Australian Municipal, Administrative, Clerical and Services Union v Greater Dandenong City Council

Federal Court of Australia|1998-06-22|Before: Madgwick J

Australian Municipal, Administrative, Clerical and Services Union v Greater Dandenong City Council [2000] FCA 1231 INDUSTRIAL LAW - Workplace Relations Act 1996 (Cth), ss 298K(1), 298L(1)(h) - Council home care employees outsourced - Council engaged in prohibited conduct - Council called for tenders for home care services pursuant to Victorian competition legislation - Council employees formed in-house bid team -employees declined to agree to reduce entitlements under applicable industrial instruments - in-house bid tendered at significantly higher prices than outside bidder subject to lower award rates - price differential principally based upon different rates under respective awards - Council's decision to accept external bid based upon award entitlements - Council workers dismissed - reverse onus - council required to demonstrate that award entitlements played no part in motivation for dismissal - discussion of necessity to call majority of corporate decision-makers to ascertain corporate mind - prohibition against conduct engaged in because of level of entitlement, not mere fact of entitlement - importance of prohibition to integrity of award system - Act does not prohibit outsourcing per se CONSTITUTIONAL LAW - Re AEU - whether application of Act would infringe State's capacity to function - whether Council emanation of State for purpose of constitutional doctrine - appropriate test to determine whether a corporation is to be treated as the State - Council ultimately accountable to electorate not State - State's immunity as to dismissals on redundancy grounds does not extend to protect prohibited conduct - Council workers not in truth "redundant" - meaning of redundancy - fact of redundancy to be determined by Court - State description thereof not conclusive WORDS & PHRASES - "state", "redundancy" Workplace Relations Act 1996 (Cth), ss 298K(1), 298L(1)(h), 298V Local Government Act 1989 (Vic), ss 6, 208A, 208C(1)(c) Competition Policy Reform Act 1995

Patrick Stevedores v Maritime Union of Australia (1998) 195 CLR 1, applied Kelly v Construction, Forestry, Mining & Energy Union (No3) (1995) 63 IR 119, applied Davids Distribution v National Union of Workers (1999) 91 FCR 463, applied Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34, applied IW v City of Perth (1997) 191 CLR 1, considered Voigtsberger v Council of the Shire of Pine Rivers (No2) (1981) 58 FLR 239, considered Re Steven Phillip Gibbs v Palmerston Town Council [1987] FCA 732, cited Roberts v General Motors-Holden's Employees' Canteen Society (1975) 25 FLR 415, considered Jones v Dunkel (1959) 101 CLR 298, applied Grincelis v House [2000] HCA 42, applied Grayndler v Cunich (1939) 62 CLR 573, applied Mills v Meeking (1990) 169 CLR 214, applied Davis v Amalgamated Television Services (unreported, NSW Industrial Relations Commission, 22 June 1998), applied Waugh v Kippen (1986) 160 CLR 156, applied Plimer v Roberts (1997) 80 FCR 303, applied George Hudson v Australian Timber Workers Union (1923) 32 CLR 413, applied North Western Health Care v Health Services Union (1999) 92 FCR 477, applied Finance Sector Union v PP Consultants (1999) 91 FCR 337, applied Childs v Metropolitan Transit Trust [1981] FCA 229, applied BHP v Australian Workers' Union (2000) 171 ALR 680, considered Re Australian Education Union; ex parte State of Victoria (1995) 184 CLR 188, applied Deputy Commissioner of Taxation v State Bank (NSW) (1992) 174 CLR 219, applied Sydney Municipal Council v Commonwealth (1904) 1 CLR 208, applied State Bank (NSW) v Commonwealth Bank (1986) 161 CLR 639, applied Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282, considered Bradken Consolidated v Broken Hill Proprietary (1979) 145 CLR 107, considered Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192, distinguished Superannuation Investment Fund Trust v Commissioner of Stamps (SA) (1979) 145 CLR 330, considered Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145, applied Federated Municipal Employees' Union v Melbourne Corporation (1919) 26 CLR 508, distinguished Public Transport Corporation v Strain (1998) 84 IR 228, distinguished Victoria v Commonwealth (1996) 187 CLR 416, applied Short v Hercus (1993) 40 FCR 511, applied Quality Bakers v Goulding (1995) 60 IR 327, applied Hawkins v Commonwealth Bank of Australia (1996) 70 IR 213, applied Melbourne Corporation v Commonwealth (1947) 74 CLR 31, cited Victoria v Riordan (unreported, Industrial Relations Court of Australia, 26 July 1996), applied Konrad v Victoria Police (1999) 91 FCR 95, applied AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION & ANOR v GREATER DANDENONG CITY COUNCIL V248 of 1999 MADGWICK J 4 SEPTEMBER 2000 SYDNEY

BETWEEN: AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION

THE COURT ORDERS THAT: 1. The parties are to confer as soon as possible as to the remedies appropriate to each employee, on whose behalf the proceedings have been brought, in the light of these reasons for decision; 2. The parties are to report the progress of their negotiations to the Registrar of the Victorian Registry within 21 days; 3. If the parties have then not reached agreement on remedies, each party has leave, on two days' notice, to approach the Victorian duty Judge to apply to have the matter referred to a mediator of the parties' agreed nomination or as determined by that Judge; 4. The parties may at any time ask the Victorian duty Judge to make orders giving effect to any settlement or partial settlement as to the appropriate remedy upon which they agree; 5. Failing settlement of the entire matter, by 20 October 2000 the parties should let my Associate have their joint or separate written proposals as to the desirable further course of the matter; 6. The matter will, unless settled, be listed before me in Sydney (by video-conference, if all parties agree to it) for further directions at 9:30 am on 30 October 2000; 7. Until 20 October 2000, the parties have liberty to apply generally to the Victorian duty Judge on two days' notice.

BETWEEN: AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION

REASONS FOR JUDGMENT HIS HONOUR: Introduction 1 This case raises questions about the reach of the federal statutory prohibition on an employer harming an employee because the employee is entitled to the benefit of an award. It also raises questions about the scope of the implied constitutional limitation upon interference with the capacity of States to functions as governments and whether a Victorian local government council should be treated as the State for the purposes of that doctrine. 2 The first applicant, the Australian Municipal, Administrative, Clerical and Services Union ("the Union"), is a registered organisation of employees whose members included all but a few of the persons employed by the respondent, the Greater Dandenong City Council ("the Council"), to provide home and community care services ("HACC", as the prevailing acronym had it). Ms Phillips, the second applicant, was one of these employees. She sues as a representative party, under Part IVA of the Federal Court Act 1976 (Cth), on behalf of the group constituted by such employees as at 17 May 1999. There were then approximately 75 HACC employees, at least, five of which have opted out of the proceedings. The Council is a local government council established under the laws of Victoria. 3 The applicants seek relief pursuant to ss 298T and 298U of the Workplace Relations Act 1996 (Cth) ("the Act") for the alleged breach by the respondent of one or more of paragraphs (a), (b) and (c) of s 298K(1). Section 298K provides: "(1) An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following: (a) dismiss an employee; (b) injure an employee in his or her employment; (c) alter the position of an employee to the employee's prejudice". 4 The prohibited reason relied on is that provided by s 298L(1)(h): "(1) Conduct referred to in subsection 298K(1) or (2) is for a 'prohibited reason' if it is carried out because the employee…: … (h) is entitled to the benefit of an industrial instrument or an order of an industrial body". 5 Relief for such a breach is provided for by s 298U: "In respect of conduct in contravention of this Part, the Court may, if the Court considers it appropriate in all the circumstances of the case, make one or more of the following orders: (a) an order imposing on a person … whose conduct contravened … the provision in question a penalty of not more than" (i) in the case of a body corporate - $10,000; or … (b) an order requiring the person … to reinstate an employee … (c) an order requiring the person … to pay to an employee … compensation of such amount as the Court thinks appropriate". 6 The burden of applicants in such cases is eased by s 298V which provides: "If: (a) in an application under this Division relating to a person's or an industrial association's conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and (b) for the person or industrial association to carry out the conduct for that reason or with that intent would constitute a contravention of this Part; it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person or industrial association proves otherwise." 7 The "industrial instruments" relevant to this application are the Victorian Local Authorities Interim Award 1991 ("the Award") and the Greater Dandenong City Council Enterprise Bargaining Agreement 1998 ("the Agreement"). These were respectively an award and a certified agreement within the meaning of "industrial instrument", as defined by s 298B, and s 298F(2) and (4) of the Act. 8 The principal thrust of the applicants' case was that the Council accepted a tender from a company, Glad Pty Ltd (trading as Silver Circle) ("Silver Circle"), to perform the HACC work at a lower price than the Council could perform the work (as measured by what might be called an "in-house bid"). This, the case ran, was because the Council would need to observe the terms and conditions of the Award and the Agreement whereas the Council by its agents believed that Silver Circle would not be so bound, and could remunerate its intended employees by reference to the considerably less favourable terms of another award, the Home and Community Care Award 1995 ("the Silver Circle Award"), to which Silver Circle was a party. The necessary and intended consequence of the acceptance of that tender would be and, as events transpired, was the termination of the employment of the HACC staff. This was claimed to amount to a breach of s 298K(1)(a) and also of paragraphs (b) and (c). 9 It is common knowledge that local government employment in Australia has long been unionised. The respondent and its predecessors have long been subject to federal awards and the employment in question was subject to such award regulation for a number of years without relevant incident. The Council held no general philosophy adverse to unionism or to award coverage for the employees in question. Indeed, the Chief Executive Officer of the Council, Mr Heine, had a personal view that, despite the prevailing emphasis on efficiency and competitiveness, as a general rule, improvements should not be demanded of employees by way of undermining their terms and conditions of employment. However, as will appear, some new factors came to bear upon this apparently unlikely setting for a case involving an alleged breach of the sections concerned. The institutional framework 10 The respondent is constituted as a City Council under the Local Government Act 1989 (Vic) ("the LGA"). Section 6 of the LGA provides: "6. Purposes of a Council (1) The purposes of a Council are (a) to provide for the peace, order and good government of its municipal district; and (b) to facilitate and encourage appropriate development of its municipal district in the best interests of the community; and (c) to provide equitable and appropriate services and facilities for the community and to ensure that those services and facilities are managed efficiently and effectively; and (d) to manage, improve and develop the resources of its district efficiently and effectively. (2) It is the intention of Parliament that the provisions of this Act be interpreted and every function, power, authority, discretion and duty conferred or imposed by or under this or any other Act on a Council be performed or exercised so as to give effect to the purposes and objectives of Councils." 11 By s 8 and Schedule 1 of the LGA it is provided that a "Council has functions" which include "health, education, welfare and other community services including ... (b) Aged, disabled and disadvantaged persons services." 12 The HACC service involves the provision of home and community care for the disabled, the frail and the aged. The work includes the provision of general home care and assistance, the provision of more specialised in-home care, the assessment of the needs of persons for whom assistance is sought, and the administration of the service generally.

