Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary for Industrial Relations

Industrial Relations Commission (NSW)|2017-10-16|Before: Ms J

Solicitors: Mr M Jaloussis, McNally Jones Staff Lawyers (Appellant) Ms J Burton, Crown Solicitor's Office (Respondent) File Number(s): 2017/00185800

DECISION

Before the Full Bench of the Commission is an Application for Leave to Appeal and Appeal from a decision of Commissioner Newall handed down on 31 May 2017. In the proceedings which led to the Commissioner's decision, the appellant, the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales, had requested that the Commission determine, pursuant to s 175 of the Industrial Relations Act 1996 ("the Act"), a question concerning the interpretation, application or operation of Premier's Memorandum 1994-35.
Section 175 of the Act is in the following terms: 175 Powers of interpretation The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument).
Premier's Memorandum 1994-35 was issued on 7 October 1994 by the then Premier, the Honourable John Fahey. The Memorandum established revised guidelines on the "Suspension of Public Employees from Duty". It replaced Premier's Memorandum 1994-21 and amended the guidelines contained in that document.

Leave to appeal

At the commencement of the appeal proceedings on 16 October 2017, the Full Bench determined, pursuant to subs 191(2) of the IR Act, and with the consent of the appellant, to receive further evidence from the respondent. That evidence was to the effect that, following the decision of Commissioner Newall on 31 May 2017, the respondent had reversed its decision to withhold pay from Mr Reynolds whilst he was suspended and had back-paid previously withheld pay.
The Full Bench then determined to deal with the question of leave to appeal as a threshold issue.
The principles governing the grant of leave to appeal are well established and it is sufficient for present purposes to cite the following passage from the recent Full Bench decision in Jessica Xiao v Industrial Relations Secretary (Department of Justice) [2018] NSWIRComm 1054: 7. The principles in relation to the grant of leave to appeal a decision of the Commission were summarised in Public Service Association and Professional Officers Association Amalgamated Union of New South Wales v Roads and Maritime Services [2015] NSWIRComm 16. In that matter the Full Bench stated at [10] and [11]: 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. 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]. 8. In Industrial Relations Secretary v Wattie [2017] NSWIRComm 1007 the Full Bench stated at [12] and [13]: Further, we reiterate the observations of the Full Bench in Antonakopoulos v State Bank of NSW (1999) 91 IR 385 at 392, referring to the then-recently enacted provisions of the Act: "The provisions of the Act as to appeals give primacy to first instance decision making in a manner not earlier found in industrial legislation in this State. We note that the Full Bench in Antonakopoulos v State Bank of NSW (1999) 91 IR 385 also held, immediately before the statement set out above, that an appeal bench should not substitute its own views as to a decision that was reasonably open at first instance. We endorse and apply that approach. Lastly, we add, as the Full Bench said in Fire Brigade Employees' Union of NSW (o/b Challinor) v Fire and Rescue NSW [2016] NSWIRComm 1050, that it will rarely be appropriate to grant leave to appeal unless an appellant can mount at least an arguable case pointing to appellable error. This is by no means a new element of the Commission's jurisprudence; it has long been held that an appellate body in an appeal of this nature will only substitute its own judgment where the first-instance decisionmaker has fallen into error of law, or made a finding of relevant determinative fact that is demonstrably wrong: Drake Personnel Ltd v Workcover Authority of NSW (1999) 90 IR 432 at 440. There will rarely be utility in granting leave to appeal where that degree of error cannot at least arguably be agitated on appeal. 9. The principles outlined in those cases have since been approved in numerous decisions of the Full Bench. It is not necessary to list them all. We will apply the same principles. 10. It is also relevant in the present case that an appeal which lacks wider application than the interests of the parties will not normally be granted leave: Stegbar v Transport Workers' Union [2008] NSWIRComm 104; (2008) 173 IR 350 at 359.
We propose to adopt the approach of the Full Bench in Xiao with respect to the question of leave to appeal in the present matter.

Submissions of the appellant

In support of its application that leave to appeal be granted, the appellant filed the following written submissions on that question (footnotes omitted): 11. Pursuant to s 188(2) of the IR Act the Full Bench ought to grant leave to appeal because the appeal raises matters of such importance that, in the public interest, leave should be granted. 12. The Commissioner's decision contains fundamental errors of law that would have the effect of substantially limiting the ability of the Commission to effectively resolve industrial disputes by arbitration. In particular, the Commissioner's conclusion that the Commission is not empowered to determine - or indeed to express any view in any formal way about - any question concerning the interpretation, application or operation of the Premier's Memorandum because it is not on its face enforceable, or because it does not create, limit or confirm a right, would preclude the Commission from effectively arbitrating industrial disputes the resolution of which depends in part upon the formation of a view as to an employer's compliance with a wide range of non-contractual or non-binding instruments that commonly affect the conditions of employment for employees in a practical sense, including workplace policies that are unilaterally adopted by employers, and unenforceable collective agreements or memoranda of understanding between industrial parties. 13. The Commissioner's decision is inconsistent with existing practice and authority, whereby the Commission has determined the interpretation, application and operation of instruments such as unregistered collective agreements and memoranda of understanding, both under s 175 and otherwise, and has expressly contemplated the availability of a determination under s 175 in respect of the application of an aspect of the Premiers Memorandum dealing with managing displaced employees. 14. The outcome of this appeal is thus likely to have broader significance for the industrial regulation of the public sector. The public interest is served by the Commission resolving the issue of the extent to which it can resolve industrial disputes concerning the application of the Premier's Memorandum and other workplace policies, guidelines and agreements.
The authorities relied upon by the appellant in support of the propositions were: Rail Corporation New South Wales and Australian Rail Tram and Bus Industry Union, New South Wales [2008] NSWIRComm 101, 174 IR 121 at [85]; Health Services Union v Director-General, NSW Department of Health [2010] 193 IR 359, 193 IR 359 at [60]; and Notification under Section 130 by PSA&POA Union of NSW of a dispute with Dept of Environmental & Climate Change re implementation of proposed new structure - CMA [2007] NSWIRComm 1096 at [3], [76]-[78].

Submissions of the respondent

In opposing the grant of leave to appeal, the respondent filed the following written narrative on the issue of leave: 1. The present appeal is one lacking in utility; and does not raise matters of such importance that, in the public interest, leave ought be granted to the Appellant to appeal pursuant to Section 188 of the Industrial Relations Act 1996 ("the Act"). 2. Pursuant to s. 188(1) of the Act, the Appellant may only appeal with leave of the Full Bench. 3. Section 188(2) expressly provides that "the Full Bench is to grant leave to appeal if, in its opinion, the matter is of such importance that, in the public interest leave should be granted." 4. The principles to be applied in the determination of an Application for Leave to Appeal are well known: Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at 381 ("Knowles"); Strathfield Group Ltd v Hall (2002) 121 IR 158 at [45]; Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263 at [5] ("Hosemans"). However, it is appropriate to reiterate that the approach of the Commission has long been that leave to appeal will not be lightly or automatically granted: King v State Bank of New South Wales (No 2) (2002) 126 IR 407 at [52]-[55]; Box Valley Pty Ltd v Price (2000) 97 IR 484 at [4]; Knowles at 381-382. 5. Leave will not ordinarily be granted unless the Appellant demonstrates that the appeal "raises substantial issues of principle or law or has wider implications for the jurisprudence of the Commission, including whether the decision has widespread application": Knowles at 382; or "raises issues going to the proper administration of justice": Hosemans at [5]. 6. The decision under appeal rose (sic arose) in the context where Commissioner Newall was endeavouring to deal with an urgent dispute concerning a decision to suspend without pay a Senior Correctional Officer, Mr Reynolds who was a member of the Appellant. 7. Following the decision of Commissioner Newall on 31 May 2017, Mr Reynolds made further representations to the Respondent, on financial hardship and compassionate grounds, and requested the decision to withhold his salary whilst suspended be reviewed. 8. The Respondent's decision-maker in this matter gave favourable consideration to those representations. In separate decisions dated 22 June 2017 and 3 July 2017 respectively, the decision-maker decided that Mr Reynolds' suspension from duty be on pay (and back payments of salary previously withheld be released to him). 9. The residual issues on appeal are confined to seeking a review of certain observations by the Commissioner in his Decision where, with respect, he was given limited assistance by the Appellant; and an advisory opinion of whether the Premier's Memorandum 1994-35 was an "instrument" for the purposes of s. 175 of the Act. 10. The present appeal is not a suitable vehicle for such an advisory opinion as: (i) It is fundamental to the due administration of justice that the substantive issues between the parties are ordinarily settled at the initial hearing: Coulton v Holcombe (1986) 162 CLR 1 at 7. (ii) The Commission correctly found (which finding is not challenged on appeal) at [26] of the Decision that the Appellant did not seek a determination pursuant to s. 175 for the purpose of the Commission exercising its functions in connection with the arbitration of the industrial dispute: see Decision at [26]; Transcript, 23 May 2017 at p. 38.27-38.40. (iii) The Appellant certainly did not, as is now sought to be argued, assert that the Premier's Memorandum was an "instrument" for the purposes of s. 175 of the Act; yet it is an elementary principle of litigation that a party is bound by its conduct of its case at first instance: Metwally v University of Wollongong (No 2) (1985) 60 ALR 68 at 71; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at [438]. 11. The Appellant's Notice of Appeal at Section G lists three reasons why leave to appeal should be granted. (i) The first asserts the appeal raises important issues as to the proper scope of the Commission's powers to resolve industrial disputes under s. 136 of the Industrial Relations Act. With respect, this is not an appropriate vehicle to determine issues of statutory construction relating to the powers of the Commission where such issues were not ventilated with any detail before Commissioner Newall. (ii) The second reason provided asserts an error of law as to the proper scope of the Commission's power to determine the interpretation, application or operation of "instruments" pursuant to s. 175 when no application pursuant to s. 175 was made nor argument put as is now sought to be canvassed. The rhetorical question arises, in those circumstances, as to how an "error" can be seriously asserted. (iii) The third basis relied on by the Appellant for leave to appeal is an asserted difference of opinion between the decisions of two single members of the Commission sitting alone as to whether the Commission lacks power or jurisdiction to make determinations under s. 175 as to the interpretation, application or operation of a Premier's Memorandum. The comparator decision is that of Commissioner Murphy in Notification under s. 130 by PSA and POA Union of NSW of a dispute with Department of Environment and Climate Change re implementation of proposed new structure - CMA [2007] NSWIRComm 1096 at [3], [76]-[78]. However, in that decision, Commissioner Murphy did not have to determine whether the Premier's Memorandum was an instrument for the purposes of s. 175 and simply did not do so. 12. Accordingly, the Application for Leave to Appeal should be refused and the appeal dismissed.
In further elaboration of its submission based on the High Court judgement in Coulton v Holcombe (1986) 162 CLR 1, the respondent put the following: 22. The Commissioner correctly stated at [26] of the Decision that Mr Wright, for the Appellant, "made it clear in submissions that the PSA did not seek an interpretation of the Premier's Memorandum pursuant to the Commission's power of s. 175 of the Act". 23. Thus, it is contrary to the due administration of justice for the Appellant to now argue issues it did not press below. 24. In this regard, the observations of the High Court in Coulton v Holcombe (1986) 162 CLR 1 at 7 are relevant: "It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish." 25. Similarly, the High Court held in Metwally v University of Wollongong (No 2) (1985) 60 ALR 68 at 71 that: "It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case has been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so." 26. These principles are particularly pertinent having regard to the nature of an appeal to a Full Bench of the Commission as presently constituted. 27. The present appeal, being pursuant to s. 191(1) of the Act, is not by way of a new hearing; and, accordingly, the appeal ought not to be permitted to act as if it was such a hearing.

