Public Service Association and Professional Officers Association Amalgamated Union of New South Wales v Roads and Maritime Services

Solicitors: W G McNally Jones Staff Lawyers (Appellant) Roads and Maritime Services (First respondent) File Number(s): IRC 488 of 2014 Decision under appeal Court or tribunal: Industrial Relations Commission of New South Wales Jurisdiction: Industrial Relations Commission Citation: [2014] NSWIRComm 32 Date of Decision: 13 June 2014 Before: Staff J File Number(s): IRC 413 of 2013

DECISION

1. This is an application for leave to appeal and appeal from the decision of the Commission dated 13 June 2014 in Roads And Maritime Services Division of the Government Service of New South Wales - Consolidated Salaried Employees Award 2013 (No 2) [2014] NSWIRComm 32.
2. In that matter Staff J determined to make a new consolidated award rescinding and replacing seven industrial instruments. There were six industrial unions of employees that were party to the prior industrial instruments, each of whom became parties to the consolidated award. His Honour described the process which led to the making of the award as follows: [4] After extensive discussions between the parties, which occurred over a period of two years, including assistance provided by the Commission in a number of conciliation conferences, the unions have reached an agreement in respect of all but one clause, that being the insertion of a "No Extra Claims" clause in the Consolidated Award.
3. The Public Service Association and Professional Officers Association Amalgamated Union of NSW ("PSA" or "appellant") sought to challenge his Honour's decision to include a no extra claims clause in the Roads and Maritime Services Consolidated Award ("the award"). We note that Unions NSW and the other union parties were named as respondents on the appeal, however, apart from an appearance on the first return date they took no formal part in the appeal.
4. The form of the clause sought by Roads and Maritime Services ("RMS" or "respondent") and granted by his Honour was: 4.1 During the term of this Award, there will be no extra wage claims, claims for improved conditions of employment or demands made with respect to the Employees covered by the Award by a party to this Award and, further, that no proceedings, claims or demands concerning wages or conditions of employment with respect to those Employees will be instituted before the IRC, by a party to this Award. 4.2 The terms of subclause 4.1 do not prevent the parties from taking any proceedings with respect to the interpretation, application or enforcement of existing award provisions. 4.3 Variations made with the agreement of the parties as provided for in clause 6(1)(d) of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 (NSW) are not prohibited by this clause
5. The appellant's challenge to the decision to include the no extra claims clause in the award was originally expressed in the following terms: (a) Clause 6(1)(d) of the 2011 Regulation did not mandate the Commission to insert a "no extra claims" provision into the awards subject of the variation applications; (b) In any event, if clause 6(1)(d) of the 2011 Regulation had that effect it was not authorised by s 146C of the Act and was invalid; (c) The Commission is not otherwise able to make an award provision constraining the exercise of the statutory rights of the parties in the absence of a party giving such a commitment; and (d) There were no discretionary reasons justifying a term preventing the making of any claims or the bringing of any proceedings concerning the wages or conditions of employment of employees covered by the Award.
6. The "2011 Regulation" referred to by the appellant was the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 ("the regulation"). It was replaced by the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014. It is sufficient for present purposes to note that each of these regulations declared policies for the purposes of s 146C of the Industrial Relations Act 1996 ("IR Act"). The Commission is obliged by that section to give effect to such policies when making or varying orders or awards.

The Course of Proceedings

1. The application for leave was heard on 16 December 2014. On that date the President issued an ex tempore decision of the Full Bench on the application for leave. His Honour stated: We refuse leave to appeal in relation to those elements of the appeal which concern: 1) whether his Honour exercised a discretion in the matter independently of his considerations of questions of power and 2) as to the merits of the exercise of that discretion, namely, whether the discretion exercised by his Honour miscarried. However, we propose to otherwise grant leave to appeal in the proceedings in that respect thereby confining the proceedings to the question of power. We will give reasons for that judgment in due course, most likely in relation to our reasons as to the balance of the matters for which relief has been granted.
2. Directions were then given and the appeal was fixed for hearing on 23 March 2015. In the revised written submissions taking account of the decision on leave, the appellant contended: (a) Contrary to the decision at first instance, clause 6(1)(d) of the 2011 Regulation did not require the Commission to insert a "no extra claims" provision into the Award; (b) In any event, if clause 6(1)(d) of the 2011 Regulation had the effect of mandating the insertion of a "no extra claims" provision in the Award, it was not authorised by s 146C of the Act and was invalid; and (c) The Commission is not otherwise able to make an award provision constraining the exercise of the statutory rights of the parties in the absence of a party giving such a commitment
3. Shortly before the hearing of the appeal a Full Bench of the Commission handed down its decisions in two matters: Crown Employees Wages Staff (Rates of Pay) Award 2011 and others [2015] NSWIRComm 7 ("Wages Staff (Rates of Pay)") and Child Protection (Working with Children) Award 2014 [2015] NSWIRComm 8 ("Working with Children"). Having regard to those decisions the PSA sought to reopen the question of leave. The Full Bench declined that application.

