State of Victoria and John MacBean, a Senior Deputy President of the Australian Industrial Relations Commission and Health Services Union of Australia

[1996] IRCA 77

DECISION NO:   77/96

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

No VI 95/1139

B E T W E E N :

STATE OF VICTORIA
Applicant

AND

JOHN MacBEAN, A SENIOR DEPUTY PRESIDENT OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
First Respondent

AND

HEALTH SERVICES UNION OF AUSTRALIA
Second Respondent

JUDGE:     Gray, Marshall, North JJ
PLACE:     Melbourne
DATE:       21 February 1996

EX TEMPORE REASONS FOR JUDGMENT

GRAY J:  I will ask North J to deliver the first judgment.

NORTH J: On 24 February 1995, Senior Deputy President Riordan determined to make an award covering 8000 employees of the State of Victoria working for the Department of Health and Community Services in the area of psychiatric service, disability service, and drug and alcohol abuse services. The award was to be made under s.170PP(3) of the Industrial Relations Act 1988 (“the Act”), consequent upon the termination of a bargaining period between the State of Victoria and the Health Services Union of Australia.

Later, Senior Deputy President Riordan retired.  The matter came before Senior Deputy President MacBean for the actual making of the award.  On this occasion, the State of Victoria and Western Australia put arguments that the Industrial Relations Commission (“the Commission”) did not have jurisdiction to make the award.  On 24 January 1996, Senior Deputy President MacBean determined these issues.  He rejected the argument that the High Court decision in Re Australian Education Union and Others; Ex parte State of Victoria and Another (1995) 128 ALR 609 prohibited the Industrial Relations Commission from making a paid rates award binding a State.

It had also been argued that s.170PP(3) was beyond the legislative power of the Commonwealth Parliament, contained in s.51(xxxv) of the Constitution in that it directed the Commission how it had to fulfil its function of settling disputes by arbitration. As the Constitutional validity of the section had not been determined definitively by the Court, Senior Deputy President MacBean decided that he ought to proceed on the assumption that it was validly enacted.

He directed the parties to prepare a draft award.  In response, the State of Victoria initiated proceedings in the High Court of Australia for prerogative relief.  On 2 February 1996, Dawson J remitted the claim for prerogative relief and an application for a stay of proceedings to this Court.  When the matter came on again before the Commission for the settlement of the draft award, the State of Victoria argued before Senior Deputy President MacBean that the award should not be made, because an application had been made to the High Court for prerogative relief and for a stay of the decision made on 24 January 1996.

On 9 February 1996, Senior Deputy President MacBean decided to proceed to make the award.  On 13 February 1996, the State of Victoria filed a notice of motion in this Court, seeking a stay of further proceedings in reliance on the decision of Senior Deputy President Riordan of 24 February 1995, or the decision of Senior Deputy President MacBean of 24 January 1996.  On 16 February 1996, the State of Victoria filed a further notice of motion seeking a stay of the award.

The applicant's argument for a stay involved the following propositions. First, the challenge to the Constitutional validity of s.170PP(3) was a strong case. Second, the Court should not require exceptional circumstances to be demonstrated for a stay to be granted, rather, the Court should make an overall judgment as to whether it is right to intervene. This proposition was based on the decision of the Full Court in Re Printing and Kindred Industries Union; Ex parte Nationwide News Pty Ltd (t/as Cumberland Newspaper Group) and Others (1994) 122 ALR 303 at 316-317.

The applicants argued that there were reasons for intervention in this case. If a stay is not granted and the application ultimately succeeds, the applicant will have permanently lost the opportunity to achieve a negotiated industrial outcome more in line with the outcomes which had occurred in other public sector employment. Further, the circumstances in which Senior Deputy President MacBean proceeded to make the award, having been told that there was a pending stay application in this Court, was a circumstance of unusualness and itself supported the grant of a stay. 