Appellant's submissions in reply

In reply, the appellant filed the following written submissions on the question of leave to appeal (footnotes omitted): Grounds of appeal relating to s 175 of the IR Act 1. The Appellant accepts that it did not provide Commissioner Newall with adequate assistance on the question of the Commission's power to interpret the Premier's Memorandum under s 175 of the IR Act; and that the part of this appeal relating to such power is inconsistent with the position that was conceded by the Appellant's representative at first instance. 2. However, the Appellant respectfully submits that this part of the appeal is an exception to the ordinary approach that a party should be bound by the conduct of its case at first instance, for the following reasons. Firstly, the "principle of litigation" upon which the Respondent relies, as expressed in Coulton v Holcombe, is properly characterised as a "general guide" that does not preclude intermediary or ultimate courts of appeal from entertaining questions of law or construction which were not raised at first instance. An appellate court may allow a new argument to be advanced that raises a pure question of law the determination of which could not have been affected by evidence the other party may have wished to adduce at first instance had the point then been raised. In O'Brien v Komesaroff the High Court said: "In some cases when a question of law is raised for the first time in an ultimate court of appeal, as for example upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is expedient in the interests of justice that the question should be argued and decided ...". 3. The question whether the Premier's Memorandum is an "instrument" within the meaning of s 175 is a pure question of statutory construction. The Premier's Memorandum was in evidence before Commissioner Newall, and the Respondent does not contend that any decisive evidence could have been adduced had the Appellant elected at first instance to invoke s 175 of the IR Act. This aspect of the appeal thus falls squarely within a recognised class of exception to the aforesaid general guide. 4. Secondly, this appeal concerns an industrial matter raised in the context of an industrial dispute and, in this context, the Commission should adopt a flexible approach to the application of the general guide in Coulton v Holcombe, particularly where important public interest issues arise. In Director-General, Department of Health (NSW) v NSW Nurses' Association the Full Bench of the former Industrial Court of NSW observed that the Court has afforded "an amount of flexibility to the parties" in its application of the approach in Coulton v Holcombe. The majority (Haylen J, with the President agreeing) refused leave to appeal on a variety of points that were not taken at first instance, but granted leave to appeal on an argument that a Policy Directive issued by the Department dealing with voluntary redundancy and Managing Displaced Staff had statutory force. This argument was not advanced at first instance, but the Full Bench determined that its significance generally and its importance for the declaratory relief ordered at first instance was of such importance that, in the public interest, leave should be granted. (The Vice-President, dissenting in part, held that there was "ample basis to grant leave to appeal" generally, referring in particular to the Policy Directive's "wide implications for the public health sector"). 5. The Commission has similarly adopted an approach that gives primacy to important public interest concerns, including as to the operation of s 175 of the IR Act. In State Transit Authority of New South Wales v Australian Rail Tram and Bus Industry Union New South Wales Branch Bus and Tram Division the Commission granted leave to appeal on the grounds that the Commission lacked power under s 175 to make determinations declaring legal rights in circumstances where, at first instance, the appellant had argued that the Commission was authorised to determine the correct interpretation of an award and had itself sought a determination under s 175 as to the correct interpretation of an award. Again, the Commission granted leave on the basis that the important public interest in resolving the appropriateness of the Commission's determinations that were made under s 175 was paramount. 6. Thirdly, the denial of leave to appeal by reason that an appellant seeks to run an entirely fresh case on appeal, as exemplified in Knowles v Anglican Church Property Trust (No 2), is primarily concerned with avoiding appeal proceedings where the Full Bench does not have the benefit of reasoning below as to the matter ventilated on the appeal. This concern either does not exist or its potency is significantly reduced in this appeal. Commissioner Newall expressly disavowed any suggestion that the Commission was bound or constrained by the nature or terms of the relief sought by the Appellant. The Commissioner was correct in doing so. This approach is consistent with the Commission's power to deal with a dispute as it sees fit within the powers available under the IR Act (s 136(2)) and its broad discretion to fashion appropriate relief by reference to the merits of the industrial dispute. Notwithstanding the Appellant's disavowal of reliance upon s 175, Commissioner Newall reasoned that the any resolution of the dispute required the Commission to form a view as to the application of the Premier's Memorandum, and he held (erroneously, as the Appellant submits) that a determination under s 175 was the only means by which the Commission could form such a view. Accordingly, the Commissioner proceeded to explicitly set out his reasoning for his (erroneous) conclusion that the Premier's Memorandum was not an "instrument" for the purposes of s 175. Thus, in this appeal proceeding the Full Bench has the benefit of reasoning below as to the matter ventilated on the appeal concerning the operation of s 175. And, for these reasons, there is no substance to the Respondent's assertion of "unfairness" to Commissioner Newall arising from this aspect of the appeal. 7. Fourthly, the Appellant's position on the application s 175 should be regarded in light of the following features of the proceedings at first instance: (a) The Commissioner dealt with the dispute urgently, with a compressed time table by which the matter was fully arbitrated a mere three weeks after the initial conciliation conference before the Commission. (b) The Appellant was not represented at the arbitration by a legal practitioner, but instead by an industrial officer who confessed to the Commissioner at the outset that he "may be a little bit out of [his] depth" in reply to the Respondent's jurisdictional objections. The Respondent was represented by counsel, who relied on detailed written submissions on matters relating to the jurisdiction of the Commission that were provided at the start of the arbitration hearing. (c) Faced with the Respondent's erroneous submission (repeated in this appeal) that the directions sought by the Appellant was in the nature of declaratory relief and beyond the power of the Commission, "the Appellant's representative mistakenly conceded that s 175 had no application because any interpretation made under that provision would be "binding as precedent at least on all other parties". This concession proceeded upon a misconception of the nature of s 175. The true position, of course, is that an interpretation of an instrument under s 175 does not confer declaratory relief simpliciter, and is not enforceable per se, but is rather made for the purpose of exercising the Commission's other functions under the IR Act, in this case the power set out in s 136(1)(a). Grounds of appeal unrelated to s 175 8. The Appellant's concession at first instance as to the application of s 175 is no impediment to the granting of leave to appeal in respect of the part of this appeal that does not rely on the Commissioner's construction of s 175. The Appellant's submissions on this aspect of the appeal are set out in from paragraph 38 onwards in the Appellant's Written Submissions on the Appeal and Leave to Appeal dated 18 August 2017. 9. At first instance, the Appellant effectively advanced the proposition that the Commission was empowered, as an intermediary step towards exercising its arbitral power under s 136(1), to form a view about the meaning of the Premier's Memorandum other than by way of a determination under s 175. Utility of the appeal 10. The utility of appeal remains intact despite the decisions - which were conveyed after this appeal was filed - to reinstate Mr Reynold's pay whilst suspended and to release the salary withheld from 5 April 2017. Firstly, these decisions were made solely on the basis of Mr Reynold's financial hardship, and expressly on the footing that the Respondent maintains the position that, contrary to the view expressed by Commissioner Newall, it otherwise continues to be entitled to withhold Mr Reynold's pay within the guidelines stipulated in the Premier's Memorandum. 11. Secondly, as with each of the Respondent's relevant decisions on the suspension of Mr Reynolds, the decision to reinstate his pay is subject to review every 30 days. 12. In the result, should there be any material change in respect of Mr Reynold's financial hardship or by reason of any other discretionary consideration, it remains open to the Respondent to give effect to its foundational position in the context of any subsequent review of the suspension, which is that the Premier's Memorandum justifies the withholding of Mr Reynold's salary. 13. Thus, there is practical utility in the relief sought by the Appellant on appeal, namely, a direction that the Respondent maintain the payment of Mr Reynold's salary for the duration of his suspension. In the alternative, the Appellant seeks a direction that the respondent refrains from refusing to pay to Mr Reynolds his salary for the duration of his suspension by reason that the charges against him falls within the "exceptional circumstances" referred to in the Premier's Memorandum. 14. Finally, the Respondent misconstrues the relevant aspects of the Commissioner's Decision as an "advisory opinion". The Commissioner's conclusion that the Commission is not empowered to determine - or indeed to express any view in any formal way about - any question concerning the interpretation, application or operation of the Premier's Memorandum was the ratio decidendi of the Decision. According to the Commissioner's reasoning, that conclusion was the only impediment to the granting of relief. Accordingly, the Decision constitutes a precedent that would have, but for correction in this appeal, the broader significance for the industrial regulation of the public sector as contended by the Appellant in paragraphs 12 to 14 of the Appellant's Written Submissions on the Appeal and Leave to Appeal dated 18 August 2017.

