Al-Shennag v Bankstown City Council Civic Services Group

FOURTH RESPONDENT: Communications, Electrical and Plumbing Union of Australia, Electrical Division, New South Wales Branch FILE NUMBER: IRC 4369 of 2003 CORAM: Wright J President; Walton J Vice-President; McLeay C CATCHWORDS : Application for leave to appeal - Appeal - Standing - Failure to consider or determine application - Procedural fairness - Failure to exercise jurisdiction - Leave to appeal granted - Appeal upheld. LEGISLATION CITED : Industrial Relations Act 1996 Al-Shennag v Bankstown City Council Civic Services Group (2002) 118 IR 138 Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No.2) (2001) 106 IR 429 Cobar Mines Pty Ltd Consent Award 1995, Re (unreported, Cahill J, Matter No. IRC 3305 of 1998, 2 August 1998) CASES CITED : Elura Mine Enterprise Consent Award 2001, Re [2003] NSWIRComm 218 King v State Bank of New South Wales [2002] NSWIRComm 353 Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 Mitchforce v Starkey (2002) 117 IR 122 Southern Copper Limited Award & Other Awards, Re (Unreported, Hungerford J, IRC No 899 of 1999, 5 May 1999). HEARING DATES: 08/29/2003; 09/03/2003 DATE OF JUDGMENT: 12/18/2003

APPELLANT: Mr A Hatcher of counsel SOLICITOR: K Parker Maurice Blackburn Cashman, Solicitors

LEGAL REPRESENTATIVES: FIRST RESPONDENT: Ms H McKenzie Blake Dawson Waldron, Solicitors

SECOND RESPONDENT: Mr A Cunningham

CORAM: WRIGHT J, President WALTON J, Vice-President MCLEAY C

Application by the Australian Workers' Union, New South Wales for leave to appeal and appeal against a decision of Deputy President Sams given on 17 July 2003 in Matter Nos. 1917 of 2003 and 2403 of 2003.

REASONS FOR DECISION [2003] NSWIRComm 469

1 This matter concerns an application for leave to appeal pursuant to s187 of the Industrial Relations Act 1996 ("the Act"), and if granted, appeal from a decision of Sams DP of 17 July 2003, in which his Honour granted an application by Elura Mines Pty Limited ("Elura Mines") to rescind the Elura Mines Enterprise (Consent) Award 2001 ("the Award"), and dismissed an application by The Australian Workers' Union, Greater New South Wales Branch ("the Union") to vary the Award: Re Elura Mine Enterprise Consent Award 2001 [2003] NSWIRComm 218.

2 The background to the proceedings is set out in the Deputy President's decision, and we do not propose reciting those facts in full. In brief, the Award relates to the operation of the Elura zinc, lead and silver mine near Cobar, New South Wales ("the Mine"). The parties to the Award were Pasminco Australia Limited ("Pasminco") (the then owner of the Mine and the second respondent in the appeal), the Union, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch and the Electrical Trades Union of Australia, New South Wales Branch. Pasminco had encountered some financial difficulties and was operating under a deed of company arrangement. The two applications arose as a consequence of a decision by Pasminco to enter into a conditional sales agreement with Consolidated Broken Hill Co Ltd ("CBH"), whereby CBH would purchase the Mine and a port facility at Newcastle through a separate corporate entity, Elura Mines. A conditional sale agreement was signed on 8 April 2003. The sales agreement required certain conditions to be met before 18 July 2003, including labour changes as identified in a Mine Improvement Plan developed by CBH.

3 The Union filed an application seeking essentially two variations to the Award. First, the Union sought that reference to "Pasminco Australia Limited" in clause 3 - "Parties Bound" be replaced with the words "any employer of employees employed in classifications covered by this Award engaged in or associated with mining activities and metallurgical plant operations at the Elura Mine in the State of New South Wales". Second, the Union sought that a new clause be inserted granting "absolute preference to employment to persons employed by the operator of the Mine as at 4 Mine 2003". Subsequently, Elura Mines filed an application to rescind the Award. The Elura Mine's application was joined for hearing with the Union's application, a course that was not objected to by the parties.

4 The Union submitted that, in granting Elura Mine's application to rescind the Award, Sams DP made three fundamental errors as follows: 1 His Honour heard and determined Elura Mine's application to rescind the Award in circumstances where Elura Mines had no standing under the Act to bring that application; 2 His Honour granted Elura Mine's application, but it was not reasonably open to him on the evidence to do so; and 3 His Honour dismissed the Union's application without having considered or determined it.

