Payne v NSW Service for the Treatment and Rehabilitation of Torture and Trauma Survivors

Industrial Relations Commission (NSW)|2024-02-22

DECISION

On 18 October 2023, the applicant, John Payne, filed in the Office of the Industrial Registrar an Application for Relief in Relation to Unfair Dismissal pursuant to s 84 of the Industrial Relations Act 1996 (NSW) ("IR Act) against the employer named in the application as "Service for the Treatment and Rehabilitation of Torture and Trauma Survivors ("STARTTS")" ("Application"). The correct name of the employer is "NSW Service for the Treatment and Rehabilitation of Torture and Trauma Survivors" ("STARTTS").
The Application was listed before me on 1 November 2023 for Conciliation and Directions. On this date, the legal representative for STARTTS submitted that the Commission did not have jurisdiction to deal with the Application as STARTTS was a "national system employer". I issued directions for STARTTS to file and serve a notice of motion setting out its jurisdictional objection by 10 November 2023, and re-listed the matter for Directions on 15 November 2023.
On 10 November 2023, STARRTS filed a notice of motion seeking the Commission dismiss the matter "for want of jurisdiction on the ground that the Application has been wrongly commenced against a national system employer and/or is otherwise vexatious and/or without reasonable cause" and seeking "[c]osts be awarded against the Applicant on the basis that the application was commenced vexatious[ly] and without reasonable cause" ("Motion").
STARTTS submitted that the Motion should be dealt with on the papers. Mr Payne sought that the Motion be dealt with in-person.
I was, and have been at all relevant times, conscious of Mr Payne's status as an unrepresented litigant and guided by the observations of the Court of Appeal in Hamod v State of New South Wales and Anor [2011] NSWCA 375 at [309]-[313] including that: 1. courts have an overriding duty to ensure that a trial is fair, which entails ensuring that the trial is conducted fairly and in accordance with law. In the context of an unrepresented litigant, the duty requires that a person does not suffer a disadvantage from exercising the recognised right of a litigant to be self-represented; 2. the court's duty is not solely to the unrepresented litigant. The obligation is to ensure a fair trial for all parties; and 3. it is not the function of the court to give judicial advice to, or conduct the case on behalf of, the unrepresented litigant.

Material before the Commission

At the hearing of the Motion, STARTTS: read the affidavit of Lachlan James Murdoch affirmed 10 November 2023 ("Murdoch Affidavit"); tendered the STARTTS Annual Report 2018/2019 and the Financial Statements for STARTTS for the year ended 30 June 2023; relied on written submissions filed on 24 November 2023 ("RS"); and made oral submissions through its legal representative Mr Peter Hindeleh.
The Murdoch Affidavit contained material that was submissions, but noting section 163 of the IR Act, I accepted the affidavit in its entirety, and I dealt with its contents on the basis of weight.
Mr Payne relied on written submissions filed on 27 November 2023 ("AS"). These submissions contained assertions of fact. As the content of the submissions was not provided under oath or affirmation but again noting section 163 of the IR Act and my obligations to a litigant in-person, I asked Mr Payne if he was willing to confirm under oath that certain content contained in his submissions was true so that the relevant material could be accepted as evidence if it became necessary. Mr Payne confirmed that he would be willing to confirm, under oath, such matters to be true. I accepted the three annexures to the AS, being a payslip for Mr Payne, the STARTTS's Policy Directive about the "Occupational Assessment Screening and Vaccination Against Specified Infectious Diseases PD_030"; and the email from Lachlan Murdoch to all STARTTS's staff dated 31 August 2023, as evidence. Mr Payne also made oral submissions.
At conclusion of the hearing and as a consequence of questions arising from the oral evidence of Mr Murdoch, I made directions for STARTTS to file a copy of its constitution and I provided Mr Payne with an opportunity to file written submissions on STARTTS's constitution and its relevance to this matter should he wish.
STARTTS filed a copy of its constitution on 23 February 2024 and Mr Payne filed submissions regarding STARTTS's constitution and its effect on STARTTS's jurisdictional objection on 29 February 2024 ("AFS"). The AFS contained material that was evidentiary in nature which I accepted. Had accepting this material resulted in a substantive procedural unfairness to STARTTS I would have provided STARTTS with an opportunity to respond. However, given the determination I have made, this was not necessary.

