Interim Transport Industry - Courier and Taxi Truck Contract Determination [2010] NSWIRComm 51

CATCHWORDS: APPEAL - objection to Member of Commission conducting arbitration - refusal of Member to disqualify himself - whether s 173 has application to proceedings under Pt 2 of Ch 6 of the Industrial Relations Act 1996 - whether arbitration about "the matter" had commenced - whether the making of determination that application be dismissed because frivolous and vexatious constitute arbitration and exclude the operation of s 173 of the Act - held - s 173 applied to proceedings - principles in respect of operation of s 173 - determination of a strike out application cannot be regarded as Commission commencing to exercise arbitral powers in context Pt 2 of Ch 6 - hearing of interlocutory application prior to proceeding into arbitration - leave to appeal granted - appeal upheld - referral to President for allocation to another Member

LEGISLATION CITED: Industrial Relations Act 1991 (NSW) Industrial Relations Act 1996

Commissioner of Police v Police Association of New South Wales (2005) 141 IR 423 Gabrielle Irene Brennan (trading as "Gai Abandon Clothing") v Lorraine Linda Asciak [2009] NSWIRComm 159 CASES CITED: Interim Transport Industry - Courier and Taxi Truck Contract Determination [2009] NSWIRComm 73 Public Service Association of NSW and Department of Corrective Services & Anor [1994] NSWIRComm 148 Re Transport Industry - Quarried Materials Wages (State) Award (1997) 74 IR 296

Mr A Hatcher of counsel (Appellant) Transport Workers Union

Mr J Murphy of counsel (First Respondent) Courier and Taxi Truck Association Mr J Stanton (Second Respondent) Australian Business Industrial No appearance (Third Respondent) LEGAL REPRESENTATIVES: Australian Federation of Employers No appearance (Fourth Respondent) CLC Deliveries No appearance (Fifth Respondent) Crisis Couriers Mr A Deardon (Sixth Respondent) Mail Call Couriers No appearance (Seventh Respondent) NSW Road Transport Association (In Liq)

• 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: WALTON J Vice-President STAFF J CONNOR C

INTERIM TRANSPORT INDUSTRY - COURIER AND TAXI TRUCK CONTRACT DETERMINATION

Application by Transport Workers' Union of New South Wales for leave to appeal and appeal against a decision of Justice Marks given on 25 September 2009 in Interim Transport Industry - Courier and Taxi Truck Contract Determination [2009] NSWIRComm 73

1 This is an application by the Transport Workers' Union of New South Wales ("TWU") for leave to appeal, and if leave be granted, to appeal against a decision of Marks J given on 25 May 2009. Those proceedings related to an application by the Courier and Taxi Truck Association ("the CTTA") to vary the Interim Transport Industry - Courier and Taxi Truck Contract Determination. During the course of the proceedings, an application was made pursuant to s 173 of the Industrial Relations Act 1996 ("the Act") by the TWU that his Honour disqualify himself. His Honour determined that s 173 did not apply to an application brought pursuant to Pt 2 of Ch 6 of the Act: Interim Transport Industry - Courier and Taxi Truck Contract Determination [2009] NSWIRComm 73. 2 The parties acknowledged that the appeal raised two questions: (i) did his Honour err in holding that s 173 had no application to proceedings before the Commission brought under Pt 2 of Ch 6 of the Act? (No issue was raised in respect of the application of s 173 to Pt 7 of Ch 6);