The rise of competition policy - far reaching but also limited 13 In 1992 the Commonwealth, States and Territories agreed to examine national competition policy. This agreement resulted in the commissioning of a report by an Independent Committee of Inquiry. The report, entitled "National Competition Policy", but more widely known as the "Hilmer Report", after its author's name, was delivered in August 1993. The Hilmer Report proposed the establishment of a regime of competition law that applied universally across all industries and uniformly between Australia's various jurisdictions. It recommended, amongst other things, a range of amendments to the Trade Practices Act 1974 (Cth) ("TPA") to establish the Australian Competition and Consumer Commission and the National Competition Council. 14 In April 1995 the Council of Australian Governments agreed to implement these recommendations. Co-operative legislation (acts of the various jurisdictions each titled the Competition Policy Reform Act 1995) was enacted by the Commonwealth, State and Territory parliaments. The Competition Principles Agreement, a post-Hilmer, inter-governmental agreement recognised by the various forms of the Competition Policy Reform Act 1995, includes clause 7, entitled "Application of the Principles to Local Government". It states that: "(1) The principles set out in this Agreement will apply to local government, even though local governments are not Parties to this Agreement. Each State and Territory Party is responsible for applying those principles to local government. (2) … each State and Territory Party will publish a statement by June 1996: (a) which is prepared in consultation with local government; and (b) which specifies the application of the principles to particular local government activities and functions." 15 The general, presently relevant, effects of that Agreement and the cognate inter-governmental "Competition Code Agreement" were that a revised form of Part IV of the TPA would apply throughout Australia, in reliance on the several jurisdictions' legislative competence; that "Government businesses should not enjoy any net competitive advantage simply as a result of their public sector ownership", and that the Governmental parties would take far-reaching steps to implement both the policies implicit in Part IV and the principle just quoted. 16 The Hilmer Report recognised that arrangements relating to the remuneration and conditions of employees were excluded from the competition regime established by the TPA (see s 51(2)) and, although it had been urged upon the Hilmer Committee of Inquiry that the provisions creating this exception ought to be repealed, the Committee proposed no such change. The Hilmer Committee noted that labour relations received "special treatment" under competition laws in the United States, Canada, the United Kingdom and New Zealand. Accordingly, neither the revised s 52 of the TPA nor the national Competition Principles Agreement required the application of the statutory provisions nor the underlying policy to arrangements regarding the remuneration of employees.

Competition policy for Victorian local government 17 The Victorian legislation, though no doubt prompted by similar policy assumptions to those underpinning the Hilmer Report and subsequent inter-governmental agreements, goes beyond what that Report recommended or what the two inter-governmental agreements required. 18 In June 1996 the Victorian Government, in accordance with the Competition Principles Agreement, released a document entitled "National Competition and Local Government". In that document it was asserted: "Through the implementation of compulsory competitive tendering [CCT], Victoria is already setting the pace for the rest of Australia in the introduction of competition into the supply of a wide range of local government services." 19 In the years of this general policy environment, the Local Government (Competitive Tendering) Act 1994 (Vic) was passed. It amended the LGA and introduced a regime of "compulsory competitive tendering" ("CCT") for local government throughout Victoria: see Div 3 of Part 9 of the LGA, "Specific Functions, Powers and Restrictions". The system was introduced incrementally. In 1994-95 councils were required to be party to "competitive arrangements" accounting for 20% of their expenditure. In 1995-96 the requisite amount was 30%, and by 1996-97 it was 50%. 20 Section 208A of the LGA now provides that each Council must ensure that in any financial year it is a party to "competitive arrangements" having a total value of 50% or more of its total operating and capital expenditure. Sections 208B, 208C and 208D explain that "competitive arrangements" are, relevant to present purposes, either contracts for the supply of goods or services to the Council or "in-house agreements" by members of a Council's staff for such supply. In either case the arrangement is to be entered into by the Council after either a "competitive process" conducted by the Council or approval by the Minister under s 208F for stated reasons. A "competitive process" requires public written tenders and the award of the contract to one of the tenderers. It is clear that the successful tenderer need not have made the lowest tender: s 208C(1)(c). 21 The Award and the Agreement applied to all the relevant employees. As the Agreement was a certified agreement under the Workplace Relations Act it, as well as the Award, is fully within the statutory concept of an "industrial instrument" referred to in s 298L(1)(h) of the Act (see the s 298B(1) definitions of "industrial instrument" and "industrial law" and Part VIB). 22 It was common ground that the Award and Agreement provided wages and conditions for employees entitled to the benefits of those instruments considerably more favourable than the wages and conditions prescribed by the Silver Circle Award, and that it would be considerably more costly for an employer to comply with the former instruments than with the latter. 23 In 1997 the Council conducted a CCT process in relation to its horticultural, parks and sporting services ("the parks bid"). Despite the fact that the in-house bid was more expensive, its own workers succeeded in winning the "contract". As a result of this decision to accept the in-house bid, legal proceedings were instigated against the Council by those who had prepared the external bid, though the matter did not proceed to curial determination. These circumstances were much relied upon by the Council as to the inferences to be drawn as to its motivation. The tendering process with respect to the HACC workers 24 As far back as March 1996 Council management had advised the HACC employees of its decision to seek tenders for the provision of HACC services. Management encouraged the HACC employees to form an in-house bid team and to prepare a bid in accordance with the tender specifications. An in-house bid team was convened for this purpose. During the preparation of the in-house bid, Ms Phillips was provided with a document prepared by Council management recommending that the in-house team should enter into a Local Area Work Agreement ("LAWA") in order to reduce the labour costs payable under the in-house bid. A LAWA is a mechanism, outlined within clause 9 of the Agreement, allowing for divergence from the terms of the Agreement, with respect to discrete groupings of Council staff, after, amongst other things, approval of the union and a majority of the staff affected. 25 In particular, the view was taken by various members of Council management that, unless the penalty rates and amounts paid for time travelled between clients, both payable under the Agreement, were reduced, the in-house bid would be unable to compete with external bids. It is clear, however, that Mr Heine was himself opposed to the reduction of employment conditions. Members of the bid team did not endorse a reduction in the conditions contained in the Agreement, and therefore the in-house bid was prepared on the basis of the existing terms and conditions. 26 On 23 December 1998 tenders closed. Two bids were received: the in-house bid and the Silver Circle bid. The bids were prepared on the basis of providing a fixed number of hours of HACC service over a three year period. The in-house bid tendered at a price of $7,770,665 and Silver Circle tendered at $6,610,429 (penalty rates were not included in these bids). Council management appointed a panel, the Evaluating Committee, to prepare a report evaluating the two tenders in accordance with various weighted criteria: financial stability (pass/fail); price (45%); capability to develop and deliver specified outcomes (25%), and; management capability qualifications (30%). 27 The final version of the report summarised the "overall position" in chart form, comparing the strengths of the Silver Circle bid relative to the in-house bid: price - 1.22: 1.03; capability - 1.03: 1.00; management - 1.20: 1.05; total - 3.45: 3.08. The report stated that: "the difference contributing most to Silver Circle's overall rating is price." In drawing its conclusions about price, the panel estimated the cost of penalty rates over the three year period, based upon the respective wage regimes contained in each bid, and took into account the competition and redundancy payments. The report stated that the in-house bid "included a wider range of penalty rates that would be payable by Council. These penalties are applied more frequently at higher rates, all resulting in a significantly higher cost." The report recommended that Council accept the Silver Circle offer. Council's decision 28 On 22 February 1999 Council met to consider, amongst other things, the Evaluation Committee report. Prior to the meeting there was a briefing, attended by all councillors, to discuss the Evaluation Committee report. Councillors Wilson and Melham gave oral evidence that, at the briefing, a matter of concern had been the major difference in the net cost between the bids because of the relative penalty rates contained in each. At the meeting the recommendation of the Evaluating Committee was moved by Councillor Kelly and seconded by Councillor Harris. The following comments were recorded on transcript: "Councillor Kelly: I find it strange that we have got opposition, because … this report is quite extensive … everything within this contract seems to me certainly to have been gone over many times, not only by Councillors but certainly by officers … I just need to go through a couple of things that have certainly caught my eye and I suppose the one of most interest is certainly that figure on page 9 where … after taking the penalty rates we have a difference of something like $1.56 million, which is of an advantage towards that Silver Circle company, and I suppose that certainly as we read through this report could be the major criteria I suppose for the selection group choosing Silver Circle … [W]hen we look at … page 8 and we look at the penalty rates that are to be charged, I think … there is a fair difference there through from Silver Circle's using 50% applied rate … so I think when we look at the Greater Dandenong Bid Team's some of the criteria there of 150% on public holidays seems to be just a little bit unrealistic for us to ask ratepayers to take on board… Councillor Reid: The reason … coming up tonight primarily is cost. $1.56 million in savings… Councillor Melham: Silver Circle have shown that in terms of overtime that … public holiday pay [is] different … that's $37,000 against $440,000 for the inhouse bid. Why is that? ... Could the inhouse bid provide the staff or pay the staff the same rating that Silver Circle would pay on public holidays? Group Manager: Through our current employment … arrangements with our own staff, that would be award conditions they currently enjoy; Silver Circle have a special award, which is a federal award, which restricts … their overtime or penalty rates. Our staff and the figure that has been put in around those penalties, which as I said are part of our award and I don't believe, unless there was a major change, which we had looked at, that that could have happened. Councillor Melham: Is [it the case] that … you look at it from the business point of view and provide the best value for money? Group Manager: Yes that is quite correct… Mr Heine (CEO): I believe the situation is that if Silver Circle were successful this evening … they would continue with all existing home care staff for the first three months of the contract, they would be made redundant by the Council when the contract was engaged, so our staff ceased their employment with Council received redundancy payments… Mr Heine (CEO): So the way in which the process will work is that irrespective of whether our staff are re-employed by Silver Circle, they will be made redundant. That's assuming that Council votes for Silver Circle to get the business… Mr Heine (CEO): We are taking the position that there is a definite cut-off of employment, cessation of employment, so the redundancy package is paid." 29 By a vote of seven to three, the Council accepted the recommendation of the report to accept the Silver Circle bid, subject to the completion of further steps. Councillor Melham gave evidence that it was his understanding that the respective penalty rates had formed at least part of the basis for the difference in the tender bids. 30 The comments of Mr Heine, according to the transcript extracts set out above, indicate that Council's decision was premised upon the redundancy of the HACC workers. On 5 March 1999 Mr Heine wrote to Mr Cochrane, the Branch Secretary of the Union, stating that: "It is regrettable the Dandenong Community Team did not win this tender… In my view, the single largest impediment to the success of the Dandenong community care team being successful in winning this tender was the lack of an agreed LAWA." 31 On 23 February 1999 a staff meeting was held at which the HACC staff were advised that they would become redundant as of 21 May 1999. On 30 April 1999 the Council sent letters to the HACC staff advising them that their employment was to be terminated, for reasons of redundancy, with effect on 23 May 1999. 32 Also on 23 February a meeting was held by Silver Circle at which all the HACC workers were invited to apply for employment with Silver Circle. Such employment was to be offered, it was explained, on a three month probationary basis, and was to be governed by the Silver Circle Award. It had been known to agents of the Council that, if Silver Circle succeeded, such an offer would be made. Some of the HACC workers were offered and accepted employment with Silver Circle. As a result, these workers were then paid significantly less for doing virtually identical work. Ms Philips gave evidence that she was providing the same services and even had the same clients. 33 Parenthetically, it should be noted that, during the course of the hearing of this matter, related proceedings were also initiated by the applicants against Silver Circle regarding the application of the transmission of business principles in s 149 of the Act, to the apparent transfer of the Council's HACC "business". However, these proceedings were settled between the parties. Whether the HACC workers were terminated because of their Agreement entitlements? 34 It is not in dispute that the HACC workers were dismissed on 23 May 1999. The burden of proof 35 Section 298V does two things. Firstly, it operates to create a rebuttable presumption that the conduct specified in s 298K(1) was engaged in for a prohibited reason. Secondly, "it also operates to place the onus on those who contend otherwise to show that it was not": Patrick Stevedores v Maritime Union of Australia (1998) 195 CLR 1 at 60, per Gaudron J. As Moore J put it in Kelly v Construction, Forestry, Mining & Energy Union (No3) (1995) 63 IR 119, at 130, a respondent is required to "demonstrate that the reason alleged played no part in motivating the proscribed conduct". 36 Accordingly, it is prima facie to be presumed that the employees concerned were dismissed (or otherwise subjected to s 298K conduct) for the reason that they are entitled to the benefits of the relevant industrial instruments, or at least that such was one of the reasons for their dismissal. It was therefore incumbent upon the respondent to demonstrate the contrary. 37 It was submitted by the respondent that before s 298V comes into operation, an applicant needs first to prove the existence of the facts constituting the cause of action under s 298L; the applicant needs to prove that the alleged reason was in fact operative. In my opinion, this misunderstands s 298V. That section "enables the allegations [by an applicant of a prohibited reason or purpose] to stand as sufficient proof of the fact unless the employer proves otherwise" (emphasis added): see Davids Distribution v NUW (1999) 91 FCR 463 at 499 - 502, per Wilcox and Cooper JJ, applying the decision in R v Hush; Ex parte Davanny (1932) 48 CLR 487 at 507. With respect, I agree with the decision in Davids, which in any case binds me. Nothing in Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 at 83 - 86, properly understood, is to the contrary. In Geraldton, at 69 and 83 - 84, RD Nicholson J was concerned simply to demonstrate that it cannot necessarily be inferred from knowledge that certain consequences will follow some particular conduct, that the conduct was motivated by those consequences. As a matter of logic that must, with respect, be right and RD Nicholson J followed high authority. However, such knowledge will, of course, often not be irrelevant in determining whether such an inference would ultimately be drawn; in many cases it will be a pre-requisite to the drawing of the inference. 38 The respondent put its case variously. It argued that as a result of Council's acceptance of the Silver Circle tender its agents had selected the employees for dismissal on the grounds of their redundancy. It was said by Mr Trestrail, the Council's human resources manager, that: "at no time was the fact that the employees are entitled to the benefit of the [Agreement] a motivating factor in undertaking the process of calling for Competitive tendering provisions". 39 However, it does not actually matter of itself whether or not tenders were called for reasons that included the reason that the HACC employees were covered by the Agreement; the reason for the terminations is decisive. 40 In this regard it was said that Council was at all times, in and after calling for tenders, merely obeying the State laws regarding competitive tendering. Subject to what appears below, regarding the decision in IW v City of Perth (1997) 191 CLR 1, it seems appropriate to me to take the entire history of the matter into account in assessing this claim. 41 It was submitted by counsel for the respondent, Mr Lacy, that, whereas the Council decided to accept the Silver Circle bid, it was Mr Heine, acting pursuant to s 94A of the LGA, who decided to terminate the HACC workers employment. Despite the fact that a few vacancies elsewhere in the Council's operations were available to some HACC staff after the Council's decision, it is clear that for all practical, present purposes, the employees' dismissal was made unavoidable by the Council when it accepted the Silver Circle bid. In terminating the employment of most and making attempts to redeploy some HACC employees, including paying them their redundancy entitlements, Mr Heine was in reality simply implementing the Council's earlier decision. Although the final decision was technically his (s 94A of the LGA provides that the CEO is responsible for dismissing Council staff) the Council was the employer and Mr Heine was acting in accordance with the Council's wishes, as indicated by the councillors' decision; Mr Heine was not acting on his own behalf but on behalf of the Council. Reasons for corporate decision-making 42 The applicants submitted that it is impossible for the Court to determine that the Council's decision of 22 February 1999 was not infected by a proscribed reason without receiving direct evidence from the Councillors who voted in favour of the recommendation. Therefore, it was argued, because the respondent had failed to lead evidence from a majority of the Councillors to establish that they were not actuated by the alleged reason, the s 298V presumption had not been rebutted. Counsel for the applicant, Mr Bromberg, relied upon the decision in the Perth Case. 43 In the Perth Case, the Council voted 13:12 to reject planning approval for a drop-in centre for people affected by HIV. Five of the 13 majority councillors were found to have been actuated by discriminatory considerations contrary to a Western Australian anti-discrimination statute. The proceedings failed in the High Court on presently irrelevant grounds. However, Toohey and Kirby JJ, the minority Justices, as well as Gummow J, each expressed the considered opinion that a decision of the Council would be tainted by the voting of individual councillors on discriminatory grounds. Toohey and Kirby JJ applied a "but for" test: the question was whether the decision would not have been discriminatory but for some councillors taking into account the unlawful reason. The logical consequence was that it should have been proven that, after discounting the discriminatory votes, the necessary majority would still exceed the minority. Gummow J, at 51, took an even more stringent approach: "What of the case where the 'person' whose activity falls for scrutiny upon a complaint of contravention of [the anti-discrimination statute] is a public body whose decisions are entrusted by its constituent law or authority to a collegiate group acting by a majority? Here the decision-making process will be tainted for the purposes of the Act by reason of discrimination, in similar manner as a decision of that body would be tainted by the presence of bias, in accordance with the principles of administrative law. Under those principles it is no answer that only a minority of those decision-makers comprising the majority of the whole body was biased."