Jurisdictional objection

STARTTS submitted that it is a national system employer and thus not subject to the Commission's unfair dismissal jurisdiction. The objection as enunciated in the AS relied on the existence of enterprise agreements approved by the Fair Work Commission which STARTTS asserted covered Mr Payne's employment at all times: par 12 of the RS. STARTTS's referred the Commission to Dazmeny Pty Ltd t/as Sails Resort v Thorn [1997] AIRC 231, approved in Zizza v Star City Pty Ltd [2000] NSWIRComm 200.
Mr Murdoch deposed in the Murdoch Affidavit details of Mr Payne's employment including at par 7 that Mr Payne's contract of employment dated 14 October 2010 "stipulate[s] that Mr Payne's employment is covered and governed in accordance with the NSW (Non-declared) Affiliated Health Organisations' Professional and Associated Staff Enterprise Agreement, … which was approved by … the Fair Work Commission and in accordance with the Fair Work Act 2009 (Cth)" and "[f]rom 6 September 2022, Mr Payne's employment was covered by the NSW (Non-declared) Affiliated Health Organisations' Professional and Associated Staff Enterprise Agreement 2022, an enterprise agreement which was approved by … the Fair Work Commission … ("the 2022 Professional Agreement")": par 10.
I have had regard to the decision of Deputy President Masson approving the 2022 Professional Agreement: Application by St Vincent's Hospital Sydney Limited - [2022] FWCA 3063, in particular [2] - [4] and [7] - [8] in which the Deputy President found: "[2] The Agreement covers the following six employer entities: - Calvary Health Care Sydney Limited T/A Calvary Health Care Kogarah - Calvary Health Care (Newcastle) Limited T/A Calvary Mater Newcastle - Karitane - NSW Service for the Treatment and Rehabilitation of Torture and Trauma Survivors (STARTTS) T/A STARTTS - Royal Society for the Welfare of Mothers and Babies T/A Tresillian Family Care Centres - St Vincent's Hospital Sydney Limited [3] The Employers have provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. The undertakings are taken to be a term of the Agreement. [4] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met. … [7] The Health Services Union being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) I note that the Agreement covers the organisation. [8] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 13 September 2022. The nominal expiry date of the Agreement is 5 September 2025."
I accept that, at all times from the commencement of Mr Payne's employment on 22 July 2009 until the termination of his employment on 29 September 2023, there were enterprise agreements approved by the Fair Work Commission, including the Professional Agreement and the 2022 Professional Agreement, which, on their face, covered the employees of STARRTS, including Mr Payne.
The Fair Work Commission may only approve enterprise agreements covering National System Employees (see Pt 2-4 and the definitions of "employee", "employer", "national system employee" and "national system employer" in ss 12, 13, 14 and 170 of the Fair Work Act 2009 (Cth) ("FW Act")). The approval of the 2022 Professional Agreement and the existence of the other enterprise agreements are matters which imply very strongly that STARTTS is a National System Employee and that this Commission does not have jurisdiction to hear and determine the Application. Dazmeny and Zizza strongly support a finding that this Commission lacks jurisdiction and no further enquiry, consideration or analysis is required.
However, both decisions considered the Workplace Relations Act 1996 (Cth), not the FW Act and predate the Industrial Relations (Commonwealth Powers) Act 2009 (NSW) ("Referral Act"). Further, Mr Payne asserted in the AS at pars 2-3 "2. The Respondent referred to a prior General Protections Application (Not Involving Dismissal) I made to the Fair Work Commission. I recall Commissioner McKenna stating in that session on 8 February 2023 that the Fair Work Commission is unable to adjudicate in the matter as New South Wales would be the appropriate jurisdiction, not federal. 3. The Respondent has raised a jurisdictional objection to the application in the NSW Industrial Relations Commission. However, if they disagree with the jurisdiction, the respondent did not volunteer their opinion to Commissioner McKenna on 8 Feb 2023 when the matter was raised. My recollection of the Commissioner's comments, and the Respondent's silence on the matter, were crucial factors guiding my decision to make this application to the NSW Industrial Relations Commission."