(ii) did his Honour err in finding that arbitration about "the matter" before him had commenced? 3 In respect of the first question, Mr J Murphy of counsel, who appeared for the CTTA, did not seek to be heard on the question. Mr A Deardon, who appeared for Mail Call Couriers ("the sixth respondent"), adopted a similar position. Australian Business Industrial, ("the second respondent"), advised that it did not wish to participate in the proceedings. The remaining respondents did not appear in the appeal. 4 The Full Bench advised the parties that it had formed the view that an affirmative answer should be given to the first question and that it would provide its reasons in due course. 5 Mr AA Hatcher of counsel, who appeared for the TWU, relied upon three propositions in support of the second question (see [38]). We agree with counsel's second proposition, that what occurred on 8 September 2008 before his Honour, did not constitute a commencement of an arbitration when properly analysed. To the extent that Marks J came to a different conclusion, we find that his Honour fell into error. History of the proceedings 6 The parties, with the assistance of his Honour in compulsory conference, reached agreement on all but one matter, which required arbitration. That matter related to a proposed variation to the operation of the safety net regime by the CTTA, whereby time worked was to commence when a courier actually picked up the first job of the day. The effect of this proposed variation was that the time taken travelling to the pick up point after the job had been allocated to a courier would be excluded, and thus, the overall quantum of the safety net payment owing to the courier reduced. 7 On 28 March 2006, his Honour varied the contract determination and fixed a timetable for the filing and serving of witness statements in respect of the safety net "issue". His Honour allocated four days for the arbitration of the matter commencing on 8 September 2008. At the commencement of the hearing on that day, the appellant attempted to have the application struck out on the basis that it was frivolous and vexatious. His Honour rejected this application. His Honour proceeded to engage in further conciliation and issued a Recommendation, rather than proceeding with a hearing in respect of the merits of the application. The Recommendation recorded proposals for amendment of the proposed Determination advanced by the CTTA and the appellant respectively. It also recorded a third version, "suggested for the consideration of the parties" by his Honour. 8 As it is important to properly understand how the proceedings progressed, it is helpful to set out the Recommendation made by his Honour on 8 September 2008: ... Each of the parties as they came to be divided in approach has formulated some words for consideration by all of the other parties and I will now proceed to put these on transcript. The association's suggested wording is as follows: "The relevant hourly rate set out in Schedule I for each hour or part thereof is determined by the time the contract carrier commences to travel directly to the first pick up or delivery of the day (whether allocated on that day or on a previous day) until the time of delivery of the final completed contract of carriage on that same day. Each contract carrier is required to notify and to record the time of commencing to travel to the first pick up or delivery of the day in a manner determined by the principal contractor. Failure by the contract carrier to notify and record such time as directed by the principal contractor will result in no entitlement to any safety net hours for that contract carrier on that day." The union's suggested wording is as follows: "The principal contractor may impose on the contract carrier an obligation to notify the principal contractor of the time the contract carrier commences to travel in order to pick up the first job of the day. Notification shall be by the means of communication or methods provided by the principal contractor. The contract carrier shall be required to fill out a daily run sheet that identifies the commencement to travel for the first job of the day, any breaks taken throughout the day and the time of completion of the final contract of carriage of the day. The daily run sheet shall be supplied by the principal contractor as per its requirements and consistent with clauses 5.10 and 10.4. The principal contractor shall provide at the contract carrier's request all documentation including daily run sheets relied upon by the principal contractor to determine the calculation of the daily safety net hours. Failure by the contract carrier to comply with the requirement to complete the daily run sheets or the notification requirements may lead to disciplinary action." I have suggested for the consideration of the parties a variation which is as follows: "The safety net hours commence each day at the time the driver commences to drive directly to pick up the first job that day, whether allocated that day or previously, and finishes at the time of delivery of the last job that day. Each driver must keep a record of the commencement time each day and tell the principal contractor of that time in any way and within such period as the principal contractor may reasonably require. If the driver fails to do so he or she will not be entitled to have the safety net applied for that day." In connection with the union proposal I note that the parties will need to give earnest consideration to the reference to the creation of daily run sheets and in particular written run sheets in the context of the operational requirements of a number of the contract companies, especially those which operate on a paperless basis. In connection with the suggested wording which I have put forward I am conscious that my use of words such as 'driver' is not consistent with the remaining provisions of the contract determination. At some stage perhaps the parties might give some consideration to converting the contract determination to plainer English. In any event my suggested wording might be considered by the parties as something in the nature of a summary which could be made available to all drivers in order to ensure that they are fully informed as to the obligations imposed by them and as to the potential for the loss of access to the safety net which is featured in the versions put up both by the association and the union. I will stand the proceedings over and they may be relisted before me by any party making contact with my Associate. I would hope that in the meantime each of the drafts is considered by a small working group consisting of representatives of all of the parties to make sure that the final agreement can operate in a practical sense given the variety of operating procedures used by a number of the courier companies. If the parties reach agreement on a consent variation that can be forwarded to my Associate with notification of the consent of all of the parties and I will vary the contract determination in Chambers. 9 Mr Hatcher submitted that it was essential to observe that, at this point. the subject matter of the proceedings had changed entirely. No longer was there any suggestion that the time for the commencement of the operation of the safety net be changed. Each proposal was predicated on the existing requirement of this continuing. The issue was now one of whether, and how, a courier might be required to make a record of the time at which he or she was actually allocated the first job and commenced to travel to pick it up. 10 The Recommendation by his Honour provided that: If the courier failed to record the commencement time, the courier would be disentitled for his or her hourly safety net payment for the entire day. 11 Counsel observed that this feature of his Honour's proposal would have effected a radical change to the system of remuneration under the determination, and indeed, would have introduced a regime totally unlike any applying under any other industrial instrument. It would have shifted the onus for the keeping of records of time worked to the courier, with a disqualification from safety net remuneration being the consequence of any failure to keep such records on any day. 12 On 18 December 2008, his Honour listed the matter for directions and was advised that there had been "broad agreement between the parties". His Honour stood the proceedings over for either directions or a hearing, if necessary, on 17 February 2009. On that day, his Honour was informed that no agreement had been reached. His Honour fixed the matter for a compulsory conference on 6 March 2009. 13 On 13 March 2009, the CTTA filed an amended application which closely reflected his Honour's Recommendation of 8 September 2008. This part of the history of the matter was not referred to in his Honour's decision. 14 On 13 March 2009, his Honour chaired a further compulsory conference of the parties. The proceedings were adjourned on the basis that, unless his Honour's associate was advised within 14 days that the matter had been resolved, his Honour would issue a certificate of failed conciliation. 15 On 27 March 2009, after being advised that the matter remained unresolved, his Honour issued a certificate of failed conciliation. By letter dated 1 April 2009, the TWU made an application under s 173. By letter dated 2 April 2009, the CTTA opposed this approach and the matter came on for hearing on 6 May 2009. 16 In rejecting the appellant's application pursuant to s 173 of the Act for disqualification, Marks J initially considered the provisions of Ch 6 of the Act. His Honour observed at [31] - [35] as follows: [31] Chapter 6 establishes, in my opinion, a separate regime to deal with contracts of bailment and contracts of carriage. It provides for the binding force of Contract Determinations made by this Commission and contains other provisions dealing with Contract Determinations. There is also, under Part 3, the ability of representative parties to make contract agreements which may be approved by the Commission under s 325 and which creates binding provisions, which are enforceable. [32] Within Part 4 of Chapter 6, there is a provision enabling the Commission to deal with disputes relating to breaches of contracts of bailment and contracts of carriage and other matters. Furthermore, under Part 5 of Chapter 6, there is provision for registration of associations of employing contractors, associations of contract drivers and contract carriers. [33] Part 7 of Chapter 6 makes provision for the awarding of compensation in certain circumstances upon the termination of particular types of contracts of carriage. There is established by s 347 of the Act, which is contained within Part 7, a Contract Of Carriage Tribunal constituted by a Presidential Member of the Commission and, in certain circumstances, two persons nominated in accordance with that section. S 348 of the Act requires a compulsory conference to deal with claims for compensation by way of conciliation in the first instance and makes provision in s 349 for the arbitration of claims. [34] The provisions of s 351, which is contained within Part 7 of Chapter 6, are, in my opinion, significant for the purpose of considering this matter. S 351 is in the following terms:

351 General procedure and powers of Tribunal (1) Part 5 of Chapter 4 (Procedure and powers of Commission) applies to proceedings before the Tribunal in the same way as it applies to proceedings before the Commission other than in Court Session, subject to this Part and to such exceptions and modifications as are prescribed by the regulations. (2) In particular, sections 179 (Finality of decisions) and 182 (Recovery of amounts ordered to be paid other than penalties) apply to decisions of the Tribunal. (3) Rules of the Commission may be made relating to the practice and procedure of (and other matters relating to) the Tribunal.

