Discretion - the role of the Commission in resolving disputes, its expertise & cl 8
147 Irrespective of other considerations, it is also concluded that a sound basis upon which this Court could exercise its discretion to refuse declaratory relief is the role of the Fair Work Commission in the resolution of disputes, and specifically its potential role in resolving the present dispute. Although it has been concluded that declaratory relief should be refused on grounds largely divorced from any exercise of discretion, had questions of discretion arisen it would most probably have been concluded that declaratory relief - particularly in respect to Declarations 4 and 5 - would have been refused.
148 One of the factors relied upon in reaching that conclusion - but not a decisive factor - is that the Fair Work Commission is, it is respectfully considered, the more appropriate forum in which the fundamental issues which divide the parties should be resolved.
149 On the facts of the present case there has clearly been a history of consultations between the parties and a series of "unresolved matters". Clearly enough, NSW Trains was not prepared to accept the March 2021 decision of the Full Bench.
150 The 2018 Agreement provides in clauses 7 and 8 for the manner in which "consultation" between the parties to the Agreement is to proceed and for the manner in which disputes are to be resolved. Clause 7.4, in particular, provides for the manner in which "unresolved matters" are to be "dealt with", namely "in accordance with the Dispute Settlement Procedure at Clause 8 of this Agreement". To the extent that competing submissions have been directed to whether the "status quo" is to be maintained, it has been concluded that cl 7.4 is unequivocal in its terms - if there is an "unresolved matter" that "matter" is to be resolved "in accordance with the Dispute Settlement Procedure at Clause 8."
151 On any view of the facts, one of the central "matters" which remains unresolved is whether the manner in which NSW Trains is seeking to operate its Mariyung Fleet involves the making of "extra claims" upon its drivers and guards. That "matter", so cl 7.4 provides, is to be resolved "in accordance with the Dispute Settlement Procedure at Clause 8" - not some part of cl 8, but cl 8 in its entirety. As Senior Counsel for NSW Trains points out, there is some tension necessarily involved in such an approach. The "status quo" provision is to be found in Step 1 of cl 8.4, and questions thereafter arise as to whether the Union has engaged cl 8 in accordance with the "following steps" as provided for in cl 8.4. Further questions arise as to the correct identification of the "dispute" to which cl 8 attaches.
152 Although it is accepted that there are legitimate questions as to how cl 7.4 and cl 8 are to be construed harmoniously, it has ultimately been concluded that there are "unresolved matters" for the purposes of cl 7.4 and that cl 8 is thereafter engaged in its entirety, including the preservation of the "status quo" as provided for in Step 1 of cl 8.4. To so approach the construction of these two clauses, it is considered, avoids a "narrow or pedantic approach", gives effect to the objective intent of those who framed the Agreement (Kucks v CSR Ltd (1996) 66 IR at 184 per Madgwick J) and gives effect to the presumed commercial purposes (TWU v Linfox [2014] FCA 829 at [34], (2014) 318 ALR at 59 per Tracey J) of those two clauses.
153 No submission was advanced that cl 8 has ceased to "operate", the 2018 Agreement itself continuing to "operate". A principal submission relied upon by NSW Trains is that cl 8 either does not apply or "has no legal effect" to the extent that a dispute "pertains to safety".
154 As to the submission that cl 8 does not apply, and contrary to the submissions advanced on behalf of NSW Trains, it is concluded that a dispute as to whether a direction may be given that the duties of drivers and guards are to be "perform[ed] … in accordance with those operational features" is a dispute falling within cl 8.2(a), namely a "dispute that arises about … matters pertaining to the relationship between the Employer and Employees (including workload matters)…"
155 The phrase "pertaining to the relationship between Employer and Employees" has as a counterpart the definition of "industrial matters" in s 4 of the now-repealed Conciliation and Arbitration Act 1904 (Cth). It was a definition closely aligned with the necessity of keeping that Act within the Constitutional head of power found in s 51(xxxv) of the Constitution. In explaining the content of that phrase as found in s 4, Latham CJ, Dixon, McTiernan, Williams, Webb and Fullagar JJ in The King v Kelly; Ex parte the State of Victoria (1950) 81 CLR 64 at 84 to 85 explained:
…We do not think that the subject matter (the closing of shops as distinct from the work of employees in shops) is a "matter pertaining to the relations of employers and employees." The words "pertaining to" mean "belonging to" or "within the sphere of," and the expression "the relations of employers and employees" must refer to the relation of an employer as employer with an employee as employee. The time at which a shopkeeper (who may or may not employ anybody) may open and close his shop is not a "matter" which belongs to or is within the sphere of the relation of that shopkeeper as employer with any person as employee. Nor is it, in our opinion, a matter affecting work done or to be done within the meaning of par. (a) of the definition. Trading hours of an employer are not the same subject as working hours of an employee, and a prescription of trading hours as distinct from working hours does not "affect or relate to work done or to be done." Provisions with respect to trading hours may affect the turnover of shop-keepers who employ persons and so indirectly affect their ability to pay award rates, and this state of affairs may in turn affect the relations of those shopkeepers and their employees. But this is the most that can be said, and it is obviously not enough. It shows only the possibility of an indirect, consequential and remote effect upon the relations of the last-mentioned persons. All kinds of matters, e.g. supply and prices of raw material, the state of the money market, may affect the capacity of employers to pay wages at a certain standard. But these are not industrial matters within the definition contained in s. 4 of the Act. …In the case of Commonwealth legislation with respect to the same subject matter any such extension would seem inevitably to involve an excess of the power conferred by s. 51(xxxv.) of the Constitution. A matter does not become an "industrial matter" or the subject of an "industrial dispute" simply because it is a matter with respect to which persons who are employers and employees are disputing.
