Hamzy v Tricon International Restaurants trading as KFC

Federal Court of Australia|2001-11-16|Before: Katz JJ

THE COURT: 1 The issue we have to determine is the validity of certain provisions in reg 30B of the Workplace Relations Regulations. Regulation 30B excludes some kinds of employees from the operation of the termination of employment provisions contained in the Workplace Relations Act 1996.

The legislative scheme 2 Division 3 of Part VIA of the Workplace Relations Act concerns termination of employment. Subdivision A of the Division commences with s 170CA which sets out the "principal object" of the Division: "(a) to establish procedures for conciliation in relation to certain matters relating to the termination or proposed termination of an employee's employment in certain circumstances; and (b) to provide, if the conciliation process is unsuccessful, for recourse to arbitration or to a court depending on the grounds on which the conciliation was sought; and (c) to provide for remedies appropriate to a case where, on arbitration, a termination is found to be harsh, unjust or unreasonable; and (d) to provide for sanctions where, on recourse to a court, a termination or proposed termination is found to be unlawful; and (e) by those procedures, remedies and sanctions, and by orders made in the circumstances set out in Subdivisions D and E, to assist in giving effect to the Termination of Employment Convention." 3 The "Termination of Employment Convention" is the Convention Concerning Termination of Employment at the Initiative of the Employer, adopted in 1982 and reproduced in Schedule 10 to the Workplace Relations Act. 4 Section 170CB indicates the categories of employees to which Subdivisions B and C apply. However, s 170CC empowers the Governor-General to make regulations excluding from the operation of specified provisions of the Division, "specified classes of employees" who are included in any of five specified classes. The classes include: "(c) employees engaged on a casual basis for a short period;" and "(e) employees in relation to whom the operation of the provisions causes or would cause substantial problems because of: (i) their particular conditions of employment; or (ii) the size or nature of the undertakings in which they are employed." 5 Subdivision B of Division 3 of Part VIA of the Act deals with applications to the Australian Industrial Relations Commission ("the Commission"), by employees whose employment has been terminated by their employer, for relief in respect of that termination on the ground that the termination was harsh, unjust or unreasonable, or in contravention of s 170CK, 170CL, 170CM or 170CN, or any combination of those grounds. Sections 170CK, 170CL, 170CM and 170CN are all contained in Subdivision C of Division 3 of Part VIA of the Act. 6 Division 1 of Part 5A of the Workplace Relations Regulations concerns termination of employment. It contains reg 30B which relevantly provides: "(1) For subsection 170CC(1) of the Act, the following kinds of employees are excluded from the operation of Subdivisions B, C, D, E and F of Division 3 of Part VIA of the Act: (a) an employee engaged under a contract of employment for a specified period of time; (b) an employee engaged under a contract of employment for a specified task; (c) an employee serving a period of probation or a qualifying period of employment, if the duration of the period or the maximum duration of the period, as the case may be, is determined in advance and, either: (i) the period, or the maximum duration, is 3 months or less; or (ii) the period, or the maximum duration: (A) is more than 3 months; and (B) is reasonable, having regard to the nature and circumstances of the employment; (d) a casual employee engaged for a short period, within the meaning of subregulation (3); (e) … (f) … (2) … (3) For the purposes of paragraph (1)(d), a casual employee is taken to be engaged for a short period unless: (a) the employee is engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months; and (b) the employee has, or but for a decision by the employer to terminate the employee's employment, would have had, a reasonable expectation of continuing employment by the employer. (4) …"

The factual background 7 The applicant, Omar Hamzy, was born in June 1984. In about September 1999, when he was in Year 10 at school, Mr Hamzy obtained employment at a Kentucky Fried Chicken restaurant. His employer was the first respondent, Tricon International Restaurants trading as KFC ("Tricon"). Mr Hamzy worked for three or four hours on each of two or three nights per week, work being allocated to him according to a roster that varied from week to week. Sometimes he would also work a non-rostered shift, to fill in for an employee who became unavailable at short notice. It is agreed between the parties that Mr Hamzy worked on a "regular and systematic basis", to use the language of reg 30B(3)(a) of the Regulations. However, he was not engaged by Tricon during a period of at least 12 months; his employment was terminated in April 2000. During his period of employment, Mr Hamzy was paid in accordance with cl 5.3 of the KFC National Enterprise Agreement 1998. That clause is concerned with entitlements of "casual employees".

