The Australian Workers' Union of Employees, Queensland v State of Queensland (Department of Communities, Child Safety and Disability Services)
[2014] FWCFB 5546
•13 AUGUST 2014
| [2014] FWCFB 5546 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
State of Queensland (Department of Communities, Child Safety and Disability Services)
(C2014/4023)
VICE PRESIDENT CATANZARITI | SYDNEY, 13 AUGUST 2014 |
Appeal against decision [2014] FWC 1979 of Vice President Watson at Sydney on 25 March 2014 in matter number C2014/2624.
[1] This is an appeal by The Australian Workers’ Union of Employees, Queensland (AWU) against a decision 1 (Decision) of Vice President Watson made on 25 March 2014 in relation to an application the AWU made under s.786 of the Fair Work Act 2009 (the Act).
[2] Prior to the hearing of this appeal on 4 June 2014, both the AWU and the State of Queensland’s Department of Communities, Child Safety and Disability Services (the Respondent) sought permission to be represented by a lawyer. Given the complexity of the matter and having regard to s.596 of the Act, permission was granted to both parties. At the hearing Mr H Borenstein QC with Mr Y Bakri appeared for the AWU, and Mr JE Murdoch QC with Mr M Healy appeared for the Respondent.
Background
[3] The background of this dispute is succinctly set out in the Decision below:
“[3] In July 2012 the AS&RS Unit [Accommodation, Support and Respite Services Unit] employed approximately 1,817 employees. In April 2013 the Queensland Government’s Commission of Audit recommended that prior to the full commencement of the National Disability Insurance Scheme all services provided by the AS&RS Unit be transitioned to the private sector. The Queensland Government accepted this recommendation in its response released on 30 April 2013.
[4] On 13 December 2013 the Queensland Government invited organisations to submit an expression of interest for accommodation support and respite services to people with an intellectual disability currently receiving direct disability support services.
[5] The AWUQ contends that the expression of interest reveals that the Queensland Government has made an irrevocable decision to terminate the employment of a large number of employees and has not complied with the terms of s.786 (2) and (3) of the Act. It seeks the following orders:
“A. An interim order pursuant to section 787 of the Act that the Respondent refrain from effecting any or all of the proposed terminations of employment until the final disposition of this application.
B. A decision, pursuant to section 786 of the Act that the Commission is satisfied that:
1. the Respondent has decided to terminate the employment of 15 or more employees for reasons of an economic and or in the alternative structural or similar nature, or for reasons including such reasons;
2. the Respondent has not complied with subsection 786(2) of the Act;
3. the Respondent has not complied with subsection 786(3) of the Act; and
4. the Respondent could reasonably be expected to have known, when it made the decision, that one or more of the employees were members of a registered employee association, namely the Applicant.
C. An order pursuant to section 787 of the Act that:
1. the Respondent notify the Applicant within three days, of the following:
a. the number of employees likely to be affected by the proposed terminations;
b. the category or categories of employees likely to be affected by the proposed terminations;
c. the time when, or the period over which, the Respondent intends to carry out the proposed terminations;
2. within three days of complying with order C 1 hereof, the Respondent provide the Applicant with an opportunity to consult it on:
a. measures to avert or minimise the proposed terminations;
b. measures (such as finding alternative employment) to mitigate the adverse effects of the proposed terminations;
3. the Respondent refrain from effecting any or all of the proposed terminations until and unless it has complied with order C 1 and C 2 hereof;
4. the Applicant give the Respondent an enforceable undertaking not to disclose information provided under order C 1 and, or in the alternative, C2 that is confidential or commercially sensitive; and
5. any dispute arising from the application of the orders C1 and, or in the alternative, C2, and, or in the alternative, C3 shall be referred to the Fair Work Commission for determination.” 2
[4] Sections 786–7 provide as follows:
“786 FWC may make orders where failure to notify or consult registered employee associations about terminations
(1) The FWC may make an order under subsection 787(1) if it is satisfied that:
(a) an employer has decided to terminate the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons; and
(b) the employer has not complied with subsection (2) (which deals with notifying relevant registered employee associations) or subsection (3) (which deals with consulting relevant registered employee associations); and
(c) the employer could reasonably be expected to have known, when he or she made the decision, that one or more of the employees were members of a registered employee association.