The meaning of the definition was returned to as follows by Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ in Re The Manufacturing Grocers' Employees Federation of Australia; Ex parte the Australian Chamber of Manufactures (1986) 160 CLR 341 at 353 ("Manufacturing Grocers"):
The question whether the dispute is about an industrial matter arises, of course, because the legislative power of the Commonwealth is, under s. 51(xxxv) of the Constitution, confined to laws with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State. …
The words "pertaining to" in the definition of industrial matters mean "belonging to" or "within the sphere of" and the expression "the relations of employers and employees" refers to the relation of an employer as such with an employee as such: R v Kelly ; Ex parte State of Victoria [(1950) 81 CLR 64 at 84]; R v Commonwealth Industrial Court Judges; Ex parte Cocks [(1968) 121 CLR 313 at 318]. The matters which will answer that description have been dealt with from time to time and the propositions to be derived from the cases are collected by Mason J. in Federated Clerks' Union (Aust.) v. Victorian Employers' Federation [(1984) 154 CLR 472 at 488-489]. For present purposes, it is sufficient to say that a matter must be connected with the relationship between an employer in his capacity as an employer and an employee in his capacity as an employee in a way which is direct and not merely consequential for it to be an industrial matter capable of being the subject of an industrial dispute. …
The reason for the requirement that there to be a "direct" connection has long been explained as follows by O'Connor J in Clancy v Butchers' Shop Employees Union (1904) 1 CLR 181 at 207:
…But once we begin to introduce and include in its scope matters indirectly affecting work in the industry, it becomes very difficult to draw any line so as to prevent the power of the Arbitration Court from being extended to the regulation and control of businesses and industries in every part. …
156 It is concluded that a direction to drivers and guards to operate the Mariyung Fleet in accordance with the operational guidelines is a matter "pertaining to the relationship" between NSW Trains and its drivers and guards. A direction as to how they are to perform duties and what their duties are to be is a matter "which is direct and not merely consequential" to the relationship: cf. Manufacturing Grocers (1986) 160 CLR at 353. A matter may "directly" relate to the relationship and "pertain" to that relationship even though (for example) it does not impact upon the rate of pay or entitlements of an employee. The term "pertain" has a width of application.
157 In seeking to resist that conclusion, Senior Counsel on behalf of NSW Trains contended in the alternative that:
such a direction as to the performance of duties is a "managerial decision" as opposed to one being "about … matters pertaining to the relationship between the Employer and Employees"; and/or
clause 8 has "no legal effect" by reason of s 29(2) of the Fair Work Act, when read together with ss 27(1)(c) and 27(2)(c) of that Act.
Both submissions are rejected.
158 As to the former, reliance is placed by NSW Trains upon the following observations of McHugh J in Electrolux Home Products Pty Limited v The Australian Workers' Union [2004] HCA 40, (2004) 221 CLR 309 at 338-339:
[60] This Court has consistently held that the rejection of demands of an academic, political, social or managerial nature does not create a dispute about matters pertaining to the relationship between employer and employee. Neither does the rejection of a demand that the employer act as a financial agent for employees in their dealings with the union. The cases emphasise that "matters pertaining" to the relations of employers and employees must pertain to the relation of employees as such and employers as such, that is, employees in their capacity as employees, and employers in their capacity as employers. …
(citations omitted)
159 The difficulty with the submission is essentially that the proposed directions to NSW Trains' drivers and guards necessarily requires that the drivers and guards perform different tasks and that they be re-trained (cf. United Firefighters' Union [2013] FWCFB 2301 at [26]) so as to be capable of discharging their new duties in accordance with the operational instructions. Such directions are directions as to the manner in which duties are to be performed. It would be difficult, with respect, to envisage a direction more clearly going to a matter "pertaining to the relationship" between NSW Trains and the Second and Third Respondents.