During the hearing of the Motion, I asked Mr Payne if he would be able to tell me on what basis Commissioner McKenna formed the view Mr Payne asserts that she expressed. Mr Payne was unable to tell me any details about Commissioner McKenna's purported reasoning: Tcpt, p 4 39-46.
At the hearing, STARTTS's legal representative informed me that STARTTS "did not volunteer any information to contradict that, to say that, yes, it could be heard in the Fair Work Commission": Tcpt p5, 25 -27. STARTTS did not challenge Mr Payne's assertion at the hearing before me that based on what Mr Payne had been told by Commissioner McKenna, he believed he was not a "national system employee".
I cannot rely on material or information from a confidential conciliation before a member of the Fair Work Commission. In this matter I have not relied on any view purportedly expressed by Commissioner McKenna's. However, I have taken into consideration, and I accept, that Mr Payne believed that Commissioner McKenna had expressed a view that Mr Payne had commenced the "General Protections Application" in the wrong jurisdiction and that he should bring any further claim in this Commission.
I have decided that, in addition to considering the existence of the 2022 Professional Agreement and other relevant enterprise agreements as strongly indicative that this Commission does not have jurisdiction, I will set out my reasoning as to whether Mr Payne is a national system employee as defined in s 13 of the FW Act.
I have decided to take this approach for reasons including the purpose for which the Commission provides reasons for its decisions. As the former Chief Justice of the Supreme Court of NSW, the Hon. Tom Bathurst, opined in his speech, "Efficient, Informal & Fair: Tribunals Delivering under Pressure Writing Better Judgments (delivered to the 2018 COAT NSW Annual Conference, Sydney, 7 September 2018) referencing a speech by the former Chief Justice of the Federal Court, the Hon. James Allsop, "Appellate Judgments - the Need for Clarity" (delivered at the 36th Australian Legal Convention, Perth, 19 September 2009): 11. … In considering the need to adequately explain the reasons for the decision it is important to keep in mind the parties, and particularly the losing party. They are the audience for whom you are writing. Justice Kearney, a former equity judge of the Supreme Court said, on his last sitting day, that the former Vice-Chancellor and well-known law academic Sir Robert Megarry had once told him the identity of the most important person in the courtroom: the party which was to lose. He emphasised that what is vital is a coherent and readable expression as to why the state, through the court or tribunal, was exercising its power for or against individuals.
Mr Payne is a litigant in-person and he believes that a member of the Fair Work Commission considers that this Commission is the correct jurisdiction. On the basis of the evidence before the Commission, I have accepted that STARTTS took an equivocal position at the conciliation hearing before Commissioner McKenna, noting that there is no evidence from Mr Murdoch about the conciliation even though Mr Murdoch does refer to Commissioner McKenna approving the Professional Agreement which he says applied to Mr Payne's employment in 2010. In these circumstances, not to provide Mr Payne with an explanation as to the reason why he is a national system employee and therefore covered by an enterprise agreement approved by the Fair Work Commission would be at odds with the purpose of providing reasons as to why the Commission was making a decision that it did not have power to hear Mr Payne's matter.