Notifying relevant registered employee associations
(2) An employer complies with this subsection if:
(a) the employer notifies each registered employee association of which any of the employees was a member, and that was entitled to represent the industrial interests of that member, of the following:
(i) the proposed terminations and the reasons for them;
(ii) the number and categories of employees likely to be affected;
(iii) the time when, or the period over which, the employer intends to carry out the terminations; and
(b) the notice is given:
(i) as soon as practicable after making the decision; and
(ii) before terminating an employee’s employment in accordance with the decision.
Consulting relevant registered employee associations
(3) An employer complies with this subsection if:
(a) the employer gives each registered employee association of which any of the employees was a member, and that was entitled to represent the industrial interests of that member, an opportunity to consult the employer on:
(i) measures to avert or minimise the proposed terminations; and
(ii) measures (such as finding alternative employment) to mitigate the adverse effects of the proposed terminations; and
(b) the opportunity is given:
(i) as soon as practicable after making the decision; and
(ii) before terminating an employee’s employment in accordance with the decision.
787 Orders that the FWC may make
(1) The FWC may make whatever orders it considers appropriate, in the public interest, to put:
(a) the employees; and
(b) each registered employee association referred to in paragraph 786(2)(a) or (3)(a);
in the same position (as nearly as can be done) as if the employer had complied with subsections 786(2) and (3).
(2) The FWC must not, under subsection (1), make orders for any of the following:
(a) reinstatement of an employee;
(b) withdrawal of a notice of termination if the notice period has not expired;
(c) payment of an amount in lieu of reinstatement;
(d) payment of severance pay;
(e) disclosure of confidential information or commercially sensitive information relating to the employer, unless the recipient of such information gives an enforceable undertaking not to disclose the information to any other person;
(f) disclosure of personal information relating to a particular employee, unless the employee has given written consent to the disclosure of the information and the disclosure is in accordance with that consent.”
Decision at first instance
[5] At first instance, the Respondent raised the following jurisdictional objections:
• The Act does not bind the Crown in Right of the State of Queensland;
• Part 6-4 of the Act does not apply to the Queensland Government because of the implied limitation on Commonwealth legislative power with respect to State Government employees; and
• The application is an abuse of process because of overlapping proceedings in the Queensland Industrial Relations Commission.
[6] The first ground was not pressed at first instance, although it was not conceded. Vice President Watson found that the second ground was successfully made out and proceeded to dismiss the AWU’s application, finding that it was not necessary to determine the final ground.
[7] In relation to the second ground, the Vice President found as follows:
“[17] In my view the Queensland Government is correct in submitting that there is one implied limitation principle to be applied and that it has not been varied or subject to a different threshold as a result of more recent applications of the principle in the High Court. The test is whether sections 786 and 787 impair, curtail or weaken the capacity of the Queensland Government to exercise its constitutional powers and functions in a material or significant way either conceptually or in its practical effect.
[18] The High Court has held that impairing a State's right to "determine the number and identity of (those) whom it wishes to dismiss ... on redundancy grounds” infringes the implied limitation and a union consultation requirement prior to implementing redundancies, and a remedy with respect to non-observance of the requirement, impairs State rights in an impermissible manner.
[19] In my view sections 786 and 787 entitle the Commission to make a wide range of orders if it is satisfied that consultation of a particular nature has not occurred. The High Court in the Industrial Relations Act case has held that similar provisions are invalid insofar as they apply to State Governments. In my view the proper application of the authorities requires me to find that the implied limitation applies in this case and it is appropriate to dismiss the application on that ground.” 3
The appeal
[8] The AWU summarised its seven grounds of appeal as follows:
● Whether the Vice President erred in finding that the Impugned Provisions of the FW Act are invalid insofar as they apply to the State on the basis that it infringes the implied limitation (Grounds 1 to 5);
● Whether the Vice President erred in concluding that the decision in Victoria v The Commonwealth (1996) 187 CLR 416 determined the question of the validity of sections 786 and 787 of the FW Act (Ground 6);
● Whether the Vice President placed undue weight on the decisions of the Australian Industrial Relations Commission after the High Court decision of Re AEU Ex parte Victoria (1995) 184 CLR 188 (Ground 7).