160 An alternative route whereby the same conclusion can be reached, namely that cl 8 applies to the resolution of an "unresolved matter", is to characterise the "unresolved matter" for the purposes of cl 8 as a "dispute [arising] about … the operation and application of this Agreement" within the meaning of cl 8.2(e) of the 2018 Agreement.
161 As to the submission relied upon by NSW Trains, namely that cl 8 "has no legal effect", it is centrally relevant to note the terms of s 29 of the Fair Work Act which provides as follows:
Interaction of modern awards and enterprise agreements with State and Territory laws
(1) A modern award or enterprise agreement prevails over a law of a State or Territory, to the extent of any inconsistency.
(2) Despite subsection (1), a term of a modern award or enterprise agreement applies subject to the following:
(a) any law covered by subsection 27(1A);
(b) any law of a State or Territory so far as it is covered by paragraph 27(1)(b), (c) or (d).
(3) Despite subsection (2), a term of a modern award or enterprise agreement does not apply subject to a law of a State or Territory that is prescribed by the regulations as a law to which modern awards and enterprise agreements are not subject.
This provision, so runs the submission advanced on behalf of NSW Trains, must be read together with s 27(1)(c) and 27(2)(c), which provide as follows:
(1) Section 26 does not apply to a law of a State or Territory so far as:
…
(c) the law deals with any non-excluded matters; or
…
(2) The non-excluded matters are as follows:
…
(c) occupational health and safety;
…
Section 26(1) provides as follows:
Act excludes State or Territory industrial laws
(1) This Act is intended to apply to the exclusion of all State or Territory industrial laws so far as they would otherwise apply in relation to a national system employee or a national system employer.
162 The argument, apparently, is that there is an "inconsistency or incompatibility" between on the one hand:
cl 8 of the 2018 Agreement;
and, on the other hand:
provisions of the Work Health and Safety Act and/or the Rail Safety Law.
An "inconsistency" arises, so the submission runs, if the terms of an enterprise agreement diminish rights or obligations under a State or Territory law concerning occupational health and safety. By way of analogy, NSW Trains also calls in aid the analysis required under s 109 of the Constitution where there is said to be an inconsistency between a Commonwealth and State law.
163 If the analogy between "inconsistency" for the purposes of cl 8 of the 2018 Agreement and "inconsistency" for the purposes of s 109 of the Constitution be pursued a little further, a point may be reached where a person can comply with both sets of requirements. But there may nevertheless be an "inconsistency" for the purposes of s 109 of the Constitution even though it may be possible to obey both the State and Commonwealth laws: cf. Viskauskas v Niland (1983) 153 CLR 280 at 291 per Gibbs CJ, Mason, Murphy, Wilson and Brennan JJ; A. Raptis & Son v The State of South Australia (1977) 138 CLR 346 at 357 per Gibbs J. Whether there is such an "inconsistency" depends not solely on whether compliance with both laws is possible, but rather on whether the intention of the Federal statute was to "cover the subject matter and provide what the law upon it shall be": Ex parte McLean (1930) 43 CLR 472 at 483. Justice Dixon (as his Honour then was) there explained the reason for that conclusion as follows:
When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes, and sec. 109 applies. That this is so is settled, at least when the sanctions they impose are diverse (Hume v. Palmer [(1926) 38 CLR 441]). But the reason is that, by prescribing the rule to be observed, the Federal Statute shows an intention to cover the subject matter and provide what the law upon it shall be. If it appeared that the Federal law was intended to be supplementary to or cumulative upon State law, then no inconsistency would be exhibited in imposing the same duties or in inflicting different penalties. The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter. …
164 The inconsistency between cl 8 of the 2018 Agreement and the Work Health and Safety Act arises, so the submission for NSW Trains contends, because:
cl 8 ultimately commits NSW Trains to an arbitrated decision - including a decision as to health and safety,
in circumstances where cl 8 is "inconsistent" with either:
the fact that the duties imposed upon NSW Trains (including the duty imposed by s 19 of the Work Health and Safety Act to "ensure, so far as is reasonably practicable, the health and safety of … workers…") "cannot be transferred to another person" (s 14) - the compliance with the duties imposed by the Act not being able to be "transferred" by way of the agreement in cl 8 of the 2018 Agreement to the Commission, and any "contracting out" of any duty owed under the Act rendered "void" by reason of s 272 of the Work Health and Safety Act; and/or
the scheme imposed by the Work Health and Safety Act whereby disputes as to safety or concerns as to the proper discharge of duties by either NSW Trains or its employees are to be resolved by consultation (s 47) - that scheme also including the creation of work groups to facilitate the representation of workers (s 51) and the election of health and safety representatives (s 60) who have the power to direct that unsafe work cease (s 85) or issue provisional improvement notices (s 90).
