Queensland Services, Industrial Union of Employees v Moreton Bay Regional Council [2020] ICQ 21

CJ Murdoch QC for the respondent, instructed by Minter Ellison

• [1] On 17 August 2020, I heard an appeal from a decision of the Queensland Industrial Relations Commission (QIRC)[1] and I reserved judgment. In the course of my consideration, serious issues have emerged that have not been the subject of full submissions and which may (depending upon their resolution) affect parties beyond those to the appeal. It is necessary to make directions for the further hearing of the appeal so that all interested parties have an opportunity to be heard.

• [2] Ms Tania Peters (Ms Peters) is an employee of the Moreton Bay Regional Council (the respondent) and a member of the appellant (Queensland Services, Industrial Union of Employees).
• [3] In 2015, Ms Peters commenced employment with the respondent and entered into an agreement as to her spread of hours (the spread agreement). The relevant award governing her employment was the Queensland Local Government Industry Award - State 2014 (the 2014 award). A clause in the 2014 award empowered Ms Peters and the respondent to make the spread agreement (a facilitative provision). Also in place at that time was the Moreton Bay Regional Council certified agreement 2014 (EBA3).
• [4] Over the course of Ms Peters' employment, the 2014 award was purportedly varied and revoked:

(a) On 31 August 2016, Deputy President Bloomfield purported to vary the 2014 award by replacing it in toto with a new version (the 2014 award - version 2).

(b) On 28 February 2017, a Full Bench of the QIRC repealed the 2014 award (including the 2014 award - version 2) and made the Queensland Local Government Industry Award - State 2017 (the 2017 award).

(c) On 30 June 2017, the Registrar revoked the 2017 award and made three replacement awards under the partitioning procedure prescribed by s 995 of the Industrial Relations Act 1999 (the partitioned award).

• [5] EBA3 has now been replaced by the Moreton Bay Council Certified Agreement 2019 (EBA4).
• [6] Each of the 2014 award - version 2, the 2017 award and the partitioned award contained a facilitative provision like the provision in the 2014 award which authorised the making of the spread agreement.
• [7] The appellant's claim is that the spread agreement was made in relation to the 2014 award, not any of the later awards, so once the 2014 award fell, her remuneration should have been calculated without reference to the spread agreement. In fact, her remuneration has been calculated by reference to the spread agreement over the entirety of her employment.
• [8] The respondent's position is that the spread agreement applied throughout Ms Peters' employment.

The hearing before the Queensland Industrial Relations Commission

• [9] After conciliation failed, the dispute was referred to arbitration. The parties agreed that there were two questions to be arbitrated:

"1. Did Council[2] enter into a legally effective 'any 5 in 7' arrangement with Ms Peters upon her employment with Council, in relation to the days upon which ordinary hours may be worked?

(a) Yes - what is the rate of remuneration that Council is presently required to pay Ms Peters under the applicable Award for her hours of work?

(b) No - what is the rate of remuneration that Council is presently required to pay Ms Peters under the applicable Award for her hours of work, and is any (and if so how much) back-pay required to be paid?"

• [10] Question one is a little misleading in the way it is framed. The way the respective arguments were presented to both the QIRC and to me recognised that question one really contained two questions:
  1. Did Ms Peters enter into a legally effective "any 5 in 7" agreement under the 2014 award when she was employed?
  2. What is the effect of that agreement now, given the changes to the various awards?
• [11] Detailed written submissions were filed on the arbitration.
• [12] The appellant made two submissions:
  1. That any spread agreement ought to have been entered into consistently with the EBA3, not the 2014 award so there never has been a valid spread agreement.
  2. If the spread agreement was valid when made, then it fell when the 2014 award - version 2 effectively revoked the 2014 award. This was because, on a proper construction of the later awards and the spread agreement:

(a) any spread agreement had to be made pursuant to the then current award; and

(b) the spread agreement was made in relation to the 2014 award but not in relation to any later award.

• [13] The respondent raised three arguments in defence of the appellant's claim:
  1. The 2014 award - version 2 was not validly made.
  2. Because of s 824 of the Industrial Relations Act 1999 (the 1999 IR Act), while EBA3 remained in force, the 2014 award continued to apply to Ms Peters' employment. That section provided:

"824 Modern award does not apply to employee covered by continuing agreement or determination

(1) A modern award does not apply to an employee, or to an employer or employee organisation in relation to the employee, at any time when the employee is covered by a continuing agreement or determination.

continuing agreement or determination means either of the following to which section 826 applies -

1. Alternatively, if the later awards did apply, then they all have a facilitative provision like the one in the 2014 award which authorise the making of the spread agreement and:

"52. It is a complete misconception to submit, as the Applicant does, that the change in Award coverage over time cancels any prior agreement that was made under an earlier Award. The clauses relied upon by the Council operate to expand the definition of ordinary time at any material time, by reference to whether or not there is (at the time that the work is performed) an agreement of the described kind in existence. If there is, the time worked is ordinary time. If not, it is overtime.