Determination of the issue of leave to appeal

In opening their respective cases, counsel elaborated on their respective written submissions on the question of leave to appeal. Both counsel addressed the Full Bench on the issue of the utility of the appeal in light of the reversal by the respondent of the decision to suspend Mr Reynolds without pay, which was the issue which prompted the dispute notification from the appellant in the first place.
After hearing from the parties, the Chief Commissioner made the following statement on behalf of the Full Bench: KITE CC: The Full Bench is, at the moment, minded to grant leave on the questions of [the] proper construction of s 175, including the meaning of the word 'instrument' as [used] in that section. The capacity of the Commission to have regard to documents other than under s 175 [in] the exercise of its arbitra[l] powers. Thirdly, the question of the meaning of the word 'direction' in s 136. At the moment we're disinclined to grant leave in relation to the question of relief, having regard to the fresh evidence, but we are prepared to revisit that, particularly in the light of any argument that develops under [s] 136(1) in relation to the question of a direction and the scope of the direction.
We now set out our reasons for the grant of leave to appeal in relation to the three matters identified by the Chief Commissioner in the passage cited immediately above.
Firstly, by its very nature, employment in the NSW public sector is, in many ways, different from employment in other sectors and industries. In addition to industrial awards and enterprise agreements made or approved by this Commission, conditions of employment in the public sector are also governed by a plethora of statutes, regulations, rules, Public Service Commissioner Directions, policy documents and, as is the case in the matter presently before the Commission, Premier's Memoranda. Clearly, this feature of employment in the NSW public sector sets it apart from many other forms of employment.
Secondly, there is a lack of uniformity of approach in the manner in which basic conditions of employment across different public sector agencies are put in place. By way of example, s 12 of the GSE Act is in the following terms: 12 Government sector employment rules (1) The Commissioner may make government sector employment rules, not inconsistent with this Act and the regulations, on any matter for which any such rules are authorised to be made by or under this or any other Act. (2) The Commissioner may amend or repeal a government sector employment rule by a further rule. (3) Government sector employment rules (including any amendment or repeal) are to be published on the NSW legislation website and take effect on the date they are so published or on any later specified date. The term "Commissioner" in this section is a reference to the Public Service Commissioner.
Misconduct by public servants and other prescribed government sector employees is dealt with in s 69 of the GSE Act, which is in the following terms: 69 Misconduct - Public Service and other prescribed government sector employees (1) In this section: government sector agency means: (a) a Public Service agency, and (a1) that part of the NSW Police Force comprising administrative employees under the Police Act 1990, and (b) any other government sector agency prescribed by the regulations for the purposes of this section. misconduct extends to the following: (a) a contravention of this Act or an instrument made under this Act, (b) taking any detrimental action (within the meaning of the Public Interest Disclosures Act 1994) against a person that is substantially in reprisal for the person making a public interest disclosure within the meaning of that Act, (c) taking any action against another employee of a government sector agency that is substantially in reprisal for a disclosure made by that employee of the alleged misconduct of the employee taking that action, (d) a conviction or finding of guilt for a serious offence. The subject matter of any misconduct by an employee may relate to an incident or conduct that happened while the employee was not on duty or before his or her employment. serious offence means an offence punishable by imprisonment for life or for 12 months or more (including an offence committed outside New South Wales that would be an offence so punishable if committed in New South Wales). (2) The person who exercises employer functions in relation to an employee of a government sector agency is responsible for dealing with any misconduct by that employee in accordance with this section. (3) The government sector employment rules may deal with the following: (a) misconduct by employees of government sector agencies, (b) the procedural requirements for dealing with allegations of misconduct by employees of government sector agencies (consistently with procedural fairness). (4) If, in accordance with those rules, there is a finding of misconduct by an employee of a government sector agency, the person who exercises employer functions in relation to the employee may take any of the following actions: (a) terminate the employment of the employee (without giving the employee an opportunity to resign) , (b) terminate the employment of the employee (after giving the employee an opportunity to resign), (c) impose a fine on the employee (which may be deducted from the remuneration payable to the employee), (d) reduce the remuneration payable to the employee, (e) reduce the classification or grade of the employee, (f) assign the employee to a different role, (g) caution or reprimand the employee. (5) Proceedings and actions under this section may be taken or continued despite the employee resigning or otherwise ceasing to be an employee of the agency concerned. Any such action may be expressed to be a termination of employment even if the person has ceased to be an employee. (6) This section does not apply to that part of the NSW Police Force comprising police officers or to any employees of a government sector agency excluded from this section by the regulations. The references to "government sector employment rules" in subs 69(3) and to "those rules" in subs 69(4) are references to the government sector employment rules made by the Public Service Commissioner pursuant to s 12 of the GSE Act.
Part 8 of the Government Sector Employment Rules 2014 ("the GSE Rules") establishes a prescriptive process by which an agency head, or delegate, is to deal with an allegation, or allegations, of misconduct against an employee. That process details the steps that are to be taken in relation to such matters as:

Initial stage for dealing with allegations of misconduct (rule 38);
Inquiries (rule 39);
Findings by agency head (rule 40); and
Records relating to misconduct (rule 41).

If disputes were brought before this Commission which involved allegations that an agency head, or delegate, had failed to comply with particular provisions of Part 8 of the GSE Rules in relation to an allegation of misconduct against an employee, it would seem that, consistent with the approach of the respondent and Commissioner Newall at first instance in the present matter, there would be no impediment to this Commission making a determination as to any question concerning the interpretation, application or operation of the GSE Rules. This must follow, given that the GSE Rules were made by the Public Service Commissioner pursuant to s 12 of the GSE Act and, therefore, must be regarded as an "instrument" for the purposes of s 175 of the IR Act being "a document having the character of an 'instrument' within the meaning of s 3 of the Interpretation Act" (see [24] of the decision at first instance).
By contrast, employees who work in the public hospital system in New South Wales are engaged pursuant to the provisions of Chapter 9 of the Health Services Act 1997 ("the HS Act"), in the NSW Health Service. That Act confers certain powers on the "Health Secretary", who is the Secretary of the Ministry of Health. Those powers include the power to fix the salary, wages and conditions of employment of employees in the NSW Health Service and to enter into an agreement with any association or organisation representing a group or class of the NSW Health Service with respect to the conditions of employment (including salaries, wages or remuneration) of that group or class (s 116A). In addition, the Health Secretary is, for the purposes of any proceedings relating to a member of the NSW Health Service held before a competent tribunal having jurisdiction to deal with industrial matters, taken to be the employer of that member (s 116H).
However, in contrast to ss 12 and 69 of the GSE Act, the HS Act contains no specific provision which empowers the Health Secretary to make "rules" which deal with misconduct by employees in the NSW Health Service, or the procedural requirements for dealing with allegations of misconduct by such employees. Nevertheless, the NSW Ministry of Health (NSW Health) has promulgated a "Policy Directive" entitled "Managing Misconduct" which prescribes a process by which an allegation, or allegations, of misconduct against an employee must be handled. This process details the steps that are to be taken in relation to such matters as:

Initial review and response;
Managing risks;
Suspension of staff;
Investigation;
Issues arising during initial review, investigation or decision-making process;
Making findings;
Making decisions about action to be taken; and
Implementing decisions and finalising the process.

This Commission is regularly called upon to deal with disputes over the manner in which misconduct processes involving employees in the NSW Health Service are conducted. Those matters will often require that the Commission determine a question concerning the interpretation, application or operation of the "Managing Misconduct" document or, at the very least, express a view as to the proper meaning of a section of the document in the context of both conciliation and arbitration proceedings. The capacity to do these things is an essential element of the Commission's role and function in settling industrial disputes by conciliation and, if necessary, by arbitration.
The approach of the respondent, both at first instance and on appeal in the present matter would, if accepted, have the potential to severely restrict the Commission's capacity to perform its core functions with respect to industrial disputes (see ss 3, 130-138 and 163 of the Act). Such an approach may also have the potential to handicap the Commission in its award-making role in cases where there were competing arguments as to the meaning and effect of a document, which may not be covered by the definition of "instrument" in s 3 of the Interpretation Act, but the meaning and effect of which might be critical in the resolution of the competing claims.
We are of the opinion that considerations of the kind outlined immediately above, in the context of the competing arguments of the parties as to the true meaning and effect of Premier's Memorandum 1994-35, involve matters of such importance that, in the public interest, leave to appeal should be granted in this matter.
Lastly, we have granted leave to appeal despite the arguments by the respondent, based on the judgement of the High Court in Coulton v Holcombe, to the effect that the appellant ought not be permitted to agitate on appeal, matters which were not agitated at first instance.
We agree with the submissions put on behalf of the appellant to the effect that the "principle of litigation", as expressed in Coulton v Holcombe, is properly characterised as a "general guide" that does not preclude intermediary or ultimate courts of appeal from entertaining questions of law or construction which were not raised at first instance and we note the examples, cited in the reply submissions of the appellant, of cases in this jurisdiction, where the approach in Coulton v Holcombe has not been followed.
We propose to depart from the approach in Coulton v Holcombe for the reasons set out at paragraphs 1-7 of the appellant's reply submissions on the question of leave (see [22] above). We accept the correctness of those submissions.
Leave to appeal is granted with respect to the three issues identified by the Chief Commissioner in the passage of transcript reproduced at [24] above.
In granting such leave, we note that, despite the potential widespread ramifications of the decision under appeal to which we have referred at [25]-[35], this appeal is primarily concerned with the status of Premier's Memorandum 1994-35 and the capacity of the Commission, in arbitral proceedings, to interpret that document.

The appeal

The three issues which were the subject of the grant of leave to appeal can be summarised in terms of the following questions: 1. Is Premier's Memorandum 1994-35 an "instrument" within the meaning of s 175 of the IR Act (at [20]-[24] of the decision under appeal)? 2. If the Premier's Memorandum is not an "instrument", as was held by Commissioner Newall, was the Commissioner nevertheless in error in concluding that the Commission cannot, in any event, interpret the document in the exercise of arbitral powers that the Commission is expressly empowered to exercise (at [25] of the decision under appeal)? 3. In the event that the answer to Questions (1) and/or (2) is "yes", does the Commission have the power under s 136 of the IR Act to make a "direction" which would have the effect of requiring the respondent to pay Mr Reynolds during the period of his suspension?
The submissions of the parties to the appeal focussed primarily on Question (1).

(1) Is Premier's Memorandum 1994-35 an "instrument" within the meaning of s 175 of the Act?

