State of Victoria v Riordan
[1996] IRCA 330
•26 Jul 1996
DECISION NO: 330/96
INDUSTRIAL LAW - Awards made by Australian Industrial Relations Commission - Validity - Awards relating to redundancies - Whether awards impaired capacity of State government to govern - Whether provisions were within the ambit of the claim giving rise to the relevant dispute.
Re Australian Education Union: Ex parte the State of Victoria (1995) 184 CLR 188
The State of Victoria and anor v Riordan and others
No VI95/2140
The State of Victoria and anor v O'Connor and others
No VI95/6089
CORAM: WILCOX CJ, LEE and MADGWICK JJ
PLACE: SYDNEY (HEARD IN MELBOURNE)
DATE: 26 JULY 1996
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA ) No. VI95/2140
VICTORIA DISTRICT REGISTRY )
IN THE MATTER of a remittal from the High Court of Australia
BETWEEN: THE STATE OF VICTORIA AND MINISTER FOR EDUCATION (VICTORIA)
Applicant
AND: THE HONOURABLE SENIOR DEPUTY PRESIDENT RIORDAN, THE HONOURABLE JUSTICE MUNRO AND COMMISSIONER McDONALD, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
First Respondents
AND: AUSTRALIAN EDUCATION UNION
Second Respondent
CORAM: WILCOX CJ, LEE and MADGWICK JJ
PLACE: SYDNEY (HEARD IN MELBOURNE)
DATE: 26 JULY 1996
THE COURT ORDERS THAT:
A writ of certiorari be granted to bring into this Court and quash paragraph (v) of clause 7(b) of the award entitled "Victorian Teachers Redundancy Award" made by the first respondent on 27 October 1994.
Save as aforesaid, the application be dismissed.
NB:Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA ) No. VI95/6089
VICTORIA DISTRICT REGISTRY )
IN THE MATTER of a remittal from the High Court of Australia
BETWEEN: THE STATE OF VICTORIA AND MINISTER FOR EDUCATION (VICTORIA)
AND: THE HONOURABLE JUSTICE DIERDRE O'CONNOR, PRESIDENT OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION, THE HONOURABLE JUSTICE ALAN BOULTON AND THE HONOURABLE JUSTICE PAUL MUNRO, SENIOR DEPUTY PRESIDENTS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION, THE HONOURABLE IAN WATSON AND THE HONOURABLE ANNE HARRISON, DEPUTY PRESIDENTS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION AND BERNARD FRAWLEY, KENNETH McDONALD AND GRAHAM HOLMES, COMMISSIONERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
First Respondents
AND: AUSTRALIAN EDUCATION UNION
Second Respondent
CORAM: WILCOX CJ, LEE and MADGWICK JJ
PLACE: SYDNEY (HEARD IN MELBOURNE)
DATE: 26 JULY 1996
THE COURT ORDERS THAT:
The application be dismissed.
NB:Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA ) No. VI95/2140
VICTORIA DISTRICT REGISTRY )
IN THE MATTER of a remittal from the High Court of Australia
BETWEEN: THE STATE OF VICTORIA AND THE MINISTER FOR EDUCATION (VICTORIA)
Applicant
AND: THE HONOURABLE SENIOR DEPUTY PRESIDENT RIORDAN, THE HONOURABLE JUSTICE MUNRO AND COMMISSIONER McDONALD, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
First Respondents
AND: AUSTRALIAN EDUCATION UNION
Second Respondent
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA ) No. VI95/6089
VICTORIA DISTRICT REGISTRY )
IN THE MATTER of a remittal from the High Court of Australia
BETWEEN: THE STATE OF VICTORIA AND THE MINISTER FOR EDUCATION (VICTORIA)
AND: THE HONOURABLE JUSTICE DIERDRE O'CONNOR, PRESIDENT OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION, THE HONOURABLE JUSTICE ALAN BOULTON AND THE HONOURABLE JUSTICE PAUL MUNRO, SENIOR DEPUTY PRESIDENTS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION, THE HONOURABLE IAN WATSON AND THE HONOURABLE ANNE HARRISON, DEPUTY PRESIDENTS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION AND BERNARD FRAWLEY, KENNETH McDONALD AND GRAHAM HOLMES, COMMISSIONERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
First Respondents
AND: AUSTRALIAN EDUCATION UNION
Second Respondent
CORAM: WILCOX CJ, LEE AND MADGWICK JJ
PLACE: SYDNEY (Heard in Melbourne)
DATE: 26 JULY 1996
REASONS FOR JUDGMENT
THE COURT: These cases are an aftermath of the decision in Re Australian Education Union; Ex parte the State of Victoria ("AEU") (1995) 184 CLR 188 in which the High Court of Australia dealt with the extent of the implied limitation upon the power of the Commonwealth to make laws, under s. 51 (xxxv) of the Constitution, affecting State employees.
The proceedings
One of the 15 proceedings before the High Court in AEU (M 8 of 1993) concerned an interim award made by a Full Bench of the Australian Industrial Relations Commission ("the Commission") on 24 December 1992, following earlier proceedings before Senior Deputy President Riordan. The history of that proceeding was shortly summarised in the joint judgment in AEU of Mason CJ, Brennan J, Deane J, Toohey J, Gaudron J and McHugh J at 216-217.