5 On 11 September 2003, the Commission issued a Statement in this matter ([2003] NSWIRComm 302) in which the following orders and awards were made (including a subsequent correction) (at [10]): 1. Leave to appeal is granted.

3. The orders of Sams DP of 17 July 2003 are quashed.

4. The matter is remitted to Grayson DP to hear and determine the applications as a matter of urgency.

5. In the intervening period, the Full Bench makes orders and awards preserving the subject matter of the applications as follows: (i) In employing persons at the Mines, Elura Mines shall ensure that it and any prospective employer at the Mines (with whom it contracts) shall firstly consider applications for employment by former employees at the Mines and in the case of rejected applications shall keep a record of all interviewing processes and reasons for any rejection. Any such rejected application shall, to the extent of any order made, be subject to any order for preference on a retrospective basis; (ii) Any such prospective employers at the Mines shall be advised by Elura Mines that there is an outstanding arbitration as to an award to regulate employment at the Mines and shall be provided with details of the arbitration and where Elura Mines contracts for the performance of work at the Mines, it shall ensure that such contractors comply with this order in respect of their employees; (iii) Liberty to apply, to the extent necessary, to make any ancillary or supplementary orders or awards, or more formal award, to ensure that orders and awards (i) and (ii) shall operate effectively; (iv) The interim award so made pursuant to s16(4) of the Industrial Relations Act 1996 shall commence on the date of this statement and remain in force for a nominal term of two months subject to any further award or order by this Full Bench or Grayson DP.

6. The Commission shall provide full reasons for its decision in this matter as soon as practicable. 6 Following are the reasons for the decision set out in the Statement of the Commission.

7 On 29 August 2003, the Full Bench refused leave to appeal with respect to the Union's first contention, that is, that Elura Mines had no standing under the Act to bring an application to rescind the Award.

8 A Full Bench of the Commission in Al-Shennag v Bankstown City Council Civic Services Group (2002) 118 IR 138 held (at [13]-[14]) that: The long-standing and settled practice of the Commission in matters requiring leave to appeal is to rule on the question of leave but to refrain from giving reasons. However, more recently a Full Bench of Commission in Court Session has considered that practice and raised bouts about its appropriateness. In Mitchforce v Starkey (2002) 117 IR 122 (Wright J, President; Walton J, Vice-President; Boland J), the Full Bench said this: (at par 31): "Although the convention of this Court is not to provide reasons for refusing leave to appeal the appropriateness or availability of that practice is now doubtful since the judgment of the High Court last year in Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (2001) 75 ALJR 1342: see particularly the passages at 26 and 32 to 36." Accordingly, we propose to give short reasons for our decision to refuse leave.

9 For the same reasons, we propose briefly setting out our reasons for refusing leave to appeal with respect to the Union's first contention as to standing.

10 The principles applicable to the granting of leave are well settled, and are usefully summarised in Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380, those principles being: (a) leave will not lightly or automatically be granted; (b) it will be relevant to the grant of leave to consider, amongst other factors, whether the appellant has brought a substantially different case in the appeal; and (c) it will be relevant to consider whether an appeal raises substantial and important considerations. See also King v State Bank of New South Wales [2002] NSWIRComm 353 and Al-Shennag v Bankstown City Council Civic Services Group .

11 The mere raising of a jurisdictional issue does not necessarily result in leave to appeal being granted. Rather the appellant must demonstrate that there is a sufficiently arguable case on jurisdiction. In Knowles v Anglican Church Property Trust the Full Bench held (at 381) that: The raising of a jurisdictional issue by an appellant does not, of itself, establish a basis for the grant of leave; each case having to be judged against the statutory criterion. The Commission should have regard to the nature of the jurisdictional issue and whether there is a demonstrable case that the Commission has exceeded or failed to exercise its jurisdiction. This consideration will involve a question as to whether the decision appealed from was inconsistent with established law and principle. See also Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No.2) (2001) 106 IR 429 at [10].