Submissions of the appellant - Question (1)

In relation to the question whether the Premier's Memorandum is an "instrument" for the purposes of s 175 of the Act, the appellant relied upon the following written submissions (footnotes omitted): 16. The Commissioner erroneously concluded that s 175 of the IR Act did not empower the Commission to interpret the Premier's Memorandum because s 175 applies only to an "instrument" that creates, limits or confirms an enforceable legal right, and the Premier's Memorandum did not do so. 17. In so concluding, the Commissioner relied on Australian Capital Equity Pty Ltd v Beale (1993) 41 FCR 242 (Beale) and s 3 of the Interpretation Act 1987 (NSW). Such reliance was misplaced for two reasons. Firstly, Beale is irrelevant to the question of the meaning of "instrument" in s 175 of the IR Act. In Beale, the question at issue was whether an invitation to tender for pay-television licenses issued by the Minister under the Radio communications Act 1983 (Cth) was an "instrument" within the meaning of s 33(3) of the Acts Interpretation Act 1901 (Cth), as it then appeared. The form of s 33(3) of the Acts Interpretation Act 1901 with which the court was concerned in Beale was confined to instruments comprising documents of a legislative character. Accordingly, the absence of legislative character of the "instrument" was determinative. The court found that the invitation to tender in question lacked "the capacity to affect rights and obligations", had "no character equivalent to a promulgation binding in nature", and instead suggested "the exercise of an administrative or executive power". 18. To the extent that the court in Beale had regard to the ordinary meaning of "instrument", it did so by reference to the analysis in Azevedo v Secretary, Department of Primary Industries and Energy (1992) 35 FCR 284 at 299-300. In Azevedo, the court was similarly concerned with the meaning of instrument under the Acts Interpretation Act 1901 and, in the course of its reasoning, referred to the Shorter Oxford English Dictionary meaning of instrument: "a formal legal document whereby a right is created or confirmed, or a fact recorded; a formal writing of any kind, as an agreement, deed, charter, or record, drawn up and executed in technical form" (emphasis added). This ordinary meaning is significant because it does not confine the meaning of instrument to a document that creates, limits or confirms an enforceable right. It extends to formal legal documents that record facts, and indeed to "formal writing of any kind". The ordinary meaning of instrument is also broadly defined in the Australian Oxford Dictionary (Second Edition): "a formal, especially legal, document". 19. The commissioner failed to take into account the ordinary meaning of instrument as referred to in Beale and Azevedo, or at all. 20. Furthermore, contrary to the Commissioner's reasoning (at [22]), Beale is not authority for the sweeping (and erroneous) proposition that "[a]dvice or guidance, even expressed in a documentary form, which does not create, limit or confirm a right is not an instrument". Rather, the question whether an instrument creates a rule of conduct or a declaration as to power, right or duty is merely the critical starting point in determining whether such an instrument has a legislative, as distinct from administrative, character. This is a different consideration to the one at issue before the Commission. It does not define the nature of an instrument for all purposes, including and especially in the context of s 175 of the IR Act. 21. Secondly, the Commissioner's reliance on s 3 of the Interpretation Act 1987 suffers from the same vice. That Act relates "to the interpretation, construction, application and operation of the legislation of New South Wales; to enact certain provisions of a common or general nature; to make provision with respect to the exercise of certain statutory functions; and for other purposes." The enactment of the Interpretation Act 1987 was part of "an endeavour to reduce the size of legislation by avoiding the repetition of common provisions", and has the purpose of setting out "the working assumptions according to which legislation is framed by Parliament". It is unsurprising that the "instruments" to which that Act applies are confined to those "made under an Act" (or instrument made under such an instrument), the usual forms of which include statutory rules or environmental planning instruments. It is beside the point that the Premier's Memorandum does not have the legislative character of an instrument within the meaning of s 3 of the Interpretation Act 1987. 22. Government-related documents that are not legislative in character but which are nevertheless intended to influence decision making, such as the Premier's Memorandum, are commonly designated "soft law". Notwithstanding that the aids to interpretation found in the Interpretation Act 1987 may be adopted in interpreting executive instruments, that will not determine the proper characterisation of the instrument. 23. The correct approach to determining the meaning of "instrument" in s 175 of the IR Act, and whether it applies to the Premier's Memorandum, is to ascertain the intention that the Commission will impute to the legislature by a process of construction which focusses primarily upon the text of a provision when read in the context of the statute as a whole, and in light of the purpose of s 175 provision. In addition, in interpreting a provision of an Act, "a construction that would promote the purpose or object underlying the Act or statutory rule… shall be preferred to a construction that would not promote that purpose or object". The purpose of an Act can be found in an express statement of the purpose in the legislation itself, but also by reference to the broader text and structure of the legislation, and (where permissible, for example where there is ambiguity as to the meaning of the legislation) by reference to extrinsic material. 24. Two propositions flow from the correct approach to the construction of s 175 of the IR Act. Firstly, the text of s 175 expressly embraces documents in the nature of the Premier's Memorandum. The ordinary meaning of the "instrument" referred to in paragraph 18 above is not confined to a document that necessarily creates, limits or confirms an enforceable legal right; but rather extends to any written document that exhibits a degree of formality usually associated with, but not necessarily confined to, documents of a "legal" nature in the broad sense, in that they are based on or concerned with rights and obligations, or are incidental to the regulation of such right and obligations . 25. The fact that the term "instrument" clearly has an ordinary meaning and common usage, and is otherwise not defined in the IR Act, indicates that "including" (in the reference to industrial relations legislation and any industrial instrument) is used in s 175 to make it clear that the word is not limited to that ordinary meaning and that the specific instruments therein referred to are not exhaustive. Where the drafters have intended to limit a term in the IR Act by reference to an exhaustive list, they have so defined the term to "mean" the items set out in that list: Cf. s 8 which gives an exhaustive definition to "industrial instrument". This construction is further reinforced by a consideration of the IR Act as a whole. 26. Consistent with this ordinary meaning, the Full Bench of the Commission has referred to an unregistered memorandum of understanding as an "instrument" within its ordinary meaning. 27. The Premier's Memorandum exhibits the necessary degree of formality associated with the ordinary meaning of instrument in that it (i) was issued by the Premier of New South Wales and published by the Personnel Policy Division of the Department of Premier and Cabinet under its letterhead; (ii) is allocated a formal identifier (M1994-35) which, inter alia, distinguished it from an earlier and similar document (M1994-21); (iii) operated as a formal amendment to previous guidelines and expressly superseded a previous Memorandum; (iv) has a precisely defined and very substantial period of operation, with a notation that "[t]his document is not replaced by any later document", and a nominated review date of 31 December 2014; and (v) is expressly intended to guide and influence decision making by Chief Executives of agencies across the entire NSW Public Sector with respect to the suspension of employees for the purpose of achieving consistency in decisions of this kind. 28. The Premier's Memorandum is also (at least) incidental to a law regulating the employment rights and obligations of Mr Reynolds. In State of New South Wales v Banas another aspect of the Premier's Memorandum dealing with managing displaced employees was held to be a policy that complemented the provisions of the predecessor to the GSE Act, arguably essential in its purpose, "largely an agreement apparently negotiated with relevant public sector unions", and (as conceded by the State of NSW in that case) amenable to relief under s 106 of the IR Act as an "arrangement" whereby a person performs work in an industry. The Court also confirmed that it is open to find that actions purportedly taken in accordance with the Premier's Memorandum rendered a particular contract unfair pursuant to s 106. Similarly, the Premier's Memorandum complements the statutory power to suspend employees contained in s 70 of the GSE Act; and is a formal document embodying the terms of an arrangement whereby Mr Reynolds performed work for the purposes of s 106 of the IR Act. 29. Thus, the form and nature of the Premier's Memorandum has the requisite degree of formality and association with the rights and duties arising from Mr Reynold's employment to constitute an instrument within the text of s 175. 30. Secondly, the Commissioner's narrow and technical approach to the meaning of s 175 is inconsistent with its proper construction in the context of the whole of the IR Act and its evident purpose. 31. A determination under s 175 has effect only "for the purpose of exercising [the Commission's] functions in connection with a matter before" the Commission; and is not otherwise enforceable under the IR Act. Relevantly, s 136 of the IR Act is directed at resolving industrial disputes by arbitration. The Commission's statutory obligation is to exercise its function to resolve industrial disputes by taking into account the public interest and, for that purpose, by having regard to the objects of the IR Act, including to provide a framework for the conduct of industrial relations that is fair and just and "to provide for the resolution of industrial disputes by arbitration in a prompt and fair manner and with a minimum of legal technicality". 32. The Commission can determine whether an employer has complied with the provisions of an award or a relevant instrument as a step along the path to the possible exercise of an arbitral discretion. A determination under s 175 reflecting the Commissioner's view of the application of the Premier's Memorandum in the circumstances surrounding Mr Reynold's amounts to a step along the path to the exercise of such a discretion, for example, to give a direction under s 136(1)(a). 33. In New South Wales Teachers' Federation v New South Wales Department of Education and Training the Full Bench of the Commission determined that the Commission's functions in conciliating an industrial dispute must be construed specifically by reference to the object of the IR Act directed to the resolution of disputes "with a minimum of legal technicality". The same applies to the resolution of disputes by arbitration. The Commission's failure to exercise its functions under s 136 to resolve this dispute by reason of an excessively narrow, technical an unwarranted construction of the term "instrument" in s 175 (based on the use of that term in legislation solely concerned with the construction of instruments of a legislative character) is fundamentally inconsistent with this approach. 34. The notion that the Commission is unable to determine the application of the Premier's Memorandum under s 175 as a step along the path to the exercise of its arbitral discretion, including in making an award, is also fundamentally inconsistent with the established status of the Premier's Memorandum as a document embodying an arrangement whereby a person performs work in an industry pursuant to s 106 of the IR Act. The jurisdiction under s 106 was initially introduced into the Industrial Arbitration Act 1940 (NSW) to safeguard against the avoidance of award wages and conditions by the use of contract labour. The result of the Commissioner's approach is that the Commission is unable to resolve any industrial dispute in arbitral proceedings where the fair resolution of that dispute warrants the making of an award based in part upon the formation or expression of a view as to the interpretation, application or operation of the Premier's Memorandum; but the Court is empowered to declare void or vary unfair aspects of the Premier's Memorandum, inter alia, to protect the integrity of an award made by the Commission. On this approach, the resolution of disputes concerning the fairness of actions regulated by the Premier's Memorandum would be confined to the legalistic and technical process of litigation, before the Supreme Court of NSW, pursuant to s 106. 35. This result logically extends to all manner of non-contractual or non-binding instruments that commonly affect the conditions of employment for employees in a practical sense, including workplace policies that are unilaterally adopted by employers, and unenforceable collective agreements or memoranda of understanding between industrial parties. The Commission would be thereby rendered entirely impotent to effectively arbitrate industrial disputes the resolution of which depends in part upon the formation of a view as to an employer's compliance with such policies and agreements. 36. Such a result is untenable, particularly when regard is paid to the principles underpinning the provisions of the IR Act which deal with industrial disputation. Those principles provide "a single, cost-effective process to deal with all questions of conciliation and arbitration", "with appropriate flexibility", and the provisions in the Act are intended to "deliver a coherent, non-legalistic and workable framework for the resolution of industrial disputes". 37. Accordingly, the Commissioner's approach erroneously departs from established authority of the Commission in which it has determined the interpretation, application and operation of instruments under s 175 such as unregistered collective agreements. It is also contrary to the approach taken in Notification under Section 130 by PSA&POA Union of NSW of a dispute with Dept of Environmental & Climate Change re implementation of proposed new structure - CMA in which the availability of a determination under s 175 was expressly contemplated in respect of the Premiers Memorandum dealing with managing displaced employees.