By the date of the High Court judgment, the interim award had been replaced by a final award entitled Victorian Teachers Redundancy Award 1994 ("the redundancy award") and made on 27 October 1994 by a Full Bench consisting of Senior Deputy President Riordan, Justice Munro and Commissioner McDonald. The State of Victoria and the Victorian Minister for Education decided to challenge the power of the Commission to make that award. On 22 December 1994, they filed in the High Court a Notice of Motion seeking writs of prohibition, mandamus and certiorari. They named as first respondents the members of the Full Bench who had made the redundancy award and, as second respondent, the Australian Education Union. The Australian Education Union was the employee organisation bound by the award, being the successor upon amalgamation to the applicant for the award, the Australian Teachers Union. The motion was numbered M 100 of 1994 in the High Court. On 23 February 1995, by consent of the parties, Dawson J made an order remitting it to this Court pursuant to s. 44 of the Judiciary Act 1903 and s. 412 of the Industrial Relations Act 1988. Upon remission the motion was numbered VI95/2140 in this Court.
When the remittal order was made, judgment was still reserved in the Full High Court in matter M 8 of 1993 and the other 14 matters heard with it. Also there was pending before the Commission an application for variation of the redundancy award. Consequently no immediate action was taken to list matter VI95/2140 for hearing.
On 1 June 1994, a Full Bench of the Commission made an interim award entitled Teachers (Victorian Government Schools - Interim) Award 1994 ("the interim award"). On 20 December 1994, the Minister for Education applied to delete certain clauses from this award. On the following day, 21 December 1994, Justice Munro made a further interim award entitled Teachers (Victoria Government Schools - Interim No 2) Award 1994 ("the interim no 2 award").
The Full High Court gave judgment in AEU on 7 April 1995. At that time the Minister's application of 20 December was unresolved. Moreover, on 26 May 1995, the State of Victoria applied to the Commission for orders setting aside the redundancy award and the two interim awards on the ground that each was beyond the Commission's power. The applications referred to the AEU decision.
For the purpose of dealing with these applications, and others arising out of AEU, the President of the Commission, Justice O'Connor, constituted a Full Bench consisting of herself, Justice Munro, Deputy President Watson, Deputy President Harrison and Commissioner Holmes. After hearings in July, the Full Bench handed down a decision on 13 September 1995. The decision is reported: see 61 IR 174. The Full Bench ruled that three provisions of the redundancy award infringed the implied limitation, as explained by the High Court in AEU, and it referred that part of the application to a Deputy President for settlement of the appropriate order. Otherwise it dismissed the applications involving the Australian Education Union.
On 10 November 1995, the State of Victoria and the Victorian Minister for Education filed a second Notice of Motion (M 71 of 1995) in the High Court requesting writs of prohibition, certiorari and mandamus. They named as first respondents the five members of the Full Bench that had made the decision on 13 September 1995 along with Justice Boulton and Commissioners Frawley and McDonald, all of whom were concerned with consequential applications. The Australian Education Union was made second respondent. On 29 November 1995 this application was remitted to this Court where it became matter VI95/6089.
The two applications for prerogative relief raised similar issues. They were heard together, by consent, on 10 May 1996. The applicant's case related to the redundancy award, that is the final award made by the Full Bench on 27 October 1994, the interim award made by the Full Bench on 1 June 1994 and the interim no 2 award made by Justice Munro on 21 December 1994. In relation to the redundancy award, the applicants relied on two arguments: that certain provisions infringed the implied limitation of power, as expounded in AEU, and that the award fell outside the ambit of the claim giving rise to the industrial dispute upon which the award was founded. In relation to the two interim awards, the applicants argued only the question of power.
On a number of occasions during the period that elapsed between Dawson J's remittal order on 23 February 1995 and the argument before us, the Commission varied the redundancy award. In their submissions to us, counsel addressed the award as varied. In dealing with the submissions, we will take the same course. Any earlier deficiency of power or ambit is irrelevant if the problem is now cured.
As the arguments concerning implied limitation of power involved a matter arising under the Constitution or involving its interpretation, notice of the proceedings was given to the Attorney-General of the Commonwealth and the various States: see s. 78B of the Judiciary Act. Pursuant to this notice, the Attorney-General of Queensland appeared by counsel at the hearing and put submissions supporting those of the applicants.
Implied limitation of power: principles
Discussion of the applicants' arguments about implied limitation of power must begin with an analysis of AEU.
In their joint judgment at 222, Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ noted that the expression "industrial dispute" in s. 51 (xxxv) of the Constitution bears its popular meaning rather than that of a dispute in an industry. Accordingly, it may apply to a dispute between a State, or a State agency, and its employees; with the possible exception of a dispute involving employees who are engaged in the administrative services of a State. Their Honours noted that this possible exception had been reserved in The Queen v Coldham; Ex parte Australian Social Welfare Union (1983) 153 CLR 297 and discussed subsequently in Re Lee; Ex parte Harper (1986) 160 CLR 430 and Re State Public Services Federation; Ex parte Attorney-General (WA) ("SPSF") (1993) 178 CLR 249. They approved statements in SPSF to the effect that the scope of the power granted by s. 51 (xxxv) must be determined with the implied limitation in mind; it was not the correct approach to first determine the extent of the power and then consider whether it could override State power.
