Apache Northwest Pty Ltd v Western Power Corporation

CORAM: Boland J President; Staff J; Ritchie C

AWARD - Application for new award - Interlocutory proceedings - Summons for Production - Commercial-in-Confidence - Correctional Centres - Legitimate forensic purpose - Relevance - Inspection limited to legal representatives - Confidentiality undertakings required. CATCHWORDS: PRACTICE AND PROCEDURE - Award - Application for new award - Interlocutory proceedings - Summons for Production - Commercial-in-Confidence - Correctional Centres - Legitimate forensic purpose - Relevance - Inspection limited to legal representatives - Confidentiality undertakings required.

LEGISLATION CITED: Industrial Relations Act 1996

Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350 Attorney General v Stuart (1994) 34 NSWLR 667; (1994) 75 A Crim R 8 Coombs v Patrick Stevedores Holdings Pty Ltd [2001] NSWIRComm 39; (2001) 103 IR 417 Dorajay Pty Limited v Aristocrat Leisure Limited [2005] FCA 588 Mobil Oil Australia Ltd v Guina [1996] 2 VR 34; (1995) 33 IPR 82 CASES CITED: National Employers' Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 Re ACI International Ltd (1986) 11 ACLR 240 Sankey v Whitlam & Ors (1978) 142 CLR 1; (1978) 21 ALR 505; (1978) 53 ALJR 11 Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455 The Commissioner for Railways v Small [1938] SR (NSW) 564 WorkCover Authority of New South Wales (Inspector Keelty) v The Crown in the Right of the State of New South Wales (Police Service of New South Wales) [2000] NSWIRComm 234; (2000) 50 NSWLR 333; (2000) 102 IR 252

APPLICANT (RESPONDENT ON THE MOTION): Mr A A Hatcher and Mr M Gibian of counsel Solicitors: W G McNally Jones Staff Ms A G Grayson LEGAL REPRESENTATIVES: SECOND RESPONDENT (APPLICANT ON THE MOTION): Mr P M Kite SC and Mr J V Murphy of counsel Solicitors: Crown Solicitor Mr P Robinson

Crown Employees (Department of Corrective Services - Protection of Conditions of Employment) Award

Application by Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales for a new award

1 The Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales ('PSA') has made an application for a new award to be titled the Crown Employees (Department of Corrective Services - Protection of Conditions of Employment) Award ('the Award'). The respondents named in the application were the Department of Premier and Cabinet Public Sector Workforce Office ('first respondent') and the Department of Corrective Services ('second respondent').

