Riverina Water County Council Enterprise Award 2004 [2007] NSWIRComm 1090

LEGISLATION CITED: Industrial Relations Act 1996 Federal Workplace Relations Amendment (Work Choices) Act 2005

Bysterfveld v. Shire of Cue (2007) WAIRC 00941 Harmer v. Shoalhaven Community Housing Scheme Limited [2006] NSWIRComm 1165 Mid Density Development Pty Limited v. Rockdale Municipal Council (1992) 39 FCR 579 CASES CITED: R v. Trade Practices Tribunal; ex parte St George County Council (1973 - 1974) 130 CLR 533 Review of Awards Case (1998) 85 IR 38 State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1 Tasmanian Dams Case (1983) 150 CLR 282

REPRESENTATIVES OF EMPLOYEES Greg Golledge New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union

Aaron McKinnon LEGAL REPRESENTATIVES: Electrical Trades Union of New South Wales

REPRESENTATIVE OF EMPLOYER Adam Dansie Local Government Association of New South Wales Shires Association of New South Wales

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Riverina Water County Council Enterprise Award 2004

Notice of award review pursuant to S.19 of the Industrial Relations Act, 1996

1 The Riverina Water County Council Enterprise Award 2004 has been referred to me for review pursuant to S.19(1) of the 1996 Industrial Relations Act:

"The Commission is required to review each award before September, 2001 and subsequently at least once in every three years."

The Registry has set the matter down for a call over on Friday, 23 November, 2007 in accordance with Practice Direction No.13 [Clause 4]. I adjourned the proceedings for hearing on Thursday, 6 December, 2007. In the proceedings Mr Golledge represented the New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union, Mr McKinnon represented the Electrical Trades Union of Australia and Mr Dansie represented the Riverina Water County Council and the Local Government and Shires Associations of New South Wales.

2 On Monday, 27 August, 2007 a new State award - the Riverina Water County Council Enterprise Award, 2007 was made by consent before Murphy C. That 2007 Award came into effect on and from Sunday, 1 September, 2007 and in terms of Clause 2, Coverage and Parties, it:

"...shall be read in conjunction with the Riverina Water County Council Enterprise Award, 2004...and shall prevail over the 2004 Award to the extent that this Award provides more favourable conditions of employment for employees or where the 2004 Award is silent..."

It is the 2004 Award which is the subject of the current proceedings before me.

3 As I understand the position, when he made the 2007 Award, Murphy C acted on a referral agreement under S.146A pursuant to which parties to a dispute may refer it to the State Commission for a common law collective agreement. In particular, S.146A(1)(a) provides for a referral agreement over the following class of matters:

"...a dispute about any conditions of employment or industrial matter between an industrial organisation of employees and one or more employers (or industrial organisations of employers)..."

4 The purpose of the S.19 review process is to modernise and consolidate State awards and, where appropriate, rescind obsolete awards in accordance with the principles set out by the Full Bench of the Commission (Wright J - President, Hungerford and Schmidt JJ, Sams DP and Redman C) in the Review of Awards Case (1998) 85 IR 38 and Practice Direction No.13. But the question arises as to whether the s.19 review process is, in fact, relevant for the 2004 Award at all. 5 By a 2006 amendment to the State IR Act - Part 8A of Schedule 4 [S.44C] - all State consent enterprise awards covering corporations within the meaning of S.51(xx) of the Commonwealth Constitution, ie trading, financial or foreign corporations (and which would otherwise be bound by the provisions of the 2005 Federal Workplace Relations Amendment (Work Choices) Act), have been converted into State enterprise agreements and, as such, become "preserved State agreements" [PSA's] for the purpose of Work Choices. In terms of S.44C(3)(a) of the State IR Act:

"...an award to which this clause applies ceases to have effect as an award, but only to the extent to which it applies to employees of a constitutional corporation..." Consequently, one outcome of that change is that any State enterprise award covering employees of a S.51(xx) corporation would no longer be a State award for review under S.19 at all. As an enterprise agreement, the 2004 Award would fall essentially to parties themselves to either amend or rescind by agreement.