[9] With its appeal, the AWU filed an amended application for relief. The amended application for relief struck out item A and C(3) from the original orders sought (and set out above). The effect of the amended application was that the AWU no longer sought that the Respondent be restrained from effecting the proposed terminations. The Respondent objected to the amended application, submitting that the appeal should be determined on the basis of the material before the Vice President at first instance and that, in any event, the validity of an amendment to an application that had been dismissed was doubtful.
[10] The AWU submitted that its amended application was irrelevant to the determination of the appeal, as even had the amended application been filed at first instance the Vice President would still have dismissed it on the basis of the reasons given for his decision. The AWU further submitted that the particular form of its application for relief should have no bearing on the validity of the relevant provisions of the Act.
[11] We are of the view that we should deal with the AWU case as presented at first instance. The AWU is not precluded from making another application and in the circumstances we consider that is the preferable course if it wishes to pursue other orders. We have not, therefore, taken the amended application into consideration.
Permission to Appeal
[12] The Fair Work Commission must grant permission to appeal if it is satisfied it is in the public interest to do so. 4 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,5 a Full Bench summarised the concept of public interest in the following terms:
“Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...” 6
[13] The AWU submitted that it was in the public interest to grant permission to appeal as the appeal raises issues as to the correct interpretation and application of important constitutional principles to the Act. It was also submitted that the appeal raises issues as to the correct interpretation and application of ss.786–7 of the Act, and that the issues in the appeal directly affect the rights of approximately 1,817 employees to have the relevant unions consulted in relation to their proposed redundancies, and the rights of all employees of States to be afforded consultation prior to significant redundancies occurring. Finally, it was submitted that the Decision below was attended with sufficient doubt to warrant reconsideration and substantial injustice would result if permission to appeal were refused.
[14] The Respondent submitted that it was not in the public interest to grant the appeal, as the Vice President correctly applied well-settled principles of law to the facts, and there was no error in the application of those principles at first instance. It was also submitted that ss.786–7 of the Act are clear and unambiguous, and either mirror or are similar to provisions that have long been included in industrial legislation and instruments. Finally, it was submitted that the Vice President’s Decision was not attended with doubt nor would it give rise to substantial injustice as it did not contain any error.
[15] Having considered both parties submissions on this point, we are of the view that this matter is one that raises issues of importance and general application. The issues raised in this appeal go to the jurisdiction of the Commission, as well as the application of ss.786–7 of the Act more generally. Permission to appeal is granted.
The implied limitation
[16] The implied limitation on Commonwealth power was described by Dixon J of the High Court as follows:
“The foundation of the Constitution is the conception of a central government and a number of State governments separately organised. The Constitution predicates their continued existence as independent entities.
...
The efficacy of the system logically demands that, unless a given legislative power appears in its content, context or subject matter so to intend, it should not be understood as authorising the Commonwealth to make a law aimed at the restriction or control of a State in the exercise of its executive authority.” 7
[17] The majority of the High Court considered this implied limitation in Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188:
“(g) Conclusion with respect to the scope and content of the implied limitation
Our rejection of the particular submissions made by the prosecutor and supporting interveners other than that advanced by South Australia as to the scope and content of the implied limitation leads us, subject to consideration of one gloss put forward by the prosecutor, to express the scope and content of the limitation in this way. 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.