Reasons for Decision on Leave

1. It is well settled that an appeal under the IR Act is an appeal in the strict sense: see s 191 of the IR Act and King v State Bank of New South Wales (No 2) [2002] NSWIRComm 353; (2002) 126 IR 407. In such an appeal the appellate tribunal will only intervene to correct error: Aboud v State of New South Wales (Department of School Education) [1999] NSWIRComm 449; (1999) 92 IR 32. In the case of discretionary decisions it is not enough that the appellate tribunal would have come to a different view. It must be shown that the primary judge had failed to properly exercise the discretion committed to him: Mace v Murray [1955] HCA 2; (1955) 92 CLR 370 and House v The King [1936] HCA 40; (1936) 55 CLR 499. It is important to bear these principles in mind in approaching the question of leave to appeal.
2. The principles guiding the determination of leave were clearly set out in this often cited passage from Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263: [5] The law and practice governing leave to appeal is well settled and does not require restatement: see Knowles v Anglican Church Property Trust (No. 2) (1999) 95 IR 380. However, two principles warrant particular mention: first, leave will not be lightly or automatically granted (see King v State Bank of New South Wales (No 2) (2002) 126 IR 407 at [52]-[55] and Knowles at 381 - 382) and, subject to the requirements of s188(2) of the Act, will not, generally, be granted unless the appellant demonstrates that the appeal "raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application" (see Knowles at 382) or raises issues going to the proper administration of justice. Secondly, leave will rarely be granted where an appeal primarily seeks to challenge findings of fact which are otherwise reasonably open on the evidence: Box Valley Pty Ltd v Price (2000) 97 IR 484; Austin v NF Importers Pty Limited [2005] NSWIRComm 353 at [5].
3. A decision by Staff J to insert a no extra claims clause in the award is an exercise of discretion.
4. In relation to the application for leave to appeal it is convenient to deal with the PSA's original grounds of challenge in reverse order.
5. As to ground (d), Staff J identified three reasons justifying the exercise of discretion in favour of including the clause. First, he observed at [38] that the challenged clause was in similar terms to that found in the Wages Policy published by the Government of New South Wales and by which the respondent was bound.
6. Second, at [39] he referred to Full Bench authority - Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award and Crown Employees (Teachers in TAFE and Related Employees) Salaries and Conditions Award [2008] NSWIRComm 209, which recognised the value of no extra claims commitments in providing certainty to the industrial parties as to their rights and obligations during the life of the industrial instrument. Although in this case the appellant was not offering a commitment, if made, the clause would provide the same or similar advantages.
7. In this latter respect it is noteworthy that his Honour earlier observed at [4] that this award was the culmination of extensive discussions, including a number of conciliation conferences, over a period of two years. It may be readily inferred that his Honour considered there would be significant value in a period of relative stability following the making of the award.
8. Third, at [37] his Honour considered the no extra claims clause to be consistent with s 17(3) of the IR Act: in that it creates a limited set of circumstances in which an award may be varied or rescinded during its nominal term.
9. In these circumstances it could not be said that his Honour's exercise of discretion was without foundation or not supported by reasons. To the extent that the appellant argued that the reasons advanced did not "justify" the making of the clause, it seeks to re-agitate the merits of the decision.
10. Further, as the respondent observed in its submission, the appellant contended in [37] of its outline that the: no extra claims provision serves little practical purpose given the restrictions already imposed by force of the Regulation
11. We concluded from that submission of the appellant that it does not regard itself as significantly constrained by the clause itself. It regards the substantial constraints as flowing from the regulation.
12. The appellant did contend that his Honour's exercise of discretion miscarried in that it was overborne by his Honour's conclusion that the Commission was obliged to include such a clause by the terms of the regulation. We do not agree. We accept the premise that his Honour concluded that the regulation required some form of no extra claims clause. Nevertheless, in our view his Honour made clear that he would exercise the discretion to include the clause even if he were not so required by the regulation. That conclusion is based on [40] of his Honour's reasons, as follows: As a matter of discretion, I would also include a no extra claims provision. (Emphasis added)
13. In that context we turn to the other challenges advanced. Ground (c) contends that the Commission is not able to make an award provision constraining the exercise of statutory rights in the absence of a party giving such a commitment. Leave was granted in relation to the issue of power.
14. The contentions advanced in grounds (a) and (b) relate to the obligations imposed by cl 6(1)(d) of the regulation and the extent of its validity. At the time of considering the application for leave we were aware that arguments relating to the effects of cl 6(1)(d) were being pursued in other proceedings. Given that the decision to include the clause in the award was based on an exercise of discretion independent of the regulation we did not consider it appropriate or necessary to determine these issues in this case.
15. That view was strengthened by the appellant's submission as to the limited practical significance of the clause in this award.
16. For those reasons we concluded that the matters sought to be raised on the appeal, other than as to the issue of power, were not of such importance that, in the public interest, leave should be granted. Nor was there any other sufficiently cogent basis identified for the grant of leave.