Submissions of the respondent - Question (1)

In response to the appellant's written submissions set out above, the respondent put the following: 28. The Respondent refers to paragraph 16 of the Appellant's Written Submissions and says, bearing in mind the nature of the appeal, it is unfair to Commissioner Newall for the Appellant to now assert the Commissioner made an erroneous conclusion as to his powers under s. 175 of the Act. 29. The Respondent refers to paragraphs 17 and 18 of the Appellant's Written Submissions and says that the Commissioner's reliance on Australian Capital Equity Pty Ltd v Beale (1993) 41 FCR 242 at 242-243 was open to him to assist in ascertaining the meaning of the word "instrument" in s. 175. 30. The relevant principles of statutory interpretation have been set out in a number of recent authorities including in PSA v State of New South Wales [2014] NSWCA 116 at [45]-[48]. To paraphrase the observations of Bathurst CJ, His Honour stated that statutory construction: (i) must begin with a consideration of the text itself; (ii) yet whilst acknowledging the language employed is the surest guide to legislative intention, the meaning of the text may require consideration of the context which includes the general purpose and policy of a provision, in particular the mischief it seeks to remedy; (iii) determination of the purpose of the statute or particular provision may be based not only on an express statement of purpose in the statute itself but also by inference from its text and structure and where appropriate by reference to extrinsic material. 31. The Commissioner drew on Beale to consider the proper meaning of the text of s. 175 itself and, in particular, the ordinary meaning of the word "instrument" as used therein. 32. It is correct to say that whilst the term "instrument" is used on many occasions in the Act it is not expressly defined in the Act itself (albeit, as will be seen later, it is a term defined in the Interpretation Act 1987). 33. Accordingly, the starting point adopted by the Commissioner in giving consideration to the ordinary meaning of the term, instrument, was unexceptional. 34. His Honour, Justice Lee in Beale, referred to Azevedo v Secretary, Primary Industries (1992) 15 FCR 284 at 299 where French J stated: "The ordinary English meaning in this context is a "formal legal document whereby a right is created or conferred, or a fact recorded, a formal writing of any kind, as an agreement, deed, charter, or record drawn up and executed in a technical form: Shorter Oxford English Dictionary." 35. In that case, French J found that the principal legal consequence of a plan of management, which circumscribed the exercise of the powers and functions of the Minister and Secretary, not of its own force, but by virtue of s. 7B(8) and (8A) of the Fisheries Act was an "instrument" for the purposes of that Act. 36. His Honour was reinforced in that opinion by "... the statutory requirement that a determination be in writing and the ordinary meaning of the word "instrument"" (and see p. 300). 37. In Beale (supra), to which Commissioner Newall referred at [22] of his Decision, the following relevant observations as to the ordinary meaning of the term "instrument" were made by Lee J at 256: "If regard is given to the ordinary meaning of instrument (see Azevedo v Secretary, Department of Primary Industries and Energy at 299-300), it is difficult to regard a request for the submission of tenders as being within that meaning. Mere advice that tenders are sought from interested parties lacks the degree of formality and of confirmation, creation or limitation of a right that is part of the ordinary connotation of the word "instrument". The formality of publication of the contents of the request in the Gazette will not stamp the request with the character of an instrument. That must be found in the contents of the document." 38. The contention in the penultimate sentence of paragraph 18 of the Appellant's Written Submissions that the term "instrument" extends to "formal writing of any kind" omits reference to the words of qualification. The formal writing is "as an agreement, deed, charter or record, drawn up and executed in a technical form". 39. Contrary to the Appellant's submissions at paragraph 19 of the Appellant's Written Submissions, the Commissioner did not fail to take into account the ordinary meaning of the term instrument as referred to in Beale and Azevedo. The Commissioner did so, and came to a conclusion that was properly open to him had there been a need to do so. 40. The Respondent refers to paragraph 20 of the Appellant's Written Submissions which presents an argument that is, with respect, difficult to understand. 41. The Respondent refers to paragraph 21 of the Appellant's Written Submissions and says that Commissioner Newall was entitled to have regard to the Interpretation Act, 1987 (NSW) by way of guidance. 42. Section 5(1) of the Interpretation Act, 1987 states that the Act applies to all acts and instruments whether enacted before or after the commencement of that Act. The Industrial Relations Act, 1996 is such an Act to which the Interpretation Act, 1987 applies. 43. The purpose underlying the Interpretation Act, 1987 is apparent from the title of that Act being: "An Act relating to the interpretation, construction, application and operation of the legislation of New South Wales; to enact certain provisions of a common or general nature; to make provision with respect to the exercise of certain statutory functions; and for other purposes." 44. Bearing that purpose in mind, it is more than relevant to the present issues on appeal that s. 3 - Definitions in that Act provides the relevant definition of the term instrument as follows: "3 Definitions (1) In this Act: Instrument means an instrument (including a statutory rule or an environmental planning instrument) made under an Act, and includes an instrument made under any such instrument." 45. Thus, s. 5(1) of the Interpretation Act, 1987, read in conjunction with the definition of the term "instrument", renders the meaning of the term "instrument" in s. 175 of the Act clear. Simply put, the proper construction of the term "instrument" in s. 175 is that to be found in s. 3 of the Interpretation Act, 1987. 46. However, if that proposition is not accepted, the alternative approach of adopting the ordinary meaning of the term instrument also leads to the conclusion the Premier's Memorandum falls outside its scope. In this regard the following considerations apply. The Premier's Memorandum (a) contains "guidelines" as distinct from directions; (b) which does not, on its face, impose mandatory outcomes on the decision making process; (c) contains general criteria to assist the decision-maker; (d) lacks the requisite degree of technical formality; (e) is not an "industrial instrument" as defined in s. 8 of the Act; (f) does not have the formality of being required to be published in the official Government Gazette; and (g) does not give rise to contractual or other rights. 47. The Respondent refers to paragraphs 22 to 24 of the Appellant's Written Submissions and disagrees with the contention that the text of s. 175 "expressly embraces" documents in the nature of the Premier's Memorandum. The Respondent could not identify any such alleged expression in the section. 48. The Respondent refers to paragraphs 25 to 29 of the Appellant's Written Submissions and says the Appellant's extended arguments referrable to the so called ordinary meaning and common usage of the term "instrument" are misconceived in interpreting that term in s. 175. The context of the use of the term instrument, including as it does "any industrial instrument" is suggestive of the narrower meaning as otherwise there would not have been any ambiguity in respect to such instruments inclusion. This is reinforced by the numerous other references to instruments under the Act which are all documents arising under legislation. 49. The definition of the term "instrument" in s. 3 of the Interpretation Act, 1987 provides the desired certainty to the definition in s. 175 of the Act of a term of common usage within statutes generally. The application of the definition in the Interpretation Act 1987 to the Act achieves the statutory object of certainty and enables the proper circumvention of the tortuous efforts of statutory construction by the Appellant in an endeavour to "fit" the Premier's Memorandum within the term "instrument" in s. 175. 50. The Respondent refers to paragraphs 30 to 37 of the Appellant's Written Submissions and rejects the Appellant's contentions that the Commissioner adopted an impermissibly narrow and technical approach to the meaning of s. 175. Again this submission by the Appellant is egregious in the sense that, as stated earlier, the Appellant not only disavowed any suggestion it was asking for an interpretation under s. 175 , but the Appellant also agreed with the Respondent that the Commissioner had no such power. 51. Yet now the Appellant is asking the Full Bench to ignore the approach it adopted below and be given a license by the Full Bench to criticise the Commissioner for relying on its representations to him.

Appellant's submissions in reply - Question (1)

The appellant put the following submissions in reply to the submissions of the respondent set out immediately above: Section 175 of the IR Act: Grounds H1 to H3, H7, H8 2. The Respondent's submissions at [42]-[45] miss the critical point that s 3 of the Interpretation Act 1987 defines the term "instrument" where that term appears in that Act. That Act serves to assist in the construction of legislation and instruments made thereunder, see for example ss 21, 31 and 32 of the Interpretation Act 1987. The definition of "instrument" in s 3 defines the scope of the application of that Act for the purposes of, for example, ss 21, 31 and 32; it does not constrain or inform the meaning of the term "instrument" as it may appear in other legislation, such as s 175 of the IR Act. Where the Interpretation Act 1987 serves to inform the meaning of particular terms that are commonly found in other legislation, it does so expressly: see for examples 21(1). 3. The Respondent's misconceived reliance on the meaning of "instrument" for the purpose of the Interpretation Act 1987 evidently informs its contention as to "the requisite degree of technical formality" associated with the ordinary meaning of "instrument": see Outline of Respondent's Submissions on Appeal dated 1 September 2017 at [46]. Most of the considerations relied upon by the Respondent (at [46(a)-(g)]) have at their heart the underlying assumption that an "instrument" must in substance create or mandate enforceable rights or obligations. The Respondent's evaluation of the Premier's memorandum applies similarly to unregistered collective agreements (about which the Commission is capable of making determinations under s 175), and a wide variety of workplace policies and memoranda of understanding that commonly affect conditions of employment that may be the subject of industrial disputes.