This approach would appear to attribute a reason to a collective body even if only one of its members, who is among a relevant majority, is motivated by that reason and regardless of the fact that the majority might have been obtained without the infected vote. 44 Earlier, in this Court, in Voitsberger v Council of the Shire of Pine Rivers (No 2) (1982) 58 FLR 239, at 255 - 258 Evatt J said: "In order to … discharge [a similar reverse onus] it was necessary in my view that the defendant call at least a majority of the eight councillors present at that meeting … and for the court to have accepted the evidence of such a majority of councillors that they were not so actuated… In my view it was relevant and essential that the court should have been able to 'analyse the motives and parts played by (at least a majority of) the individual actors', namely the said eight councillors. But six of those witnesses were not called as witnesses." Reliance was also placed on the decision of Gibbs v Palmerston Town Council (1987) (unreported, Federal Court of Australia, 21 December 1987), at paragraphs 115 - 116 and 126. 45 Most recently, in Geraldton Nicholson J said at 82 - 83: "Questions arising at a meeting of the GPA [the Port Authority] are decided by a majority of the votes of the members present and voting… The relevant issue is what constituted the reasons of the GPA in making the relevant decisions. The issue of determining the reasons for decision of a multiple member corporate body arose in IW v City of Perth (1997) 191 CLR 1, on appeal from the Full Court of the Supreme Court of Western Australia… In the High Court the majority decided the case on a different ground and did not deal with this issue. Toohey and Kirby JJ addressed the issue. Their Honours found that if the decision would have been different but for some Councillors taking into account the unlawful reason, then the decision was made for reasons that included the unlawful reason… I consider that I should follow the approach favoured by two justices of the High Court." 46 I am bound to follow the decisions of Evatt J in Voitsberger and Nicholson J in Geraldton because I do not believe them to be clearly wrong. It could hardly be otherwise when three High Court justices have in substance come to the same view.