1. Before the Commission would read such a provision into an award, it would be necessary for there to be strong and clear words in a new award to the effect that any prior agreements of the kind actually permitted by the new award which were in existence at the time that the new award came into effect, are deemed to be terminated and must be remade. No such words are to be found in any award. In fact, the similar terms of each successive Award suggest in strong terms that it is intended that any such prior arrangements may continue to operate in the same manner as before, without the parties having to take any action to renew their agreements."[3]

• [14] The Industrial Commissioner was placed in a difficult position when faced with the argument that the 2014 award - version 2 was not validly made. The Commissioner was being asked to consider, not only the correctness of Deputy President Bloomfield's decision, but also, indirectly, the decision of the Full Bench which made the 2017 award. She did not rule on those issues but commented:

"[55] It is unnecessary and inappropriate for the Commission, in the context of arbitrating a dispute concerning a single employee's remuneration, to delve into whether the variation of an Award, effected over three years ago, and since replaced, was statutorily compliant. If the Council had such concerns, it ought to have been raised while the Interim Award was operative or, for instance, by way of an application for a Declaration as to its invalidity."[4]

• [15] The Industrial Commissioner referred to the 2014 award and the agreement entered into by Ms Peters and concluded that upon her employment Ms Peters entered into a valid "any 5 in 7" agreement. She then accepted the respondent's alternative submissions, which are set out at paragraph [13] above,[5] and concluded:

"[29] There is some force in the Council's submission that, for the introduction of the Interim or 2017 Award to have the effect of automatically vitiating the validity of all extant agreements forged under the previous Award like Ms Peters', clear and emphatic language of that intention might have been expected.

[30] In this regard, I note there is no inconsistency between the terms of the 2014 Award and the Interim Award which suggest the Agreement was to be rendered invalid by implication. The Union, in part, hangs its hat on the removal of the table of rates of payment. On that basis alone, I am not prepared to conclude that the drafter(s) desired the outcome for which the Union contends."[6]

• [16] The Industrial Commissioner then went on to determine the second question but there is no necessity to analyse that reasoning now.
• [17] Ultimately, the Industrial Commissioner answered the questions in this way:

• [18] The Industrial Commissioner's answer of "Yes" to question 1 should be understood, consistently with the reasoning, that there was a legally effective "any 5 in 7" agreement over the entire period of Ms Peters' employment with the respondent during which the various different awards operated.

• [19] On appeal, the appellant did not argue that a valid any 5 in 7 arrangement had not been entered into by Ms Peters with the respondent when she entered her employment. Rather, it was submitted that the spread agreement fell when the 2014 award fell. In other words, Ms Peters was not bound by the spread agreement as and from 31 August 2016. That was said to flow from the fact that the spread agreement had not been made in relation to any award other than the 2014 award.
• [20] The respondent sought to defend the Industrial Commissioner's findings at paragraph [29] and [30] of the judgment as set out in paragraph [15] of these reasons. Its case was that there was a facilitative provision in each of the various awards and as the spread agreement could have been validly entered into under any of them, the spread agreement which was made followed through and applied to each of the awards.
• [21] The respondent did not completely abandon its submission made to the QIRC that the 2014 award - version 2 was invalid. It submitted this:

"Other matters - Invalidity of the Interim Award

1. The Industrial Commissioner dealt with the Respondent's alternative submission in relation to the invalidity of the Interim Award at [50] - [57].
2. The Respondent accepts it would be unnecessary and potentially inappropriate for the Court to resolve the matter of the validity of the Interim Award in the context of these proceedings, given there are so many other stakeholders who would be affected by and would need to be given an opportunity to be heard on that issue.
3. Nor is consideration of this issue necessary for the disposition of the Appeal in the Respondent's favour. Therefore, the Respondent does not press this aspect of its submissions in the appeal, however otherwise reserves its position in relation to the validity of the Interim Award for any future purpose."[7]