For the purpose of this application, I am prepared to assume, in favour of the applicant, that it has a strong argument on the challenge to s.170PP(3) of the Act. I emphasise that I make this assumption for the purpose of argument. I do not determine that the applicant has a strong argument against s.170PP(3). I also assume, in the applicant's favour, that it does not have to show exceptional circumstances in order to obtain a stay of the award. But even on those assumptions, the applicant has not demonstrated that it would be right for the Court to intervene.

I take the consequences of a refusal of stay on negotiations first. On 6 February 1996, Dr John Paterson, Secretary of the Department of Health and Community Services, wrote to staff members affected by the proposed award.  The letter was written on an appreciation that the award was to be made.  He wrote:

“We have reluctantly applied to the High Court to stop the Award from being implemented in its current form.  An appeal will be made to the Australian Industrial Relations Commission on those particular aspects of the award which restrict our opportunities to deliver services properly. 

The Department will seek discussions with officials of the Health and Community Services Union in order to obtain a negotiated settlement.  That would allow an immediate increase in your minimum rate of pay. 

We will try to negotiate a settlement on the issues still in contention between the Department and HACSU while the appeals are being heard.  There is no reason why this should not be achieved in quick time, so that dollars can flow to you. 

It is up to HACSU. 

I will keep you informed of major developments in this matter and I look forward to soon being able to notify you of a favourable outcome.” 

The existence of the award was not a matter which Dr Paterson appeared to see as an impediment to negotiations with the union.  The union has indicated its willingness, as recently as 14 February 1996, to engage in negotiations.  It wrote to Dr Paterson concerning the final award as follows:

“The union is in receipt of a copy of your letter dated 6 February 1996 to all staff and notes your ‘invitation’ to the union to enter into discussions with the department over those provisions in the final award which you say in your letter ‘create serious difficulties for service operations’. 

I advise that the union is happy to meet at any time with officers of the department to discuss these issues.  I therefore ask that the department contact David Stevens at his office as a matter of urgency to arrange a meeting.”

There is no evidence that the refusal of a stay will cause permanent loss of the opportunity to negotiate a settlement in terms desired by the State of Victoria.  Given the complex dynamics of industrial negotiations, such a result should not be assumed.  The public stance of the applicant prior to the seeking of a stay has been to express a desire to enter into negotiations with the union to reach a settlement.  The stance was not conditional upon the grant of a stay of the operation of the award.  This points to the unlikelihood that the failure to grant a stay would cause irreparable damage to the applicant.

On the other hand, the grant of a stay would deprive the employees of a wage increase and improvement in conditions.  Ordinarily, in these applications, the Court will pay due regard to the industrial judgment of the Commission.  I refer to the comments of Brennan J, as he then was, in Re Griffin (1988) 167 CLR 37 at 42, and also to an earlier decision of the Full Court of this Court in Public Transport Corporation v Boulton and Others (unreported, 22 December 1995).  In this case, Dr Paterson has also expressed a view in his letter dated 6 February 1996.  He said to staff members that:

“We value your contribution to departmental and hospital services.  You are entitled to salary increases similar to those which have already been granted to most non HACSU members across the health and community services sector.  You deserve to have received similar pay increases to your non-HACSU colleagues by now.”

I turn now to the circumstances surrounding the making of the award. Senior Deputy President MacBean had a statutory obligation to settle the industrial dispute before him expeditiously.  In the discharge of that obligation, he heard the application and determined whether he should proceed no further, pending the application for a stay in the Court.  He was not obliged to refuse to proceed.  He had to exercise a discretion.  He did so and he published his reasons.  They include the following:

“It should be noted that the employees covered by the new award have endured a considerable delay in having the benefits of Senior Deputy President Riordan's decision reflected in their pay.  It is almost 12 months since the Senior Deputy President awarded employees concerned a 10% increase in salaries.  In this time nurses and other health employees employed elsewhere in the Victorian public health sector under other federal health awards, have had the benefit of a salary increase through agreements reached between the HSUA, the Australian Nursing Federation (ANF) and the Department.” 

The circumstances in which the award was made were unexceptional.  They provide no basis for a grant of a stay of the award.

