Corporate Affairs Commission v Bradley

Waste Contractors and Recyclers Association of New South Wales Third Respondent FILE NUMBER: IRC 5394 of 2000 CORAM: Wright J President; Hungerford J; Patterson C CATCHWORDS : Wage fixing principles - Whether registered organisations whose members, because of the way in which award coverage in the relevant industry is structured, are not capable of employing employees bound by the subject award may nevertheless be "parties" to the award for the purposes of principle 2(e) of the wage fixing principles - Historical role of the organisations in the industry - Intervention - Whether commissioner had erred in limiting the role of the appellants as interveners as to the material they could place before the Commission at first instance - Discretionary considerations - Leave to appeal granted in part - Appeal dismissed LEGISLATION CITED : Industrial Relations Act 1996 s 11 s 166 s 167 s 187 s 191 Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391 Employers' Federation of New South Wales v New South Wales Nurses' Association (1995) 64 IR 194 House v The King (1936) 55 CLR 499 Re Asbestos Sheet Makers (State) Award and Other Awards (No 2) [1961] AR (NSW) 479 Re Equal Remuneration Principle (2000) 97 IR 177 Re Iron and Steel Works Employees (Australian Iron & Steel Limited - Port Kembla) Award (No 1) [1956] AR (NSW) 566 Re Plumbers and Gasfitters (State) Conciliation Committee [1936] AR (NSW) 341 Re Principles for Approval of Enterprise Agreements (1996) 94 IR 98 CASES CITED : Re Special Constables (Police Department) Award [1956] AR (NSW) 880 Re Transport Industry (State) Award (1996) 95 IR 126 Re Transport Industry (State) Award (2000) 95 IR 232 Re Transport Industry - Waste Collection and Recycling (State) Award [2000] NSWIRComm 236 State Wage Case - December 1993 (1993) 52 IR 157 State Wage Case - December 1994 (1994) 57 IR 1 State Wage Case - June 1998 (1998) 79 IR 416 State Wage Case 2000 (2000) 97 IR 93 United States Tobacco Company v Minister for Consumer Affairs (1998) 20 FCR 520 HEARING DATES: 12/07/2000; 01/30/2001 EXTEMPORE JUDGMENT DATE : 01/30/2001

APPELLANTS Mr P M Kite SC with Mr S B Benson of counsel

FIRST RESPONDENT Mr A A Hatcher of counsel

LEGAL REPRESENTATIVES: SECOND RESPONDENT Mr A R Moses of counsel Clayton Utz, Solicitors

THIRD RESPONDENT Mr M J B Creswell

CORAM: WRIGHT J, President HUNGERFORD J PATTERSON C

TRANSPORT INDUSTRY - WASTE COLLECTION AND RECYCLING (STATE) AWARD

Application for leave to appeal and appeal by the Local Government Association of New South Wales and Shires Association of New South Wales against decisions of Commissioner Connor given on 24 October 2000 and 10 November 2000 in Matters Nos IRC 154 and IRC 155 of 1999.

