Hogan v Employment National

APPLICANT: Mr D Marr of counsel SOLICITOR: Ms D Roberts Doran Roberts & Co Solicitors LEGAL REPRESENTATIVES: RESPONDENT: Mr J Phillips of counsel SOLICITOR: Mr J D'Abaco Anderson Legal

JUDGMENT:

• 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: WALTON J, Vice-President

Michael John Hogan v Employment National (Administration) Pty Limited

Application under section 106 of the Industrial Relations Act 1996.

1 In these proceedings, Michael John Hogan ("the applicant") seeks an order pursuant to s106 of the Industrial Relations Act 1996 ("the Act") declaring the contract of employment between himself and Employment National (Administration) Pty Limited ("the respondent") void ab initio, in whole or in part, as well as consequential orders for the payment of money. On 23 February 2000 the applicant filed a notice of motion seeking leave to file and serve an amended summons for relief. Leave was granted to amend the summons on 10 March 2000. 2 By notice of motion filed on 28 February 2000 the respondent moved the Court for an order that the amended summons for relief be set aside for want of jurisdiction. The grounds advanced to support this application were as follows: 1. The Applicant Summons and the Amended Summons seek to vary a Federal Australian Workplace Agreement and/or a Federal Award. 2. The Summons and the Amended Summons are precluded from determination by the Commission in Court Session by the provisions of Section 109A of the Industrial Relations Act . 3. The Commission, in any event, in the exercise of its discretion ought to refuse to further deal with the Summons or Amended Summons. 3 It will be observed that the grounds raised by the respondent in support of the application that the summons be set aside are essentially twofold. Firstly, the respondent submitted that the summons seeks orders which would have the effect of varying an Australian Workplace Agreement (AWA) made pursuant to the Workplace Relations Act 1996 (Cth). In particular, the summons sought orders varying the probationary clause which forms part of the policies and procedures of the respondent. The policies and procedures of the respondent were said to be incorporated into the AWA by virtue of cl5 of that instrument. As such, it was argued that the summons sought to vary the AWA and as such is precluded by s109 of the Australian Constitution. 4 Secondly, the respondent argued that the grounds relied upon by the applicant in the original summons related to an allegation that the applicant was dismissed as a result of complaints raised by him concerning certain practices he claimed were taking place within the respondent's operation. In line with the principles laid down by the Full Bench in Beahan v Bush Boake Allen Australia Ltd (1999) 47 NSWLR 648, the respondent submitted that the claim was essentially a claim in the nature of an unfair dismissal and the Court had no jurisdiction to hear the claim by virtue of s109A of the Act. 5 It was agreed between the parties that the proceedings should progress initially by way of a short hearing to address the question of whether the notice of motion should be heard as a preliminary matter or remain to be determined at trial ("the preliminary question"). 6 After hearing the parties on the preliminary question the Court sought submissions from the parties as to whether it was appropriate, in the circumstances of this matter, for the Court to require notices to be issued pursuant to s78B of the Judiciary Act 1903 (Cth). After receiving these submissions the Court directed that notices be issued pursuant to s78B of the Judiciary Act 1903 (Cth), and that those notices be served on the Commonwealth Attorney-General and the Attorney-Generals of the States and Territories. The notices were made returnable before the Court on 9 August 2000. 7 On the return date no appearances were entered by the Attorney-Generals of the Commonwealth, States or Territories. Mr Phillips of counsel, who appeared for the respondent, advised that his solicitor had received various communications from the Attorney-Generals, indicating that they did not intend to intervene in the proceedings (although in some cases the Attorney-Generals had reserved their rights as to any future proceedings). In these circumstances I now turn to consider the preliminary question 8 The respondent submitted that there is sufficient material now filed by the parties for the notice of motion to be heard and determined. The respondent contended that the claims relied upon by the applicant represents nothing more than a claim for unfair dismissal. The one exception was the claim relating to the probationary period, but this too, it was submitted, could not found jurisdiction because of the constitutional consideration raised. Thus, the respondent submitted that even taking the application and the material relied upon at its highest, there is no jurisdiction for the Court to act. 9 This submission was resisted by the applicant who contended that the question of jurisdiction can only be determined as part of the substantive proceedings. The applicant submitted that, in relation to section 109A of the Act, the question of whether the application is, in essence, a claim for unfair dismissal is a question of fact which must be determined after hearing all the evidence. The applicant submitted that he should not, in effect, be required to present his case at an interlocutory stage. 10 As a general rule, it is desirable that a challenge to the jurisdiction of a Court to determine a particular application should be heard at the earliest opportunity. Should such an objection succeed the expense and delay occasioned by a full trial of the matter would thereby be avoided. However, numerous decisions of this and other Courts, notably Nagle t/as W D and J L Nagle & Sons v Tilburg (1993) 51 IR 8 and the authorities relied upon therein, have indicated that it will only be appropriate to determine an objection to jurisdiction at the appropriate stage in the proceedings. As was said by Kirby P (as he then was) in Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1991) 28 NSWLR 443 at 446, the approach of determining jurisdiction at a preliminary stage is a sensible course only "where a party has a substantial threshold argument which, if it succeeds will knock out the claim"; see also Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 at 447 - 448. 11 Whether it is appropriate for a question of jurisdiction to be resolved at a preliminary or threshold stage will necessarily depend upon the nature of the challenge to jurisdiction, as well as the amount of evidence which must be examined and the scope of the determinations which must be made in the course of deciding the jurisdictional point. If an objection to the jurisdiction of the Court requires the examination of the bulk of the evidence and demands that the Court make extensive factual findings, it is unlikely that it will be profitable from the perspective of the parties or the Court for the matter to be determined on a preliminary basis. To do so, would effectively require an applicant to run the case twice should the challenge to jurisdiction prove unsuccessful. 12 It is also relevant to observe that this Court and other Courts have demanded that a particular threshold be satisfied before a preliminary challenge to jurisdiction can be upheld. For the respondent to succeed it must be demonstrated that there is no power for the Court to grant any relief to the applicant: see Virtue at 448 and Federated Municipal and Shire Council Employee's Union v Energy Australia (1999) 90 IR 311 at 319. This is a matter which must be considered when assessing whether the respondent has raised a substantial threshold argument which will "knock out" the claim if it succeeds. 13 In this case, the major objection raised by the respondent is that the bulk of the claim is precluded by virtue of the operation of section 109A of the Act. 14 Section 109A of the Act provides: 109A. Exclusion of certain contracts in connection with unfair dismissals