[35] It will be observed that sub-section 1 of s 351 provides that Part 5 of Chapter 4 of the Act applies to proceedings before the Tribunal in the manner therein set out. S 173 is contained within Part 5 of Chapter 4. Accordingly, s 173 is specifically incorporated within the procedures of the Contract Of Carriage Tribunal. 17 His Honour observed that s 173, contained within Pt 5 of Ch 4 of the Act, is, accordingly, specifically incorporated within the procedures of the Contract of Carriage Tribunal. His Honour proceeded to observe that s 173, by virtue of the provisions of s 351, should be contrasted with the provisions of s 343 of the Act, which applies particular provisions of the Act for the purposes of Ch 6. Section 343 of the Act is in the following terms: 343 Application of certain provisions for the purposes of this Chapter (1) The following provisions of this Act apply to and for the purposes of this Chapter (the applied provisions):

(a) Section 27 (Prohibition on cashing-in of accumulated sick leave), (b) Part 3 of Chapter 2 (National and State decisions), (c) Part 10 of Chapter 2 (Payment of remuneration), (d) Part 3 of Chapter 3 (Common law actions during conciliation of industrial disputes), (e) Section 143 (Strike pay prohibited), (f) Section 172 (Power to order secret ballot), (g) Part 8 of Chapter 4 (Industrial Committees), (h) Part 1 of Chapter 5 (Principles of association), (i) Part 7 of Chapter 5 (Entry and inspection by officers of industrial organisations), (j) Chapter 7 (Enforcement).

(2) The applied provisions have effect subject to such modifications as are prescribed by this Part or the regulations. 18 His Honour further stated: [38] I have already observed that s 173 falls within the provisions of Part 5 of Chapter 4 of the Act. S 343 incorporates within the provisions of Chapter 6 Part 8 of Chapter 4 but does not refer in any way to the provisions of Part 5 of Chapter 4. [39] It is a fundamental rule of construction that where an Act specifically incorporates particular matters and does not refer to other matters, it is intended thereby that matters not specifically referred to are excluded unless there are some indicia to the contrary which may be derived specifically from statutory provisions or by necessary implication. 19 His Honour considered a submission by the appellant that there were provisions of the Act that by necessary implication imported the provisions of s 173 into Ch 6. In this regard, the appellant referred to the provisions of Pt 3 of Ch 3, which applies to certain actions in tort which are detailed in s 140 and s 141. Section 343(1) specifically applies these provisions to Ch 6. Section 140 is found in Ch 3, Pt 3 of the Act. Section 140 provides for actions in tort to which Pt 3 applies. Section 141 deals with actions in tort while the Commission is attempting to conciliate a dispute. Section 141 provides:

141 Actions in tort while Commission attempting to conciliate dispute not actionable (1) A person may not bring or continue an action in tort to which this Part applies while the industrial dispute to which the action relates is subject to conciliation by the Commission. (2) For the purposes of this section, an industrial dispute is subject to conciliation if:

(a) the Commission has been notified under this Chapter of the dispute or has decided on its own initiative to resolve the dispute, and (b) a certificate of attempted conciliation has not been issued by the Commission under this Chapter in respect of the dispute.