DECISION OF THE COMMISSION (Extempore) [2001] NSWIRComm 5

1 These proceedings relate to an application by the Local Government Association of New South Wales and the Shires Association of New South Wales (the appellants) under Pt 7 of Ch 4 of the Industrial Relations Act 1996 for leave to appeal and, should leave be granted, an appeal against a decision of Connor C delivered on 24 October 2000. By their amended notice of appeal the appellants have also sought leave to appeal and to appeal against the second decision of Connor C given on 10 November 2000. 2 In the proceedings before the Full Bench the appellants were represented by Mr P M Kite SC and Mr S B Benson of counsel. Mr A A Hatcher of counsel, Mr A R Moses of counsel and Mr M J B Creswell respectively appeared for the respondents who were, in the order named on the application for leave to appeal, the Transport Workers' Union of Australia, New South Wales Branch, the New South Wales Road Transport Association and the Waste Contractors and Recyclers Association of New South Wales. 3 Subsequent to the second of the commissioner's decisions, these proceedings came before Wright J, President on 15 November 2000 for the purpose of the appellants' stay application which was declined that day and the subject of a decision and orders published on 27 November 2000: see Transport Industry - Waste Collection and Recycling (State) Award [2000] NSWIRComm 236. In that decision, his Honour set out the issues with which the proceedings were concerned and also relevant extracts from the decisions of Connor C delivered on 24 October and 10 November 2000. In those circumstances, and in the light of our determination of these proceedings as to leave to appeal and appeal, it is not necessary to set out again those aspects. 4 Upon the hearing of the appeal and pursuant to leave earlier granted when directions were given in relation to the appeal, the appellants moved on an amended notice of appeal filed on 20 November 2000. With the consent of the respondents, the Full Bench granted leave to amend the notice of appeal in terms of the amendment filed. Further, in accordance with directions given, each of the parties had prior to the hearing of the appeal filed detailed written submissions. As the argument proceeded before the Full Bench, it became clear that the two issues to be determined were as follows: (1) Whether registered organisations which, because of the way in which award coverage in the relevant and related industries is structured, are not capable or their members are not capable of employing employees who are bound by the subject award may nevertheless be "parties" to the award for the purposes of principle 2(e) of the wage fixing principles as determined in the State Wage Case 2000 (2000) 97 IR 93 by reason of the historical role of the organisations in the regulation of the industry, including, for example, having nominated representatives of employers on the relevant conciliation or industrial committee. (2) Whether, in the proceedings the subject of the appeal, Connor C had erred in limiting the role of the appellants as to the material they could place before him as to cost impact etc. of the proposed award, notwithstanding that the appellants had been granted leave to intervene in the proceedings. 5 Although we consider the way the issues should be described is slightly different to that proposed by the appellants, it is nevertheless appropriate to set out the way in which they encapsulate the issues, which is in the following terms: (i) Should the Appellants have been recognised as parties to the proceedings for the purposes of the operation of the State Wage Case principles? ( State Wage Case 2000 (2000) 97 IR 93 at 117 - 124) (ii) Should the Appellants have been entitled to lead evidence going to the cost impact of the agreement to provide an immediate increase of 10% rather than staged increases of 5% plus 5% twelve months later? 6 The appellants rely upon the terms of s 11 of the Industrial Relations Act and submit that that section permits certain persons or bodies to be applicants for awards. Such persons or bodies may not necessarily be bound by or directly affected by the award but are nevertheless eligible to be "a party to any proceedings for the making of an award" in terms of s 11(3). Whether they become a party depends on them satisfying the criterion of "sufficient interest" as that term is used in s 11(4). It is also submitted that the appellants as industrial organisations of employers are eligible to be party to award proceedings, notwithstanding the fact that neither they nor their members can employ persons under the subject award. The commissioner erred in finding that, although the appellants had a sufficient interest to warrant intervention, but because they would not be directly affected in the sense of being bound by the award, they did not have the status of parties. He thus applied an incorrect test. 7 It is further submitted that the parties to award proceedings are not confined to persons to be bound by the award nor are all persons bound by the award entitled to be parties. In this latter respect, an example is the situation of employees. The statute in relation to award matters did not follow the traditional litigation test as to who may and should be a party. Rather a statutory test has been put in place and should be applied and the commissioner should have regarded the appellants as parties. 8 The appellants also put an alternative submission based on the fact that the Industrial Relations Act does not deal generally with the question of intervention. There are merely specific rights given to the Minister, the President of the Anti-Discrimination Board and State peak councils to intervene and this provision is found in s 167. It is also submitted that the statute does not otherwise distinguish between the notion or status of a party and that of an intervener. In this respect, reference is made to the phrase "a party that intervenes" in s 167(4) and the phrase "a party to proceedings … may … be represented" in s 166. 9 It is submitted in consequence that the absence of a statutory distinction between parties and interveners is consistent with the proposition that "an intervener becomes a party to the proceedings": Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391 at 396 and also United States Tobacco Company v Minister for Consumer Affairs (1998) 20 FCR 520 at 534 - 535. 10 The respondents strongly dispute the contentions of the appellants. We, however, do not consider it necessary to refer to the submissions of the respondents in detail because of the conclusion we have reached in this matter. Nevertheless, it is appropriate to identify some issues raised by the respondents but upon which it is not necessary to rule. These include, first, the submission that in order for an organisation to become a party to the making of an award it is necessary for it to have membership to which the award in question directly applies: citing Re Plumbers and Gasfitters (State) Conciliation Committee [1936] AR (NSW) 341 at 344 - 345, Re Iron and Steel Works Employees (Australian Iron & Steel Limited - Port Kembla) Award (No 1) [1956] AR (NSW) 566 at 570, Re Asbestos Sheet Makers (State) Award and Other Awards (No 2) [1961] AR (NSW) 479 at 486, Employers' Federation of New South Wales v New South Wales Nurses' Association (1995) 64 IR 194 at 203 - 205, Re Transport Industry (State) Award (1996) 95 IR 126 at 133 and Re Transport Industry (State) Award (2000) 95 IR 232 at 235. 11 Second, the submission made by a number of the respondents that the appellants do not have the requisite standing to appeal against the decisions of Connor C because the only relevant bases upon which they might appeal are those set out in paras (a) and (b) of s 187 and they are not, as is required by those provisions, either parties to the proceedings in which the decisions were made or industrial organisations affected by the decisions: see, for example, Employers' Federation of New South Wales v New South Wales Nurses' Association . 12 We now turn to the first issue earlier identified which requires consideration of the history of the development of the wage fixing principles insofar as they relate to the relevant principles, that is principle 2(e) and principle 10 concerning Special Cases. 13 The relevant history commences with proceedings before the Commission in 1993 when, in the State Wage Case - December 1993 (1993) 52 IR 157, the Full Bench modified the Special Case principle in order to assist "the process of devolution of industrial affairs to the parties". The Full Bench held (at 198 - 199):