Power

1. The PSA's contentions in grounds (a) and (b) at [7] above are beyond the scope of leave granted. They were included, as we understand it, in light of the decisions in the Wages Staff (Rates of Pay) and Working with Children decisions and prompted the application to reconsider the issue of leave. We regard those issues as being resolved by those decisions.
2. The remaining contention was supported by an argument that such a clause was inconsistent with the IR Act and, therefore, could not be included in an award.
3. Reliance was placed upon the decision of the Full Court of the Federal Court in Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84; (2014) 222 FCR 152 ("Toyota"). In that case the appellant had sought to ask its employees if they would agree to vary the terms of the enterprise agreement which bound them and was within its nominal term. It was argued that the requests of the employer were "further claims" and were proscribed by cl 4 of the enterprise agreement. That clause was in the following terms: This comprehensive Agreement resolves the enterprise bargaining claims by The Parties and shall operate seven days from the date of approval by FWA and will nominally expire on 6 March 2015. TMCA and the Union agree to start negotiations for renewal of this Agreement, three months prior to its expiry. The parties agree they will not prior to the end of this agreement: • make any further claims in relation to wages or any other terms and conditions of employment; and • take any steps to terminate or replace this Agreement without the consent of the other parties. Written commitments as outlined in the letter to FVIU chairperson dated 16 September 2011 will be honoured by all parties
4. The Full Court held that the proposals made by Toyota were "further claims" within the meaning of the clause.
5. The statutory scheme under consideration in Toyota is of course detailed, complex and different to that which applies in this jurisdiction. We do not consider it necessary to traverse the detail of the scheme. We do note, however, two considerations relevant to that scheme. The first is that the scheme and the legislative history formed part of the context in which the particular clause was to be construed. The second is that the scheme makes specific provision for the employer to be able to ask the employees to agree to a variation. Section 208 of the Fair Work Act 2009 (Cth) ("FW Act") provides: Employers may request employees to approve a proposed variation of an enterprise agreement (1) An employer covered by an enterprise agreement may request the affected employees for a proposed variation of the agreement to approve the proposed variation by voting for it. (2) Without limiting subsection (1), the employer may request that the affected employees vote by ballot or by an electronic method.
6. The Full Court further held that that the clause was inconsistent with and repugnant to s 208 of the FW Act.
7. Particular reliance was placed by the appellant upon the following passage from the Full Court judgment which follows discussion of the principle of invalidity of subordinate legislation inconsistent with the legislation which authorises its making. The Full Court stated (at [97]): An enterprise agreement made under Pt 2-4 of the FW Act is not, of course, a regulation. But, as stated above, it is something more than a mere agreement in the way of a contract. It is a specific instrument made only under the detailed regime for which Pt 2-4 provides and enforceable only as provided by the FW Act. To this extent, we consider that the general principle applicable to the invalidity of regulations on account of repugnancy with their authorising statute is relevant to the issue presently for resolution. At base, the question which arises under that issue is essentially one of the rule of law. Parliament having said that an enterprise agreement may be varied, and that the employer may put a request to its employees in that regard, a term of the agreement which states, or has the effect, that the employer may not so proceed must necessarily be inconsistent with or repugnant to the FW Act to that extent. Subject to his view as to the significance of Toyota's ability to initiate, and to carry through, a variation of the Agreement by removing the no further claims provision itself, the primary Judge took that view of the matter, and we agree with him. (appellant's emphasis)
8. We accept that an award cannot validly be made if it is inconsistent with the IR Act. Awards derive their force from the legislation pursuant to which they are made. Section 10 of the IR Act authorises the making of awards "in accordance with this Act". We would observe that in Toyota the Full Court had earlier summarised the principle in this way (at [94]): There does not appear to be any real doubt about the proposition that a subordinate instrument made pursuant to statutory power which is inconsistent with the Act under which it is made will be invalid and void to the extent of the inconsistency. (emphasis added)
