Chief Executive Officer of the Australian Sports Drug Agency v Honourable Geoffrey Michael Giudice

4 Notwithstanding that the quantum sought was identical to the prevailing condition for employees in their employment, the Agency and the Authority argued that no award provision be made or in the alterative a lesser quantum be provided, namely, the standard established in 1984 by the Australian Conciliation and Arbitration Commission in the Termination Change and Redundancy test cases: see (1984) 8 IR 34, and (1984) 9 IR 115.

5 The Full Bench examined the history of the provision of redundancy pay for employees of the Authority at [3] to [6] of its decision. That history revealed the following:

· On establishment 70 staff who were formerly part of the Australian Public Service were compulsorily transferred to the Authority.

· At the time of the transfer the staff were entitled to the same level of redundancy pay which was sought to be included in the Awards by the Union's application under s 113(2).

· The first certified agreement between the Union and the Authority was entered into in 1993. It included a provision for redundancy pay of the same quantum, which had previously applied.

· Subsequent certified agreements, including one made in 2000, made the same provision.

· Between 1993 and 2000 the Authority was bound by an award, which provided for the redundancy benefit the subject of the Union's application.

6 The Full Bench then turned to consider the position of the Agency at [7] and [8] of its decision. That position included the following:

· In 1993 the Agency entered into a certified agreement with the Union, which contained the same redundancy provisions being sought before the Full Bench.

· Subsequent certified agreements maintained that position in 1995, 1997, 1998 and 2000.

7 Next the Full Bench considered the position applying generally in Commonwealth employment with respect to redundancy pay. At [9] to [10] it said: "[9] It is common ground that the redundancy benefit sought in the applications applies, with very few exceptions, to employees in the departments, agencies and authorities of the Commonwealth. We were provided with a list of departments and related Government entities bound by awards which include the redundancy benefit which is sought in these applications. The list comprised: · 17 Departments of State,

· 45 statutory agencies which employ staff under the Public Service Act 1999

· 35 parts of departments, statutory bodies or office holders with staff provided by a department,

· nine statutory agencies which might engage staff under the Public Service Act 1999, and

· 23 statutory bodies which engage staff under the provisions of the legislation establishing them.

In most cases the relevant award is the Australian Public Service Award 1998. In the other cases the redundancy pay provision is found in the specific award applying to the agency or authority. [10] While there is a small number of statutory authorities to which no or lesser award redundancy benefits apply it is beyond doubt that the overwhelming majority of persons employed in Commonwealth Government departments and authorities are covered by an award containing a redundancy benefit of the kind and amount claimed in the applications before us."

The submissions below 8 The Union made the following main points in its submissions to the Full Bench: · The level of redundancy pay sought to be included in the Awards was the same as that which has been applied by the Authority and the Agency since the beginning of their operations, i.e. for up to 14 years.

· The level of redundancy pay sought is consistent with that applying elsewhere in Australian Government employment, and in assessing what the safety net is, or should be, it is relevant to look to conditions applying in those areas.

· The true safety net with respect to redundancy pay operating in the Agency and the Authority is the current level.

· As a matter of fairness, and to ensure the maintenance of an effective safety net of fair and enforceable minimum wages and conditions, the applications should be granted.

· As redundancy pay entitlements have been dealt with by certified agreements, award provisions are unnecessary.

· If the Awards are varied they should be varied to the standard established in the 1984 test case.

· It is inappropriate to rely on the concept of "comparative conditions justice", under the Act.

· The prevailing level of redundancies applying in the Commonwealth public service was attained by consent, not through arbitration.

· The appropriate comparison is with conditions applying in the community generally.