Their Honours at 226 referred to the principle enunciated by Dixon J in Australian Railways Union v Victorian Railways Commissioners (1930) 44 CLR 319 at 390: that every grant of legislative power to the Commonwealth must be interpreted as authorising Parliament to make laws affecting the operations of the States and their agencies, subject to two then irrelevant reservations. However, they also pointed out that Dixon J had cautioned that Parliament's power over a State may not be "as full and ample as over the subject". They went on to consider the nature and extent of the relevant limitation, commenting at 228 on the difficulty the Court had experienced "in formulating with a sufficient degree of precision the implied limitation on the exercise of Commonwealth powers".
The authors of the joint judgment then turned to the submissions made to them about the nature and extent of the implied limitation. They rejected a submission that it extends to any impairment of capacity to exercise government functions. At 229 their Honours found that such a limitation:
"would confer protection on the exercise of powers by the States to an extent which is inconsistent with the subordination of those powers to the powers of the Commonwealth through the operation of s 109 of the Constitution. And the argument, if successful, would protect a substantial part of a State's workforce from the impact of federal awards, notwithstanding that the operation of those awards in relation to school teachers, health workers and other categories of employees would not destroy or curtail the existence of the State or its capacity to function as a government.
The fact is that the existence of the States and their Constitutions and their capacity to function as governments would not be impaired by the operation of federal awards made in respect of the vast majority of the employees sought to be covered by the logs of claims, at any rate if the award provisions were confined to minimum wages and working conditions which take appropriate account of any special functions or responsibilities which attach to them. The freedom of State governments to determine terms and conditions of employment of employees would be restricted but that is a consequence of the application of the arbitration power to States."
Their Honours then considered arguments based upon a supposed distinction between "policy" and "operational" functions and protection of the "integrity" or "autonomy" of a State. At 231 they said:
"The limitation consists of two elements: (1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities (the limitation against discrimination) and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments."
In relation to the second matter, and the argument about "integrity" and "autonomy", their Honours said at 232 - 233:
"It seems to us that critical to that capacity of a State is the government's right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds. An impairment of a State's rights in these respects would, in our view, constitute an infringement of the implied limitation. On this view, the prescription by a federal award of minimum wages and working conditions would not infringe the implied limitation, at least if it takes appropriate account of any special functions or responsibilities which attach to the employees in question. There may be a question, in some areas of employment, whether an award regulating promotion and transfer would amount to an infringement. That is a question which need not be considered. As with other provisions in a comprehensive award, the answer would turn on matters of degree, including the character and responsibilities of the employee.
In our view, also critical to a State's capacity to function as a government is its ability, not only to determine the number and identity of those whom it wishes to engage at the higher levels of government, but also to determine the terms and conditions on which those persons shall be engaged. Hence, Ministers, ministerial assistants and advisers, head of departments and high level statutory office holders, parliamentary officers and judges would clearly fall within this group. The implied limitation would protect the States from the exercise by the Commission of power to fix minimum wages and working conditions in respect of such persons and possibly others as well. And, in any event, Ministers and judges are not employees of a State."
Turning to the facts of the cases before them, their Honours commented (at 233) that "the Commission has power to make awards binding the States and their agencies in relation to minimum wages and working conditions which take account of the special functions and responsibilities, if any, of a broad range of public servants and employers ..." However, they said at 234:
"the operation of the implied limitation would preclude the Commission from making an award binding the States in relation to qualifications and eligibility for employment, term of appointment and termination of employment, at least on the ground of redundancy. It would also preclude the Commission from making an award binding the States in relation to the terms and conditions of employment or engagement of persons such as Ministers, ministerial assistants and advisers, heads of department and senior office holders - as well as parliamentary officers and judges. What impact the implied limitation would have on the power of the Commission to make an award prescribing particular minimum terms and conditions of employment for particular classes of employees, eg, term of appointment, procedures and criteria for promotion and transfer, and termination on grounds other than redundancy, was a question which was not explored in detail in the arguments presented to this Court. Obviously these are matters to be considered in the Commission if the proceedings are taken further in that tribunal."
Their Honours held that the prosecutor had failed to demonstrate that the Commission was precluded "from making awards of the kind sought", although perhaps not in respect of all public servants and employees sought to be covered.
At 235 the authors of the joint judgment said that "the mere making of interim awards as such does not bring the cases within the operation of the implied limitation"; but that "the making of interim awards regulating or restricting the offer of voluntary departure packages to employees of the State and its agencies cannot be supported". Accordingly, they held, the interim awards made in two matters (M 11 of 1993 and M 156 of 1993) were invalid. It seems they would have taken the same view concerning the interim award in M 8 of 1993 made on 24 December 1992; see the conclusion at 241. However, as that award had, by then, been set aside, it was unnecessary to deal with it. The Court's order in M 8 of 1993 was that the order nisi be discharged.
Implied limitation of power: the redundancy award
The redundancy award was designed to deal with redundancies in the Victorian Teaching Service. It bound the Crown in right of Victoria in respect of "all ... employees engaged as teachers in or in connection with or incidental to the Victorian Teaching Service other than teachers employed in the TAFE Teaching Service or by a TAFE College Council". It provided by cl. 6 a notification procedure where an employer (an authority or body employing teachers within the operation of the award) proposed "to make changes to educational programs, curriculum, class sizes, courses, school organisation, school classification structure or technology that are likely to have a significant effect on employees or excluded category employees". The term "excluded category employee" was defined by cl. 5(f) of the award to mean a teacher engaged under a contract of employment for a specified period of time, a casual teacher and a teacher employed on probation.
