longer a live industrial matter so that there was no longer any power to order compensation. It is to be noted that the claim for compensation in Pepler was in respect of wages lost during a period following the dismissal when Pepler was not an employee. It was not for wages or some other benefit due in respect of the employment before the dismissal and payable on dismissal. (Claims of this latter kind are now expressly within jurisdiction exercisable by the Commission under s 29(b)(2)). In his reasons, Kennedy J at 17 said:

"In other words, the jurisdiction of the Commission to deal with the recent unfair dismissal of an employee extends to ordering the employer to re-employ him; but it does not extend to making an order for compensation at large, quite unrestricted to the legal entitlement of the employee at the time of his dismissal."

See also Rowland J at 22 - 23.

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74 Pepler's case was considered and applied in a number of subsequent decisions. I would mention Kounis Metal Industries Pty Ltd v Transport Workers Union (1992) 73 WAIG 14 where a former employee sought redundancy pay, there being no provision for that in the award. In Coles Myer Ltd v Coppin (1993) 73 WAIG 1754 there was a claim by a former employee for increased redundancy payments. In Sakal v T O'Connor & Sons Pty Ltd (1995) 75 WAIG 1509 the claim was for unpaid benefits under the employment contract. In Robe River Iron Associates v Metal and Engineering Workers Union (supra) the claim was for a restraining order to prevent the former employer pursuing a civil action for negligence against the former employee. I will not spend time in these reasons dealing with particular courses of decision in those cases except to note the view of Owen J in the Kounis Metal Industries decision at 19 where his Honour said:

"In my view, the judgments in Pepler suggest that the decision rests upon a point of principle, namely, that jurisdiction depends on the present or future existence of the employer/employee relationship. Unless, at the time when the application is made, the relationship actually exists, or is expected to come into existence in the future or did exist and is to be restored, the key element of an 'industrial matter' is missing."

It is upon this passage, in particular, that the appellants rely. The words of Owen J appear, of course, to be directed with particular focus on a discrete or personal dispute between the employer and the former employee which was the context of that case. There may be reason to give further consideration to such a statement of the principle in a case where the issue is of more general significance than a dispute between individuals.

75 Of more significance, however, are the views expressed in the Federated Miscellaneous Workers Union of Australia (WA Branch) v Nappy Happy Hire Pty Ltd T/A Nappy Happy Service (1993) 74 WAIG 1493, which was decided in the year following Kounis Metal Industries. At 1495 - 1496 Anderson J, Kennedy and Franklyn JJ concurring, said:

"It is clear that a matter relating to the dismissal of a person may be an industrial matter for the purposes of the Act. See the definition of 'industrial matter' in s 7(c). Quite apart from the express recognition of that in the definition of 'industrial matter' it is anyway not easy to see why the continued existence of the industrial matter should necessarily depend on the continuation of the contract of service.

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…

This must mean that the continuation of the contract of service is not a jurisdictional fact. It is not easy to see how jurisdiction can be affected by changes to facts upon which jurisdiction does not depend although, obviously, particular remedies that might be appropriate on a given state of facts might not be appropriate should the facts change."

76 The unanimously held view in that decision that the continuation of the contract of service is not a jurisdictional fact must qualify any proposition for which the Pepler line of cases may be thought to stand and the observations of Owen J in Kounis Metal Industries must be read in that light. Once again, in the Nappy Happy Hire case the attention of the members of the Court focussed directly on the express words of the definition, to which effect was given. It is also to be noted that in the Nappy Happy Hire case there was a submission, as there is in this case, that the decision in Pepler's case should be overruled. This received careful consideration in the reasons for decision in the Nappy Happy Hire case but the unanimous view of the Court was that Pepler's case should not be overruled. The views expressed by the Court on that issue, in my respectful opinion, commend themselves as warranting the rejection of that submission in this appeal.

77 It may be helpful to an understanding of the basis for the decision in Pepler and the other cases in that line of authority to be reminded of the terms of the definition of industrial matter and in particular of par (c) of that definition which was, of course, the approach taken by the court in the Nappy Happy Hire decision. In Pepler's case the jurisdictional point may be seen to have been "the dismissal of any person" employed in the industry. It follows, necessarily, from those terms of par (c) of the definition that the termination by dismissal of an employer and employee relationship in an industry is an industrial matter. It does not matter whether the dismissal has had effect so that there is no longer an existing employer and employee relationship when the matter is taken to the Commission or whether the dismissal is on notice and the notice is yet to expire. It is the termination of the relevant relationship by dismissal and matters which "relate to" the dismissal which is the industrial matter. This was not only the view succinctly identified in the Nappy Happy Hire decision, but it was the view specifically relied on by Burt J in the Princess Margaret Hospital decision in the passage which has been quoted earlier in these reasons, and it was the foundation for the view of Jackson J expressed in the passage quoted earlier from the Kwinana