The Full Bench's conclusions 10 At [12] to [15] of its decision, the Full Bench said: "[12] The opponents of the claims also submit that if we were to grant the applications we would be establishing an industry standard for the Commonwealth public sector and that to do so would be inconsistent with our statutory obligations to establish and maintain a safety net of minimum pay and conditions. It was contended that it would be inappropriate to adopt by arbitration provisions which have emerged from a paid rates environment in a series of consent arrangements and which have never been the subject of arbitral consideration as to their industrial merit. [13] We would have more sympathy for these submissions if the redundancy benefit claimed was not so widespread in awards applying to Commonwealth employment. The material shows that the redundancy benefit sought is a feature of the awards applying to employment in the Australian Public Service and the great bulk of Commonwealth authorities. Looked at as a matter of fairness, there does not appear to be any satisfactory explanation for different treatment to be afforded to the employees of the Authority and the Agency by comparison with Commonwealth employees generally. While it was pointed out that the awards applying in other areas were made by consent, we do not know why consent was not forthcoming in this case. In that respect it was not suggested that either the Authority or the Agency compete in any relevant sense with the private sector. We think, therefore, that the considerations which led a Full Bench to depart from public sector conditions in Re Employment National Limited do not apply. [14] In granting the applications we are not approving the particular level of redundancy pay sought as such. We are correcting a clear anomaly in the award conditions of the employees concerned because, in the absence of any explanation for the anomaly, it would be unfair not to do so. [15] We are satisfied that in granting these applications we are acting consistently with our statutory responsibilities. It was submitted that the redundancy benefit sought, being in excess of the standard in the TCR Cases, would not be a true minimum rates provision. The submission has significance beyond the area of employment we are concerned with and strikes at the basis of all of the awards applying to Commonwealth employment which contain the same redundancy benefit. It is not a submission which has been made in relation to those awards. To the contrary, the level of the redundancy benefit in the awards was consented to by the Commonwealth and the relevant employing authorities. On the basis of the albeit brief argument in this case we do not think the submission should be upheld. As we have previously indicated, we are not concerned so much in this case with the level of the benefit as with the removal of an anomaly within the awards applying to Commonwealth employment. If there is to be a challenge to the level of the benefit it should be in a context in which all of the relevant awards are before the Commission." 11 These passages indicate that a chief reason for granting the application was that, as a matter of fairness as between like employees, there was no good reason for there to be different redundancy pay entitlements. The Full Bench came to this conclusion, largely because not to intervene would be to perpetuate an anomalous situation. But that reason alone would not be a sufficient basis for granting the relief. The Full Bench could only vary the awards to make provision for redundancy if it formed the view that the redundancy was a fair minimum safety net condition. The question on this appeal is whether this is what the Full Bench did.

The Statutory Context 12 Section 113(2) of the Act provides: "The Commission may set aside an award or any terms of an award." 13 Section 113(4) provides: "This Act applies in relation to applications, and proceedings in relation to applications, for the setting aside or variation of awards in the same manner, as far as possible, as it applies in relation to industrial disputes and proceedings in relation to industrial disputes, and for that purpose such an application shall be treated as if it were the notification of an industrial dispute." 14 Section 113 is found within Pt VI of the Act. The objects of Part VI are set out in s 88A: "(a) wages and conditions of employment are protected by a system of enforceable awards established and maintained by the Commission; and

(b) awards act as a safety net of fair minimum wages and conditions of employment; and

(c) awards are simplified and suited to the efficient performance of work according to the needs of particular workplaces or enterprises; and

(d) the Commission's functions and powers in relation to making and varying awards are performed and exercised in a way that:

(i) encourages the making of agreements between employers and employees at the workplace or enterprise level; and

(ii) uses a case-by-case approach to protect the competitive position of young people in the labour market, to promote youth employment, youth skills and community standards and to assist in reducing youth unemployment."

15 The objects of the Act as a whole are set out in s 3. Section 3(d) states that a framework for cooperative workplace relations, which promotes the economic prosperity and welfare of the people of Australia, is to be provided by: "(d) providing the means:

(i) for wages and conditions of employment to be determined as far as possible by the agreement of employers and employees at the workplace or enterprise level, upon a foundation of minimum standards; and

(ii) to ensure the maintenance of an effective award safety net of fair and enforceable minimum wages and conditions of employment." 16 In its award making and dispute settling functions the Commission is entitled to settle a dispute about "redundancy pay" by making award provision for it; redundancy pay being an "allowable award matter" under s 89A(2)(m). Section 89A(3) provides that: "The Commission's power to make an award dealing with the matters covered by sub-section (2) is limited to making a minimum rates award." 17 Under s 90, the Commission is required to take into account the public interest in the performance of its functions and is obliged to have regard, inter alia, to the objects of the Act, including s 3(d)(ii). 18 Pursuant to s 110(2)(c) the Commission is obliged to: "…act according to equity, good conscience and the substantial merits of the case, without regard to technicalities and legal forms." 19 Certain matters to which the Commission must have regard in performing its functions under Part IV are set out in subss (2) and (3) of s88B, which provide: "88B(2) In performing its functions under this Part, the Commission must ensure that a safety net of fair minimum wages and conditions of employment is established and maintained, having regard to the following: (a) the need to provide fair minimum standards for employees in the context of living standards generally prevailing in the Australian community; (b) economic factors, including levels of productivity and inflation, and the desirability of attaining a high level of employment;

(c) when adjusting the safety net, the needs of the low paid.

88B(3) In performing its functions under this Part, the Commission must have regard to the following:

(a) the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which work is performed;

(b) the need to support training arrangements through appropriate trainee wage provisions;

(ba) the need, using a case-by-case approach, to protect the competitive position of young people in the labour market, to promote youth employment, youth skills and community standards and to assist in reducing youth unemployment, through appropriate wage provisions, including, where appropriate, junior wage provisions;

(c) the need to provide a supported wage system for people with disabilities;

(d) the need to apply the principle of equal pay for work of equal value without discrimination based on sex;

(e) the need to prevent and eliminate discrimination because of, or for reasons including, race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin."

