Fair Work Act 2009

s.365 - Application to deal with contraventions involving dismissal

Application to deal with contraventions involving dismissal

• [1] The Applicant in this matter, Ms. Danielle Mazza, has filed an application under s.365 of the Fair Work Act 2009 (Act) alleging that she was dismissed by her former employer, the Council of the City of Ryde (Respondent) in breach of the general protections provisions in Part 3-1 of the Act.

• [2] The Respondent has raised jurisdictional objections to the application. They maintain that the application is incapable of being brought against them because Part 3-1 did not apply to the Applicant's employment with them. In short, the Respondent says that the Council is neither a national system employer nor a constitutionally-covered entity for the purpose of Part 3-1. Accordingly, they say that the scope of Part 3-1 does not extend to the Respondent and the Applicant's engagement. Further, the Respondent contends that on a proper construction of sections 365(a), 386 and 380, the first-mentioned section is only engaged in circumstances where there has been a dismissal of a national system employee by a national system employer, and, as this was not the case here, the application is unable to proceed.

• [3] The parties were directed to file written submissions and evidence dealing with the objections that had been raised. The Respondent filed material in response to those directions. The Applicant did not. In the circumstances I advised that the matter would be determined on the papers.

• [4] The Commission has very recently considered similar objections by the same Respondent in a separate matter brought by another applicant under s.365 of the Act. In Bonora v. Council of the City of Ryde[1] (Bonora) Deputy President Easton considered whether the Respondent was either a national system employer[2] or a constitutional corporation[3] (and therefore a constitutionally-covered entity pursuant to s.338(2)(a)). The Deputy President determined that the Respondent fell within neither of those descriptions. It followed that the objections by the Respondent were upheld in that matter and the application was dismissed.

• [5] The essential issues that arise in this matter received detailed consideration in Bonora. Having had the benefit of Deputy President Easton's reasons in Bonora, I have reached the same conclusion in relation to the objections raised by the Respondent. I refer to and rely on those reasons.

• [6] The core issue for determination is whether the Respondent is excluded from the operation of Part 3-1 because it is neither a national system employer nor a constitutionally-covered entity (as a constitutional corporation).

• [7] Section 339 of the Act extends the operation of Part 3-1 to national system employers. It provides, relevantly:

In addition to the effect provided by s.338, this Part also has the effect it would have if any one or more of the following applied:

(a) a reference to an employer in any one or more provisions of this Part were a reference to a national system employer.

• [8] Section 14 of the Act defines "national system employer". Subsection 14(2) specifically provides that a particular employer is not a national system employer if they meet the criteria set out in subsections (a), (b) and (c) of that section. For present purposes, the relevant criteria are as follows:

(1) Subsection 14(2)(a)(ii) - that employer is a "body established for a local government purpose by or under a law of a State or Territory" ;[4] and

(2) Subsection 14(2)(b) - "that employer is specifically declared, by or under a law of the State or Territory, not to be a national system employer for the purposes of this Act"; and

(3) Subsection 14(2)(c), an endorsement by the Minister under paragraph 4(a)is in force in relation to the employer.

• [9] I am satisfied that the Respondent meets each of the abovementioned criterion. It is a body established for a local government purpose by or under the Local Government Act 1993 (NSW).

• [10] Section 9A(1) of the Industrial Relations Act 1996 (No 17) (NSW IR Act) provides that:

(1) An eligible employer[5] is declared not to be a national system employer for the purposes of the Fair Work Act 2009 of the Commonwealth if the Minister, by order published on the NSW legislation website, declares the employer not to be a national system employer."

• [11] The Industrial Relations (National System Employers) Order 2009 (Order) is an order published on the NSW legislation website as contemplated by section 9A(1) of the NSW IR Act. This Order declares in Schedule 1, a list of "non-national system employers", specifically "Councils" in Part 2 of Schedule 1, which includes the "Ryde City Council". Together these provisions constitute a specific declaration under the law of the state for the purposes of s.14(2)(b).

• [12] A state declaration of this kind, in relation to an employer, may be endorsed by the Minister under s.14(4)(a) of the Act. The Fair Work (State Declarations - employers not to be national system employers) Endorsement 2009 (Cth) is such an endorsement. Schedule 1 Part 1 item 135 of that instrument identifies Ryde City Council as an employer that is not a national system employer. That endorsement commenced on 1 January 2010.