12 In the present case, the Union submitted that Elura Mines did not fall within the scope of s11 of the Act as a person or entity entitled to bring an application to rescind the Award pursuant to s17 of the Act. Sections 11 and 17 of the Act are in the following terms respectively: 11 When award may be made

11(1) An award may be made: (a) on application to the Commission or on the Commission's own initiative, or (b) in the course of an arbitration by the Commission under Chapter 3 to resolve an industrial dispute. 11(2) An application for an award may be made only by: (a) an employer, or (b) an industrial organisation of employers or employees, or (c) a State peak council. 11(3) Anyone who can apply for an award may become a party to any proceedings for making an award. 11(4) An applicant for an award, or to become a party to the making of an award, is required to satisfy the Commission that it or any one or more of its members has a sufficient interest in the proposed award. 17 Variation or Rescission of Award

17(1) The Commission may vary or rescind an award. 17(2) Sections 11, 13 and 15 apply to any such variation or rescission. The other provisions of this Division continue to apply to the award as varied. 17(3) An award may be varied or rescinded in any of the following circumstances only: (a) at any time with the mutual consent of all the parties to the making of the original award, (b) at any time to give effect to a decision of the Full Bench of the Commission under section 50 or 51 (National and State decisions), (c) during its nominal term if the Commission considers that it is not contrary to the public interest to do so and that there is a substantial reason to do so, (d) after its nominal term if the Commission considers that it is not contrary to the public interest to do so. 17(4) This section extends to a variation or rescission of an award in the course of an arbitration by the Commission under Chapter 3 to resolve an industrial dispute.

13 According to the Union, Elura Mines failed to meet the standard set in s11 for two reasons. Firstly, Elura Mines was not an employer within the meaning of s11(2)(a) as it did not employ anyone. At best, it may become such an employer in the future if the sale of the Mine proceeded as was intended by CBH. The Union contended that the definition of "employer" in the Act did not encompass prospective employers, that definition being set out in the Dictionary in the Act in the following terms: Employer means a person who employs an employee within the meaning of this Act: (a) whether the person is an individual, a corporation, an unincorporated body or the State, and (b) whether the person does so on the person's own behalf or on behalf of some other person.

14 Secondly, the Union submitted that Elura Mines failed to satisfy the test in s11(4) of the Act, in that it did not have a "sufficient interest" in the Award since "it did not and never could ever employ anyone who would be bound by it". According to the Union, whilst Elura Mines may have sufficient interest in the Award such that it may become a respondent to the Union's application to the vary the Award, Elura Mines does not have the sufficient interest necessary to allow it to apply to rescind the Award. In that respect, the Union contended that Sams DP's reliance on the decision in re Cobar Mines Pty Ltd Consent Award 1995 (unreported, Cahill J, Matter No. IRC 3305 of 1998, 2 August 1998) was misplaced, the relevant distinguishing feature being that the applicant in that matter was a receiver and manager of an employer bound by the award, rather than a potential purchaser of a mine as in the present case.

15 Elura Mines presented an array of submissions as to its standing at first instance, which included (but were not limited to) the following: (a) The decision to grant its application was consistent with previous decisions of the Commission, namely Re Cobar Mines and Re Southern Copper Limited Award & Other Awards (unreported, Hungerford J, IRC No 899 of 1999, 5 May 1999). (b) Its application for rescission was based on the evidence that, if CBH successfully acquired the Mine from Pasminco, Elura Mines would be the entity which employed labour at the Mine in the future. In support of this submission, Elura Mines relied on the decision of Hungerford J in Re Southern Copper , where it was held (at [3]): The applicant is not a party to the awards concerned. However, I am satisfied it has sufficient interest to bring the application on the basis that it will shortly commence operations at the same site at Port Kembla previously utilised by Southern Copper Limited in its operations in the smelting of copper and in respect of which the there subject awards had application. (c) The reference to "employer" in s11 of the Act should be construed as including a person who is "generally or typically an employer, and whose interests is as an employer, not only as meaning a person who has at least one employee". Such an interpretation would be consistent with a purposive construction of the Act. (d) It was Elura Mine's submission that to allow the Union to rely on insufficiency of standing as a grounds of appeal, in circumstances where that issue was not raised at first instance, would be contrary to the principles of natural justice. (e) As to the decision in Re Cobar Mines , Elura Mines submitted that "a receiver and manager, unlike a liquidator, does not stand in the shoes of the company. Rather, a receiver and manager owes his/her primary duty to the creditors of the company to which it is appointed". Accordingly, the decision in Re Cobar Mines was comparable to the present matter, and correctly relied on by Sams DP, as in that case the application made by the receiver and manager of the mine was not made on behalf of the company (as was asserted by the Union), but on behalf of the company's creditors.