The Commission proceedings 8 On 3 May 2000 Mr Hamzy lodged with the Commission an application for relief in respect of termination of employment. The application was based on s 170CE(1), which is contained in Subdivision B of Division 3 of Part VIA of the Act, and s 170CK, which is in Subdivision C. Mr Hamzy sought reinstatement and compensation for lost remuneration. 9 The application was assigned to Commissioner Wilks. On 6 November 2000 the Commissioner heard argument as to whether Subdivisions B and C applied to Mr Hamzy. Tricon contended they did not; Mr Hamzy was excluded by reg 30B(1)(c), read with reg 30B(3) of the Regulations. Counsel for Mr Hamzy argued these provisions were invalid. 10 On 9 November 2000 Commissioner Wilks published a decision in which he recorded the submission about invalidity. However, he accepted a submission, made on behalf of Tricon, that the Commission ought not to determine the validity of a regulation. Commissioner Wilks found Mr Hamzy was a casual employee whose employment had not extended beyond 12 months. Commissioner Wilks also found, contrary to an agreement subsequently reached between the parties, that Mr Hamzy's employment was not regular and systematic. Regardless of the last finding, the result of the earlier findings was that, if reg 30B(3) was valid, Mr Hamzy was excluded by reg 30B(1)(d) from obtaining relief under Subdivision B or C of Division 3 of Part VIA of the Act. Upon the basis that the regulation was assumed to be valid, Commissioner Wilks dismissed his claim. 11 On 29 November 2000 Mr Hamzy filed a notice of appeal to the Full Bench of the Commission under s 45 of the Workplace Relations Act. The grounds of appeal, and for leave to appeal, were stated as follows: "(i) The learned Commissioner erred in refusing or failing to exercise his jurisdiction under Division 3 of Part VI A of the Workplace Relations Act 1996; (ii) The learned Commissioner erred in dismissing the application; (iii) The learned Commissioner erred in failing to consider whether Regulations 30B(1)(d) and 30B(3) of the Workplace Relations regulations were validly made so as to be effective at law; (iv) the learned Commissioner erred in failing to hold that Regulations 30B(1)(d) and 30B(3) of the Workplace Relations Regulations were not effective at law having not been validly made. (v) The learned Commissioner erred in holding that the Applicant was a casual employee within the meaning of the said Regulations. (vi) The learned Commissioner erred in holding that the employment of the Applicant was not regular or systematic." 12 On 17 January 2001 the Minister for Employment, Workplace Relations and Small Business gave notice to the Commission and the parties that he intended to intervene, on behalf of the Commonwealth, pursuant to s 44 of the Workplace Relations Act. 13 On 6 February 2001 the application for leave to appeal came before a Full Bench comprising Vice President McIntyre, Senior Deputy President Drake and Commissioner Lawson. Counsel for Mr Hamzy requested the Full Bench to refer certain questions to this Court pursuant to s 46(1) of the Act. That subsection provides: "(1) The Commission may refer a question of law arising in a matter before the Commission for the opinion of the Court." 14 Section 46(3) requires that an award, order or decision of the Commission in the matter be, or be made to be, not inconsistent with the opinion of the Court. 15 The Full Bench decided to refer questions to this Court, although they were framed more narrowly than those suggested by counsel. On 15 February 2001 the Full Bench referred the following questions: "(1)(i) Is subregulation 30B(3), of the Workplace Relations Regulations, in so far as it purports to exclude the applicant from bringing an application for relief and purports to exclude the Commission from determining any such application: (a) on the ground that the termination was harsh, unjust or unreasonable under Subdivision B of Division 3 of Part VIA; or (b) on the ground of an alleged contravention of section 170CK of Division 3 of Part VIA of the Act, authorised by section 170CC of the Act? (ii) If the answer to (i) is in the negative, is the said subregulation, in so far as it purports to exclude the applicant from bringing an application for relief on either of the said grounds authorised by any other provision of the Act? (iii) Is the said subregulation invalid in so far as it purports to exclude the applicant from bringing an application for relief on either of the said grounds? (iv) If the answer to (iii) is in the affirmative, to the extent described, is the said subregulation invalid in whole or in part? (v) If the answer to (iv) is that, to the extent described, the said subregulation is invalid in part: (i) which part of the said subregulation is invalid; and (ii) may the invalid part of the said subregulation be severed so as to otherwise preserve the subregulation? (2) (i) Is paragraph 30B(1)(d) of the Workplace Relations Regulations, in so far as it purports to exclude the applicant from bringing an application for relief or the Commission from determining any such application: (a) on the ground that the termination was harsh, unjust or unreasonable under Subdivision B of Division 3 of Part VIA; or (b) on the ground of an alleged contravention of section 170CK of Division 3 of Part VIA of the Act, authorised by section 170CC of the Act? (ii) If the answer to (i) is in the negative, is the said paragraph, in so far as it purports to exclude the applicant from bringing an application for relief on either of the said grounds, authorised by any other section of the Act? (iii) Is the said paragraph invalid in so far as it purports to exclude the applicant from bringing an application for relief on either of the said grounds? (iv) If the answer to (iii) is in the affirmative, to the extent described, is the said paragraph invalid in whole or in part? (v) If the answer to (iv) is that, to the extent described, the said paragraph is invalid in part: (i) which part of the said paragraph is invalid; and (ii) may the invalid part of the said paragraph be severed so as to otherwise preserve the paragraph?"