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Construction Group

(

supra

) decision. The reinstatement to the former employment, ie to the employer and employee relationship may be seen as a matter directly "relating to" a dismissal and therefore within the scope of par (c) of the definition. Hence, those cases have held consistently that reinstatement of a dismissed employee is within the jurisdiction of the Commission and an order to reinstate is within power. The point of the

Pepler

line of cases may, therefore, be a concern to draw the line between those matters such as reinstatement which are to be accepted as sufficiently directly related to a dismissal so as to be within the jurisdiction of the Commission, and those other matters which are insufficiently closely related to the jurisdictional fact of dismissal so that they are beyond the power of the Commission to deal with them. Necessarily, questions such as this involve fine and difficult distinctions. Views may differ as to their appropriate resolution as is evident from the discussion of this issue in the reasons in the

Happy Nappy Hire

case. In the

Pepler

decision that line may be seen to have been drawn to exclude a claim for compensation for loss of income for a period following a dismissal in circumstances where it was the decision of the Commission that the employment should not be reinstated. So too, in the decision in

Robe River Associates v Metal and Engineering Workers Union

(

supra

) the permanent cessation of the employer and employee relationship was seen as one basis on which it should be concluded that the continuance of a civil action for negligence by the employer was not sufficiently related to the dismissal of the former employee to be within the jurisdiction of the Commission. In that case, however, other factors, which were also considered in the reasons and which may perhaps be thought to be more fundamental to the issue of jurisdiction, also commended the same conclusion.

78 Whatever be the merit of those views, I am not persuaded that Pepler's case and the decisions in the cases that have followed and applied it are inconsistent with The Master Builders and Contractors Association, the Princess Margaret Hospital and the Totalisator Agency Board decisions. The clear statement in the Nappy Happy Hire decision that the continuation of the contract of service is not a jurisdictional fact in cases of dismissal does much to overcome what may have been some misapprehension as to the point of Pepler's case and in my view sufficiently displaces the point on which the submission now being considered is founded. Further, The Master Builders and Contractors Association, Princess Margaret Hospital and Totalisator Agency Board decisions are concerned relevantly with different aspects of the definition

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of industrial matter from the aspect of dismissal which was the focus of the

Pepler

line of cases.

79 The terms of par (c) of the definition appear to exclude the view that there must always be an existing or continuing contract of employment for there to be an industrial matter. The express confirmation by par (c) that dismissal is within the matters which effect or relate to the work privileges, rights or duties of employers or employees in any industry necessarily requires that jurisdiction may exist even though a contract of employment has been terminated by dismissal. It might be possible to give the jurisdiction in respect of dismissal an extremely limited and artificial operation by limiting it to those cases where a dismissal is on notice and the notice has not expired before the matter is brought to the Commission, but such an approach would not be warranted by the language of the definition and there would not appear to be any industrial sense to such an approach. Past decisions that have been identified in these reasons confirm that, historically, the definition has not been viewed in such an artificial way. The distinct statement in par (c) that a refusal to employ is within the scope of an industrial matter also requires the conclusion that there can be an industrial matter within the defined meaning even though there is no existing contract of employment. Further, the preference in employment cases such as The Master Builders Association and Re Cram deny that there needs to be an immediately or directly contemplated employment relationship for there to be an industrial matter.

The matter in issue

80 The ground of the application to the Commission in the present case in relation to the proposed amendment to the award to add subclauses (1) - (4) is expressed as being to give effect to freedom of choice in relation to employment, in particular because the employer respondents were employing labour only on the basis of workplace agreements thereby depriving prospective employees of the right to choose employment under the award system. While this ground could be more happily expressed, it emerges sufficiently clearly that the matter sought to be raised is the policy of WSL, which was confirmed in evidence before the Commission, that in filling its existing vacancies in the industry, vacancies which at the time of the application it was actively seeking to fill by offering employment to prospective employees, it would only employ persons who agree to enter into a workplace agreement. By committing itself to this policy WSL refuses, and has indicated it will continue to refuse, to

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employ in the vacancies it is offering persons who comprise an identifiable class, ie those who wish to be employed pursuant to the award that would apply if no workplace agreement is entered into. There is no existing contract of employment between WSL and any of the prospective employees who have been offered employment, but employment was clearly in immediate contemplation. Given the terms of the application to the Commission and the evidence that has been led at first instance, if the position remains in essence as it was at the time of the application and hearing, it seems to me that it would be open to the Commission to conclude that the application raised a matter within the definition of an "industrial matter" being, or relating to, a refusal by WSL to employ in the industry that class of persons. The Commission was persuaded against this essentially because of the view it took of the effect of the

Pepler

line of cases. For the reasons given earlier, in my respectful view the Commission fell into error of law in so doing.

