Endeavour Coal Pty Limited v Construction, Forestry, Mining and Energy Union

ENDEAVOUR COAL PTY LTD (ACN 109 830 476), ANGLO COAL (DARTBROOK MANAGEMENT) PTY LTD (ACN 007 377 577), ANGLO COAL (DRAYTON MANAGEMENT) PTY LTD (ACN 002 028 237), MT ARTHUR COAL PTY LTD (ACN 000 181 902), HELENSBURGH COAL PTY LTD (ACN 086 463 452), GLENNIES CREEK COAL MANAGEMENT PTY LTD (ACN 097 768 093), CAMBERWELL COAL PTY LIMITED (ACN 003 825 018), BERRIMA COAL PTY LTD (ACN 064 237 092), CENTENNIAL ANGUS PLACE PTY LTD (ACN 101 508 945), CENTENNIAL MANDALONG PTY LTD (ACN 101 508 892), CENTENNIAL MYUNA PTY LTD (ACN 101 508 981), CENTENNIAL NEWSTAN PTY LTD (ACN 101 508 865), CENTENNIAL SPRINGVALE PTY LTD (ACN 052 096 812), CHARBON COAL PTY LTD (ACN 064 237 118), CLARENCE COLLIERY PTY LTD (ACN 001 680 584), TAHMOOR COAL PTY LTD (ACN 076 663 968), RAVENSWORTH COAL MANAGEMENT LTD (ACN 008 596 549), UNITED COLLIERIES PTY LTD (ACN 001 990 209), BULGA COAL MANAGEMENT PTY LTD (ACN 005 534 391), ULAN COAL MINES LTD (ACN 000 189 248), BELTANA HIGHWALL MINING PTY LTD (ACN 095 339 629), WALLERAWANG COLLIERIES LIMITED (ACN 000 001 436), LAKECOAL PTY LIMITED (ACN 094 084 787), WAMBO COAL PTY LIMITED (ACN 000 668 057), RIX'S CREEK PTY LIMITED (ACN 003 824 244), BLOOMFIELD COLLIERIES PTY LIMITED (ACN 000 106 972) AND NORTHERN WAGGONS PTY LIMITED (ACN 000 082 075) v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH) NSD 656 OF 2007

ON APPEAL FROM THE INDUSTRIAL COURT OF NEW SOUTH WALES

ANGLO COAL (DARTBROOK MANAGEMENT) PTY LTD (ACN 007 377 577)

ANGLO COAL (DRAYTON MANAGEMENT) PTY LTD (ACN 002 028 237)

GLENNIES CREEK COAL MANAGEMENT PTY LTD (ACN 097 768 093)

BLOOMFIELD COLLIERIES PTY LIMITED (ACN 000 106 972)

AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH)

JUDGES: RYAN, MOORE AND MANSFIELD JJ DATE OF ORDER: 22 november 2007

1. The appeal be allowed.
2. The order of the Industrial Court of New South Wales dismissing the application of the appellants be set aside.
3. It be declared that the New South Wales Industrial Relations Commission does not have jurisdiction pursuant to s 10 and s 11 of the Industrial Relations Act 1996 (NSW) to hear an application for an award determining the condition of employment of long service leave of employees of the appellants, namely the companies listed in Schedule A to these orders.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Schedule A

1. Endeavour Coal Pty Ltd (ACN 109 830 476)
2. Anglo Coal (Dartbrook Management) Pty Ltd (ACN 007 377 577)
3. Anglo Coal (Drayton Management) Pty Ltd (ACN 002 028 237)
4. Mt Arthur Coal Pty Ltd (ACN 000 181 902)
5. Helensburgh Coal Pty Ltd (ACN 086 463 452)
6. Glennies Creek Coal Management Pty Ltd (ACN 097 768 093)
7. Camberwell Coal Pty Limited (ACN 003 825 018)
8. Berrima Coal Pty Ltd (ACN 064 237 092)
9. Centennial Angus Place Pty Ltd (ACN 101 508 945)
10. Centennial Mandalong Pty Ltd (ACN 101 508 892)
11. Centennial Myuna Pty Ltd (ACN 101 508 981)
12. Centennial Newstan Pty Ltd (ACN 101 508 865)
13. Centennial Springvale Pty Ltd (ACN 052 096 812)
14. Charbon Coal Pty Ltd (ACN 064 237 118)
15. Clarence Colliery Pty Ltd (ACN 001 680 584)
16. Tahmoor Coal Pty Ltd (ACN 076 663 968)
17. Ravensworth Coal Management Ltd (ACN 008 596 549)
18. United Collieries Pty Ltd (ACN 001 990 209)
19. Bulga Coal Management Pty Ltd (ACN 005 534 391)
20. Ulan Coal Mines Ltd (ACN 000 189 248)
21. Beltana Highwall Mining Pty Ltd (ACN 095 339 629)
22. Wallerawang Collieries Limited (ACN 000 001 436)
23. Lakecoal Pty Limited (ACN 094 084 787)
24. Wambo Coal Pty Limited (ACN 000 668 057)
25. Rix's Creek Pty Limited (ACN 003 824 244)
26. Bloomfield Collieries Pty Limited (ACN 000 106 972)
27. Northern Waggons Pty Limited (ACN 000 082 075)

ON APPEAL FROM THE INDUSTRIAL COURT OF NEW SOUTH WALES

ANGLO COAL (DARTBROOK MANAGEMENT) PTY LTD (ACN 007 377 577)

ANGLO COAL (DRAYTON MANAGEMENT) PTY LTD (ACN 002 028 237)

GLENNIES CREEK COAL MANAGEMENT PTY LTD (ACN 097 768 093)

BLOOMFIELD COLLIERIES PTY LIMITED (ACN 000 106 972)

AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH)