The proceeding in this Court 16 On 26 February 2001 Beaumont ACJ directed, pursuant to s 20(1A) of the Federal Court of Australia Act 1976, that the Court's jurisdiction in respect of the referred questions be exercised by a Full Court. 17 By virtue of that order, the questions came before us on 24 May 2001. The Minister exercised his right, under s 471(1) of the Workplace Relations Act, to intervene. Counsel for the Minister appeared in order to put submissions supporting the validity of the regulations. 18 However, procedural difficulties quickly became apparent. Order 50, rule 1(1) of the Federal Court Rules provides that "a question … to be referred for the consideration of the Court … must be in the form of a special case". Order 50, rule 1(2)(b) and (c) require the special case to "state the facts concisely" and to "annex all documents necessary to enable the Court to decide the questions raised by the special case". So far as referrals of questions by the Commission are concerned, Order 50, rule 2 provides that, in the usual course, the special case shall be prepared by the party having carriage of the proceeding after consultation with the other parties concerned, shall be settled by the Commission and transmitted by it to the Registry at the proper place. Order 50, rule 4 provides that, if a question is referred to the Court by the Commission, any party who requested the reference is the party having carriage of the proceeding for the purpose of rule 2. 19 In the present matter, none of the provisions of Order 50 had been complied with. That technical problem might have been overcome, if the Full Bench had made findings of fact: see Order 1, rule 8 of the Federal Court Rules. However, neither the Full Bench's reasons for its decision, nor its document setting out the questions, stated relevant findings of fact or annexed relevant documents. The Court was presented only with a list of questions. 20 Second, although s 412(1)(c) of the Workplace Relations Act confers on the Court jurisdiction with respect to "matters arising under this Act in relation to which … questions may be referred to it under this Act", that conferral relates only to a referral authorised by the Act. It will have been noticed that s 46(1) of the Act imposes two conditions on the power of the Commission to refer a question for the opinion of the Court: first, the question must be one "of law"; and second, the question must be one "arising in a matter before the Commission". 21 This second condition presented a problem in the present case. A question does not "arise" in a matter unless it pertains to an issue that actually exists. In O'Grady v The Northern Queensland Company Limited (1990) 169 CLR 356, Toohey and Gaudron JJ (with whom Dawson J agreed: see 367) quoted at 373-374 a statement by Isaacs J in Australian Commonwealth Shipping Board v Federated Seamen's Union of Australasia (1925) 36 CLR 442 at 450: "It is manifestly impossible for this Court or any other Court to 'hear and determine' a question so as to give it the character of a conclusive judgment, unless that question 'arises' so as necessarily to enter into the legal determination of the matter upon the facts stated. Remote or merely possible relation of the question of law to the facts is not enough to make the question 'arise' in a legal sense. To say that it may arise is not the same as saying it does arise, which is the meaning of 'arising'." (Original emphasis) 22 This statement was applied by a Full Court of this Court (Northrop, Cooper and Mansfield JJ) in Re Alcoota Land Claim No 146 (1998) 82 FCR 391. In that case, the Order 50 requirements had been followed in respect of a reference of questions by an Aboriginal Land Commissioner, but there was a dispute as to the sufficiency of the Commissioner's statement of facts. The Court commented (at 394): "The case stated procedure ought not be adopted where there are disputed questions of fact which impinge upon the question or questions of law reserved for determination." 23 The problem in the present case was that, at the time of the Full Bench's referral of questions of law, there was no agreement between the parties that Mr Hamzy was a casual employee of Tricon. As will have been noted, one of the grounds of appeal proposed to be agitated before the Full Bench was that Commissioner Wilks erred in holding Mr Hamzy was a casual employee. There was also a live issue as to whether his employment had been regular and systematic. Although Commissioner Wilks had made findings about these matters, those findings were not binding on the Full Bench. If the Full Bench granted leave to appeal, it had power to determine the facts for itself, even taking further evidence or directing a report for that purpose: see s 45(6) of the Workplace Relations Act. If the Full Bench accepted Mr Hamzy's contention that he was not a casual employee, none of the questions referred to the Court would be material. 24 Conscious, perhaps, of these difficulties, on 14 March 2001 the parties filed in this Court a statement of agreed facts. This statement did not, in terms, cover the question whether Mr Hamzy was a casual employee, although it did refer to the fact that he was paid pursuant to cl 5.3 of the enterprise agreement. However, even if that reference be taken as an implied agreement concerning casual employment, the statement of agreed facts could not overcome the problem that it could not have appeared to the Full Bench, on 15 February 2001, that the question of the validity of s 30B(1)(d) of the Regulations actually arose in the matter before it; there was not then any agreement about the facts and the Full Bench had not made findings of fact. 25 Upon these matters being pointed out, Mr A Rogers, counsel for Mr Hamzy, sought an adjournment of the hearing in order to file an Application seeking declaratory relief, with affidavits in support. This application was not opposed by the representative of Tricon, Mr G Krayem, or counsel for the Minister, Mr A Robertson SC and Mr S Lloyd. Accordingly, we granted the adjournment. We fixed times for filing the Application and affidavits by all parties. 26 On 25 June 2001 an Application and Statement of Claim were filed on behalf of Mr Hamzy. The Application joined as respondents both Tricon and the Minister. It sought the following declarations: "1. A declaration that the Applicant, as at and about 3 April 2000, was an employee of the First Respondent. 2. A declaration that the Applicant, as at and about 3 April 2000, was not a casual employee of the First Respondent within the meaning of subregulation 30B(1) of the Workplace Relations Regulations. 3. Further or in the alternative, a declaration that the Applicant, as at and about 3 April 2000, was not an employee engaged on a casual basis within the meaning of paragraph (c) of subsection (1) of section 170CC of the Workplace Relations Act 1996. 4. Further, a declaration that the Applicant, as at and about 3 April 2000, was not an employee engaged on a casual basis for a short period within the meaning of paragraph (c) of subsection (1) of section 170CC of the Workplace Relations Act 1996. 5. Further, a declaration that the Applicant, as at and about 3 April 2000, was not a member of a class of employees in relation to whom the operation of the provisions of subdivisions B, C, D, E, and F of Division 3 of Part VI A of the Workplace Relations Act 1996 causes of [sic] would cause substantial problems because of: (i) their particular conditions of employment; or (ii) the size or nature of the undertakings in which they are employed within the meaning of paragraph (c) of subsection (1) of section 170CC of the Workplace Relations Act 1996. 6. Further a declaration that subregulation 30B(3), of the Workplace Relations Regulations, in so far as it purports to exclude the Applicant from bringing an application for relief and/or purports to exclude the Australian Industrial Relations Commission ('the Commission') from determining any such application: (a) on the ground that the termination was harsh, unjust or unreasonable under Subdivision B of Division 3 of Part VI A; or (b) on the ground of an alleged contravention of section 170CK of Division 3 of Part VI A of the Workplace Relations Act 1996, is not authorised by section 170CC of the said Act. 7. Further, a declaration that paragraph 30B(1)(d) of the Workplace Relations Regulations, in so far as it purports to exclude the Applicant from bringing an application for relief and/or purports to exclude the Commission from determining any such application: (a) on the ground that the termination was harsh, unjust or unreasonable under Subdivision B of Division 3 of Part VI A; or (b) on the ground of an alleged contravention of section 170CK of Division 3 of Part VI A of the Act, is not authorised by section 170CC of the said Act." 27 On 11 October 2001 Black CJ directed, pursuant to s 20(1A) of the Federal Court of Australia Act, that this Application be heard by a Full Court. 28 The matter came before us again on 15 October 2001. Affidavits were read and two witnesses were cross-examined. Submissions were put by Mr Rogers, on behalf of Mr Hamzy, and by Mr Robertson and Mr Lloyd, on behalf of the Minister, but not by Mr Krayem, on behalf of Tricon. On 16 October we reserved our decision.