(3) For the purposes of this section, an industrial dispute is not subject to conciliation if the Commission has decided to dismiss or otherwise discontinue the proceedings concerned. (4) A certificate issued by a member of the Commission as to whether a specified industrial dispute is subject to conciliation by the Commission is admissible in evidence in any proceedings in which this Part is in issue and is evidence of the matters stated in the certificate. 20 His Honour accepted the appellant's submission that s 141 could only apply to Ch 6, if by necessary implication, the provisions of the Act dealing with the issue of certificates of conciliation (s 135) were imported into the conciliation process which applies to Ch 6. His Honour observed that s 135 required the issue of a certificate after conciliation and this was what was specifically referred to in s 141(2) and s 141(4). 21 His Honour concluded: [47] However, the provisions of s 173 create a unique entitlement to disqualify a member of the Commission as opposed to any right to seek disqualification on the basis of apprehended bias. I shall refer to the provisions of s 173 later in these reasons for decision. The right to seek disqualification under s 173 is a matter that, in my opinion, is of a different nature to the requirement to issue a certificate under s 135. Whilst the issue of a certificate under s 135 is necessary to make s 141 work, the right to seek disqualification under s 173 has nothing to do with and falls outside the operation of the provisions of Part 3 of Chapter 3 of the Act. The provisions of Part 3 of Chapter 3 impact upon a right to commence or continue an action in tort that will be taken before a Court, and will not be taken before the Industrial Relations Commission of New South Wales. An action in tort instituted before a Court has nothing to do with the constitution of the Industrial Relations Commission of New South Wales for the purpose of dealing with the arbitration of proceedings before it after the conclusion of the conciliation process conducted by the same member. [48] Accordingly, I disagree that there is a necessary or permissible incorporation of the provisions of s 173 into Chapter 6 by reason of the incorporation of the provisions of s 141 and s 142 into Chapter 6. [49] I can find no other provision of the Act which would allow me to proceed on the basis that notwithstanding the failure to refer to Chapter 4 of Part 5 of the Act within s 343, there was an intention on the part of the legislature that the provisions of s 173 were to be incorporated within and apply to the provisions of Chapter 6 of the Act, other than Part 7 of Chapter 6. [50] Furthermore, the legislature has specifically applied the provisions of Part 5 of Chapter 4 to proceedings under Part 7 of Chapter 6 by reason of the provisions of s 351 of the Act, to which I have previously referred. It must be presumed that the legislature, in specifically applying the provisions of Part 5 of Chapter 4 to Part 7 of Chapter 6 and failing specifically to do so within s 343, has demonstrated that the Act is not to be construed as applying s 173 to proceedings being considered under Chapter 6 of the Act other than Part 7. [51] In so concluding, and in so finding that s 173 does not apply to these proceedings, I am mindful also of the unique nature of the provisions of s 173 which create a statutory right to seek disqualification without demonstration of apprehended bias or any other matter which, at common law, would form the basis of a successful disqualification application. The unique nature of the provisions of s 173 was discussed by McKenna C in Brown v Coca-Cola Amatil (Aust) Pty Ltd (2001) 123 IR 33 at p 44. 22 Nextly, his Honour turned to consider what he described as the "merit" argument in the event, as his Honour observed, "that I may be found to have been incorrect in determining that s 173 does not apply to these proceedings". After setting out the terms of s 173 and referring to two Full Bench authorities that considered the provisions of s 173: Re Transport Industry - Quarried Materials Wages (State) Award (1997) 74 IR 296 and Commissioner of Police v Police Association of New South Wales (2005) 141 IR 423, his Honour stated as follows: [61] In my opinion, the resolution of the controversy as to whether or not s 173 applies to these proceedings as contended for by the TWU depends upon a characterisation of the subject matter of the dispute as at the time that conciliation ceased and a characterisation of the dispute as at the time the TWU made its request under s 173. 23 His Honour proceeded to characterise the dispute. At [63] his Honour observed: ... The remaining issue for determination was the consequences that would flow if a driver failed to comply with his or her record-keeping obligations. ... 24 His Honour set out his conclusion in this respect as follows: [65] In my opinion, it is necessary to look in general terms at the subject matter of the dispute rather than focussing on the minutiae that creates an unduly narrow and unrealistic characterisation of the subject matter of the dispute. At all relevant times, what was in dispute was the way in which the safety net clause should operate. Not only the commencement time, but also the consequential requirement to record details for the purpose of ascertaining when the time commenced, were live issues in a general sense. I would reject the characterisation of the dispute contended for by the TWU, and uphold that contended for by the applicant. [66] In these circumstances, I conclude that the request made under s 173 by the TWU was made at a time after conciliation had concluded and at a time after the arbitration proceedings had been initiated.

CONSIDERATION The first question: The operation of s 173 25 The first question for determination is whether s 173 applied to the proceedings brought under Pt 2 of Ch 6 of the Act. Section 173 which is found in Ch 4, Pt 5 - Procedure and Powers of the Commission provides as follows:

173 Members who may exercise arbitration powers after attempted conciliation (1) The member of the Commission who attempted conciliation of an industrial dispute or other matter is not to exercise arbitration powers in relation to the dispute or matter if a party to the arbitration proceedings objects and requests that a different member of the Commission exercise arbitration powers. (2) A member of the Commission is not, for the purposes of this section, taken to have attempted conciliation merely because:

(a) the member attempted conciliation after having begun to exercise arbitration powers, or (b) the member arranged or gave directions for a conference of the parties involved in the industrial dispute or other matter, or their representatives, to be presided over by the member, but the conference did not take place or was not presided over by the member, or (c) the member arranged or gave directions for those parties or their representatives to confer among themselves at a conference at which the member was not present.

It will be immediately observed that this section refers to "the Commission" which is defined in the Dictionary of the Act as "the Industrial Relations Commission of New South Wales established by this Act". 26 With the exception of Pt 7 of Ch 6, all of the powers and functions conferred in Ch 6 are conferred on the Commission. In particular, the powers relevant here, namely, the jurisdiction of the Commission with respect to contracts of carriage in s 313, and the jurisdiction of the Commission to vary or rescind contract determinations found in s 320 (both sections being in Ch 6, Pt 2, Contract determinations) are expressly conferred on the Commission. 27 His Honour concluded that s 173 did not apply for two reasons. First, because s 351(1) of the Act, which is located in Pt 7 of Ch 6, applies, Pt 5, Ch 4 of the Act (s 173) "to proceedings before the Tribunal in the same way as it applies to proceedings before the Commission other than in Court Session". His Honour reasoned, therefore, that the absence of an equivalent provision applicable to the other powers and functions in Ch 6 meant that the legislature intended that s 173, as well as the other provisions in Pt 5, Ch 4, did not apply to the exercise of those powers and functions. 28 We respectfully disagree. Section 351(1) is necessary because the powers and functions in Pt 7 of Ch 6 are exercised by the Contract of Carriage Tribunal, not the Commission. No equivalent provision was required for the rest of Ch 6, where it is the Commission which exercises the relevant powers and functions. Part 5 of Ch 4 applies expressly to the exercise of power and functions by the Commission in all relevant contexts. 29 His Honour's second reason was that s 343 and s 344 (which have the effect of applying certain provisions of the Act to Ch 6 proceedings) do not include any reference to s 173, or indeed, any of the provisions in Pt 5 of Ch 4. It followed, so his Honour concluded, that the legislature thereby had indicated its intention that the provisions of Pt 5 of Ch 4 did not apply. 30 Once again, we respectfully disagree. Section 343 and s 344 make applicable to Ch 6 provisions of the Act which do not, by their terms, otherwise so operate. It is clear, from the list of specified "applied provisions", that these are provisions which apply in their terms to employment or connected industrial concepts. In our view, the purpose of s 343 and s 344 is to make those provisions operate to the non-employment context of Ch 6. There was no need for the legislature to include in s 343 and s 344, any of the provisions found in Pt 5 of Ch 4, because those provisions already apply according to their express terms to all the powers and functions of the Commission. 31 We consider that the approach to construction preferred by his Honour would lead to absurd consequences. The Commission would be deprived, in the exercise of its powers and functions under Ch 6, of the procedural powers that are required for it to practically operate. These powers and procedures concern the admission of evidence and the rules of evidence; the production of evidence; perjury and contempt; the issue of summonses; representation of parties; intervention rights; the making of amendments and the correction of irregularities, and, costs. 32 There is no basis, in our view, why these provisions, which are set out in a discreet part of the Act and which apply to the Commission generally, should be read as being inapplicable to the Commission when it is exercising its functions under Ch 6. 33 It follows that his Honour's conclusion was incorrect as to the application of s 173 in Pt 2, Ch 6 proceedings. In addition, we note that no party at first instance, contended that s 173 did not apply to Ch 6 proceedings generally, nor was this proposition raised in argument by his Honour. It follows that all parties, and in particular the appellant, was, therefore, denied procedural fairness with respect to the conclusion reached by his Honour. The appeal might have been upheld on this basis alone, but it is suffice to conclude that that error and the aforementioned error in the construction of Ch 6 of the Act, warrants a finding that the appeal should be upheld in this respect. The second question 34 We turn to consider the alternate basis for his Honour's decision, that being, even if s 173 applied to proceedings under Pt 2 of Ch 6, that section could not be invoked by the appellant because arbitration of the proceedings had already commenced. 35 Mr Hatcher relied on three propositions in submitting that s 173 should have been applied by his Honour at first instance. They were: (a) that the issuing by his Honour of a certificate of attempted conciliation was conclusive of when conciliation was completed and the date of the issuing of that certificate alone demonstrated that arbitration had not commenced at the time that the appellant made its application pursuant to s 173 of the Act;