Is STARTTS a national system employer and Mr Payne a national system employee?

The FW Act set out the meaning of a "national system employee" and "national system employer" as follows: 13 Meaning of national system employee A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement. Note: Sections 30C and 30M extend the meaning of national system employee in relation to a referring State. 14 Meaning of national system employer (1) A national system employer is: (a) a constitutional corporation, so far as it employs, or usually employs, an individual; or (b) the Commonwealth, so far as it employs, or usually employs, an individual; or (c) a Commonwealth authority, so far as it employs, or usually employs, an individual; or (d) a person so far as the person, in connection with constitutional trade or commerce, employs, or usually employs, an individual as: (i) a flight crew officer; or (ii) a maritime employee; or (iii) a waterside worker; or (e) a body corporate incorporated in a Territory, so far as the body employs, or usually employs, an individual; or (f) a person who carries on an activity (whether of a commercial, governmental or other nature) in a Territory in Australia, so far as the person employs, or usually employs, an individual in connection with the activity carried on in the Territory. Note 1: In this context, Australia includes Norfolk Island, the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands (see the definition of Australia in section 12). Note 2: Sections 30D and 30N extend the meaning of national system employer in relation to a referring State. Particular employers declared not to be national system employers (2) Despite subsection (1) and sections 30D and 30N, a particular employer is not a national system employer if: (a) that employer: (i) is a body established for a public purpose by or under a law of a State or Territory, by the Governor of a State, by the Administrator of a Territory or by a Minister of a State or Territory; or (ii) is a body established for a local government purpose by or under a law of a State or Territory; or (iii) is a wholly‑owned subsidiary (within the meaning of the Corporations Act 2001) of, or is wholly controlled by, an employer to which subparagraph (ii) applies; and (b) that employer is specifically declared, by or under a law of the State or Territory, not to be a national system employer for the purposes of this Act; and (c) an endorsement by the Minister under paragraph (4)(a) is in force in relation to the employer. (3) Paragraph (2)(b) does not apply to an employer that is covered by a declaration by or under such a law only because it is included in a specified class or kind of employer. Endorsement of declarations (4) The Minister may, in writing: (a) endorse, in relation to an employer, a declaration referred to in paragraph (2)(b); or (b) revoke or amend such an endorsement. (5) An endorsement, revocation or amendment under subsection (4) is a legislative instrument, but section 42 (disallowance) of the Legislation Act 2003 does not apply to the endorsement, revocation or amendment. Note: Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the endorsement, revocation or amendment (see regulations made for the purposes of paragraph 54(2)(b) of that Act). Employers that cannot be declared (6) Subsection (2) does not apply to an employer that: (a) generates, supplies or distributes electricity; or (b) supplies or distributes gas; or (c) provides services for the supply, distribution or release of water; or (d) operates a rail service or a port; unless the employer is a body established for a local government purpose by or under a law of a State or Territory, or is a wholly‑owned subsidiary (within the meaning of the Corporations Act 2001) of, or is wholly controlled by, such a body. (7) Subsection (2) does not apply to an employer if the employer is an Australian university (within the meaning of the Higher Education Support Act 2003) that is established by or under a law of a State or Territory. … 30C Extended meaning of national system employee (1) A national system employee includes: (a) any individual in a State that is a referring State because of this Division so far as he or she is employed, or usually employed, as described in paragraph 30D(1)(a), except on a vocational placement; and (b) a law enforcement officer of the State to whom subsection 30E(1) applies. (2) This section does not limit the operation of section 13 (which defines a national system employee). Note: Section 30H may limit the extent to which this section extends the meaning of national system employee. 30D Extended meaning of national system employer (1) A national system employer includes: (a) any person in a State that is a referring State because of this Division so far as the person employs, or usually employs, an individual; and (b) a holder of an office to whom subsection 30E(2) applies. (2) This section does not limit the operation of section 14 (which defines a national system employer). Note: Section 30H may limit the extent to which this section extends the meaning of national system employer . … 30H Division only has effect if supported by reference A provision of this Division has effect in relation to a State that is a referring State because of this Division only to the extent that the State's referral law refers to the Parliament of the Commonwealth the matters mentioned in subsection 30B(1) that result in the Parliament of the Commonwealth having sufficient legislative power for the provision so to have effect. 30M Extended meaning of national system employee (1) A national system employee includes: (a) any individual in a State that is a referring State because of this Division so far as he or she is employed, or usually employed, as described in paragraph 30N(1)(a), except on a vocational placement; and (b) a law enforcement officer of the State to whom subsection 30P(1) applies. (2) This section does not limit the operation of section 13 (which defines a national system employee). Note: Section 30S may limit the extent to which this section extends the meaning of national system employee. 30N Extended meaning of national system employer (1) A national system employer includes: (a) any person in a State that is a referring State because of this Division so far as the person employs, or usually employs, an individual; and (b) a holder of an office to whom subsection 30P(2) applies. (2) This section does not limit the operation of section 14 (which defines a national system employer). Note: Section 30S may limit the extent to which this section extends the meaning of national system employer. … 30S - Division only has effect if supported by reference A provision of this Division has effect in relation to a State that is a referring State because of this Division only to the extent that the State's referral law refers to the Parliament of the Commonwealth the matters mentioned in subsection 30L(1) that result in the Parliament of the Commonwealth having sufficient legislative power for the provision so to have effect. STARTTS asserted that it is a "constitutional corporation within the meaning of s 51 (xx) of the Australian Constitution": par 9 of RS and consequently it is a national system employer.
Section 51 (xx) of the Australian Constitution refers to "foreign corporations, and trading and financial corporations formed within the limits of the Commonwealth".
It was unclear from the RS and the Murdoch Affidavit on what basis STARTTS asserted it was a "constitutional corporation within the meaning of s 51 (xx) of the Australian Constitution". I inferred from the material filed by STARTTS prior to the hearing that STARTTS asserted it was a constitutional corporation because it is a trading corporation. However, no evidence of the STARRTS's trading activities was provided to the Commission prior to or at the hearing.
At the hearing, STARTTS obtained leave to tender the STARTTS Annual Report 2018/2019 and the Financial Statements for STARTTS for the year ended 30 June 2023. The trading revenue for STARTTS in the relevant periods was in the range of 6-8% of its total revenue. It was not immediately apparent from these documents therefore that STARTTS is a trading corporation.
If it was necessary for me to determine whether STARTTS is a trading corporation and thus a constitutional corporation this may have required notice to the Attorney-Generals of the Commonwealth and other States under cl 1.22 of the Uniform Civil Procedure Rules 2005. However, it is not necessary for me to consider whether STARTT's is or is not a trading corporation if Mr Payne's employment falls under s 5 of the Referral Act and I turn now to that consideration.