Jurisdiction 29 At the hearing of 15 and 16 October, there was discussion about the Court's jurisdiction to determine whether or not to make the declarations sought in the Application filed on 25 June 2001. No party contended the Court lacked jurisdiction to do this. Nonetheless, it is necessary for the Court to satisfy itself about jurisdiction. 30 Section 39B(1A)(c) of the Judiciary Act 1903 confers on this Court original jurisdiction "in any matter … arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter." 31 The situation in the present case is reminiscent of that in Transport Workers Union v Lee (1998) 84 FCR 60. That case arose out of prosecutions in a Queensland court for contraventions of Queensland industrial legislation. The defendants claimed their alleged conduct, if proved, was "protected action" within the meaning of s 170MT of the Workplace Relations Act. They commenced a Federal Court proceeding seeking declarations and orders restraining continuation of the Queensland prosecutions. North J granted interlocutory relief and the respondent (the prosecutor in the Queensland proceedings) sought leave to appeal. He argued the Federal Court had no jurisdiction to grant relief as there was no "matter" before the Court, within the meaning of s 39B(1A) of the Judiciary Act. 32 The Full Court (Black CJ, Ryan and Goldberg JJ) disagreed. The Court upheld (at 65) a submission that a "matter arises" under a law made by the Parliament "when it is necessary in litigation to determine whether that law confers a right or affords a defence which is in issue in the litigation". The Court said (at 67) that it was necessary for it "to determine whether that law (the Workplace Relations Act) confers the rights which the applicants claim in this proceeding". The Court went on to consider and reject a submission that s 39B(1A) of the Judiciary Act depends upon other laws made by the Parliament to specify the matters that arise. 33 In the present case, Tricon asserts in the Commission that reg 30B(1)(d) provides to it a defence to Mr Hamzy's claims under Subdivisions B and C of Division 3 of Part VIA of the Workplace Relations Act. Mr Hamzy disputes this and contends, amongst other things, that this provision (and the associated reg 30B(3)) are invalid. He seeks declarations to that effect. His entitlement to those declarations depends upon whether the Workplace Relations Act confers the defence relied on by Tricon in the Commission; it is thus a matter that arises under that Act. It follows that Mr Hamzy's claim for declaratory relief is a "matter" that falls within s 39B(1A)(c) of the Judiciary Act. 34 The Court has jurisdiction to deal with the application for declarations regardless of the problems arising out of the failure of the applicant to follow the procedure prescribed by Order 50 of the Federal Court Rules and the lack of Full Bench findings of fact.

(i) The expression "engaged on a casual basis" 35 Mr Rogers submitted the expression "employees engaged on a casual basis", in s 170CC(1)(c) of the Act, does not have the same meaning as the words "casual employee", used in reg 30B(1)(d) of the Regulations. He contended the former expression does not have a commonly understood industrial meaning, the latter does. He said that, in s 170CC, "Parliament deliberately avoided the more common expression 'casual employee' because it wished to make clear that it was not attempting to catch all persons who are designated casual employees under awards. It chose the expression to ensure that only true casuals (and then only those engaged for a short period) could be excluded from the benefit of the Act." 36 Mr Rogers said the essential characteristic of casual employees was irregularity of employment. He referred to the decision of Moore J in Reed v Blue Line Cruises Limited (1996) 73 IR 420. That case arose under an earlier form of the subject regulations, when they were called the Industrial Relations Regulations. Regulation 30B(1)(d) was in the same terms as at present, but reg 30B(3)(a) specified "at least 6 months", rather than "at least 12 months", as now. When Reed was decided, the whole of Division 3 of Part VIA of the Industrial Relations Act 1988 (as the Act was then called) was based wholly on the external affairs power and the Termination of Employment Convention, unlike the present situation where Subdivision B is based on other sources of federal legislative power as well. 37 In Reed there was no challenge to the validity of the regulation. Moore J was concerned only to review a decision of a judicial registrar dismissing a claim of unlawful termination on the ground that Division 3 of Part VIA of the Act had no application to the applicant's employment. So his Honour had to construe reg 30B. He did so by reference to the terms of the Convention. He stated (at 424) that, in Australian domestic law, the expressions "casual employee" and "casual employment" have no fixed meanings. He thought it would be wrong in principle to treat as conclusive, for the purpose of reg 30B, the character ascribed by the relevant award to particular employment. Moore J construed the words in the Convention, "workers engaged on a casual basis for a short period" as referring to a situation "where the employment is known to the parties at the time of engagement to be informal, irregular and uncertain and not likely to continue for any length of time" (our emphasis). However his Honour thought reg 30B(3) required attention to the situation at the time of termination of the employment. He said (at 425-426): "…the employee must have had a reasonable expectation of continuing employment at the time of termination. It is of some significance, in my opinion, that the regulation proceeds on the basis that, as a matter of fact, the engagement has been both regular and systematic. It is significant because it would indicate that casual employment of the type I earlier described, had existed but the parties had offered and accepted employment so as to regularise and systematise what otherwise could have been irregular and unsystematic. That is, the inherent informality, uncertainty and irregularity of casual employment had not been, as a matter of fact, a feature of the employment because of the conduct of the parties." 38 In our opinion there is no material difference between the description "employees engaged on a casual basis for a short period", in s 170CC(1)(c) of the Workplace Relations Act, and the description "a casual employee engaged for a short period", in reg 30B(1)(d). Both descriptions embrace an employee who works only on demand by the employer (or perhaps only by agreement between employer and employee) over a "short period" (whatever that may be). The essence of casualness is the absence of a firm advance commitment as to the duration of the employee's employment or the days (or hours) the employee will work. But that is not inconsistent with the possibility of the employee's work pattern turning out to be regular and systematic.