Determination of the appeal - Question (1)

Counsel for both parties elaborated upon the written submissions which had been previously filed and from which relevant extracts are set out above.
In relation to the question as to whether Premier's Memorandum 1994-35 is an "instrument" for the purposes of s 175 of the Act, the Full Bench has carefully considered the written and oral submissions put on behalf of both parties and has determined the answer is "yes", for the reasons set out below.
The Full Bench accepts the correctness of the submissions of the appellant at paragraphs 16-37 of its written submissions in chief; which are extracted at [43]; and at paragraphs 2-3 of its reply submissions which are extracted at [45]. It follows that we reject the respondent's submission to the effect that the term "instrument", as it appears in s 175 of the Act, is confined to "an instrument… made under an Act, and includes an instrument made under any such instrument".
The terms "instrument" and "instruments" appear in excess of 180 times in the Interpretation Act. It is clear from the introductory words of subs 3(1), "In this Act:", and from the context in which those terms appear throughout that statute, that the definition of the term "instrument" in s 3 is to be understood as defining that term wherever it appears in the Interpretation Act. There is nothing in s 3 or s 5 of that Act which purports to define the term "instrument" in other legislation. Were it otherwise, the introductory words of subs 3(1) would be "In this and any other Act". The words "and any other" do not appear in the subsection and should not be read into it.
Alternatively, had Parliament intended to define the term for all legislation it could have included it in s 21 of the Interpretation Act. That section begins with the words: "(1) In any Act or instrument:" There follows a list of definitions of commonly used words. That option was not chosen either.
The Full Bench proposes to answer the question as to the meaning of the term "instrument", as that term appears in s 175 of the IR Act, by reference to the ordinary meaning of that word. This approach is consistent with that adopted by the Full Bench (Walton J, President; Harrison DP; Tabbaa C) in The Industrial Relations Secretary on behalf of Department of Justice (Corrective Services NSW) v Public Service Association and Professional Officers Association Amalgamated Union of New South Wales (on behalf of Darren Rudd) [2015] NSWIRComm 11, where the following was stated: Principles of statutory interpretation 22 Prior to examining the issues surrounding the dispute between the parties, it is useful to reiterate the principles surrounding statutory interpretation. Although a well laid course, a Full Bench of this Commission recently discussed the synthesis of the modern approach in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWIRComm 23 at [101] to [144]. It is unnecessary to restate that analysis. For present purposes, the seminal judgments of the New South Wales Court of Appeal, particularly the comments of the Chief Justice in Rail Corporation New South Wales v Brown [2012] NSWCA 296 ('Brown'), provide guidance as to the correct path this Commission should take when examining the language of the provisions giving rise to the dispute. 23 In Brown, the Chief Justice stated, by reference to High Court authority: [39] As has recently been pointed out by the High Court on a number of occasions, the process of construction begins with the construction of the ordinary and grammatical meaning of the words in question, having regard to their context and legislative purpose: Australian Education Union v Department of Education and Children's Services [2012] HCA 3; (2012) 285 ALR 27 at [26]; Roadshow Films Pty Ltd v iiNet [2012] HCA 16; (2012) 286 ALR 466 at [22]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27 at [41], [45]-[48]. [40] Further, although the legislative purpose in enacting the provision and the mischief to be remedied are factors which are to be taken into account in construing the provision in question (see the cases cited above; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Interpretation Act 1987, s 33, s 34) it is not for a court to construe its own idea of a desirable policy, impute that to the legislature and then characterise it as a statutory purpose: Australian Education Union at [26] and the cases there cited; Alcan at [46]. 24 As noted by his Honour, the High Court has recently emphasised that the correct starting point in statutory interpretation requires a close examination of the text itself. For example, Chief Justice French recently cited Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at 382, [71] when his Honour observed (at [24] to [26]): In any event, the task of a court construing a statutory provision is to give meaning to every word in the provision. It is a long-established rule of interpretation that 'such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void or insignificant, if by any other construction they may all be made useful and pertinent': Plaintiff M47/2012 v Director-General of Security [2012] HCA 46; (2012) 251 CLR 1 at [41] (emphasis added). 25 Reference should also be made to the judgment of the High Court in Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross (Matter No S417/2011) [2012] HCA 56; (2012) 248 CLR 378 and the principles expounded therein. Specifically, the determination of the purpose of a statute, or particular provision of a statute, may be found from express statements of purpose in the statute and inferences drawn from its text and structure. Statutory construction requires deciding the legal meaning of a provision by reference to the language of the statute, viewed as a whole, and in that respect, the context and general purpose of the provision. French CJ and Hayne J (Kiefel J agreeing), stated: [24] The context and purpose of a provision are important to its proper construction because, as the plurality said in Project Blue Sky, '[t]he primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute'. [Emphasis added.] That is, statutory construction requires deciding what is the legal meaning of the relevant provision 'by reference to the language of the instrument viewed as a whole', and 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed'. [25] Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials. The purpose of a statute resides in its text and structure. Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted. It is important in this respect, as in others, to recognise that to speak of legislative 'intention' is to use a metaphor. Use of that metaphor must not mislead. '[T]he duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have'. [Emphasis added.] … The search for legal meaning involves application of the processes of statutory construction. The identification of statutory purpose and legislative intention is the product of those processes, not the discovery of some subjective purpose or intention. [26] A second and not unrelated danger that must be avoided in identifying a statute's purpose is the making of some a priori assumption about its purpose. The purpose of legislation must be derived from what the legislation says, and not from any assumption about the desired or desirable reach or operation of the relevant provisions. As Spigelman CJ, writing extra-curially, correctly said: 'Real issues of judicial legitimacy can be raised by judges determining the purpose or purposes of Parliamentary legislation. It is all too easy for the identification of purpose to be driven by what the particular judge regards as the desirable result in a specific case.' [Emphasis added.] And as the plurality said in Australian Education Union v Department of Education and Children's Services: 'In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose'. [Citations and footnotes omitted] 26 The above principles form the premise on which this decision goes forward.
Adopting the approach in the cases cited by the Full Bench in the passage extracted immediately above, it is the determination of this Full Bench that the term "instrument" should be given its ordinary and grammatical meaning having regard to its context and legislative purpose.
In addition to the dictionary definitions of the term "instrument", which are cited at paragraph 18 of the written submissions of the appellant, extracted at [43], we note that the definition of the word in the Macquarie Dictionary includes, "a formal legal document, as a contract, promissory note, deed, grant, etc.". None of the dictionary definitions restrict the meaning of the term to an instrument made under an Act.
Further, s 175 appears in Chapter 3, Part 5 - Procedures and Powers of Commission, of the Act. Also included in this part of the Act is s 163 which is in the following terms: 163 Rules of evidence and legal formality (1) The Commission: (a) is not bound to act in a formal manner, and (b) is not bound by the rules of evidence and may inform itself on any matter in any way that it considers to be just, and (c) is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.
The objects of the Act are set out in s 3 in the following terms: 3 Objects The objects of this Act are as follows: (a) to provide a framework for the conduct of industrial relations that is fair and just, (b) to promote efficiency and productivity in the economy of the State, (c) to promote participation in industrial relations by employees and employers at an enterprise or workplace level, (d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies, (e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments, (f) to prevent and eliminate discrimination in the workplace and in particular to ensure equal remuneration for men and women doing work of equal or comparable value, (g) to provide for the resolution of industrial disputes by conciliation and, if necessary, by arbitration in a prompt and fair manner and with a minimum of legal technicality, (h) to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations.
It would be antithetical to the achievement of these objects, especially those set out in pars (a) and (g) of s 3, if the Commission were to take a narrow view as to the breadth of the powers invested in it by way of provisions such as s 175.
In this respect, even if it were the case that the definition of "instrument" in s 3 of the Interpretation Act was intended to apply to that term where it appeared in legislation generally, it is our opinion that this definition would not apply to the term as it appears in s 175 of the Act by virtue of subs 5(2) of the Interpretation Act which is in the following terms: 5 Application of Act (1) … (2) This Act applies to an Act or instrument except in so far as the contrary intention appears in this Act or in the Act or instrument concerned. … In our opinion, the context in which the term "instrument" appears in s 175 evinces an intention that it should not be interpreted in a manner that would restrict it to instruments made under an Act.
In this case, the legislative context of s 175 demands that the Commission have the power to determine any question concerning the interpretation, application or operation of Premier's Memorandum 1994-35 for the purpose of exercising its functions in connection with the matter before it, namely, an industrial dispute. It is illogical that the legislature would expressly confer power to interpret legislation but withhold a power to interpret policy documents impacting on industrial matters.
Moreover, if the word instrument is confined to documents of a legislative kind, as suggested by the reliance on Azevedo v Secretary, Department of Primary Industries and Energy (1992) 35 FCR 284, one wonders what it adds to the term "any relevant law" as it appears in s 175.
The answer to Question 1 is "yes". We uphold the appellant's appeal on this question and we set aside the decision of Commissioner Newall to the extent that it is contrary to our determination of this issue.

(2) If the Premier's Memorandum is not an "instrument", as was held by Commissioner Newall, was the Commissioner, nevertheless, in error in concluding that the Commission cannot, in any event, interpret the document in the exercise of arbitral powers that the Commission is expressly empowered to exercise?

In light of our determination with respect to Question (1), consideration of Question (2) becomes somewhat academic. Nevertheless, in view of Commissioner Newall's conclusion expressed at [25] of his decision and the fact that the parties to this appeal have put submissions to the Full Bench on this question, we propose to express our opinion on the issue.

Submissions of the appellant - Question (2)

With respect to Question (2), the appellant put the following submissions: Interpreting the Premier's Memorandum, other than pursuant to s 175: Grounds H4 to H6 38. Even if s 175 does not apply to documents in the nature of the Premiers Memorandum, the Commission is able to resolve the dispute about its interpretation or application by the exercise of its arbitral powers under s 136. 39. The question of the application of the Premier's Memorandum in the circumstances surrounding Mr Reynolds' charge relevantly falls under the definition of industrial matters: s 6 IR Act. This question is a matter or thing affecting or relating to the privileges, rights, duties or obligations of an employer and an employee in an industry. It directly relates to the payment of remuneration and conditions of employment for Mr Reynolds: s 6(2)(b) and (c) IR Act. It is also directly incidental to the relationship of employment with Mr Reynolds by affecting the exercise of discretion to suspend Mr Reynolds without pay through an instrument which is subsidiary to the statutory regulation of that power. In the same manner, the Full Bench of the Commission held that it could determine the interpretation or application of unregistered memoranda of understanding between industrial parties (in addition to the power to do so under s 175). 40. The Commission is empowered to resolve a dispute about such an industrial matter (s 130 IR Act), including by exercising its discretionary arbitral powers (s 136 IR Act). In this context, the proposition set out in paragraph 32 above is relevant. There is an important distinction between: (a) the Commission's intermediate formation of a view about the meaning of an instrument (including enforceable instruments such as awards) and whether a party has acted in breach of its terms, and (b) the Commission's discretion to exercise its arbitral powers under s 136(1) based on that view. As exemplified in Federated Municipal and Shire Council Employees Union of Australia New South Wales Branch v Sutherland Shire Council, the Commission can form such a view about the breach of an instrument as a step along the path in reasoning towards the exercise of its discretion whether to invoke its arbitral powers; and it may do so in the absence of any formal determination such as that provided under s 175.