Industrial Relations (Commonwealth Powers) Act 2009 (NSW) ("Referral Act")

The Referral Act referred certain employment and industrial matters to the Parliament of the Commonwealth but excluded certain matters from the referral. I set out below relevant provisions of the Referral Act: 5 Reference of matters (1) Subject to the other provisions of this Act, the following matters are referred to the Parliament of the Commonwealth: (a) the matters to which the initial referred provisions relate, but only to the extent of the making of laws with respect to those matters by including the initial referred provisions in the Commonwealth Fair Work Act, as originally enacted, and as subsequently amended by amendments enacted at any time before this Act commences, in the terms, or substantially in the terms, set out in the scheduled text, (b) the referred subject matters, but only to the extent of making laws with respect to any such matter by making express amendments of the Commonwealth Fair Work Act, (c) the referred transition matters. (2) The reference of a matter under subsection (1) has effect only: (a) if and to the extent that the matter is not included in the legislative powers of the Parliament of the Commonwealth (otherwise than by a reference for the purposes of section 51 (xxxvii) of the Constitution of the Commonwealth), and (b) if and to the extent that the matter is included in the legislative powers of the Parliament of the State. (3) The operation of each paragraph of subsection (1) is not affected by any other paragraph. (4) For the avoidance of doubt, it is the intention of the Parliament of the State that the Commonwealth Fair Work Act may be expressly amended, or have its operation otherwise affected, at any time after the commencement of this Act by provisions of Commonwealth Acts whose operation is based on legislative powers that the Parliament of the Commonwealth has apart from under the references under subsection (1). (5) Despite any other provision of this section, a reference under subsection (1) has effect for a period: (a) beginning when this section commences, and (b) ending at the end of the day fixed under section 7 as the day on which the reference is to terminate, but no longer. 6 Matters excluded from the reference A matter referred by section 5 does not include: (a) matters relating to Ministers, Members of Parliament, judicial officers or members of administrative tribunals, or (b) matters relating to persons in the service of either House of Parliament, or of the President or Speaker, or of the President and Speaker jointly, or (c) matters relating to State public sector employees, or (d) matters relating to persons appointed or engaged by the Governor or a Minister under any Act, law or authority, or (e) matters relating to law enforcement officers, or (f) matters relating to local government sector employees, or matters relating to the employer of any of the above.
Distilled to their essence, Mr Payne's submissions and cross-examination of Mr Murdoch were directed to the effect that Mr Payne's employment fell with the exclusion at s 6(c) and he was a "State public sector employee" and excluded from the reference. Neither party has submitted that any other exclusion applies nor is there evidence before the Commission to suggest any other exclusion applies.
The definition of "State public sector employee" is set out at s 3 of the Referral Act as follows: State public sector employee means the following: (a) a member of the Government Service of New South Wales, the NSW Health Service, the Teaching Service of New South Wales or any other service of the Crown in right of the State (including an employee of any New South Wales government agency), (b) an employee of a body established for a public purpose that is subject to control or direction by a Minister of the State or in which the State has a controlling interest, but does not include an employee of the following: (c) a State owned corporation or a subsidiary of a State owned corporation, (d) a person or body declared by or under an Act not to be or not to represent the Crown in right of the State or not to be a New South Wales government agency.
Mr Payne did not submit that, nor was there evidence before the Commission, that STARTTS is a state-owned corporation or a person declared by or under an Act not to be or not to represent the Crown in right of the State or not to be a New South Wales government agency, such that the exclusions in (c) or (d) of the definition apply.
It is therefore necessary to determine whether STARTTS is a "body established for a public purpose" and whether it is "subject to control or direction by a Minister of the State" or whether "the State has a controlling interest" in STARTTS such that Mr Payne falls within (b) of the definition of "State public sector employee".

Is STARTTS a body established for a public purpose?

STARTTS's constitution establishes that it is a "body established for a public purpose" as its objects state: "3.1 The principal objects of the company are to establish, operate and promote a New South Wales health service for the treatment and rehabilitation of torture and trauma survivors: 3.1.1 for the direct relief of poverty, sickness, destitution, suffering, helplessness or misfortune for those arousing compassion in the community; 3.1.2 for the delivery of specific health programs for the treatment and rehabilitation of torture and trauma survivors; 3.1.3 to promote the provision of services in a multi-disciplinary framework to torture and trauma survivors; 3.1.4 to assist survivors of torture and trauma resettling in Australia to overcome psychological and other impacts of their traumatic experiences; 3.1.5 to provide a range of assessment, treatment and rehabilitation services including group and individual counselling to survivors of torture and trauma and their families; 3.1.6 to promote ongoing improvement in the quality and effectiveness of services provided to torture and trauma survivors through culturally congruent service provision informed and supported by research, education, development and innovation in the field; 3.1.7 to provide ancillary services in support of the objectives of the company including, but not limited to, information provision, training and community engagement. 3.2 Subject always to the principal objects, the company has the following additional objects: 3.2.1 to raise money to further the aims of the company and to secure sufficient funds for the purposes of the company; 3.2.2 to receive any funds and to distribute these funds in a manner that best attains the objects of the company; 3.2.3 to do all such things as are incidental or conducive to the attainment of all or any of the objects of the company; 3.2.4 above all objects, do all things necessary to retain public benevolent institution status."
As STARTTS is a body established for a public purpose, I must therefore determine whether STARTTS is subject to control or direction by a Minister of the State or if the State has a controlling interest in STARTTS in order to establish if Mr Payne is a "State public sector employee".