2 The application sought an award in the following terms: CROWN EMPLOYEES (DEPARTMENT OF CORRECTIVE SERVICES

• PROTECTION OF CONDITIONS OF EMPLOYMENT) AWARD

1. Area, Incidence and Classification (a) This award shall apply to the State of New South Wales, the Director of Public Employment, the Department of Corrective Services, and employees of the Government Service of New South Wales employed in the Department of Corrective Services. (b) This award shall take effect on and from 1 January 2009 and shall remain in effect thereafter for a period of three years. 2. Definitions "Conditions Award" shall mean the Crown Employees (Public Service Conditions of Employment) Reviewed Award 2006. "Department" shall mean the Department of Corrective Services. "PSA" shall mean the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales. "Salaries Award" shall mean the Crown Employees (Public Sector - Salaries 2008) Award. "Correctional Officers Award" shall mean the Crown Employees (Correctional Officers, Department Of Corrective Services) Award "Superintendents Award" shall mean the Crown Employees (General Managers, Superintendents, Managers Security and Deputy Superintendents, Department Of Corrective Services) Award 2005 "Assistant Superintendents Award" shall mean the Crown Employees (Senior Assistant Superintendents and Assistant Superintendents, Department Of Corrective Services) Award 2005 "Psychologists Award" shall mean the Crown Employees (Psychologists) Award 3. Contracting Out/Privatisation - Consultation (a) Where it is proposed by the State Government and/or the Department to contract out or privatise the operations or any part thereof of any correctional centre or any other correctional or ancillary function currently performed by employees in the Department, the Department shall immediately engage in discussions with affected employees and the PSA. Such discussions shall cover all relevant matters, including: (i) the reasons for the proposed contracting out/privatisation; (ii) any available alternatives to the proposed contracting out/privatisation; (iii) available measures to mitigate any adverse effects of the proposed contracting out/privatisation, particularly with respect to persons whose positions are displaced as a result; (iii) the availability of reasonable alternative employment within the Department or with the private operator(s) which will conduct the operation or function proposed to be contracted out/privatised. (b) For the purpose of such discussions, the Department shall as soon as practicable supply the affected employees and the PSA with all relevant information about the proposed contracting out/privatisation, including but not limited to: (i) the number and categories of employees likely to be affected; and (ii) the name and address of the relevant private operators(s). 4. Contracting Out/Privatisation - Protection of Conditions of Employment Where the State Government and/or the Department has decided to contract out or privatise the operations or any part thereof of any correctional centre or any other correctional or ancillary function currently performed by employees in the Department, the State Government and the Department shall make it a condition of any contract that it enters into with any private operator(s) in respect of the operations/functions to be contracted out/privatised that: (a) any persons employed by the private operator(s) to perform work with respect to those operations/functions being contracted out/privatised shall be paid wages and conditions not less inferior than those under the awards (including but not limited to the Salaries Award, the Conditions Award, the Psychologists Award, the Assistant Superintendents Award, the Superintendents Award and the Correctional Officers Award), determinations and any other employment instruments that would have applied had such persons been employed directly by the State of New South Wales to perform the same work; and (b) any person displaced in his or her employment as a result of the contracting out/privatisation is to be offered employment with the private operator(s) in an equivalent position at rates and conditions not inferior to those under the awards (including but not limited to the Salaries Award, the Conditions Award, the Psychologists Award, the Assistant Superintendents Award, the Superintendents Award and the Correctional Officers Award), determinations and any other employment instruments currently applicable to the employee. 5. Anti-Discrimination See clause 101 of the Conditions Award. 6. Grievance and Disputes Settling Procedure In the event that any dispute or grievance arises in relation to any matter in this Award, the Department, the PSA and employees shall comply with the procedure in clause 9, Grievance and Dispute Settling Procedure, of the Conditions Award.

3 The grounds, reasons and particulars in support of the application were expressed as follows: 1. The State Government and the Department have announced a decision to privatise the operations of Cessnock and Parklea Correctional Centres, and prisoner transport operations. 2. The State Government and the Department have not ruled out privatising other aspects of the Department's operations in the future. 3. The announced decision of the State Government and the Department threatens the security of employment of many hundreds of PSA members. 4. There is no award (federal or state) applicable to any private sector correctional centre operator which provides wages and conditions of employment comparable to those currently applicable in the NSW public sector under awards of the NSW Industrial Relations Commission. 5. The Department has failed to engage in proper discussions, consultation or negotiations with the PSA or affected employees about the future of any displaced employees or the conditions under which the announced privatisation has occurred. 6. The Department has not guaranteed the continued employment of all affected employees in reasonable and acceptable alternative employment with the Department, or that affected employees will be offered jobs with the private operator(s) on comparable wages and conditions. 7. The actions of the State Government and the Department has eroded the job security of all employees of the Department, and provides an avenue by which the Department can avoid the operation of relevant awards of the NSW Industrial Relations Commission. 8. In other privatisation exercises, the State Government has imposed contractual conditions on private operators with respect to the employment of displaced employees and the payment of comparable wages and conditions, but has not, to the Applicant's knowledge, done so here. 9. Upon such other grounds and reasons as to the Commission seem appropriate.

4 On 7 April 2009, the applicant served on the second respondent a Summons for Production pursuant to s 165 of the Industrial Relations Act 1996 to produce documents relating to the contracting out of the operation of Cessnock and Parklea Correctional Centres and the Court and Escort Security Unit of the Department of Corrective Services. Relevantly, the Summons sought the production of the following documents: Paragraph 2 - Copies and/or originals of any responses received to the expressions of interest issued by the Department of Commerce with respect to the operation and management of Parklea and Cessnock Correctional Centres - DCS on or around 19 December 2008 and any invitation for expressions of interest issued with respect to the court and escort security unit of the Department of Corrective Services. Paragraph 3 - Copies and/or originals of any invitation for tenders issued with respect to the operation and management of Parklea and Cessnock Correctional Centres and any draft invitation for tenders prepared with respect to the operation and management of Parklea and Cessnock Correctional Centres or the court and escort security unit of the Department of Corrective Services. Paragraph 6 - Copies and/or originals of documents containing, recording or referring to the results of the market testing process undertaken with respect to the management of Cessnock or Parklea Correctional Centres or the court and escort security unit of the Department of Corrective Services.