16 Put simply, we agree with and accept Elura Mine's submissions as set out in paragraphs 15(a), (b) and (e) above such that we are satisfied that Elura Mines had standing at first instance, as was determined by Sams DP at [133] where his Honour held: In my view, it would be a manifest absurdity and a denial of natural justice to reject Elura Mine's interest in these proceedings in circumstances where it is the prospective operator of, and employer of employees at the mine. One could hardly find a more obvious example of a party which had established a " sufficient interest " in the proceedings both to make applications in its own right and appear in proceedings designed to bind it to the terms of an industrial instrument. I find accordingly.

17 We are satisfied that the Union's first contention as to standing does not raise any jurisdictional issue, nor does it raise any other substantial or important matter which requires our consideration. For these reasons, leave to appeal is refused.

Failure to consider or determine the Union's application

18 We turn then to the Union's third contention, that the Deputy President fell into error by dismissing the Union's application without having considered or determined it. In the Statement of the Commission, it was determined that: In our view the appellant has at least made out a case with respect to the third ground for the appeal, set out above, namely, that, in substance, the appellant's application was not considered or not adequately considered and thus not properly determined by the Deputy President. That error can be characterised as jurisdictional in nature as was submitted by the appellant.

19 Faced with two competing applications - one to vary the Award and one to rescind the Award, the Deputy President elected, incorrectly in our view, to firstly consider Elura Mine's application to rescind the Award, and secondly, having made a determination that the Award should be rescinded, considered that "as a matter of sequential logic" he was not required to consider or determine the Union's application to vary the Award. Sams DP summarised his findings at [167]-[168] as follows: It follows from the foregoing consideration that the Commission finds that firstly, Elura Mines is competent to bring the application to rescind the Award; secondly, that it would be in the public interest to grant the application and, thirdly, that there are substantial reasons to do so. Accordingly, I am satisfied that the requirements of s17(3)(c) are met and the Award will be rescinded effective from the completion of the sale process. As a matter of sequential logic, it is unnecessary for the Commission to consider or determine the AWU's application, both as to its merits or whether it constitutes a special case for the purposes of the State Wage Case Principles (State Wage Case 2002) [2002] NSWIRComm 118).

20 By not considering or determining the Union's application to vary the Award the Deputy President has fallen into error by constructively failing to exercise jurisdiction.

21 The Deputy President's error is patently clear in his conclusion that "as a matter of sequential logic, it is unnecessary for the Commission to consider or determine the AWU's application". His Honour's sequential approach to determining the applications before him meant that, having considered the Elura Mine's application and determined that the Award should be rescinded, he then refused the Union's application to vary the Award on the basis that the Award no longer existed. That approach is undoubtedly wrong. Principles of procedural fairness demanded that the Commission consider and determine the Union's application. It is an object of the Act, set out in s3(a), "to provide a framework for the conduct of industrial relations that is fair and just". Section 146(2) of the Act requires the Commission, in exercising its functions, to take into account the public interest, and in doing so, to have regard to the objects of the Act. It would be plainly inconsistent with those objects, and contrary to the proper exercise of the Commission's powers, to accept an application, made in the proper form by a party who has standing, and to then refuse that application without it being considered or determined.

22 The Union's application was in two parts - the first part relating to coverage; the second relating to preference of employment. It is conceivable that there was a degree of overlap between the rescission application and the union's application to vary the Award as to coverage. In those circumstances, it may have been feasible for the Deputy President to have addressed those applications concurrently, and with regard to similar factors (although we note that this is not what appears to have been done). However, we are confident that there were significant issues to be considered with respect to the Union's application for preference to employment of persons previously employed at the Mine, which issues were not considered or sufficiently considered in the course of his consideration of the Elura Mine's rescission application. By refusing the Union's application without considering or determining it, those important issues did not see the light of day (although, again, we observe that this same failure also arose with respect to the scope issue).

23 In the circumstances, we consider the Deputy President's error to be jurisdictional in nature, and as such, is a significant error of law warranting both the granting of leave to appeal (having regard to the general principles discussed earlier), as well as the upholding of the appeal.

24 The Union's second contention was that, even where the requirements of s17(3)(c) of the Act are met (that is, an award variation is in the public interest and there is a substantial reason to make the variation), the Commission is nevertheless required to exercise a discretion as to whether or not to rescind an award, and that there was insufficient evidence to support the conclusions reached by Sams DP at first instance. Given that we have granted leave to appeal and upheld the Union's appeal as to its third contention, this issue does not require determination.

Orders 25 We confirm the orders made on 11 September 2003.

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