Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation [1990] HCA 52

The log of claims served by the A.T.O.F. on the R.T.A. was accompanied by a demand made by the A.T.O.F. in its own right and also as agent for some 1,100 members of the A.T.O.F. who either were or would soon be employees of the R.T.A. The Deputy President refused to add the R.T.A. as a party to the dispute previously found to exist between the A.T.O.F. and certain other employers in Tasmania and Victoria arising from non-acceptance of the same log of claims, being of the view that employees of the R.T.A. did not fall within the eligibility rule of the A.T.O.F. and that it therefore lacked constitutional capacity to create an industrial dispute with the R.T.A. Nevertheless, the Deputy President found a dispute to exist between the R.T.A. and the individuals on whose behalf the log had been served.

The R.T.A. and the sixth respondent, the Public Service Association of New South Wales ("the P.S.A."), appealed to the Full Bench of the Commission from the finding of dispute and the A.T.O.F. appealed against the finding adverse to it. The Full Bench by majority allowed the appeals by the R.T.A. and the P.S.A. and dismissed the appeal by the A.T.O.F. In the result the Commission affirmed the refusal of the Deputy President to find that there was a dispute between the A.T.O.F. and the R.T.A. The majority also concluded that the A.T.O.F. could not represent as agent a group or class of persons who by reason of their employment were outside the scope of the union's eligibility rule and amended the Deputy President's finding of a dispute accordingly.

Gaudron J. granted an order nisi for writs of mandamus and certiorari against the Commission, the members constituting the majority of the Full Bench of the Commission who had heard the appeals, Deputy President Polites, the R.T.A. and the P.S.A. The grounds upon which the order nisi was granted are:

(1) The Full Bench was in error in finding that the R.T.A. was not the successor, assignee or transmittee of the business of the Commissioner for Motor Transport (New South Wales) ("the C.M.T.") within the meaning of the A.T.O.F.'s eligibility rule and that, as a consequence, the A.T.O.F. lacked the capacity to initiate a dispute between itself and the R.T.A., thereby failing to exercise the Commission's jurisdiction under the Act and the Constitution.

(2) The Full Bench erred in failing to find the A.T.O.F. had the capacity to initiate an industrial dispute between itself and the R.T.A. in respect of persons employed by the R.T.A. and validly enrolled as members of the A.T.O.F., thereby failing to exercise the Commission's jurisdiction under the Act and the Constitution.

(3) The Full Bench erred in holding that the A.T.O.F. lacked the capacity to act as agent on behalf of persons being members of the A.T.O.F. pursuant to authority given to the A.T.O.F. by such persons so as to create an interstate industrial dispute to which such persons and their employer, the R.T.A., were parties, thereby failing to exercise the jurisdiction of the Commission under the Act and the Constitution.

The industry rule in the A.T.O.F.'s Rules is in the following terms:

The industry in connection with which the Federation is formed is the transport industry, whether by land, water (except sea) or air (excluding activities of or relating to the piloting of aircraft) as carried on by -

the Crown in right of the Commonwealth or of any State or States or of the Commonwealth and any State or States; or

any statutory body representing the Crown in any such right as aforesaid; or

any instrumentality or authority whether corporate or unincorporate acting under the control of or for or on behalf of or in the interest of the Crown in any such right as aforesaid; or

any company or corporation in which at least fifty per centum of the issued shares are held by or for or on behalf of or in the interest of the Crown in any such right as aforesaid; or

any company, corporation, firm or person engaged in the transport or carriage by air of passengers and/or goods.

The eligibility rule of the A.T.O.F., so far as it is material, is as follows:

(1) The following persons and classes of persons shall be eligible for membership of the Federation, namely:

(a) Persons employed at an annual salary rate in any capacity in the transport industry whether by land, water (except sea) or air (excluding the piloting of aircraft) by -

(i) the Crown in right of the Commonwealth or of any State or States or of the Commonwealth and any State or States; or

(ii) any statutory body representing the Crown in any such right as aforesaid; or

(iii) any instrumentality or authority whether corporate or unincorporate acting under the control of or for or on behalf of or in the interest of the Crown in any such right as aforesaid; or

(iv) any company or corporation in which at least fifty per centum of the issued shares are held by or for or on behalf of or in the interest of the Crown in any such right as aforesaid; or

(v) any company, corporation, firm or person engaged in the transport or carriage by air of passengers and/or goods including without limiting the ordinary meaning of the foregoing, persons employed at an annual salary rate in any capacity (other than the piloting of aircraft) by -

The Public Transport Commission of New South Wales.