• [22] The oral submissions before me on the appeal dealt solely with the correctness or otherwise of the Industrial Commissioner's conclusion that on a proper construction of the various awards and of the spread agreement, the spread agreement applied throughout Ms Peters' employment. Indeed, in one exchange with counsel for the respondent I was told that it was unnecessary to look at any of the statutory provisions as the answer was in a proper construction of the spread agreement and the various awards.[8]
• [23] While it is unnecessary and undesirable to express a concluded view now, there is some force in the appellant's submission that the spread agreement would only apply while the 2014 award was in force. The provision in the 2014 award allowing for the spread agreement is clearly a "facilitative provision". By s 143(1)(k)(i) of the Industrial Relations Act 2016 (the 2016 IR Act) a facilitative provision is one about "how the provisions of the award are to apply". There is a strong argument that the reference to "the award" must be a reference to the award containing the facilitative provision. If the 2014 award fell, then there is strength in the appellant's submission that the spread agreement also fell and did not apply to the later awards. I appreciate that s 143(1)(k)(i) of the 2016 IR Act came into force after Ms Peters started her employment with the respondent. However, the section reflects the common understanding of what a facilitative provision in an award is.[9]
• [24] Having entertained some doubts as to the respondent's primary position, I turned to consider paragraphs 35, 36 and 37 of the respondent's written submissions which are set out above. I took those to mean that the submissions made to the QIRC as to the invalidity of the interim award were only abandoned to the extent that it was unnecessary for the respondent to rely upon them. In other words, if the primary submission failed, the argument dependent on the invalidity of the 2014 award - version 2 was relied upon, as was the argument based on s 824 of the 1999 IR Act.
• [25] The issue of the invalidity of the 2014 award raises a variety of matters upon which there had been no oral submissions. The appellant had not made submissions on those matters believing, reasonably enough, that the real issue on the appeal was the correctness of the findings by the Industrial Commissioner that the spread agreement had carried over so as to apply to the later awards.
• [26] On 27 October 2020, I caused my associate to send an email to the parties inviting further submissions on various issues which I had identified concerning the impact of the modernisation of awards provisions of the 1999 IR Act and other provisions of the 2016 IR Act. These matters concerned the operation of s 824 of the 1999 IR Act and the alleged invalidity of the 2014 award - version 2.
• [27] On 17 November 2020, the respondent filed submissions the effect of which were that:

(d) the relevant award governing Ms Peters continues to be the 2014 award; and

(e) the spread agreement therefore remains effective.

• [28] The submission raises serious issues as to how the appeal should proceed.
• [29] Firstly, the submission challenges the validity of a decision by Deputy President Bloomfield sitting in the QIRC, a decision of the Full Bench of the QIRC and a decision of the Registrar. There are appeal/review procedures available in relation to those decisions. Questions arise as to whether it is appropriate to determine the validity of those decisions on the present appeal or whether applications to appeal ought to be filed out of time and perhaps determined with this appeal.
• [30] Secondly, any determination as to the validity or otherwise of the later awards impacts not just Ms Peters, but many other employees. Issues then arise as to who should be invited to make submissions. Further questions arise as to whether the appeal should involve the receipt of further written submissions or further oral hearing, or both.
• [31] I had the matter listed for review on 23 November 2020 at which time the present parties to the appeal appeared. Mr Henderson appeared for the appellant and Mr Murdoch QC appeared for the respondent on the review.
• [32] Mr Henderson raised the prospect that the respondent's submissions, while directly attacking the validity of the awards, also raise an issue as to the validity of EBA4. That is because when considering certifying the agreement, the QIRC was obliged to apply the "no disadvantage test" imposed by s 199 of the 2016 IR Act. Section 199 is in these terms:

The commission must be satisfied the proposed bargaining instrument passes the no-disadvantage test under division 3."[10]

• [33] Mr Henderson's submission was that EBA4 may not have been validly certified if the "no disadvantage test" was applied and considered by reference to an invalid award.
• [34] The present parties identified the other parties who may have an interest in the respondent Council's challenge to the validity of the awards and perhaps EBA4. Those parties are listed in Schedule A to these reasons. They do appear to me to be the relevant other parties.
• [35] During the course of argument, submissions were invited as to whether it was necessary, in order for the respondent to mount a proper challenge to the validity of the awards, the partition of the 2017 award and EBA4, for the respondent to appeal those various decisions rather than have those issues litigated in the present appeal. Mr Murdoch QC raised the prospect of the respondent bringing an application for prerogative relief under s 424 of the 2016 IR Act to quash the various decisions bringing the awards and EBA4 into existence. Section 424 provides:

(a) perform all functions and exercise all powers given to the court under this Act or another Act; and

(b) hear and decide, and give its opinion on, a matter referred to it by the commission; and

(c) hear and decide an offence against this Act, unless this Act provides otherwise; and

(d) hear and decide appeals from an industrial magistrate's decision in proceedings for -

(ii) recovery of damages, or other amounts, under this Act; and

(e) if the court is constituted by the president, exercise the jurisdiction and powers of the Supreme Court to ensure, by prerogative order or other appropriate process -

(i) the commission and magistrates exercise their jurisdictions according to law; and

(ii) the commission and magistrates do not exceed their jurisdictions.