(ii) The date at which the employee's status is to be evaluated 39 The more difficult construction problem of reg 30B is the time as at which the status of the employee is to be evaluated. Moore J thought the words, in s 170CC(1) of the Act, "engaged on a casual basis" required consideration of the situation as at the time of engagement. If that view is correct, it presumably would apply equally to the words in reg 30B(1)(d), "a casual employee engaged for a short period". However, if so, it is not a view supported by any of the parties to the present case. It leads to a strange result, in its application to reg 30B(3), because it would be impossible to know, at the time of formation of the employment contract, whether the employee's employment pattern would turn out to be regular and systematic, or involve a sequence of periods of employment extending over at least 12 months (or 6 months, as was formerly required). And para (b), dealing with the employee's expectation, certainly directs attention to the situation as at the date of termination of employment. 40 These observations do not directly apply to the words "a casual employee engaged for a short period" in the context of their use in reg 30B(1)(d). However, as the function of reg 30B(3) is to provide meaning to reg 30B(1)(d), it is impossible to construe the terms differently in the two contexts. 41 In our opinion, the better interpretation of reg 30B is that the question whether a person is a "casual employee engaged for a short period", for the purposes of possible exclusion of that employee from the operation of any part of Division 3 of Part VIA of the Act, is to be determined as at the date of the person's termination of employment.

(iii) Whether the regulations may define a "short period" 42 Mr Rogers contended it was not open to the Governor-General, in making regulations under s 170CC(1) of the Act, to specify what constituted "a short period". His argument is that this is necessarily a matter of fact in relation to each particular type of employment; a body exercising a power to make delegated legislation has no authority to determine the width of that power. 43 The argument put on behalf of the Minister is that a power to make regulations excluding the operation of specified provisions of the Division for a "short period" necessarily includes power to specify what is to constitute a "short period" for the purpose of those regulations. Counsel said the only limitation on the Governor-General's power is that any selected period must be reasonably able to be regarded as "short", in relation to casual employment, even if not everybody would so regard it. 44 We accept the submission on this point put by counsel for the Minister. Under the influence of the Termination of Employment Convention, the statute adopted a standard of indeterminate reference: "short period". We think it was open to the Governor-General to specify what should constitute a "short period", for the purposes of regulations carrying that provision into effect, provided only that the selected period might reasonably be regarded as falling within the description "short period".

(iv) Interpretation and validity of reg 30B(3) 45 We do not find it necessary to determine whether a period of 12 months may reasonably be regarded as a "short period" of casual employment, either generally or in relation to any particular type of employment. Although counsel for the Minister suggested otherwise, the regulations leave no room for the operation of the concept of "short period" simpliciter. 46 Counsel for the Minister argued reg 30B(3)(a) and (b) have to be read as applying only to a person who is a casual employee engaged for a short period. They submitted the first step is to determine, as a matter of fact, whether the person is a casual employee engaged for a short period. If so, the second step is to apply paras (a) and (b) of reg 30B(3). If the person fulfils the criteria specified in those paragraphs, the person is excluded from the exclusion effected by reg 30B(1)(d). 47 Counsel argued that, understood in this way, reg 30B(3) is valid; it was open to the Governor-General to decide not to exclude all the persons who fell within the description in s 170CC(1)(c) of the Act. They said: "reg 30B could validly have excluded from the operation of the relevant Subdivisions the whole class of employees engaged on a casual basis for a short period". Therefore, they contended, it was open to the regulation to exclude only some of the employees who fell within the statutory description. They went on: "However, it does not do so. Only part of that class is excluded, as is permissible by virtue of section 33(3A) of the Acts Interpretation Act 1901 … That part of the class which is not excluded is those casual employees engaged for a short period but who are engaged by a particular employer regularly for a sequence of periods of employment during a period of at least 12 months and who have a reasonable expectation of continuing employment by the employer." 48 The difficulty about this submission is that it misconstrues reg 30B. The person described in the opening words of reg 30B(3), before the qualification introduced by the word "unless", is not a casual employee engaged for a short period but a "casual employee". As a matter of ordinary English, the qualification applies to all casual employees, not only to casual employees engaged for a short period. It follows that the qualification potentially catches casual employees who do not fall within the class of employees mentioned in s 170CC(1)(c) of the Act. It may catch employees engaged on a casual basis for a period exceeding anything that may reasonably be called "short". 49 Counsel's submission overlooks the significance of the words "is taken to be". This is a deeming provision, designed to apply regardless of the true position. The effect of the opening words of reg 30B(1) is that any casual employee is taken to be engaged for a short period, and so excluded from the benefit of Subdivisions B, C, D, E and F of Division 3 of Part VIA of the Act, unless that employee is able to fulfil the criteria specified in paras (a) and (b) of reg 30B(3). The critical matter is not the length of the employee's period of employment but the criteria in paras (a) and (b). 50 The effect of reg 30B may be illustrated by reference to two hypothetical cases. First, suppose a person has worked on a casual basis for a particular employer for ten years; frequently, but on an irregular employment pattern. Despite the ten year period of service, reg 30B(3) would take that employee to be "a casual employee engaged for a short period". Second, assume a casual employee has worked, even regularly and systematically, for a particular employer for many years but learned, shortly before the termination of his or her employment, that the employer's financial position had so deteriorated that it was doubtful the employer would long continue in business. That employee would be unable to fulfil the criterion in para (b) and would therefore be deemed to be engaged for a short period. 51 These examples demonstrate that reg 30B(1), as drafted, goes beyond the regulation-making power conferred on the Governor-General by reason of s 170CC(1)(c) of the Act. The problem is that the Governor-General, being empowered to make regulations concerned with the length of the period of employment, has made regulations that impose criteria that have nothing to do with length of employment.

