A & M Thompson Pty Ltd & Ors v Total Australia Ltd

Industrial Relations Commission (NSW)|1985-05-22|Before: Grayson DP, Honour Schmidt J

CITATION : Teachers (Independent Schools) State Award 2001 [2002] NSWIRComm 250 PARTIES : NSW Independent Education Union Seventh Day Adventist Church FILE NUMBER: IRC 5235 of 2001 CORAM: Grayson DP Application for inclusion within scope of existing award - exemption provisions within Area, Incidence and Duration clause - minister/teachers who are members of Seventh Day Adventist Church presently exempted - clause contemplates application being made on behalf of such members individually or severally - IEU application made on behalf of 37 individual members - opposed by Church on doctrinal or policy grounds - wages and conditions of employment hitherto fixed administratively by Church - regulation by award said to be inconsistent with teachings of Church - withholding of remuneration by tithe - operation of sections 117, 118 and 119 of the Act considered - operation of section 18 of the Act considered - distinction between exemption from award and exclusion from award discussed - challenge to standing of application brought by petition CATCHWORDS : Held, present award exempts minister/teachers from its operation - application duly made on behalf of such persons - appropriate in proper exercise of Commission's discretion to grant IEU application - application granted LEGISLATION CITED : Industrial Arbitration Act 1940 Industrial Relations Act 1996 A & M Thompson Pty Ltd & Ors v Total Australia Ltd [1980] 2 NSWLR 1 Agius v Arrow Freightways Pty Ltd [1965] AR (NSW) 77 Baker v National Distribution Services Ltd (1993) 50 IR 254 Brown & Ors v Rezitis & Ors (1970-1971) 127 CLR 157 Bryce & Anor v Apperley (1998) 82 IR 448 City of Wanneroo v Holmes (1989) 30 IR 362 Davies & Anor v General Transport Development Pty Ltd & Ors (1967) 67 AR 371 Employers Federation of NSW v Federated Clerks Union [1993] NSWIRComm 32 Independent Schools Staff Association ACT v Canberra CEGGS and Ors, 17 Dec 1984, No.5668 of 1983 Print F7328 Independent Schools Staff Association ACT v Canberra CEGGS and Others, 22 May 1985, ACAC, C No 4535 of 1984 CASES CITED : Kingham v Sutton (No.3) [2001] FCA 1117 Kingmill Australia Pty Ltd t/as Thrifty Car Rental v Federated Clerks' Union of Australia, NSW Branch (2001) 106 IR 217 National Distribution Services Ltd v Kellett and Ors (1998) 80 IR 475 Prescott College & Ors v South Australian Commission for Catholic Schools Inc & Ors, SAIRC, 1 December 1997, No 89 of 1984 Printing Industry Superannuation Award (NSW), Re, (1990-1991) 36 IR 247 Private Hospital Nurses (State) Award, Re [1994] NSWIRComm 158 State Personal/Carers Leave Case 1998 (1998) 84 IR 416 Nursing Homes, &c Nurses' (State) Award & Anor, Re [2001] NSWIRComm 298 Teachers (Independent Schools) (State) Award 2001 Teachers Award - Non Government Schools 1982 (QGIG 15 May 1982) Teachers Award - Non Government Schools 1982 (QGIG 30 October 1982) Union of Australian College Academics v Canberra College of Advanced Education and Others, 10 July 1991, AIRC, C No 363 of 1987 HEARING DATES: 04/08/2002; 04/09/2002; 04/10/2002; 04/12/2002; 07/22/2002 DATE OF JUDGMENT: 10/04/2002

APPLICANT Mr S Rothman of senior counsel instructed by the NSW Independent Education Union LEGAL REPRESENTATIVES: RESPONDENT Mr R Moore of counsel instructed by Brennan Blair & Tipple, Solicitors & Attorneys

JUDGMENT: - 32 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES Coram: Grayson, DP

Friday, 4 October 2002 Matter IRC 5235 of 2001

Application by the New South Wales Independent Education Union for orders pursuant to section 11 of the Industrial Relations Act 1996

1 This matter, which involves an application by the NSW Independent Education Union (the IEU) for an order pursuant to s 11 of the Industrial Relations Act 1996 (the Act), proceeded before her Honour Schmidt J until reallocated to the Commission as presently constituted.

2 In the course of proceedings before Schmidt J, the matter was referred to his Honour Wright J, President pursuant to s 193 of the Act for decision by a Full Bench of the Commission.

3 Having considered the reference by Schmidt J and the submissions of the parties before her Honour, the President determined pursuant to s 193 of the Act, that the "proceedings including any Special Case aspect of them, are to be dealt with by her Honour."

4 The determination by the President was made on 29 August 2001 subject to reconsideration when the parties specified in due course the legal bases upon which they intended to argue their respective cases.

5 The parties subsequently filed documents in that regard and as earlier observed, the matter was then reallocated to me and programmed for arbitration.

6 At hearing, Mr S Rothman SC appeared for the applicant union (the IEU) and Mr R Moore of counsel appeared for the respondent employer, the Seventh Day Adventist Church (the Church).

7 The essential claim by the IEU is for the inclusion within the scope of the Teachers (Independent Schools) (State) Award 2001 (329 IG 533) (the Award) of some 37 minister/teachers employed in Adventist schools within the geographical area known as the North New South Wales Conference.

8 In New South Wales, there are three Church conferences, the other two being known respectively as the Greater Sydney Conference and the South New South Wales Conference.