We consider that in conformity with the policy of the Act, parties should be encouraged to bring awards to settled rights. Therefore the flow of such awards should not be unnecessarily impeded. With that in mind we propose to add a proviso to the Special Cases principle to encourage that development.

During the hearing of this case mention was made of the process of devolution of industrial affairs to the parties, implying at least a partial retraction of the present application of State Wage Case principles.

Such devolution would complement the development federally and in this State of new structures and forms of relations between employers and employees and point to changes in the relation between the Commission and the parties appearing before them.

A major part of this redirection is towards an increased accommodation of change brought about by the parties themselves. Before this Commission this redirection is most obvious in relation to enterprise arrangements, usually fully agreed, between the parties. In this State intractable industrial confrontation has become a rare occurrence and ordinary frictional disputation has over several years been much reduced, which gives rise to a question as to whether the Commission in response to these trends should become less prescriptive, particularly where parties are in agreement.

A change in direction would mean that the Commission would be able to direct attention to the areas of industrial relations where its intervention is most needed; where the parties are not able to agree and arbitration is required, or where parties have reached a substantial area of agreement but require conciliation or arbitration to bridge their differences.

The Commission has as a consequence determined that where parties apply for an award by consent, the Commission in the ordinary case will note the course taken in negotiations to be assured that the agreement is genuine and that the proposed award is in accordance with the Act.

Further, the Commission strongly recommends to consenting parties generally that they pay regard to the industrial initiatives discussed in recent State Wage Case decisions, especially micro-economic reform.

Two further propositions follow: (i) Consenting parties to awards will no longer be bound by the need to make out a Special Case.

(ii) The State Wage Case principles will remain applicable where parties are unable to reach agreement. The Commission at the request of the parties where substantial but incomplete agreement has been reached will assist by conciliation and if sought by arbitration.

Nothing in these varied arrangements is intended to prevent access to the arbitration of cases before the Commission where the parties are unable to reconcile their differences. (emphasis added) 14 The Special Case and the Enterprise Arrangements principles were both continued by the Full Bench in the State Wage Case - December 1994 (1994) 57 IR 1, the Full Bench noting the strong support of the parties for those principles and the useful role which they had played. 15 The final part of the history that needs to be noted is what occurred in the State Wage Case - June 1998 (1998) 79 IR 416. It was in those proceedings in which principle 2(e) was included in the principles as the result of an agreement between the parties and, as the Full Bench noted at 429, principle 2 was proposed by the parties on the basis that it reflected their "desire to continue the Special Case principle developed in New South Wales". In including this provision in the principles, and so continuing the Special Case principle in essentially the same form as had been made in 1993 (and which continues to the present), the Full Bench observed (at 439): One reflection of these differences, of some years standing now, appears in the existing Special Case principle, which accommodates departure from the provisions of the Commission's Wage Fixing Principles in cases where the parties are in agreement with each other. This provision has accommodated many consent arrangements, arrived at on an industry or enterprise basis, being reflected in awards of the Commission, an outcome generally not readily available in the federal system. 16 As is clear from these references to the background to the making of the principles, they developed because of the objectives of both the Industrial Relations Act 1991 and the Industrial Relations Act 1996 that there should be a "process of devolution of industrial affairs to the parties" and the recognition that, where parties are in agreement as to the terms of their industrial arrangements, the Commission should be "less prescriptive" and "less interventionist". This approach was usefully encapsulated by the Full Bench in Re Principles for Approval of Enterprise Agreements (1996) 94 IR 98 at 117, in these terms: [T]he 1996 Act ... emphasises the continued devolution of industrial relations matters directly into the hands of those most immediately concerned, employers, employees and the industrial organisations which represent them. The Commission's role in this aspect of the legislation is protective and facilitative, rather than interventionist.

