Health and Research Employees' Association of New South Wales v Baptist Community Services NSW and ACT

Health and Research Employees' Association of New South Wales v Baptist Community Services NSW and ACT - [2003] NSWIRComm 7 - NSWIRComm 2002 case summary — Zoe

[30]

Submissions 6 When the issues requiring decision again came before the Court the applicant argued that the award made by Grayson DP pursuant to s 19 (the second award) and that made by Neal C (the third award) both applied to BCS and any declarations made should extend to those awards. As to the second award, the applicant submitted: 5. Therefore, when the s 19 review of the award came before Grayson DP in 2001, BCS and its employees were covered by the award, despite non-membership of BCS of the ASA at that time. 6. The award made by Grayson DP (the Second Award) contained clause 49 'Area Incidence and Duration' which was in relevant respects unaltered from clause 49 in the First Award. The Applicant, therefore, submits that the approach to the construction of that provision in the First Award by His Honour the President should also be adopted in relation to the relevantly identical provision in the Second Award, namely, that there was never any intention that individual employers had the right to unilaterally relieve themselves of obligations arising under the award by resigning membership of their employer organisation. Further, there is nothing to suggest that the parties to the Second Award proceedings or Grayson DP gave the slightest thought to the proposition that by effectively repeating clause 49 in the same terms as appeared in the First Award, the consequence would be the removal of BCS and its employees from the coverage of the award. Had such a drastic alteration to the coverage of the award been intended it would have been expected that such a significant matter would have been fully ventilated by Grayson DP. 7. In any event, it is clear from s 19(2) that the purpose of a review is "to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards". Clearly, an alteration to the coverage or potential coverage of an award of the sort referred to in the previous paragraph travels far beyond the purpose of a s 19 review as stipulated in the statute.

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It matters not that the s.19 process had a particular purpose, as argued by the Applicant (submissions, para 8). That does not bear on the fact that a new award was made rescinding and replacing the award made by Maidment J. 10 The parties, at the request of the Court, reached agreement on factual matters relevant to the present issues. The document filed was relevantly in these terms: STATEMENT OF AGREED FACTS 1. The Industrial Registrar issued a 'Notice of Award Review' (IRC Matter Number 925 of 2001) pursuant to section 19 of the Industrial Relations Act 1996 for the Charitable, Aged and Disability Care Services (State) Award on 16 February 2001. 2. This award, the subject of the section 19 review, was originally made by Maidment J (as published in Volume 315 of the Industrial Gazette at page 1302) and subsequently varied by Glynn J (as published in Volume 315 of the Industrial Gazette at page 1497). 3. In an appearance before His Honour, Deputy President Grayson, on 18 May 2001, the following variations resulted to the then existing Award: (a) The existing clause 2 ~ Basic Wage/State Decisions, was deleted. (b) As a result of (a) above, the existing clause 3 ~ Definitions, was renumbered as clause 2. (c) The Anti-Discrimination clause made by General Order of the Industrial Relations Commission of NSW was inserted and numbered clause 3. (d) A new sub-clause (i) and (ii) were inserted into clause 49 ~ Area, Incidence and Duration, of the existing award that sought to reflect the process of review completed under section 19 of the Industrial Relations Act 1996. (e) The form of words used in clause 49(i) and (ii) identified in (d) above reflected 'standard' wording adopted by the Industrial Registry. (f) As a result of (d) above, the existing sub-clauses in clause 49 were renumbered to give effect to the newly inserted sub-clauses (i) and (ii). (g) Table 1 ~ Rates of Pay, in Part B of the existing award, was amended to remove reference to pay rates applicable from 10/11/98, 01/07/99 and 01/01/00. (h) The rates of pay previously designated as being applicable from 01/01/00 identified in (g) above remained unchanged and only amended as being deemed to apply from the first full pay period to commence on or after 18 May 2001. 4. The award, as made by Grayson DP, appeared in Volume 330 of the Industrial Gazette at page 1023.