9 The IEU application sets out the grounds and reasons for, and the particulars relied upon in support of the claim in the following way: A. The applicant seeks an order of the Commission: B. Under Section 11, Industrial Relations Act C. In the terms set out in the attached Schedules A

D. Awards affected: Teachers (Independent Schools) (State) Award 2001 E. Grounds and Reasons 1. The union has received requests from employees that the provisions of the Teachers (Independent Schools) (State) Award 2001 apply to them. Copies of such requests including the names of the employees are attached at Annexure A. 2. The award at clause 19.2(b) provides for application to be made on behalf of such employees to be included in the scope of the Award. F. Particulars 1. The Teachers (Independent Schools) (State) Award 2001 made 21 June 2001, yet to be published, contains an exclusion at clause 19.2(b) for Minister/Teachers who are members of the Seventh Day Adventist Church who teach in a school operated by a local conference of the Australasian Division of the Seventh Day Adventist Church. 2. Such exclusion has been in all preceding awards since the making of the Teachers (Non-Government Schools and Pre-Schools) (State) Award published 13 November 1974 [195 IG 186] 3. However, an application can be made on behalf of any such employees to be included within the scope of the award. 4. Attached at Annexure B, is a copy of a petition from such employees seeking to be included within the scope of the award.

19.1 This award rescinds and replaces the Teachers (Independent Schools)(State) Award, published 20 March 1998 (303 IG 1104), and all variations thereof. 19.2 It shall apply to all teachers and teacher/librarians employed in any recognised independent school or special school registered under the provisions of the Education Act 1990 in the State, including the independent schools listed below:

Chevalier College Kincoppal Rose Bay Loreto Convent Kirribilli Loreto College Monte Sant Angelo College Rosebank Stella Maris College St Aloysius St Ignatius College St Mary Star of the Sea College St Stanislaus College St Vincents College

but excluding all Catholic schools not listed in this sub-clause. It shall also apply to teachers employed in a pre-school attached to or operated by an independent school covered by this award. Provided further that the award shall not apply to the following persons:

a. teachers of music or other individual arts who are renumerated on an individual basis; and

b. Members of a recognised religious order and/or Clerks in Holy Orders, and/or Ministers of Religion (including a Minister/Teacher or a Missionary/Teacher who is a member of the Seventh Day Adventist Church and who teaches in a school operated by a local Conference of the Australasian Division of the Seventh Day Adventist Church), provided that application may be made on behalf of any such member to be included within the scope of this award; (emphasis added)

c. Employees of all city, municipal, shire and county schools;

d. Employees within the jurisdiction of the Independent Schools and Colleges, General Staff &c. (State) Industrial Committee and the Kindergartens &c. (State) Industrial Committee;

e. Persons employed in kindergartens, nursery school or other pre-school centres licensed as child care centres under the Children (Care and Protection) Act 1987 other than such establishments attached to or operated by an independent school covered by this award. 19.3 It shall take effect from 1 July 2001 (provided that the increases in rates of pay and allowances shall be paid from the beginning of the first full pay period to commence on or after 1 July 2001) and shall remain in force thereafter until 31 August 2004.

11 Mr Ron Sparke, a teacher at Avondale Secondary Campus was called and gave evidence in the IEU case in support of the claim.

12 Mr Sparke deposed to 27 years of continuing service as a teacher in the Adventist system and to a developing concern in recent years as to the appropriateness of the present award free environment in which wages and conditions of employment are fixed for Adventist teachers in New South Wales by a committee established under the constitution and by-laws of the South Pacific Division of the Church.

13 Mr Sparke was involved in the mid-1990's in the creation of a "Teacher Association" for Adventist teachers in the North New South Wales Conference. He considered the initial level of support for the "Teacher Association", which had been extended by the administration of the North New South Wales Conference, had diminished with time to the extent that it was difficult for the Association to be effective.

14 Efforts directed at improving teachers wages and conditions by membership of various Church remuneration committees had proved to be less than successful for Mr Sparke. Although he conceded that the Church system had some benefits which were not available under the award, he felt on balance that the award ensured a more even handed and equitable approach to wages and conditions commensurate with fellow teachers in other systems.

15 He felt that the award would, if it applied to him and other Adventist teachers the subject of this application, operate to provide him with a choice not presently available to him as to where to direct his income. He said that the Church presently removes 10% of his wages in a practice known as "tithing". The practice is arbitrary and does not afford those affected the choice which Mr Sparke would prefer.

16 The working policy published in respect of the South Pacific Division of the Adventist Church expresses the practice thus: PER 40.90 Personnel/ Wages and Allowances/ Wages b i. The Australian and New Zealand wage factors are subject to a 10 per cent reduction, on the understanding that this applies to all workers classified under the wages schedules, and that such workers are therefore regarded as having fulfilled their tithing obligation to the Church. b ii. Each pay period, employing organisations shall pay an amount equivalent to one-ninth of wages of its workers classified in the Australian and New Zealand wages schedules and housing allowances, into the tithe funds of the conference in which the worker concerned is a member. This amount to be set up in the accounts of the employing organisation as a staff tithe expense.

17 Mr Sparke said there are numerous provisions within the award such as carer's leave, long service leave and annual holiday loading which would be of direct benefit to him and that award coverage by its relative certainty of outcome would have the further benefit of removing those elements of dissatisfaction and frustration with respect to wages and conditions which have historically existed under the Church regulatory system.

18 Mr Sparke alluded in his evidence to the fact that the Adventist school system has maintained registration with the NSW Board of Studies, thus requiring adherence by and large to a prescribed education syllabus, and to the extent that certain unspecified extra curricula activities and some parts of the religious instruction may differ, they are not matters of such significance as to preclude the operation of the award.

19 He said that non-members of the Adventist faith teach very effectively within the Adventist system and that Adventist schools have close liaison with the other education systems through cultural and sporting activities run by government bodies and other educational systems. He could see no possibility of the award detracting from his work as a teacher.

20 It might usefully be added here in the absence of controversy as to this, that Mr Sparke and other IEU members the subject of this claim, are all persons to whom the exclusionary designation "minister/teacher" applies, thus distinguishing them by virtue of their membership of the Church from other employed teachers within Adventist schools to whom the award applies. That distinction, as I view the evidence, would seem to be one which does not extend in any practical sense to the teaching work carried out by teachers in Adventist schools which, for all practical purposes, is the same regardless of whether the teacher is a member of the Church or not.