The prosecutor relied, in particular, on the formulation of the second element in the limitation which is to be found in the reasons for judgment of Deane J in Queensland Electricity Commission where his Honour stated that its central operation is to preclude the exercise of Commonwealth powers ‘to control the States’ or in a manner which would be inconsistent with the continued existence of the States as independent entities and their capacity to function as such. The exercise of Commonwealth power ‘to control the States’ would be an exercise of power inconsistent with the continued existence of the States as independent entities and their capacity to function as such. So the correctness of the major proposition asserted by the prosecutor may be accepted.
In elaborating the concept of ‘control’ for the purposes of the argument, the prosecutor drew attention to observations of Dixon J in Melbourne Corporation where his Honour, in the context of a law aimed at controlling some particular exercise of a State's exercise of its executive power, said:
‘Such a law wears two aspects. In one aspect the matter with respect to which it is enacted is the restriction of State action, the prescribing of the course which the Executive Government of the State must take or the limiting of the courses available to it. As the operation of such a law is to place a particular burden or disability upon the State in that aspect it may correctly be described as a law for the restriction of State action in the field chosen. That is a direct operation of the law.’
But it is important to appreciate that, in his Honour's view, the implied limitation precluded the exercise of Commonwealth legislative power ‘for a purpose of restricting or burdening the State in the exercise of its constitutional powers’. To do so ‘brings into question the independence from federal control of the State in the discharge of its functions’.
At this point it is convenient to consider South Australia's argument based on impairment of a State's ‘integrity’ or ‘autonomy’. Although these concepts as applied to a State are by no means precise, they direct attention to aspects of a State's functions which are critical to its capacity to function as a government. 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, heads 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.” 8
[References omitted]
[18] In Western Australia v Commonwealth (Native Title Act Case) (1995) 183 CLR 373 the High Court said:
“For constitutional purposes, the relevant question is not whether State powers are effectively restricted or their exercise made more complex or subjected to delaying procedures by the Commonwealth law. The relevant question is whether the Commonwealth law affects what Dixon J called the ‘existence and nature’ of the State body politic. As the Melbourne Corporation Case illustrates, this conception relates to the machinery of government and to the capacity of its respective organs to exercise such powers as are conferred upon them by the general law which includes the Constitution and the laws of the Commonwealth. A Commonwealth law cannot deprive the State of the personnel, property, goods and services which the State requires to exercise its powers and cannot impede or burden the State in the acquisition of what it so requires.” 9
[References omitted]
[19] In Austin v The Commonwealth (2003) 215 CLR 185, Gaudron, Gummow and Hayne JJ observed that:
“There then is posed the ‘practical question’ identified by Starke J in Melbourne Corporation. This, in the end, is whether, looking to the substance and operation of the federal laws, there has been, in a significant manner, a curtailment or interference with the exercise of State constitutional power.” 10
(References omitted)
[20] More recently, the High Court considered the implied limitation in Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272, in which French CJ said the following:
“The constitutional implication considered in Austin and its precursors means that the Commonwealth cannot, by the exercise of its legislative power, significantly impair, curtail or weaken the capacity of the States to exercise their constitutional powers and functions (be they legislative, executive or judicial) or significantly impair, curtail or weaken the actual exercise of those powers or functions. The Constitution assumes the existence of the States as ‘independent entities’. This implies recognition of the importance of their status as components of the federation. The ‘significance’ of a Commonwealth law affecting the States’ functions is not solely to be determined by reference to its practical effects on those functions. This is not a return to any generalised concept of inter-governmental immunity. It simply recognises that there may be some species of Commonwealth laws which would represent such an intrusion upon the functions or powers of the States as to be inconsistent with the constitutional assumption about their status as independent entities.
The application of the implied limitation is evaluative. It has always been thus. There is a normative element in the criterion of ‘significance’ by which the adverse effects of a Commonwealth law on State capacities or functions must be characterised, before such a law will be held to be invalid. Whether the effects of a law upon the capacities or functions of the States are ‘significant’ is to be judged qualitatively and also, but not only, by reference to its practical effects. To take an extreme example, a law of the Commonwealth purporting to subject the Governor of each of the States to a special ‘gubernatorial privileges tax’ might fix the tax at a level which, in a financial sense, would be of little practical importance to the States or to their Governors. It might be thought, nevertheless, that the nature of such a law would mark it as asserting an intrusive legislative authority with respect to the constitutional office of Governor that was inconsistent with the status of the States as independent entities under the Constitution.