The Commissioner for Motor Transport (New South Wales).

[There follows a list of thirty-three statutory authorities and companies engaged in the transport industry, including airlines.] All other airline companies, corporations, firms and businesses engaged in the transport by air of passengers and/or goods either intra-state and/or interstate and/or on international air routes.

A successor or assignee or transmittee of the business of any of the foregoing so long as such successor, assignee or transmittee is an employer within sub-paragraphs (i), (ii), (iii), (iv) or (v) of paragraph (a) of this sub-rule.

(2) Notwithstanding anything hereinbefore contained -

(i) persons employed in a professional capacity by -

The Commissioner for Government Transport (New South Wales).

The Superintendent of Motor Transport (New South Wales).

A successor or assignee or transmittee of the business of any of the foregoing.

shall not be eligible for membership of the Federation.

Prior to 16 January 1989 the C.M.T. was a body corporate responsible for the administration of the Department of Motor Transport ("D.M.T."). At the date in question the C.M.T. was the employer of some 3,000 employees, approximately 1,100 of whom were members of the A.T.O.F. employed under a Federal award.

The C.M.T. and the D.M.T. were abolished from 16 January 1989 pursuant to the Transport Administration Act 1988 NSW ("the Administration Act"). That Act provides for the substantial amalgamation and rationalization of the functions formerly performed by the D.M.T., the Department of Main Roads ("the D.M.R.") and the Traffic Authority of New South Wales. Section 46 of the Administration Act establishes as a body corporate the R.T.A. and imposes upon the R.T.A. functions under the subject Act and various other Acts. Section 46(2)(b) provides for the constitution of the R.T.A. as a statutory body representing the Crown.

From 16 January 1989 and by operation of cl. 27 of Sched. 7 to the Administration Act, the 3,000 employees of the C.M.T., together with approximately 8,000 employees of the D.M.R. and 124 employees of the Traffic Authority, were transferred to the employment of the R.T.A. The assets, liabilities and legal responsibilities attaching to the C.M.T. as a "former Authority" were transferred to the R.T.A. pursuant to cl. 24 of Sched. 7 to the Administration Act.

The evidence before the Deputy President concerning the transfer of functions from the D.M.T. to the R.T.A. was to the effect that the major functional divisions of the former department, namely, driver licensing, vehicle registration, information systems, regional services, and finance and administration, were all functions transferred to the R.T.A. by operation of the amending legislation. This transfer was largely effected by the substitution of the R.T.A. for the C.M.T. as the relevant administrative authority in the various Acts previously administered by the C.M.T.

However, not all of the functions formerly performed by the D.M.T. were transferred to the R.T.A. According to the evidence, some of the functions of the D.M.T. were vested in the Secretary, Ministry of Transport (now the Director-General, Department of Transport), and staff numbers, assets and budget appropriate to those functions were accordingly transferred to the Ministry of Transport (now the Department of Transport). On the evidence, the Deputy President made the following findings:

(i) that all of the functions of the D.M.R. are to be carried out by the R.T.A. and some, but not all of the functions, of the D.M.T. are to be carried out by the R.T.A.;

(ii) that some 232 former D.M.T. staff were transferred to the [Traffic Authority of New South Wales] with the bulk of other staff moving to the R.T.A.;

(iii) that many ex-D.M.T. staff, though not all, will be performing within the R.T.A., the same or similar functions to those performed within the D.M.T.

The correctness of these findings was not contested in this Court. But, as will appear, the R.T.A. and the P.S.A. contend that they do not convey a sufficiently comprehensive picture of the substantial reorganization of functions that has taken place by and under the Administration Act.