21 Mr Benton Allen Craig deposed to commencing full-time teaching work in the Adventist education system in 1996. In 2001, he was appointed Head of Department, Mathematics at Avondale Secondary Campus with additional responsibilities including but not limited to:

· Year 12 prefect and year 12 coordinator · Roll Marker Year 12 · Choir Director · Assembly Committee Chair · Assembly Music Co-ordinator · Academic/Curriculum Committee Member

22 Prior to commencing in the Adventist school system and graduating as a 4-year trained teacher in 1992, Mr Craig was employed as a teacher by the Department of Education and Training in a number of high schools within the state education system.

23 He said the award within the system operated to beneficial effect affording equality, merit and service-based salary increases with little cause for conjecture, few anomalies and rare disputes save those for pay increases for the teaching profession generally.

24 Mr Craig cited examples such as rental subsidy and sick leave conditions whereby the Adventist system operates in an unequal way as between individual minister/teachers and by and large, in a less beneficial way than the award.

25 He said his present salary of $1768 per fortnight is less than 100% of the amount prescribed by the South Pacific Division wages schedule (for reasons which he did not explain) and significantly less than the amount of $2436 per fortnight prescribed by the award for the classification of Senior Teacher Level 1 (including the allowance for a two-point co-ordinator).

26 Mr Craig's evidence is strongly suggestive of a feeling that grievances and disputes would be more adequately and fairly dealt with under the award than independently of it, as is presently the case.

27 Mr Rozmarina (Rosie) Kadareanu is the Head of Department, Creative Arts at Avondale Secondary Campus with responsibilities for teaching students from years 8-12, maintenance of the visual arts classrooms, ordering of supplies and management of budget. She attends as others do, to a number of additional tasks such as the daily roll class, lunch duty, bus duty and library supervision.

28 Ms Kadareanu alluded to the inequality of operation of the Adventist system of regulation of employment conditions when compared with the award system and in particular, highlighted her attempts since 1998 to interest her employer in the prospect of bringing in paid maternity leave. She described her approaches to administrators within the Adventist system "at each level of management, Conference, Union and Division levels" which succeeded seemingly in gaining assurances of support but as yet, no paid maternity leave.

29 In that process, Ms Kadareanu obtained copies of the award and other awards applying to the Catholic and State education systems, thus satisfying herself as to the legitimacy and merit of a claim for paid maternity leave as a professional standard which existed in other comparable education systems.

30 She felt that inclusion within the scope of the award would result in progressive improvement in working conditions over time without the need for negotiation between specific individuals and the employing body, as presently exists under the Adventist system.

31 The IEU also called Mr Richard Francis Shearman, General Secretary, who deposed to the financial membership of his union of some 21,109 persons and to the numerous non-government teaching awards to which the IEU is a party, in addition to the award here being considered.

32 In relation to the Teachers (Independent Schools) (State) Award 2001, Mr Shearman described its coverage as extending to schools of various religious faiths including, for example, Catholic schools, Jewish schools, Muslim schools, Christian fundamental schools, Anglican schools and others.

33 He said many of these schools would provide teachers with letters of appointment as required by Clause 4 - Terms of Engagement of the award, and that such letters of appointment would include reference to the religious ethos of the school and the behaviour expected of teachers in accordance with that ethos. Many teachers would be members of the religious community supporting the school. Various letters of appointment were attached to Mr Shearman's statement by way of example.

34 Mr Shearman also described the recent growth in IEU membership of minister/teachers employed in Adventist schools mostly from schools operated by the North New South Wales Conference. He said he met with Adventist minister/teachers who had joined the union and discussed award coverage. He subsequently organised meetings in early and mid 2001 with North New South Wales Conference representatives under the auspices and in the presence of the Association of Independent Schools, and at those meetings discussed the possibility of minister/teachers coming under the award or alternatively, the negotiation of a separate industrial instrument. In each case, he offered to incorporate into the award or agreement particular provisions to meet the needs of Adventist schools.

35 On 21 June 2001, he wrote to the Association of Independent Schools in the following terms:

Mr Terry Chapman Executive Director Association of Independent Schools Level 4, 99 York Street Sydney NSW 2000 Dear Mr Chapman Further to our meeting with representatives of the Seventh Day Adventist Church today, the IEU confirms the following: 1. We seek an "in-principle" agreement from the Church to the regulation of salaries and conditions for teachers by way of a formal agreement between the Seventh Day Adventist Church and the NSW Independent Education Union. We seek a reply prior to the commencement of the third school term (Monday, 23 July). 2. That the Church enter into negotiations on the form of such an agreement which, in the IEU's view, should be based upon the terms and conditions of the Independent Schools State Award. Yours sincerely Dick Shearman, General Secretary

37 The respondent called three witnesses, the first being Mr Chester Grant Stanley, an ordained and credentialed Minister of the Seventh Day Adventist Church and President of the Australian Union Conference thereof.

38 Pastor Stanley described the origins of the Church in the mid-19th century and the extension of its major doctrinal beliefs back centuries into Europe and the Protestant Reformation. He described the Church as a conservative protestant Trinitarian movement basing its origins and adhering to the Holy Scriptures. He said there are distinctive beliefs within the Church including for example, Saturday as the Sabbath and an eschatological perspective on history, mission and theology.

39 Pastor Stanley described the Church's organisation, structure, administration and constitutional objectives. He set out the statistically impressive range of hospitals and sanatoriums, clinics and dispensaries, publishing houses, colleges, universities and schools both primary and secondary which are operated throughout the world, and he alluded to the differing employment arrangements as between employees who are members of the Church and those who are not.

40 The former category of employees are recognised as authorised officers of the Church by the issue of credentials and licences. Mr Craig, for example, produced the teaching-ministry licence issued to him in April 1999. Such employees, as was earlier observed, are paid under schedules determined by the South Pacific Division of the Church. In the instant case, the schedule is known as the Education Employees Wage Schedule.