(b) that what occurred on 8 September 2008 in any event did not constitute a commencement of the arbitration in any sense when what occurred on that day was properly analysed; and

(c) even if arbitration did commence on 8 September 2008, it was a commencement of an arbitration about a different matter. In other words, it was submitted that the subject matter of the application had changed. 36 After Mr Hatcher had developed each of these propositions, the Full Bench advised that it did not wish to hear from the respondents in respect of propositions (a) and (c). We shall explain our reasons for rejecting these contentions later in our decision. We, therefore, propose to firstly deal with the second proposition relied upon by the appellant and why we consider in that respect, the appellant has demonstrated appellable error. 37 It will be recalled that the application filed on 28 June 2005 was set down for arbitration for five days commencing 8 September 2008. At the commencement of the proceedings on that day, Mr Murphy sought leave to formally amend the application by embracing his Honour's Recommendation (earlier referred to in this decision) in an amended application. 38 Mr M Aird, who appeared for the TWU, opposed that course and sought to make submissions that the matter should be dealt with pursuant to s 162(2)(h); that the application be dismissed on the basis that it was frivolous and vexatious. Mr Murphy submitted "we are in your Honour's hands" whether the application to amend is dealt with, or whether Mr Aird should proceed with the application pursuant to s 162(2)(h). 39 His Honour proceeded to hear the application pursuant to s 162(2)(h). His Honour rejected what effectively was a strike out application by the TWU. His Honour subsequently advised the parties that he was prepared to conciliate the matter. Mr Murphy, after obtaining instructions, advised his Honour that the CTTA was of the view that his Honour should conciliate the matter and that his client would accept any recommendation made by his Honour. Mr Aird advised his Honour that the TWU would participate in a conciliation conference, but was not prepared to be bound by any recommendation. 40 Mr K Brotherson, who appeared for Mail Call Couriers, adopted a similar position to Mr Aird. Mr S Schmitke, who appeared for the Australian Industry Group, Toll Holdings and Thomas National Transport, advised his Honour that his clients were in the same position as the CTTA. His Honour proceeded to chair a private conference of the parties. 41 Although not entirely clear, it appears that the strike out application and the conciliation concerned the amended application. Neither counsel disagreed with this characterisation of what occurred before his Honour on 8 September 2008. 42 The question which arises, therefore, is how does s 173 of the Act operate, if at all, in this context? 43 The principles in respect of the operation of s 173 have been the subject of determination at Full Bench level in a number of cases which we will discuss below. 44 In Re Transport Industry - Quarried Materials Wages (State) Award, the Full Bench (at 306) stated: ... The right afforded by s 173(1) is accordingly conferred without any need for any justification or explanation to be offered by the objector beyond the fact of the conciliation having been attempted. ... We consider the section ought to be approached as contended for by the appellant. The clear and unambiguous purpose of the provision is to grant to one or other of the parties the opportunity to ensure that, after a conciliation has been attempted but has failed, another person not privy to the conciliation proceedings will hear and determine the matter by way of arbitration. ... we consider its intention and effect [s 173(1)] is to ensure that a matter requiring arbitration will be dealt with by a member of the Commission who has had no involvement in the previous conciliation procedures. 45 In Commissioner of Police v Police Association of New South Wales, the Full Bench determined that once a matter had moved into the arbitration phase, it is no longer possible for a party to invoke s 173 to disqualify a member of the Commission. The Full Bench observed that s 173 was in very similar terms to s 209 of the Industrial Relations Act 1991 (NSW). That provision was dealt with in an authoritative way by a Full Commission decision of this Commission's predecessor in Public Service Association of NSW and Department of Corrective Services & Anor [1994] NSWIRComm 148 (Hill J, Peterson J and Murphy CC, 9 December 1994). The Full Bench, after referring to this case, stated: [25] The Full Commission then dealt with the matter in a way which we consider decisive for the present issue when it said: " We consider that the right conferred by s 209(1) to require a different member to exercise arbitration powers must, as a matter of logical construction, be exercised before arbitration commences. The right is not expressed in terms which would suggest that a party may permit a member who has conducted conciliation to commence the arbitration but be subject to later disqualification by reason of having conciliated. The words `if either party ... so requires' indicate with clarity that the right is one capable of being waived by non-exercise. Were it otherwise, an arbitration might proceed at considerable length and cost, with at least two (and perhaps more than two) parties retaining the opportunity to utilise their right of objection as they seek to discover indications of the tribunal's thinking, as it were, midstream. The effect of this risk would be quite detrimental to the proper conduct of proceedings. We consider that to construe s 209(1) as affording a right of objection virtually at any time prior to judgment would seriously destabilise the conduct of arbitration proceedings. We cannot conceive that to be the intention of the section. Furthermore, if it were so, s 209(2) would be denuded of any effect; the preservation of the proceedings to which s 209(2) is directed would be able to be overcome by the belated use of the right conferred by s 209(1). We reject the proposition advanced for the appellant that the right conferred by subs (1) may be exercised at any time during the proceedings. " [26] ... The provision fundamental to the Full Commission decision, s 209(2) of the 1991 Act, is in virtually identical terms to s 173(2) of the present Act. The Full Commission's analysis of that provision is undoubtedly correct as a matter of statutory construction and legal analysis. Unsurprisingly therefore, it also shows the sensible way in which s 209, and thus s 173, works in practice. [27] The major difficulty which s 173 raises, in a practical sense, is the apparently untrammelled right of a party to disqualify a member at any stage up to when arbitration commences notwithstanding the inconvenience that may cause to other parties or to the Commission's lists if the party exercising its rights under s 173(1) unduly delays in raising the matter. This was the issue considered in the Cootamundra case, to which we now turn. We have already set out [12] of that decision which is relied upon by the appellant. 46 It is important to bear in mind the emphasis that the Full Bench placed on the reference to "matter" in s 173. In particular, it was observed that this is a reference to the substantive subject matter, which has been the subject of conciliation, not simply the proceedings as a whole. It follows that in order to determine if arbitration has commenced, this must be done, not in a general way, but in the context of the actual proceedings under consideration. 47 Mr Murphy did not rely on the issuing of directions for the filing and serving of affidavits and fixing the application for hearing by his Honour as indicating that arbitration had commenced. In this respect, Mr Murphy accepted the Full Bench's observations in Commissioner of Police v Bunait [2010] NSWIRComm 16 at [30]: The making of directions for the filing and serving of evidence to be relied upon by parties in the arbitration proceedings (in this case the appellant acquiesced in the directions made by the Deputy President on 31 July 2009) cannot be regarded as the Commission commencing to exercise arbitration powers in relation to the respondent's application for relief under s 174 of the Police Act . The Deputy President was merely exercising procedural powers as a prelude to exercising arbitration powers. 48 Recently, a Full Bench considered whether a determination under s 85(3) of the Act (an out of time application), involved the exercise of an arbitration power, or arbitration proceedings for the purpose of s 173(1): Gabrielle Irene Brennan (trading as "Gai Abandon Clothing") v Lorraine Linda Asciak [2009] NSWIRComm 159. Without finally determining the question, the Full Bench took the view that it may not. The Full Bench stated at [32] - [35]: [32] Here, the Commissioner conducted a conciliation of the application under s 86 of the Act prior to hearing the application for an extension of time under s 85(3). The application under s 173(1) was made after the determination of the 'out of time' question. The issue, then, is whether the hearing of the 'out of time' question under s 85(3) of the Act constituted the exercise of arbitration powers under Pt 6 of Ch 2 of the Act such as would extinguish the rights of the appellant under s 173(1), which were otherwise available at the conclusion of the conciliation and prior to the commencement of arbitration proceedings.