The first issue before this Court concerns the capacity of the A.T.O.F. to create a dispute with the R.T.A. at the time of service of the log and the answer to that question necessarily turns on the question whether the eligibility rule of the A.T.O.F. embraces employees of the R.T.A. The second issue concerns the capacity of the A.T.O.F. to create the dispute either on its own account or on behalf of its members in the event that such members by virtue of their employment in the R.T.A. are no longer eligible to be members of the A.T.O.F. It will not be necessary to examine this question if the first issue is answered favourably to the A.T.O.F.

With respect to the first issue, if the employees of the R.T.A. qualify under the eligibility rule of the A.T.O.F., it is because they fall within the last sentence of sub-r. (1)(a)(v) of r. 6. That is common ground. In order to show that the R.T.A. employees fall within the last sentence of sub-r. (1)(a)(v), the A.T.O.F. must establish: first, that the reference to "any of the foregoing" embraces any of the employers listed at the beginning of that paragraph and so includes the C.M.T.; secondly, that the R.T.A. is a "successor or assignee or transmittee of the business of" the C.M.T.; and, thirdly, that the reference to "an employer" in the last sentence means simply one of the bodies in the five paragraphs of r. 6(1), not being one of the bodies described or referred to in those paragraphs which employs persons in the transport industry. Again, it is not in contest that the expression " any of the foregoing" (our emphasis) is wide enough to comprehend the bodies listed in sub-par. (v). But the R.T.A. and the P.S.A. contend that the R.T.A. is not a successor, assignee or transmittee of the business of the C.M.T. and that the reference to "an employer within" sub-pars (i), (ii), (iii), (iv) or (v) is a reference to a body which employs persons in the transport industry. To some extent these contentions involve overlapping considerations.

It is convenient to note, by way of preliminary comment, that in sub-r. (1)(a)(v) the word "including" in the collocation of words "including persons employed at an annual salary rate in any capacity (other than the piloting of aircraft) by " is a word of extension so that par. (a)(v) embraced employees of the C.M.T. who were engaged in clerical and administrative work and were not employed in the transport industry: Reg v Holmes; Ex parte Public Service Association (NSW) [1] . So the reference in that clause to "the business of any of the foregoing" must be read as a reference to the business, whatever it may be, of the predecessor employer. It follows that, when it is sought to relate the successor clause back to the "business" of the C.M.T., the circumstance that the C.M.T. was not engaged in the transport industry and did not employ anyone in that industry is not an objection to the application of the clause.

There are two grounds for the submission that the successor clause is, as a matter of law, incapable of applying so as to comprehend the employees of the R.T.A. First, it is said that the activities of the D.M.T. under the C.M.T. did not amount to a business and, secondly, even if they did, the business was and remains the property of the Crown. The submission that the activities of the Department did not amount to a business is based largely on the judgment of Gibbs J. in Holmes . His Honour noted [2] that the Department's functions fell into three categories, namely, (1) registration and licensing functions, including the regulation of the construction, equipment and operation of motor vehicles; (2) the promotion of traffic safety; and (3) the collection of taxes and charges paid in connection with the operation of motor vehicles. Speaking of the work of the officers of the Department, Gibbs J. said [3] :