41 The basis of Pastor Stanley's objection to award coverage of this category of employees is probably best described in the extract from his statement of evidence which for convenience is set out below: There are employees of the Church who are covered by Awards. However, these are persons who are not credentialed as Church workers, who are not commissioned to act on behalf of the Church and who are not recognised as officers of the Church. The Church historically has been and is active in the cause of religious liberty and the separation of Church and State. The Church believes that there is a Biblical basis for this ideal and philosophy. The General Conference has a religious liberty department and publishes a highly regarded cross-denominational magazine "Liberty" dedicated to the freedom of religious worship and the separation of Church and State. The Church has long maintained a policy that to the extent to which it is able it will avoid the intrusion of the State into its affairs and likewise will not attempt to intrude into affairs of State. It does not regard itself or Christianity generally as a legitimate political force. It does not consider that Christianity, Christians or the Church have any relevance to politicians save insofar as they may attempt to set an example to the community generally and politicians in particular. However, the Church does recognise that from time to time the affairs of the State will of necessity intrude unto the affairs of the Church in matters of regulation and control of its undertakings and institutions. The Church believes that an intrusion or attempted intrusion, which threatens its teaching institutions, and so its missions, may be conscientiously resisted. Such threatened intrusion is also considered contrary to the terms, intent and spirit of section 116 of the Constitution of the Commonwealth of Australia. The making of an Award binding upon the Church in respect of teachers would, in my view, constitute such an intrusion. The Church has no working policy about affairs of the State or politics save to the extent that it is obedient to the laws of the State. This is because it is not concerned with the State and has no political ambition. However, the intrusion of the State and politics into the affairs of the Church has led it to formulate attitudes and a philosophy about particular issues and to give advice to members from time to time in that regard, as the need arises. The Church considers trade unions and trade associations (both employer and employee) a political force and a limb of the State. It does not object to their existence. The religious liberty department of the South Pacific Division has, however, formulated the official attitude of the Church towards union membership by member of the Church. I produce and mark as Exhibit "CS12" a copy of the policy document. As will be observed, the policy is limited in its concern to non-membership as a consequence of religious conviction. The Church does not purport to impose its will upon the conscience of its members. It is inherent in Church policy, philosophy and principle that the individual has the supreme right to choose. Thus, the Church will not dictate to a member whether he or she can or cannot join a trade union or association or any other political or State organisation. The Church perceives no difference in principle between membership of trade unions and associations and membership of a political party. However, membership of such political organisations and membership of the Church is philosophically inconsistent. The Church is non-confrontational. Its philosophy of administration is democratic and conciliatory. For example, there are policies relating to dispute resolution within the Church. Resort to the courts of law by Church members is in conflict with the teaching of the Church. Such conduct is in conflict with the teachings of the Bible. The Church also supports a non-combatant role in military service for its members. Award coverage for teachers employed by the Church, would constitute an unjustifiable (and it is submitted unconstitutional) intrusion into the religious affairs and mission of the Church. The Church will, if any Award is made in whatever terms, be subject to a State authority and State controls and sanctions in respect of the terms of its employment of ordained pastors, evangelists and credentialed and licensed teachers. The Church will no longer be able to maintain a relationship with these persons in the like terms to the relationship it now maintains throughout the world to other workers occupying similar positions. It will not be free to ensure that its mission remains in the hands of wholly dedicated members of the Church. A practical effect of Award coverage is that transfer and mobility of workers will be prejudiced. A different range of salary structures and benefits may be payable to those under the award and employed in like positions elsewhere. An element of material reward or prejudice will enter into the decision of making transfers of it workers. The introduction of that element is inconsistent with the principles and beliefs of the Church and will impede its efficient administration. It would be philosophically untenable if the Church was not able to ensure that those engaged in directly fulfilling the Educational mission of the Church are setting the highest possible example of behaviour, moral principle and doctrinal purity. The Church must remain able to employ teachers who meet the high ideals set for its credentialed teachers. Furthermore, attendance at schools of union officials (or any other political or secular group) to hold meetings, to meet with members or to recruit is philosophically inconsistent with the objectives and beliefs of the Church. The Church will not voluntarily permit such an intrusion by the State into its affairs. Strict controls have always been in place regarding those permitted to enter upon school grounds. Adventist education, administration, objectives, staffing policy and prescribed standards all have a theological basis. Award coverage will, in effect, oblige the Church to make a radical change in it thinking and beliefs and prevent its free exercise of religion.

42 The respondent next called Mr Dennis Reye, Associate Director of Education for the Australian Union Conference of the Church. Prior to his appointment to that position in November 2000, Mr Reye had been variously employed as a teacher, deputy principal or principal within the Church system for 30 years. He deposed to responsibility for the overall academic administration and management of the Adventist education system involving 52 primary and 19 secondary schools in the Australian Union, one of 4 Unions within the Church's South Pacific Division. He said there are 252 credentialed/licensed full-time teachers, (I take that to mean or be synonymous with minister/teachers for the purpose of these proceedings), 55 credentialed/licensed part-time teachers, 15 non-credentialed full-time teachers and 8 non-credentialed part-time teachers employed in the North New South Wales Conference.

43 It is to be noted here that 37 credentialed teachers, out of the total of 307 to which Mr Reye deposed, seek to be included within the scope of the award.

44 Both Pastor Stanley and Mr Reye alluded in their evidence to the unsecured tenure of the credentialed teacher as distinct from the non-credentialed teacher, such that the former category of employee can be asked to consider, to use Mr Reye's words, filling a position within or outside his or her home Division or in other words elsewhere in the world, whereas the latter category of employee is recruited to a particular school. There was no evidence as to the frequency of inter-Divisional movement by credentialed teachers.