Expressed differently, the contention is that cl 8 and the provision there made for the arbitration of a dispute leading to a decision binding on NSW Trains is inconsistent with either or both:
particular statutory provisions, namely ss 14 and 272 of the Work Health and Safety Act; and/or
the scheme whereby the Work Health and Safety Act provides for the resolution of disputes going to matters of safety.
165 The difficulty in the path of NSW Trains is that the submissions advanced on its behalf do not adequately take into account the difference in language between s 29(1) of the Fair Work Act - i.e., an enterprise agreement "prevails over a law of a State or Territory, to the extent of any inconsistency" - and s 29(2) - i.e., a term of an enterprise agreement "applies subject to the following…" And, even if there be an inconsistency, cl 8 would not be wholly invalid - it would only be invalid to the extent of the inconsistency.
166 The drafting style of s 29(1) invokes the analogy with s 109 of the Constitution, which provides that "[w]hen a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid." The drafting style of s 29(2) does not replicate the same language but, rather, employs the language of a term of an enterprise agreement applying "subject to" (for example) the Work Health and Safety Act.
167 The purpose of the phrase "subject to", and the accepted meaning that it has in construing provisions of different legislation, is to denote that which is "dominant" in the event of a conflict or "collision" between the provisions: Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 580 to 581. When considering the terms of ss 51 and 122 of the Constitution, McHugh J there observed:
The relationship between s 51(xxxi) and s 122 of the Constitution
In interpreting s 122 and its relationship with s 51 of the Constitution, the most striking feature of the relationship is that the powers conferred by s 51 are conferred "subject to this Constitution" while s 122 is unqualified by that expression. Thus the relationship between s 51 and s 122 is very different from the relationship between s 122 and s 90 or between s 122 and s 116 or s 118. The use of the expression "subject to this Constitution" does not itself mean that there is always conflict between s 51 and s 122. But it does mean that, where conflict exists, s 122 must prevail. As Megarry J pointed out in C & J Clark Ltd v Inland Revenue Commissioners [[1973] 1 WLR 905 at 911] "[w]here there is no clash, the phrase does nothing: if there is collision, the phrase shows what is to prevail"… In S v Marwane [(1982 (3) SA 717 (A)], the Appellate Division of the Supreme Court of South Africa had to construe the words "[s]ubject to the provisions of this Constitution". Miller JA, giving judgment for the majority, said [at 747-748]:
"The purpose of the phrase 'subject to' in such a context is to establish what is dominant and what subordinate or subservient; that to which a provision is 'subject', is dominant - in case of conflict it prevails over that which is subject to it. Certainly, in the field of legislation, the phrase has this clear and accepted connotation. When the legislator wishes to convey that that which is now being enacted is not to prevail in circumstances where it conflicts, or is inconsistent or incompatible, with a specified other enactment, it very frequently, if not almost invariably, qualifies such enactment by the method of declaring it to be 'subject to' the other specified one."
Although there were divisions on the Court as to the manner in which s 51(xxxi) and s 122 of the Constitution were to be construed, his Honour's observations as to the meaning generally to be ascribed to the phrase "subject to" and his reliance upon the South African decision remain apposite.
168 That the same approach to the construction of the phrase "subject to" in s 29(2) of the Fair Work Act should prevail is supported by the following explanation as to its intended meaning in the Explanatory Memorandum, which provided as follows:
149. However, subclause 29(2) provides that a modern award or enterprise agreement is subject to any of the State or Territory laws that are saved by clause 27, as well as any State or Territory laws prescribed by the regulations. This means that a modern award or enterprise agreement cannot diminish, but may supplement, rights and obligations under these laws.
169 Section 29(1) should thus be construed as inviting an inquiry as to whether there is an "inconsistency" between an enterprise agreement and a law of a State or Territory; s 29(2) should be construed as providing - in the event of a conflict or "collision" between an enterprise agreement and a law of a State or territory - that the law of the State or Territory is the "dominant" provision and is the provision which "prevails".
170 Approached in this manner, s 29(1) leads to the conclusion that the enterprise agreement "prevails" over (e.g.,) the Work Health and Safety Act, "subject to" any provision of the State Act "prevailing" in the event of a conflict or "collision" with the enterprise agreement.
171 Construed in this manner, there is no conflict or "collision" between cl 8 and any provision of the Work Health and Safety Act. The terms of the 2018 Agreement can be read consistently with the State legislation. Each of the two sources of rights and obligations can be read consistently with the other. And any arbitration of the dispute between NSW Trains and the Union would be an arbitration approached in that same manner. The analogy with s 109 of the Constitution is, to this extent, inapposite.
172 The same reasoning and the same conclusion is reached if, rather than by reference to the Work Health and Safety Act, reference is made to the Rail Safety Law.
173 The argument advanced on behalf of NSW Trains dependent upon s 29 and inconsistency or repugnancy is thus rejected.