81 It is also possible that, insofar as WSL may offer employment to persons then employed by RGC, the reasoning in Totalisator Agency Board v Federated Clerks Union might also provide a basis on which a more limited industrial matter could be seen to arise. It is unnecessary to explore that further at the present time. The observations that follow would appear to be generally applicable also to that situation should it arise.

82 The immediately preceeding paragraphs should not be taken to indicate any concluded view that all aspects of the proposed amendment to the award relate sufficiently to the industrial matter which has been identified so as to be within the jurisdiction of the Commission pursuant to s 23(1) IR Act, or to be within its power to "deal with" that industrial matter. On the contrary, at first blush most of the proposed clauses of the amendment could be seen to be pursuing industrial matters and objectives other than the refusal to employ. For example, the proposed subclause (1) of the amendment seeks to bind a number of theoretically potential employers in the industry but which are not presently employers and which have not refused to employ. It is not immediately apparent how such parties are in any adequate way related to the refusal of WSL to employ a class of persons. The proposed subclause (2) seeks to compel WSL to offer employment on terms that are above those determined by the existing award. The claim that above-award conditions be offered on the face of it would suggest that an industrial object is being pursued which is quite different from the refusal to employ in the industry and, in any event, is not immediately apparent how the two might be sufficiently related. The proposed subclause (4) is seeking to deal with the choice by

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an employee whether to agree to be employed pursuant to a workplace agreement or pursuant to the award. It is not immediately apparent that there is a sufficiently direct relationship between that

choice by an employee

and the jurisdictional fact, ie the refusal of the employer to employ a class of persons in the industry.

83 The proposed amendment to the award to add subclause (5) also appears to give rise to jurisdictional problems as it is not apparent that there can be a sufficient relationship between it and the refusal of the employer to employ a class of persons. It seeks the inclusion of a specific clause in any workplace agreement. The subject matter and terms of a workplace agreement are governed by the WPA Act. In particular it is to be noted that given the terms of Part IA of the IR Act, there appears to be an obstacle to the terms of a workplace agreement being the subject of an industrial matter within the meaning of the IR Act.

84 Hence, while it may be open to the Commission to find there is an industrial matter revealed by the application, were the Commission to be persuaded it should deal with that matter and to order an amendment to the award, the amendments proposed by the application, for the most part, may not prove to be within the Commission's power to "deal with" the industrial matter.

85 These matters, however, may come to be considered in greater depth at some later time.

The effect of Part IA of the Industrial Arbitration Act

86 I turn now to the second of the determinative issues identified earlier in these reasons. Part IA IR Act seeks to define the interrelationship of the WPA Act with the existing structure of employment regulated pursuant to the IR Act.

87 It is clear that by s 7B IR Act, where there is a workplace agreement that is in force under the WPA Act (see the definition of a workplace agreement in s 7(1) IR Act) an employer and employee who are parties to the workplace agreement are not, "in relation to one another" within the definitions of employer and employee in s 7(1) IR Act. So too, by s 7C IR Act, where an employer and employee are parties to a workplace agreement that is in force, a matter that is part of the relationship between them is not an industrial matter within the definition in the IR Act. Unless and until there is a workplace agreement which is in force there is no provision in either the IR Act or the WPA Act which has any effect on the

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relationship between an employer and an employee or on the mutual relationships of prospective or past employers and employees. In particular, there is no provision that the negotiations between a prospective employer and a prospective employee with a view to employment, which concerns or which in fact becomes employment in respect of which a workplace agreement is in force, are in some way removed from any jurisdiction which the Commission might otherwise have.

88 The appellant sought to submit that there can be no sufficient connection between an offer to employ pursuant to a workplace agreement and the work, privileges, rights or duties of employers or employees because, if the offer is accepted, s 7B has the effect that they are not employers or employees as defined in s 7(1). So, it is submitted, there can be no industrial matter. This fails to recognise, however, that when the offer of employment is made it is an offer of an "employer" as defined, to a prospective "employee" as defined (NB par (b) of the definition of employee in s 7(1) IR Act). If there is a refusal of an employer to employ a person or a group of persons there will be no workplace agreement between them. The terms of s 7B and s 7C IR Act have no application to or operation in this situation, and no other provision in the Act has sought to deal with it.

89 In this connection the appellants also sought to rely on words of Murray J at 2479 of the decision in Robe River Iron Associates v Metal and Engineering Workers Union (supra) and of Rowland J at 1510 of the decision in Sakal v T O'Connor & Sons Pty Ltd (supra) for a proposition that to be within the definition of industrial matter the work, privileges, rights or duties must be those of persons who are employers or employees at the time when the work, privileges, rights or duties are performed or exercised. This submission fails to have sufficient regard to the contexts in which those passages were written. Each of the passages relied on are but brief summaries of the effect of the Pepler line of decisions. What has been said already about that line of cases is sufficient to dispose of this submission.