(a) make the decisions it considers appropriate, irrespective of specific relief sought by a party; and

(3) The court's jurisdiction is not limited, by implication, by a provision of this Act or another Act.

(4) The jurisdiction conferred on the court by this Act or another Act is exclusive of the jurisdiction of another court or tribunal, unless this or the other Act provides otherwise."

• [36] Various submissions were made on the review as to the appropriate way forward. It is clearly necessary for a proper platform to be established where the validity of the awards and EBA4 can be tested and where all parties interested can be heard.
• [37] It was evident that, during argument on the review, issues were raised which had not been considered by the respondent. In the context of what is now a fairly complicated matter, that is understandable. The respondent should be given a reasonable time to settle upon the course it intends to take and then crystallise that into a set of submissions which can then be considered by the other parties and prospective parties.
• [38] To that end, I make the following directions:
  1. The respondent shall, by 4.00 pm on 4 December 2020, deliver to those listed in Schedule A to these reasons a copy of each of the documents listed in Schedule B.
  2. The respondent shall deliver the documents listed in order 1 under cover of a letter drawing the recipient's attention to the fact that the documents are relevant to a matter being mentioned in the Industrial Court on 4 February 2021 and that the court has determined that the recipient may have an interest in the matters before the court and may wish to be heard.
  3. By 4.00 pm on 23 December 2020, the respondent shall file and deliver to each of those listed in Schedule A to these reasons a copy of their written submissions in the current matter which will identify and fully explain:

(a) their challenge to the validity of the 2014 award - version 2;

(d) if there is no challenge to EBA4, their argument as to why EBA4 subsists if the awards fall; and

(e) all procedural arguments including whether the challenge to the awards and EBA4 ought to be mounted by appeals out of time, or by way of application for prerogative orders, or by another process.

1. The matter is listed for mention on 4 February 2021.
2. All parties wishing to be heard on any of the matters raised by the respondent's submissions ought to appear on the mention at which time further directions will be made with a view to a full hearing at some later time.

1. Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland.
2. Construction, Forestry, Mining & Energy, Industrial Union of Employees, Queensland.
3. Electrical Trades Union of Employees, Queensland.
4. Local Government Association of Queensland.
5. Plumbers and Gasfitters Employees' Union Queensland, Union of Employees.
6. Queensland Independent Education Union of Employees.
7. Queensland Nurses' Union of Employees.
8. Queensland Services Union of Employees.
9. The Association of Professional Engineers, Scientists and Managers, Australia, Queensland Branch, Union Of Employees.
10. The Australian Workers' Union of Employees, Queensland.
11. The Hon. Grace Grace, Minister for Education, Minister for Industrial Relations and Minister for Racing.
12. Transport Workers' Union of Australia, Union of Employees (Queensland Branch).
13. United Voice Industrial Union of Employees.

1. Documents in the Queensland Industrial Relations Commission:

(a) Notice of industrial dispute filed 25 June 2018.

(b) Appellant's outline of submissions filed 10 April 2019.

(c) Respondent's outline of submissions filed 9 May 2019.

(d) Queensland Services, Industrial Union of Employees v Moreton Bay Regional Council [2020] QIRC 038.

1. Documents in the Industrial Court of Queensland:

(b) Appellant's outline of submission filed 28 April 2020.

(c) Respondent's outline of submission filed 25 May 2020.

(d) Appellant's reply submissions filed 9 June 2020.

(f) Supplementary submissions of the respondent dated 17 November 2020 in response to the email of 27 October 2020.

(g) Queensland Services, Industrial Union of Employees v Moreton Bay Regional Council [2020] ICQ 021.

[1] Queensland Services, Industrial Union of Employees v Moreton Bay Regional Council [2020] QIRC 038.

[3] Respondent's written submissions dated 3 May 2019, filed at the Queensland Industrial Relations Commission on 9 May 2019.

[4] Queensland Services, Industrial Union of Employees v Moreton Bay Regional Council [2020] QIRC 038 at [55].

[6] Queensland Services, Industrial Union of Employees v Moreton Bay Regional Council [2020] QIRC 038 at [29] and [30].

[7] Respondent's written submissions, filed in the Industrial Court on 25 May 2020.

[8] Transcript of 17 August 2020, T 1-15.

[9] They are called "flexibility terms" in the Fair Work Act 2009 (Cth).

[10] Division 3 of Chapter 4; see s 210.