The criticisms of the Full Bench's approach and reasons 20 Counsel for the applicants referred to a number of comments in the hearing below and in the reasons of the Full Bench to show that the Full Bench was mistaken in its approach and was probably led to error by the Union advocate. The point sought to be made was that the Full Bench acted only to cure an anomaly and did not, as it was required to do, consider whether the redundancy provisions it introduced into the award were fair minimum safety net provisions. 21 First, during the Union advocate's submissions concerning the redundancy pay rates to be found in other Commonwealth and the State public sector awards, the President observed that: "I can assure you we will not be attempting to establish the public service standard in relation to this matter." It is likely that the President was minded to make this comment not only because at the time the Commission was seized of an application to create a new test case standard for redundancy pay, but also to convey to the parties that the Full Bench was not intending to embark on an exercise of reviewing what the appropriate redundancy pay should be for the Australian public sector generally. This was entirely understandable in light of the currency of the test case. The Full Bench only had before it two statutory authorities. It did not have the benefit of the views of the Commonwealth Government or other organisations with a relevant interest in public sector employment. It was only considering a redundancy pay in respect of the parties before it, in the context of the employee's existing conditions and others in the Australian public sector. 22 In response to the President, the Union advocate said: "I am not asking you to establish a public service standard, your Honour. Indeed, in my argument, my primary submission is not that. You know, the industry has it, and these are part of the industry, therefore they should get it too. My submission is that it is not remarkable across the industry. And in particular circumstances of these two agencies, whether the standard was 4 and 48 or 104 and 148, it should be seen as their safety net, in all the circumstances of the case." 23 This response indicates that the Union was not submitting that the variation requested should automatically be made by the Full Bench because it was common amongst other public sector employees, but was submitting that it should be a consideration in determining whether the requested rate was a fair minimum condition in the circumstances. 24 Counsel for the applicants also drew attention to a related comment made later in the Union advocate's reply: "We are not asking you to arbitrate the standard and we are not asking you to determine the reasonableness or otherwise of that standard. In fact, we positively ask you not to do that. There would be many submissions by many parties affected by such a case. We are asking you to essentially fix an anomaly in much the same way that another Full Bench fixed an anomaly with respect to Court Reporting Officers, based on the circumstances that exist in this case…" 25 When understood in context, the Union advocate was only saying that the Full Bench was not required to arbitrate a standard for the entire public sector. The Union advocate was not saying that the Full Bench need not consider the reasonableness of the redundancy terms requested by the Union. The context is revealed when one looks at what the Union advocate said immediately before the passage just set out: "[W]e are not asking you - and I think you have already indicated that you are not going to authoritatively determine that there is a public sector standard or what that public sector standard is." 26 The discussion concerning a review of the public sector standard, as opposed to focusing on the fair minimum for the awards before it, also arose during the submissions put by the advocate for the Agency and Authority. In submitting that the Full Bench should not depart from the TCR standard, the advocate said: "It is important in considering whether to depart from that standard to consider what a test case standard is or what it reflects. In proceedings resulting in the establishment of test case standards, all the parties with an interest in the matter, be they peak industrial bodies, particular employers and unions, or groups with a particular interest in the matter, would normally have the opportunity to appear before a Full Bench of the Commission and be heard." 27 That the Full Bench was responding to, and dismissing, the suggestion that a test case was necessary to allow it to depart from the TCR standard is reflected in its reasons at [15], where it said: "It was submitted that the redundancy benefit sought, being in excess of the standard in the TCR Cases, would not be a true minimum rates provision. The submission has significance beyond the area of employment we are concerned with and strikes at the basis of all of the awards applying to Commonwealth employment which contain the same redundancy benefit." 28 At no stage did the advocate for the employers seek to persuade the Full Bench that it should engage in the much larger exercise of reviewing the level of redundancy pay for the public sector as a matter of industrial merit. At no stage did the advocate tender evidence relating to the merits of the prevailing conditions in the Australian public service. 29 Counsel for the Agency and Authority directed particular attention to two sentences in the Full Bench's reasons which he said indicated that the Full Bench did not give any consideration to the question whether the claimed redundancy condition was a fair minimum safety net condition. When considering what the Full Bench said it is necessary to bear in mind what Mason CJ, Wilson and Dawson JJ said in Re Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia (1987) 72 ALR 1, at 6, in the context of a decision of a Full Bench of the Commission's predecessor: "…reasons for judgment are not to be read as if they were a statute requiring to be construed. They must be read in context." 30 The first sentence to which attention was directed was at [14], where the Full Bench said: "In granting the applications we are not approving the particular level of redundancy pay sought as such." 31 It was submitted that the use of that language showed that the Full Bench granted the applications without regard to the merit of the quantum. It is easy to see how this sentence can give rise to the submission. That sentence must, however, be read in the context of the comments made by the President and the Union advocate about the inappropriateness of the instant matter before the Full Bench being used as a test case to determine a general level of redundancy pay to apply throughout the Australian public sector: see [20] to [28] above. 32 The second sentence was in [15] of the Full Bench's reasons: "As we have previously indicated, we are not concerned so much in this case with the level of the benefit as with the removal of an anomaly within the awards applying to Commonwealth employment." 33 Here again the Full Bench is expressing itself in a way which could easily lead to the impression for which the applicants contend. On the other hand, the sentence commences with words which reveal it to be a repetition of the view expressed in the first sentence. It follows the Full Bench's statements regarding the submissions referred to at [27] above. The sentence that immediately follows puts the matter into proper context. There the Full Bench said: "If there is to be a challenge to the level of the benefit it should be in a context in which all of the relevant awards are before the Commission."