90 The submission on behalf of the Hon Minister for Labour, who appeared as amicus curiae, recognised that neither the IR Act nor the WPA Act made any direct or express provision which dealt with the situation now under consideration. Nevertheless, the submission sought to rely on what was described as the "spirit" of the legislation which introduced workplace agreements. It was said to be consistent with that "spirit" that an employer should be free to do as WSL now proposes, ie to

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offer to employ in an industry only pursuant to a workplace agreement. There are difficulties in the way of discerning that to be the "spirit" of the legislation. The primary guide to the spirit or policy of any legislation is the words used by the Parliament to express its intentions. As I have indicated, in this case they fail to express any such spirit or intention, indeed they fail even to hint at it. We were referred to the second reading speech of the Hon Minister for Labour Relations when introducing the Bills for the WPA Act and to amend the IR Act to insert Part IA. As recorded in the Hansard of 8 July 1993 at 145, the Hon Minister said:

"The effect of the legislation will be to provide, for the first time, a real choice for employers and employees as to the industrial relations system governing their relationship by establishing a new stream, based on workplace agreements which will sit alongside the existing award system. …"

The focus of the new system will be on the workplace and the development of a workplace culture in which employees can take an active and responsible role in directly setting their own work conditions. All employees … deserve far greater freedom to negotiate employment conditions which best suit their needs - be it pay, conditions or working hours.

This Bill, then, will establish the alternate system. It will not do so by abolishing the old. Employers and employees will be able to choose the system they prefer. … this system will win its adherents because of the strength and attractiveness of its attributes, not by leaving employers and employees with no other choice. Further, the legislation contains extensive provisions to .. protect workers against coercion by anybody and to ensure that all parties to an agreement … genuinely wish to have the agreement registered."

The reference by the Hon Minister to the two systems of industrial regulation operating side by side with employers and employees able to choose which system they prefer, while clear enough in the context of an existing employer and employee relationship, fails to deal with the case where employment is being offered. The submissions for the Hon Minister suggested that the freedom to choose referred to in the speech was reflected in the present case by the employer choosing to employ only on the basis of a workplace agreement and the employee being free to choose whether or not to accept such employment. That, however, is a different choice from that which the Hon Minister's speech dealt with.

(Page 41)

The speech contemplated an employer and employee mutually agreeing whether their employment relationship should be regulated by the award

by a workplace agreement. In the case of WSL, the choice of the prospective employee is whether or not to enter into an employment relationship at all , ie whether or not to have a job at all.

91 Thus the second reading speech does not deal with the situation which is now raised by this application. Nor do the provisions of the legislation, ie the WPA Act and Part IA of the IR Act. Had the legislature intended to make such a significant change to the existing operation of the IR Act it is fair to expect that express provision would have been made to give effect to such an intention. Instead, the amendments are carefully limited to the situation where a workplace agreement is in force. Given the failure of the legislature to make any provision, and indeed even the failure of the second reading speech of the Hon Minister to deal with this issue, the conclusion is required that the legislation does not have the effect for which the appellants and the Hon Minister contend. Hence, insofar as the terms of Part IA of the IR Act and of the WPA Act reveal, the scheme intended by the Parliament is that it is only where and while a workplace agreement is in force that an employer and an employee who are bound by a workplace agreement are, in their mutual relationship, not an "employer" and "employee" within the defined meanings of those terms in s 7(1) IR Act, and that a matter relating to that mutual relationship is not capable of being an "industrial matter" as defined in that provision. Had more been intended by the legislature that could easily have been made clear.

Conclusion and order

92 For these reasons I have come to the conclusion that it was open to the Commission to find that an industrial matter was disclosed by this application, albeit that much that was proposed by way of amendment to the award to deal with it may prove to be beyond the scope of that industrial matter and the jurisdiction and power of the Commission. Hence, the decisions of the Full Bench of the Commission to allow the appeals and to suspend the orders made by the Commission at first instance were correct. It will be preferable, however, to amend Part 5 of the order of the Full Bench as, in some respects, the reasons for decision of this Court may vary from the reasons given by the Full Bench.

93 For these reasons, I would allow the appeal but only to amend par 5 of the orders of the Full Bench by deleting the concluding words "in

(Page 42)

accordance with the reasons for decision". In all other respects the appeal fails.

RGC Mineral Sands Ltd v Construction, Mining, Energy, Timberyards, Sawmills, WOODWORKERS Union of Australia WA Branch

[2000] WASCA 162

9 JUNE 2000

RGC MINERAL SANDS LTD & ANOR -v- CONSTRUCTION, MINING, ENERGY, TIMBERYARDS, SAWMILLS, WOODWORKERS UNION OF AUSTRALIA WA BRANCH & ORS [2000] WASCA 162