9. As a general proposition awards will be construed, should there be any doubt or ambiguity, as far as possible so as to be consistent with the legislation which authorises them. As to the general principles of award construction see Transport Workers' Union of New South Wales v Linfox Australia Pty Ltd (No 2) [2014] NSWIRComm 57 at [40]-[41] and State Transit Authority of New South Wales v Australian Rail, Tram and Bus Industry Union, New South Wales Branch, Bus and Tram Division [2014] NSWIRComm 41 at [26]-[31]. As to principles of construction of statutory instruments, see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]-[70]. These various principles emphasise the importance of context. Context includes the source of the power to make the award and the limits on that power.
10. In our view there is substantial reason to approach this clause in that way.
11. It appears that his Honour also accepted this premise of necessary consistency. As we have already noted, Staff J regarded the clause as being consistent with, in particular, s 17(3) of the IR Act. It follows (although it does not determine the proper construction) that it was his Honour's intention that the clause would operate in that way.
12. During the course of argument the appellant confined its challenge to a part of the first paragraph of the clause. The part specified was: that no proceedings, claims or demands concerning wages or conditions of employment with respect to those Employees will be instituted before the IRC, by a party to this Award
13. The appellant accepted that, if these words were preceded by words such as "except as provided by the Industrial Relations Act 1996", it would have no cause for complaint. That concession necessarily involves an acceptance that the Commission has power to include no extra claims clauses in awards.
14. Having regard to the propositions relating to construction identified above, the suggested words are to be implied. One may readily accept that stating them would have obviated such a challenge, but there is no need for them to be stated. In the award under consideration in Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award and Crown Employees (Teachers in TAFE and Related Employees) Salaries and Conditions Award (referred to by his Honour) such words were included in the clause but that was by no means a universal rule: see the discussion of the "traditional form" of the clause in Re Corrections Health Service Nurses' State Award (1999) 90 IR 235 per Wright J, President at 243. The "traditional form" did not include such words.
15. Further, once it is accepted that it is possible for the Commission to make a no extra claims clause any invalidity would be limited to the extent of the inconsistency. However, the clause properly understood is not inconsistent with the IR Act.
16. The respondent accepted that the clause should be understood in the way we have outlined.
17. The appellant speculated that, if that were the proper construction of the clause, there would be no work for it to do. The PSA did accept that the clause would operate in relation to over award claims. We would also observe that the utility of such clauses in reminding parties of the settled nature of the award during its nominal term has long been recognised. The clause does have both legal and practical utility.
18. In that respect, we note that in the Wages Staff (Rates of Pay) Case the Full Bench said at [27]: … the absence of a 'no extra claims' provision in a given award, by no means permits extra claims to be made. 'Extra claims' are already precluded by the valid making of the Award. A provision such as that sought in these applications would, in fact, be wholly superfluous.
19. In our view, the last sentence needs to be read in context. Part of that context is revealed by what the Full Bench said two paragraphs later: [29] It follows from what we have found above that, in the absence of any submission by the applicants based upon discretionary grounds, the applications advanced as to the no extra claims clause should be refused and we so order. (emphasis added)
20. In that case the Full Bench was dealing with a confined issue. That was whether as a matter of statutory construction the Commission was required to include such a clause in an award. The answer was no. As is apparent from [29] quoted above no issue of discretion was raised. That is not the position in this case. As we have noted above, his Honour decided to include the clause as a matter of discretion.
21. For these reasons, on the construction of the clause described above, we do not regard it as inconsistent with the legislation. This ground of challenge is accordingly dismissed.

Orders

1. The Full Bench makes the following orders: 1. The Full Bench confirms the grant of leave in the manner appearing in this decision but otherwise refuse leave to appeal. 2. The appeal is dismissed.

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: 16 June 2015