45 The basis of Mr Reye's opposition to award coverage is probably best summarised for present purposes, by the following extract from his statement of evidence: It is an ideal of Adventism that its workers do not look for rewards in this life. Those who have dedicated their lives to the mission of the Church are licensed or credentialed by the Church as its ministers and missionaries. The Church views service as one of the highest attributes which a Christian may achieve. This concept in fact governs the Church's own remuneration system for its workers. External regulation of the remuneration system or workers will interfere and detract from the ideal of service. The external regulation of appointment, remuneration and conditions of teacher's employment would subvert the mission of the Church and infect the roots of its education program with materialism, secularism and a view of the world wholly inconsistent with that advanced by the Church as part of its philosophy and doctrine. External regulation, including a notion of union representation of staff, bargaining with the Church, and otherwise being involved in the selection of or administration of staff would intrude upon the community of spirit and mission between Church workers. An underlying aspect of the Church wage philosophy is the notion that all Church workers work for the Church. There is but one employer, the Body of Christ in the world, all Christians, on behalf of whom Church workers perform their sacred undertaking. Ideals and a spirit of sacrifice, equality and democracy limit the differential in wages paid to Church workers. This ideal also facilitates the transferability of workers without financial prejudice to any of them. In order that the Church may properly administer its mission it must be capable of transferring its workers to locations where their services are most needed. A Church worker has security of service only with the Church. A worker cannot assume permanency in a particular appointment. This would be contrary to the interests of the Church and its mission. An example of the variations in salary can be better understood when it is realised that for every percentage point difference in the wage scale, the annual variation amounts to about $420.00. The ideal of service in the Church is paramount to achieving its mission. Church workers serve the Church, its members and its mission. It is fundamental to doctrine and principle that a worker be prepared to serve in whatever position nominated by the Church. Thus, it is essential that there not be any substantial difference in wage and salary levels. The salary structure maintained by the Church is designed to achieve this objective. This objective is refined by ensuring that wherever possible the wage and salary levels applicable to the range of responsibilities with which any particular group of Church workers may be assigned will be remunerated at precisely the same level.

46 Mr Reye drew the Commission's attention to three unreported decisions of the Australian Industrial Relations Commission and its predecessor and to one unreported decision of the Full Commission of the Industrial Relations Commission of South Australia going to issues of award coverage/exemption in respect of minister/teachers employed in Adventist schools in the Australian Capital Territory and South Australia (see Independent Schools Staff Association ACT v Canberra CEGGS and Others, Cohen J, 17 Dec 1984 Australian Conciliation and Arbitration Commission, C No.5668 of 1983 Print F7328; Independent Schools Staff Association ACT v Canberra CEGGS and Others, Staples, Maddern JJ, Paine C 22 May 1985, Australian Conciliation and Arbitration Commission, C No 4535 of 1984; Union of Australian College Academics v Canberra College of Advanced Education and Others, Lear C 10 July 1991 Australian Industrial Relations Commission, C No 363 of 1987; Prescott College and Others v South Australian Commission for Catholic Schools Inc and Others, Full Bench SAIRC, 1 December 1997, No 89 of 1984).

47 The final witness called by the respondent was Mr Kingley Robert Wood, Secretary/Treasurer of the Australian Union Conference of the Adventist Church. Mr Wood deposed to being a commissioned minister of the Church and by that means, to being part of a category of Church employees known as "workers" or "denominational workers". He referred to the established philosophy of the Church with respect to remuneration and in that regard, to the wages scale established for minister/teachers across Australia which he described as essential to facilitate transfers between the various Church conferences.

48 Mr Wood also referred to the allowances paid to minister/teachers under the Church system including a location allowance in the form of a rental or housing subsidy which varies from one location to another. He spoke about a discount or subsidy available to minister/teachers in respect of course fees normally charged at Adventist schools and tertiary institutions. He characterised these as tangible benefits in the hands of minister/teachers in addition to their base salaries, which are reviewed annually having regard to the All Cost Wages Index published by the Australian Bureau of Statistics.

49 Mr Wood provided a comparison table setting out the 13-step scale presently prescribed by the award and the 10-step scale provided by the Adventist system, and he spoke of the commitment of Church members to the tithing requirements which are deemed by the Church to have been met by minister/teachers by their acceptance of the Church wages schedule. He referred to the South Pacific Division policy in this respect which states: No worker shall be employed who is not a faithful tithe payer, and workers who are known to be unfaithful in tithe paying shall not be transferred to another conference/mission without proper consideration of this standing of the worker.

50 It would seem from the evidence as though the wage rates provided by the Church system contemplated the amount of the tithe being withheld and as earlier observed, it was not the wish or intention of the IEU witnesses to avoid their tithing obligations by seeking award coverage. It was more, as I understood them, that they preferred the issues of wages and tithing to stand independently of each other rather than be intertwined as is presently the case.

51 The IEU submitted that the Commission would in determining the matter presently before it, pay close regard to objects of the Act in general and in particular to those provisions relating to the provision of a framework for the conduct of industrial relations that is fair and just; to the promotion of participation in industrial relations by employers at an enterprise level and to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments. The Commission would also be mindful in its award making function of setting fair and reasonable conditions and would, in determining the present application, relevantly consider whether the existing contractual arrangements between the Church and those minister/teachers the subject of the application, operate in a way which undermines the industrial standards established by the award.

52 In Brown & Ors v Rezitis & Ors (1970-1971) 127 CLR 157 the High Court considered the scope of the Commission's powers pursuant to the unfair contract provision of the day which are not relevantly dissimilar to the present provisions of s 105 of the Act.

53 In so considering, the High Court (per Menzies, J at 169) said this: The section is clearly intended to confer a comprehensive power upon the Commission to go to the substance of arrangement made for a person to perform work in any industry - and to do so in disregard of the legal dress in which the arrangement has been clothed, in order to put such a worker in no worse a position than if he had been working under a contract of employment protected by award conditions.

54 In Davies & Anor v General Transport Development Pty Ltd & Ors (1967) 67 AR 371 the Industrial Commission of NSW (per Sheldon J) commented at 373: [88F] is seen to be but one of several in the Act designed to protect the arbitration system against those who enter its allocated field unprepared to pay the standard price of admission - the regulation of wages and conditions of employment by award or industrial agreement. This includes not only those who directly avoid regulation by chicanery but also those who get their work done for them in a way which gives them business advantage over competitors so bound. Thus, the section invades only one bastion in the citadel of private contract and does so primarily, not because certain contracts are unjust to individuals but because they are subversive of the orderly control of industry. In fact in some cases within (c), (d) and (e) the parties may be truly in pari delicto .