Is STARTTS subject to control or direction by a Minister of the State or does the State have a controlling interest in STARTTS?

Mr Payne relied on an email from the CEO of STARTTS, Mr Aroche, dated 30 September 2021, confirming that "[a]s an Affiliated Health Organisation in the State of New South Wales, ... STARTTS has an obligation to take all reasonable steps to ensure staff comply with the New South Wales Public Health Order".
Mr Payne submits in the AFS: "14. STARTTS is required to do all that is necessary to maintain their status as a public benevolent institution. 15. STARTTS, as a New South Wales Affiliated Health Organisation, has followed the directives of NSW Health in relation to the Covid-19 vaccine policy from 2021 until the present time."
Mr Payne asserts in the AFS that STARTTS is an Affiliated Health Organisation ("AHO") and: "6. STARTTS' financial statement shows the overwhelming amount of income as revenue from government. Much of the relatively small amount of "Revenue from Goods and Services" is derived from the after-hours counselling program to asylum seekers in Villawood Detention Centre, the program referred to by Mr Murdoch at the IRC Hearing on February 22. In this program, STARTTS bills the relevant government department on a fee-for-service basis. … 13. The essential purpose of STARTTS is to provide a public health service for the treatment and rehabilitation of torture and trauma survivors. 14. STARTTS is required to do all that is necessary to maintain their status as a public benevolent institution."
AHOs are defined in s 13 of the Health Services Act 1997: 13 WHAT IS AN AFFILIATED HEALTH ORGANISATION? (1) An "affiliated health organisation" is an organisation or institution that is an affiliated health organisation under section 62. (2) An organisation or institution is an affiliated health organisation only in relation to any of its recognised establishments or recognised services. Note : The Dictionary defines a "recognised establishment" of an affiliated health organisation to mean a hospital or health institution of the organisation that is listed in column 2 of Schedule 3 next to its name. It also defines a "recognised service" of an affiliated health organisation to mean a health service or health support service of the organisation that is listed in column 2 of Schedule 3 next to its name. (3) The principal reason for recognising affiliated health organisations is to enable certain non-profit, religious, charitable or other non-government organisations and institutions to be treated as part of the public health system where they control hospitals, health institutions, health services or health support services that significantly contribute to the operation of that system. Note : Affiliated health organisations are intended to replace the system of separate institutions and associated organisations recognised under Part 5AA and section 29B(1)(a) of the Public Hospitals Act 1929, respectively.
Section 62 of the Health Services Act 1997: 62 RECOGNITION OF AFFILIATED HEALTH ORGANISATIONS (cf PH Act s 29B) (1) An organisation or institution whose name is included in column 1 of Schedule 3 is an affiliated health organisation in respect of any of its recognised establishments and recognised services.
STARTTS is listed in column 1 of Schedule 3 and therefore is an affiliated health organisation.
AHOs may be treated as part of the public health system for specific purposes. STARTTS is a not-for-profit body corporate which receives substantial pubic funding which was set up for the specific purpose of providing a public health service for the treatment and rehabilitation of torture and trauma survivors. The CEO of STARTTS requires the employees of STARTTS to comply with New South Wales Public Health Orders and other health policies from time to time. While these factors illustrate STARTTS's provision of public health services and involvement in and contribution to the public health system, there is nothing in the Constitution of STARTTS which suggests "that is subject to control or direction by a Minister of the State or in which the State has a controlling interest": see provisions dealing with "Membership at Part 2 and provisions dealing with Directors at Part 3. Nor does the fact that the CEO of STARTTS directed the employees to comply with Health Orders establish that STARTTS was subject to a Minister of the State.
STARTTS is a "body established for a public purpose" but it is not "subject to control or direction by a Minister of the State," nor does "the State ha[ve] a controlling interest" in STARTTS. Accordingly, Mr Payne does not fall within (b) of the definition of "State public sector employee".

Mr Payne is a national system employee

Mr Payne's employment was not a matter excluded pursuant to s 6 of the Referral Act from the reference of certain industrial relations matters to the Commonwealth under s 5 of the Referral Act. Consequently, STARTTS is a national system employer and Mr Payne is a national system employee whose employment terms and conditions are covered by the 2022 Professional Agreement. As this is the case, the Commission has no jurisdiction to hear the Application.
I am therefore required to dismiss the Application.