REASONS FOR JUDGMENT THE COURT 1 This is an appeal under s 853(1) of the Workplace Relations Act 1996 (Cth) ("WR Act") from a judgment of the Industrial Court of New South Wales ("the Industrial Court"). The appellants are corporations and employers in the coal industry. It is common ground they are constitutional corporations for the purposes of the WR Act. They seek declarations that the Industrial Commission of New South Wales ("the New South Wales Commission") does not have jurisdiction to hear an application for an award prescribing long service leave conditions for employees of constitutional corporations. 2 This appeal concerns the scope of the WR Act in a context where the Commonwealth Parliament has relied on radically different heads of Constitutional power to regulate the relationship between employer and employee. The power which now underpins the greater part of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ("the Amending Act")(which substantially amended the WR Act generally effective from 27 March 2006) and the Workplace Relations Regulations 2006 (Cth) is the power in s 51(xx). This paragraph confers on the Commonwealth Parliament the 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. 3 The appeal is founded on s 16 of the WR Act which limits the role of States in prescribing or indirectly regulating terms and conditions of employment of employees of constitutional corporations. Section 16 provides: (1) This Act is intended to apply to the exclusion of all the following laws of a State or Territory so far as they would otherwise apply in relation to an employee or employer: (a) a State or Territory industrial law; (b) a law that applies to employment generally and deals with leave other than long service leave; (c) a law providing for a court or tribunal constituted by a law of the State or Territory to make an order in relation to equal remuneration for work of equal value (as defined in section 623); (d) a law providing for the variation or setting aside of rights and obligations arising under a contract of employment, or another arrangement for employment, that a court or tribunal finds is unfair; (e) a law that entitles a representative of a trade union to enter premises. (2) However, subsection (1) does not apply to a law of a State or Territory so far as: (a) the law deals with the prevention of discrimination, the promotion of EEO or both, and is neither a State or Territory industrial law nor contained in such a law; or (b) the law is prescribed by the regulations as a law to which subsection (1) does not apply; or (c) the law deals with any of the matters (the non-excluded matters ) described in subsection (3). (3) The non-excluded matters are as follows: (a) superannuation; (b) workers compensation; (c) occupational health and safety (including entry of a representative of a trade union to premises for a purpose connected with occupational health and safety); (d) matters relating to outworkers (including entry of a representative of a trade union to premises for a purpose connected with outworkers); (e) child labour; (f) long service leave; (g) the observance of a public holiday, except the rate of payment of an employee for the public holiday; (h) the method of payment of wages or salaries; (i) the frequency of payment of wages or salaries; (j) deductions from wages or salaries; (k) industrial action (within the ordinary meaning of the expression) affecting essential services; (l) attendance for service on a jury; (m)regulation of any of the following: (i) associations of employees; (ii) associations of employers; (iii) members of associations of employees or of associations of employers. (4) This Act is intended to apply to the exclusion of a law of a State or Territory that is prescribed by the regulations for the purposes of this subsection. (5) To avoid doubt, subsection (4) has effect even if the law is covered by subsection (2) (so that subsection (1) does not apply to the law). This subsection does not limit subsection (4). (6) In this section: this Act includes the Registration and Accountability of Organisations Schedule and regulations made under it. 4 Section 4 of the WR Act defines "State or Territory industrial law" as meaning: (a) any of the following State Acts: (i) the Industrial Relations Act 1996 of New South Wales; (ii) the Industrial Relations Act 1999 of Queensland; (iii) the Industrial Relations Act 1979 of Western Australia; (iv) the Fair Work Act 1994 of South Australia; (v) the Industrial Relations Act 1984 of Tasmania; or (b) an Act of a State or Territory that applies to employment generally and has one or more of the following as its main purpose or one or more of its main purposes: (i) regulating workplace relations (including industrial matters, industrial disputes and industrial action, within the ordinary meaning of those expressions); (ii) providing for the determination of terms and conditions of employment; (iii) providing for the making and enforcement of agreements determining terms and conditions of employment; (iv) providing for rights and remedies connected with the termination of employment; (v) prohibiting conduct that relates to the fact that a person either is, or is not, a member of an industrial association (as defined in section 779); or (c) an instrument made under an Act described in paragraph (a) or (b), so far as the instrument is of a legislative character; or (d) a law that: (i) is a law of a State or Territory; and (ii) is prescribed by regulations for the purposes of this paragraph. 5 Section 17 of the WR Act provides that Federal awards and workplace agreements prevail over State and Territory laws and industrial instruments (including awards) to the extent of any inconsistency. The section also provides, however, that Federal awards and workplace agreements will be subject to particular State or Territory laws dealing with occupational health and safety and other prescribed matters. 6 Central to this appeal is the interaction between s 16 of the WR Act and ss 10 and 11 of the Industrial Relations Act 1996 (NSW) ("the State Act"). Those latter sections provide: 10 Commission may make awards The Commission may make an award in accordance with this Act setting fair and reasonable conditions of employment for employees. 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 (c) 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.