55 Further in that context, the IEU relied upon the majority judgment of the Industrial Commission in Court Session in A & M Thompson Pty Ltd & Ors v Total Australia Ltd [1980] 2 NSWLR 1 which was later cited with approval by the Industrial Court of NSW in Baker v National Distribution Services Ltd (1993) 50 IR 254.

56 In Thompson, the court observed as to the nature of the unfairness attracted by the provisions of the day: It has been said that fairness is determined by the commonsense approach of a juryman and that it is a moral and not a legal issue ( Davies' case). Whether this be so or not, it does not seem that in distinguishing between what is fair and what is not fair the Judge must apply standards which appear to him to provide a proper balance or division of advantage and disadvantage between the parties who have made the contract or arrangement. In doing so he would always have to bear in mind the conduct of the parties, their capability to appreciate the bargain they had made and their comparative bargaining positions when entering into the contract or arrangement.

57 In Baker, the court referred to the earlier words of Beattie J, as he then was, in Agius v Arrow Freightways Pty Ltd [1965] AR (NSW) 77 at 89 where his Honour said it as a matter of deciding: …in each particular case by application of the tribunal's common sense and sense of justice whether a particular transaction is unfair, harsh and unconscionable.

58 The decision of a Full Bench of this Commission in National Distribution Services Ltd v Kellett & Ors (1998) 80 IR 475 which followed the decision in Baker, is also relied upon by the IEU in demonstrating the consistency of approach to notions of fairness which this Commission and its predecessors have historically adopted.

59 The IEU submitted that the application presently before the Commission is in effect requiring the Commission to review the exemption prescribed by cl 19.2 (b) of the award in relation to the 37 named minister/teachers having regard to the provisions of s 18 of the Act which are as follows: SECTION 18 EXEMPTIONS FROM AWARDS 18(1) [Application for exemption] The Commission may, on application, grant an exemption from the whole or any part of an award if it is satisfied that it is not contrary to the public interest and that: (a) it is in the best interests of the employees and employers concerned, or (b) the operation of the award (or part of the award) would result in significant unemployment or other serious consequences for the employees and employers concerned. 18(2) [Duration of exemption] An exemption may be granted for a period not exceeding 3 years at any one time. 18(3) [Review exemption] The Commission may, on application or on its own initiative, review any exemption, and may confirm, vary or revoke the exemption.

60 Factors relevant to a review of an exemption have not, according to the IEU research, been the subject of judicial consideration, although the distinction between an exemption from the scope of an award and an exclusion from an award has been so considered.

61 In Re Private Hospital Nurses (State) Award [1994] NSWIRComm 158 unreported, Schmidt J observed: Common rule awards are a feature of the award system of this State, both under the existing Act and under its predecessor, the Industrial Relations Act 1940. Both the current award and that proposed contain an exclusion in relation to persons employed in the industry to which the award applies, in the geographical location of the County of Yancowinna. That is a very well known and long-standing feature of many current awards and their predecessors. It was an approach to the drafting of awards not sought to be challenged by Mr Warren. Given that position it must follow that an award may likewise make provision as to that part of the industry to which it is to apply, by excluding from its area of coverage named employers, without the necessary consequences being that the provision has the effect of granting an exemption from the award in terms contemplated by section 105 of the Act. A necessary precondition to the granting of an exemption from an award in favour of an employer is that the award first applies to the employer. If that is not so, no question of exemption from its operation can logically arise. In that context I take the view that exemption as used in section 105 of the Act, is not a synonym for exclusion as used in clause 39 of the proposed award…

62 Similar reasoning was applied by the Commission in Re Printing Industry Superannuation Award (NSW) (1989-1991) 36 IR 247, where Maidment J said this about the exemption provision of the Industrial Arbitration Act 1940: An application for exemption under s 87 of the Act, and the obstacles thereto provided by s 87A, are not appropriate for consideration unless and until the Commission has determined or directed which of the employers and employees engaged in the industry or calling, to which the award relates, it shall be binding upon and which locality is to be specified therein. Until that point in time nothing exists from which an exemption as envisaged by ss 87 and 87A can be made.

63 The IEU contends that one of the beneficial consequences of the granting of the application presently before the Commission is that the provisions of s 117, s 118 and s 119 of the Act would operate to preclude the current practice of enforcing the tithing obligation by means of withholding the tithe from amounts which would otherwise by payable to the minister/teacher by way of award prescription.

Those provisions of the Act are as follows: SECTION 117 EMPLOYEES TO BE PAID IN MONEY 117(1) [Remuneration payable] Remuneration payable to an employee must be paid in money and, if demanded, at least once each fortnight. 117(2) [Money] Payment is made in money only if it is made: (a) in cash, or (b) with appropriate authority, by cheque payable to the employee, or (c) with appropriate authority, into an account in the name of the employee (whether or not jointly with another person) at a financial institution by electronic transfer of funds or other means. Appropriate authority is authority conferred in writing by the employee or authority conferred by an industrial instrument. 117(3) [Payment in advance] Payment of remuneration is to be made in advance if the employee is entitled to payments in advance by agreement, custom or otherwise. 1174(4) [Offence] An employer must not pay remuneration to an employee contrary to this section. Maximum penalty: 100 penalty units

SECTION 118 EMPLOYEES TO BE PAID IN FULL 118(1) [Payment in full] Payment of remuneration to an employee is to be made without any deduction for goods, board or lodging or any other services supplied by the employer in payment (or part payment) of remuneration. 118(2) [Authorised deduction] However, an employer can deduct and pay on behalf of an employee from any remuneration payable to the employee: (a) any payment principally for the benefit of the employee that are authorised in writing by the employee to be deducted and paid, or (b) any payments that are authorised by an industrial instrument to be deducted and paid. 118(3) [Offence] An employer must not pay remuneration to an employee contrary to this section. Maximum penalty: 100 penalty units

SECTION 119 EMPLOYERS NOT TO STIPULATE HOW REMUNERATION TO BE SPENT 119 An employer must not, directly or indirectly, impose as a condition of the employment of an employee any terms as to the place where or the manner in which or the person with whom any remuneration paid to the employee is to be spent. Maximum penalty: 100 penalty units

64 I would again observe here on the evidence as I understood it, that it was not the intention of minister/teachers seeking to be brought within the scope of the award to avoid the tithing obligation to which they have committed, but rather to afford those persons the right to meet the obligation independently of employment arrangements per se.