An alternative approach 47 Nevertheless, it is not beyond all bounds of possibility that this case might wind its way to the High Court and that the point might fall squarely for decision. It may therefore be useful if I outlined the approach that I would take if the matter were free from authority and, in due course, the conclusion I would reach based on such an approach. 48 In my view the process of placing great emphasis on the operative reasons of each member of a majority of the decision-makers in a multi-member corporate body, in order to ascertain the operative reasons to be attributed to the corporation, is somewhat artificial. It is a process that is not necessarily benign to those who would challenge a corporation. If some decision-makers are for adequate reason unavailable at trial, the available evidence may too readily support the innocence of the corporation. However, in a reverse-onus litigious framework, as here, real injustice to the corporation may result. The process will tend to lengthen litigation, often frustrating the need for prompt resolution of the litigation. In many trade unions, for example, the relevant decision-making body may be comprised of dozens of people. 49 More fundamentally, however, the approach tends to introduce a narrow perspective and unwarranted rigidity into fact-finding, when a broad view is generally to be preferred. Some of the difficulties that accompany the task of analysing a collective decision were adverted to in Roberts v General Motors-Holden's Employees' Canteen Society (1975) 25 FLR 415 (not fully reported there; the following passage was quoted in Voitsberger at 256) by Smithers, Woodward and Evatt JJ: "It is apparent that, when a decision is made by a committee different considerations may have operated on the minds of the various members of the committee, and not all the considerations operating on the mind of every member would necessarily be know to the others. In addition it could well be that, in the decision-making process, the influence of one or more members may, for various reasons, have been greater than that of others. The effective decision may even have been made by a person who was not a member of the committee. In any particular case, a recommendation of one man may have been rubber-stamped by others without their giving the matter independent consideration. In another case a person actuated by improper motives may have overborne the minds of others who were not so motivated. Or a person improperly motivated may have presented a dishonest case to others." 50 Thus, in reality, decision-makers may follow a faction-leader, or other dominant member of the decision-making body, but be unwilling to admit it. They may unreliably tell others, who can report the conversation to a court, as evidence of a relevant state of mind (see s 72 of the Evidence Act 1995 (Cth)), what their supposed motivations were. 51 At least where there is other material that could bear on a commonsense, overall assessment and evaluation of the motivation to be attributed to the corporation, it seems unduly laboured to emphasise, as a matter of necessity, what the decision-makers (or their interlocutors) may say regarding their subjective motivation. What persons say about their own motivation, or others' claimed motivation, is, indeed, often best received with a grain of salt. What people do is often a better guide to an assessment of motivation than what they say. A myriad of circumstances is apt to attend collective decision-making. Why should any rigid rule, tending to distract a judge from a broad view, be imposed? An evaluation of all of the direct and surrounding circumstances would appear to me to be a better and fairer approach. Application of the rule in Perth 52 Only one councillor, Cr Melham, who comprised the majority was called. Apart from the authorities mentioned, I would, subject to application of the rule in Jones v Dunkel (1959) 101 CLR 298, prefer not to decide this case on the basis that a considerable number of councillors was not called. The voting in the Council on the relevant question was seven for and three against. It seems to me that I am bound to say that, since at least five councillors were not called to deny that a prohibited reason was not among their reasons for voting as they did, the respondent must fail; "but for" five of the majority voting as they did, without unlawful motivation, the minority would have carried the day. However, for the reasons given above and because, in fairness to both sides, my decision does not only rest on that mechanistic consideration, it seems right that I should express my views more fully. Council's motivation in light of all the circumstances 53 Having regard to the legislative imperatives imposed by the CCT regime, and in particular s 208A of the LGA, and to the earlier litigation that resulted from the parks bid, it was said that Council's acceptance of the Silver Circle bid was based solely on the fact that Silver Circle appeared, on the face of the Evaluation Committee report, to offer a more economic service. To establish this, the respondent relied upon the evidence of Mr Heine, Councillor Melham, and Mr Trestrail, the Council's human resources manager. 54 Further, in the judgment of liability in these matters, it seems to me that one should not pile Ossa on the Peleon of the reverse onus (cf Kirby J's dissenting approach in Grincelis v House [2000] HCA 42. Nor should one weigh the matter "on golden scales", but apply a broad, commonsense approach. 55 There is no doubt that the price differential between the bids was a reason for the Council's acceptance of the Silver Circle bid, although price alone does not, of course, constitute a prohibited reason. However, a strong inference does arise that the dismissals occurred, in part, because of the employees' Award and Agreement entitlements. The suggestion that the competitive tendering imperatives and Silver Circle's price constituted the only real and operative reason for the Council's decision is unpersuasive. 56 It is clear from s 208C(1)(c) of the LGA that the Council was not obliged to accept the lowest priced bid, and even had it been, the Act, as federal legislation, would have prevailed, pursuant to s 109 of the Constitution, over the requirements of the LGA. More importantly, no evidence was led, despite the Council's experience with the parks bid, to suggest that any decision-maker believed that he or she was so obliged. 57 While the relative price of the bids was of great significance to the Council's decision, and price of itself is not sufficient to constitute a prohibited reason, in the circumstances of this bid, the only significant factor going to establish that price differential was the HACC workers' entitlements under the Award and Agreement. Further, it is likely that it was well-known to all councillors that the discrepancy between the Council's and Silver Circle's industrial instruments accounted for the great part of the price disparity. Councillors are political figures, elected and usually relying upon support groups that keenly follow matters of local politics. In reality, they would have been unlikely, in my opinion, not to know the main reasons why the CCT process might constitute a real threat to the continuation of the Council's employment of a significant part of its workforce.

58 Further still, representatives of the Council's middle management had, albeit at least partially in the HACC workers' own interests, as those representatives conceived those interests, tried to induce them to forego some of the benefits that the Award and the Agreement provided for them. It is, in my opinion, inconceivable that the middle management view had not permeated to the Council's decision-makers (of both the formal and perhaps informal varieties). 59 The majority Councillors are very likely to have known and to have shared that view. They are also very likely to have shared a further view that was abroad, that the HACC workers were unreasonable in declining to agree to a voluntary diminution of their Award and Agreement entitlements and that they had only themselves to blame for being unable to undercut or match the Silver Circle bid. 60 This conclusion is to be drawn despite the position of Mr Heine, the General Manager, who as I have noted did not share the enthusiasm prevailing in some quarters for reducing lowly-paid employees' industrial entitlements. Mr Heine was in a curious position: his obligations to external tenderers, such as Silver Circle, meant that he had, in jargon fashionable in some legal quarters, to put himself in a Chinese box. He therefore felt unable to, and did not, play the leadership role in advising the in-house bid team that, one infers, he would and may well successfully have otherwise done. 61 As emphasised by counsel for the applicants, Silver Circle's bid did not propose to utilise new technology nor, to any significant degree, to implement novel management techniques or methods. Neither was it suggested that Silver Circle would otherwise perform the work more efficiently than the in-house bid, since both bids were prepared upon the same number of hours worked by the service-providers, namely, the HACC staff or their replacements. The major and decisive factor in the Silver Circle bid's acceptance was its price. The major and decisive factor in the difference in price was that, as everyone conceived it, Silver Circle would remunerate the workers doing HACC work under the Silver Circle Award and not the Council's industrial instruments. 62 Despite this evidence, the respondent chose to call only one of the councillors who voted to accept the Silver Circle bid. Some sensible allowance might be made in the Council's favour as to the weight to be attributed to the Council's failure to call a full five councillors, on account of time considerations. However, that only one was called really cannot, in light of the other available evidence, be overlooked. That no other such witness was called suggests that none could have provided evidence contrary to the powerful inference already apparent from the available evidence that the Council was motivated by the HACC workers' entitlements. That inference may therefore be more confidently drawn: Jones v Dunkel. 63 In any case, Councillor Melham's evidence, in cross-examination, was not helpful to the respondent. Actual entitlements 64 The respondent put further argument, based upon the fact that approximately 20 of the 70 HACC workers were not members of the Union and were not therefore entitled to the terms of the Agreement. It was said that, if entitlement to the Agreement had been a reason for the dismissal, then the Councillors would have drawn a distinction between those union members who were entitled to its benefits and those who were not. The respondent relied for this submission upon Hyde v Chrysler (1977) 30 FLR 318 at 332 and Leontiades v Mansfield (1980) 43 FLR 193 at 196 - 197, (cf contra finding of Nicholson J in Geraldton at 62). However, this argument is unconvincing. The vast majority of HACC staff were members of the Union, the Council paid all of its HACC staff under the Agreement, and it appears that Council was so bound under clause 4 of the Award. In the real world of industrial relations it is unheard of to pay non-union members less than union members in the one workplace, even if an industrial instrument does limit its benefits only to union members. It may have been unlawful to do so, see ss 298K(1)(e) and 298L(1)(b). Conduct was for a prohibited reason 65 For these reasons the respondent has failed in a factual sense to establish that a reason for the dismissal or any other s 298 conduct (as to which, see below) of the HACC workers was not because of their entitlement to the benefits of the Award and Agreement. On the contrary, in my opinion the Council's decision was, in part, so motivated. In my view, an actual, operative and significant reason for the Council's actions was that the substantial majority of the HACC staff were entitled to the benefits of the Award and the Agreement. The meaning and reach of ss 298K and 298L(1)(h) 66 There are arguably two ways of reading s 298L(i)(h). It may mean either: (i) all that is prohibited is s 298K conduct wholly or partly motivated by the very fact that the employee concerned is entitled to something, whatever it may be, under an industrial instrument that could be called a benefit, or;

(ii) conduct is also prohibited if motivated by the level, degree or extent of the entitlement.

The first interpretation fixes upon the mere fact of entitlement, the second on the nature of the entitlement. If the first meaning is correct, then the respondent Council must succeed. It plainly had, by its agents, no intention at all to discourage the HACC workers from having some kind of entitlements under an industrial instrument per se.

67 However, textually, the use of the term "benefit" and the employee's "entitlement" to it, tends against this construction. The express concept is not whether motivation for the s 298K conduct is simply regulation of the parties' entitlements by award or agreement, but whether it is the employee's "entitlement" to "benefit" thereunder. Moreover, if this is the correct meaning of the paragraph, its application is confined to the conduct of employers who ideologically object to the intrusion into their enterprises of any "award or agreement [though such a person would presumably be reluctant to enter an agreement] made under or recognised by" any Commonwealth or State (or Territory) statute: see s 298B(1) "industrial instrument" and "industrial law", whatever the terms of such an instrument, provided it could be said to give some "benefit" to an employee. It is unlikely that, on such a crucial subject, Parliament would have concerned itself with such fringe eccentricities; employers (and employees) are concerned with the nature of entitlements, not the mere formality of their existence. 68 The seeming difficulty about the second available meaning is that the provision may catch some employers who have no ideological aversion to award coverage of their employees, or to trade unionism among them, but who simply wish to cut costs where they find that a significant reason for present costs is the level of entitlements under an industrial instrument. On analysis, this supposed difficulty is only to say that, in some situations, questions of degree, characterisation and judgment will be called for. These potential uncertainties are hardly novel or significant obstacles to any entrepreneur or undertaking. In any case, it is a "problem commonly encountered" in statutory interpretation that "nice questions of degree" may be involved: Superannuation Investment Fund Trust v Commissioner of Stamps (SA) (1979) 145 CLR 330 per Stephen J, at 348 - 350. 69 In all such cases, where the question of the applicability of s 298L(1)(h) might arise, the employer will be able to assert dissatisfaction with the expense of an employee's performance of the work as a genuine reason for action. Mere knowledge that the entitlements under an industrial instrument are the source of such expense will not, of itself, convert that knowledge into another reason for the employer's reduction of staff, "outsourcing", introduction of new technology, or cessation by other means of the direct performance of the work process concerned. In many cases, the circumstances will properly give rise to an inference that it is the expense, per se, that is the sole reason for the employer's action, rather than that award entitlements have played a part. If an employer judges, for example, that he or she simply cannot afford to pay an award increase, and closes the business, there was no requirement by virtue of s 298L(1)(h) that the employer should have risked bankruptcy. In other circumstances, the inference that there is a proscribed reason as well as expense operating as part of the employer's motivation may be readily drawn, even without s 298V; an employer who dismisses an employee paid an award rate and promptly hires another who has indicated a willingness to work at less than award rates is plainly in peril of the section (as well, no doubt of others). Beyond these basic instances, it is unnecessary and undesirable for the Court to attempt to chart, in advance of the actual occurrence of illuminatory factual situations, the outer limits of the section's reach. 70 There is also longstanding authority to support the second interpretation: in Grayndler v Cunich (1939) 62 CLR 573 at 594, Evatt J said of a predecessor to paragraph 298L(1)(h): "It must be remembered that s 9 of the Commonwealth Conciliation and Arbitration Act is one of the key sections of the Act. If an employee can be dismissed or prejudiced because, by joining a union, he becomes entitled to better conditions contained in an award of the Federal court, the whole system, of industrial arbitration would be threatened with destruction." Later at 596 he continued: "In my opinion, the case of Grayndler v Broun was wrongly decided so far as it laid down that an employer is entitled to dismiss an employee entitled to an award merely because his reason for doing so is that he does not wish to be saddled with the heavier burden of the award rates. If this general principle were accepted, a vital provision would be completely excised from the statutory scheme… If an employer, who, ex hypothesi, is a party to the industrial dispute and is bound by the award, could set the award at nought not merely by differentiating between unionists and non-unionists, but by dismissing unionists in his employ so soon as they became entitled to better conditions under the award, one of the great purposes of the industrial-arbitration system would be defeated… Parliament itself has seen fit to intervene and to require that, if a worker is in employment, his being or becoming entitled to award benefits should not cause his dismissal or prejudice in his employment, without the employer being subjected to penalty." In considering this, it is necessary to remember that, when Evatt J wrote this, the benefit of awards had been judicially regarded as only extending to unionists. 71 The second interpretation is clearly to be preferred. A purposive approach to ss 298K and 298L 72 It was further contended by the respondent that even if the broader interpretation of s 298L(1)(h) is adopted, that section could not be read together with s 298K "to prohibit out-sourcing in the circumstances of this case". In other words, there should be read into these provisions, if they should have the second meaning eludicated above, some overriding restriction on their operation. The respondent claimed that this would follow from a purposive reading of the Act, and relied upon s 3(a), according to which "[t]he principal object of [the] Act is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by [inter alia]… (a) encouraging the pursuit of … international competitiveness through higher productivity and a flexible and fair labour market". 73 It was argued that, interpreted purposively, the Act ought not be regarded as proscribing the conduct set out in s 298K(1) in circumstances in which, due to prevailing economic conditions, to refrain from such conduct would be to the organisation's disadvantage; an employer, in such circumstances, is entitled to consider its own interests and decide its own course. Further, as the provisions in question fall under Part XA of the Act, "Freedom of Association", it would be incongruous to find there provisions that have what were said to be extremely broad consequences, as contended for by the applicant. In short it could not have been intended by the Act to prohibit outsourcing. 74 There are several answers to this. The first is that the Act clearly does not prevent outsourcing per se, and the resolution of this case in favour of the applicants carries no such implications. It is the reason for the outsourcing that is important. Outsourcing may be an economically or ideologically attractive option to an employer for reasons that have nothing to do with employees' "present entitlements"; outsourcing may also have something to do with such entitlements, but little enough as to warrant the conclusion that those entitlements are not a real and operative reason for the s 298K conduct. In the circumstances of this case, it would have been open to the Council to conduct its CCT process without regard to the respective award entitlements to be paid. Finally, however, outsourcing may be wholly or in real part motivated by the employer's dissatisfaction with employees' entitlements under an industrial instrument. The Act may well operate so as to render outsourcing illegal in those circumstances. 75 Secondly, a purposive reading must still produce a meaning that can be adequately stated and that is reasonably conformable with the text of the statute, taken as a whole: see, for example Dawson J in Mills v Meeking (1990) 169 CLR 214. Counsel for the respondent was unable to offer a satisfactory alternative formulation to the broader meaning that, as I have attempted to explain, tolerably clearly appears on the face of the legislation, other than the very narrow one set out above. That meaning would, for practical purposes, render s 298L(1)(h) a dead letter. Moreover the provisions in question are undoubtedly remedial in nature, and accordingly a beneficial construction ought to be adopted: see Waugh v Kippen (1986) 160 CLR 156 and Davis v Amalgamated Television Services (unreported, NSW Industrial Relations Commission, 22 June 1998) per Cahill, Hill, Maidment JJ & Redman C, which held that broadly analogous sections were "remedial in nature". 76 Third, the fact that the heading of the Part of the Act in which the subject provisions appear is not entirely apt for their evident content is a consideration of small importance. See Plimer v Roberts [1998] 12 LegRep SLb and Plimer v Roberts (1997) 80 FCR 303 as to the limited weight that has been given to the heading "Consumer Protection" in Part V of the TPA which contains its most litigated provision, s 52. 77 Fourth, I agree that a purposive approach should be adopted, but it does not in my view assist the respondent. The "principal object" of the Act is said by subs (a) - (k) of s 3 to