• [13] On the basis of the matters referred to above I conclude, as did Deputy President Easton in Bonora,[6] that the Respondent is not a national system employer.

• [14] Section 338(1)(a) of the Act provides that Part 3-1 applies to action taken by a constitutionally-covered entity. A constitutionally-covered entity is defined, relevantly, as including a constitutional corporation.[7] "Constitutional corporation" is in turn defined in s.12 as "a corporation to which paragraph 51(xx) of the Constitution applies." Paragraph 51(xx) of the Constitution provides that the Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.

• [15] The Respondent submitted that the Commission could deal with the anterior question of whether it was a corporation at all before considering whether it was a constitutional corporation. In this respect they relied on the provisions of the Local Government Act 1993 (NSW) (LGA). Section 220 of the LGA provides that a council is a body politic of the State and is not a body corporate (including a corporation).[8]

• [16] In Bonora the Commission traversed the history of s.220 and its likely effect, particularly in light of the High Court's decision in Communications, Electrical, Electronic. Energy, Information, Postal, Plumbing and Allied Services Union of Australia v. Queensland Rail[9] (Queensland Rail). The Deputy President also made reference to various decisions of the Commission and superior courts which might bear on the operation of s.220. This included the decision in Carroll v. Clarence Valley Shire Council[10] where His Honour Emmett J expressed the view that a statement in a State Act was not decisive as to whether a particular entity was a corporation as that term is defined in federal legislation.[11]

• [17] Ultimately the Commission in Bonora took the view that the matter should be determined by reference to the Respondent's potential status as a trading corporation rather than coming to a concluded view as to its status as a corporation per se. In my view, particularly having regard to the lack of full submissions from an informed contradictor in this matter, I think that is the appropriate course to adopt here.

• [18] The evidence in this matter was the Respondent's 2021/2022 annual report. The same report was relied upon in Bonora. I have considered that evidence, the submissions of the Respondent and the analysis undertaken by Deputy President Easton in Bonora. I see no reason to depart from the ultimate conclusion reached on this point in Bonora. Whether the trading activities of an (entity) are sufficient to justify its categorisation as a 'trading corporation' is a question of fact and degree.[12] I am satisfied that to the extent the activities of the Respondent may be considered to be trading activities they are not substantial or sufficiently significant[13] such as to render the Respondent a trading corporation.

• [19] The Respondent also submitted that the matters raised by the application were not covered by the provisions of s.337 and 30R of the Act.

• [20] Section 337 provides that the operation of Part 3-1 applies only to the extent provided by Division 2 of that Part. Despite s.337, s.30R of the Act extends the operation of the general protections provisions to action taken in a referring State that is a referring state because of Division 2B of Part 1-3. That includes the State of New South Wales. However, that extension is subject to the limitation in s.30S of the Act, the effect of which is that a provision of the Act can only have effect if it is supported by the state referral itself. In this instance, s.6(f) of the Industrial Relations (Commonwealth Powers) Act 2009 (NSW) (CP Act) excludes from referred matters, matters relating to local government sector employees. "Local government sector employee" is defined under section 3 of the CP Act as an employee of, inter alia, a "local council or county council under the Local Government Act 1993". The Applicant, as an employee of the Respondent, the Council of the City of Ryde is such an employee. Part 3-1 therefore has no operation to the Applicant by virtue of the operation of ss.337 and 30R.

• [21] The Respondent is not a national system employer. It is not a constitutionally-covered entity because it is not a constitutional corporation since it is not a foreign, trading or financial corporation. Neither is it a body of any other kind whose actions are captured by Part 3-1. Part 3-1 of the Act does not apply to the employment of the Applicant by the Respondent.

[1] [2024] FWC 384.

[4] The Respondent may also be a body established for a public purpose under s 14(2)(a)(i) but it is unnecessary to consider the issue further here.

[5] Section 9A(2) of the NSW IR Act provides that "an eligible employer is an employer that, under section 14 of the Fair Work Act 2009 of the Commonwealth, is eligible to be declared not to be a national system employer for the purposes of that Act".

[9] [2015] HCA 11; (2015) 256 CLR 171.

[10] [2012] FCA 1143.

[11] At [8]. See also Queensland Rail at [23].

[12] Roads and Maritime Services v. Leeman [2018] FWCFB 5772.

[13] R. v. Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190.

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