Submissions of the respondent - Question (2)

The respondent did not specifically address this question in its written submissions. However, during the hearing of the appeal, the following exchange occurred between counsel for the respondent and the Chief Commissioner: BENSON: Commissioner, as I understand Mr Chin's raised on the question of utility, two broad principles. One is the proposition which we say is unfounded, that Commissioner Newall's decision is authority for the proposition that the Commission can't come to a view about the meaning of a document in the resolution of industrial disputes outside the parameters of s 175. That was never the case of the respondent below. The position of the respondent below was that to the extent that the appellant was seeking coercive directions from the Commission in the arbitral phase, then the only way he could do that as far as a determination of any rights under the Premier's memorandum was coming to a view under s 175. The appellant below disavowed any claim to make in an application under s 175. So the Commission was dealing with an application for coercive directions within that context. Insofar as the question of leave is concerned these issues were not canvassed at all before Commissioner Newall. And it is simply unfair if our submissions and contrary to the public interest that a fresh case can be raised at this point in time. KITE CC: The difficulty I have with that submission is that Commissioner Newall really framed it in a way in discussions with the advocate for the appellant below, he said the only way which I can do this is under 175 and the advocate said I am not asking for declaratory relief under s 175. I agree with Mr Benson, you can't make final declarations as of right. And yet the Commissioner said the only way I can proceed is under s 175. BENSON: That's correct.
Later in the proceedings, counsel for the respondent put the following: The second issue raised by the Full Bench is to address the capacity of the Commission to have regard to documents in the extracise [sic exercise] of its arbitrary powers. Certainly from the respondent's view there was little doubt that the Commission can in the exercise of the arbitrary functions perform [sic form] a view about any evidence including documents relevant to the resolution of the dispute. The Commission can make findings in that regard. It can make a ruling but it can't beyond the scope of 175 make binding determinations in that process. ……………………… Mr Chin in his oral submissions submitted that the Commission could interpret in other words, form a view as distinct from a determination under section 175 as to the meaning of a document such as the Premier's memorandum as an incident to the exercise of its powers of decision making under section 136. We don't disagree with that.

Determination of the appeal - Question (2)

At [25] of the decision under appeal, Commissioner Newall stated: If the Memorandum is not an instrument, as I am bound to conclude it is not, the Commission cannot interpret it, even within the context of other proceedings, such as arbitral proceedings, that the Commission is expressly empowered to conduct.
With respect to the Commissioner, we do not agree with this statement. As was positively put by the appellant and conceded by the respondent, the Commission is able to interpret documents even in cases where such documents might not have the characteristics of an "instrument" in the sense that the term is defined in s 3 of the Interpretation Act. Such "non-instrument" type documents could range from things such as a job advertisement to a transcript of a conversation between two or more people. In exercising its functions under the Act, the Commission will often be called upon to interpret such documents.
Such interpretations may not have the force and effect of a determination made under s 175 of a question concerning the interpretation, application or operation of an instrument, but such interpretations will often be a necessary step along the way to the ultimate exercise of the Commission's functions under the Act. To the extent that the passage from the decision of Commissioner Newall, cited immediately above, expresses the view that the Commission in arbitral proceedings cannot interpret such documents, we respectfully disagree.
The answer to Question 2 is "yes".

(3) In the event that the answer to Questions (1) and/or (2) is "yes", does the Commission have the power under s 136 of the Act to make a "direction" which would have the effect of requiring the respondent to pay Mr Reynolds during the period of his suspension?

Commissioner Newall did not get to the point of making any determination with respect to this question but, as it was part of the appellant's case below that such a direction should be made and the parties have made submissions about it, we propose to deal with the issue.

Submissions of the appellant - Question (3)

The relatively brief submissions of the appellant on this question were as follows: 41. The fact that the Commission forms the view that the Respondent has acted in breach of the Premier's Memorandum is invariably a powerful discretionary factor in favour of exercising the discretion to direct the Respondent to place Mr Reynold's on suspension with pay, and/or to continue to do so. However, the governing consideration is the resolution of the industrial dispute in a fair manner. The proper exercise of discretion to give a direction in resolution of the dispute depends upon the circumstances found to exist and the facts which stand around the Respondent's non-compliance with the relevant instrument, in this case - the Premier's Memorandum. 42. All the circumstances surrounding the Director's refusal to follow the Commission's view of the operation of the Premier's Memorandum in respect of Mr Reynolds naturally demands the fair resolution of the dispute by the Commission giving a direction for the Respondent to act in compliance with that view.
In effect, the appellant is seeking, pursuant to s 136(1)(a) of the Act, a direction from the Commission which would require the respondent to pay Mr Reynolds his normal rate of pay for the duration of the period of his suspension.

Submissions of the respondent - Question (3)

In reply, the respondent put the following submissions: 52. The Respondent refers to paragraphs 38 to 42 of the Appellant's Written Submissions and acknowledges the Commission has extensive powers to resolve industrial disputes in arbitration; and the power pursuant to s. 175 is only one aspect of that power. 53. But the applications for relief by the Appellant below were not at large. The Respondent had a right to procedural fairness in the course of arbitration. In particular, as noted earlier, procedural fairness dictated the Respondent had a right to know what relief was being sought by the Appellant and the opportunity to be heard in respect of those applications. Forensic evidentiary considerations would also necessarily arise for determination contingent on the relief sought. 54. It was for this reason that the Respondent asked the Appellant below to set out the relief it sought in arbitration which it did. 55. The Appellant below was seeking coercive "directions" pursuant to s. 136(1)(a) of the Act that the Commissioner correctly concluded could not be made without making a determination pursuant to s. 175 (but such a power was not available in the circumstances). 56. The submission by the Appellant at [41] of its submissions is based on a misconceived premise. The assertion by the Appellant is to the effect that should the Commission form the view that the Respondent had acted in breach of the Premier's Memorandum that finding would be a powerful discretionary factor in favour of exercising its discretion to direct the Respondent to place Mr Reynolds on suspension with pay; and/or to continue to do so. However, no such power exists. The Respondent accepts that if a ruling was made of such an entitlement then a direction that the Respondent give consideration to that ruling could be made. 57. Furthermore, the power to make a direction under s. 136(1)(a) is not a direction in the sense of a binding order issued by a body empowered to compel parties to whom the order is directed. This provision in the Act refers to directions in the sense of assistance, guidance, instructions or aid to administrative functions. It is intended to be a facilitative measure, in the nature of an emphatic recommendation, not a binding order. It is a directory provision, not mandatory. 58. But the Appellant below, and indeed on appeal, is seeking directions of a coercive, mandatory nature that are simply not available. Of course, if there was non-compliance with a direction then that may precipitate an application for an award which, if made, would be enforceable. However, no such application was made below (and, had such an application been made, it would have faced jurisdictional objection pursuant to the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014).

Appellant's submissions in reply - Question (3)

In reply to the respondent's submissions, the appellant put the following: Nature of the relief sought 4. The Respondent incorrectly and irrelevantly alleges that the Appellant, at first instance and on appeal, was and is seeking directions that are beyond the power of the Commission to make. This submission is incorrect and irrelevant for the following reasons. Firstly, the Respondent misconstrues the nature of the Decision. The Commissioner did not merely decide that the relief as sought by the Appellant could be made only if the Commission was empowered to make an interpretation of the Premier's Memorandum that was binding on the Respondent. The Commissioner's inquiry and reasoning was not limited to the precise terms of the relief sought by the Appellant at first instance. Instead, the Commissioner clearly found that no relief was available in any form because the Commission was not authorised to state the meaning of the Premier's Memorandum "in any formal way", whether or not such a statement would be binding in the sense that such an interpretation, of itself, would be enforceable. As Commissioner Newall has previously acknowledged, an interpretation of an instrument under s 175 does not confer declaratory relief simpliciter, and is not enforceable per se, but is rather made for the purpose of exercising the Commission's other functions under the IR Act, in this case the power set out in s 136(1)(a). 5. Secondly, aside from the question whether the Commission was empowered to form a view as to the meaning and application of the Premier's Memorandum (which was the solitary basis on which the Decision rested), the availability of consequent mandatory directions under s 136(1)(a) - including in the terms sought by the Appellant at first instance, and contrary to the submissions of the Respondent below - was not questioned by Commissioner Newall. The Respondent does not otherwise assert, by way of notice of contention, that the result of the Decision should be supported on this alternative basis. The Respondent's submissions at [55] to [58] should be disregarded. 6. Thirdly, the Respondent's analysis of the Commission's power to give directions under s 136(1)(a) is wrong, for the following reasons: (a) In the federal jurisdiction, the distinction between the enforcement of existing rights and obligations (a judicial power) and the creation of new rights and obligations (an arbitral power) has assumed critical importance. By reason of the doctrine of the separation of powers, which results from the provisions of the Australia Constitution, the federal industrial tribunal cannot be endowed with judicial power, and has no jurisdiction to entertain disputes as to the existence or enforcement of legal rights or obligations. However, even in this constitutional framework, a tribunal may form an opinion as to the existing legal rights and obligations of the parties without exercising judicial power if the formation of such an opinion is a step in arriving at the ultimate conclusions on which is based the making of an award intended to regulate the future rights of the parties. "The critical point is whether the interpretive exercise is a step in the process of arbitration or whether it is an end result in itself. It may be necessary as a step towards the exercise of arbitral power to attempt to delineate existing rights before attempting to create new rights. This is distinguishable from an exercise which is solely about the enforcement of existing rights". (b) In New South Wales, however, the separation of powers doctrine which derives from the Australian Constitution does not apply to the Commission exercising jurisdiction imparted to it by the IR Act. The Commission's powers are circumscribed solely by the provisions of the IR Act, and in the absence of any rigid or absolute distinction between the exercise of judicial and arbitral powers. When the Commission is otherwise exercising arbitral functions under the IR Act its powers include, for instance, the power to order an employer to pay an amount payable under an industrial instrument constituting a "small claim" (which is clearly in the nature of a judicial power): ss 136(1)(d) and 380 of the IR Act. (c) Thus, the Commission can determine whether an employer has complied with the provisions of an award or relevant instrument as a step along the path to the possible exercise of an arbitral discretion. (d) A "direction" under s 136(1)(a) must have a mandatory or compulsory character, in contradistinction to the essentially advisory nature of a "recommendation", and in the absence of any equivalent to exemption from penalty for non-compliance associated with directions and recommendations given in conciliation: s 134(2). (e) The Commission routinely gives directions and makes recommendations under s 136(1)(a) as to substantive conditions of employment (and not merely procedural) matters that affect the privileges, rights, duties or obligations of employers or employees, such as the type of work to be performed by employees and the number of employees to be engaged per shift, the lifting of work bans and limitations, the reinstatement or re-employment of an employee, and the payment of remuneration to employees. (f) There are conflicting views as to whether a direction given under s 136(1)(a) is "binding" on the parties to a dispute, or is otherwise enforceable per se. Although there is no statutory machinery to enforce a direction so given, s 179 of the IR Act confers finality on a "decision" of the Commission, which includes a decision to make a recommendation or direction under s 136(1)(a). And, because a direction given under s 136(1)(a) can be distinguished from a recommendation made under the same provision on the basis that the former has the character of a compulsory (and not merely advisory) order, a party's refusal to comply with such a direction may amount to a contempt of the Commission pursuant toss 180 and 355D of the IR Act. In any event, it has been observed that: "... there is a fundamental and time honoured tradition in this Commission which requires parties to accept recommendations and directions of the Commission ...A failure to do so has its consequences, including ultimately a test of whether a recalcitrant party should continue to enjoy the benefits of access to the Commission or registration under the Act; both of which confer certain obligations on parties, including a moral dimension to the obligation to accept the decision of the independent umpire." (g) Whether or not a direction under s 136(1)(a) has a mandatory or compulsory effect (such that non-compliance may constitute a contempt), or is in the nature of an "emphatic recommendation" (as contended by the Respondent), it is well established that such a direction may be directed to the substantive conduct of the parties to a dispute, and may concern the industrial privileges, rights, duties or obligations of employers or employees, provided that it is aimed at resolving an industrial dispute by arbitration. 7. The ultimate relief sought on appeal is a direction that the Respondent maintain the payment of Mr Reynold's salary for the duration of his suspension. In the alternative, the Appellant seeks a direction that the respondent refrains from refusing to pay to Mr Reynolds his salary for the duration of his suspension by reason that the charges against him falls within the "exceptional circumstances" referred to in the Premier's Memorandum. Whether compulsory in nature, or more akin to an emphatic recommendation, the relief is unambiguously directed to resolving the industrial dispute concerning the meaning and application of the Premier's Memorandum to the suspension of Mr Reynold's employment.
During the hearing of the appeal, the following exchange occurred with counsel for the appellant: MURPHY C: Mr Chin, just going back to the issue of relief, to the extent that your client is seeking a direction for a payment of money was the power of the Commission to make such a direction the subject of debate before the Commissioner because he doesn't seem to have made any ruling on it? CHIN: Commissioner, the second limb of the appeal that we advance is not really grappled with by the respondent in these proceedings. Their response is to point to the submissions that are made below about the nature of the relief sought which was expressly not going to be held to the applicant but nonetheless the applicant sought directions, in effect, which involved expressly the meaning of the memorandum, the Premier's memorandum perhaps in infelicitous terms because it bound up two tasks, rolled up two tasks in one; (a) consideration of what the memorandum meant and how it applied; and (b) the consequences of that meaning or application in terms of any relief being granted. What the Commission can do in my submission is to make a determination under 175 about the meaning or simply to take it into account as a step to the ultimate result of granting the relief, relief by way of a recommendation or direction under 136(1)(A) requiring the respondent to pay on an ongoing basis the remuneration owed to Mr Reynolds for the duration of his suspension. MURPHY C: Putting aside the recommendation at the moment do you say that such a direction for the payment of money backdated and ongoing can be made under 136? CHIN: We do, we do, leaving aside the question of recommendation. The respondent's submissions about this are wrong in my respectful submission. 136(1)(A) is not simply a mechanism for orders or directions or recommendations of a procedural nature, they never have been. In our written submissions we point to authorities, if I may I'm sorry, if the Commission will bear with me in our reply submissions on the appeal dated 29 September on page 4 of those submissions, paragraph 6(e) onwards. MURPHY C: On the appeal? CHIN: On the appeal. We have identified authorities that establish the Commission routinely gives directions and recommendations under 136(1)(A) about substantive conduct of the parties to resolve a dispute including the type of work that can be performed by employees engaged in a shift, lifting work bans, reinstatement and we cite Police Association and New South Wales Police, a decision of Justice Boland at footnote 16 and indeed we cite New South Wales Local Government and Marrickville Council, a decision of Commissioner Newall himself. There then followed a discussion of the decision of Commissioner Newall in NSW Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union and Marrickville Council [2014] NSWIRComm 1006. The exchange continued: MURPHY C: But in this case he didn't make a direction for the payment of money. CHIN: Well, what he did was he made a recommendation for the payment of money. MURPHY C: That is (sic isn't) in dispute, that he is entitled to do that at arbitration. CHIN: Yes. MURPHY C: What I am asking you is where is the power to make a direction under section 136 for the payment of money? CHIN: Well, this demonstrates that it is an exercise of a discretion to make a recommendation, a strong one to pay money. If the Commission can make a recommendation under 136(1)(A) to pay money it can certainly do so by way of a direction to pay money. The next question is what is the consequence of that. MURPHY C: Well, before you get to the consequence can you give us any authority to the effect or any precedent where the Commission has made a direction in arbitrary proceedings in the resolution of an industrial dispute for the payment by the employer of money to an employee under Section 136? CHIN: I don't have at hand an authority that is a demonstration of the Commission, in fact, doing it but as a matter of principle in my submission the Commission can do so. I will have to develop that submission by reference to a more fundamental principle.