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11 The parties also reached agreement on, or did not contest, a number of other factual matters which included: (a) that the resignation of BCS from membership of the ASA was known to HREA prior to the s 19 award being made by Grayson DP in May 2001; (b) HREA was then aware that BCS was advising employees that they were no longer entitled to the benefits of the relevant award; (c) the employees of the BCS were not paid the increased rates under the award of Maidment J whilst the appeal from his Honour was on foot. In December 2000, after the appeal was dismissed, the increased rates were "back-paid" but the employees were adviced by BCS that the increased rates would cease as of 1 January 2001; (d) the present proceedings were commenced shortly before the proceedings before Neal C were heard; (e) changes of substance resulted from the award made by Neal C (it is unnecessary to detail the changes. They are summarised in a two page document which was tendered). 12 The applicant submitted: 11. The Second Award was rescinded and replaced by a new award made on 14 November 2001 by Commissioner Neal (the Third Award). The Third Award contained a number of changes to rates of pay and other conditions of employment. The Third Award did not contain the limited opting out provision which was contained in the First Award and repeated in the Second Award. Therefore, on its face and adopting a purely literal approach to the document the Third Award applies only to employers who are members of the ASA or CCER. The Applicant conceded that BCS is not and was not at the time of the making of the Third Award, a member of the ASA. 12. However the Applicant contends that in the special circumstances of this case it would be inappropriate to the Commission to adopt a literal approach to the determination of the question of the coverage of the Third Award. To do so would have the effect of "enshrining" an error. 13 The applicant contended that neither the transcript of the proceedings of 14 November 2001 which led to the making of the third award nor the decision of Neal C support the proposition that the parties to those proceedings, or the Commissioner himself, gave any consideration to the prospect that in making the award in the terms proposed by the parties one consequence would be that employees of BCS who were, up until the time of the making of the third award, covered by the second award yet immediately rendered no longer covered by that award but rather by the Charitable Sector Aged and Disability Services (State) Award, an award which contains lower rates of pay and different classification structures than are contained in the first, second and third CADS Awards. It was strenuously submitted that such an outcome was neither contemplated nor intended. 14 As to the question of the construction of the Area, Incidence and Duration clause of the third award the applicant relied upon the approach of Burchett J in Short v F W Hercus (1993) 40 FCR 511 as cited with approval in, for example, Perisher Blue Pty Ltd v Australian Workers Union (1999) 91 IR 274 at 283 - 284 (for example, the wider context of the making of the award provisions should be considered). The clause in the third award is a successor provision to the corresponding clause in the earlier awards. That is, and using the analogy adopted by Burchett J, the clause in the last award has, in some respects, been "transplanted". Continuing the metaphor, the applicant submitted when the "soil in which it once grew" is considered, it may be readily concluded that its intended operation was not relevantly different from the intention that underpinned its predecessor provisions, with the single qualification that the formerly expressed limited "opting out" provision was removed because the time frame of the operation of that provision had long since past and it served no purpose. 15 The applicant submitted that: It would be extreme irony if, as a consequence of the removal of this provision which was always intended to be limited in its scope and to operate for a finite period of time (ie up until 1 September 1999), the coverage provision of the award was completely altered from one, as the commission as presently constituted has found, that, in its original form, did not permit individual employers to escape the provisions of the award by resigning membership of the relevant employer association, to one where such an outcome became instantly possible and, indeed, where a large number of employees, namely those of BCS, were immediately excluded from the scope of the award. Again, it is submitted that if such an outcome was within the contemplation of the parties and the Commission one would have expected reference to it in the proceedings. The consequence of acceptance of the contrary view would be that Commissioner Neal has been unwittingly led by the parties, who were equally unwitting in this respect, to a position where he has made a new award with immediately excluded employees previously covered by the award from the more advantageous rates of pay and employment conditions contained within it. When considered in that light it is clear that such an approach pays no regard to the "source", "creation" and "understanding [of] its original meaning." 16 The applicant relied on Kingmill Australia Pty Ltd t/a Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch at 229 - 230 for the submission that: The Applicant contends in this case that the "context" of the relevant provision in the Third Award includes the circumstances in which it was made and the history of its predecessor provisions. This "context" does not lend support to the proposition that there was ever any intention to alter the scope of the Third Award from that of the First and Second Awards. 17 It was said that a different approach would be contrary to the principles enunciated in the judgment of the majority in Cepus v Heggies Transport Pty Ltd (1994) 52 IR 123 at 127 - 128 and specifically these principles stated there: (iv) Situations which fall accidentally within the words of an award should not be regarded as coming within such award.

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… (vi) The meaning to be attributed to an award term is to be found by reading it in its industrial context recognising that awards are drawn up by those who cannot be expected to be perfectionists in legal drafting. (vii) It is desirable that, in interpreting an award, the Tribunal should have the fullest knowledge of the circumstances under which it is made. (viii) The context of an award should be considered in the first instance and not merely when ambiguity might be thought to have arisen. (ix) The history of the award provision is relevant to the ascertainment of its meaning. 18 The applicant submits finally that: The Commission and its predecessors have historically, when confronted with disputes as to the scope of a particular award, adopted a practical approach to the reality of the award making process, especially where the award was made by consent. This approach, in general terms, give[s] primacy to an outcome which is consistent with what was intended by the parties, and does not uphold unintended consequences. Such an approach is consistent with that adopted by Curlewis J in Wills v Hartland (1917) AR 410 at 412 where his Honour stated as follows: "Let us stop for a moment to consider what really takes place on the hearing of an application for an award. The applicants put before the Board a statement of the work done by the various classes for whom they desire wages and conditions fixed. The Board makes an award for the classes to which its attention is drawn. I am now asked to hold that a Board must be deemed to have foreseen every contingency that can ever arise, and to have prescribed that every one who cannot be shown to be something else is to be deemed to be a journeyman. Every award is a bed of Procrustes, into which every employee is to be fitted, however manifest it may be that the case of such an employee could never have been considered by the Board." Such a practical approach has been consistently followed in this jurisdiction. 19 It was said the respondent puts the reverse proposition, namely that employees who were always intended to be covered by the award have unwittingly been excluded. That approach, it was submitted, pays no regard to "what really takes place on the hearing of an application for an award". In this case the Commission should be satisfied that there was never any intention to exclude persons covered by the award from its scope. It would thus be contrary to the approach described above to decline to make the declaratory orders sought by the applicant. Consideration and Conclusions