have no less than 11 intended modes of its achievement. These include, as well as subs 3(a) set out above, the following: "(d) providing the means: … (ii) fair and enforceable minimum wages and conditions of employment; and (e) providing a framework of rights and responsibilities for employers and employees, and their organisations, which supports fair and effective agreement-making and ensures that they abide by awards and agreements applying to them; and … (h) enabling the Commission to prevent and settle industrial disputes as far as possible by conciliation and, where appropriate and within specified limits, by arbitration". 78 Despite much innovation in federal industrial legislation between 1988 and 1996, and particularly by the 1996 amendments, the Act still intends, among other things, to encourage the participants in industrial relations to prevent and settle industrial disputes by the making of awards and agreements. Through this means, the Act aims to provide and preserve industrial peace in the areas of potential or actual industrial disturbance dealt with by the awards and agreements made. An essential element of such a scheme is that awards and agreements are enforceable and effective, so that those who have participated in the scheme are able to enjoy the fruits of their participation and also so that the industrial peace made by settlements is maintained and preserved. A number of provisions of the Act, including ss 149, 170MB and 178, are directed to this end; see George Hudson v Australian Timber Workers Union (1923) 32 CLR 413, 437 - 438, 441 - 422, 452, 453 - 455; North Western Health Care v Health Services Union (1999) 92 FCR 477 and Finance Sector Union v PP Consultants (1999) 91 FCR 337 for discussions of the Act's and its forerunners' policy in this regard. 79 The same policy clearly informs ss 298K and 298L. The legislature has evidently decided that the capacity for employees to enforce observance of an award, and to protect the integrity of awards and agreements and the system that underlies their making, by various provisions, including ss 149, 170MB and 178, is insufficient without more. It was argued by the respondent that ss 298K and 298L could not be regarded as preventing dismissal in the conditions of this case because s 149 would impose the same conditions of employment upon the successor business in any case. I prefer however the explanation offered by the applicant that ss 298K and 298L operate in tandem with s 149 to further augment the role performed by that provision. This is conformable with the view taken by Evatt J in Grayndler v Cunich. 80 In Childs v Metropolitan Transit Trust [1981] FCA 229 Smithers J at 3, said of s 5 of the then Conciliation and Arbitration Act 1904 that: "I think it has to be observed that basically the mischief aimed at by section 5 is a class of action taken by an employer against an employee not because there is anything wrong in taking that action in a proper case, but taking that action where it is actuated by various reasons, or one of various reasons, closely connected with the operation of the Conciliation and Arbitration Act … Recognising that the objectives of the Act [set out in the then section 5], which are to encourage unionism and the observance of awards, the settling of disputes by conciliation and arbitration and through representative bodies of employers and employees, Parliament has been aware of the fact that those objectives would be largely frustrated if employees … were subject to fear that they would be injured in their employment if they did take an active part in … pressing what they thought were the rights and privileges which ought to be associated with their employment." 81 The integrity of the award system, established by the Act, requires the preservation of award conditions unless, by a process of conscious variation, sanctioned by the Act, they are altered: North Western Health Care and PP Consultants. 82 There is, in any case, a number of lawful avenues open to an employer who does not wish to continue to employ employees according to their present entitlements. Among other things, an award variation might be sought pursuant to s 113. Sections 298K and 298L are, in the main, part of a statutory scheme to protect the integrity of the award-making process, of awards and of agreements, and to protect employees against various forms of victimisation if they choose to stand on their existing entitlements. One such form of victimisation is dismissal. 83 To say the least of it, the Act evinces no clear purpose which would support reading down s 298L(1)(h) so as to have the effect contended for by the respondent. Insofar as a consequence of its operation may be to hinder an employer from exposing employees with rights under existing industrial instruments to the full rigour of wage-based competition for work, there is nothing surprising about that. The Act, in that regard, would evince a policy in harmony with that which is now apparent from the TPA and which follows the recommendations of the Hilmer report. It will be recalled that these espoused an evident view that, whilst the implementation of competition reform is an important objective, such reforms ought not impose direct competition between employees as to working conditions. 84 The legislative provisions protecting awards, and employees' entitlements under them, are interrelated and extensive. Their application in some circumstances may at times seem to be draconian. However, they have been developed out of experience. Provisions that may appear somewhat harsh in particular applications are nevertheless vital components of the systems of industrial regulation that Parliament has seen fit to set up and to protect. The scope of s 298K(1)(c) 85 The key case is Patrick Stevedores. Although Patrick dealt with the appropriateness of an interlocutory injunction for an alleged breach of s 298K, the majority proposed a broad interpretation of the concept of altering an employee's position to his or her prejudice, used by the legislature in both ss 170MU(1)(a) and (b), and 298K(1)(c), where the employees were actively harmed. In Patrick,active harm to the employees was involved in the allegation of a conspiracy to alter the position of the employees to their prejudice, under s 298K(1)(c), and to dismiss them under s 298K(1)(a), for a purpose proscribed by s 298L(1)(a). Of s 298K(1)(a), (b) and (c), the authors of the principal judgment (Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ) said at paragraph 4: "Paragraph (a) covers termination of employment; par (b) covers injury of any compensable kind; par (c) is a broad additional category which covers not only legal injury but any adverse affectation of, or deterioration in, the advantages enjoyed by the employee before the conduct in question." At paragraph 3 the principal judgment indicated that this should be regarded as among its authors' "considered views" on the law. This statement must be regarded as authoritative as to the meaning of paragraphs (a), (b) and (c) of s 298K(1). 86 At paragraph 32, discussing the allegations, the principal judgment continued: "The conspiracy alleged - more accurately, the conspiracies alleged - were to engage in two examples of contravening conduct. The first alleged conspiracy was an agreement to reorganise the Group whereby the position of the employees would be altered to their prejudice for reasons which included the reason that the employees were members of the MUA. This would be a conspiracy in contravention of par (c) of s 298K(1). The second alleged conspiracy, which has not yet been brought to completion, was an agreement to take action whereby the employees would be dismissed (by the employer companies) for the reason, or for reasons which included the reason, that the employees were members of the MUA. This would be a conspiracy in contravention of par (a) of s 298K(1)." 87 It is to be noted that the first alleged conspiracy, the corporate restructuring, was supported in the evidence by a failure to deny that "a reason for the restructure was to facilitate the employment of the employees' employment". Thus, that "facilitation" fell within s 298K(1)(c). 88 Here, the added liability, amounting to certainty, that the employees would be dismissed as a result of the councillors' resolution was surely, in the language used in Patrick, an "affectation of or deterioration in the advantages, 'being security of employment, a high probability of maximum benefit from superannuation contribution, etc', enjoyed by the [employees] before the conduct in question". 89 Applying the meaning given to s 298K(1)(b) in Patrick, no breach has been established here. There was no independently compensible injury to the employees, notwithstanding that a reason for what was done to them was within those proscribed by s 298L(1). 90 After the hearing of this matter the decision in BHP v Australian Workers' Union (2000) 171 ALR 680 was handed down. In BHP about 1000 employees had their wages and conditions regulated by a Western Australian award. After the start of negotiations with State registered unions for a new collective agreement, the employer offered each of its award employees an individual workplace agreement and later refused to bargain collectively with the unions. In that case it was held at paragraph 35 that it is implicit from the terms of s 298K that: "the proscription is essentially against an intentional act of the employer directed to an individual employee or prospective employee." The requirement that the conduct be directed against an individual employee was said to arise because s 298K adopts the terms "an employer" and "an employee" which are in the singular. This conclusion is entirely in accord with the reasons I have given.