In my opinion, the application of the implied limitation requires a multifactorial assessment. Factors relevant to its application include:
1. Whether the law in question singles out one or more of the States and imposes a special burden or disability on them which is not imposed on persons generally.
2. Whether the operation of a law of general application imposes a particular burden or disability on the States.
3. The effect of the law upon the capacity of the States to exercise their constitutional powers.
4. The effect of the law upon the exercise of their functions by the States.
5. The nature of the capacity or functions affected.
6. The subject matter of the law affecting the State or States and in particular the extent to which the constitutional head of power under which the law is made authorises its discriminatory application.
None of these factors, considered separately, will necessarily be determinative of the application of the limitation. The decisions of this Court indicate that the fact that a law singles out the States or a State will be of considerable significance, to be weighed together with the effects of such a law on their capacities and functions. The fact that a law is of general application may make it more difficult to demonstrate, absent operational discrimination in its impact upon the States, that it transgresses the limitation.” 11
[21] Gummow, Heydon, Kiefel and Bell JJ considered the implied limitation in Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272 as follows:
“The fifth point is that in Austin, a majority of the Court, Gleeson CJ and Gaudron, Gummow and Hayne JJ, concluded that the notion of ‘discrimination’ by federal law against a State is but an illustration of a law which impairs the capacity of the State to function in accordance with the constitutional conception of the Commonwealth and States as constituent entities of the federal structure. Too intense a concern with identification of discrimination as a necessity to attract the Melbourne Corporation doctrine involves the search for the appropriate comparator, which can be a difficult inquiry and is apt to confuse, rather than to focus upon the answering of the essential question of interference with or impairment of State functions. It also may be that the references to discrimination by Dixon J in Melbourne Corporation use the term in the somewhat different sense of a law which is ‘aimed at’ or places a ‘special burden’ on the States.” 12
[References omitted]
[22] The Full Court of the Federal Court has twice considered the implied limitation in relation to the capacity of a State to terminate the employment of its employees. In Konrad v Victoria (1999) 91 FCR 95 the Full Court held that the imposition of a condition that the State may only dismiss an employee for a valid reason did not offend the implied limitation. In Greater Dandenong City Council v ASU (2001) 112 FCR 232 the Full Court held that the implied limitation was not infringed by Commonwealth laws that protected employees from adverse treatment on the grounds that they were entitled to the benefit of an industrial instrument.
[23] The AWU submitted that ss. 786–7 of the Act do not operate to destroy or significantly curtail the continued existence of the State or its capacity to function as a government as the provisions merely impose procedural requirements that do no more than requiring the Respondent to have discussions with the affected employees in order to ameliorate the impact of the decision to terminate employees. The AWU submitted that the Act does not give the Commission the power to affect the State’s capacity to determine the “number and identity” of those whom it wishes to make redundant, and thus when properly evaluated it does not offend the implied limitation.
[24] Before considering these arguments, it is necessary to turn our minds to the High Court decision in Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416.
The Industrial Relations Case
[25] Much emphasis has been placed during the course of this appeal on the decision of the High Court in Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416. In that case, the High Court was required to determine the validity of certain provisions of the Industrial Relations Act 1988 (Cth), which was expressed to bind the States. The High Court found as follows:
“The challenge to the termination of employment provisions, as they affect the States, is made compendiously by reference to the holding in Re Australian Education Union that the Commonwealth cannot legislate to prevent a State from exercising its ‘right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and ... the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds’. The plaintiff States claim that that is what the termination of employment provisions do. In the alternative, they argue that the provisions apply to persons employed by the States at the higher levels of government and are, to that extent, invalid. It is convenient to consider the arguments of the plaintiff States first in relation to the general prohibitions on termination and, then, in relation to the provisions specifically dealing with redundancy.