(i) The argument 52 In the alternative, counsel for the Minister seek to use s 170CC(1)(e) to support reg 30B(3). They argued the present case is covered by subpara (i); casual employees are persons in relation to whom the operation of Subdivisions B, C, D, E and F would "cause substantial problems because of … their particular conditions of employment".

(ii) The evidence 53 In an attempt to lay a foundation for this argument, counsel for the Minister adduced some statistical and opinion evidence. The statistical material emanated from the Australian Bureau of Statistics ("ABS"). It covered the years 1984 to 1999 and showed, as at August each year, the number of permanent employees in Australia, the number of casual employees and the total number of employees. The statistics indicated each year's "casual density"; that is, the proportion of total employees who were in casual employment. Another column showed the percentage change in casual employment since the preceding year. 54 These statistics reveal that total Australian casual employment grew from 848,300 in 1984 to 1,931,700 in 1999, an increase of 117.7%. This compares with a growth in permanent employment over the same period of 19.1% (4,509,900 to 5,372,500). There were more additional casual employees (1,083,400) than permanents (862,600). Casual density increased from 15.8% to 26.4%. The increase was steady throughout the period. Casual density rose by about 1% per year, with slip-backs only in 1990, 1997 and 1999. 55 The Minister's expert evidence was provided by Professor Mark Wooden, a Professorial Fellow with the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne. Professor Wooden is an economist by training and has worked for some years in the field of labour studies. He has published extensively in that area. 56 Professor Wooden commented on the statistics demonstrating increased casual employment. He said research indicated that casual employment is more heavily concentrated in some particular industry sectors, and among some particular age groups, than in others. There is a high rate of casualisation among employees aged between 15 and 19 years, many of whom are students. 57 Professor Wooden discussed several issues concerning casual employment: casuals' relative levels of pay and skills, the question whether casual jobs are replacing permanent jobs, the causes of casualisation, whether casual employment constitutes a "bridge" or a "trap" for the affected employees, and concern about job insecurity. 58 This discussion is interesting, but none of it bears on the question whether s 170CC(1)(e) of the Workplace Relations Act supports reg 30B of the Regulations. Professor Wooden approached that question only in the last section of his affidavit, headed: "The effect of applying unfair dismissal laws to those casuals excluded by regulation". 59 In para 69 of his affidavit, Professor Wooden stated what he understood (accurately) to be the effect of the current regulations. In para 70 he said: "In my view, the application of the unfair dismissal provisions of the Federal Workplace Relations Act 1996 to the types of casual employees excluded by regulations would be likely to have an adverse effect of job creation in Australia. In particular, I consider that it would be considerably more difficult for more vulnerable classes of potential employees, such as early school leavers, to find work and to gain the ability to progress to other positions within the workforce." 60 Professor Wooden did not offer any empirical evidence to support his view. He was unable to do so. In cross-examination Professor Wooden said "there certainly hasn't been any direct research on the effects of introducing unfair dismissal laws". 61 Professor Wooden's view was an entirely theoretical construct. He said in his affidavit: "The question may well be asked as to what would happen if the unfair dismissal laws were to apply to the types of casual employees excluded by the regulations. The answer essentially is that there would be fewer jobs, especially for early school leavers, unemployed people and persons seeking to re-enter the workforce after a period of absence. Firms value the flexibility afforded by casual employment. In particular, they value the ability to vary working hours quickly and sever employment relationships at short notice. Extending the reach of unfair dismissal laws to casual employees would effectively remove one of these flexibilities. That is, employers would no longer have the same flexibility to vary employment numbers in line with variations in demand for their product. Further, employers would have to spend more time, money and effort in deciding who they hire. If they hire someone who is a poor fit with their business, it will now be much more difficult and costly to remove that person." 62 Professor Wooden conceded "many employers do not use this flexibility", "as is reflected in the large proportion of casuals working regular hours in apparently long-term jobs". However, he argued that "just because a firm does not use the flexibility that casual employment potentially affords does not mean it does not value it". 63 Professor Wooden suggested flexibility was especially important to small business enterprises, which had relatively higher casual densities. However, he did not offer any evidence, either statistical or anecdotal, to support his belief about the importance of flexibility to small business. This is particularly disappointing in the light of a table set out in Professor Wooden's affidavit in reply, in which he set out the current job duration, expressed in mean years, of employees aged 15 to 69 years as at April-June 2000. The table showed the position in respect of permanent and casual employees in each of 17 industries. The mean figure for casual employees ranges from 1.6 years (in the construction and the accommodation, cafes and restaurant industries) to 4.9 years (in education). 