6 But is the Riverina Water County Council a S.51(xx) trading corporation? If it is not, compliance with the S.19 review process is still required (and also the S.146A referral agreement on which the 2007 Award apparently relied would strictly be unnecessary, with the parties being able to rely entirely on the inherent jurisdiction of Ss. 10 or 136(1)(b) of the State IR Act to make such State awards or vary them). Whether or not any particular local government authority is an employer which will actually be bound by Work Choices as a S.51(xx) corporation is at the present time far from clear. It has been described as "...a grey area of the law..." depending on the structure of the particular council.

7 The majority of the High Court (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ with Kirby and Callinan JJ dissenting) in State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1 confirmed the effect of Work Choices on S.51(xx) corporations as far as the State industrial jurisdiction was concerned. But in submissions on behalf of the Commonwealth Government in the hearing before the High Court the Solicitor General for the Commonwealth had this to say:

"...If the principal activity is concerned with the exercise of governmental authority, as in the case of a municipal council, in making this judgement, one would give more weight to that activity. So one would not say because it collects the garbage and charges for it a municipal corporation becomes a trading corporation..."

8 In the Tasmanian Hydro-Electric Commission [the Tasmanian Dams Case (1983) 150 CLR 282] has been classified as a S.51(xx) trading corporation. But in R v. Trade Practices Tribunal; ex parte St George County Council (1973 - 1974) 130 CLR 533 a county council trading in electricity was held not to be a S.51(xx) trading corporation because the purchase of electricity and electrical fittings and appliances for the purpose of sale or hire, were conducted under the terms of the 1919 Local Government Act and were not undertaken for profit but for the benefit of constituents. In Mid Density Development Pty Limited v. Rockdale Municipal Council (1992) 39 FCR 579 Davies J of the Federal Court held that revenue generated from the performance of statutory duties could not be described as trading activities. Smith SC of the Western Australian Industrial Relations Commission on Friday, 20 July, 2007 also concluded in Bysterfveld v. Shire of Cue (2007) WAIRC 00941 that a local government instrumentality was not a S.51(xx) corporation.

9 Each cases must turn on its own particular facts and no general position can be confidently taken over the status of any local government authority. Certainly, there has only been very limited material available to me in this hearing - insufficient to conclusively determine the actual status of the Riverina Water County Council - whether it is, or is not, a S.51(xx) trading corporation. But neither Mr Golledge, Mr McKinnon nor Mr Dansie expressed the view that the Riverina Water County Council is properly a S.51(xx) trading corporation. Mr Golledge and Mr McKinnon argued that it is not a S.51(xx) trading corporation. Mr Dansie made no submissions on that point. I believe that I am entitled to rely on the submissions made to me by the parties in that respect.

10 On the basis of those submissions, notwithstanding the fact that the primary function of the Riverina Water County Council is the sale of water, to my mind it remains essentially a community based organisation: that appears to me to be the emphasis of its operations - a service to the community. In that respect the comments I made in my unreported decision of Tuesday, 14 November, 2006 in Harmer v. Shoalhaven Community Housing Scheme Limited [Matter No.IRC 3350 of 2006 at pp.8 and 9] appear to me to be apposite, viz:

"... Some - possibly many - community based organisations with mixed activities may still escape Work Choices notwithstanding the fact that they have some trading and/or financial activities. I have in mind particularly local government authorities, many church run educational bodies, welfare organisations or small recreational clubs whose activities will always be predominantly directed towards providing a service to the community they serve and only incidentally and peripherally involved in activities of a trading and/or financial character. It would be most unfortunate if the valuable community service those organisations provide is reduced to being categorised simply as no more than trading and financial concerns. It should be more than that..."

Currently, I believe that water is too precious a commodity, especially in country regions, to be treated as no more than a product for sale for profit. It is an essential commodity for the community and should be treated as such.

11 The upshot is that I am satisfied that the S.19 award review process remains relevant to the 2004 Award. The parties are content for it to remain in its present form and I am satisfied that it complies with the provisions of S.19 in that respect. It shall operate on and from Thursday, 6 December, 2007.

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