Decision of the Industrial Court of New South Wales 7 The appellants sought from the Industrial Court declaratory relief concerning the New South Wales Commission's jurisdiction to arbitrate a new award which was to be known as the Coal Industry (Long Service Leave) Award 2006 ("the proposed award"). Specifically, they sought orders declaring that the proposed award would be invalid in so far as it purported to apply to them (employers in the coal industry and constitutional corporations) and that the New South Wales Commission did not have jurisdiction under ss 10 and 11 of the State Act to hear an application for an award determining the condition of employment going to long service leave of employees of constitutional corporations. 8 In its reasons for judgment, the Industrial Court identified the issue as whether the New South Wales Commission's jurisdiction to make an award for long service leave pursuant to ss 10 and 11 of the Act was excluded by the operation of s 16(1) of the WR Act. 9 The matter proceeded upon the basis of an agreed statement of facts which was in the following terms: 1 Each of the Applicants [the appellants in this matter] a. is an "employer" as that term is defined in s 6(1)(a) of the Workplace Relations Act 1996 (Cth); b. is a constitutional corporation as that term is defined in section 4(1) of the Workplace Relations Act 1996 (Cth); c. employs individuals to perform work in the coal mining industry; and d. is a respondent to, or is otherwise bound by, the Coal Mining Industry (Production and Engineering) Consolidated Award 1997 (the Federal Award). 2 At clause 36, the Federal Award provides for a long service leave entitlement and associated machinery provisions. 3 The Respondent has filed an application in the New South Wales Industrial Commission in matter no 2785 of 2006 which seeks the making of a new award to be known as the Coal Industry (Long Service Leave) Award 2006 (the proposed state award). 4 Both the Federal Award and the proposed State Award (if made) have, or will have, application in the coal mining industry. 5 The area and incidence of the proposed award would, as a minimum, apply to persons not covered by the Federal Award. 6 Each of the applicant companies is either bound by the Federal Award, or is party to a federal agreement that substantially replicates, or incorporates by reference, the long service leave provision contained in the Federal Award. 7 There are a number of companies that operate in the New South Wales coal industry who are not bound by the Federal Award or a federal agreement that substantially replicates, or incorporates by reference, the long service leave provisions of the Federal Award. 10 The Industrial Court referred to the history of long service leave in New South Wales, noting that s 6 of the Long Service Leave Act 1955 (NSW) ("the Long Service Leave Act") expressly recognised the continuation of the New South Wales Commission's award making power in relation to long service leave. 11 The appellants' first argument before the Industrial Court had three elements. First, that the exception in s 16(2)(c) and s 16(3)(f) had to be read so as to give effect to the general legislative intention. Secondly, that certain matters had been excluded for the express purpose of enabling the State, by legislation, to put in place statutory minimum provisions across the State. Thirdly, that those matters were not excluded so as to allow determination by arbitration of general conditions of employment of employees relating to those matters. Essentially, the appellants argued that a specific statute such as the Long Service Leave Act would fall outside the general exclusion in s 16(1) but that the New South Wales Commission's power to make award provisions for long service leave would be caught by that general exclusion. The appellants' second argument, which really underpinned the first, was that ss 10 and 11 were not laws that dealt with long service leave in the manner contemplated by ss 16(2)(c) and s 16(3)(f). 12 Citing Re Inquiry into matters relating to the availability of work at Tristar Steering and Suspension Australia Ltd [2007] NSWIRComm 50, the Industrial Court accepted (at [16]) that the purpose of s 16(1) of the WR Act was to establish a legislative field concerning: prescription of the rights and obligations of employees and employers (as defined) and the regulation of their workplace relations in which the WR Act is to operate to the exclusion of any State or Territory law which, subject to the exceptions in ss 16(2) and (3), intrudes upon that field. 13 One of the arguments pursued by the appellants was that the New South Wales Commission's award making power might be excluded by s 16(1) by virtue of s 109 of the Constitution. The Industrial Court held this argument was without proper foundation. It concluded that, having regard to the words of the exception as they appear in ss 16(2) and 16(3), the context in which those subsections appeared and the evident purpose of the Commonwealth Parliament in expressly including a limitation upon the exclusion of State and Territory laws, the Parliament did not intend, by s 16, to exclude the general award making power of the New South Wales Commission as to long service leave. 14 The Industrial Court referred to the Minister's speech on the second reading of the Bill which became the Amending Act. It also referred to the explanatory statement to the Workplace Relations Regulations 2006 which said (at [18]): To the extent that a State and Territory law is within the scope of subsection 16(1), and is not …otherwise saved by subsections 16(2) and (3), the State or Territory law will be excluded in relation to an employee or employer within the meaning of subsections 5(1) or 6(1). The effect of this is that, for example, the State and Territory industrial laws will cease to apply in relation to an employee or employer within the meaning of subsection 5(1) or 6(1) for the following kinds of matters: · Matters about state awards (other than compliance with award obligations before the reform commencement), including the making or variation of an award; 15 However, the Industrial Court indicated it was unable to extrapolate from that stated objective to conclude that the specific exceptions to the general exclusion should be narrowly interpreted as applying only to specific statutes concerning the particular "non-excluded matter". The Industrial Court concluded analysis at such a broad level ignored the particular context in which the exceptions found in s 16(2) and (3) existed and did not assist in the interpretation of those specific exceptions. The Industrial Court rejected the contention that there was a conflict between the WR Act setting statutory minima and the New South Wales Commission's role in setting conditions of employment under s 10 of the State Act. The Industrial Court found that conditions set under s 10 were also minima and no different from statutory minima under the WR Act and that therefore s 16(2)(c) should not be read to include only specific laws that set statutory minima. 