[I]t should in my opinion be held that the duties performed by the clerks and administrative officers employed in the Department of Motor Transport are only incidental to transportation in a remote and indirect way. But what is more important is that their duties are not in their nature industrial, because they stand "outside the whole world of productive industry and organized business". It is not a sufficient distinction between the position of clerks in the Treasury, and that of clerks employed by the Commissioner for Motor Transport who collect taxes and charges, that the funds raised by the latter are devoted to special purposes relating to transportation. The tasks of licensing, and registration, and formulating rules for the governance and safety of traffic, also cannot properly be described as industrial. They are bare administrative functions, such as could not be performed in industry under our system. His Honour's comments were directed to demonstrating that the activities were not industrial in character, a conclusion which must now be viewed in the light of the subsequent decision in Reg v Coldham; Ex parte Australian Social Welfare Union [4] . The reference to the departmental activities standing outside the world of "productive industry and organized business" must be read accordingly. The reference should not be understood as a statement that the departmental activities did not constitute a business within the meaning of the eligibility rule. Of all words, the word "business" is notorious for taking its colour and its content from its surroundings: see Federal Commissioner of Taxation v Whitfords Beach Pty Ltd [5] . Its meaning depends upon its context. It is common and apt to speak of "the business of government": see, for example, Conway v Rimmer [6] . In the context of sub-r. (1)(a)(v) it is plain enough that the successor clause relates back to the activities of public authorities and departments of government, which do not or may not carry on commercial undertakings for profit, as well as to such undertakings. Indeed, the structure of sub-r. (1) suggests that the eligibility rule is primarily concerned with public sector employment; the first four paragraphs in pars (a)(i) to (iv) inclusive are directed to such employment as are the first twelve employers listed in par. (a)(v). 1. (1977) 140 C.L.R., at pp. 70-71. 2. (1977) 140 C.L.R., at p. 77. 3. (1983) 153 C.L.R. 297. 4. (1982) 150 C.L.R. 355, at pp. 378-379. 5. [1968] A.C. 910, at p. 952.

The argument that the business of the Department was and remains the property of the Crown seeks to deny that there has been in the present case any succession by the R.T.A. to the business of which the C.M.T. was the titular head. The argument is that the C.M.T. was the agent of the Crown and at all times administered the Department for and on behalf of the Crown so that the Crown was and remained the employer. Hillman v The Commonwealth [7] provides some support for this proposition. An award made by the Commonwealth Court of Conciliation and Arbitration in respect of conditions of work at the Cockatoo Island dockyard provided that the award should be binding on the Ministers for Navy and Defence and the Naval Board which was a body constituted under the Naval Defence Act 1910 Cth and Regulations. At the time the dockyard belonged to the Commonwealth. Starke J. held [8] that the award did not bind the Crown or the Commonwealth generally, but only so far as an activity covered by the award was administered or controlled by the Naval Board or by one of the Ministers. Consequently, the award did not bind the Crown or the Commonwealth when the administration of the dockyard passed to the Prime Minister and was placed by Order in Council under the direction of a Board of Control and later when the Commonwealth Shipping Act 1923 Cth incorporated the Australian Commonwealth Shipping Board and vested in it Cockatoo Island and the dockyard and also the management of the works on the Island.

1. (1924) 35 C.L.R. 260. 2. (1924) 35 C.L.R., at p. 265.

Starke J. refused [9] an application to join the Shipping Board as a party to the action as a matter of discretion but also on the ground that the Board was not a successor, assignee or transmittee of the business of a party to the dispute or of a party bound by the award. His Honour observed [10] :

But some reliance is placed, I suppose, upon the Arbitration Act 1904-1921, s. 29: "The award of the Court shall be binding on (ba) in the case of employers, any successor, or any assignee or transmittee of the business of a party to the dispute or of a party bound by the award, including any corporation which has acquired or taken over the business of such a party." I see no reason to doubt the identity of the business. It was carried on in the same place, by the same staff, doing substantially the same kind of work. But there is, in my opinion, no successor, assignee or transmittee of the business of a party to the dispute or of a party bound by the award. Cockatoo dockyard and the business there carried on are and always have been, in substance, the property of the King in right of the Commonwealth, or else of the Commonwealth itself, under whatever control the business has been placed or in whatever body it has been vested. And the party to the dispute who is bound by the award is and has always been the King or the Commonwealth, in respect of the activities carried on by him or it under the administration and control of the Naval Board, the Minister for Navy, or the Minister for Defence. Consequently s. 29 of the Arbitration Act does not, in my judgment, aid the plaintiff in this action. 1. (1924) 35 C.L.R., at p. 267. 2. (1924) 35 C.L.R., at pp. 265-266.

An appeal from the decision of Starke J. was dismissed. Isaacs J. agreed with the reasons given by Starke J. Knox C.J. and Gavan Duffy J. held that the appeal must fail whether the Commonwealth was the real respondent to the award - as Isaacs J. thought it was - or whether the Ministers named and the Naval Board were the real respondents.