Although the present applicants challenge cl. 6 on the basis that it extends beyond the ambit of the claim that generated the relevant industrial dispute, they put no argument that it infringes the implied limitation on the power conferred by s. 51 (xxxv) of the Constitution. They do challenge parts of cl. 7 on that ground. Clause 7 is entitled "Redeployment, retraining and redundancy". Omitting parts irrelevant to the argument, it reads:
"Consultation
(a)(i) Where it appears to an employer that an employee is likely to be excess to workplace requirements, the employer shall, at least one week before the commencement of any procedures in accordance with this clause, provide all relevant details to the union. Relevant details for these purposes shall include the reasons for the employer considering that an employee is likely to be excess to workplace requirements and:
(1) the number, classification, location and details of the employees likely to be excess to workplace requirements;
(2) where changes in the staffing structure are proposed the projected student enrolments, the number and classification of employees affected and the number and classification of the employees expected to be required for the performance of any continuing function of the employer.
(ii)The employer and the union shall discuss, and attempt to reach agreement, on:
(1) the number of employees, (if any), likely to be excess to workplace requirements;
(2) measures that could be taken to remove or reduce the incidence of employees becoming excess to workplace requirements; or being designated as potentially excess employees;
(3) retraining of the employees concerned;
(4) redeployment prospects for the employees concerned;
(5) the use of voluntary separation;
(6) the use or avoidance off compulsory redundancy.
Provided that the employer and the union shall consider each other's representations and where such representations are rejected, the party concerned shall provide proper reasons for the rejection.
(iii)The consultations and negotiations under paragraph (ii) above shall take place over such time as is reasonable having regard to the particular matters under discussion and to the need for potential situations of a likely excess to workplace requirements to be resolved quickly.
(iv)Except where a lesser period is agreed between the union and the employer, an employee shall not, within one month after the union has been advised under paragraph (i), be advised that he or she is declared to be excess to workplace requirements, nor be made, or invited to accept, an offer of a voluntary separation package howsoever described.
Provided that, where the discussions under paragraph (iii) have not been completed within that month the employee shall not be so invited or advised until the discussions have been completed unless the discussions have not proceeded with reasonable expedition and it is inappropriate for the declaration or offer to be made.
(v)Once consultation and negotiation in accordance with paragraphs (ii) and (iii) have been completed, subject to the limitation in paragraph (iv) above and to the employee's position having been within the scope of such consultations and negotiations, an employee may be declared excess to workplace requirements in accordance with Schedule 1.
Redeployment and Retraining
(b)(i) Where the Director is of the opinion that it is appropriate to consider or to proceed with action to compulsory transfer or redeploy an employee who has been declared to be excess to workplace requirements, the Director shall advise in writing the affected employee and the union, that the employee is designated as a potentially excess employee being an employee potentially excess to the requirements of the Teaching Service and subject to redeployment and associated rights and duties applicable to potentially excess employees.
(ii)Following an employee being declared excess to workplace requirements, and not later than upon the designation in writing required under paragraph 7(b)(i), the Director shall:
(1) attempt to redeploy an employee declared excess to workplace requirements to any suitable position which is available;
(2) assess the redeployment prospects of an employee who cannot be redeployed immediately and discuss those prospects with the employee and the union.
(iii) Where an offer of redeployment is made the employee shall be given fourteen days to accept or reject the offer, unless otherwise agreed.
(iv) The employer shall not redeploy a potentially excess employee into a position which is less than an equivalent position without first considering all reasonably available options for redeployment to an equivalent position and after a period of three months following the designation of the employee as a potentially excess employee the employer may redeploy such an employee to a position that is not an equivalent position.
(v) The employer shall make no new offer of employment to fill a vacant position while a suitable employee designated as a potentially excess employee under paragraph 7(b)(i), who occupied a position equivalent to or higher than the vacant position and who is competent to perform the duties of the vacant position, is available and willing to be redeployed to it.
(vi) Where a program of retraining into areas of need or demand in the Teaching Service can facilitate redeployment, the Director shall give priority consideration to providing that training to employees declared excess to workplace requirements, and shall take reasonable steps to offer retraining to a potentially excess employee for whom redeployment has not been, or is unlikely to be, possible without some retraining.
(vii) A potentially excess employee may be required by the Director to undertake a program of retraining into areas of need or demand in the Teaching Service, but shall not be required to do so before reasonable prospects for redeployment to an equivalent position have been examined, or within three months from the date of designation as a potentially excess employee. ...
(viii) Where a potentially excess employee accepts an offer of redeployment the employer shall take all reasonable steps to facilitate such redeployment.
(ix) Subject to paragraphs (ii) to (viii) of this subclause where one month has elapsed since a potentially excess employee was declared to be excess to workplace requirements, and where no offer of redeployment has been made, or any such offer or offers, if made, have been declined, the employer may invite the potentially excess employee to elect for voluntary separation, but will continue to apply the provisions of this subclause pending advice that the employee intends to so elect.
Voluntary Separation
...
Retrenchment
(d) (i) This clause applies to employees who are designated Excess to Requirements and whose employment has not been terminated in accordance with subclause 7(c).
(ii) Subject to subclauses 7(b) and 7(c), in order to avoid the involuntary retrenchment of an employee, the employer shall invite other employees who are not in a redundancy situation to volunteer for retrenchment with benefits in accordance with subclause 7(e), and may at its discretion accept a volunteer who elects to accept such invitation, but only where the taking up by an employee of such retrenchment would facilitate the redeployment of the employee who would otherwise have been retrenched involuntarily.