[33] As we have mentioned, it is unnecessary for us to answer this question in this appeal. Further, we should note that we have only received short (supplementary) written submissions on the question so framed.

[34] It would seem that a determination under s 85(3) does not involve the exercise of an arbitration power or arbitration proceedings for the purpose of s 173(1), and that it may not, therefore, have been open to the Commissioner to refuse to stand down under s 173(1) when an application to do so was made after the determination of the application made by the respondent under s 85(3) of the Act. [35] Our views, in that respect, are based upon the following considerations: 1. The arbitration powers constrained by s 173(1) are those exercisable in relation to the matter, in this case an unfair dismissal application, brought under Pt 6 of Ch 2 of the Act. This much is clear from the use of the definite article 'the' in the phrase "in relation to the dispute or matter" in the sub-section.

2. Hence, the inquiry as to whether arbitration powers have been exercised for the purpose of s 173(1) must be directed to the particular statutory context in which the arbitration proceedings arise. Thus, the question in the present case is whether an arbitral power was exercised under Pt 6 of Ch 2 when the 'out of time' question was determined. That question must be answered having regard to the particular statutory conditions for the exercise of arbitral power under that Part.

3. Viewed in that light, there are a number of aspects of the statutory scheme which point in favour of the view that the legislature did not treat the determination of an 'out of time' application as an arbitration under Pt 6 of Ch 2 of the Act. This is because: (a) Whilst s 87 of the Act does not, by its terms, refer to 'arbitration', it is clear that, where the section refers to the Commission having to "determine the claim", it is a reference to the exercise of such powers. The provisions of that section operate where conciliation has failed. The whole statutory scheme is premised upon unsuccessful conciliation being resolved by 'arbitration' (see, for example, s 3(g)) and, in this context, a determination under s 87 must involve an arbitration. Further, the nature of the powers referred to under s 87(1) are consistent with that conclusion, as is the heading of the section (although this is only of marginal use in construing the statute).

(b) The provisions of s 87 (coupled with s 89) specify the determinations that may be made in an arbitration, none of which are coextensive with a power to extend time, although they may well include other interlocutory adjudications, such as the resolution of jurisdiction questions (see Commissioner of Police at [29] and [30]). The expression "making any other order it is authorised to make under the Act" in s 87(1) is wide, but it does not seem to encompass an 'out of time' application, as the order, so made, can only be for the purposes of determining the claim, being a reference to the claim brought under s 84. Such a claim may only be brought within time (s 85(1)) or by the grant of an extension of time (s 85(3)) but in neither case, it would appear, does the claim arise unless one of those conditions is first met (see, the words "may accept" in s85(3) and also the discussion in Commissioner of Police at [30]).