The applicant also submitted that, if the applicant had to make payments under the award, there would be some inconvenience in the event that the challenge to the validity of the section was successful.  The evidence demonstrated that the applicant has a statutory right to recover such amounts as are overpaid from the wages of existing employees.  Consequently, the inconvenience of payment, in the event that repayment becomes necessary, is not a substantial factor.  Similarly the offer by the applicant of an undertaking to back-pay the increases if the challenge fails does not, on balance, persuade me to grant a stay.

A similar matter was dealt with by the Full Court in Public Transport Corporation v Boulton, referred to earlier, as follows:

“The PTC offered an undertaking to pay the termination payments with interest at 10 per cent if it failed in its challenge.  Such an undertaking may often meet the competing interests in a commercial dispute.  It does not adequately meet the apprentices' interests in this case because it makes no provision for the likelihood that the apprentices need the payments now rather than at the end of the proceedings.”

The same approach applies in this case.  I observe in passing that the undertaking offered in this case did not include a component for interest.  Finally, the applicant intends to institute an appeal from the decision of Senior Deputy President MacBean to the Full Bench of the Industrial Relations Commission.  By this means, the applicant is able to ventilate any of the practical problems which might arise from the terms of the award. 

I would dismiss both the motion filed on 13 February 1996, seeking a stay of proceedings, and the motion filed on 16 February 1996, seeking a stay of the award.

GRAY J:   I agree that both applications for a stay of proceedings should be dismissed.  I agree with the reasons for judgment of North J.

MARSHALL J:   I would refuse a stay in each case.  I agree with the orders proposed by Gray and North JJ.  I agree with the reasons of North J.

I certify that this and the preceding seven (7) pages are a true copy of the reasons for judgment of the Court.

Associate:
Dated:        12 February 1996

Solicitors for the applicant:             Victorian Government Solicitor
Counsel for the applicant:               Dr C Jessup QC and Mr M McDonald

Solicitors for the second respondent: Maurice Blackburn
Counsel for the second respondent:   Mr R Hinkley and Mr W Friend

Date of hearing:  21 February 1996
Date of judgment:                   21 February 1996

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

No VI 95/1139

B E T W E E N :

STATE OF VICTORIA
Applicant

AND

JOHN MacBEAN, A SENIOR DEPUTY PRESIDENT OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

First Respondent

AND

HEALTH SERVICES UNION OF AUSTRALIA

Second Respondent

ORDER

JUDGE:     Gray, Marshall, North JJ
PLACE:     Melbourne
DATE:       21 February 1996

THE COURT ORDERS THAT:

1. The application for a stay of further proceedings in matter C No 31432 of 1993 in the records of the Australian Industrial Relations Commission, remitted to this Court by the High Court of Australia by order made on 2 February 1996, be dismissed.

1. The motion the subject of the applicant's notice of motion filed on 16 February 1996 be dismissed.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

No VI 95/1139

B E T W E E N :

STATE OF VICTORIA
Applicant

AND

JOHN MacBEAN, A SENIOR DEPUTY PRESIDENT OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
First Respondent

AND

HEALTH SERVICES UNION OF AUSTRALIA
Second Respondent

JUDGE:        Gray, Marshall, North JJ
PLACE:         Melbourne
DATE:          21 February 1996

CORRIGENDA TO EX TEMPORE REASONS FOR JUDGMENT OF NORTH J DELIVERED ON 21 FEBRUARY 1996

An additional page is attached.

I certify that this is a true copy of corrigenda made to the ex tempore reasons for judgment in this matter of the Hon. Justice North.

Associate:

Date:

C A T C H W O R D S

INDUSTRIAL LAW - AWARD - proceeding to quash award - APPLICATION TO STAY OPERATION OF AWARD - no permanent loss of opportunity to negotiate settlement - employees would be deprived of benefit of award - inconvenience of having to pay and recover if successful not substantial

STATE OF VICTORIA -v- MacBEAN and HEALTH SERVICES UNION OF AUSTRALIA

No. VI 95/1139

Before:       Gray, Marshall, North JJ
Place:         Melbourne
Date:          21 February 1996