65 The IEU submitted that in determining whether the application before it should be granted, the Commission should look to the Church to discharge the onus of demonstrating that the preservation of the status quo is not contrary to the public interest. That burden would not be satisfied where, as here, the 37 employees themselves request the removal of the exemption, where the employees concerned are paid less than the award and where non-Adventist teachers covered by the award are paid more for carrying out the same duties as the employees concerned.

66 Further, the Commission in the exercise of its functions is enjoined by s 146 of the Act to take into account the public interest relevant to which among other things, is the disparity between conditions of employment for Adventist teachers performing the same work with the same qualification and the lack of success thus far of Adventist minister/teachers who have sought to negotiate wages and conditions comparable with the award.

67 To refuse the application on the basis that, the religious character of the Adventist schools or of the work of teachers in those schools is of itself a ground for opposing industrial regulation, would be contrary to the well-established practice of the Commission in respect of numerous non-government teaching and related awards, in respect of numerous approved enterprise agreements containing provisions concerning the religious ethos of schools and in respect of various test case and other decisions of the Commission relating to personal/carer's leave (see for example State Personal/Carers Leave Case 1998 (1998) 84 IR 416 and Re Nursing Homes, Nurses (State) Award [2001] NSWIRComm 298.

68 The IEU points to the decisions of the Industrial Conciliation and Arbitration Commission of Queensland and the Industrial Court of Queensland where an application by the Church to exempt Adventist teachers from the Teachers Award - Non Government Schools 1982 was refused at first instance (QGIG 15 May 1982 at 58) and an appeal against that refusal was later dismissed (QGIG 30 October 1982 at 266).

69 For its part, the Church accepts for the purposes of these proceedings that each of the persons named by the IEU within the draft order are employees in respect of whom an order may be made in exercise of the Commission's discretion and it accepts, as the IEU submits, that "award" includes any order of the Commission under the Act that sets conditions of employment.

70 The Church submitted that the provisions of cl 19.2 of the award presently being considered should not be characterised as an exemption to which the provisions of s 18 of the Act apply, that s 18 of the Act has no work to do in the present context and that the IEU application falls to be determined under s 17 or in the alternative, s 10 of the Act in terms of varying the existing award or making a new award. It was put that properly understood, the decisions of Schmidt and Maidment JJ in the Private Hospital Nurses case and the Printing Industry case respectively, support the proposition that cl 19 of the award acts to exclude Adventist teachers from the award rather than exempt them.

71 If that be so, the Commission would approach the question whether to extend the scope of the award by variation or otherwise to cover persons hitherto excluded from it, necessarily by reference to its Wage Fixing Principles in particular the first award principle.

72 Further, to the extent that cl 19 is construed as an exemption as opposed to an exclusion, considerations as discussed in Employers Federation of NSW v Federated Clerks Union [1993] NSWIRComm 32 arise.

73 Further yet, the Commission would be constrained to deal with a class of persons so exempted rather than as here contemplated, individuals within a class of persons.

74 The Church points to the operation of the award and its predecessors in the present form for something like 29 years now and contends that the mere petition by employees who did not give evidence in the proceedings is insufficient to support the application brought on their behalf. As to the evidentiary weight to be given to a petition, the Commission is referred to Kingham v Sutton (No.3) [2001] FCA 1117.

75 In interpreting the award, the principles conveniently collected in City of Wanneroo Holmes (1989) 30 IR 362 apply, such principles having been considered and applied in Bryce & Anor v Apperley (1998) 82 IR 448 which was in turn approved by a Full Bench in Kingmill Australia Pty Ltd t/as Thrifty Car Rental v Federated Clerks' Union of Australia, NSW Branch (2001) 106 IR 217. Moreover, cases such as Kingmill make it clear that the scope of an award is determined by the area, incidence and duration clause.

76 In the present case, the Church accepts that the terms and conditions or provisions of the award apply to its operation in relation to persons who are not members of the Church. It further accepts that the award applies to the operations of the Church in relation to such persons by common rule.

77 As to minister/teachers however, there is a clear and express exclusion in cl 19 of the Award notwithstanding the proviso at cl 19.2 (b) to the effect that application may be made on behalf of such persons for inclusion within the scope of the award.

78 In that regard, the Church contends as a matter of construction, that the operation of the proviso is limited by its terms to "members of a recognised religious order" and does not extend to the persons the subject of this application. I do not accept this.

79 If the Commission was minded, over the respondent's opposition, to make an order arising from the IEU application it should do so only in relation to the three persons who gave evidence, rather than the 37 persons the subject of the application. Further in relation to any order made, the Commission should ensure that the remuneration to apply is exclusively that prescribed by the award such that any benefits available as part of the remuneration policies of the Church should not apply unless consented to by the Church. The Commission should specify a reasonable period within which the Church may review its position in that regard.

80 As to the tithing obligation and present practice, the Commission as part of any order made, would include a provision that the Church may make a deduction of 10% of gross wages paid to the employee engaged as a minister/teacher in any given week as an authorised deduction pursuant to s 118 (2) (b) of the Act. It may be that reference to s 118 (2) (a) was intended by the respondent in making that submission but at all events, it was not a submission which was extensively developed or strongly pressed in the respondent's case and as I am disposed, those provisions of the Act do not call for the exercise of discretion by the Commission in the context of these proceedings. Payment of the tithe is a matter properly between the Church and its members and is not a matter, in my opinion, relevant to the Commission's present arbitral functions.