...
The other prohibition which operates specifically with respect to terminations for redundancy is in s 170DG. That section provides that ‘[a]n employer must not terminate an employee's employment in contravention of an order in force under section 170FA.’ The latter section provides that, subject to Pt VIA, ‘the Commission may ... make an order for the purpose of giving effect to ... Article 12 (in so far as it relates to a severance allowance or other separation benefits) or 13 of the Termination of Employment Convention’. As already indicated, Art 12 is concerned with severance pay and Art 13 with union consultation.
An order for the payment of severance pay and orders requiring union consultation clearly impair a State's right to ‘determine the number and identity of [those] whom it wishes to dismiss ... on redundancy grounds’. However, the effect of the reading down of s 6 is that s 170FA does not apply to the States. It follows that the prohibition in s 170DG has no operation with respect to the States.” 13
[References omitted]
[26] The AWU sought to distinguish between ss.170FA and 170DG of the Industrial Relations Act 1988 (Cth) as considered by the High Court in the Industrial Relations Act Case and ss.786–7 of the Act. At the relevant time, s.170FA provided as follows:
“(1) Subject to this Part, the Commission may, at any time on or after 26 February 1994, make an order for the purpose of giving effect to the requirements of Article 12 (in so far as it relates to a severance allowance or other separation benefits) or 13 of the Termination of Employment Convention in relation to the termination of employment of employees.
(2) In so far as an order is made for the purposes of Article 13 of that Convention, the Commission must limit the order's application to cases where an employer decides to terminate the employment of a number of employees that is not less than a number (not less than 15) that is specified in the order.”
[27] The Convention referred to is the Termination of Employment Convention, 1982. Article 12 of the Convention relates to various termination entitlements, and Article 13, at that time, provided as follows:
“DIVISION A. CONSULTATION OF WORKERS' REPRESENTATIVES
Article 13
1. When the employer contemplates terminations for reasons of an economic, technological, structural or similar nature, the employer shall:
(a) provide the workers' representatives concerned in good time with relevant information including the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out;
(b) give, in accordance with national law and practice, the workers' representatives concerned, as early as possible, an opportunity for consultation on measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment.
2. The applicability of paragraph 1 of this Article may be limited by the methods of implementation referred to in Article 1 of this Convention to cases in which the number of workers whose termination of employment is contemplated is at least a specified number or percentage of the workforce.
3. For the purposes of this Article the term "the workers' representatives concerned" means the workers' representatives recognised as such by national law or practice, in conformity with the Workers' Representatives Convention, 1971.”
[Emphasis added]
[28] The AWU submitted that the High Court’s finding that “orders requiring union consultation clearly impair a State's right to ‘determine the number and identity of [those] whom it wishes to dismiss ... on redundancy grounds’” 14 must be read in its proper context, which was the consideration of s.170FA. On this basis, the AWU submitted that the High Court’s comments were not applicable to ss.786–7 of the Act, as these sections only allow for the Commission to make orders requiring consultation after a decision has been made to make staff redundant. By contrast, s.170FA (by reference to Article 13 of the Convention) allowed the Australian Industrial Relations Commission to make orders requiring consultation prior to the making of such a decision, only requiring that termination be “contemplated.”
[29] The AWU further submitted that s.170GA of the Industrial Relations Act 1988 (Cth) was not considered by the High Court in the Industrial Relations Act Case. Section 170GA allowed the Australian Industrial Relations Commission to make orders requiring consultation after a decision to terminate had been made:
“Section 170GA. Orders by Commission where employer fails to consult trade union about terminations
(1) Subsection (2) applies if the Commission is satisfied that an employer has, on or after 26 February 1994, decided to terminate the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons, and that:
(a) the employer did not, as soon as practicable after so deciding and in any event before terminating an employee's employment pursuant to the decision, inform each trade union of which any of the employees was a member, and which represented the industrial interests of such of those employees as were members, about:
(i) the terminations and the reasons for them; and
(ii) the number and categories of employees likely to be affected; and
(iii) the time when, or the period over which, the employer intended to carry out the terminations; or
(b) the employer did not, as soon as practicable after so deciding and in any event before terminating an employee's employment pursuant to the decision, give each such trade union an opportunity to consult with the employer on:
(i) measures to avert the termination, or avert or minimise the terminations; and
(ii) measures (such as finding alternative employment) to mitigate the adverse effects of the termination or terminations.