Determination of the appeal - Question (3)

Whilst we acknowledge and accept, in general terms, the submissions of the appellant in relation to the doctrine of separation of powers deriving from the Australian Constitution, we note that the doctrine is not completely irrelevant to the determination of the extent of the Commission's jurisdiction and powers. That said, we are prepared to accept for present purposes that the Parliament of this State may invest a non-court with State judicial power. The real question to be addressed, as correctly identified by the appellant, is whether the legislation grants the power to the Commission to make the direction sought by the appellant. That is to be answered by construction of the Act.
Chapter 3, Part 1 of the Act prescribes the powers and functions of the Commission with respect to conciliation and arbitration of industrial disputes. Section 133 mandates that the Commission must first attempt to resolve an industrial dispute by conciliation. During the conciliation of a dispute, the Commission may make a recommendation or give a direction to the parties to the industrial dispute. However, failure to comply with any such recommendation or direction may not be penalised - subs 134(2). In the present matter, the recommendation made by Commissioner Newall in conciliation did not achieve a resolution of the dispute.
After reasonable attempts to resolve a dispute by conciliation have failed, the Commission will issue a certificate of attempted conciliation. The Commission's arbitral powers then become available, as occurred with the present matter - s 135.
Section 136 prescribes that the Commission may, in arbitration proceedings, do any or more of the following: 1. make a recommendation or give a direction to the parties to the industrial dispute, 2. make or vary an award under Part 1 of Chapter 2, 3. make a dispute order under Part 2, 4. make any other kind of order it is authorised to make (including an order made on an interim basis).
The appellant relied upon the power to make a direction found in s 136(1)(a) of the Act.
As the appellant submitted, directions pursuant to s 136(1)(a) are common. Classic examples of such directions would be that a named individual be required to attend a compulsory conference or that certain persons meet and confer about specified matters. Another example is a direction that specified persons take all reasonable steps to ensure compliance with a dispute order or orders made pursuant to s 136(1)(c). Unlike the subs 134(2) directions there are no words excluding a penalty for failure to comply with such directions. No penalty is specified but failure by a party to comply with a direction may be subject to contempt proceedings.
Section 136(1)(b) empowers the Commission to make or vary an award under Part 1 of Chapter 2. Suffice to say that, for present purposes, the Commission's award making functions would seem to be an unlikely vehicle for achieving the outcome the appellant was seeking in these proceedings, which is that the respondent be required to pay Mr Reynolds for the period of his suspension. That may well explain why the appellant did not seek to invoke the Commission's award making powers.
The kinds of dispute orders that the Commission may make pursuant to s 136(1)(c) are set out in s 137, none of which are capable of achieving the outcome sought by the appellant in these proceedings. Subsection 137(3) would positively rules out an order of the kind here contemplated. We note that dispute orders are enforceable. The consequences for contravention of a dispute order are dealt with in s 139.
It is sufficiently clear from the submissions in reply of the appellant at paragraphs 6 and 7, extracted at [73], that it was seeking a direction to compel the respondent to pay Mr Reynolds an amount of money for a past period of time and on an ongoing basis. In the context where the Commission has no power to make a dispute order which would achieve that result, the question arises as to the harmonious construction of the legislation. How is the construction for which the appellant contends consistent with subs 137(3)? In our opinion, the making of such a direction would appear at least to have the potential to subvert the statutory scheme established under the Act for the conciliation and arbitration of industrial disputes by the Commission.
In further support of its proposition, the appellant pointed to s 380 of the Act. This section is located in Chapter 7, Part 2 of the Act which makes provision for the recovery of remuneration due under an industrial instrument and, broadly described, related matters. The section referred to empowers the Commission, on the application of an industrial organisation during any proceedings before it, to deal with such a claim in accordance with the small claims procedure specified in s 379. The latter section provides for an order to be made for an employer to pay, on a small claims application in respect of any one employee, an amount not exceeding the small claims limit which is currently $20,000.
For present purposes we may accept that this is an example of the Commission being invested with State judicial power. However, even if it be accepted that the Act grants this "judicial power", it is expressly limited both in amount and procedure. The orders available do not include the kind contemplated by the appellant - the making of an open ended direction for an employer to pay money to an employee.
This Full Bench acknowledges that the Commission may make directions pursuant to s 136(1)(a) of the Act which have coercive force, in the sense that a failure to comply may give rise to proceedings for contempt of the Commission, much in the same way as a failure to comply with a summons to appear and/or produce documents may have that consequence. As already indicated, such directions will, in most cases, be of an administrative or facilitative kind, such as a direction to an individual to attend a compulsory conference, a direction that the parties to a dispute confer or a direction that certain individuals take steps to ensure publication and compliance with dispute orders made by the Commission.
Directions of that kind are qualitatively different from a direction that an employer pay money to an employee. Further where such an outcome is not permitted by way of a dispute order (subs 137(3)), or the Commission's powers to order an employer to pay money to an employee as specifically provided for by way of the small claims procedure (ss 379 and 380), it appears to us that the legislature did not intend the directions power in s 136(1)(a) to extend that far.
For the reasons set out above, the answer to Question 3 is "no".

Orders

The Full Bench makes the following orders: 1. Leave to appeal is granted in respect of: 1. The proper construction of s 175 of the Industrial Relations Act 1996; 2. The capacity of the Commission to consider and interpret documents in the course of proceedings before it other than by reference to s 175; and 3. The proper construction of the word "direction" in s 136(1)(a) of the Industrial Relations Act 1996. 1. Leave is otherwise refused. 2. The appeal is upheld and the decision of Commissioner Newall of 31 May 2017 in this matter is set aside. 3. Any issues which remain outstanding in connection with this matter, being file number 2017/00127296, are allocated to Commissioner Murphy to deal with in accordance with these reasons for decision.

Amendments 29 November 2018 - Paragraph 60 (2) amended "arbitrary" to "arbitral" 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: 29 November 2018

Industrial Arbitration Act 1940(NSW)

[1999] NSWIRComm 449

At a glance

Court

Decision date

Before

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Judgment (24 paragraphs)

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Legislation Cited (4)

Cases Cited (47)

Cited By (10)