(iii) Subject to paragraph (iv), where the employer retrenches an employee who is Excess to Requirements the employee shall be entitled to be paid a sum calculated in accordance with subclause (e).
...
Retrenchment benefits
(e) (i) The sum referred to in paragraph 7(d)(iii) is a sum equal to two weeks' salary for each completed year of service, plus a pro rata payment for completed months of service, calculated in accordance with this clause. ..."
The applicants put four submissions in respect of cl. 7. First, they say that para (a) (iv) infringes the implied limitation of power because it imposes on the employer a delay of one month in notifying an employee that he or she is excess to workplace requirements; thereby opening the way to redeployment or retrenchment. During that month, the employer is compelled to retain the employee in his or her position notwithstanding the employer's judgment that this position is unnecessary. This amounts, according to counsel for the applicants, to an impairment of the employer's right "to determine the number and identity of the persons whom it wishes to dismiss on redundancy grounds". They say this contravenes the limit set in the passage in the joint AEU judgment at 232 quoted above.
At 196-197 the five member Full Bench considered a similar submission:
"The scheme of the award is to require that first there be consultation about the existence of a staffing surplus at each school location; the time limit for such consultation is one month from the provision of notice to the union of the impending change. That limit is subject to several qualifications which it is not necessary to develop in this context. Evidence before the Commission in the proceedings that resulted in the award permits an inference that the provision of such notice will usually be associated with DSE advising provisional staffing and student estimates for the forthcoming year. This advice is usually issued in about October. It is the basis on which the Principal conducts at each school a staffing resource analysis against curriculum and other estimated needs for the next school year. The award requires that after such consultation the Principal follow a process laid down for the declaration of an employee as excess to the requirements of the particular workplace. In the past, similar identifications of surplus teachers were made toward the end of each school year. Surplus teachers became members of a pool of "excess teachers". The DSE sought to place members of that pool in other schools prior to the end of the school year, or at least before the commencement of the next school year.
Upon declaration of an employee as excess to workplace requirements, the award provides that the employer may take steps to consider the possible compulsory transfer, redeployment, or retraining of the declared employee. The employer must consider such measures once the employee has been designated as potentially excess to the requirements of the VTS. The timing of that designation is a matter for the discretion of the employer. There are grievance and appeal rights which have a potential for delaying the final resolution of a particular case.
Victoria's contention was that the provisions outlined operate as a block to retrenching anyone on the basis of redundancy and are at least part of a scheme restraining the termination of an employee on the ground of redundancy.
The AEU did not dispute that the relevant provisions of the award had that effect and purpose. It contended the form of regulation involved did not infringe the implied limitation.
We have considered whether these provisions may be beyond jurisdiction because they would trespass into a jurisdictional area denied to the Commission by the operation of the implied limitation. We are not satisfied that we should hold that provisions for consultative and determinative processes of the kind described amount to an impairment of the capacity of the State of Victoria to function as a government. Certainly there is an element of regulation in the process prescribed by the award. It is regulation of a kind intended to deal with what is a perennial and commonplace conflict of interests between teachers, their unions and management on one hand, and between some individual teachers themselves at the time of the regular, if not annual, adjustment of staffing levels and resources at each school. Similar forms of regulation have long been a feature of school workforce administration, and have been the subject of industrial agreement between the employer and the relevant union. Only in recent years has there been any serious prospect that such processes are a prelude to action by the employer to declare certain employees redundant. There is now a clear association of the preliminary phase of displacement of a teacher from a current teaching position with a greater risk off exposure of that teacher's employment to voluntary or involuntary termination procedures. But that association does not in our view magnify the impact of such processes upon the capacity of the State to function as a government. We are unable to conclude that the prescription of such award duties amounts to such an inhibition on the freedom of action or function of the State of Victoria that the State's integrity or autonomy could be said to be affected adversely or impaired in the manner necessary to trigger the implied limitation on the Commission's powers. The process required does not prescribe what the State's determination is to be in any matter critical to its capacity to function as a government."
The acronym "DSE" refers to the Director of School Education. "VTS" stands for Victorian Teaching Service.
It will be noted that the members of the Full Bench saw para 7(a), including sub-para (iv), as "provisions for consultative and determinative processes". They recognised that the paragraph imposed an element of regulation on employers but felt that the degree of regulation fell short of an impairment of the State to function as a government. We agree. There is nothing in AEU to suggest it is beyond the power of the Commission to stipulate procedures for determining whether employees have truly become redundant; provided that, at the end of the day, the government is left free to determine the number and identity of the persons it wishes to employ. Any procedures necessarily involve some delay in the employer determining whether or not to retrench the employee. No doubt a question of degree is involved. Cumbersome procedures or extensive delays might impose such a significant inhibition on a State's ability to determine its workforce as to amount to an impairment of its capacity to govern. But it is difficult to so regard a moratorium of one month to permit discussions between the employer and the union. One month would seem to be the minimum period during which it is realistic to expect meaningful discussions to be completed; particularly if many cases have to be considered at the same time, as is likely at the end of the school year.
The Justices who wrote the joint judgment in AEU stated that award provisions regulating promotion and transfer might depend on matters of degree. They said this was so "(a)s with other provisions in a comprehensive award". There is no reason to believe that, when they made this statement, they intended to exclude redundancy provisions. Looking at the question as one of degree, it seems to us that it cannot sensibly be said that cl. 7(a)(iv) impairs the capacity of Victoria to determine the number and identity of its teaching staff.