(1) This Division does not apply to a contract of employment that is alleged to be an unfair contract for any reason for which: (a) an application has been or could have been made by the employee under Part 6 (Unfair dismissals), or

(b) such an application could have been made but for the provisions of section 83 that exclude the employee from making an application under that Part. (2) In this section: "contract of employment" means any contract or arrangement under which work is done by a person in the capacity of an employee, and includes a related condition or collateral arrangement with respect to such a contract.

"dismissal" has the same meaning that it has in Part 6. 15 In Beahan v Bush Boake, the Full Bench made it clear that this provision is directed at removing from the unfair contracts jurisdiction claims which essentially involve unfair dismissals. As stated by the Full Bench (at 692): In short, our view is that s109A operates to exclude a contract of employment from the operation of section 106 only where the unfair contract claim is an unfair dismissal claim in disguise and where essentially it is of the nature of an unfair dismissal. Where a claim challenges the terms or operation of a contract of employment by genuine, not superficial or coloured, reasons related to the contract itself then, in our view, it is a claim properly within s106 and s109A has no operation in relation to it.

16 An application will not be excluded merely by reason of the fact that the applicant's dismissal motivated him or her to bring the claim. The question in each case will be whether the relief sought is, in truth, directed to the unfairness in or arising from the contract itself. 17 As Beahan v Bush Boake indicates, the question posed by s109A is not a matter which is likely to be determined solely upon the characterisation of the claim found in the pleadings. What is required is an examination of the substance of the claim. In that context, as the respondent here concedes, and leaving aside the constitutional issue to which I shall come, part of the claim falls within the jurisdiction of the Court under s106 of the Act, notwithstanding the limitations arising from s109A. To succeed in having the summons set aside at a preliminary stage, it would be necessary for the respondent to make out its arguments in relation both to the s109A point and the constitutional point. 18 As I have indicated, the respondent contends that this aspect of the summons is also beyond the jurisdiction of the Court because it seeks to vary a federal industrial instrument. 19 In these circumstances, I have formed the view that it is not appropriate to hear the notice of motion at a preliminary or threshold stage of the proceedings. The notice of motion will be determined during the trial. 20 The success of the motion to set aside the summons is dependant upon a finding that the variation of the probationary clause would constitute an attempt to vary a federal industrial instrument. This much was conceded by the respondent as it put that the issue raised in the summons concerning the probationary clause (and the resulting constitutional question) would remain for determination by the Court, irrespective of the operation of s109A of the Act. 21 The applicant disputed that the variation to the probationary clause would constitute a variation to the federal instrument. Mr Marr of counsel, who appeared for the applicant, submitted that the policies and procedures of the respondent in relation to the probationary employment were not incorporated into the AWA if the effect of the policy was to reduce the substantive entitlements of an employee. As a consequence, orders varying the probationary period would not necessarily have the effect of varying a federal instrument. Without commenting on the merits of this submission, it seems clear that the resolution of this question may demand an investigation of the terms and conditions of the applicant's employment which would be more properly undertaken in conjunction with the full hearing of the matter. 22 Further, on a preliminary analysis of the grounds specified in the amended summons, there is, in my view, doubt as to whether the summons should be set aside by virtue of the operation of s109A of the Act. The summons makes a range of allegations of unfairness arising from the duties which the applicant was required to perform and the actions taken by the respondent whilst the applicant was working under his contract of employment. Allegations were also raised that the contract permitted termination in a manner which was discriminatory to the applicant and deprived him of legitimate benefits. The determination of whether part of the summons falls within the operation of s109A is likely to require a detailed examination of the substance of the claims and the circumstances of the case. I do not consider it would be appropriate to embark upon such an analysis at this stage in the proceedings. 23 Finally, I stress that the refusal of an application to hear the notice of motion at a preliminary stage is not intended to imply a final determination that the Court has jurisdiction to make any order sought. It is merely decided that the issues raised in the motion be determined at trial.

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