Application for Costs

STARTTS sought costs be awarded against Payne and set out the following in the RS: "15. The Application is the third claim made by Mr. Payne against STARTTS after the Previous Applications. The Application was, at all times, frivolous and vexatious. Mr. Payne instituted proceedings against STARTTS knowing that the Application was without reasonable cause. Mr. Payne was also provided with sufficient evidence to explain that the Application has been commenced in the wrong jurisdiction [Murdoch paragraph 12]. Mr. Payne elected to maintain his objection to the Motion. STARTTS respectfully requests that an order of costs be made against Mr. Payne pursuant to section 181 of the IR Act."
Mr Payne set out the following in the AS: "16. The Respondent stated that my claim is "vexatious and frivolous". As per the reasons stated above, it has been my understanding that this is a state matter and hence this application has been made to the Industrial Relations Commission. Furthermore, in making this application, I am merely exercising a human right available to any employee who has experienced loss of employment in a manner they consider to be unfair. The Respondent acknowledges such rights in para. 13 of their Outline of Submissions. I dispute the Respondent's claim that I was provided with sufficient evidence to explain that the Application has been commenced in the wrong jurisdiction. They refer to para. 12 of the Murdoch Affidavit as providing this evidence: I have already referred to my dispute with their contention in that paragraph, "At no time has Mr Payne's employment with STARTTS ever been covered by any NSW state modern award... ". As previously explained, I understood from the Fair Work hearing in February 2023 that the Industrial Relations Commission was the correct jurisdiction. I have provided several examples of STARTTS' interrelationships with the NSW government and NSW Health. To label my actions "vexatious and frivolous" is absurd. In the event of this application not being successful, any request for an order of costs against me should be dismissed."
No oral submissions were made on the question of costs.
Section 181 of the IR Act is in the following terms: 181 Costs (1) Subject to the rules of the Commission and any other Act or law: (a) the Commission may award costs, and (b) costs are in the discretion of the Commission, and (c) the Commission may determine by whom and to what extent costs are to be paid, and (d) the Commission may order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (2) However, the Commission may award costs only in the following cases: (a) the Commission may award costs against an applicant if it considers that the application to it was frivolous or vexatious, or (b) the Commission may award costs against a party to proceedings who, in the opinion of the Commission, instituted proceedings without reasonable cause, or (c) the Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair dismissals) who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim or whose application was frivolous or vexatious, or (c1) the Commission may award costs against an industrial agent representing an applicant or employer in proceedings under Part 6 of Chapter 2 if: (i) the industrial agent fails to file a certificate as required by section 90A, or (ii) the Commission finds that the industrial agent has filed a certificate under that section certifying that the agent has reasonable grounds for believing, on the basis of provable facts, that the applicant's claim or employer's response to the claim had reasonable prospects of success when the agent did not have reasonable grounds for believing, on the basis of provable facts, that it had reasonable prospects of success, or (d) the Commission may award costs in proceedings for a breach of an industrial instrument or the recovery of money under Chapter 7, as provided by sections 357 and 373. (3) (Repealed) (3A) Despite subsection (1), the Commission may not award costs in proceedings under Part 7 of Chapter 2. Note. This subsection does not prevent the award of costs in appeals relating to questions of law in relation to public sector promotional and disciplinary matters under section 197B. (4) In this section, costs includes: (a) costs of or incidental to proceedings in the Commission, and (b) in the case of an appeal to the Commission, the costs of or incidental to the proceedings giving rise to the appeal, as well as the costs of or incidental to the appeal.
In summary, the Commission may award costs against an applicant if it considers that the application to it was frivolous or vexatious: s 181(2)(a) of the IR Act. The Commission may also award costs against a party to proceedings who, in the opinion of the Commission, instituted proceedings without reasonable cause: s 181(2)(b) of the IR Act.
The approach to be taken by the Commission to its discretion under s 181 of the IR Act was described by the Full Bench in Re Operational Ambulance Officers (State) Award (No 2) [2011] NSWIRComm 85 as follows: "[28] The exercise of the Commission's discretion to award costs involves a two stage process: see Bankstown City Council v Paris [1999] NSWIRComm 585; (1999) 93 IR 209 and Four Sons Pty Ltd v Sakchai Limsiripothong (No 2) [2000] NSWIRComm 131; (2000) 100 IR 400. The first stage requires a determination as to whether s 181(2) of the Act is enlivened. The second stage of the process requires the Commission to exercise its discretion whether to award costs under s 181(1) of the Act."
In Dr A v Health District (No 4) [2014] NSWIRComm 56, Justice Boland AJ, with whom Commissioners Stanton and Newall agreed, stated: "[8] The Commission's jurisdiction … is essentially a non-costs jurisdiction. There are limited exceptions, which are prescribed in s 181(2) of the IR Act. If one or more of the tests required by s 181(2) are met in any particular case it then becomes a matter for the Commission's discretion whether to award costs: s 181(1)(b)."