91 Later at paragraphs 45 - 48 the Court said: "The fourth case to which Gray J referred in this context was Independent Education Union of Australia v Canonical Administrators (1998) 157 ALR 531 which concerned the prohibition in s 170MU(1) of the Act which provides: 'An employer must not: (a) dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee's prejudice; or (b) threaten to dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee's prejudice; wholly or partly because the employee is proposing to engage, is engaging, or has engaged, in protected action.' The question which arose in Canonical Administrators was whether the withholding by employers of teachers' salaries referable to a period of protected industrial action amounted to an injury of the relevant teachers or an alteration of their position to their prejudice in contravention of s 170MU(1). As to that matter, Ryan J said, at 548: 'I entertain considerable doubt whether the exercise of a claimed right to withhold payment of salary or wages amounts to injuring an employee in his or her employment or alteration of the position of an employee to the employee's prejudice within the meaning of s 170MU(1). As I perceive it, the purpose of that sub-section is to ensure that the relationship of employer and employee can resume or continue unaffected after the conclusion of protected industrial action. Accordingly, the employer is prohibited from dismissing or demoting the employee for the proscribed reason. Similarly, the sub-section precludes an employer from discriminating against an employee wholly or partly for the same reason, by, for example the allocation of less congenial shifts or rosters or affording fewer opportunities for overtime than are extended to other employees.' The learned primary Judge explained his reliance on Canonical Administrators by saying, at para 29: 'The reference to affording fewer opportunities for overtime indicates that his Honour took the view that a relative upgrading of benefits to other employees, without any actual downgrading of benefits to the specific employee, could amount to injury to the specific employee in his or her employment or to alteration of that employee's position to his or her prejudice.' However, in our view, the observations in Canonical Administrators extend only to an alteration in the employee's position which has been brought about by a discriminatory act of the employer in 'singling out', as Marshall J put it, the employee concerned for exposure to detrimental consequences or exclusion from benefits or advantages such as promotion or the availability of congenial shifts or attractive overtime. As we have endeavoured to explain, the facts of the present case do not reveal any such discriminatory 'singling out' by BHPIO of any of its existing workforce. It is apprehended by the applicants that employees who elect not to sign individual workplace agreements will, in the future, be excluded from consideration for promotions or changes of shifts to which they are as well qualified by experience or training as employees who have accepted the offer. On the evidence, this has not happened and, until it does, it is not open to find that BHPIO has injured in their employment, or has altered to their prejudice the position of, those employees who remain regulated by the award. It is also true that a continuing award employee who receives a promotion or some other beneficial change in his or her employment may not achieve the same increase of remuneration as a similar employee on an individual workplace agreement. However, for the reasons outlined above, that will be a consequence of an election between different contractual regimes for the regulation of the employment of the two groups of employees. It will not have been brought about by the active, intentional, conduct of the employer which is struck at by s 298K." 92 It is apparent that these remarks are, as always, to be understood in the context of the facts at hand. In BHP it seems that the Full Court took the view that nothing was done to the complainant employees. That is a long way from this case. Here, their dismissal was made inevitable and they were in fact dismissed. Further, the Court's remarks should not be regarded as being at odds with the approach adopted by the High Court in Patrick Stevedores. Absence of malice 93 The subject legislative provisions, indeed the Act as a whole (among other aims), aims at the protection of statutorily authorised or recognised fixations of wages and conditions and thereby the preservation of industrial (or, in the new lexicon, "workplace") harmony. They also aim at the practical protection of individual employees' remuneration standards, recognising that for most, it is employment that provides them with life worthy of the name. If those protections are infringed, it is of no necessary relevance that the infringer has trodden a road paved with good intentions. This is a case where, in my view, intentions that might be seen as benign by some observers, do not cut to the heart of the matter. Though the Council acted at all times without malice or caprice, there was an unambiguous intention to dismiss the HACC workers and to alter their position to their prejudice for reasons which included a prohibited reason. Application of ss 298K & 298L(1)(h) to this case 94 In this case, to recapitulate, the employer was concerned as to the comparative expense of its employees performing the HACC work, and knew that the entitlements of those employees to the benefit of the relevant industrial instruments were the main reasons for that comparative expense. The employer also believed that the main reason why the expense might be reduced was that the independent contractor's employees would be unable to access entitlements of similar value. Further, the employer knew that it was probable that at least some of the contractor's employees would come from the ranks of the employer's own subject employees and that the work would be performed in substantially the same ways. Finally, the employer's agents had attempted to have the employees voluntarily reduce their entitlements. The decisive action was taken only after reference to the employees' decision to accept that they were, in effect, labourers unworthy of their present hire. 95 In my opinion, these facts lead to a positive inference that an operative, if subsidiary, reason for the Council's actions was that the subject employees had those very entitlements. At the very least, in my opinion, it can safely and without injustice be said that the Council has failed to discharge its s 298V onus of proof of the contrary. 96 As submitted by the respondent, it is clear from the oral evidence of Mr Heine and Mr Trestrail that the Council acted throughout the tender process in subjective good faith, and without an anti-union attitude. However, the bona fides of the Council's officers is here relevant only to the quantum of any penalty, not to liability for it, although in some cases the employer's attitude to such matters will be of assistance to negate a prescribed reason. The constitutional objection 97 It was contended by the respondent that the implied constitutional immunity against interference by Commonwealth laws with a State's capacity to function as a State operated, in the circumstances of this case, to prevent the application of ss 298K and 298L of the Act. That is because those provisions would otherwise make unlawful the dismissal of the Council's employees on grounds of redundancy, and the Council is, constitutionally, to be regarded as the State, or a sufficient part or emanation of it as to attract the constitutional immunity. 98 In Re Australian Education Union; ex parte State of Victoria (1995) 184 CLR 188, at 232, the majority of the High Court said: "It seems to us that critical to that capacity of a State is the government's right to determine the number and identity of the persons who it wished to employ, the terms of appointment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds. An impairment of a State's rights in these respects would in our view, constitute an infringement of the implied limitation." 99 The respondent submitted that s 6 of the Act, which deals with the application of the Act to the Crown, ought to be read down so that ss 298K and 298L(1)(h) do not apply to a State that dismisses persons on grounds of redundancy. Three questions arise from this submission: first, should the Council be considered to be part of the State of Victoria ("the State") for the purposes of the immunity; second, does the immunity apply to prohibit the operation of ss 298K and 298L; third, what does "redundancy" mean in this context? Is the Council to be regarded as the State? 100 The respondent contended that the Council was an emanation of the State rather than an agent of it. The key authority seems to me to be Deputy Commissioner of Taxation v State Bank (NSW) (1992) 174 CLR 219 at 229 - 223, relied on by the respondent, in which the High Court espoused an extended notion of a State. In that case the High Court affirmed the decision in Sydney Municipal Council v Commonwealth (1904) 1 CLR 208. At 230 the Court said: "Once it is accepted that the Constitution refers to the Commonwealth and the States as organizations or institutions of government in accordance with the conceptions of ordinary life, it must follow that these references are wide enough to denote a corporation which is an agency or instrumentality of the Commonwealth or a State as the case may be. The activities of government are carried on not only through the departments of government but also through corporations which are agencies or instrumentalities of government… [T]he distinction … between traditional and inalienable functions of government on the one hand and business, commercial and trading functions undertaken by government on the other hand … has … been discarded. And it can have no place in the interpretation of s 114…