16 The appellants contended that State awards were not intended to be maintained and that this was demonstrated by the fact that all State awards in existence at the time of the commencement of the WR Act (that related to constitutional corporations and their employees) became notional agreements preserving State awards ("NAPSAs") which could only be varied in the Federal system. Further, it would be inconsistent with the objects of the WR Act to subject an employer (who had effectively been taken out of the State system) to State awards in which an arbitral tribunal would determine the relevant condition. In rejecting the relevance of the provisions concerning NAPSAs in determining the reach of s 16(2)(c) and s 16(3)(f), the Industrial Court noted that State awards continued to exist despite NAPSAs, that State arbitral systems would continue where employers were not constitutional corporations, and that long service leave was regulated by statute and awards. 17 The appellants contended that s 16(2)(c) should be construed only as dealing with the situation in Queensland. Long service leave is dealt with in the Queensland equivalent to the State Act and not specific long service leave legislation. If it were not for s 16(2)(c), the Industrial Relations Act 1999 (Qld) would be excluded by the operation of s 16(1). The Industrial Court rejected this argument, accepting the respondent's submission that there was nothing in the extrinsic material to suggest that the drafting was designed to address only the situation in Queensland. It also pointed to the fact that the Industrial Relations Act 1999 (Qld) conferred power on an arbitral body to decide entitlement to long service leave for certain employees as well as providing "a statutory minima". 18 The appellants contended that New South Wales v Commonwealth of Australia (2006) 81 ALJR 34 was relevant to certain matters in issue. The Industrial Court held that limited guidance could be gleaned from that case because the States and the Commonwealth had agreed on a description of the relevant provisions and the High Court itself (at [12]) acknowledged the agreed description was not intended to foreclose any issues of construction. 19 The Industrial Court then considered the particular construction of the exception in s 16(2)(c) and s 16(3)(f) which it noted, in combination, provided that s 16(1) did not apply to a State or Territory industrial law so far as it "deals with" "long service leave". The appellants argued firstly that ss 10 and 11 do not deal with long service leave as, properly characterised, they deal with the power of the New South Wales Commission to make awards. Secondly, they argued that these sections make no mention of long service leave, nor do they establish rights or obligations with respect to long service leave. Thirdly, in order to deal with long service leave, they would need to refer to long service leave and be operative provisions in that respect. They also submitted that the Court should apply the decision of the President of the New South Wales Commission in Unilever Australia Limited v The Australia Workers' Union, New South Wales (2005) 141 IR 266 and that Re Transport Industry - Mutual Responsibility for Road Safety (State) Award and Contract Determination (No 2) (2006) 158 IR 17 (Re Transport Industry)was incorrect in its interpretation of "deals with" in s 16(2)(c) and should be distinguished. The Court declined to distinguish Re Transport Industry. 20 The Court found that there was nothing in the section which supports the proposition that "long service leave" in the context of s 16(3)(f) should be read as referring only to specific long service leave legislation. 21 The Industrial Court noted that Re Transport Industry involved an analogous question, namely, whether s 10 of the State Act dealt with occupational health and safety matters. The Industrial Court set out a lengthy passage from that judgment (at [41] of the Court's judgment). The issues which arose in that case included the following (at [112] of Re Transport Industry): (a) whether the reference to occupational health and safety was only to occupational health and safety legislation and not to instruments made under the IR Act that deal with or relate to occupational health and safety issues; (b) whether the exception actually applied to the present application as the exception in ss 16(2) and (3)(c) relates to "laws" dealing with occupational health and safety and as the industrial instruments sought by the Union in its application are not laws, the instruments do not fall within the exception; … 22 The Industrial Court agreed with the Full Bench in Re Transport Industry and noted that the decision was centrally relevant to the matter it had before it. The Industrial Court summarised the findings of the Full Bench of the New South Wales Commission as follows (at [43]): (a) sub-section 16(2) should be read beneficially and broadly given the public policy purpose of occupational health and safety; (b) the phrase "occupational health and safety" should not be limited to a reference to specific occupational health and safety legislation as there is nothing in the plain words of s 16(3)(c) to require such a limitation; (c) the wording of s 16(2)(c) implies a clear intent to "save" those parts of laws caught by the exclusion in s 16(1) that deal with the "non-excluded matters" and as such, the reference to occupational health and safety should not be limited to specific occupational health and safety legislation; (d) The context of the exception implies a broader reading so as to include in the exception all of the existing regulation in the area; and (e) as the Commission's power to make awards setting fair and reasonable conditions of employment related to any "industrial matter" and that as occupational health and safety was an "industrial matter", then s 10 was a law that dealt with occupational health and safety. 23 The Industrial Court considered that, as with occupational health and safety, the exclusions for long service leave should be read broadly and beneficially to give effect to the social purposes of the subject matter. As with occupational health and safety, there was no reason to restrict the reference to a law that deals with long service leave to provisions expressly referring to long service leave. The reasoning in Re Transport Industry that led to a finding that s 10 was a law that dealt with occupational health and safety was held to be directly applicable and, therefore, the Court rejected the appellants' contention that a provision must refer specifically to "long service leave" to bring it within s 16(2)(c). The New South Wales Commission's award making power in s 10 was accepted to extend to awards containing provision for long service leave because long service leave was an industrial matter and therefore, by reference to Re Transport Industry,s 10 was a law that dealt with long service leave. On that basis s 16(1) did not operate to restrict the New South Wales Commission from making award provisions relating to long service leave. 24 The Industrial Court found that s 10 was a law which dealt with long service leave for the purposes of s 16(2)(c) of the WR Act and that therefore s 16(1) did not operate to preclude the New South Wales Commission from making award provisions relating to long service leave.