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(3) The Commission must take account of the following matters in the review of awards: (a) any decision of the Commission under Part 3 or any other test case decision of the Commission, (b) rates of remuneration and other minimum conditions of employment, (c) part-time work, casual work and job-sharing arrangements, (d) dispute resolution procedures, (e) any issue of discrimination under the awards, including pay equity, (f) any obsolete provisions or unnecessary technicalities in the awards and the ease of understanding of the awards, (g) any other matter relating to the objects of the Act that the Commission determines. (4) The Commission must also take account of the effect of the awards on productivity and efficiency in the industry concerned. (5) During a review of awards, relevant industrial organisations and any other parties to the awards may make submissions on any of the matters being reviewed. (6) The Commission is to make such changes to awards as it considers necessary as a result of a review. 22 It is unnecessary for present purposes to analyse exhaustively the purpose and role of s 19 and the process created by the provision. It is sufficient to observe that it is essentially an award review provision, rather than an award making or award variation provision, in the usual sense in which the latter expressions are used. So much is confirmed by the decision in Principles for Review of Awards - State Decision 1998 at 44 and 47 - 48 where the following observations were made: We immediately remark that it follows from this statutory framework that the review process established by s19 of the 1996 Act gives the Commission a particular role in reviewing awards which is different to the opportunity which parties to awards themselves are given, by the other sections mentioned, to bring forward applications for the making of new awards or the variation of existing awards. Section 19 is neither an alternative to nor a substitute for such applications. Applications brought by award parties in order to meet the needs of employers and employees in the circumstances of a particular industry or enterprise are pursued and determined in accordance with the provisions of the 1996 Act, particularly s10, together with other applicable legislation and applicable principles, including those established in State Wage Case decisions, State decisions and test case decisions. By way of contrast, the process established by s19 has a stated and limited purpose - namely `to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards'. In s19(3) and (4), matters which the Commission must take into account in giving effect to that purpose are specified. Care must be taken, it seems to us, to ensure that those two processes are not confused. … We observe that the s19 review process as part of industrial regulation by awards involves both new and different processes and obligations. They are philosophically different to the familiar processes available to award parties in the 1996 Act and in the predecessor legislation to which we earlier referred. It requires the Commission to make changes to the award which properly flow from the review process. That obligation could not be achieved by the giving of a possibly unenforceable direction to award parties that they make an application consistent with the view the Commission had formed in the review. We add that in coming to a view changes were required to the award being reviewed, that the Commission of necessity would have regard to other principles applicable to the making or variation of an award, such as the wage fixing principles and would not act inconsistently with them. The parties would also be given an opportunity to be heard. Nevertheless, if the Commission formed the view in the review proceedings that a particular change to the award was required then, in order to satisfy the purpose of the review as specified in s19(2), it would be obliged to make the change as part of the review process in accordance with the mandatory provisions of s19(6).

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(b) Employers who are members of the employer organisations that are party to this award and either the Employers' Federation of New South Wales or the Australian Nursing Homes and Extended Care Association (NSW), who elect not to be covered by this award. These include: … For the purposes of this clause, an employer who elects not to be covered by this award shall do so by writing to the parties to this award to advise them of the election, on or before the first of September 1999. In such cases this award shall be deemed never to have applied and the Charitable Sector Aged and Disability Care Services (State) Award (281 IG 1011) shall continue to apply. … Particularly is this so when, virtually alongside that provision, is clause 49(i) (which makes plain that the award was made following a review under s 19) and when the original clause 49(i) is maintained as clause 49(iii). The presence of the original clause 49(i) was one of the bases upon which the initial judgment was made. In my opinion, these matters are of more significance than the assertions made by the BCA as to its legal situation. The matters considered most significant are objective in nature whereas the assertions of the parties are inevitably subjective or self-serving (cf Seamen's Union of Australia v Adelaide Steamship Company (1976) 46 FLR 444 and Re Security Officers (Waterfront) Award (1988) 26 IR 1 at 7 - 8, as referred to in the earlier judgment in these proceedings [2002] NSWIRComm 32 at [74] and [75], and Re Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (No 2) (2001) 104 IR 385 at 390 [22]) and, in any event, it is not suggested that the view of BCS was accepted by HREA either in fact or by its conduct. The conclusion reached is also confirmed by the limited and essentially formal nature of the changes reflected in the award made under s 19 which are summarised in the third paragraph of the Statement of Agreed Facts recorded in paragraph [10] above.

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Cases Cited (10)

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