The approach taken by the Commission to its discretion under s 181 of the IR Act is to determine whether the matters which enliven the Commission's discretion have been established and then to decide whether it is a matter in which the Commission will exercise its discretion to make a costs order.
In Peden v Lake Macquarie Refrigeration Pty Ltd (2003) 134 IR 149 ("Peden") at [20], the Commission stated that an application will be "frivolous" "if, on its face, it cannot possibly succeed, if it is manifestly groundless or if it is a paltry or trifling matter." The Full Bench determined in Peden that there was "an insufficient foundation for a finding that … [the applicant's case] was frivolous" because Harrison DP, at first instance, was required to make a factual finding in respect of conflicting evidence and to resolve that conflict using "an orthodox application of principles and the testing of evidence": [21] - [22].
The Commission went on in Peden at [28] to refer to the test articulated by Justice Roden in Attorney-General v Wentworth (1988) 14 NSWLR 481, being that proceedings are "vexatious" if: 1. they are instituted with the intention of annoying or embarrassing the person against whom they are brought; 2. they are brought for a collateral purpose, and not for the purpose of having the court adjudicate on the issues for which they give rise; or 3. if, irrespective of a motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless.
In Tapia v Emibarb Pty Ltd t/as Lagoon Seafood Restaurant [2005] NSWIRComm 232 Justice Backman considered the relevant authorities in relation to an application for costs on the grounds of "frivolous" and/or "vexatious" and "instituted without reasonable cause" and said at [122]: "122 There is some overlap in various meanings [of "frivolous", "vexatious" and "instituted without reasonable cause"] adopted [in the decision] above. An application, for example, brought by the applicant could be both frivolous and vexatious, on the objective test for vexatiousness, if it is manifestly groundless."
Her Honour referred at [121] to the judgment of Wilcox CJ in Imogen Pty Ltd v Sangwin (1996) 70 IR 254 dealing with a submission that there was no substantial difference in meaning between "vexatious" and "without reasonable cause" in which he said at 257: "I doubt that this is correct; if the two expressions were intended to mean the same thing, there would have been no need for Parliament to use both of them. If there is a difference in meaning, "without reasonable cause" is the lower standard. Accordingly, as I said in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, "for the qualification of s 347 to operate, it is sufficient that the proceeding be instituted 'without reasonable cause'". … In Kanan I collected the authorities on the meaning of the phrase "without reasonable cause". At 264-265 I proposed a test: It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause."
There was no evidence before the Commission of correspondence exchanged between the respondent's legal representatives and Mr Payne about offers of settlement.
I accept that Mr Payne's decision to commence the Application in the Commission irritated STARTTS in circumstances where he had previously commenced proceedings in the Fair Work Commission. However, there is no evidence to support a finding that the Application was vexatious on the basis that it was instituted, or pressed, with the intention of annoying or embarrassing STARTTS.
I accept, as I am entitled to do pursuant to s 163 of the IR Act, the applicant's assertions while not in proper evidentiary form that he commenced the Application in the Commission because he believed that it was the correct jurisdiction. I do not consider that there was a collateral purpose and thus it was not vexatious on this basis.
There is some force to the submission that the Application was manifestly groundless, and that it was instituted without reasonable cause, given the existence of the 2022 Professional Agreement and earlier enterprise agreements approved under the FW Act.
However, even if I were to find that the Application was instituted without reasonable cause, this is a matter in which I would not exercise my discretion to make a costs order against Mr Payne. Mr Payne came to the Commission seeking a remedy that he believed was available to him on the basis of his understanding of information given to him by a member of the Fair Work Commission whom I have inferred was herself aware of the 2022 Professional Agreement.
Although s 5 of the Referral Act applies to Mr Payne's employment, Mr Payne has a lay understanding of the concepts of "State public sector" and "State public sector employee" such that he understandably had some confusion as to whether he fell within that definition in the circumstances of what he understood a member of the Commission informed him.
Further, STARTTS, in its written submissions and for much of the hearing of the Motion relied on it being a "Constitutional corporation". It appears the funding of STARTTS is largely from public funds, and the trading status of STARTTS is not clear from the material provided to the Commission.
In my view it is not in the interests of justice in these circumstances to order costs against Mr Payne in what has been described by Justice Boland as "essentially a non-costs jurisdiction": Dr A at [8].
Accordingly, I make no order as to costs.

ORDERS

I order that the Application be dismissed and there is no order as to costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 May 2024

Powers) Act 2009(NSW)

Workplace Relations Act 1996(Cth)

[1999] NSWIRComm 585

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