See also Re Equal Remuneration Principle (2000) 97 IR 177 at 208 in para [126]. 17 The other area which should be referred to, although strictly not necessary for determination, is the effect of s 11 of the Industrial Relations Act which is in the following terms: 11 When award may be made (1) An award may be made: (a) on application to the Commission or on the Commission's own initiative, or (b) in the course of an arbitration by the Commission under Chapter 3 to resolve an industrial dispute. (2) An application for an award may be made only by: (a) an employer, or (b) an industrial organisation of employers or employees, or a State peak council. (3) Anyone who can apply for an award may become a party to any proceedings for making an award. (4) An applicant for an award, or to become a party to the making of an award, is required to satisfy the Commission that it or any one or more of its members has a sufficient interest in the proposed award. 18 Do the references in s 11(2) to "an employer" and to "an industrial organisation of employers", when read in conjunction with the qualification in s 11(4) as to "sufficient interest", apply where the relevant employers cannot employ employees bound by the subject or proposed award? We do not consider there is any basis to find that an employer in that situation, or an organisation representing such an employer, could be said to have a sufficient interest so as to enable the employer or employers' organisation to be a party to a proposed award in terms of s 11. This conclusion is sufficient to dispose of the appellants' contentions based on s 11 of the Industrial Relations Act . Although the appellants submitted, in effect, that the present proceedings provided the occasion to determine the scope of the section, it is unnecessary, in light of our conclusion, to deal further with the issue. 19 We now return to the earlier consideration of the history of the development of the relevant Wage Fixing principles. The history demonstrates that although some of the references to "the parties" may be thought to be sufficiently general so as to include reference not only to employers and unions actually bound by an award, but also to other employers or organisations which might have some indirect interest in the award, the history seen in its context, in particular the foundational discussion cited above from the State Wage Case - December 1993 , makes tolerably plain that references to parties were clearly intended to be limited to the employers and employees bound by the award or to be bound by the proposed award, or to those organisations representing such employers and employees. There is no basis to construe the reference to "the parties" in either principle 2(e) or principle 10 as including an employer or employer organisation which has an indirect interest in the award or proposed award, as exemplified by the situation of the appellants. The approach of the Full Bench in Re Transport Industry (State) Award (2000) 95 IR 232 at [12] and [38] is, we consider, supportive of this construction of the principles. 20 We now turn to the second issue raised in the appeal as to whether the commissioner at first instance had erred in limiting the material that the appellants could place before the Commission as to cost impact and associated matters. In respect of that issue, the appellants have also raised a related issue as to whether, in adopting the approach he did, the commissioner denied them procedural fairness. As earlier observed, Connor C granted the appellants leave to intervene in the proceedings before him but limited the role they might play in such proceedings. Once the commissioner held, as we consider he correctly did, that the appellants were not parties to the proposed award, then the only role they could have in the proceedings was as an intervener. The commissioner permitted them leave to intervene. The role of interveners before the Commission, and its predecessors, has been the subject of consideration and the development of relevant principles over a number of decades. The approach that has been and should be adopted is one particular to the jurisdiction and it is contrary to the jurisprudence that has developed to afford a person or organisation granted leave to intervene the rights or standing of a party to the proceedings. 21 Two clear principles emerge from the cases and it is sufficient, so far as authorities are concerned, to refer to those set out in the well known judgment in Re Special Constables (Police Department) Award [1956] AR (NSW) 880. For present purposes, it is sufficient to state the relevant principles as having two aspects: first, that the role of an intervener is limited and is subject to the exercise of the Commission's discretion as to that role; and, second, that an intervener has no right to call evidence or to cross-examine witnesses. The approach of Connor C as to the role of the appellants, when considered in the light of the principles, was one within the exercise of his discretion. In terms of the applicable appeal principles, that the exercise of discretion is immune from review unless it can be said to constitute appellable error, reference need only be made to House v The King (1936) 55 CLR 499. Our review of the record as to the proceedings before the commissioner does not permit the conclusion that the commissioner fell into appellable error in that respect. Indeed, having found as he did that the appellants were not entitled to be parties to the relevant award or, thus, to the award proceedings, it was inevitable that their role in the proceedings would be limited. It is not a question of whether this Full Bench would have taken the same approach adopted by the commissioner. The relevant question, in light of the requirements of s 191, is whether the commissioner misused the discretion available to him. We do not consider he did. Accordingly, it cannot be said in the context particular to this case that the appellants were denied procedural fairness. 22 The conclusions we have thus reached are sufficient to dispose of this appeal on the basis that it should be dismissed. We have come to this conclusion without separately considering the question of leave to appeal. We consider the appropriate course in relation to that aspect is for leave to appeal to be granted as to one issue and to refuse leave otherwise. We approach the matter in this way since the appeal, on the assumption the appellants do have standing to bring the appeal (an issue which we have not considered it necessary to decide), raises an important although limited question as to the construction and application of the Commission's wage fixing principles. 23 We therefore make the following orders in disposition of the appeal: 1. Leave to appeal granted as to the construction and application of the wage fixing principles. 2. Leave otherwise refused. 3. Appeal dismissed.

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