Grounds of appeal 25 The grounds of appeal are: 1 The court below erred in holding that, notwithstanding s 16(1) of the Workplace Relations Act 1996 (Cth), the NSW Industrial Relations Commission has jurisdiction to hear an application for an award to be made for long service leave for employees employed by Constitutional Corporations pursuant to s 10 and s 11 of the Industrial Relations Act 1996 (NSW). 2 The Court below erred in holding that s 10 and s 11 of the Industrial Relations Act 1996 (NSW) "deal with" long service leave for the purposes of s 16(2) of the Workplace Relations Act 1996 (Cth). 3 The Court below erred in holding that, s 16(1) of the Workplace Relations Act, does not exclude the general award making power of the Commission as to the non excluded matters in s 16(2)(c). 4 The Court below erred in holding that no inconsistency arises in the proper construction of s 16 of the Workplace Relations Act 1996 (Cth) and s 10 and s 11 of the Industrial Relations Act 1996 (NSW) that would require the application of s 109 of the Commonwealth Constitution.

Appellants' submissions 26 The appellants' submissions were largely a repetition of the arguments before the Court below. 27 The appellants submitted that the general effect of the WR Act is that constitutional corporations are not to be exposed to arbitral determination by State or Territory industrial tribunals but only to laws of a State or Territory prescribed as 'non-excluded' from the operation of WR Act by the Commonwealth Parliament. The gravamen of their argument was that ss 10 and 11 of the State Act deal with award-making and do not deal with long service leave. They submitted that the New South Wales Commission did not have power to make the proposed award to the extent that it affects them and it did not have jurisdiction to hear the application so far as it affected them because the WR Act removed constitutional corporations from the scope of the New South Wales Commission's jurisdiction. 28 The appellants viewed the issue for determination as whether the Commonwealth, in enacting s 16(2), had made provision for the continuation of a system of State arbitral determination of conditions of employment. The appellants referred to New South Wales v Commonwealth where the majority of the High Court said (at [33]): Section 16 expresses the intention that the new Act is to apply to the exclusion of a range of State and Territory laws that would otherwise apply in relation to an employer and employee. 29 The appellants cited Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 (at [69]-[71]) as propounding the applicable principles of statutory construction. There, McHugh, Gummow, Kirby and Hayne JJ discussed the importance of construing a provision by reference to is context, general purpose and policy and the requirement to identify the leading provision when reconciling conflicting provisions. 30 Referring to extracts from New South Wales v Commonwealth the appellants provided an overview of the WR Act, including s 16 and Parts 7, 8 and 10 of the Act and Schedule 8 to the Act. They noted that, though Part 7 deals with a number of forms of leave, it does not deal with long service leave. Part 8 contains no specific provision in relation to long service leave but the appellants submitted it has the effect of making void any term of a workplace agreement which incorporates an award regulating conditions of employment enforced under a law of the State. Under Part 10, long service leave was not listed as one of the terms that may be included in the awards made by the Australian Industrial Relations Commission, nor was its inclusion in awards expressly forbidden. Long service leave is a preserved award term and, as such, continues to have effect despite not being about an allowable matter. The appellants noted there was no other reference to long service leave in the legislation. 31 The appellants noted the objects of Schedule 8 to the WR Act (titled "Transitional Treatment of State Employment Agreements and State Awards") which included preserving for a time the terms and conditions of employment that existed immediately before the commencement of the Amending Act for those employees bound by a State agreement, award or industrial law. The appellants submitted that, had the New South Wales Commission made the proposed award prior to the commencement of the Amending Act, that award would have been converted to a NAPSA. The appellants noted that long service leave was not identified as a preserved entitlement in cl 34(3) of Part 3 of Schedule 8. Clause 34 provides that NAPSAs incorporate any industrial law that would have determined a preserved entitlement identified in subclause (3). 32 The appellants contended that the legislative intention was that there be statutory minima created through a combination of Federal and State legislation with a view to encouraging employers and employees to agree on the conditions of employment to apply to them, rather than have those conditions imposed by third party arbitration. The appellants submitted that a reference to particular subject matter in s 16(2) anticipated a State law providing "a statutory minima", not an arbitral determination of standards. 33 Referring to the Industrial Court's finding that the exclusion in s 16(2) ought to be interpreted "broadly and beneficially to give effect to the social purposes of the subject matter" the appellants submitted that it was not apparent why such a broad and generous interpretation ought be afforded. 34 The appellants submitted that, as the Industrial Court had accepted that an award was not a law for the purposes of s 16(2), it was necessary to consider whether the law which related to the making of an award (ss 10 and 11 of the State Act) fell within the exclusion and, therefore, whether these sections dealt with long service leave. The appellants submitted that while ss 10 and 11 "deal with" award-making, they clearly do not "deal with" long service leave for the purposes of ss 16(2) and 16(3) of the Federal Act. 35 The appellants submitted that should the appeal not be upheld, the Industrial Court's decision will significantly erode the intended effect of Work Choices, namely the achievement of a unitary national system regulating industrial relations.