64 During the course of cross-examination, Mr Rogers suggested to Professor Wooden that, if his assumption about the effect of unfair dismissal laws on casual employment opportunities was correct, it would also apply to full-time permanent employment. Professor Wooden agreed. His evidence went on: "Do I take it then that you accept that the consequence for employment is not dependent upon the designation of the employee, that is as between full time, part-time and casual, correct? --- Yes It is dependent upon the fact that the given employee or the given class of employees have access to unfair dismissal laws? --- Correct." 65 Professor Wooden's attention was drawn to the ABS figures on employment growth. It was pointed out to him that, in the period of approximately three years, from March 1994 to December 1996, during which the more comprehensive unfair dismissal protections of the 1993 Act were in place, employment growth was stronger than in the following three years, during which less comprehensive protections applied. Employment growth under the 1993 Act was also stronger than in the three years immediately before the commencement of that Act, when there was no comprehensive unfair dismissal protection. (The ABS statistics show casual employment as being 1,271,800 in August 1990 and 1,435,000 in August 1993 - an increase of 163,200; 1,841,200 in August 1996 - an increase of 406,200 on the August 1993 figure; and 1,931,700 in August 1999 - only 90,500 more than three years earlier). 66 Professor Wooden agreed "the peak in increased employment happens to coincide with the most protective provisions, from the employees' point of view". He also agreed that the pattern in relation to permanent employment was similar. It was suggested this "rather demonstrates that the existence or non-existence of unlawful dismissal legislation has got very little to do with the growth of employment and that it is dictated by economic factors". Professor Wooden agreed "the driving force behind employment is clearly the state of the economy" and mentioned the recovery from recession after 1993. 67 It seems unfortunate that nobody has investigated whether there is any relationship between unfair dismissal legislation and employment growth. There has been much assertion on this topic during recent years, but apparently no effort to ascertain the factual situation. 68 Professor Wooden thought research would be difficult because of the absence of an appropriate control group. However, unfair dismissal provisions were introduced gradually during the 1980's, on an industry-by-industry basis, by awards of industrial commissions. It may have been possible, and may still be possible, for a researcher to have compared, or to compare, the pattern of employment in an industry newly affected by such a provision with the pattern, over the same years, in industries to which no unfair dismissal provisions applied. The results of any comparison might need to be treated with caution; however, any empirical material would be an improvement on mere assertion. 69 Professor Wooden's conclusions about the relationship between unfair dismissal laws and employment generation were disputed by Dr Richard Hall, a Senior Research Fellow with the Australian Centre for Industrial Relations Research and Training at the University of Sydney. Dr Hall noted that Professor Wooden's claim is not based on "directly relevant evidence, statistical or otherwise" but on Professor Wooden's "theorisation of the decision making processes followed by hirers". Dr Hall said: "Professor Wooden appears to base his view on the assertion that employers faced with an extension of the unfair dismissal laws to a greater number of casuals will become more risk averse with respect to hiring because they will perceive that new substitute hires (for example permanent part-timers) will be more difficult to dismiss in the short term should they prove to be unsuitable ... That argument would be valid if it were not for the widespread practice of using probationary employment terms. Probationary employment arrangements are designed precisely to ensure that employers can exercise the flexibility to quickly and easily dispense with a new employee should they regard them as unsuitable. If the extension of unfair dismissal laws to include a greater proportion of casuals occurred there is little logical reason to expect that it would automatically lead to fewer jobs. First, many casuals are employed by employers with the intention of retaining them for relatively long periods anyway. Second, employers who chose not to engage casual employees would be likely to meet their labour needs through other strategies that facilitate a high degree of flexibility, for example, though the use of flexible hours, part-time contracts and/or the use of probationary periods. There is no evidence that greater reliance on these strategies would lead to any adverse consequences for job creation at the aggregate level."

(iii) Conclusions on the evidence 70 In the absence of any evidence about the matter, it seems to us the suggestion of a relationship between unfair dismissal laws and employment inhibition is unproven. It may be accepted, as a matter of economic theory, that each burden that is placed on employers, in that capacity, has a tendency to inhibit, rather than encourage, their recruitment of additional employees. However, employers are used to bearing many obligations in relation to employees (wage and superannuation payments, leave entitlements, the provision of appropriate working places, safe systems of work, even payroll tax). Whether the possibility of encountering an unlawful dismissal claim makes any practical difference to employers' decisions about expanding their labour force is entirely a matter of speculation. We cannot exclude such a possibility; but, likewise, there is no basis for us to conclude that unfair dismissal laws make any difference to employers' decisions about recruiting labour.