(2) The Commission may make whatever orders it thinks appropriate, in the public interest, in order to put the employees whose employment was terminated pursuant to the decision, and each such trade union, in the same position (as nearly as can be done) as if:
(a) if paragraph (1)(a) applies - the employer had so informed the trade union; and
(b) if paragraph (1)(b) applies - the employer had so given the trade union such an opportunity.
(3) Subsections (1) and (2) do not apply in relation to a trade union if the employer could not reasonably be expected to have known at the time of the decision that one or more of the employees were members of the trade union.”
[30] In oral submissions the AWU conceded that there was no evidence that the court had turned its mind to s.170GA, but submitted that it was “unthinkable” that, in the context of that litigation, nothing would have been said about the section if anyone at the bar table or the bench had considered that the section was problematic. 15
[31] In reply, the Respondent submitted that the High Court’s finding was clear, and that the words “orders requiring union consultation” in the Industrial Relations Act Case establish the nature and extent, or scope, of a Sate’s capacities and functions which the High Court found would be impaired, weakened or curtailed by Commonwealth laws requiring consultation regarding the termination of employment on redundancy grounds.
[32] We are not convinced that s.170FA of the Industrial Relations Act 1988 (Cth) operated in the manner suggested by the AWU. While Article 13 of the Convention does require consultation upon the contemplation of termination, s.170FA(2) limited the Australian Industrial Relation Commission’s powers as follows:
“In so far as an order is made for the purposes of Article 13 of that Convention, the Commission must limit the order's application to cases where an employer decides to terminate the employment of a number of employees that is not less than a number (not less than 15) that is specified in the order.”
[Emphasis added]
[33] Thus, despite the text of the treaty, it is doubtful that the Industrial Relations Act 1988 (Cth) permitted the Australian Industrial Relations Commission to make orders requiring consultation prior to an employer making a decision to terminate a group of at least 15 employees.
[34] The distinction that the AWU has attempted to draw between the operation of s.170FA of the Industrial Relations Act 1988 and ss. 786–7 of the Fair Work Act 2009 becomes difficult to sustain in light of such an interpretation of the legislation. As a result, there seems to be little basis for confining the High Court’s statement that “orders requiring union consultation clearly impair a State's right to ‘determine the number and identity of [those] whom it wishes to dismiss ... on redundancy grounds’” 16 on the basis of one possible interpretation of the legislation in circumstances where such an interpretation had not been settled, and in circumstances where no comments were made as to the approach taken by the High Court.
[35] As a result, we accept the Respondent’s submissions that ss.786–7 of the Act infringe the implied limitation on Commonwealth legislative power on the basis of the High Court’s finding in The Industrial Relations Act Case.
[36] Additionally, we are of the view that the practical effect of the operation of ss.786–7 of the Act is to interfere with the exercise of State constitutional power in a significant manner. 17 This is because ss.786–7 of the Act interfere with the State government’s ability to implement its powers with respect to terminating employees on redundancy grounds. The imposition of a condition precedent requiring union consultation to the exercise of this power goes beyond simply subjecting the power to a delaying procedure or making its exercise more complex.18 While the AWU claims that its application was made only after the Respondent had made its decision to implement redundancies, and thus after the Respondent had determined the number and identity of those whom it wishes to dismiss, the Respondent rightfully points out that the introduction of a “before and after” binary into such a context is necessarily problematic.