Next the applicants challenge the procedural requirements of Schedule 1 that are imposed by cl. 7(a)(v). Schedule 1 is in this form:
"The employer and the Principal of a relevant school, (the Principal), shall observe the criteria and processes in this Schedule, and shall apply them in good faith within the framework of the criteria and staffing resource limits publicly declared by the Director to be followed in determining the staffing establishment for each workplace. The following process shall apply for the declaration of employees as excess to workplace requirements in the case of a workplace which is to continue in operation:
(a)The Principal after appropriate consultation shall determine the curriculum areas of the workplace in which there may be an excess of the staffing establishment.
(b)The Principal shall convene meetings of employees from such curriculum areas to seek volunteers to be declared as excess to workplace requirements.
(c)Where insufficient volunteers are forthcoming the Principal shall provide an opportunity for employees in such curriculum areas to provide reasons why they should not be considered for declaration as excess to workplace requirements.
(d)The Principal shall take into account the overall curriculum needs of the workplace, the submissions from individual employees in accordance with (c) above and consult with the union at the workplace before declaring as excess to workplace requirements those employees whose declaration would cause the least disruption to the program at the workplace.
(e)The Principal shall make every effort to ensure that an employee is not declared as excess to workplace requirements where there are compelling personal compassionate grounds pertaining to that employee or where the employee has been compulsory redeployed within the previous two years.
(f)A part time employee or an employee returning from leave must not be deemed to have any less claim to a position in the workplace than a full time employee currently on staff.
(g)The Principal shall not discriminate against any employee on the basis of any one or more of the following reasons:
(i) temporary absence from work because of illness or injury;
(ii) union membership or participation in union activities outside working hours or with the employer's consent, during working hours;
(iii) non-membership of a union or of an association that has applied to be registered as a union under the Industrial Relations Act 1988;
(iv) seeking office as, or acting or having acted in the capacity of, a representative of employees;
(v) the filing of a complaint, or the participation in proceedings, against the employer;
(vi) race, colour, gender, sexual preference, age, physical or mental impairment, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
(viii) absence from work during maternity or other parental leave.
(h)The declaration of employees as excess to workplace requirements is an administrative process to enable the redeployment of employees and not a disciplinary process. Where the declaration of an employee as excess to workplace requirements requires a selection to be made between available employees, the selection shall be made as far as practicable on objectively assessed grounds related to the suitability for the program determined for the workplace, or by reference to relative efficiency if there is more than one employee suitable for the program as determined.
(i)The Principal shall advise in writing the employee(s) declared as excess to workplace requirements.
(j)The Principal shall advise the employer of the names of employee(s) so declared."
Counsel say that this Schedule imports Commonwealth law criteria into the selection of those employees who are to be declared excess to workplace requirements and thereby impairs the capacity of Victoria to determine the identity of employees to be terminated. We do not agree. The Schedule does no more than specify a procedural regime. First, the Principal is to determine the curriculum areas in which there may be an excess of the staffing establishment (para (a)). This is entirely a matter for the judgment of the Principal, the representative of the employer. Having made that determination, the Principal is required to undertake a process of consultation with employees in the relevant curriculum areas (paras (b) and (c)) and the union (para (d)). The Principal must "take into account" overall curriculum needs and submissions from individual employees and, in particular, compelling personal compassionate grounds (para (e)). However, at the end of the day, it is for the Principal to determine who shall be declared excess to workplace requirements. Although, no doubt, the Principal would tend to give preference to volunteers, he or she is not bound to do so; the ultimate decision is for the Principal alone. The only restriction on the Principal's decision is that it must not involve discrimination on any of the grounds specified in para (g). Those grounds are framed in terms almost identical to s. 170 DF(1) of the Industrial Relations Act; they reflect the general law. It could not possibly be contended that the proscription of discrimination on those grounds impairs the capacity of a State to govern.
The applicant's third point relates to cl. 7(b)(v). This sub-paragraph prohibits an employer making a "new offer of employment to fill a vacant position" while a suitable employee designated as a potentially excess employee is available and willing to be redeployed to it. As we understand the provision, a "new offer of employment" is an offer of new employment; that is, an offer of employment to someone who is not already employed by the particular employer. The effect of the sub-paragraph, therefore, is to deny the employer the right to engage a person to fill a particular position if a suitable potentially excess employee is available.
The validity of cl. 7(b)(v) occasioned the five member Full Bench some concern: see 197. However, its members ultimately held the provision to be within power. At 198 they noted that the restraint imposed by cl. 7(b)(v) "leaves room for a fair measure of employer discretion in the assessment of whether the position is one which may not be filled". They said that, for "the filling of a vacant position to be barred or frozen by operation of cl. 7(b)(v) there must be an employee:
(i) who is a 'suitable employee';
(ii) who occupied an equivalent or higher position than the vacant position;
(iii) who is competent to perform the duties of the vacant position; and
(iv) who is available."
They pointed out that s. 6 of the Teaching Service Act 1981 (Vic) already conditioned the power of the Director of School Education to fill a vacant position from outside the Service upon the Director's being satisfied that there was no one within the Service as capable of filling the position as the outside appointee.