Respondent's submissions 36 The respondent's submissions addressed four principal points. The first was the appellants' submissions concerning the general purpose of the WR Act and its relevance. The second was the construction of the exceptions in s 16. The third was the beneficial nature of statutory provisions for long service leave. The fourth was the narrow construction contended for by the appellants. 37 The respondent submitted that the appellants had mischaracterised the issue for determination and that it had been correctly described by the Industrial Court (at [2]): The issue requiring adjudication in this matter is whether the Commission's accepted jurisdiction to make an award for long service leave pursuant to ss 10 and 11 of the Act is excluded by the operation of s 16(1) of the Workplace Relations Act 1996 (Cth) ("WR Act"). Central to the determination of that issue is the question as to whether the award making power of the Commission, so described, is removed from the operation of s 16(1) of the WR Act by the combination of ss 16(2)(c) and (3)(f) thereof. That issue may be stated more specifically as being whether the award making power of the Commission with respect to long service leave is a law which deals with (in the sense contemplated in s 16(2)(c) of the WR Act) a matter, namely long service leave, as that expression is referred to in s 16(3)(f). 38 The respondent submitted that the appellants' reliance on the general intention of the WR Act, and materials establishing that intention, was misplaced as aiding the interpretation of ss 16(2) and 16 (3) because these subsections were exceptions to the general purpose and must be considered in that context. To illustrate the point the respondent pointed to Div 8 of Part 9 of the WR Act which provided for the arbitration of actual conditions rather than minimum conditions of employment, which is at odds with the general intention contended for by the appellants. 39 In response to the appellants' argument in relation to NAPSAs, the respondent submitted that it failed to acknowledge that the creation of NAPSAs under Div 3, Part 4 of Schedule 8 did not alter the status of the original award. The respondent also submitted that the appellants' argument in relation to NAPSAs failed to recognise that the WR Act was confined in operation to constitutional corporations and that State arbitral systems would continue. 40 The respondent submitted that, if other provisions of the WR Act were relevant, then they supported the proposition that the Federal legislation contemplated that long service leave would be a State responsibility, noting particularly the fact that it was not an allowable matter or a protected award condition or preserved (other than in a temporary or transitory manner) as a matter of Federal regulation. The respondent also noted that several State awards made under the State Act deal with long service leave. 41 In relation to the construction of the exceptions in s 16, the respondent submitted that, to the extent that s 10 allows the New South Wales Commission to make award provisions relating to long service leave, it falls within the exceptions in ss 16(2) and 16(3)(f) so that s 16(1) does not operate to preclude the New South Wales Commission from making award provision relating to long service leave matters. The respondent acknowledged that this submission depended on the terms of s 10 which sets out the New South Wales Commission's power to "make an award … setting fair and reasonable conditions of employment…". The terms "award" and "conditions of employment" are defined in the dictionary to the State Act as follows: award means an award made, or taken to be made, by the Commission under this Act, and includes any order of the Commission under this Act that sets conditions of employment conditions of employment includes any provisions about an industrial matter. 42 The respondent submitted that what comprised an "industrial matter" was therefore fundamental to the jurisdiction under s 10. "Industrial matters" are defined in s 6 of the State Act and the respondent submits long service leave matters clearly fall within the definition: In this Act, industrial matters means matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry. 43 The respondent then referred to s 5(1) of the Long Service Leave Act which acknowledges the power of the New South Wales Commission to make awards that deal with long service leave and that these awards should prevail over the entitlement conferred by s 4 of the Long Service Leave Actwhere they are more favourable. 44 The respondent submitted that the argument that ss 10 and 11 deal with award making and not with long service leave ignores the fact that ss 10 and 11 do not deal with award making in a vacuum. The respondent submitted that the subject matter of award making about long service leave is merely a subset of the subject matter of long service leave and that nothing in s 16(3)(f) would require a limitation to be placed on the phrase "long service leave". 45 Section 16(3)(f) refers to long service leave as a "non-excluded matter". The respondent submitted that the relevant subject matter is long service leave, not specific long service leave legislation. The respondent submitted that there was no reason to restrict the reference to a law that deals with long service leave in s 16(2)(c) to provisions which expressly refer to long service leave. 46 The respondent submitted that the qualification in s 16(2) that preserves parts of legislation "so far as" they deal with certain subject matters implies that parts, but not all, of a law may deal with long service leave matters. The respondent then referred to the Industrial Court's judgment at [53] which points to the absence of the words "neither a State or Territory industrial law nor contained in such a law" in s 16(2)(c), though they appear in s 16(2)(a). The respondent noted that specific long service leave legislation such as the Long Service Leave Act is exempted from the operation of s 16(1) because of s 16(1)(b) and that it follows that ss 16(2) and 16(3) are unnecessary for exempting specific long service leave legislation. This, the respondent contended, supports the contention that ss 16(2) and 16(3) must have a broader operation in relation to long service such that the exemption therein applies to laws such as the State Act so far as they deal with long service leave. 47 The respondent noted the Industrial Court's other reason for rejecting the construction contended for by the appellants, namely that the exclusion for long service leave should be read broadly and beneficially to give effect to the social purposes of the subject matter. That is, to give effect to the purpose of providing long service leave to reward employees of long standing. The respondent submitted that because long service leave statutory provisions serve the social purposes they do, they should be read beneficially. The respondent submitted there was a clear public policy reason for protecting long service leave laws, namely the ongoing concern to foster the social purposes of long service leave. 48 The respondent noted that the Commonwealth Parliament had not sought to narrow the reach of the exceptions relating to long service leave in ss 16(2) and 16(3) and submitted that, accordingly, the purpose was to retain all existing laws relating to long service leave that would otherwise be ousted by s 16(1). 49 The respondent submitted that the argument that the exceptions in ss 16(2) and 16(3) should be given a narrow construction relies on the general intention of the legislation which the respondent submits is irrelevant. The respondent submitted that the other argument for a narrow construction, that a broad construction would eliminate the coverage of the WR Act in relation to other subject matters not listed in ss 16(2) and 16(3), was without any rational foundation.

Submissions of the Attorney-General of New South Wales 50 Following the provision of a notice pursuant to s 78 of the Judiciary Act 1903 (Cth) the Attorney-General of New South Wales intervened in these proceedings. The Attorney-General's submissions were four fold. He submitted that the decision below was correct and that s 16 permits the subject matter of long service leave to be dealt with by State law in respect of employers as defined in s 6 of the WR Act except to the extent of any direct inconsistency. He submitted that the expression "so far as … the law deals with [long service leave]" in s 16(2)(c) should be read as including a State law that provides relevant legislative minima to be arrived at by a particular process, such as arbitration. The Attorney-General submitted that the WR Act does not evince an intention to invalidate the State Act insofar as that Act provides a method by which long service leave minima are to be determined by arbitration. 51 The Attorney-General cited authority to the effect that the Commonwealth Parliament can give a clear statement of the intention that an Act is not intended to cover the field: R v The Credit Tribunal; Ex parte General Motors Acceptance Corporation Australia (1977) 137 CLR 545 at 563. He submitted that ss 16(2) and (3), though drafted as exceptions, clearly evince an intention that the WR Act is not intended to cover the field insofar as that field includes the subjects listed in s 16(3). It was submitted that this left room for the operation of such State laws as do not conflict with Commonwealth law in respect of that subject matter. It was further submitted that ss 16(2) and (3) plainly indicate that the minimum standards in respect of certain employment conditions are not to be set by the WR Act but rather by State laws and are to apply to employers as defined except where a workplace agreement applies and deals with the subject. 52 The Attorney-General submitted that the way in which the WR Act deals with the subject of long service leave reinforces the conclusion long service leave is intended to be dealt with by State law. This is because the subject is not dealt with in Parts 7 (The Australian Fair Pay and Conditions Standard) and 8 (Workplace Agreements) of the WR Act. Long service leave, where it existed as an award condition, was intended to be preserved only for so long as an employee is never employed pursuant to a workplace agreement. On the expiry of a workplace agreement, if not replaced by a new agreement, the minimum standard under State law would again apply. 53 It was noted that there was no dispute that theState Act empowers the New South Wales Commission to make an award dealing with long service leave. It was submitted that, in light of the history of industrial legislation in Australia the expression "law [that] deals with [long service leave]" would not be intended to refer to one type of State law that provided for long service leave and to exclude the other types, which provided that long service leave entitlements could be established by conciliation and arbitration. 54 The Attorney-General next submitted there was nothing in s 16(2) to suggest an intention to permit State law to operate where it directly prescribed long service leave but not where long service leave is to be determined by some other method. Reference was made to those sections of the WR Act which suggest Parliament understood that conditions of employment listed in s 16(3) would continue to be set by State awards (s 17(1), s 16(1)(b) and, for the reasons set out by the Court at 53, ss 16(2)(a) and (c) when read together). In light of the subject matter, a broad and beneficial construction was appropriate. 55 According to the Attorney-General, the appellants' contentions amounted to a submission that, in order for a law to "deal with" long service leave, it must directly refer to long service leave which ss 10 and 11 do not. The appellants' contention that the scheme of the WR Act is to relieve employers from being subject to arbitral proceedings should be rejected noting that there was nothing in the objects of the WR Act, or the second reading speech, or the explanatory memorandum to the effect that conditions are no longer to be set by arbitral processes. It was also submitted that is was unlikely that the Commonwealth Parliament intended that State laws which created entitlements directly would be operative but that State laws providing an opportunity for affected parties to be heard before the creation of an entitlement would not be operative. 56 The Attorney-General further submitted that the Commonwealth, in creating the exceptions in s 16(2) and s 16(3), chose to create a system that, in respect of certain particular conditions, would not be national, deciding to have those conditions determined pursuant to State law, subject to direct inconsistency. It was submitted that the WR Act is intended to cover the field in respect of employment conditions applying to employers and employees (as defined) but that certain subjects or matters are to be governed by State law. 57 The Attorney-General's submitted that it was consistent with the history of the prescription of employment conditions, that States had laws with respect to long service leave which both set out the entitlements and provided for them to be set by award. He submitted that the expression "deals with" should be read as referable to both a State law that prescribes long service leave and a State law that establishes that long service leave can be determined by a tribunal. The Attorney-General submitted there was nothing conclusive about the fact that in providing the power to make an award as to long service leave, which is accepted by the appellants, the State Act did not refer specifically to that subject.