There is no reason for drawing a distinction between the reference to 'a State' in s 75(iv) and similar references elsewhere in the Constitution where the reference is to a State as a polity and not as a geographical area. Indeed, the decision of Sydney Municipal Council v The Commonwealth is direct authority for the proposition that a corporation exercising governmental functions is 'a State' for the purposes of s 114. In that case the municipal council, a body corporate, which levied local government rates on property was held to be the State and its rates were held to be a tax on property for the purposes of that section … The question then is whether the State bank is discharging governmental functions for the State or, to put it another way, is the State carrying on banking through its statutory corporation, the State Bank". (Emphasis added) 101 The Court went on to hold that an earlier decision, in State Bank (NSW) v Commonwealth Bank (1986) 161 CLR 639, that a legal action by the State Bank was a suit by "a State" within the meaning of the Judiciary Act 1901 (Cth) was decisive. In the latter case, the Court looked to the absence of corporators; a "measure of control" through the State's power to appoint all but one of the directors of the Bank; the "public character" of its functions as measured by its policy and objectives; the Government's guarantee of the Bank's debts and its appropriation to Consolidated Revenue of the Bank's profits. 102 The applicant points out that at various times the High Court appears to have endorsed at least three different tests to determine whether a particular corporation is to be considered part of the Crown for constitutional purposes: a statutory interpretation approach, the control test, and the essential functions test. 103 According to the statutory interpretation approach, unless the statute that grants power to the corporation in question designates that body to be the Crown a rebuttable presumption arises that it is not so. In Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282 Gibbs CJ (Murphy, Wilson and Brennan JJ agreeing) said at 291: "It has more than once been said in this Court that 'there is evidence of a strong tendency to regard a statutory corporation formed to carry on public functions as distinct from the Crown unless parliament has by express provision given it the character of a servant of the Crown': Launceston Corporation v Hydro-Electric Commission [(1959) 100 CLR 654 at 662] … All persons should prima facie be regarded as equal before the law, and no statutory body should be accorded special privileges and immunities of the Crown, and where it does not do so it should not readily be concluded that it had that intention.". The LGA does not designate Victorian Councils to be part of the Crown. On this approach, it would therefore be necessary to turn to other indicia to determine whether the presumption that the Council is not the Crown has been rebutted. 104 The essential functions test looks to the role that the corporation is to play. In Bradken Consolidated v Broken Hill Proprietary (1979) 145 CLR 107, Gibbs ACJ at 115, noted that: "It has always been recognized in Australia that the conduct of railways is a function of the governments of the States… That fact is by no means conclusive, for a body which discharges public functions is not necessarily an agent of the Crown, but it does provide some assistance to the view that the Commissioner is acting on behalf of the Crown." And in Superannuation Investment Fund Trust v Commissioner of Stamps (SA) (1979) 145 CLR 330, Aitkin J said: "it seems to me that, whichever of the various indicia which have been suggested in the many cases on this topic is used in the process of characterization, the Trust does not fall into the category of the Crown, or a servant or agent of the Crown. There is first the absence of any power to control the activities of the Trust; there is also the nature of the function of the Trust which is a limited one, though no doubt of importance." (Emphasis added). This approach, however, seems to have been discarded: State Bank Case. 105 The control test examines whether the Act in question demonstrates such a level of control or supervision by the Crown over the instrumentality in question, that it should be concluded that the instrumentality is the Crown or its agent: this test was applied to determine the question of agency in Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192, per Gibbs CJ, at 199, 206 - 207, Brennan J, at 231 - 232 and 237 - 238, Deane J, at 248 and 252, and Dawson J, at 256 and 260. It will be relevant, on this approach, to consider the level of independent function granted to the corporation in question. 106 In Superannuation Investment Fund Trust v Commissioner of Stamps (SA) (1979) 145 CLR 330, Stephens J, at 348 - 350, set out at some length an approach which indicates that none of these approaches is in itself sufficient and that the question ultimately remains one of legislative intention. "The importance of the presence or absence of control by the executive government in ascertaining whether or not a statutory corporation possesses a particular immunity or privilege of the Crown is a consequence of the very nature of that inquiry, concerned as it is with the nexus between the corporation and the executive. If a corporation is no more than the passive instrument of the Crown, subject in a high degree to control by the executive, it is appropriate enough that its acts be viewed as those of its master and that it be itself treated as the alter ego of the Crown, enjoying accordingly those immunities and privileges with which the Crown is clothed. If, on the contrary, a statutory corporation is essentially autonomous, its acts being in no sense the outcome of direction by the executive but truly its own, there will be little reason to clothe it with any of those immunities or privileges. In saying this I do not intend to suggest the need for any examination of the actual extent to which particular actions are or are not the result of the exercise of control by the executive: it is the existence of the statutory ability to control, or its absence, that is to be looked at. No doubt in practice a statutory corporation will seldom be either a mere passive instrument or wholly autonomous. If the former its creation would scarcely be worthwhile, departmental officers could serve the purpose just as well. If the latter it would savour of Frankenstein's monster, hence the usual retention of some control, even if it be no more than some power of appointment and removal of the members of its governing body, perhaps the existence of an obligation to make periodic reports to Parliament, or, particularly if public funds are in question, the imposition of audit and financial reporting procedures. In the usual case of the statutory corporation which is subject to some greater or lesser degree of control by the executive government, conclusions sought to be arrived at on the basis of the extent of control by the executive will often involve nice questions of degree, particularly in borderline cases. However this is a problem commonly encountered in processes of statutory interpretation and the likelihood of its occurrence does nothing to diminish the relevance of the factor of control. When, by reference to the extent of control and such other indicia as the constituting statute may provide, a Court embarks upon the task of determining whether, in particular circumstances, a statutory corporation attracts particular Crown immunities or privileges it does no more than seek out the legislative intent. That being the aim, relevant indicia will be as various as the scope of the material in the statute permits. Occasionally, as in the present case, some express reference to immunities may cast light upon that intent: the type of function which the corporation performs, its funding from consolidated revenue, any frustration of its intended purposes which the absence of some immunity or privilege may threaten, all these may aid in divining legislative intent. To dignify anyone or more of them by the title of test or rule may do no harm so long as it neither leads to rigid application of particular tests nor obscures the fact that what is in hand always remains the search for legislative intent. One observation may be made concerning the significance of the type of function which a corporation performs… It may be acknowledged that what is a function appropriate to government may be answered differently in different ages and under the influence of differing social and political theories or the State. However there nevertheless remain some areas … of which it may confidently be said that, in an Australian context, they are traditionally the province of central government. Where that is so it constitutes a relevant factor in any consideration of the claim of the statutory corporation in question to the benefit of some Crown immunity or privilege… On occasions the legislative intent may be a complex one, especially where a corporation has conferred upon it a number of quite distinct functions. The intention may be that only some of these should attract the immunities and privileges of the Crown. Again, whether a corporation possesses one of more functions, the intention of the legislation may be that only some of the Crown's immunities and privileges should attach to it." (Emphasis added) 107 However, in respect of the last point raised by Stephen J, that a body might be considered to be an agent of the State with regard to some of its functions but not others, in Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145, Mason CJ, Deane, Toohey and Gaudron JJ at 170, expressed a view about individual statutory office-holders that appears to tend to the contrary: "Clearly, it is or will often be inappropriate to describe a … statutory office holder as the servant or agent of the Crown in relation to some functions and not others. As a general rule, it will be the overall nature of the functions and duties involved which determines whether he or she is to be categorized as a servant or agent of the Crown, no matter for what purpose that classification is or becomes necessary. But there may be cases where there are discrete functions which involve no interest or purpose of the Crown and which are separate and distinct from other functions which serve a Crown purpose." 108 It is true that in Federated Municipal Employees' Union v Melbourne Corporation (1919) 26 CLR 508, in the pre-Engineers' Case environment when there were thought to be implied immunities at large for the States from federal industrial award regulation, Higgins J held that municipalities are not agents of the Crown. At 541 he said: "I very much doubt … whether it is proper, under our law, to call a municipality an agent of the State at all. The municipality is created by the State, no doubt; but not everything created by the State, even for the benefit of the people of a locality, is an agent of the State. There is an oak-tree - a forbidden tree; it must not be touched - its fruit, or its leaves, or its wood. But the tree drops an acorn which takes root. The young tree is not within the prohibition. To be a product is not to be an agent."

However the majority judges in that case, Isaacs, Duffy, Powers and Rich JJ did not go so far, holding that the municipal council ought not, for the purposes of carrying out the crucial functions in that case, be regarded as the State. 109 The applicant attempted to distinguish the State Bank Case on the grounds that it was concerned only with the meaning of a State "for the purposes of s 114". However, in that very case, the High Court, in the passage quoted above observed that there is no reason to distinguish between "a State" referred to in s 75(iv) of the Constitution and "a State" referred to in s 114. Adopting this logic, I can see no reason to distinguish between that notion of "a State" and the conception to be adopted for the purposes of another constitutional prohibition, including an implied one. 110 Counsel referred to many indicia in the LGA to support their respective cases. Counsel for the respondent noted, amongst other things, that: · The Minister may order that a Councillor is incapable of remaining a Councillor if the Councillor fails to properly comply with a meeting call, s 85(6). · Resolutions of Council relating to the remuneration or termination of a CEO are of no effect unless the Minister is given reasonable notice of the intention to put the resolution, s 94(6). · The Minister may impose restrictions on the employment of the CEO, s 95B(3). · Employment of senior officers is subject to statutory criteria unless excused from them by the Minister, ss 95A and 95B. · The Governor in Council may revoke local laws made by Council on the recommendation of the Minister, s 123. · Financial reports must be provided to the Minister, s 126. · The Minister may direct the Council to prepare and submit within four weeks financial statements in respect of any part of a financial year, s 127A · The auditor must report to the Minister on competitive tendering in the Council, ss 127B and 128. · The Minister may surcharge any Councillor or member of staff of the Council for any expenditure, deficiency or loss occasioned by the Councillor or member of staff, s 133.

· The Council may invest monies and borrow to exercise its powers under the Act, but not so as to repay an advance by overdraft without the approval of the Minister, ss 138, 139 and 140. · The Council must provide the Minister with details of budgets or revised budgets, s 144B. · The Council must not budget for a deficit above three per cent without the consent of the Minister, s 153. · Council must submit a corporate plan to the Minister each financial year and prepare to provide the Minister each year with a statement of performance, ss 153A and 153B. · The Minister may limit income from rates and charges that may be imposed by Council, Part 8A. · The Council is accountable to the Minister to ensure that at least 50 per cent or more of its expenditure is subjected to competitive arrangements, Div 3 Part 9. · The Minister may approve alternative arrangements to competitive tendering, s 208F. · Council is to report to the Minister regarding Competitive tendering, s 208G. · The Minister may arrange for inquiries into and review of Council and suspended Councillors, Part 10. · The Minister may appoint panels to review local government restructuring, Part 10A. 111 Counsel for the applicant noted, amongst other things, that: · One of the purposes of the LGA is to enable Councils to meet the needs of their communities, s 1. · Councillors are elected pursuant to the provisions contained within Part 3, s 5(1). · The purposes of the Council include providing for the peace, order and good government of its municipal district, s 6. · In seeking to achieve its purposes Council is to facilitate the involvement of members of the community, users of the relevant facilities and service, s 7. · Councils have the power to make local laws, s 111. · Councils have the power to impose and collect rates, Part 8. · Councils may apply any fund to perform its functions, may invest money, and may borrow funds (subject only to Ministerial approval in limited circumstances), ss 136, 138, 139, 140, 143, 153.

· The CEO has complete control over the hiring and firing of staff, ss 94A, 94B, 94C, 95A. · The Minister does not have power to direct the Council with respect to its day to day exercise of power, nor does the Minister have power to direct the Council with respect to the manner of the exercise of its power. The Minister may in circumstances where Council has demonstrated a serious failure with respect to the exercise of its functions, conduct an inquiry and ultimately recommend a suspension of Councillors, Part 10, ss 209 and 219. A Council may only be dismissed by legislative warrant when it has failed to exercise its powers or failed to comply with a law. · Even if the procedures in s 219 are adopted the CEO retains the power with respect of the employees, s 94A(3). 112 It was submitted by the applicant that the overall picture presented by these provisions is that, in the main, such control as is exercised or exercisable by the Minister over Councils relates to prudential requirements, seeking to ensure their lawful and efficient functioning. Councils, it was said, retain discretion with regard to the allocation of funds, the exercise of powers and the performance of functions. The Minister does not have a general power to direct the Council in the exercise of its functions and the Council has absolute control over its firing and hiring. Most importantly it was noted that Councillors are elected and are therefore accountable to their constituents rather than to the State government. 113 Dr Griffiths QC, counsel for the Victorian Government, an erstwhile intervener in the case on constitutional questions, submitted that when dealing with an emanation of a State the control test could never be relevant; control only being pertinent, if ever, to determining whether a corporation was an agent. As a matter of strict logic, this appears to me to be correct, although one would hardly expect to see an emanation of the State outside State control. Therefore, the decision of QEC may be distinguished. 114 Ultimately, however, I consider that I am bound by the statements of the High Court in the State Bank Case. Insofar as the Court in that case approved the proposition for which the Sydney Municipal Council Case stands, it was not submitted, for example, that the constituent statute of the corporation was materially different from the LGA. But for these statements, I would have applied the following test: looking at all the legal circumstances of the Council's legal relationship with the State, is there such a real degree of identity between them that the council ought to be regarded as the State for all the purposes of the Constitution? I should have gone on to answer this question in the negative because, looked at overall, I do not consider that the State is carrying on through the Council; rather, the Council has been set up as a fundamentally independent entity, albeit one exercising powers at the heart of government. 115 I think, therefore, that I must accept the submission of the erstwhile intervenor, adopted by the respondent, that the governmental nature of municipal councils operates axiomatically to bring the Council within the meaning of "a corporation exercising governmental functions". In particular the Council is to provide for the "peace, order and good government of the municipality". The respondent is therefore entitled to the immunity of the State of Victoria under the AEU Case. Does the immunity apply in the present case? 116 It was submitted by the respondent that in this case the employment was terminated on grounds of redundancy, and that fact is so, regardless of whether the reason for the redundancy included a prohibited reason. Therefore, the principle enunciated in Re AEU must apply. The respondent relied upon the decision of the Australian Industrial Relations Commission in Public Transport Corporation v Strain (1998) 84 IR 228 in which the Commission said at paragraph 43: "It will be a question of fact in each case whether the State wishes to terminate employment for redundancy. But once it is established that redundancy is involved, the State's ability to identify those to be made redundant (or their number) cannot be made subject to Commonwealth law." 117 The applicants however argued that this approach did not take account of the High Court's reasoning in Victoria v Commonwealth (1996) 187 CLR 416. In that case the Court considered the application of the implied immunity to ss 170DB, 170DC, 170DE and 170DF of the Industrial Relations Act 1988 (Cth). Of particular relevance to this case, s 170DF, prohibited termination of employment for reasons including: "temporary absence because of illness or injury, union membership, participation in union activities, non-membership of a union, standing for election to or holding a union position, and complaining or participating in proceedings against the employer for alleged breach of its legal obligations."