[37] The evidence that the AWU relied upon in asserting that the Respondent had made a decision to terminate over 15 employees was that the State of Queensland had appointed the Honourable Peter Costello to conduct an audit of the State’s finances on behalf of the new government. A detailed report was subsequently issued which included a recommendation that the all services provided by the AS&RS Unit should be transitioned to the non-government sector. The Queensland Government accepted this recommendation and commenced meeting with certain unions, as well as notifying AS&RS staff of its intention to transition services to the non-government sector. A conciliation conference also took place before the Queensland Industrial Relations Commission.
[38] The Respondent rightfully points out that there is no suggestion that the Respondent has already identified the number and identity of those employees whom it wishes to dismiss on redundancy grounds. The Respondent contends that the Applicant acknowledged this in its submissions at first instance, which included the following paragraph:
“... the required consultation with the Applicant [the AWU] could not prevent the State of Queensland [the Respondent] from ultimately making a decision about the number and identity of those employees whom it wishes to dismiss on redundancy grounds.” 19
[Emphasis added]
[39] It seems clear that, at the time of the initial application, there was no evidence to suggest that the Respondent had made a decision as to the number or identity of those employees that would be dismissed on redundancy grounds. Thus, the “before and after” dichotomy that the AWU has attempted to rely upon does not stand up to an analysis of the practical effects of ss. 786–7 of the Act. By allowing the Commission to make orders requiring union consultation before the number and identity of employees to be dismissed had been determined, it is clear that these provisions would interfere with the exercise of State constitutional power in a significant manner. 20
The Decisions of the Australian Industrial Relations Commission
[40] The AWU’s final appeal point was that the Vice President placed undue weight on two decisions of the Australian Industrial Relations Commission decided after Re AEU Ex parte Victoria (1995) 184 CLR 188. The two decisions were Re Victorian Teachers Redundancy Award 1994 (1997) 76 IR 1 and Re Professional Administrative Clerical Computing and Technical Staff (Colleges of Technical and Further Education) Victoria (Interim) Award 1994 (1999) 88 IR 164.
[41] The AWU conceded that “it is not apparent from the Decision whether, and if so in what way, the Vice President relied upon these decisions.” Given this concession, it is difficult to sustain an argument that undue weight was place on the decisions. In any event, we accept the submissions of the Respondent that even had the Vice President relied on these two decisions, it was open for him to do so. While the two decisions concerned provisions that were different to the provisions that were being considered by the Vice President, there is nothing to suggest that the Vice President’s consideration of these decisions led him into error.
Conclusion
[42] Having rejected the AWU’s submissions that the Vice President’s Decision is affected by legal error, the appeal is dismissed.
VICE PRESIDENT
Appearances:
H Borenstein QC with Y Bakri for the Australian Workers’ Union of Employees, Queensland.
JE Murdoch QC with M Healy for the State of Queensland (Department of Communities, Child Safety and Disability Services).
Hearing details:
2014.
Brisbane:
June 4.
1 The Australian Workers’ Union of Employees, Queensland v State of Queensland (Department of Communities, Child Safety and Disability Services)[2014] FWC 1979.
2 Ibid [3]–[5].
3 Ibid [17]–[19].
4 Fair Work Act 2009, s.604(2).
5 [2010] FWAFB 5343.
6 GlaxoSmithKline Australia Pty Ltd v Colin Makin [2010] FWAFB 5343, [27].
7 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31, 82-3.
8 Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188, 231-3 (Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ).
9 Western Australia v Commonwealth (Native Title Act Case) (1995) 183 CLR 373, 480 (Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ).
10 Austin v The Commonwealth (2003) 215 CLR 185, 265.
11 Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272, 298-9.
12 Ibid 306.
13 Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416, 518–21.
14 Ibid 521.
15 Transcript, PN62.
16 Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416, 521.
17 Cf Austin v The Commonwealth (2003) 215 CLR 185, 265.
18 Cf Western Australia v Commonwealth (Native Title Act Case) (1995) 183 CLR 373, 480 (Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ).
19 Exhibit A2, Applicant’s Outline of Submissions, para. 50.
20 Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416, 521.
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