After referring to authorities on statutes claimed to impair in other respects the capacity of States to govern - Commonwealth v Tasmania ("Tasmanian Dam") (1983) 158 CLR 1 and Western Australia v Commonwealth (The Native title case) (1995) 69 ALJR 309 - the Full Bench said at 199 that, "(i)n application of the relevant principle to this matter it is proper ... (to) have regard ... to the circumstances and intended operation of the award". They concluded at 200:
"Because of the discretionary factors integral to the restraint in cl. 7(b)(v) of the award, it does not amount to a direct or substantial interference with the State function of determining the number and identity of its workforce. Understood in its industrial context, the provision lacks both the elements of 'purpose' and the operational effect of 'control' of a State function which the Court in Re AEU and in Melbourne Corporation (Melbourne Corporation v the Commonwealth (1947) 74 CLR 31) associated with an invalid use of a Commonwealth Power in application to a State government function."
We regret we cannot agree with the Full Bench's view about cl. 7(b)(v). It seems to us immaterial that there is Victorian legislation that restricts the power of the Director of School Education to fill a vacancy from outside the Service. The existence of that legislation may reduce the practical importance of cl. 7(b)(v) but it cannot affect its validity. Validity depends upon the Commission's power to make the provision. With respect to the Full Bench, it seems to us that cl. 7(b)(v) plainly affects the capacity of the Victorian government "to determine the ... identity of the persons whom it wishes to employ". Whilst there is anyone who fulfils the four criteria identified by the Full Bench, an outsider may not be appointed to the vacancy. The effect of the provision cannot be avoided by reference to "discretionary factors". Either there is a person who fulfils the four criteria or there is not. The determination of the question whether a particular person fulfils those four criteria does not involve an exercise of discretion. It requires the making of a judgment having some subjective elements; but it must be assumed that the relevant judgment will be honestly made. If an honest judgment about the application of the four criteria to a particular employee leads to the conclusion that the employee falls within sub-para (v), the effect of the sub-paragraph is to prevent the employer offering the position to anyone else. Whatever view might have been taken about the effect of that result upon a State's capacity to govern, in the absence of AEU and arguing only from more general authorities such as Tasmanian Dam and the Native Title case, in the light of AEU the proper conclusion, in our opinion, is that cl. 7(b)(v) exceeds the Commission's power and is invalid.
In supporting the Full Bench's decision on cl. 7(b)(v), counsel for the Australian Education Union argued that the provision would operate only in limited circumstances and would apply, mainly if not exclusively, to classroom teachers whose skills were not so specialised as to necessitate the engagement of a particular person for a particular position. This may be so and but for AEU, we might have concluded that proscription of the government's entitlement to recruit an outsider for such a position would be unlikely to impair its capacity to govern. But the authors of the AEU joint judgment at 232 clearly identified, as a matter going to a government's capacity to govern, its "right to determine the number and identity of the persons whom it wishes to employ". At this point in their reasons, their Honours were not speaking of employees "at the higher levels of government"; they dealt with such employees in the following paragraph. They were referring to all government employees, including classroom teachers.
Counsel seek to avoid the effect of the statement in the joint judgment by contending that the word "identity" was not intended as a reference to the particular persons to be employed, but only to their categorisation or qualifications. We do not agree. This would be an unnatural use of the word. We think their Honours were meaning to convey that a provision that prevents a government from determining which individuals it will employ affects its capacity to govern and is, therefore, beyond power. Clause 7(b)(v) does this.
The final point taken by the applicants in connection with cl. 7 relates to the entitlement to retrenchment compensation contained in paras (d) and (e). The argument is that the imposition upon a State of a requirement to pay compensation to a retrenched employee impairs the governmental capacity of that State. As counsel for the applicants mentioned, this question was debated in litigation involving the Victorian Public Transport Corporation, judgment in which was reserved at the time of the argument before us. Judgment has now been given: see Public Transport Corporation v Eames (Spender, Moore and North JJ, 5 July 1996, not yet reported). The Court unanimously rejected the argument, saying at 22:
"The setting of minimum wages establishes a financial consequence on the engagement of employees, but it does not impair the State in its capacity to function as a government. By parity of reasoning, while an award must not impair the State in determining how many, or whom, it wishes to dismiss on grounds of redundancy, it may impose a financial consequence flowing from the action. The latter is outside the implied constitutional limitation."
Unless we were positively persuaded that the view expressed in Public Transport Corporation was wrong, it would be our duty to follow that decision, as a recent Full Court decision directly in point. Far from being persuaded that the decision is wrong, we think it is correct; and for the reasons given by Spender, Moore and North JJ. We reject this part of the present applicant's claim.
Clauses 8 to 11 and 13 to 15 of the redundancy award are uncontentious in the present context. At one stage cl. 12 was extremely contentious. Until the day before the argument in this Court, it read:
"12 - Termination of Employment
An employee shall have the right not to have his or her employment terminated and the employer shall have a duty not to terminate the employment of an employee other than in accordance with this award or the disciplinary and dispensation with services provisions of the Teaching Service Act 1981 (Vic)".
However, on that day, an additional sentence was added: "Nothing in this Award shall prevent the termination of the employment of an employee on the ground of redundancy". In the light of that amendment, counsel for the applicants put no separate submission in relation to cl. 12.
Counsel for the applicants contend that this Court should quash the whole of the redundancy award, leaving to Victoria the task of establishing appropriate redundancy procedures and rules. Whatever may be the merit of allowing redundancy provisions for Victorian teachers to be governed entirely by Victorian law - a matter about which we express no opinion as it is not something for us to determine and has not been argued - this Court can intervene only where, and to the extent that, the Commission has exceeded its powers. In relation to the redundancy award, in our opinion this has occurred only in respect of cl. 7(b)(v). The deletion of this provision would not affect the operation of the remainder of the award. Consequently, any order of the Court should be confined to that provision.