Even if the view expressed by Isaacs and Starke JJ. be taken as correct, it is not decisive of the present case. In Hillman the question was whether the parties named in the award were the real respondents. If not, no question of succession to the Commonwealth's business arose. Here a different question arises and it is to be determined as a matter of construction by reference to the particular and rather complicated provisions of r. 6 of the A.T.O.F. constitution. The question is not whether the Crown in right of the State is party to, or bound by, an award, but whether the A.T.O.F. has coverage in respect of the employees of a statutory body in a setting in which the statutory body is treated as the employer, even if the statutory body is or represents the Crown, and in which the proviso in the successor clause is looking to an employer as a successor to the business of the first employer. In that context sub-r. (2)(b)(i) is of special significance. The function of that provision is to exclude from A.T.O.F. membership persons employed in a professional capacity by twelve named statutory authorities, including the C.M.T.'s predecessor, the Superintendent of Motor Transport. The provision contains a successor clause in the same terms as that contained in sub-r. (1)(a)(v) subject only to the elimination of the proviso to that clause. It is obvious that, in sub-r. (2)(b)(i), there is scope for the concept of succession to a business as between two statutory authorities, notwithstanding that the functions which they discharge are governmental functions performed by, on behalf of or for the benefit of the Crown in the right of the State. That is how Gibbs J. saw sub-r. (2)(b)(i) as operating in Holmes when the C.M.T. succeeded the Superintendent of Motor Transport [11] . The successor clause in sub-r. (1)(a)(v) must operate in the same way. Accordingly, the question in the present case is not governed by the way in which the Court in Hillman applied s. 29 (later s. 61) of the Commonwealth Conciliation and Arbitration Act 1904 Cth.

That brings us to the final and most difficult question: whether, on the facts of the case, the R.T.A. is " a successor or assignee or transmittee of the business of" the C.M.T. (our emphasis). At the outset of our consideration of this question we should refer to the comprehensive review of that reorganization which is set out in the judgment of Hill J. in Re Crown Employees RTA etc Award [12] . In the light of that review we need refer only to the principal matters on which the parties rely in support of their submissions. The first point urged by the respondents is that the form of the statutory scheme so far as it related to the C.M.T. and the R.T.A. was inconsistent with the claim that the R.T.A. is a successor, assignee or transmittee of the business or activities of the C.M.T. Rather, the business or activities of the C.M.T. were abolished and the R.T.A. was brought into existence with a new business or set of functions. The R.T.A. and the P.S.A. point to the different way in which that Act deals with the R.T.A. as compared with the way in which it deals with the State Rail Authority ("the S.R.A.") and the State Transit Authority ("the S.T.A."). Thus, it is provided that the S.R.A. shall operate railway passenger and freight services and continue to operate the railway services which were provided by it (s. 5). Clause 3 of Sched. 7 to the Administration Act provides that the S.R.A. constituted under that Act is a continuation of, and the same legal entity as, the former S.R.A. Likewise, cl. 13 of Sched. 7 provides that the S.T.A. constituted under the Administration Act is a continuation of, and the same legal entity as, the Urban Transit Authority under earlier legislation, in circumstances in which the Administration Act directs the S.T.A. to continue to operate the bus and ferry services which were provided by the Urban Transit Authority. The provisions of Pt 6 of the Administration Act relating to the R.T.A. take a different form. There is no reference to the functions of former departments or authorities nor to continued performance by the R.T.A. of those functions. Instead, the D.M.R. and the D.M.T., along with other authorities including the Traffic Authority of New South Wales, "are abolished": Sched. 7, cl. 23. Moreover, the Chief Executive of the R.T.A. is not the person who held office as Commissioner for Motor Transport but the person who held office as Commissioner for Main Roads: Sched. 7, cl. 25.