Consideration 58 It is convenient to refer, in overview, to the scheme of industrial regulation now provided for in the WR Act. It was described by the majority of the High Court in New South Wales v Commonwealth at [7]-[44]. As to s 16, the majority said (at [33]): Section 16 expresses the intention that the new Act is to apply to the exclusion of a range of State and Territory laws that would otherwise apply in relation to an employer and employee. The excluded laws include a "State or Territory industrial law" of a kind specified, together with an Act of a State or Territory "that applies to employment generally" and has a main purpose of either regulating workplace relations; providing for the determination of the terms and conditions of employment; providing for the making and enforcement of agreements determining the terms and conditions of employment; providing for rights and remedies connected with termination of employment or prohibiting conduct that relates to whether a person is a member of an industrial association. It will be necessary to make further reference to the provisions excluding State and Territory laws when dealing with the arguments on that topic. 59 A feature of that scheme is to limit the role of State legislatures in prescribing legislatively and of State industrial tribunals in prescribing by instruments they make or approve, the wages or salaries and the terms and conditions of employment of employees of constitutional corporations. A declaration that this is a feature of the scheme is embodied in s 16. The validity of that section was considered by the High Court. One attack on its validity concerned the width of its operation which, in turn, depended on the meaning of the words "employee" and "employer" in s 16(1). Western Australia had contended that these words were not limited to constitutional corporations and their employees. The majority rejected this argument and said (at [356]): Secondly, as Western Australia conceded, the Explanatory Memorandum to the Workplace Relations Amendment (Work Choices) Bill 2005 indicated that in s 16(1), the terms "employee" and "employer" were used in their defined senses. Thus the Explanatory Memorandum said of the provisions which now correspond with ss 16, 5(1) and 6(1): "70. Proposed section [16] would ensure that the [new Act] would operate to the exclusion of present and future State and Territory industrial regimes in their application to employers and employees who would fall within the general constitutional coverage of the [new Act] (that is, employers and employees within the meaning of proposed subsections [5(1)] and [6(1)]). 71. This object would be achieved, first, by the exclusion by proposed paragraph [16(1)(a)] of a State or Territory industrial lawin its application to constitutionally covered employers and employees." (italics in original.) This indicates that s 16(1) was not seen, in its references to "employees" and "employers", as applying to "employees" and "employers" in the general meaning of those expressions. It also indicates that s 16(1) was seen as excluding a State or Territory law only to the extent that it applied to employees and employers in the senses defined in ss 5(1) and 6(1). 60 It can be seen that the majority accepted that the explanatory memoranda could be taken as indicating the scope of s 16 which, in turn, was to result in the WR Act as operating to the exclusion of present and future State and Territory industrial regimes in relation to constitutional corporations and their employees. In fact, there appears to have been very little controversy in the proceedings in the High Court about the effect of the WR Act if the amendments were valid. So much is apparent from the dissenting judgment of Callinan J at [626] and particularly at [632] where his Honour spoke of s 16 and related sections seeking "effectively, if not to obliterate, certainly very greatly to diminish, State industrial power over corporations and their employees". Of importance is that, in these proceedings, it was common ground that, apart from the operation of s 16(2), the New South Wales Commission could not exercise power to make an award prescribing wages or salaries or the terms and conditions of employment of employees of constitutional corporations. This was because the WR Act, subject to the operation of s 16(2), applies to the exclusion of the State Act, which is the Act conferring on the New South Wales Commission its general award making powers. 61 It is against this background that we must consider whether ss 10 and 11 of the State Act, constituting part of a law which generally was no longer to operate on constitutional corporations and their employees, nonetheless had limited operation because it relevantly dealt, in some respect, with long service leave. Sections 10 and 11 do not, in terms, deal with the matter of long service leave. They confer an award making power which is not expressly confined as to subject matter otherwise than by the general description of "conditions of employment". It was not disputed in this appeal that long service leave is a condition of employment. 62 It was common ground that, historically and at the time s 16 was enacted, long service leave was mostly regulated by State Acts. Generally, the principal subject matter of these State Acts was long service leave. Indeed, one such Act of earlier times was the Factories and Shops (Long Service Leave) Act 1953 (Vic) which was discussed by the majority of the High Court in Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529. At 554, the majority said: The State Act is entirely concerned with prescribing conditions entitling an employee to long service leave with pay and with providing for its commencing period and the rate of pay in respect of the period and with making ancillary and incidental provisions. 63 That Act created an entitlement in every worker to long service leave in respect of continuous employment with one and the same employer. It defined "a worker" and "ordinary pay" and specified that service in the defence forces would not constitute a break in service. It set out the basis on which long service leave was accrued and when leave should be granted by the employer. It provided the ways in which long service leave payments could be made when long service leave was taken or when employment had been terminated before accrued long service leave had been taken. The Act prohibited engaging in employment while on long service leave. Failure to comply with provisions of the Act constituted an offence. It also provided for the settlement by courts of petty sessions of disputes in relation to long service leave and vested the Industrial Appeal Court with appellate jurisdiction in relation to relevant decisions of courts of petty sessions. 