81 As was pointed out in the course of debate, this case raises issues as to the operation of s 18 of the Act namely, the exemption provisions which do not appear to have been previously considered and hence the Commission is left to do the best it can in the circumstances. There is furthermore the question whether the application calls for the exercise of discretion under s 18 of the Act as the IEU asserts or under the primary award making, variation or rescission provisions of ss 10 and 17 of the Act as the Church asserts.

82 In my opinion that question should be answered in favour of the IEU contention and with every respect to the respondent's argument in this regard, it is unnecessary to consider whether in the light of the Wage Fixing Principles, the award should be varied or a new award made to accommodate the IEU application when the existing award expressly provides without variation, for the inclusion within its scope of the persons here concerned.

83 The language of the clause is expressed in such a way as to clearly contemplate persons including Adventist minister/teachers on whose behalf application is duly made, being brought within the scope of the award. I can see no work for the Wage Fixing Principles to do in the context of the present application, given as the IEU is quick to point out, that the application is concerned only with the proper operation of the existing award.

84 The making of an order relating to a named individual or to named individuals is not a movement in wages and conditions as contemplated in the preamble to the Wage Fixing Principles. Those words, as the IEU submitted, clearly refer to movements in collective wages and conditions as expressed in awards rather than to the extension of coverage of the existing award to certain individuals as expressly provided under the terms of the existing award.

85 Furthermore and contrary to the respondent's submission in reliance upon the Printing Industry Superannuation case and the Private Hospital Nurses case, it is difficult to see how the provisions of cl 19.2 (b) can operate in any way other than as an exemption in respect of the persons therein described.

86 To the extent that they stand as authority for any principle or as precedent for any proposition here in issue, and with every respect I remain to be convinced that they do, the Printing case and the Private Hospital Nurses case are readily distinguishable on their facts in the present circumstances because in Private Hospital Nurses, for example, the Commission was concerned broadly speaking with proposed award provisions that operated to qualify or limit their common rule and in neither case, was there a provision expressly providing for the making of an order that the award applied to specified individuals. In those cases, as distinct from the present case, the Commission found it unnecessary to consider the exemption provisions of the statute, a necessary precondition for which is that the Award must first apply to an employer. If that is not so as Schmidt J observed in Private Hospital Nurses, no question of exemption from its operation can logically arise.

87 I take the view in all the circumstances, that the provisions of cl 19.2 of the award here being considered have the effect among things of exempting minister/teachers who are members of the Adventist Church from the scope of its operation such that the provisions of s 18 of the Act apply.

88 I take the further view that the same provisions clearly contemplate application being made on behalf of such persons to be brought within the scope of the award. I am not persuaded that the standing of the IEU application on behalf of 37 minister/teachers is necessarily compromised by the fact that only three were called to give evidence in the proceedings. As the IEU was quick to point out, it was open to the respondent to require other signatories for cross-examination if there was any doubt about the authenticity or genuineness of their stated wish to be covered by the Award. In Kingham v Sutton, relied upon by the respondent, the court had to consider a petition containing 8,700 signatures, in circumstances where whether the signatories were genuine financial members of the union was a contested issue between the parties at all times. The authenticity of signatures was an important issue. Among other things, there were a number of "joke" signatures on the petition.

89 In the particular circumstance of that case, the court held there was no presumption of regularity applicable to the petition and that the appellant should have to prove the petition had been signed by the requisite number of members. In this case, the names of the signatories are clearly identified with addresses and telephone numbers provided, and the fact that such persons wish to be covered by the Award and have authorised the IEU to make an application on their behalf, has not been disputed at any stage in the proceedings. I accept that an application on behalf of all signatories has been duly made and is properly before the Commission. Furthermore and as earlier observed, the respondent concedes that each of the persons concerned is an employee in respect of whom an order may be made in the exercise of the Commission's discretion.

90 I am satisfied that it would be a proper exercise of the Commission's discretion having regard to the evidence and the arguments on either side of the record, if the IEU application were granted. To do otherwise would in my opinion lead to a situation which would not be in the best interests of those concerned and which would not give proper effect to the provisions of cl 19.2 (b) which clearly, as an outcome of proceedings such as these, contemplate minister/teachers on whose behalf application is duly made, being brought within the scope of the Award.

91 It should be observed in reaching that conclusion that the Commission is not unmindful of, or unsympathetic to, the notion of the Church being free to conduct its affairs without undue or unwarranted intrusion by the State, but it is difficult to imagine, for whilstsoever Church organisations and their members remain relevantly governed by the law of the State, a more fundamental operation of State law than in the context of the employment relationship which the parties agree exists in the case of employees the subject of this application.

92 For the foregoing reasons, the Commission grants the IEU application and makes orders in terms which are to be agreed between the parties. In that regard, the parties are directed to confer with a view to formulating and filing within 21 days, an agreed form of orders which will give effect to the Commission's decision. In so doing, it is noted that the award will thereby apply to certain persons from the date of filing of the IEU application on 21 August 2001, to others from the date of its amendment on 21 March 2002 and to another from the commencement of hearing of the matter on 8 April 2002.

93 As to the implementation of the orders referred to above, the parties are at liberty to apply in the event that agreement cannot be reached in individual cases where for example, some consideration of offset or absorption may be called for to effect the transition between award conditions and those applicable under the Adventist remuneration system.

94 I note before leaving the matter, that whilst no evidence was called by either side in that regard, the parties have respectively turned their minds to such practicalities in the course of debate and there appears to me from the submissions to be a shared wish to apply, with the Commission's assistance if required, notions of commonsense and fairness to such matters.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

[1994] NSWIRComm 158

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (112 paragraphs)

Parties

Cases Cited (10)