118 In that case the States argued that s 170DF infringed their capacity to determine the number and identity of persons whose employment they might wish to terminate on redundancy grounds. The Court dealt with this submission at 519 as follows: "The prohibitions in … [s 170DF are not] concerned with termination on redundancy grounds." (emphasis added) 119 The significance of this for the present proceedings is great. A State cannot lawfully decide, in the face of a Commonwealth provision such as that in the Victoria Case, that it does not want to employ, say, any union members and then, having identified those members, brand them "redundant", so as to attract the AEU constitutional immunity in respect of the State's "right to determine … the … identity of the persons whom it wishes to dismiss … on redundancy grounds". Likewise, the Council (as an assumed emanation of the State of Victoria) cannot lawfully select for dismissal persons such as the HACC staff, on grounds proscribed by s 298L(1)(h) and then claim the constitutional immunity for their dismissal on supposed redundancy grounds. Sections 298K and 298L(1), according to their terms, are concerned to prevent various forms of employer conduct: they do not deal with dismissals on the ground of redundancy. 120 The point may be made in a slightly different context. Suppose that a State as the employer, in a particular enterprise of ten persons, has a shortfall in demand and a proportionate reduction in the required amount of operational labour, to the equivalent of two employees. The State is, in general, constitutionally entitled to declare two employees redundant, whatever any Commonwealth law may say. This entitlement however does not allow the State to select those two employees for redundancy because they are women, or are union members, or on any ground proscribed by an otherwise applicable Commonwealth law. In this regard, in Victoria v Riordan (unreported, Industrial Relations Court of Australia, 26 July 1996) at [22], a Full Court of the Industrial Relations Court of Australia said: "It could not possibly be contended that the proscription of discrimination on those grounds impairs the capacity of a State to govern." 121 The scheme of the Act is to give an employee civil remedies, according to s 298U, for the conduct proscribed by ss 298K and 298L. Nothing in the AEU doctrine gives a State immunity against those remedies. That is because the selection of persons for dismissal for

"redundancy", properly understood (see below), and actual dismissals on that account are within the conduct proscribed by those sections. "Redundancy" 122 Further, in this case, the prohibited reason preceded and caused the supposed redundancy; but for the impugned decision there would have been no such redundancies. The Council cannot be protected against engaging in prohibited conduct merely because it declared "redundancy" to be the reason for dismissal. The real reason for dismissal was the Council's decision (made in part for a proscribed reason) to outsource the HACC services, not because of an absence of work. A declaration of redundancy premised upon a prohibited reason will not attract the immunity. In this case, the Council, by its statutory representative for the purpose, dismissed the employees for reasons including a reason proscribed by s 298L. That reason also partly motivated the decision of the Council which necessitated the dismissals. These actions of the Council do not attract the immunity. The plea that "redundancy" was the real reason for the dismissals is disingenuous. The constitutional immunity does not protect euphemism. 123 In this regard, the use of the term "redundancy" in the respondent's submissions evinces a degree of confusion. In Australia, the term "redundancy", in the context of employment, has had a settled meaning at least since 1984. Burchett J recorded how this came about in Short v Hercus (1993) 40 FCR 511 at 520 - 522. As explained in that case: "…a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wishes the job the employee has been doing to be done by anyone. This definition: (a) refers to a job becoming redundant and not to a worker becoming redundant; (b) recognizes that redundancy situations may not necessarily involve dismissals; and (c) emphasizes that the job or work has disappeared through no fault on the part of the employee. A key element in that definition is that the employer no longer requires to have the work done by anyone."

See also Quality Bakers v Goulding (1995) 60 IR 327, per Beazley J, and Hawkins v Commonwealth Bank of Australia (1996) 70 IR 213. It is inconceivable that in AEU the Justices of the High Court were using the term redundancy in any other sense. No employer may dismiss an employee for a legally proscribed reason and escape liability by citing redundancy as the reason. 124 The respondent argued that to apply the AEU decision in this manner is to treat the formulation arrived at as judicial legislation, and is to fail to give real content to the implied immunity doctrine seminally outlined out in Melbourne Corporation v Commonwealth (1947) 74 CLR 31. However, it is clear that the principle outlined in the AEU Case was intended to be prescriptive. Moreover, the High Court has refused special leave to re-open this question: see Victoria v Riordan [1996] HCA M55. My approach to this question follows that adopted by a Full Court of this Court in Konrad v Victoria Police (1999) 91 FCR 95 and by RD Nicholson J Geraldton. 125 For these reasons the immunity articulated in AEU does not apply to this case. Remedies 126 In due course I will, as indicated, find proven breaches by the Council of s 298K(1)(a) and (c), but not (b), having regard to s 298L(1)(h). As to penalties, there are plainly mitigating circumstances and, in my opinion, a nominal penalty will suffice. 127 In various jurisdictions there are statutory provisions rendering certain dismissals unlawful and providing for reinstatement as one of a number of available remedies. It is trite law that where reinstatement is sought under these provisions for proven, unlawful termination of employment, it should generally be regarded as the primary remedy and awarded, except where it would be impracticable so to do, or where there are other just and compelling reasons against that course. Nothing in the material before me showed that it would be other than inconvenient for the Council, and attended with some expense, to reinstate the relevant employees. Whatever, if anything, might be the implications for the Council's legal relations with Silver Circle is not something that principle would permit to be used against the wronged employees. There is nothing impracticable about ordering reinstatement. 128 It was, however, urged that there were other discretionary considerations that tipped the balance against reinstatement. In particular, it was said that regard should be had to the degree to which the proscribed reason was a causative factor in the Council's decision. The difficulty with this is that the Act makes it a sufficient condition for the attachment of liability that the proscribed reason be but one of the reasons for the employer's actions. The provisions are explicitly protective of employees. If a non-punitive remedy is to be denied to an employee who has made out the statutory case for it, because the employee has done no more than make out that case, that would tend to undermine the seriousness with which the legislature has viewed the matter. In a nutshell, if the proscribed reason was influential enough to be found to be an actual reason, even if not the main reason, for the employer's conduct, then its merely partial influence will not, at least usually, furnish a reason to deprive the employee of reinstatement. In any case, I see no reason to depart from that position here. 129 It was also argued that the employees' own conduct, if lawful, nevertheless had an unreasonable quality to it. It was submitted that there had been a degree of rigidity in the employees' adherence to certain work practices that had a tendency to drive up the cost to the employer of having the necessary work done. In the context of s 298L(1)(h) and the considerations just mentioned, this submission, with respect to its author, amounts in this case to little more than adding insult to injury. If there were anything in this complaint by the Council, there were, both legally and practically, remedies open to it, falling short of unlawful dismissal of the employees concerned. (This was hardly a group of employees able by industrial might to bring irresistible pressure to bear on the Council, whatever its legal position). Further, the degree of responsibility for any such rigidity is likely to differ as between the employees concerned, and there is no material before the Court to enable me to assess those differentials. 130 I have also considered whether reinstatement would be an available and appropriate remedy if my conclusion about the breach of s 298K(1)(a) is incorrect, so that the only breach is of s 298K(1)(c). At least in the circumstances of this case, where the offending alteration of the employees' position was the creation of circumstances in which they would certainly be dismissed and no longer enjoy reasonable security of their employment, it seems to me that affirmative answers to these questions must be given.

131 However, through no fault of the parties, a considerable time has elapsed since the dismissals and their precipitation. While that is regrettable, at least the supervening events with Silver Circle have taken the erstwhile urgency out of the matter. 132 Some employees would probably prefer now to receive any compensation that might be agreed or determined to be appropriate. There may be some employees who have a case for greater or smaller amounts of compensation in addition to reinstatement. In any case, there should be no "double-dipping". When any employee who wishes it is reinstated, then adjustments will need to be made between the parties as to such matters as the "redundancy pay" received, payments on account of leave entitlements, superannuation entitlements perhaps, and so on. Questions of reasonable efforts to mitigate employees' losses may conceivably arise. There may even be an employee or two who has done so well since being dismissed that he or she desires no reinstatement and has no case for compensation. 133 Further, the proceedings were brought on behalf of all the HACC employees. Questions may also possibly arise as to the Court's power to order remedies in respect of some of them, that have not been fully debated.

Disposition 134 In all the circumstances, it seems to me that the orders that I should make at this stage are: 1. The parties are to confer as soon as possible as to the remedies appropriate to each employee, on whose behalf the proceedings have been brought, in the light of these reasons for decision; 2. The parties are to report the progress of their negotiations to the Registrar of the Victorian Registry within 21 days; 3. If the parties have then not reached agreement on remedies, each party has leave, on two days' notice, to approach the Victorian duty Judge to apply to have the matter referred to a mediator of the parties' agreed nomination or as determined by that Judge; 4. The parties may at any time ask the Victorian duty Judge to make orders giving effect to any settlement or partial settlement as to the appropriate remedy upon which they agree; 5. Failing settlement of the entire matter, by 20 October 2000 the parties should let my Associate have their joint or separate written proposals as to the desirable further course of the matter; 6. The matter will, unless settled, be listed before me in Sydney (by video-conference, if all parties agree to it) for further directions at 9:30 am on 30 October 2000; 7. Until 20 October 2000, the parties have liberty to apply generally to the Victorian duty Judge on two days' notice.

I certify that the preceding one hundred and thirty four (134) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

Counsel for the Applicants: M Bromberg with R Doyle

Solicitor for the Applicants: Maurice Blackburn & Co

Solicitor for the Respondent: Maddock Lonie & Chisholm

Counsel for the Intervener: G Griffith QC with L Kaufman

Solicitor for the Intervener: Victorian Government Solicitor

Date of Hearing: 1, 2 & 7 June, & 8 July 1999

Workplace Relations Act 1996(Cth)

Federal Court Act 1976(Cth)

Trade Practices Act 1974(Cth)

Local Government (Competitive Tendering) Act 1994(Vic)

Judiciary Act 1901(Cth)

Industrial Relations Act 1988(Cth)

At a glance

Court

Decision date

Before

Source

Judgment (32 paragraphs)

Parties

Legislation Cited (8)

Cases Cited (42)

Cited By (6)