(c) None of the matters prescribed in s 88 are referable to a determination under s 85(3), which identifies, by its own provisions, a particular class of factors to be taken into account.

(d) If a determination under s 85(3) constituted an arbitration, then it would follow that the legislature contemplated that a determination of that question could only occur after the completion of conciliation. This would appear to be the combined effect of ss 86 and 87 which contemplate the sequential processes of conciliation and arbitration. Such an approach is entirely inconsistent with the policy of resolving preliminary issues, where appropriate, at the earliest available time. It would be an odd result if the legislation contemplated subjecting all 'out of time' questions to an adjudication after conciliation, as such an approach would seem to stand against modern approaches to the efficient and cost effective disposition of proceedings. We have emphasised the word 'all' in the preceding sentence, as parties, by agreement, may well find that a conciliation at an earlier time in the proceedings is the most cost effective means of conducting the unfair dismissal proceedings.

(e) Subjecting all 'out of time' applications to a preliminary conciliation would further stand in the face of the restrictions for bringing applications out of time in s 85(1) and jurisprudential notions that an extension of time should never be granted lightly and only for the purposes of ensuring the statutory restrictions (or other such restrictions in rules) do not become instruments of injustice: see WorkCover Authority of NSW (Inspector Salmon) v Parkes Council (1996) 70 IR 298 at 299 - 301; Brady v Kennedy t/as Sardines (1999) 91 IR 258 at 263 - 264 and Hurrell at [13]. 49 Although the comments of the Full Bench in Brennan v Asciak were, obiter dicta, the Full Bench observations do offer guidance in the present matter, particularly as the Full Bench was dealing with a question as to the operation of s 173 in the context of an interlocutory application, that being, whether an out of time question constituted the exercise of arbitration powers within Pt 6 of Ch 2 of the Act. 50 Adopting the Full Bench's observations in respect of the interlocutory application considered in Brennan to this case, the specific question raised by the second of the three propositions by the appellant, can be stated thus: did the making of a determination under s 162(2)(h) of the Act constitute an arbitration for the purposes of Pt 2 of Ch 6 such as to exclude the operation of s 173 of the Act? 51 In order to answer this question, it is necessary to consider the scheme of Ch 6 of the Act (and ascertain its intention of the legislation) and to consider the powers of the Commission under s 162(2)(h). 52 We have already observed, the power to make contract determinations with respect to contracts of carriage, are those set out in s 313 of the Act. Section 315, "Conference to precede contract determination" and s 316 are in the following terms:

315 Conference to precede contract determination (1) When application is made to the Commission to exercise its jurisdiction under this Part, the Commission must, before it considers the application, summon to attend and confer with the Commission the applicant and such other persons served with the application as the Commission may direct. (2) At the conference, the Commission is to: (a) ascertain which of the matters with which the application is concerned are in dispute and which are not, and (b) ascertain whether there are any special circumstances or problems existing with respect to contracts of the class with which the application is concerned, and (c) take all reasonable steps to effect an amicable settlement of any matters in dispute. (3) After conferring on an application, the Commission may: (a) dismiss the application, or (b) proceed to hear the application or specify a time and place at which it will be heard, or (c) adjourn the application for such period or periods as it thinks fit. (4) Before hearing an application, the Commission may require service of the application on such persons as it may direct. 316 Making of contract determinations (1) After hearing an application for it to exercise its jurisdiction under this Part, the Commission may: (a) dismiss the application, or (b) make a contract determination with respect to the application. (2) When the Commission makes a contract determination: (a) it may defer the operation of the determination wholly or in part for such period or periods as it thinks fit, and (b) it must specify the class or classes of contracts in respect of which the determination is to operate (including classes defined by reference to a named bailor or principal contractor). 53 Even though s 315 does not expressly refer to conciliation, or s 316 to arbitration, it was correctly conceded by the parties, in our view, that s 315 and s 316 provide respectively conciliation and arbitration powers to the Commission in dealing with contracts of carriage applications. Section 315(1) requires the Commission "before it considers [an] application", "to summon to attend and confer with the Commission the applicant and such other persons served". Section 315(2) requires the Commission at the conference to ascertain which matters are in dispute (s 315(2)(a)); ascertain whether there are any special circumstances or problems existing with respect to the class of contract (s 315(2)(b)), and take all reasonable steps to effect an amicable settlement of any matters in dispute (s 315(2)(c)). Section 315(3) sets out the action to be taken by the Commission after conferring on the applications. These functions and powers are characteristic of the conciliation powers exercised by the Commission elsewhere in the Act. 54 Section 316 is directed to the making of contract determinations. This section provides that after hearing an application, the Commission may dismiss the application (s 316(1)) or make a contract determination with respect to the application (s 316(1)(b)). This again bears all the features of arbitration under the Act. When taken together, s 318 and s 316 clearly resemble the dichotomy between conciliation and arbitration for ordinary employment matters found under the Act. 55 Mr Murphy submitted that s 162(2)(h) is not a provision which can proceed in advance of an arbitration. Counsel contended that the reason for this is that the power to dismiss proceedings on the basis that an application is frivolous or vexatious cannot be exercised without a contested hearing of the parties, including argument for and against dismissal, and that should properly be characterised as arbitration. In short, counsel submitted that what his Honour was doing in determining that application was part of an arbitration (and, therefore, the opportunity to take an objection under s 173 of the Act had passed at this point). However, on the views expressed by the Full Bench in Brennan, the relevant question was not whether the hearing of the question was generally arbitral in nature but whether the hearing of the question constitutes an arbitration under Ch 6 of the Act. 56 The terms of s 162(2)(h) partly assist that inquiry. Section 162(2)(h) makes provision for the dismissal of proceedings "at any stage" of the proceedings. The words "at any stage" are intractable. An application can be brought before, during, or after a conciliation or during the course of arbitration. 57 It is true that proceedings under s 162(2)(h) are interlocutory in nature and may result in the striking out of proceedings. However, s 315(3)(a) expressly contemplates that an application may be dismissed after conferences have taken place in accordance with s 315(2), that is during the conciliation phase. Likewise, as we have noted, s 162(2)(h) permits an application under that section to be made at that stage of the proceedings. 58 As was observed in Brennan the inquiry as to whether arbitration powers have been exercised for the purpose of s 173(1) must be directed to the particular statutory context in which the arbitration proceedings arise. Whether an arbitral power was exercised under Pt 2 of Ch 6 when the strike out application was determined must be answered, having regard to the particular statutory conditions for the exercise of the arbitral power under that part. Similar to the approach adopted in Brennan, when viewed this way, and combined with the above observations, there are a number of aspects of the statutory scheme which point in favour of a conclusion that the legislature did not treat the determination of a strike out application in the proceedings below as an arbitration under Pt 2 of Ch 6 of the Act. We have also reached this conclusion for the following reasons:

1. The powers exercised under s 315(3) may be only exercised after conciliation. This is clear from the opening words of s 315(3). A conference had occurred before the strike out motion in this case. 2. Upon a proper construction of s 315(3)(a), the power to dismiss under s 315(3)(a) may only be exercised prior to the hearing of an application. This follows from the scheme of the Act whereby conciliation and arbitration under s 315 or s 316 occur in successive steps. More particularly, the power to dismiss under s 315(3)(a) may be distinguished from the equivalent power under s 316(1)(a) by the opening words of s 316(1) which temporally limit the exercise of powers under s 316(1)(a) to a time "after hearing an application". The application in that context is the application for a contract determination (although those provisions would not seem to limit the bringing of an application under s 162(2)(h) during the course of the hearing of such an application). 3. As the determination of the interlocutory application to dismiss the proceedings was determined before his Honour had actually commenced the hearing of the application for a contract determination per se (in fact, that hearing was deferred in favour of further conciliation), it follows that the hearing of the application of the interlocutory application must have occurred within the purview of s 315(3). This corresponds in reality with the actual stage the proceedings before Marks J had reached at the time the interlocutory application was made. 59 It follows, therefore, that the hearing of the application pursuant to s 162(2)(h) in the present case cannot be regarded as the Commission commencing to exercise arbitral powers. His Honour was hearing an interlocutory application prior to proceeding into arbitration. 60 Strictly speaking, having reached this conclusion, we do not need to deal with the submissions advanced in respect of propositions (a) and (c), as proposition (b) is sufficient to establish error and quash his Honour's decision. 61 However, we would make the following brief comments in respect of proposition (a). As to the issuing of a certificate under s 135 of the Act, we have some doubts whether a requirement exists to issue such a certificate under Pt 2 of Ch 6 of the Act at all, let alone giving the certificate which was issued in this case the effect contended for by Mr Hatcher, that is the certificate being conclusive and not capable of collateral challenge in this appeal (pursuant to s 178 of the Act). 62 In addition, Mr Hatcher submitted that the issuing of a certificate evidenced his Honour's view that conciliation had been completed. Even if not valid, it was submitted that it served to demonstrate that the proceedings had crossed from conciliation to arbitration, thus giving rise to the exercise of rights under s 173. Although we do not propose to determine this issue, it seems to us that the issuing of a certificate can not be conclusive of the questions raised by Mr Hatcher, but merely indicative, in an evidentiary sense, whether or not the conciliation has concluded. In respect of proposition (c), in essence, it was predicated upon the notion that something different raised in the application, or some addition to it, would make the application become a different matter and require conciliation to be conducted afresh. 63 Putting aside the correctness, as a matter of law, of that proposition, we do not consider that, in substance, the proceedings had altered in the manner described by Mr Hatcher - the subject matter remained essentially the same. Leave to appeal and conclusions on the appeal 64 It is necessary for the Full Bench to consider whether leave to appeal should be granted: s 188 of the Act. Mr Murphy opposed leave being granted in respect of Mr Hatcher's second proposition on the basis that the matter had proceeded before his Honour, essentially, in respect of the third proposition raised by Mr Hatcher, that being, as at 8 September 2008, the subject matter of the proceedings had changed to such an extent as to constitute a different matter to that which had been previously the subject of conciliation before his Honour. Counsel submitted that in the normal course the appellant should be confined to the way it argued the case below. 65 That submission has some merit and in many circumstances could have resulted in leave to appeal being refused. However, there are a number of countervailing considerations in this case. First, it was necessary, in any event, to grant leave to determine whether s 173 had any application under Pt 2 of Ch 6. Secondly, the question raised, involved important issues about the operation of s 173 in the context of that section of the Act. Thirdly, a significant issue as to the proper administration of justice arises, because of the errors demonstrated in that decision at first instance. It follows that leave to appeal must be granted, and, as we have indicated, the appeal should be upheld on the basis of the errors found in the decision at first instance. The decision at first instance should be quashed and set aside.

ORDERS 66 We make the following orders: 1. Leave to appeal is granted. 2. The appeal is upheld. 3. The impugned decision of Marks J in Matter No IRC 3303 of 2005 is quashed and set aside. 4. The application by the Transport Workers' Union of New South Wales made pursuant to s 173 of the Industrial Relations Act 1996, is granted. 5. Proceedings in Matter No IRC 3303 of 2005 are remitted to the President for allocation to a member of the Industrial Relations Commission of New South Wales, other than Marks J.

AMENDMENTS HISTORY: 13/05/2010 - The word "radial" amended to read the word "radical". - Paragraph(s) 11

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