34 When put into proper perspective, it is on balance clear that the Full Bench was distinguishing between the need for a determination of a public sector standard, from its immediate task of determining a fair minimum rate for the awards before it. The Full Bench was reiterating that it was acting to grant the level of redundancy pay sought because it would be anomalous, and consequently unfair, not to do so. 35 As the Agency and the Authority did not mount a challenge to the level of redundancy benefit applying in awards elsewhere in the Commonwealth public sector, the Full Bench was entitled to adopt the "standard" level of redundancy if it believed the standard was a fair minimum in the circumstances.

Statutory obligations 36 It was submitted on behalf of the Authority and the Agency that s 88B(2)(a) requires the Full Bench to set redundancy pay in the Award at a level which provides a fair minimum standard in the context of standards prevailing in the community generally, and not only in the public sector. That submission is contrary to the language of the sub-section. The need to provide a fair minimum standard is expressed in the context of: "…living standards generally prevailing in the Australian community." The sub-section does not say "award standards prevailing in the Australian community"; especially in circumstances where the Act gives primacy to enterprise bargaining; see s3(b). 37 The principal submission of counsel for the Authority and the Agency that the Full Bench misconceived its task, by acting solely to remove an anomaly based on general considerations of fairness, is rejected. 38 The Full Bench granted the applications before it, cognisant of its obligation to establish and maintain a safety net of minimum pay and conditions. That is what it recognised it must do at [12] of its decision, in the context of reciting a submission by the Authority and the Agency. Fairness was a central consideration in the Full Bench's reasoning process. Importantly it said at [13]: "Looked at as a matter of fairness, there does not appear to be any satisfactory explanation for different treatment to be afforded to the employees of the Authority and the Agency by comparison with Commonwealth employers generally."

39 Section 88B(3) requires the Commission to take certain considerations into account in assessing the need for wage relativities to be altered between awards. The considerations reveal that comparative industrial justice is not a dead letter under the Act. The Act is replete with references to the Commission's role in providing a fair safety net of minimum conditions: see ss 88B(2)(a), 3(e) and 3(d)(ii). Fairness was a consideration in this matter, by reference not only to what other like employees had in their award conditions, but by historical reference to the quantum of redundancy pay set or agreed to by the Authority and the Agency either in awards or enterprise agreements. 40 The role of the Commission in hearing an application to vary an Award is to consider if the variations requested provided a fair minimum safety net of conditions concerning redundancy. That involves the exercise of a wide discretion, giving greater weight to matters it considers to be of more importance in the circumstances of the applications before it. 41 Despite the fact that the Full Bench delivered reasons which are not very detailed, we are of opinion that it did act in accordance with its obligations. The fact that the material upon which it reached its conclusion was slim does not evidence any legal error. Apart from the two sentences of the Full Bench's decision discussed above, there is nothing in the Full Bench's decision to suggest that it did not understand, or failed to act in accordance with, the objects and the considerations to which it must have regard under the Act.

Costs 42 Costs are reserved as a result of the Court acceding to a request by counsel for time to consider the implications of the judgment before addressing it on the availability of costs in a matter remitted from the High Court, notwithstanding s347(1). On publication of these reasons, the Court will request the parties' views on how the costs issue should be dealt with.

Order 43 In light of the foregoing it is appropriate to order: 1. The order nisi be issued. 2. The application be dismissed. 3. Costs reserved. I certify that the preceding forty three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Whitlam, Marshall and Finkelstein.

Dated: 31 March 2004 Counsel for the Applicants: Mr J.L.Bourke

Solicitor for the Second Respondent: Mr S.Ramsay and Ms M.Cooper

Date of Hearing: 23 February 2004

Date of Judgment: 31 March 2004