64 At 551, the majority of the High Court in Collins v Charles Marshall Pty Ltd said: The State Act deals with the whole subject of long service leave as it affects employees and employers in Victoria. It can be seen that the Victorian Act is described as an Act which deals with the subject matter (of long service leave). This description is consistent with the thesis of the appellants, namely that s 16 is intended to preserve only the operation of State Acts which deal directly with the matters enumerated in s 16(3) including long service leave and that ss 10 and 11 not only do not directly deal with long service leave, but do not deal with it at all. 65 The appellants' thesis is, in our opinion, consistent with the overall objectives introduced by the Amending Act and is supported by the language and structure of s 16. In the section, a distinction is drawn between a law which deals with a subject matter (s 16(1)(b) and s 16(2)(c)), and laws which might authorise a tribunal or court to make an order or determination concerning a specified subject matter. Provisions of the latter type are s 16(1)(c) and s 16(1)(d). This suggests a "law deal[ing]" with one of the matters specified in s 16(3) must deal with the matter itself and directly in the sense that the express subject matter of the legislation is the specified matter (or perhaps one of a number of them). On this approach, a law which may authorise a tribunal or court to deal with the subject matter is not a law dealing with the matter. Also, it must be remembered that not only do ss 10 and 11 not deal with long service leave in any direct or obvious way, but the powers they confer might never be exercised to deal with that matter or any of the other matters specified in s 16(3). It is difficult to accept that the Commonwealth Parliament had contemplated that these empowering provisions were "dealing with" those matters in circumstances where none of those matters might be addressed by an award or order made in exercise of the power. 66 The features identified by the respondent and the Attorney-General as contra-indicating the construction for which the appellants contended were s 16(1)(b), s 16(2)(a) and s 17(1) together with the explanatory memoranda. However, in our opinion, these provisions do not persuasively establish that ss 10 and 11 "deal", in any relevant sense, with the matters specified in s 16(3) and long service leave in particular. The proviso concerning long service leave in s16(1)(b) only serves to illustrate that the law which was excluded by that paragraph was a law dealing with any type of leave except the specific type of leave which a law might continue effectively to deal with because of the combined operation of s 16(2)(c) and s 16(3)(f), namely long service leave. Section 16(1)(b) says nothing about what is a law dealing with one of the specified matters except, as discussed earlier, by suggesting a legislative intention which excludes ss 10 and 11 as being laws of that character. 67 Similarly s 16(2)(a) serves to illustrate the Commonwealth Parliament's intention of excluding, for present purposes, any operation of the State Act by permitting or providing for the continued operation of a law dealing with discrimination or equality in the workplace unless it was dealt with in a State industrial law such as the State Act. This provision really says nothing about whether a law deals with one of the specified matters only if it deals with it directly as the legislative subject matter or whether the law can deal with the matter indirectly. 68 Section 17 raises different considerations. The appellants, the respondent and the Attorney-General pointed out that existing State awards are transmogrified, for the purposes of Federal law and to the extent that they apply to constitutional corporations, by Part 3 of Schedule 8 into NAPSAs, instruments which derive their present legal effect from the WR Act. It appears to be correct that s 17 has either no field of future operation or a limited field of future operation in relation to State awards if s 16 excludes, in all respects, the award making powers of State industrial tribunals under State industrial laws, as defined in relation to constitutional corporations and their employees. That would be because existing State awards binding constitutional corporations are dealt with by Part 3 and there would be no State awards concerning constitutional corporations made in the future. Federal awards apply to employers which are not constitutional corporations because they have effect as transitional awards and there is a specific provision giving them paramountcy over State awards: see cl 60 of Schedule 6 to the WR Act. 69 However, s 17(1) replicates a provision of a similar character which has existed in Federal industrial law since 1904: see s 30 of the Conciliation and Arbitration Act 1904 (Cth) as enacted. While it has been doubted whether it is necessary (see, for example, Collins v Charles Marshall Pty Ltd at 549), this provision has provided continuously a statutory mechanism in Federal industrial laws to ensure paramountcy of awards made under those laws. Section 17(1) would at least have the function of putting beyond doubt the contemporary and continuing paramountcy of Federal awards over State awards in relation to any right or liability under a Federal award before the Amending Act took effect in 2006. Section 17 does not, in our opinion, provide a clear pointer of substance to State industrial tribunals continuing to have some, though limited, award making powers in relation to constitutional corporations and their employees. In addition s 17(1) would be efficacious in declaring the paramountcy of Federal awards over State acts. For example, by s 527, the WR Act preserves an award term in relation to long service leave in a Federal award. That term would prevail over State long service leave provisions, such as the Long Service Leave Act, which would remain effective because of s 16(2). 70 In our opinion, the Industrial Court of New South Wales erred in concluding that New South Wales Commission has power to make an award binding a constitutional corporation in relation to long service leave. The appeal should be allowed and a declaration made of the type sought by the appellants though limited, in terms, to the constitutional corporations to which the proposed award was intended to apply. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Counsel for the Appellants: Mr G J Hatcher SC

Solicitor for the Appellants: Freehills

Counsel for the Respondent: Mr S Crawshaw SC

Solicitor for the Respondent: Construction, Forestry, Mining and Energy Union

Counsel for the Attorney-General of New South Wales (intervening): Mr I Taylor

Solicitor for the Attorney-General of New South Wales (intervening): Crown Solicitor's Office, New South Wales

Date of Hearing: 21 August 2007

Date of Judgment: 22 November 2007