Implied limitation of power: the interim award
The applicants argue that three provisions in this award are beyond power: cl. 2.1.8, cl. 2.4.6 and cl. 10.1.3(3)(i). The same provisions were challenged before the five member Full Bench but the challenge was rejected: see 205-210.
The Full Bench set out the terms of the relevant provisions and explained their significance. They are concerned with the composition of panels to select persons to be paid certain special allowances. The Full Bench assumed that, ordinarily, each selected person would be promoted to a higher position. But it pointed out that the selection process did not determine the filling of a vacancy; the panel's decision constituted a mere recommendation to the delegate of the Director of School Education. It was for the delegate to determine whether the appointment should proceed. That being so, we agree with the Full Bench that none of these provisions impairs the capacity of Victoria to determine the identity of the persons to be employed in a particular position; that decision resides with the government's delegate.
Implied limitation of power: the interim no 2 award
The interim no 2 award is a short document. It contains only one operative clause, cl. 5. Sub-clause (a) of that clause provides, on an interim basis, that:
"no further School Responsibility Position (SRP) allowance determination shall be made other than by, or after consideration of the recommendation of, a panel constituted in a manner which includes a nominee of the Australian Education Union, such nominee to be a teacher at the relevant school, who is a member of the Australian Education Union, being a teacher of not less than five years standing, or a teacher otherwise of a status broadly equivalent to the SRP position to be assigned, and who is not an applicant in the current round for an SRP position, the filling of which is directly or indirectly affected by the assignment to the SRP position to be considered by the panel."
Sub-clause (b) provides some exceptions. The applicants' argument in respect of this provision is similar to that in connection with the interim award. It was put to the five member Full Bench and rejected. We respectfully agree.
Ambit: the redundancy award
The evidence includes the demand that gave rise to the dispute in resolution of which the redundancy award was made. The demand was as follows:
"No teacher employed by you shall be terminated from his or her employment, whether by way of voluntary redundancy or otherwise except with the consent of the Australian Teachers Union."
As counsel for the applicants point out, the demand was for an embargo on all terminations of employment, whether by voluntary redundancy or otherwise, except with the union's consent. The award does not contain an embargo; rather it sets out a procedural regime governing the determination of redundancy. Counsel for the applicants argue that the prescription of a process for determining which employees shall be selected for termination on the ground of redundancy is not relevant or reasonably incidental to the settlement of the dispute created by non-accession to the original demand.
During the course of argument reference was made to Re Federated Storemen and Packers Union of Australia: Ex parte Wooldumpers (Victoria) Limited ("Wooldumpers") (1989) 166 CLR 311. That case dealt with the appropriate test for determining whether a particular award provision was within the ambit of a claim. At 315 Mason CJ observed that "a log of claims, particularly an ambit claim, should not be read narrowly". At 317 he said that "the Act [the Conciliation and Arbitration Act 1904, but that seems to be immaterial] authorises the Commission to make an award if it is 'relevant' or 'reasonably incidental' or 'appropriate' to the settlement of the differences constituting the interstate dispute or if it has a 'natural or rational tendency to dispose of the question'". He quoted something said by Dixon CJ, Webb, Fullager and Kitto JJ in The Queen v Galvin; Ex parte Amalgamated Engineering Union (1952) 86 CLR 34 at 40:
"the award need not adhere to the remedy or relief proposed or claimed in the course of the dispute or in a demand forming a source of the dispute, so long as the provision in the award is related to the dispute or its settlement in the manner stated."
In Wooldumpers at 334, Gaudron J categorised the issue then before the Court as "whether the dispute concerns a subject matter capable of settlement by the making of the award sought".
Applying these criteria, it seems to us that the redundancy award was plainly within the ambit of the dispute. The dispute arose out of a demand by the union that there be no termination of employees whatever, except with its consent. The subject matter of the dispute was, therefore, the termination by the employer of employees' employment. The award dealt with the matter of termination of employment by the employer; although it did so, not by imposing an embargo on terminations, but by prescribing a procedure to be followed in connection with redundancies. Although the award fell well short of the union's initial demand, it pertained to the same subject and had a rational tendency to dispose of the issue of termination.
We would uphold the applicants' case insofar as it challenges the validity of cl. 7(b)(v) of the redundancy award. That provision should be quashed. Otherwise, both applications should be dismissed.
The appropriate course is to grant certiorari in proceeding VI95/2140 to bring into this Court and quash paragraph (v) of clause 7(b) of the redundancy award. Otherwise that proceeding should be dismissed. Proceeding VI95/6089 should be dismissed.
I certify that this and the preceding thirty (30) pages are a true copy of the Reasons for Judgment of the Full Court.
Associate:
Dated:
APPEARANCES
Counsel for the Applicant : Dr C N Jessup QC
N Green
Solicitor for the Applicant : Minter Ellison
Counsel for the Respondent : R Kenzie QC
K Bell
Solicitor for Respondent : Holding Redlich
Counsel for the State of
Queensland Intervening : J S Douglas QC
R S Jones
Solicitors for the State
of Queensland Intervening : Crown Solicitor
Date of hearing : 10 May 1996
0
10
0