Paragraph 7 - Copies and/or originals of any documents recording or referring to any analysis conducted with respect to the budgetary savings expected to be derived from the privatisation or contracting out of the operation and management of Parklea or Cessnock Correctional Centres or the court and escort security unit.

5 On 28 April 2009, the second respondent filed a notice of motion seeking to have paragraphs 2, 3, 6 and 7 of the Summons struck out. The motion was supported by an affidavit of Gerry Schipp, the second respondent's Deputy Commissioner, Corporate Services. The grounds and reasons cited in the motion were as follows: 1. The production of documents sought in relation to paragraphs 2, 3, 6 and 7 of the Summons reveal commercial in confidence information and information that could prejudice the security of Corrective Centres in New South Wales. 2. (not pressed) 3. The documents sought in relation to paragraphs 2, 3, 6 and 7 of the Summons have no legitimate forensic purpose in relation to the Award sought in the proceedings. 4. The documents sought in relation to paragraphs 2, 3, 6 and 7 of the Summons have no apparent relevance to any issue in the proceedings.

6 The applicant opposed the motion, contending that confidentiality was not a ground per se for setting aside a summons for production and, in any event appropriate arrangements could be made to limit access to the material to legal representatives and identified officials of the applicant organisation. It was also contended that the applicant had a legitimate forensic purpose in seeking production of the challenged documents. It was submitted that it was "on the cards" that the documents would assist the PSA's case in demonstrating that the intention or effect of contracting out operations of the Department was to permit derogation from the conditions of employment established by awards of the Commission. Consideration

7 We note at the outset that subsequent to the Summons being issued, an announcement was made by the Minister for Corrective Services that the government would not be proceeding with the outsourcing of Cessnock Correctional Centre or the Court and Escort Security functions. Documents relating thereto are, therefore, not relevant. 8 The party seeking to set aside a summons for production bears the onus of establishing the grounds to do so: The Commissioner for Railways v Small [1938] SR (NSW) 564 at 574; National Employers' Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 at 381; WorkCover Authority of New South Wales (Inspector Keelty) v The Crown in the Right of the State of New South Wales (Police Service of New South Wales) [2000] NSWIRComm 234; (2000) 50 NSWLR; (2000) 102 IR 252 333 at [30]. 9 The second respondent's resistance to the Summons was based on three main grounds: 1. the information sought was commercial in confidence and its release could prejudice the security of Corrective Centres in New South Wales, 2. the documents sought had no legitimate forensic purpose, and 3. the documents had no apparent relevance.

10 We note that ground 2 of the motion was not pressed. There it was asserted that the production of some of the documents in relation to grounds 6 and 7 of the summons could prejudice the proper function of the government. On 6 May 2009, the first respondent filed a notice of motion objecting to the production of a document (caught by grounds 6 and 7 of the summons) on public interest immunity grounds. This document, according to the affidavit filed in support of the first respondent's notice of motion, was prepared by the New South Wales Treasury. It contained advice in relation to the proposals of the then Minister for Justice for submission to the Cabinet Standing Committee on the Budget and speaking points for the Treasurer's use before the Cabinet Standing Committee on the Budget. Apparently, the advice concerned the issuing of a Request For Tender to known providers of correctional services to outsource the management and operations of the Parklea and Cessnock correctional centres and the Court and Escort Security functions. 11 The PSA, in proceedings before Staff J on 6 May 2009 in respect of these notices of motion, advised that it did not press for the production of this document. In light of this concession, the second respondent did not press ground 2 of its motion.