(iv) The reference to "particular conditions" of employment 71 However, even if unfair dismissal laws do have the general effect of inhibiting employment growth, this is not an effect that flows from the "particular conditions" of casual employees' employment. The inhibition would apply equally to permanent employment. As Professor Wooden agreed in cross-examination, "the consequence for employment is not dependent upon the designation of employee" but "upon the fact that the given employee, or the given class of employees, have access to unfair dismissal laws". 72 In arguing that job creation is relevant to the application of s 170CC(1)(e) of the Act to reg 30B, counsel for the Minister drew attention to the first "principal object" of the Workplace Relations Act, as stated in s 3 of the Act. That object includes "encouraging the pursuit of high employment". No doubt that is an important object of the Act. However, s 3 also refers to "assisting in giving effect to Australia's international obligations in relation to labour standards" (para (k)). And s 170CA(1)(e) makes it a "principal object" of Division 3 of Part VIA of the Act, by the procedures, remedies and sanctions provided by the Division, "to assist in giving effect to the Termination of Employment Convention". Although that convention contains a provision upon which s 170CC(1)(e) is evidently based (Article 2.5) it is in more restricted terms.

(v) Conclusions about s 170CC(1)(e) 73 It is not necessary to explore the limits of the term "substantial problems" in s 170CC(1)(e) of the Workplace Relations Act. Nor is it necessary to consider whether the term "conditions of employment", in sub-para (i), is limited to the terms and conditions of the employment contract (as Mr Rogers contended) or includes the circumstances of employment (as Mr Robertson suggested). Whatever the position in relation to those matters, the Minister's argument in relation to s 170CC(1)(e) lacks a proper factual foundation. It must be rejected.

The severability of reg 30B(3) 74 The above reasoning compels the conclusion that reg 30B(3) is invalid. What about reg 30B(1)(d)? 75 We have indicated that a regulation framed in terms of the statutory formula could validly have been made. Consequently, if reg 30B(1)(d) had stopped at the comma, in our opinion it would have been valid. However, reg 30B(1)(d) did not stop at that point; the words "within the meaning of subregulation (3)" were added. Those additional words operated as a qualification upon the preceding words. 76 Section 46 of the Acts Interpretation Act 1901, relevantly provides: "(1) Where an Act confers upon any authority power to make, grant or issue any instrument (including rules, regulations or by-laws), then: (a) … (b) any instrument so made, granted or issued shall be read and construed subject to the Act under which it was made, granted or issued, and so as not to exceed the power of that authority, to the intent that where any such instrument would, but for this section, have been construed as being in excess of the power conferred upon that authority, it shall nevertheless be a valid instrument to the extent to which it is not in excess of that power." 77 However s 46(1)(b) cannot operate to save a remaining provision which would then have an operation or effect different from what it would have had before severance. The position of s 46(1)(b) in that regard is similar to that arising under s 15A of the Acts Interpretation Act, dealing with constitutionally invalid legislation. Dixon J explained that position in Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 371: "… in applying s. 15A and s. 46(b) the courts have insisted that a provision, though in itself unobjectionable constitutionally, must share the fate of so much of the statute, regulation or order as is found to be invalid, once it appears that the rejection of the invalid part would mean that the otherwise unobjectionable provision would operate differently upon the persons, matters or things falling under it or in some other way would produce a different result. This consideration supplies a strong logical ground for holding provisions to be inseverable, whether the prima-facie presumption be in favour or against severability. It is important where there is no statutory clause like s. 15A and it is important in using s. 15A. For the inference in such a case is strong that provisions so associated form an entire law and that no legislative intention existed that anything less should operate as a law." 78 This approach was affirmed in Dingjan; Ex Parte Wagner (1995) 183 CLR 323 by Brennan J at 339 and Dawson J at 348 and by Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ in Harrington v Lowe (1996) 190 CLR 311 at 328. 79 It is apparent, in the present case, that the words "engaged for a short period", in reg 30B(1)(d), would operate differently, if retained but stripped of the reference to s 30B(3), than with that reference. Without the reference to reg 30B(3), the words would require determination only of the question (a mixed question of fact and law) whether the employee's period of engagement could properly be regarded as "short"; whereas the regulation maker intended the question to be determined by reference to the altogether different criteria set out in reg 30B(3)(a) and (b). 80 In the circumstances, there is no room for the operation of s 46(1)(b) of the Acts Interpretation Act. Regulation 30B(1)(d) is also invalid.

Disposition 81 Having regard to the problems surrounding the case stated by the Full Bench of the Commission, we think it preferable to mark each of the questions "Inappropriate to answer". In taking that course, we nonetheless acknowledge this Court's obligation to assist the Commission by answering questions of law referred to it under s 46 of the Workplace Relations Act. The Court will ordinarily be very willing to undertake that task. However, it is essential that it first appear that the question does truly arise in the matter before the Commission, as explained in paras 20 to 23 above. It is also important that the moving party comply with the requirements of Order 50. 82 As Mr Hamzy has applied for declaratory relief, no problem will arise from our failure to answer the questions referred by the Commission. We propose to make a declaration that neither reg 30B(1)(d) nor reg 30B(3) is authorised by s 170CC of the Workplace Relations Act and both are invalid. If the matter is restored to the Commission's list, Mr Hamzy's advisors will no doubt draw attention to that declaration. 83 The parties agree there should be no order as to costs.

I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate: Dated: 16 November 2001 Counsel for the Applicant: Mr A Rogers

Representative of the Applicant: Shop, Distributive and Allied Employees' Association

Representative of the First Respondent: Mr G Krayem, Australian Retailers' Association

Counsel for the Second Respondent: Mr A Robertson SC and Mr S Lloyd

Solicitor for the Second Respondent: Henry Davis York

Date of Hearing: 15 October 2001

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