On the other hand, cl. 24 of Sched. 7, which makes provision for the transfer of assets of the abolished authorities to the R.T.A., strongly supports the case for a succession. By virtue of the clause all such assets that immediately before that abolition were vested in an abolished authority vest in the R.T.A.: cl. 24(a). The clause makes similar provision in respect of money payable to such an authority, claims enforceable by or against such an authority, proceedings pending against or at the suit of such an authority, contracts and securities entered into or given to or by such an authority and the acts and omissions of the abolished authority. By cl. 27(1) any members of the staff of the D.M.R., the D.M.T. or the Traffic Authority immediately before the reorganization were to be taken to be members of the staff of the R.T.A. employed under the Administration Act and employed under awards applying previously to the staff of the D.M.R.: cl. 27(2). In the light of cll. 24 and 27(1), the difference in the provisions relating to the S.R.A. and the S.T.A. on the one hand and the R.T.A. on the other is not in itself a reason for concluding that the R.T.A. is not a successor of the business of the C.M.T.

The R.T.A. and the P.S.A. submit that a substantial identity between the business formerly carried on by the C.M.T. and the business now carried on by the R.T.A. must be shown to exist in order to constitute the R.T.A. as a successor of the business of the C.M.T. We do not agree that Shaw v United Felt Hats Pty Ltd [13] supports such an absolute proposition. That decision, which related to s. 29(ba) of the Commonwealth Conciliation and Arbitration Act as it then stood, turned on its own facts. The respondents' notion of substantial identity invites a comparison between the nature of the business as it was formerly carried on and the nature of the business now carried on by the new entity with a view to ascertaining an identity between the two. According to the natural reading of the language of the successor clause, the inquiry should be directed to ascertaining whether the business or the activities formerly carried on by the C.M.T. are still carried on by the R.T.A., notwithstanding that the R.T.A. also carries on one or more other substantial activities. The question then is whether the purpose of the clause viewed in this context requires a different reading for which the respondents contend. The natural reading, it is urged, could give the A.T.O.F. very wide, indeed "windfall", coverage, even a coverage unrelated to employment in the business of the kind carried on by the former employer. There is force in this argument and it may be perhaps that some limitation would need to be implied in order to preclude such an extreme operation. However, there are two answers to the respondents' argument. The first lies in the proviso to the successor clause and requires the successor to be an employer within sub-r. (1)(a)(i) to (v). The second is that the Commission has a discretion under the Act to refuse to make an award at the instance of a registered organization which has a peripheral interest in the industry. Accordingly, on the reading of the clause which we favour, the ultimate issue is whether there is a substantial identity between the old activities and those now carried on by the R.T.A. which correspond with the old activities.

It is then said that no such substantial identity exists when regard is had to all the facets of the reorganization of functions effected by the Administration Act. Not all the functions previously performed by the D.M.T. under the C.M.T. are now performed by the R.T.A. Thus, the regulation and licensing of taxis, hire cars, private buses and water taxis, and the licensing of privately operated passenger taxi ferries were vested in the Secretary of the Ministry of Transport (now the Director-General, Department of Transport). Nonetheless, according to the evidence and the findings made at first instance in the Commission, the major part of the functions of the D.M.T. are now undertaken by the R.T.A. and the bulk of the D.M.T. staff have been transferred to the R.T.A. In Holmes , Gibbs J. described the functions of the D.M.T. as falling into three categories which he set out [14] . The bulk of those functions were retained by the D.M.T. until the reorganization and are now discharged by the R.T.A. The major functional divisions of the D.M.T., driver licensing, vehicle registration, information systems, regional services, and finance and administration, went over to the R.T.A. In the light of all this we conclude that the R.T.A. is the successor of the C.M.T., notwithstanding that the major activities of the R.T.A. are former functions of the D.M.R. and predominantly the staff of the R.T.A. are former employees of the D.M.R.

Accordingly, we have come to the conclusion that the Full Bench of the Commission was in error in finding that the A.T.O.F. had no capacity to generate a dispute between itself and the R.T.A. It is therefore unnecessary for us to consider the remaining question, namely, whether the A.T.O.F. was able to generate a dispute with the R.T.A. on behalf of the individuals consisting of Mr. Purton and the other persons named in the schedule of prosecutors.

In the result, we would make absolute the order nisi for mandamus, the order nisi for certiorari directed to the Full Bench of the Commission in so far as it relates to the decision in matter C No. 25607 of 1989 and the order nisi for certiorari directed to Deputy President Polites.