12 As to confidential documents generally, that they may be confidential will not ordinarily be a sufficient reason to deny inspection by the opposite party: Mobil Oil Australia Ltd v Guina [1996] 2 VR 34; (1995) 33 IPR 82 at 38 per Hayne JA. See also Re ACI International Ltd (1986) 11 ACLR 240 at 243; Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350 at 380-81; Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455 at [51]; Dorajay Pty Limited v Aristocrat Leisure Limited [2005] FCA 588 at [36]. 13 Nevertheless, it appears to us the second respondent has legitimate concerns about the information sought being produced to the applicant. Mr Schipp deposed that the nature of the information dealt with in the tendering process is highly confidential and that a breach in probity could lead to the entire tender process being jeopardised. We accept that evidence. The material sought is clearly of a highly confidential nature and it would be inappropriate to make it generally available to the applicant or any other person not authorised to receive it. We consider, however, the second respondent's concerns may be addressed by limiting, for the time being, access to the material to the applicant's legal representatives with appropriate confidentiality undertakings being given: see the approach in Mobil Oil at 39-40. 14 We would not have adopted this course unless we considered the documents have a legitimate forensic purpose, which brings us to the second of the Department's objections. As the applicant submitted, the question in relation to the exercise of discretion to require production and permit inspection is whether the documents have "apparent relevance" to the issues arising in the proceedings: National Employers' Mutual General Association Ltd v Waind and Hill at 385; WorkCover Authority of New South Wales (Inspector Keelty) v The Crown in the Right of the State of New South Wales (Police Service of New South Wales) at [29]; Coombs v Patrick Stevedores Holdings Pty Ltd [2001] NSWIRComm 39; (2001) 103 IR 417 at [52]. It was stated in Attorney General v Stuart (1994) 34 NSWLR 667; (1994) 75 A Crim R 8 at 681 per Hunt CJ at CL: The concept of legitimate forensic purpose is not confined to claims of public interest immunity. It arises whenever a party seeks access to documents for which he has issued a subpoena; where objection is taken, a party who is unable to show that it is at least "on the cards" that such documents will assist his case is not entitled to have access to such documents simply to see whether they may do so: R v Saleam (at 17-18). He is not entitled to conduct a fishing expedition. The need to show a legitimate forensic purpose arises even if the claim of public interest immunity fails. It is therefore a pre­ requisite before the balance required for that claim can be struck. 15 It was the second respondent's submission that the documents had no legitimate forensic purpose and were not relevant because it had stipulated by way of a concession that there was a "possibility" that a successful tenderer would offer lower wages and less generous conditions of employment to its employees in operating the Parklea Centre than those that currently applied under the awards referred to in the application. On that basis, it was submitted, it was not necessary to produce the documents in order for the applicant to know what a tenderer was proposing in respect of wages and employment conditions. 16 Contrary to that position of the second respondent, we are of the view that the applicant and the Commission are entitled to know whether it is indeed intended that a tenderer, if it is successful, will operate the Parklea Centre on the basis of lower wages and conditions of employment than presently apply. It may be a material consideration, in assessing the applicant's claim, just what is the difference between the current level of benefits provided and what is proposed to apply by a private contractor and, in that respect, the applicant is entitled to know in order that it may fashion its case accordingly. There may be other matters disclosed by the documentation, for example, the nature and history of the private operator's industrial or employment practices that are material considerations in these proceedings. 17 As to relevance, that issue has largely been addressed. However, what we have said does not prevent the second respondent taking an objection, based on relevance, to any particular summoned document that the applicant seeks to tender in the proceedings. 18 It follows from what we have said that the documents referred to in paragraphs 2, 3, 6 and 7 of the Summons for Production are to be produced only to the applicant's legal representatives subject to the giving of appropriate confidentiality undertakings by them. The notice of motion will be dismissed. Orders

19 The Full Bench makes the following orders: (1) Subject to appropriate confidentiality undertakings being provided to the second respondent and filed in the Commission, the documents sought in relation to the Parklea Correctional Centre in paragraphs 2, 3, 6 and 7 of the Summons for Production issued in these proceedings on 7 April 2009 on the application of the PSA, shall be produced for the inspection of the legal representatives only of the applicant organisation. (2) The notice of motion filed by the second respondent in these proceedings on 28 April 2009 is dismissed. ________________________________

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.